Usman Shahzada: Where are you from and tell something about yourself?
Ian Ippolito: I grew up in Merritt Island, Florida, which is the home of Kennedy Space Center. Most of the people who lived there worked for NASA and my dad did too. He first worked in the Apollo control room, and then later became the director of the U.S. shuttle tracking station. It was an huge inspiration to see my dad (and his co-workers) use their brains and technology every day, to conquer huge challenges and push the boundaries of human knowledge.
After college, I moved to Tampa, Florida for my first job. I loved the weather, lifestyle and affordable housing and decided to stay. It also became an excellent place to start a business, because of the lost cost of living and ease in bringing in new recruits.
Usman Shahzada: When and why you started rentacoder.com (now called vworker) and what was the reason behind it?
Ian Ippolito: It was back in 2001. 6-7 years earlier, I had created a site called Planet-Source-Code.com, which was the first site to enable programmers to share source code. As the webmaster, I was bombarded by people asking me to help them with their code. I was an independent programmer/consultant at the time and was happy to be getting so many requests for paid work. But it also hurt to have to tell so many of them “Sorry I can’t help you, because I’m too busy.”
I realized there was a need that wasn’t being met, so I decided to create a marketplace that would connect people to programmers. But I didn’t just want to create a copy of the same thing that already existed in the real world. Traditional freelancing/consulting has a lot of serious problems and I felt it was a broken model. I saw many good programmers work very hard and end up getting ripped off by clients, who never paid them. I also saw extremely bad programmers ripping off good clients by walking away with their deposits and never delivering…or by delivering shamefully buggy code and never fixing them.
So I wanted to create something much better. I came up with the idea of a marketplace where the employers would not pay the programmer directly, but instead would escrow the funds in advance. This would prove to the programmer they had the ability to pay, and relieve them of the worry about being ripped off. And if the employer acted poorly and refused to pay them, we would test the deliverables and pay them anyway. And by the same token, we would protect employers from bad programmers who would otherwise walk away with an advance payment or who didn’t deliver the final work in a quality format.
Usman Shahzada: Now vworker has more than 300,000 registered workers but when you started it what was the initial response of the people?
Ian Ippolito: I created the first version of Rent a Coder in 2001 on my laptop during a long plane ride back from Italy, and it went live a few months later. We were profitable in the very first month, but it was not much of a profit (less than a few hundred dollars). But every month was better than the last. The company’s first big break came when a Wall Street Journal reporter used the site to have some programming work done and wrote a very glowing article about the experience. After that, more customers and publicity from others followed, and we grew very rapidly.
Usman Shahzada: How did you market your business/website after the launch?
Ian Ippolito: This was back before Google adwords even sold PPC ads, so that option wasn’t available to us. We marketed on Overture to get a jump start, but soon word-of-mouth became a much better source of new business.
Usman Shahzada: How many teams members you have at vworker?
Ian Ippolito: 12 full time employees, 3 part time and a team of another 10-12 virtual workers from the site. Staffing is a significant cost, so I purposefully keep it to a minimum, so that we are able to pass the savings on to our customers.
Usman Shahzada: Do you have other businesses/websites other than vworker?
Ian Ippolito: Yes, I own Exhedra Solutions, Inc. which is the parent company of vWorker. It runs the Planet Source Code website, sells some shareware products and offers consulting services. However, after 2002 or so, 99% of my time has been, and is continued to be taken up by vWorker.
Usman Shahzada: How do think makes vworker different from odesk, elance, freelancer, getacoder, guru and other online market places?
Ian Ippolito: The online marketplaces are as different and unique as if they were real people! There are about 50-60 major differences between us and the rest. I don’t want to bore anyone, so I’ll talk just about the top two differences between us and the first two you mentioned. Then I’ll give links where they can more details.
1) oDesk: oDesk offers two services: pay-for-time where the employer pays by the hour (they call it “hourly”), and pay-for-deliverables where the employer pays for the entire job (they call it “fixed price”). I take my hat off to them for inventing the idea of pay-for-time, and first enabling the employer to monitor the workers’ desktop and webcam so they know for sure they are being billed accurately. However, today, we also offer this service, the exact same guarantees, but charge customers 10-35% less for it. On pay-for-deliverables: their tagline is “Guaranteed Work. Guaranteed Payment”, but they actually don’t guarantee either party on it. This makes that sort of work much riskier than on vWorker where we guarantee safety to both sides. More info is at: http://www.vworker.com/RentACoder/oDeskVersusVWorker_ForWorkers.aspx
2) Elance: has improved a lot over how they used to be several years ago. They emulated our ideas of escrowing and arbitration, and today offer a base-level pay-for-deliverables guarantee. However, it still is not ideal. First, arbitration isn’t free like it is on vWorker: it costs $99 or $199. And if the other party wants arbitration and you don’t want to automatically lose, you are forced to cough up the fee, just to avoid forfeiting. This doesn’t happen on vWorker. They also charge workers $10-$40/month for bidding privileges. Again, there are no fees for doing the same thing on vWorker. More info is at: http://www.vworker.com/RentACoder/ElanceVersusVWorker_ForWorkers.aspx
For 50-60 other differences, with elance, Odesk and the rest, your readers can read more at:
Usman Shahzada: Where do you see vworker after five or ten years?
Ian Ippolito: We’ll have expanded into other areas of work, beyond what we do today. We’ll also be taking advantage of better bandwidth to allow better and richer communication between employers and virtual workers. And finally we’ll have expanded the model to other countries and languages as well.
Usman Shahzada: Any upcoming and new exciting features that are to be launched in vworker that you wish to share?
Ian Ippolito: Yes, we are putting out about 100 new changes every month. Here are some that your readers might be interested in learning about:
1) Change to bidding: Right now if a virtual worker bids $100, we take out our fee (say it’s an open auction project, so that is $15) and they receive $85. However, after this change, if the worker bids $100, we’ll add our $15 fee to it, and the employer will escrow $115. (Many workers are currently in the habit of adding the fee to every bid. So after this change, they’ll have to remember that they will no longer need to do that.) This will make it easier for workers to bid.
It will also give employers an incentive to save money with a preferred payment discount. The PPD is a discount for them sending us funds via a cheaper method (wire or snail mail check). Since it’s cheaper for us, we pass the savings on to the customer. Currently the employer doesn’t really “see” the affect the discount very clearly, so they don’t take advantage. After this change, they’ll see when they escrow the fund that doing this can save them significantly (because it will require less to escrow). So I expect we’ll see employers saving considerably more money this way than they currently do.
2) Tech Sherpa: Non technical employers with no experience managing programmers have a very difficult time using any online marketplace. That’s because effective supervision requires a combination of skills they don’t have: the skills of a technical lead, outsourcing manager, project manager, and quality control manager. We currently have in beta a feature where these people can hire a pre-screened Sherpa to manage their project for them at just $25/hour-$90/hour (depending on location in the world and skills). This is going to enable entrepreneurs to finally be able to take advantage of outsourcing and make it mainstream.
3) Worker qualification: The best virtual workers are 10x more productive than the worst, so choosing the right one is crucial. However, most employers don’t have the skill and ability to choose effectively. In a few months, we’ll be putting out a way that will enable them to do this, while drastically cut the time and cost required to do so. I encourage those interested to subscribe to http://siteupdates.vworker.com, to be notified when it’s ready.
Usman Shahzada: Any message for the newbies who want to start their freelancing career?
Ian Ippolito: That’s a great question, and to answer it well, would require a whole article in itself. The main keys are effective bidding, managing client expectations, managing deadlines and doing things to protect themselves in case of a dispute. For those interested, more details can be found here: http://imtips.co/freelancing-career.html