Home > Web > Thinking of online freelancing for some spare…

Thinking of online freelancing for some spare cash? Be prepared to work for it

When I fly, I often run into people I know – it’s a bit freakish. Big cities, commuter airports, connections in the midwest, the small city where I grew up … everywhere. I probably exchange at least a wave and a few words with someone I didn’t expect to meet on about half my trips. Spotting these people has turned into a bit of a game.

I recently bumped into someone I hadn’t seen in nine years: Sid Moradel. When I first met Sid, he’d been a not-so-skinny teenager who wanted to be a rock star. Now he was a trim, decorated U.S. Army vet who’d just moved to the eastern U.S. and was engaged to be married. Sid had used his military benefits to get a computer science degree but had struggled in the tough economy, despite some stints as a contractor for Microsoft and a couple startups. Then came the surprise: “Since I just moved, right now I’m kind of working full time off Guru.com.”

I was stunned: I knew about online freelancing sites, but didn’t think anyone worked off them full time. “I don’t think many people do that,” said Moradel. “But if you’re professional and have real skills, sure, there’s money to be made.”

That got me thinking: with things like the iPad Air, PlayStation 4, and Xbox One looking to put big dents in credit cards this holiday season, might online freelancing be a way to pay for a new gadget or two – or at least make downtime more productive or repair finances damaged in the Great Recession?

How it works

Online freelancing services try to match up freelancers with jobs or buyers who need to get something done – and, of course, they take a cut of the money. A few services are highly specialized, but the big four are Guru.com, Elance, Upwork (formerly oDesk), and Freelance.com, which acquired vWorker a year ago. (A related service is Amazon’s Mechanical Turk – we’ll get to that in a minute.) The basic idea is that businesses can put their work out to freelancers from all over the world instead of dealing with want ads and local temporary agencies. Similarly, freelancers can cherrypick from hundreds or thousands of open jobs, all from the comfort of their Web browsers, without the hassles of a commute or a dress code. If you like working in sweatpants, online freelancing might be for you. The “big four” services handle almost any job that can be done via the Internet or off-site, from programming and accounting to translation and graphic design – even engineering projects.

“It’s been great,” said Andrea Salert, a community coordinator for a Seattle-area church. “We’ve hired off eLance and Freelancer.com for things like event posters, social media help, and outreach. We got someone great every time.”

Sounds like a win-win. However, most services run on a variation of a reverse auction process, where freelancers compete against each other for jobs – and, often, the most appealing bid has the lowest price. The global nature of the Internet comes into play: someone in Chicago might be willing to crop and color-correct photos for $20 an hour, but someone else might offer less than half that rate. Those “lowballers” might be in India or Brazil, but can come from anywhere. Not surprisingly, online freelancing has developed a reputation as a way for businesses find cheap – or easily-exploitable – workers.

Freelance website“Businesses or buyers are going to be able to find cheap labor if they want to – it’s not going to be quality cheap labor, because that doesn’t really happen,” said Lea Popielinski, who offers academic editing and proofing via eLance and Make Your Words Pop. “Some are just looking for lowballers, but others are looking for quality freelancers and they are willing to pay what it costs to take one on.”

Some posted jobs are unethical or even illegal. Occasionally students simply post school assignments, offering to pay someone to do their coursework. Other postings are scams or violate terms of service, such as copying articles or posting fake Yelp reviews. Some buyers never pay for completed work (leaving freelancers high and dry) and some buyers try to hire freelancers independently – maybe sidestepping a services’ overhead, but also avoiding payment escrows and other protections services offer that help make sure freelancers actually get paid.

“That’s a red flag for me,” said Popielinski. “If they’re trying to circumvent the policies, then how are they going to treat me as their freelancer?”

When will you be rolling in money?

Earning real money from online freelancing doesn’t happen overnight: to land anything but lowball work, freelancers need a positive reputation. All online freelancing services have feedback mechanisms where businesses and freelancers rate each other – and those ratings matter.

“It’s a chicken-and-egg thing,” said Moradel. “You gotta have a good rep get good work, but you gotta get good work to build your rep! My first jobs I did stupidly cheap proposals, then busted my ass to get good feedback.” Asked how that worked out financially, Moradel grimaced. “I think one of those came in under $2 an hour.” However, Moradel adds that he’s on track to earn about $45,000 this year doing freelance programming.

Even within fairly narrow work categories, most posted jobs don’t seem to be worth serious freelancers’ time.

“I can dismiss about 90 percent of [available jobs] offhand,” Popielinski said of eLance. “I screen out any with a budget too low, that have ridiculous parameters, that are clearly misfiled, or need to be in a language other than English. But even though I’m not even taking two glances at the vast majority of material, it still leaves enough to probably submit two or three proposals a day.”

Speaking about Guru.com, Moradel said he submits “maybe two or three proposals a week” but “almost never” scans all the listings. “It’s not worth the time, there’s so much crap.” Moradel adds that roughly half his business comes directly from past clients, so he doesn’t have to seek it out.

Salert confirms she tries to hire freelancers she’s used before. “I try to get the same people when I can,” said Salert. “Of course, sometimes they’re not available, so we start over.”

“Specialization is key,” said Moradel. “I focus on three or four things, and those seems to get my proposals in the door. If I just said ‘Hey, I can do Javascript,’ I don’t think I’d get much real work.”

“If you have a niche, you can definitely exploit that,” said Popielinski. “But if you are a generalist sending proposals out to everything and everybody, you might struggle and have a bit more difficulty.”

Then there’s turking…

If you don’t have a niche to exploit, another option is Amazon’s Mechanical Turk – the name comes from famous chess-playing hoax from the 1700s. Instead of offering jobs, Mechanical Turk offers “Human Intelligence Tasks” or HITs: piecework humans can do easily but computers can’t. Most HITs are short, repetitive, and pay mere pennies. Examples might include matching keywords to a photo, spotting potholes in images of streets, or transcribing business cards for LinkedIn. Workers complete the HIT, and get paid if the requester likes the results.

Amazon mechanical turkThere are some gotchas – besides potentially being bored to death. First, only workers in the United States and India can get cash: everyone else earns Amazon gift certificates. (Maybe that’s OK, but they don’t pay rent.) Second, a 2010 academic analysis of “turking” calculated an effective wage of about $5/hour, and other estimates are as low as $1.50/hour, leading many to dismiss turking as an exploitative digital sweatshop. Third, not all HITs are available to everyone: some of the best tasks are open only to a select circle or “master” turkers.

Nonetheless, turking has its fans. Some people turk for entertainment and a little extra cash, and a handful claim to do it full time.

Yoonsuh Kim, an 18 year-old student in southern California, said she earned $50-80 per day this summer on Mechanical Turk. “I worked mornings then evenings, and watched my sister’s sons in the daytime. I wanted a summer job, but I had no car and [Mechanical Turk] paid more than anything close by.” Kim said she did two three-to-five hour sessions per day, and, curiously, focused on low-paying HITs. “I looked for HITs to speed up with AutoHotKey,” she wrote. “Sometimes I could do 0.05 HITs as fast as three or four a minute. It adds up.”

…and then there’s working

Folks with niche skills might be better off with a niche marketplace. One example is Visual.ly, which got started as a hub for infographics and recently launched an online marketplace to match up designers and creative professionals with clients looking to get visual work done. And it’s not just infographics: Visual.ly just announced they’re now handling jobs to create videos, presentations, and interactives, and hopes to expand into other areas soon.

“We realized we have designers capable of doing many more things,” said Visual.ly co-founder Tal Siach. “They can do videos, they can work with interactive design, and more, so we assembled a pool of creatives that have been certified by us. A lot of different roles can participate, between designers, animators, developers, journalists, researchers, and even project managers and creative directors. Some projects need just a designer, sometimes we get up to four people on a project.”

Visual.ly’s community of freelancers now totals about 100,000 –but Visual.ly has vetted and certified about 1,000 to work on more complex projects. And Visual.ly has been landing major clients, including companies like Nike, Cisco, Twitter, Verizon, and Nissan. Visual.ly’s idea is to shake up the marketing agency business by letting major clients tap into a worldwide pool of certified creatives without the overhead of a traditional creative agency – kind of the same way Uber is trying to disrupt taxi service by connecting riders with vetted drivers. Visual.ly says it’s paid out over $2 million to freelancers since launching its Project Center last June, and handles hundreds of projects per month.

“We make sure the creatives get projects they deserve,” said Saich, “and at the same time they will never do spec work.”

Bottom line

Picking up extra money via online freelancing is certainly do-able – but you have to put in the time and effort to develop a solid profile, submit job proposals, and figure out the in’s and out’s of the service(s) you use – and that’s all unpaid time. Folks who are most successful with online freelancing aren’t overnight successes, and – perhaps most importantly – seem to treat it like a real job.

So, it’s probably a little too late to look at online freelancing as a way to bolster your 2013 holiday gift budget. But if you’ve got solid skills in a good niche like the idea of being able to work from home in sweatpants, online freelancing might help you pay off that holiday credit card debt a little faster come 2014.