IT@TT - Online

Based in Sunnyvale, California, eLance.com is the world's first and largest global services marketplace. In an exclusive tete-a-tete with Sonny Ajmani, Vice-president, International and Business Operations, here's more on its workings, revenues and India-specific plans

IT@TT: You seem to have an interesting idea. What brought about eLance.com?

SA: Most of the early team comes from a financial services background. As we know, the stock market is one of the most efficient exchange in existence. Thus, our idea was to build an exchange for services where people from around the world could buy/sell from each other.

Interestingly, about the same time a professor from MIT, Tom Malone, published his research on "The Dawn of the e-Lance Economy" which explored the evolution of the way we work and how the world is now migrating to a project-based economy where people would dynamically buy/sell services. Since we were the realisation of this vision we named our business 'eLance' and got Prof Malone as an advisor to our business.

IT@TT: Mr.Ajmani, can you give our readers a little background on eLance.com's products and services?

SA: eLance.com provides an online marketplace for buying and selling any knowledge-based service that can be delivered remotely. Good examples of such services are computer programming, web & creative design, translation, transcription, research etc. Unlike ebay, we do not trade products on our site.

IT@TT: What role does eLance play in ensuring authenticity and quality of transactions?

SA: eLance actively works to improve the quality of the marketplace. An internal team of project managers interact with buyers & sellers to maintain the quality and integrity of the marketplace. They help buyers in describing their needs, select vendors etc. The team actively screens projects and bids that are inappropriate or illegitimate.

The eLance marketplace is competitive and self-regulating. In addition, eLance authenticates and guarantees vendors who have proven themselves in the marketplace. These vendors' services are then offered to buyers with an eLance 'satisfaction and quality guarantee'.

Finally, we also have partnerships with third-party authentication, certification and online testing firms to allow vendors to get themselves authenticated/certified/tested.

IT@TT: Everyone's interested in how auction site's handle disputes? Given that transactions occur across borders, how does you handle disputes?

SA: Disputes usually arise from miscommunication. Thus our project managers actively try to facilitate clear communication between buyers and sellers before they agree to do business together. We also have sample contracts available online for legal agreements between buyers and sellers. Finally, we have partnered with SquareTrade, a global mediation firm, which helps mediate any disputes. However, very few users have used this service to date.

IT@TT: Have you had instances of projects being handled outside of eLance, despite the relationship being built via your site?

SA: We screen contact information from vendor profiles available on the website. Thus it is difficult for visitors to directly contact vendors. Besides, the main value of the eLance service is in getting competitive proposals/bids from vendors which you can only get by posting your project on our website.

IT@TT: Either way, how do you get freeLancers and outsourcers to return?

SA: Buyers and sellers have several reasons to come back to use the eLance service, even if they already know each other. The strongest of these reasons is that they can continue to build their online reputation by providing feedback to each other if the work is done through eLance. Good feedback helps buyers & sellers significantly in their future business on eLance. Sellers with a good feedback rating can charge other clients more, and buyers with good feedback get competitive bids from vendors who are keen to service them.

In addition, using eLance also provides users access to free services such as the online workspace, global online billing & payment, dispute resolution etc.

IT@TT: What work dominates eLance and where does it come from?

SA: The most popular services on eLance are software development and web design. As for the demographics, 60% comes from the US, 20% Europe and 20% Asia. Indian software firms dominate the Asian community on eLance. I believe this is because they are very talented and price their services very competitively. In addition, the Indian software industry has now achieved international recognition for being the leaders in design and development.

IT@TT: Can you share with our readers your revenue model?

SA: The eLance service is free for buyers. We earn our revenue by charging vendors a nominal charge of 10% when they win some business. This 10% is significantly lower than the 25-40% marketing and sales costs these firms face for acquiring business. One way to think about it is that we provide vendors free marketing (via online profiles) and sales leads (via projects in the marketplace), and only charge them when they win business. I would love to have a service like this in the offline world :-)

IT@TT: Where does eLance stand today? How are you placed vs. the competition?

SA: We have achieved significant momentum in our first year of business. To date, over 40,000 projects worth $50M have been posted on our website. We currently serve nearly 250,000 businesses and professionals from over 160 countries. This business continues to grow at a double-digit rate every month.

eLance's space is hot and this has attracted several other competitors. However, we have the most vibrant online business community, the deepest and broadest vendor base, and the most active marketplace.

IT@TT: Did the recent US stock market crash affect you?

SA: The recent crash was been good for eLance :-) Online advertising rates have dropped, some of the copycats have gone out of business. We have over $40M in cash to help us continue with our mission to help businesses around the world fulfil all their services needs.

IT@TT: What do you have for the future? And region-specific plans for India?

SA: India is a very important market for us. The talent in India is of immense value to the rest of the world. We have partnered with Indya.com to reach the Indian community. We continue to talk to other potential business partners as well.

IT@TT: Mr.Ajmani can you list your 5 favourite sites and why you like them?

SA: ebay is the most amazing window shopping experience. internet.com: I wouldn't be connected to the outside world without it. google.com: locate anyone and everything. f**kedcompany.com: for all the spicy industry gossip. And Yahoo: when I don't know where else to go.

Interviewed By Radhika Peddi
[email protected]

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