AU Interactive
« Facebook Introduces Stalking 2.0
Interview with Scott Jones, creator of the ChaCha Search Engine »

Adventures in Outsourcing: Rent-A-Coder vs. oDesk

Techcrunch gave a rave review of oDesk yesterday, which is prompting me to share some of our recent experiences with outsourcing. I started subcontracting some projects through Rent-A-Coder in November of last year and most of the experiences have been positive. I also tried out oDesk earlier this year, with less than stellar results.

Rent-A-Coder

Rent-a-Coder works on a per project basis - you throw out the project requirements, different people bid, and then you choose the combination of best price and reputation. Choosing coders is rather subjective - each coder or team has a profile, ratings, the number of previous projects, their prices, etc. - so it’s up to you to decide who you’re most comfortable with. The money is escrowed until the project is complete.

I started with small projects - little bits and pieces. Found a few coders who were pretty proficient and gave us top notch work. 23 projects (of various scopes) later, I’m still pretty satisfied. The most recent project, which was the biggest we submitted, we actually had to arbitrate. The work was of poor quality, the deadline was not met, and the whole thing was a waste of everyone’s time. Since the contract was not met, though, we got our money back from escrow. This is why I would recommend keep the projects small or breaking them up into smaller pieces.

oDesk

oDesk, on the other hand, is a system that lets you “rent” a coder at an hourly rate. They have software in place that lets you keep track of progress via screenshots, progress reports, and webcams. It’s a good idea in theory and I think the oDesk team has the best intentions in mind with their system.

However, our project, which was estimated to take X amount of time, ended up being a huge money pit. After bleeding a good chunk of money (they withdraw every week), we had to end and close out the project when it was only about 75% done due to the slow progress. We were only able to gauge this after several weeks had passed, though - after we had already paid the coder for work. We ended up finishing the project through Rent-A-Coder at a much lower price. To be fair - it was only 1 project so my experiences are limited, but I will never try them again - the experiment proved to be way too costly.

Techcrunch said of oDesk:

“oDesk is also unique in that it doesn’t fix the cost of a project, instead charging an hourly rate, which allows the project manager to use the providers as required”

Yeah, it’s unique, but not optimal. Paying per project is FAR better in my opinion. There’s no point in outsourcing if you have to babysit your coders on the progress every step of the way (which would be how you would prevent bleeding too much money via oDesk). I’d much rather pay per project. When the coders encounter technical issues (which ALWAYS happens), you’re not charged for the overtime of fixing them. oDesk is probably good for coders, but not for buyers. Another thing that left me a bit wary of oDesk is that coder reviews were almost all very low - it should probably have raised a flag for me.

If anyone else has outsourcing experiences they want to share, please feel free.

September 9, 2006 · Filed under development

dave said,

September 9, 2006 @ 6:22 pm

i certainly agree that it sucks to pay a lot of money for a project, and then not feel like you’re getting the value you payed for.

that said, i wonder if the criticism above should be aimed more at the developer, rather than the service itself? as you suggest, one test case probably isn’t a fair empirical sample to judge the service by.

i guess the other observation i would make is that “paying per project” is only a better situation than “paying hourly” if it works out in every case… however, that’s rarely been my experience. many fixed-bid projects end in dispute or negotiation, which effectively negates the buyer benefit of choosing a fixed-bid project.

in perhaps 1 out of 3 (maybe more?) technical projects i’ve been involved in over the past 20 years, there are almost always changes in scope, budget overruns, time delays, and other factors that result in the original project changing substantially. fixed bid rarely ends up being a static scenario, and that leads to challenges on both manager & developer side to figure out fair compensation.

you could say the buyer’s risk is mitigated by not having to pay out until certain milestones are reached… but in many cases, saving money but not lost time isn’t a victory either. and if you’re only paying out based on milestones, then isn’t that pretty similar to an hourly model where you monitor progress?

seems to me that successful projects are less about the difference between hourly vs fixed bid, and more about simply finding good developers… and then monitoring the work to make sure it’s being done as you would expect.

Markus said,

September 9, 2006 @ 6:44 pm

Very good points, Dave.

I agree that at the end of the day it’s really almost all about finding good developers no matter which model of outsourcing you go with. Finding reliable, proficient, and reasonably-priced development work has been one of our biggest challenges.

In either scenario, the best course of action would probably be to find a developer by testing some small projects with them, then establishing a more long-term relationship.

But even after all that, there’s always the risk that your parner will become to complacent once they gain your trust and their work will start slipping. Or they might become unavailable due to other projects unless you supply them with regular work.

jf.sellsius said,

September 10, 2006 @ 3:12 pm

I’ve heard about Rent a Coder and this post points out the different ways to go. I think your idea to start small until you find a person or team you have confidence in (quality/timely work) is the best advice.
Thanks Markus

Andrew Davey said,

September 22, 2006 @ 11:55 pm

I’ve been asked to look into outsourcing out our software development firm. It’s not that our prices are not competitive with the industry in our area, they’re just too much. We don’t win a software job because a competitor can do it cheaper/better, but because we need to charge around $80/hr/developer. Custom written software is expensive.

In any case, a few friends have recommended oDesk over Rent-a-Coder (tho it’s still very early days in my research). I’m looking for a cheap way to leg into outsourcing. Currently we have two maintenance contracts for software we didn’t write (wish we had…..ugly ugly buggy code….guess that’s why they need a maintenance contract). So I’m thinking bugfixes would be a good way to start small (a typical bug fix for us doesn’t take more than three days).

In your opinion, out of oDesk and Rent-a-Coder, which would suit this model best?

Thanks in advance,

Andy

Dan said,

September 28, 2006 @ 10:03 pm

Paying based on entire projects or at least ‘fixed prices’ for milestones is the emerging norm for work in this area. Buyers prefer it, and clever/experienced providers can balance under and over runs well enough to create a viable cash flow business.

The oDesk offering runs in the opposite direction, that combined with the ‘battery hen’ image in my mind, does not paint a pretty picture.

Should be intersting to see how they spend the latest $$$$, a few more VP’s maybe :-p

Marv said,

December 30, 2006 @ 11:55 am

Check http://www.freelr.com which is a new Social Networking site for webmasters and Programmers.

While sites like elance, guru, rentacoder, odesk all charge for connecting webmasters with programmers Freelr is a free alternative which is easier to use and creates a more exciting user experience. With Freelr users can interact freely with each other in an open-market, which is impossible with the other sites mentioned…..

benjamin said,

January 29, 2008 @ 2:01 pm

I had a few bad experiences with Odesk, and finally have learned my lesson. Sure everyone says there are good and bad programmers, but the problem with Odesk is their dispute system. If a programmer runs up the hours and/or delivers garbage. Which happens more often than it doesn’t, then you have little recourse. Their system charges your bank card anyway, then you are at their mercy to get a refund. You’d be more likely to get hit by a meteorite. So I advise everyone to stay away from Odesk.

Mercedes said,

February 4, 2008 @ 3:58 pm

I thought I had tried every possible way to find the right coder to work with. I asked around, got recommendations and finally after a month of discussion and clarification on document spec the project started using the RAC site.
To cut a long story short, coder failed to deliver yet happily took bonus’s along the very long year it took to realise.

After a year, wasted money, I am left with nothing but bills from elsewhere, no refund as yet because RAC hates to refund money to anyone.

Now, RAC went silent because they have a large sum of money to refund but they don’t want to refund it even though they have agreed the coder didn’t deliver.

The RAC site and set up is a nightmare and I have truly learnt my lesson. Never again! I think you can prepare yourself for slow work, on small projects maybe, try to be clear and manage it as though you are managing the refurbishment of a house.

As they say, you get what you pay for and then RAC chooses to hold on to your money for as long as they can - BECAUSE THEY CAN. It’s a faulty system with what looks like policies and procedures, but rip through them and read, there isn’t any protection for either party really, buyer or coder and everyone leaves feeling stung and out of pocket except RAC.

I would say, stay far away from RAC and sites like it and wow there are quite a few, in fact run for the hills….

Gavin said,

March 21, 2008 @ 6:49 pm

I’ve been using rentacoder for a few years and in the main I must say that the experience has been positive. Indeed I have met my fair share of timewasters but whilst good developers are like golddust I managed to find at least 3 over the course of 25 projects. I made sure I held onto the good ones for subsequent work.

I have only recently joined oDesk and have only hired some data entry resources so far. So far so good but the jury is still out on oDesk and I do worry about the hourly rate aspect.

Luis Lazo said,

April 28, 2008 @ 5:33 am

I own a website that teaches both buyers and coders how to use Rent a Coder with videos 100% free. I also created a software application called the RACsuccess package which teaches both buyers and coders how to succeed in Rent A Coder.

Rent A Coder is for professional people. If you are a programmer, having the necessary technical skills isn’t enough for you to succeed in Rent A Coder. You need to understand how to work in Rent A Coder to take the best out of Rent A Coder and that’s why I created the RACsuccess package which is available for sale on my website!

If you are a buyer, knowing what you need for your project isn’t enough because you also need to have techniques of choosing the best coders that less likely will let you down on your project or on the deadline of your project if deadline is really important for a specific project and you need to improve your communication skills in Rent A Coder!

The RACsuccess package will teach both buyers and coders how to have a better and more successful experience when working in Rent A Coder for just $9.95!

Check out my site: http://www.racsuccess.com/index.php

Dale said,

May 19, 2008 @ 1:55 am

I normally don’t post comments but I have had allot of expirence with RAC. Keep the project simple. Explain it well and don’t jump on the cheapest bid.

Noël Lynne Figart » Blog Archive » I’ll Pass said,

May 23, 2008 @ 7:50 am

[...] Apparently there are buyers who don’t like it all that much, either. There’s no point in outsourcing if you have to [...]

S- said,

June 4, 2008 @ 12:40 pm

I think that RAC is `dead` for now. With rates so ridiculously low only providers with very little knowlege or no chances for a ‘real’ job will stay there.

Most of the projects on RAC are for $20-$100USD and the requirements are insane. Eg. $50 for designing a professional website, $400 for youtube and other big sites clones, etc.

On the other side, how “work” done on RAC looks? Like it was finished in 1990’s. Tables, no css, font tags, spaghetti coding, no object oriented programming, lack of any code structure, planning, comments, etc.

I’m not suprised. When you go for a job that pays $1/hour you certainly don’t have time nor skill to finish it properly. And you’ll do everything to do it fast so you’ll end up with $1.50 / hour. It’s still ridiculous, but more than $1 anyway. How insane should you be to devote time and skill to $1/hour projects when it’ll only lower your rate to a couple of cents / hour.

Let’s be honest that RAC promotes bad providers and cheap, crappy, insecure code. When you devote more time to do something right on RAC you get punished for your goodwill.

I could be cleaning toilets in my third world country and still earn more than on RAC. And when cleaning toilets (or doing any kind of work) my government provides me with:
* medical care
* paid holidays
* social care (insurance)
When working on RAC with average projects i would still earn less, have no benefits and have to pay 30% tax anyway (+rac fees, money transfer fees and money conversion fees).

Together with lowest bid limit set to only $3 and “3USD + i give you good rating” projects ($3 to cover the rac fee coder get $0) this is insane.

I got some good projects on RAC but good projects there are maybe about 5% of all projects posted. Most posts on RAC isn’t even worth reading. I think that professionals will move to odesk quickly as I did.

>>When the coders encounter technical issues (which ALWAYS happens), you’re not charged for the overtime of fixing them.>>
When the coders encounter technical issues, eg. because the buyer came up with new requirement and half ot the application need to be re-built you can change the requirement, drop it or proceed and pay for additional time. Thats a fair deal. On RAC the buyers change requirements all the time during the projects and simply don’t care about how much time it’ll take or how you do it, how fair is that?

You are right that technical issues will always be there and i try to include this into the project bid. But there is problem with providers on RAC. Most of them doesn’t know what they are doing. They accept several weeks/months project for $50 then you see all those (repost)(repost). I’m tired of competing on market where all high-school kids can outbid me. I loose time writing serious bids that buyers like but they go for the kids that charge $1 hour or less and hope the project will get finished. Just to get it reposted.

Markus said,

June 4, 2008 @ 5:26 pm

@S- thanks for posting - there’s definitely a balance to be had between what’s fair to a buyer and what’s fair to the coder (been on both sides of that, which helps)

S- said,

June 5, 2008 @ 6:02 am

Markus i think the only balance which can be achieved is ‘pay per hour’ sheme. Should providers charge less or do parts of the project for free just because buyer wants to use some technology in a way it wasn’t designed to be used so there is technical difficulty in implementing it?

For RAC i think there’s still some decent projects out there. Maybe 1% maybe 5%. But they are only ‘normal’ paid project. Maybe $10/$15 per hour, which again is very little. And you have to devote much time to find a decent posts / buyers, that alone can make it pointless.

@Luis Lazo - i don’t think there is any kind of `success` on RAC possible. Been there for over two years. Found a nice buyer, but he was asking me do do all kinds of stuff, eg. restore backups after server hacks, fix code of other RAC providers (the quality is horrible), look into some simple coding errors, etc, etc. so I was doing many very small projects that took half of my developement time.

I can’t quote guy $5 for copying directory, $10 for restoring backup, $2 for changing photo on page, etc, etc. So i have to move to pay per hour on odesk where i’ll get pay for that.

Maybe there is success on RAC for buyers achievable but…

Just look at the quality of code developed on RAC. I’m 100% honest here. I didn’t see any decent RAC code since i have been working there with my buyers which is OVER A YEARS! Most coders doesn’t even know what procedure is.

Example 1: we need to move one PHP site developed on rac. It took 4 hours because the coder doesn’t even knew what include is and he copy/pasted DB/server config to each 15-20 PHP files! Which again all contained copies of header / footer and menu.

Example 2: 90% finished project (provider told that to the buyer). Financial app (frontend/backend). What was completed? Front page and a MENU, no backend at all!

Example 3: Project developed on RAC broken when we changed php version. The provider just turned PHP error reporting altogether! It isn’t guaranteed that every PHP version will treat errors same way…

ODESKISTERRIBLE said,

August 23, 2008 @ 9:37 am

I used a programmer who proclaimed to know what they were doing. His name is David Bain and he is on odesk. Do not use him. He rushes you to pay and then after you pay..he states by the way I don’t know what I’m doing. It wasn’t a case of not wanting to pay for labor. It was a case of not wanting to pay for inefficiencies. Why should I pay a guy for 3 more hours because he needs to read up on something that he CLAIMED HE ALREADY KNEW. Do not use odesk because they have a place for flatrates it doesn’t allow for a refund or dispute.

Leave a Comment