Everything You Wanted To Know About The Giant Elance, oDesk Merger

Earlier last year, Seamless and Grubhub announced that their companies would be joining forces in a blockbuster merger. Already two of the biggest names in online food-ordering, the prospect of a combined “Grubless” sent ripples through the market. Once upon a time, these kind of massive private mergers only happened once in a blue moon, but those were different times.

Before a week, the online employment industry became the latest victim of this kind of blockbuster consolidation, as oDesk and Elance announced a deal that, pending regulatory approval, will see their two companies unite into the new online freelancer marketplace to be reckoned with. Like Seamless and Grubhub, up until pen hit paper, oDesk and Elance were considered rivals in the world of online staffing, but unlike the former, the response to the oDesk-Elance merger has been, well, less than positive. 

While visions of strategic synergies and competitors running for cover danced in the heads of company executives, the scores of freelancers who use oDesk and Elance to find work or hire support don’t seem ready to break out the pom-poms. Angry customers let their opinions be heard en masse on Elance’s blog this morning, while oDesk’s Facebook page drew a similar reaction. And so did the announcement in its community portal.

In short, the consensus among oDesk and Elance users is that both sites are separated by some fundamental differences and that any integrations to result from merging the two platforms will significantly reduce their usability and overall value. Many said, for example, that they use the platforms exclusively and had a long list of reasons why they chose to use one and not the other.

One commenter, Moonsis Mansor, commented on both oDesk and Elance’s Facebook pages, saying that he had used both platforms and thought the merger needed to accomplish three key items to be successful: “Elance’s minimum hourly rate restriction ($3/hr) and Escrow Guarantee on fixed price projects do not change and oDesk platform also incorporates these policies, [second, that] oDesk’s team application is replaced with Elance’s tracker because oDesk’s software is way better than Elance [and, third that] Elance’s way of treating Agencies, a.k.a. companies, is far better than oDesk…”

And that being said, he continued on Elance’s page, if oDesk’s product were to be favored more after the merger, he would likely go elsewhere. The main gripe that surfaced again and again about oDesk centered around its reputation as favoring low-cost labor at the expense of quality. 

In other words, an anything-goes approach in which oDesk eschews a minimum rate — with some freelancers offering to work for as low as $1/hour or $0.50/hour — and a model that favors the client at the expense of the freelancer. Ultimately, the most frequently-expressed concern seemed to be that, were the marketplaces ever to merge, oDesk freelancers would undercut pricing and dilute the quality.

Another commenter on Elance’s Facebook page said, in no uncertain terms: “This is awful. The monopoly created by the merger will significantly cost users.”

Of course, representatives from both Elance and oDesk were quick to assure users in social feeds and in comment sections of blog posts that the two companies planned to “continue to operate as separate, independent services … [and that] … as usual, and there are no planned changes to the fees.” The companies both pointed users to an FAQ section they added to their sites to address and flesh out specific questions about the merger. 

One important point to note is that, in the wording of the FAQ, while it says that both companies will continue to operate as separate entities, they would do so “for now.” Those can be two very powerful, qualifying words, especially for the seemingly unhappy masses.

Conversation With Elance And oDesk CEOs

When I caught up with Elance CEO Fabio Rosati and oDesk CEO Gary Swart after the announcement and asked them about the backlash, both opted to explain the reaction as a function of the fierce loyalty that each user base has to its platform of choice. In fact, Rosati expressed pride in this loyalty and said that a certain amount of backlash should be expected as a result.

 

“We have two very distinct platforms, each of which has value to its specific user base … so, in our case, we’re not focused on the traditional synergies two mature businesses might have, we’re trying to approach [the deal] in a unique way,” the Elance CEO told TechCrunch. 

In other words, rather than reflexively force the two businesses to become one entity across the board, which would be like forcing a square peg into a circular hole in many respects, the CEOs said they want to operate two micro businesses under one collective umbrella. Furthermore, instead of focusing on the “traditional” where merging companies might promote synergy, Rosati reiterated the language in the FAQ, saying Elance and oDesk would look to create synergies from their investments.” 

With their combined financial resources and audience, it becomes a matter of finding areas where that bigger balance sheet can support investments that benefit both platforms, both models and both companies. On the one hand, this kind of thinking makes sense. There are ways to avoid forcing the issue, especially when the gulf between the two appears to be wide — at least in some respects.

The Realities

And, yes, one could say that the display of frustration among users is a heart-warming show of loyalty and that change is frightening and a small group of loyal and vocal dissenters will always react emotionally to the prospect of that change. Having gone through several TechCrunch redesigns, I can say that I’m familiar with this kind of adverse reaction to change, even if some of it may have been justified.

However, on the other hand, when this many users not only perceive but delineate some significant differences in the use cases, models and potential value of the two companies, there’s usually some truth to it. Which then begs the question, are the companies better off? Well, after the torch-and-pitchfork crown poked so many holes in oDesk, it seems they, at least, may be better off. And certainly, if their ambition is to build the next Google or Facebook-sized platform for freelancing and hiring, then they’re a lot closer today than two weeks ago — at least on paper. 

But, as George Anders points out, unless oDesk/Elance can figure out a way to rely less on algorithmic matchmaking and more on building human trust and human relationships, it won’t matter whether they go forward as two companies or one.

Looking Forward

The prevailing model at work in staffing marketplaces needs to be optimized by, say, making it easier for employers (or clients) to connect with their regular and most trusted freelancers — or by giving freelancers the potential to, over time, be able to turn hourly gigs into full-time gigs (and incentivize clients to hire their favorite freelancers). 

To a certain extent, it’s okay if the Elance and oDesk merger isn’t seamless right away, or that the synergies aren’t perfect, and maybe now together they can attract bigger customers and clients. In the end, whatever shape it takes, the company will have to prove that the new version has the ability to bring more business into the marketplace — and to its freelancers. 

After all, in 2013, the average freelancer on Elance and oDesk made less than $100. Yes, there are ways to explain away that stat, and that will work for awhile, but those “8 million registered users” between the two companies aren’t going to stick around for less.

Web Developer’s Guide to Getting a Startup Up and Running

Despite the overall economic downturn, there seems to be yet another boom in web startups. In the ’90s, we saw the explosion of the Internet’s first big names, like eBay, Yahoo, Amazon, and others. In the 2000′s, social networking and the beginnings of web apps took off, planting MySpace, Facebook, and Flickr firmly on the map–the so-called Web 2.0.

But times have changed yet again, and we’re now in a new kind of web startup boom; one that is on a smaller scale, yet more prevalent due to more accessible development tools and cheaper infrastructures (powered by affordable cloud-based services such as Amazon S3). This is the app boom. The focus is on utility, cost-effectiveness, and highly targeted solutions to common problems. This can range from niche web apps to mobile device apps for iOS (iPhone, iPad, and iPod touch) and Android.

Today’s web startups are leveraging the technological and social advancements we’ve made over the past two decades, packaging them into useful tools meant to fit right into a person’s daily life.

Why Web Developers Become Startup Founders

The bulk of today’s apps and services are web-based and internet-enabled in one form or another. So it’s no surprise that web developers so often become startup entrepreneurs. Having the capability in-house to quickly design and produce a high-quality app certainly makes things easier for today’s startup entrepreneurs.

But I think this connection goes even deeper. Web developers (such as myself), by nature, like to build things. In doing so, we are naturally problem-solvers. We take the requirements given to us (often by a client or boss), and devise the best way to achieve these objectives using the tools that are available to us.

So what happens when we’re not working on client projects? If you’re anything like me, you’re thinking of ways to use your skills and experience to build tools that are useful and have potential to launch a successful new business. Instapaper, for example, is a widely successful web app startup founded and developed by a single web developer.

Equipped with our expertise, some spare time (or overtime), and perhaps some funding from our own bank account, launching a new startup might be an attractive option for the web developer looking to branch out.

In this article, I aim to guide you through a few things to consider as you get rolling with your first startup.

How to Choose the Right Idea

If you’re like me, you’ve probably brainstormed dozens of ideas for products by now. You might even be stockpiling domain names just in case you ever decide to move on one of these ideas.

So how do you know which ideas are worth pursuing?

Scratch Your Own Itch

Conventional wisdom would tell you to choose the idea with the most profit potential and a proven market. Sure, these are important factors; after all, your product needs to make money, and you need to find customers willing to pay you for it!

But there’s one key factor I look for when choosing an idea to pursue: Is it something that I would personally buy and use?

To restate the question: Does it solve a problem that I personally confront on a daily basis? By "scratching your own itch," you ensure this is an idea you’re truly passionate about. If user experience is the most important factor when designing a product (and I believe that it is), you can bet that you’ll craft the best experience possible if you are user #1.

Leverage Your Existing Skill Set

You also want to choose something that aligns with your expertise. I’ve had many ideas for iPhone apps that I think are winners. Unfortunately, I have zero experience with iPhone app development. Therefore, I’ll leave these ideas alone and pursue something else which falls more in line with what I already specialize in.

Case Example: WP Bids

To illustrate what I mean, here’s the story behind how I came up the idea for WP Bids, my own startup.

Identifying a Problem (Scratching My Own Itch)

As a freelance web designer, writing project proposals is a very important part of my business. The proposal, or "bid", is my final pitch at winning a new client. It’s basically a document, which outlines the scope of work, time estimate, and price quote for a particular project. I had been relying on MS Word and Google Docs to write up these proposals. The process was clunky, very time consuming, and I wasn’t happy with the design and presentation options that these tools provided. I needed some kind of template system that I can tweak to my liking and speed up the process. Much like I do when tweaking a website or a WordPress theme. Light bulb!

Executing the Solution Using an Existing Skill Set

Since I had already been specializing in WordPress theme development, and since I felt very comfortable using the WordPress interface, I decided to build my proposal-creation tool as an app built on top of WordPress. I created it in the form of a specialized WordPress theme. WP Bids has slowly gained interest from fellow freelancers (particularly those who use WordPress a lot), but more importantly, it has proven to be a valuable tool for my own client business.

Finding the Right Partner

Sometimes going it alone can work, but launching a startup with a partner or two can be much more rewarding.

Needless to say, when it comes to productivity, two heads are better than one. Even more important is the value of collaboration. Having a partner who shares your vision and who will be there to bounce ideas around with, keep you in check when you’re taking things in the wrong direction, and balance out your areas of weakness with their strengths are benefits of having a partner.

But it isn’t enough to simply find any partner. You must find the right partner. Ideally, you and your partner should already have some kind of relationship to build on. If you already know how they work and what they’re like on a personal level, you can skip a lot of the "discovery" phase.

Of course, you may not know anyone in your circle that is a good fit as a partner. That’s OK. Here are some suggestions for finding a potential business partner.

Referrals and Social Networking

Ask around in your network; ask around on Twitter, Facebook, LinkedIn, etc. Contact known experts in the niche of your start-up idea.

Do you follow the blog of a few guys you think might be a good fit? Shoot them an email; you never know who may be looking for a new venture.

Job Boards, Forums and Directories

Check out FreelanceSwitch and Drawar, and click through to a few portfolios or blogs of users. Check out directories and listings such as ProgrammerMeetDesigner, PartnerUp, Startuply, and 37signals Job Board. Do some background research on each candidate (check out their personal site and Twitter feed, for example). Send them an email, and take it from there.

Web Design Conferences and Meetups

Check out Lanyrd to find upcoming conferences near you.

Key Factors for Choosing the Right Partner

Here are a few factors I look for in a business partner, in order of importance:

1. Passion: They have to share your level of passion for the idea, as well as your level of self-motivation.
2. Willingness to take risks: Starting a business is risky–there’s no getting around it. It requires sacrifice in the form of working for nothing, working overtime, and sometimes investing money. If your partner isn’t on board, it won’t work.
3. Complementary expertise: Typically, you will share many skills. But there should be areas where your partner’s strengths make up for your weaknesses. You want to avoid partnering with someone who is a carbon copy of yourself.
4. Communication skills: You will spend countless hours talking and emailing with one another, so effective written and spoken skills are a must. They should also be accessible. Nobody appreciates a colleague who doesn’t answer emails or doesn’t sign into Skype for days or weeks at a time.

Managing and Planning Your Time Commitments

More often than not, your biggest investment in your new startup will be your time. A lot of your time. It’s essential that your time management skills are in top notch form. Otherwise, there is no way your startup project will materialize, let alone achieve success.

The biggest hurdle is balancing your time between your day job (i.e. the gig that pays your bills), and your work on the startup, which of course will be unpaid (at least in the beginning).

There are obvious financial concerns to be aware of. Since your work on the startup will be taking you away from your paid work, you’ll need to prepare yourself for potential dips in income. Perhaps this means padding your bank account with extra savings before you start, or building your team of trusted sub-contractors and virtual assistants to help you manage the workload.

It’s also important that you map out an estimate of the time you plan to spend preparing and working on your startup. Have a ballpark number of hours in your head? Double it. The result will be the more accurate of the two. Building a web startup entails more things than a typical web development project does.

Things That Will Take Time

Here’s a list of things to take into account when planning your time:

• Conceptualizing the idea–this can take weeks and will likely be reworked several times over the course of the process.
• Pitching the idea to friends and getting their feedback.
• Crafting the business model.
• Creating your marketing plan.
• Wireframes, prototypes, and designs, redesigns, and more redesigns.
• Site development, testing, and debugging.
• Blogging and marketing, which are time consuming and will be an ongoing effort.
• Legal and partnership-related tasks.

The list goes on, and many items will likely be repeated several times as you inch towards launch and beyond.

Designing Your Product: Battling Feature Creep

Think your clients are the only ones who are guilty of feature creep? Think again. When you’re designing your ideal product that you yourself will want to use, it’s easy to keep adding to the "awesomeness" of the product every time another idea strikes.

The key is to remain focused like a laser on the core functionality and your original project scope. Take note of those extra ideas, but don’t implement them in your first version. If you keep adding to the scope, you’ll never proceed to launch!

This is where having a partner really comes in handy. Not only are they there to bounce ideas off of, but they can also be there to keep you in check when your ideas are taking you away from the core feature set.

Every time a new idea for a feature pops up, ask yourselves, Is it essential for the product to function or can it at least work without it? Based on your answer to this question, you can group your feature ideas into two categories.

"Essentials" Idea Category

This is your to-do list for phase 1 of development. These features must be designed and implemented from the start. This is what you will spend the bulk of your pre-launch time on.

"Nice to Have" Idea Category

These are enhancements; Things that might make the product better, but are not required for it to function in its most basic form. You might choose to implement these post-launch when you’re ready to iterate on your product; perhaps these ideas could migrate to the "essentials" idea category after production, based on user feedback.

Your goal in the short term should be to get the essentials up and running as quickly as possible. The advice we’ve heard time and time again from other startups rings true: Launch early, get user feedback, and iterate.

If you can’t bang through the first list, the "essentials," your product will never get off the ground and ultimately will result in waste of your valuable time.

Craft Your Marketing Plan

As early as you begin mapping out your product, you should be constructing your marketing strategy. As a bootstrapped startup, much of your marketing will require quite a bit of time commitment from you and your partners.

Blogging

Blogging is likely a major part of any web startup’s promotional activities. I’m an avid fan of Mixergy, and there is one common storyline I hear from many successful web startup founders interviewed on the startup interview site: They launched their product off of the success of their blog.

Building an audience ahead of time will give you a huge head start when it comes time to find your first users for your new product.

But many of us don’t have massive traffic to our own blogs. That’s OK. In this case, I highly recommend building relationships with other more popular blogs to get your name out there. I have found success over the past few years as a guest writer on blogs like this one, Mashable, FreelanceSwitch, and others.

Not only has guest blogging resulted in increased exposure for my work as a web designer, it also gives me an "in" when launching or promoting a product. For example, my WP Bids WordPress theme has been reviewed on Netsetter and included as a prize for a FreelanceSwitch promotion thanks to my relationship with editors at Envato.

Traditional Internet Marketing

There are other more traditional marketing strategies such as CPC and banner advertising. These can have varying levels of effectiveness depending on your product, your overall branding strategy, and the amount of money you plan to invest. Paid advertising is worth considering. But before you go and create your Advertiser account on BuySellAds.com, you should make sure you and your partners are on the same page in terms of how much money you each plan to invest in your marketing campaign.

Social Networking

It goes without saying that you should have an active (and never automated) Twitter account to keep early adopters informed about your progress. Create a Facebook fan page as well, and keep it up to date.

Launch, Get Feedback, Iterate, Build Community (All at Once)

The goal is to launch your startup sooner rather than later, even if it’s not "perfect" yet. Here’s a word of advice: It will never be perfect. Perfection is a constantly moving target.

As you gain new users, you will receive new and constructive feedback. As your product progresses, new challenges arise. The key is to embrace change and iterate to fit the demands of your customers.

Launch, feedback, iterations, and building your community should be a continuous process. You can plan for this by designing your startup with flexibility in mind.

This idea of flexibility and malleability can be applied in every area of your startup:

• Concept: Is your idea locked in one place? Think of various directions your business might take you and see if there is anything you can do to make a potential transition easier.
• Startup’s name: Is it too focused, or can it represent anything? Choosing the name BrandName.com instead of ShoeSite.com (their original name) allowed the startup to venture into a wider array of products outside of just shoes.
• Business model: Are there alternate revenue sources you may want to explore? How might introducing these affect your customers and your business?
• Design: Like the name, is the design tied to a specific concept or is it fluid enough to evolve along with changes in your business?
• Code: Your code will change and change again. Is it clean, flexible, templated, modular, and editable? Are you logging the right data (some of which may not be useful now, but might be later)?
• Marketing: Always track and measure your results from marketing campaigns and social media efforts. Does your budget allow for changing strategies on the fly?

Over to You

For those who have made the transition from serving clients to selling products, what advice might you add for web developers becoming first-time entrepreneurs? Do you have an idea for a startup? If so, name one action you can take today that will move your potential startup forward. 

Have questions about this topic? I’ll be monitoring and responding to comments. Ask away!

Web Application Development Guide

Simply put, Web Applications are dynamic web sites combined with server side programming which provide functionality such as interacting with users, connecting to back-end databases, and generating results to browsers.

Examples of Web Applications are Online Banking, Social Networking, Online Reservations, eCommerce / Shopping Cart Applications, Interactive Games, Online Training, Online Polls, Blogs, Online Forums, Content Management Systems, etc..

Technologies

There are two main categories of coding, scripting and programming for creating Web Applications:

I. Client Side Scripting / Coding - Client Side Scripting is the type of code that is executed or interpreted by browsers.

Client Side Scripting is generally viewable by any visitor to a site (from the view menu click on "View Source" to view the source code).

Below are some common Client Side Scripting technologies:

• HTML (Hyper Text Markup Language)
• CSS (Cascading Style Sheets)
• JavaScript
• Ajax (Asynchronous JavaScript and XML)
• jQuery (JavaScript Framework Library - commonly used in Ajax development)
• MooTools (JavaScript Framework Library - commonly used in Ajax development)
• Dojo Toolkit (JavaScript Framework Library - commonly used in Ajax development)

II. Server Side Scripting / Coding - Server Side Scripting is the type of code that is executed or interpreted by the web server. 

Server Side Scripting is not viewable or accessible by any visitor or general public.

Below are the common Server Side Scripting technologies:

• PHP (very common Server Side Scripting language - Linux / Unix based Open Source - free redistribution, usually combines with MySQL database)
• Zend Framework (PHP's Object Oriented Web Application Framework)
• ASP (Microsoft Web Server (IIS) Scripting language)
• ASP.NET (Microsoft's Web Application Framework - successor of ASP)
• ColdFusion (Adobe's Web Application Framework)
• Ruby on Rails (Ruby programming's Web Application Framework - free redistribution)
• Perl (general purpose high-level programming language and Server Side Scripting Language - free redistribution - lost its popularity to PHP)
• Python (general purpose high-level programming language and Server Side Scripting language - free redistribution)

Program Libraries

Program libraries are a collection of commonly used functions, classes or subroutines which provide ease of development and maintenance by allowing developers to easily add or edit functionality to a frame-worked or modular type application.

Web Application Frameworks

Web Application Frameworks are sets of program libraries, components and tools organized in an architecture system allowing developers to build and maintain complex web application projects using a fast and efficient approach.

Web Application Frameworks are designed to streamline programming and promote code reuse by setting forth folder organization and structure, documentation, guidelines and libraries (reusable codes for common functions and classes).

Web Application Frameworks - Benefits and Advantages

• Program actions and logic are separated from the HTML, CSS and design files. This helps designers (without any programming experience) to be able to edit the interface and make design changes without help from a programmer.
• Builds are based on the module, libraries and tools, allowing programmers to easily share libraries and implement complex functionality and features in a fast and efficient manner.
• The structure helps produce best practice coding with consistent logic and coding standards, and provides other developers the ability to become familiar with the code in a short time.

Coding Guidelines, Standards & Convention

Coding guidelines are sets of rules and standards used in programming a web application project.

 

These rules and standards apply to coding logic, folder structure and names, file names, file organization, formatting and indentation, statements, classes and functions, and naming conventions. These rules also enforce writing clear comments and provide documentation.

Important benefits of using Coding Guidelines

• Creates the best environment for multiple programmers to work on the same project
• Provides ease of maintainability and version management
• Delivers better readability and understanding of the source code
• Insures that other developers can understand and become familiar with the code in a short time

Web Applications Lifecycle Model

Web Application Lifecycle is the process of developing a web application and involvement of the multiple teams that are engaged in the development process. Each organization may set forth its own unique style of operating.

Some companies follow a certain standard model such as SDLC (System Development Life Cycle) or Agile Software Development Model.

• SDLC is the traditional process of developing software or web applications by including research to identify and define the application requirements, information analysis, architectural design and specifications blueprint, team involvement, programming, testing and bug fixing, system testing, implementation and maintenance.
• Agile Software / Web Application Development is the iterative development process and development process practices that focus on collaboration of people involved and provide a better procedure to allow revisions and evolution of web application requirements. Agile methodology includes research, analysis, project management, design, programming, implementation, frequent testing, adaptation and maintenance.

Web Application Development Process

Web Application Development Process organizes a practical procedure and approach in application development.

For detail information: Web Application Development Process

The following list of procedures and suggested documents provide a good outline for a Web Application Lifecycle and Process:

• Roadmap Document: Defining Web Application, Purpose, Goals and Direction
• Researching and Defining Audience Scope and Security Documents
• Creating Functional Specifications or Feature Summary Document
• Team Collaboration and Project Management Document
• Technology Selection, Technical Specifications, Illustrative Diagram of Web Application Architecture and Structure, Development Methodology, Versions Control, Backups, Upgrades, Expansion and Growth Planning Document, Server Hardware / Software Selection
• Third Party Vendors Analysis and Selection (Merchant Account and Payment Gateway, SSL Certificate, Managed Server / Colocated Server Provider, Fulfillment Centers, Website Visitor Analytic Software, Third Party Checkout Systems, etc.)
• Application Visual Guide, Design Layout, Interface Design, Wire Framing
• Database Structure Design and Web Application Development
• Testing: Quality Assurance, Multiple Browser Compatibility, Security, Performance - Load and Stress Testing, Usability
• Maintenance

Web Application Testing

Testing is an important part of the Web Application Development process. On occasion, testing would consume more manpower and time than development itself.

Below are some of the most common testing needed for any web application development process:

• Quality Assurance and Bug Testing
• Multiple Browser Compatibility
• Application Security
• Performance - Load and Stress Testing
• Usability

Trends and Popularity

The demands for companies to build Web Applications are growing substantially.

If planned and built correctly, web applications can:

• Reach and service millions of consumers and businesses
• Generate substantial, multi-layer / multi-category income from consumers, businesses and advertisers
• Easily build business goodwill and assets based on audience reach, popularity, technology and potential growth

Below are good reasons for companies to build web applications:

• Companies want to streamline their internal departments and functions, operations, sales and project management, etc.
• Companies want to take advantage of a web based application's flexibility and versatility, by moving away from the traditional desktop application platform to the web application platform
• Companies want to gain more clients or better service their current clients by offering convenient services and solutions online
• Companies want to build new web applications to offer innovative services or solutions to online users and businesses

Business Impact

Today's web applications have substantial business impact on the way companies and consumers do business such as:

• There are opportunities to gain the upper hand and bypass the traditional brick and mortar companies when this type of opportunity was rarely possible or existed before the explosion of the web
• The new web created a global business environment which challenges the way in which traditional companies do business
• Companies need to reinvent and evolve in order to compete in today's trends, online business and global marketplace
• Businesses and consumers have more options and resources to research and easily compare and shop around for the best deals
• Information and resources are immense and available to everyone who seeks it
• Businesses or companies who used to profit from consulting or advice, that can now be easily acquired online are struggling, and will need to take a new business direction if they want to stay solvent.