Outsourcing: Ian Ippolito, Founder and CEO of vWorker (Part 3)

Sramana Mitra: That’s one of your differentiators, that you use crowdsourcing instead of the interview process, and then you let people hire based on the best crowdsourced project?

Ian Ippolito: Yes.

SM: What are the terms under which you work? It’s a commission on projects, yes?

II: Yes. With the crowdsourcing, we take 6.5% to 10% of the prize that’s offered, and then once the client outsources, it’s anywhere from 6.5% to 15%, depending on what features the client wants to use. We have the desktop software that monitors what the person is doing. Maybe she’ll want that. Maybe she’ll want the backing of arbitration, whatever the client wants. What we make off it depends on the services we provide.

SM: Where are your service providers, and where are your employers? Give me a breakdown of how the exchange has developed.

II: For the employers, the top three countries are the United States, the United Kingdom and Australia.

SM: The English-speaking ones.

II: Yes, the English-speaking ones. The top three on the workers’ side always fluctuates. It’s not constant, but it would be the United States, India, Romania, and Pakistan. Those four are always going back and forth from month to month.

SM: So, you have a lot of people who are freelancing from the U.S. as well, it sounds like.

II: Yes.

SM: Interesting. What other metrics can you share, or demographics or anything else?

II: Well, we have 350,000 remote workers around the world, we have more than 150,000 employers, people who are employing those remote workers.

SM: Are most of the employers small businesses?

II: Yes, most are. There are some that are just little entrepreneurs, like a one-person business. Some are under 100; the majority of them are in that category of 10 to 100 people in the company.

SM: Any more color on who these employers are from an industry segment point of view? Do you see a lot of technology entrepreneurs? Do you see a lot of e-commerce companies? Where do you see the most activity?

II: We see pretty much all of them, but there is definitely a skew toward technology just because the people in the technology ventures are comfortable with using technology to build their companies. We have a lot of tech ventures and tech entrepreneurs. I’m already excited about technology, so I’m interested in using the Internet to grow my business rather than some of the more traditional type businesses, which [can be] slow to adopt something like that because it’s a new model.

SM: What has been your experience? You’ve been in this business for about 10 years now, or a bit more?

II: It’s a little bit more, yes.

SM: And you’re at about $11 million in revenue?

II: Yes, that’s right.

SM: What are you seeing? Over the course of the past decade of doing this business, are you seeing an acceleration in the trend and adoption of the trend? In the early 2000s, this trend was not that well known. But now I see a lot of companies in this business and also lots of employers, lots of service providers, working in this model. In my company, we hire people on services exchanges all the time.

II: That’s great. It’s becoming more normal. It’s almost becoming typical for a lot of companies, especially technolog-related ones or entrepreneur-related ones like yours.

I’ve noticed a couple of things that are driving the adoption. One is broadband. Back when this started, the Internet was difficult to get to for a lot of people. It was so expensive. In the past 10 or 11 years, the prices have come down a lot. That’s made a big difference. And then the other thing that’s made a big difference is the commoditization of software. In the past, if an entrepreneur needed a website, someone would create something custom for him. And it would take a pretty long time to do custom software. Well, what’s happened is this whole open source thing has happened. Now people can take parts, kind of like what Planet Source Code was, taking components and parts, but in this case, it’s easy to use open source to create a website that looks custom and that is custom. But on the back end, 80% of it has already been created in advance, and it’s just a matter of tweaking things.

These two things are allowing a lot more companies to be created, more than would ever have been created in the past. Ten or eleven years ago, it would have been so much more difficult, so much more expensive. Open source has definitely helped us, and it’s great for entrepreneurs.

This segment is part 3 in the series : Outsourcing: Ian Ippolito, Founder and CEO of vWorker
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