“Several important factors involved with their failure include: Too much competition, little service provider differentiation besides price, high service provider fees, no locality of services, ambiguous project descriptions, cheap Indians, as well as cheap Indians, and last but not least, cheap Indians.

Lets start from the buyer’s perspective. I think I made a pretty decent example. I’m a company CEO (or to dumb me down, startup founder) and I needed a business plan made and my website programmed from the ground up. I go to Elance.com, I submit a project that says I need these things done and I want to work directly with the service provider to make it happen. 50 Indians bid on my project, each going cheaper than the one before him, and I realize that they all suck. They don’t know what I’m looking for, so how can they adequately do my project? I want them in front of me so that we can plan the process out easier, but they’re in India and have a language barrier. Great. Now that I’m frustrated, I leave Elance and wasted over $200 in bidding fees for the service providers who bid on my project.”

Good point! Since post a project on elance is free. There are too many fake or dummy projects out there. Some buyers post projects simply to get an idea of the cost or to try to find free work. But bid on project is not free. Service providers will soon find it is waste of time to use Elance.

“From the service provider’s perspective, let’s say that I’m an Indian. I know that I’m good at programming, I know that I’m good at business, and I know that I speak perfect English. Mr. American goes ahead to post his business plan and programming project request for a really stupid idea. I look at it, nod, and make my bid. 49 other Indians bid with me. Mr. American is thinking, where the hell do I even start? How do I know that Mr. Indian can speak perfect english when I have to interview all 50 of these guys to know which one is right. Too many choices isn’t a good thing. Mr. American doesn’t buy from me, I wasted a lot of time and some money on a lost lead.

Of course, all of this is a problem for both the buyer and seller. The lack of quality service providers steers away the quality leads and buyers. Few buyers means fewer qualified service providers. At this point, the marketplace has failed. Elance has been treading water for the past 7 years and haven’t changed their model at all. They went into enterprise software for a few years, but that didn’t go very far.”

Very good point. The lack of quality service providers steers away the quality leads and buyers. Since most of the bidders on those sites are  typically freelancers, self employed and work at home. The reliability and quality of service are highly unpredictable. Elance is just middleman or marketplace so they have no control about the bidders at all. More and more dispute happened on elance. Serious business can’t depend on freelancers for outsourcing.

Some real life experience about elance users:

http://highfade.com/2008/09/27/elancecomterribleexperience/

http://www.complaintsboard.com/complaints/elancecom-c55889.html

http://www.lawguru.com/cgi/bbs/message.php?i=265026830

BPOVIA takes the concept of “eBay of Outsourcing” to next level. All BPOVIA virtual assistants are full-time employees working in the central service center. BPOVIA brings corporate employee management, state-of-the-art IT infrastructure and sophisticated project management system together to ensure the high quality, reliable and cost-effective service.
Why we are better?

1. Quality and Reliability of Service.
Most of the bidders are typically freelancers, self employed and work at home. The reliability and quality of service are highly unpredictable. All of BPOVIA employees work full time in our central service center. We have dedicated quality control department.

2. Availability.
We are real company. We are always available when our clients need us. You won’t get that luxury when you work with freelancer or part-timers.

3. One-stop solution.
We have the capacity to provide one-stop solution of essential business services like administrative task, website design, graphic design, internet research, market research, data entry, accounting, CAD, word processing etc. Our clients don’t need to deal with multiple freelancer bidders at Elance anymore. That eliminates a lot of headache and management overhead for our clients.

4. Support
Freelancers at Elance maybe suitable for One-Off project。
We are trying to build long term win-win relationship with our clients. When you need us in the future, we are here to support you.

Elance, ODesk and Guru maybe suitable for someone who only care about the price. But if you are more serious business owners who are looking for a cost-effective solution, you should think about BPOVIA.