Meet freelance IT millionaires

It’s 1 pm in Noida, a suburb near New Delhi. A peanut vendor sits in front of a tea stall adjacent to pan-shop opposite Synapse Communications -- an IT outsourcer.

A barber shop gives customers a shave in the open in front of the IT company.

As we move in Synapse, things change. Various clocks denoting Pacific, New York, Australian and UK time zones are hung on the wall in an air conditioned, marble floored office. Synapse was started by 26-year old Shamit Sinha in 2001 with a capital of Rs 6 lakh, five rented PCs through Elance.com -- a platform for freelance IT work, after the dot com bubble burst.

Synapse now grosses $2 million in revenue and employs 200 people. The economic slowdown is repeating itself in the US now, and many techies are quitting jobs to turn entrepreneurs and hope to become freelance IT millionaires.

As hard times lead to cost cutting, many companies outsource work to freelancers rather than hire full time employees.

Take for instance, 24-year old Rahul Mahajan, who quit his job in Wipro Technologies to start Xicom Solutions in Janakpuri West Delhi on Elance.com with a capital of just his tech skills and a PC.

“My parents were worried after I quit my cushy job. I was earning about Rs 50,000 as a fresh IT employee. But I wanted to make it big. So I partnered with a fellow techie to turn entrepreneur.”

Today, Mahajan is a dollar millionaire and grossed about $600,000 through Elance.com alone, last year. Mahajan managed to rope in many foreign clients and charges a minimum of $20 per hour for work on technologies such as PHP, AJAX, ASP.NET, Flash and Web 2.0.

Elance.com the platform for IT work, seeks to bring together freelance geeks and companies who want to outsource specific projects. Whether it’s creative writing or editing, designing an interior or a building, developing a portal or computer applications, you can freelance any computer job on Elance.com or platforms like -- Getacoder.com, Guru.com, Odesk.com.

ET travelled about 12,500 kilometres to the US Pacific coast to learn about the phenomenon. At Mountain View in Northern California, the dusty roads get replaced by manicured concrete covered with yellow maple leaves -- suggesting the onset of Spring.

There are no cycle repair shops and no peanut vendors. But BMWs, Mercs and Lincolns mounted on top of each other can be seen in multi-layered parking lots in IT campuses of the world’s largest tech companies --Facebook, Google, Symantec, Verisign, Silicon Graphics, Sun Microsystems , Adobe and of course Elance.com.

Like its service providers, Elance.com started around the dotcom bust. “While everybody was flying to US East coast fleeing the Silicon Valley, I was the only one flying West. My family especially, my mother and wife thought I was crazy,” says Fabio Rosati, CEO Elance.com who quit his job at CapGemini to turn entrepreneur.

And Elance.com’s largest and richest service providers come from India. Some of them have even exceeded Elance.com’s headcount while some like US-based Digg.com (started via Elance) have become really big.

Today, Elance does about a million dollars a week. It grossed $40 million revenue in 2007 and plans to gross $200 million in the next 2-3 years and get listed. Elance also outsources works such as webpage design.

The rates are attractive -- $500, $1000 and $10,000 for time bound projects open for bidding at any time.

With an economic slowdown in US, such freelance opportunities are gaining momentum. Small and medium businesses and individuals also prefer outsourcing through such platforms, work like designing a logo, website, maintenance of applications or websites and designing works.

The reasons are simple -- there are no large companies willing to take small outsourcing tasks worth $2,000, $5,000 or $10,000. The other reasons is rising rupee -- which is forcing large and mid-sized companies to increase their billing rates to protect margins.
Slowdown in hiring and salary hikes due to a slowdown in contracting of large projects is also a reason. Some who went bankrupt after dotcom bubble also started afresh though this model.

“Techies should wait a while before they become big on such platforms which can help them become entrepreneurs,” says Synapse’s Sinha. But some like to dive fearlessly. Take for instance, 29-year old Piyush Nigam, an engineer who started PINIG Systems (an IT applications development firm) on Elance.com, after the downturn with small savings.

Today, PINIG grosses $100,000 through Elance alone. There are several techies turning freelance millionaires, are you one of them?