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Outsourcing: Million-Dollar Freelancer Sanjay Dange, Co-Founder and COO of Smartinfosys.net (Part 2)

Posted on Wednesday, Nov 9th 2011

Sramana Mitra: In 2006, how did the order volume change? What happened in 2006? What level did it reach?

Sanjay Dange: In mid 2006, we started getting 20 to 25 projects in a month. Plus, in a year and a half, we also acquired more than 50 new customers. We would get a lot of repeat orders from them. It’s very important to keep our clients satisfied. We were lucky that we could get a few serious customers who developed e-commerce websites and serious business portals.

SM: And you were also maintaining their websites?

SD: Yes. We got the opportunity to maintain their websites. Every month, they used our hourly-based maintenance packages. Gradually, we built a base of 200+ overseas customers in a period of one and a half years.

SM: Wow. What were you doing on the back end? Obviously, you were no longer two people, right? Did you hire a lot of people? What was the strategy?

SD: Yes, we started with a small office of 200 square feet and three people: me, Nishi and a Web designer. The strength grew to 10 people by 2004.. In 2004-2005, we started working on outsourcing portals and the volume of orders started increasing.  Today, we have a total office space of 6,000 square feet in Surat and 2,000 square feet in Baroda.

SM: How many people do you have?

SD: We have 100 people on our payroll.

SM: Okay. And what is the volume now from Freelancer.com? Are you doing mostly Freelancer.com work, or are you getting business outside as well?

SD: There are other portals, but Freelancer provides 25% of our annual revenue, and 75% is from other portals and our Indian market.

SM: Would you talk about the other portals? Are you on oDesk and Elance as well?

SD: We are on Elance.com. We are on PeoplePerHour.com. We are on various contest sites such as LogoGuru.com, Hatchwise.com, 99designs.com and a few others. With increasing exposure, we get a lot of direct inquiries. We have also established marketing partnership arrangements in the USA , UK and European countries.

SM: Take me through the example of Elance. You were doing well on Freelancer.com. How did you penetrate Elance? Elance was a much bigger company by the time you got on it, right? A lot more competitive?

SD: In 2004, we registered on Elance and Freelancer.com because they came up first in a Google search. Elance had a few paid packages, whereas Freelancer.com had a gold membership package, which cost only $12 a month. We could only penetrate a little on Elance.com due to a large number of bigger players. Other deterrents were the huge cost of registration, more competition and a complex bidding process. We still bid and got a few orders, but our success rate was still quite low

SM: Would you explain why you were more successful on Freelancer.com versus Elance? Is it because Freelancer was small, and there was less competition?

SD: I believe that our success on Freelancer.com can be attributed to two factors. The first one was few big players bidding on projects. Elance.com, an established portal, had a lot of big players who did not leave any room for new players to come in and get the orders. Freelancer.com had small volume players. That’s why the probability of success was higher. The second factor was low entry barriers due to low registration fee. Freelancer.com would charge us $8 per month to bid on an unlimited number of projects. So, inspite of lots of bids getting rejected, we kept our motivation high and kept on trying. Elance.com had restrictive practices in terms of the number of bids and exorbitant entry costs.  At that time, Elance cost around $900 for the complete deal of a website design and graphics design package.

SM: Have you also worked with oDesk?

SD: No. We do not work on oDesk, although we are registered there as a business entity. Our Indian operations, Freelancer.com and Elance.com kept us occupied. As I said, Freelancer.com only charged $8,  which we found competitive. A flow of gradual orders on Freelancer.com kept us occupied, and our confidence in it increased.

This segment is part 2 in the series : Outsourcing: Million-Dollar Freelancer Sanjay Dange, Co-Founder and COO of Smartinfosys.net
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