You're tolerating a 50%+++ discount to your easily achievable potential rate every day. Next to that, $25 is nothing.

You're optimizing your business to churn out $X00 projects for clients who are, out of the universe of consulting clients, pretty bad. Your projects are, structurally, not going to leave you with any impressive accomplishments which you could take to other potential clients to justify your newer, higher rates. You're overwhelmingly going to be stuck doing the most boring work possible with your skill set.

You're tolerating a higher than average amount of "patholgoical customers" in your client pool -- people who have no business managing a software development project, with unreasonable expectations, poor managerial skills, and the ability to stiff you for virtually any reason.

You should start prospecting for clients yourself. You'll have a minor hit in billing efficiency while learning how to do this, but then be able to start selling days/weeks at a time of availability at actual professional rates rather than competing with people charging $10 to $20 an hour. Turn some of those clients into referrals and some into recurring engagements / retainers / etc, and your business will be much, much more stable, more lucrative, and less stressful.

An alternative: to a first approximation, any business with both millions in revenue and which pays for any professional services can also purchase software development services. Learn to estimate the revenue of a business from the outside (great life skill for consulting). One simple heuristic is "White collar employee count times $200k." Can you identify a business in your town which has 5+ white collar employees? Great.

Let's say you have a financial adviser firm in your neighborhood which has 8 white collar employees. Can you describe how a financial adviser makes money? If this isn't obvious to you from a lifetime of reading the Wall Street Journal, the answer is Googleable.

Find the guy at the firm who would have the authority to hire you. (At a firm with 8 people, "owner" is a fairly strong bet. You can identify him pretty easily, since he's plastered all over their website.) Talk to him. At a financial adviser firm, since his primary job is going to be sales, talking to him is really easy. You call them up and say "Hiya, I'm a software developer living in town and would like to speak to Bob. I read about him on the Internet and want to talk about financial advising." I predict a 98% success rate at successfully speaking to Bob.

You then talk to Bob like two business owners who each can learn something from the other. You can learn a lot about Bob about the financial advising industry. Bob can learn a lot from you about e.g. wild and whacky things computers can do these days, like email people. After you have learned from Bob how his firm works, you say "That's great, but there exist ways to make that even better with a bit of elbow grease. Let me outline how I'd get you more rich clients, directly increasing your revenue. It gets technical but the brief description is [pitch project here]. Interested in talking about this further?"

  You then talk to Bob like two business owners 
  who each can learn something from the other.

This is probably something that comes with experience, but I fear like initial forays would be flaming piles of failure.

It is entirely possible that your first forays will be flaming failures. Oh well! More fish in the sea. You'll at least have learned one approach that didn't work, or have heard concrete objections as to why they didn't move forward with you, as opposed to the illusory objections that devs think will cost them business, like "You do not have a Github" or "I don't think you've built a website for a homeless shelter recently."

Here are a few things that I've found work well:

1. Call them up, don't email. But always start by asking if it's a good time and offering to set up better time to call if they're busy. The call is important because people ignore emails and since it's known to be "low cost" to send them it indicates that they're probably being generally targeted instead of being called specifically. But being polite and offering to call at another time indicates that you respect their time.

2. Give them a quick idea of who you are and why you're calling them specifically. How did you find them? Why does what they do interest you? Tell them that you're interested in learning more about what they do and what kinds of frustrations they have with their technology. People like it when you are interested in what they do.

3. Instead of telling them what you want to do, ask them what they would like to have someone do. People love to complain about their problems, and it's good information for you to know. Knowing your potential client's problems will make you more conversant when talking to future possible clients. It's okay for you to not be able to address their problem, just take extensive notes on anything they say, and instead of trying to solve their issue on the phone or set up a contract right away, just ask questions. "Are there any other things you find frustrating?" is a totally legitimate question, and has given me usually much more useful information than specific stuff.

4. If they don't seem to be interested, or don't feel they themselves have interest in being involved, ask them if they have any ideas of who might be more in need of the kind of thing you can offer, or if they know anyone else who might be able to offer advice on what kind of services you could offer.

5. Ask them if there are any questions you should have asked but didn't. "Is there anything else that you think I should be asking about but didn't?" is a totally normal and reasonable question.

After you call your first five possible clients, compile that information, research the things they mentioned, and use that to refocus the way you present what you might be able to help with.

Being small is an immense advantage here. You can speak to the person in a way that a larger company can't. "Hi, I live nearby and am interested in what you guys do." That tenor of conversation has landed me two extremely lucrative contracts.[1] The conversations did not begin with "I need to sell you this thing." but rather "Tell me about your business and what you guys do day-to-day." To do this you don't even need to know anything about the industry at the outset (although it certainly helps if you do). After enough gigs you get really good at quickly dreaming up ideas that can help people that they have absolutely zero idea are possible or where to begin to develop them.

When you or I think of getting cold-emailed sales pitches we cringe because the typical sales pitch we receive is insulting.

"You should pay me for x even though I know nothing about you or your needs. Because of this, it is obvious I am not just selling you, but thousands of other people too."

However when you think of a sales pitch as a genuine attempt to start a conversation that you really believe would benefit the person you are attempting to sell to, you are actually helping them, not spamming them. People are receptive to those who express a genuine ability to help them.

[1] One contract, ultimately worth mid five-figures came about after being in contact with a particular business owner for two years. The sales process isn't necessarily a sudden spike but rather a gradual climb.

Do other people respond differently?

There are a truly vast number of "solutions" which people might try to offer me that I'm just not interested in.

However, if someone was to call up and offer me a production-grade finger motion capture solution for under $1000, they'd definitely have my attention. Ditto a procedural solution for creating interiors in a fantasy or medieval setting for use with path tracing renderers. And I could reel off another half-dozen ideas.

That's why Patio11's "talk to them, find out what their problems are" approach is so darn effective - it narrows down to the solutions that will actually capture your interest, because they're solutions to problems you actually have.

(Re finger capture - Yes, I'm aware of the Leap Motion and Control VR. Both are interesting, Control VR slightly more so, but neither are quite production-grade yet.)

Hitting the pavement and contacting businesses unsolicited would be extremely nerve-racking for me. I'd probably go more for contract jobs and/or existing consulting companies who are overloaded. It probably depends on your personality, whether you are good at sales and if you have your accounting/billing worked out.

I ran a consulting business for five years and my ex-employer became my first client. That allowed me to pay the bills. After that I started searching job boards for contract opportunities and eventually some of them turned into clients as well. If you're doing quality work then pretty soon the word will get out and the next thing you know you'll be so busy that you'll need to hire somebody. Then you can offer some other person their foot in the door!

I mean, you don't live in Tulsa, right? The Internet connects you to Tulsa. Can you find a financial advisor in Tulsa with 5+ employees using only the Internet? Can you find 10+ firms which are similarly situated in a day? Great. That should get you 2 ~ 5 meaningful conversations.

patio11 talks about it some in his writings/podcasts/etc.

Brennan Dunn talks about it heavily in his Consultancy Masterclass.

But here is a tidbit for free.

Join your local chamber of commerce. Set up a small seminar on a topic closely related to what you do. Invite local business owners to it (do it for free if you can, or charge a small amount..depends on how well established you are).

GIVE THEM ALL THE INFORMATION THEY WOULD NEED TO DO WHATEVER IT IS YOU ARE TALKING ABOUT.

Pass out your email address, and let business owners contact you. You will have stablished your knowledge and authority, and even though you gave them a 4 hour speech on how to do internet marketing (or whatever), they wont have the time or comfort level to do it themselves...but now they will know one person who can.

Just one way to get started.

I began my own freelance career by browsing http://jobs.perl.org and responding to the more interesting requests for contract work. That was like 7 years ago; pretty much everything I've done since then has been through referrals.

It's just a question of getting yourself kickstarted. There's plenty of great clients out there who need help, and aren't using crappy lowest-bidder sites (because they care about good work and are willing to pay for it).

Good luck... you can do it.

How NOT to get your first freelancing client: http://christopherdbui.com/how-not-to-get-your-first-freelan...

That post contains things I've tried that have all been unsuccessful, like buying ads... Don't waste your time and money on that stuff.

What I learned from Brennan Dunn on Freelancing: http://christopherdbui.com/what-i-learned-from-brennan-dunn-...

This post talks about the lessons I've learned from Brennan Dunn via reading his content on freelancing/consulting. Talks about how I went to meetups and got a few leads. Although, the two leads I've gotten from the meetups haven't turned into anything. I should write an update on that.

Hope sharing my experiences helps others save time not making the same mistakes.

The quality of client is generally correlated with your rate. Learn to hustle and find the very clients that need your services most. This skill will serve you well the rest of your life.

Once you own your niche market, rinse and repeat as necessary.

They asked me for my ID, and other details so they can refund the money. It took months of back and forth with their support team and then they decided that they are going to hold this indefinitely as unresolved.

Never got my money back. They are indeed a SCAM.

I would be happy to get someone look into this for you if you email me your username to matt@freelancer.com. Did you supply your ID?

Regards Matt

The second simple answer is that you don't have to use these platforms at all. Ultimately, anything which places you in a commodity / human cloud type of market is something you should avoid. If you can't avoid it now, then work hard to get away from it. Don't get too reliant on these sites. Keep trying new things to create new opportunities.

Aside from that, I'm not sure how much you really need of the features that Freelancer and the alternatives add. Outside the platform, you don't get things like buyer history or financial protection. Whatever fees Freelancer can charge is probably low considering they are providing leads which could turn out to be valuable over the lifetime of your relationship with the client.

You shouldn't need to rely on buyer history and filters against "spam" projects. You should be able to pick this up from the interactions you have with the client. Is the description a one paragraph mess full of misspellings? Does the description look like it was written by a professional? Does the listing really look like it has potential or are you just being overly optimistic?

Are you looking in an area which is full of trash? Are there other, more niche areas which have a better ratio of high quality postings to trash?

You need to be trying lots of things. You need to be spending time every day networking and marketing. There are lots of people here who have said these things far better than I could. Look through past HN posts on freelancing to pick up tips. This site is a gold mine of information.

ETA: For buyer protection, it's best to get paid as you go. Get a payment up-front. Get payments weekly. Make sure that at any given time, if the client flakes out, you aren't out much money.

Freelancing is a business. Like any business, there is a steep learning curve. There is a ton to learn and a lot of mistakes to be made. The effort is so large, that for many freelancers it doesn't even make sense to be doing this.

Spend a substantial amount of time researching info from others so that you don't have to make as many mistakes. Even then, you are going to make a lot of mistakes and you will need to try a lot of things to find out what works for you. All the issues you mentioned here are part of that. You just have to keep banging away and trying different approaches to find something which works.

The escrow system doesn't protect the coder at all, it's meant to protect the person paying the commission.

In order to apply to more projects you have to buy premium membership! You have to pay to work for peanuts!

The escrow system has protected me more than once. It benefits both sides of the equation. I even got help from them (on a one-time basis) when an employer went radio silent after I submitted a non-escrow invoice.

By the way, if it takes you more than the 10 free bids to land a single project, you may not be putting enough effort into your proposals, or you may be bidding on toxic projects.

Freelancer lets you establish trust between parties so to speak and then after that there isn't that much of an incentive to carry on using it if you're dealing with the same person.

patio has very good point, and I'm looking to get off the FL bandwagon as soon as possible and switch to more prosperous/lucrative opportunities.

Also, when a buyer asks you to go on Skype to discuss his project most of the time he will try to scam you into giving your work without being paid.

Freelancer CEO here. I thought I'd address some of the issues you brought up.

We did increase the membership plan to $50/mo from $29/mo simply because the volume of projects have skyrocketed and as a result the volume of jobs performed by standard members had likewise increased. The $50/mo standard membership give a 50% discount on commissions to 5% from 10%, so there is tremendous value there. We have lots of users earning six figures (up to almost $1m per annum), so these memberships are quite reasonably priced for the benefits.

We removed the buyers name but not the feedback. We did that after an overwhelming number of requests from employers to take it off. The problem has been that freelancers have been spamming and harassing employers by guessing their contact details (e.g. trying similar skype names).

Of course we care about the coder's experience and we actively solicit ways to improve the site from our users. Your comment of "if you pay $2 your bid will be better placed than a bid of a coder with a better rating/history" is exactly how Google and Facebook works in terms of a small number of paid listings above organic results. We order freelancers from the best to the worst feedback in the organic results in the bid list. We have three slots available for paid sponsored bids above this. This gives people an opportunity who may be new but really want to stand out in the bid list a chance to break in to the market. We think this is a very fair way of doing things.

We don't tolerate spam projects for free work, how would that make sense? Our primary business model is to charge a commission for introductions- after both parties have talked, discussed the project details, pricing and a prepayment (milestone payment) has been made, not before.

We do offer financing protection for buyers and sellers through our milestone payment system, dispute resolution and arbitration systems. Your comment that we offer "no financial protection" is incorrect.

Regards Matt

Importantly: it is both not true that your reputation will necessarily be improved by working for charities/contributing to OSS, and not necessary that one has "a reputation" to successfully get consulting gigs.

To get a consulting gig, you need to a) identify a person who has the authority to say yes to a consulting gig, b) convince them to say yes. Even if you have a reputation, you don't get to skip these steps. Reputation as being among the top in the field will get you more inbound leads, but you'll still have to sift down to people who can actually say yes to gigs, and then sell them.

How do you think your average accountant sells accounting services? By having a reputation as being one of the best accountants available for hire? No. They meet with business owners, winnow down to the ones who have money and problems with it, and then say that they'll trade solutions to problems for money.

Besides, he might be able to refer new customers to his old history (I hope, I haven't used Freelancer).

The ultimate goal of any agency-type business is to take the maximum amount of money from their clients while doing the least possible amount of work for them. If the clients feel locked-in (as you do), that's brilliant for them, because they can abuse you in this way and they know you won't change your behaviour apart from grumbling on some forum.

Although others are suggesting you use a competitor, I think you should consider whether this is a business model you want to support in the future.

Reputation is, by definition, how people see your work, experience, and ability.

As of today, oDesk looks better, but I don't have a lot of experience with them.

This very site's monthly freelancer thread is also worth checking out. I got a few decent leads out of it.

[1] http://www.topcoder.com/

*not affiliated with them in any way

Where are your developers located?

While we don’t have any geographic preference, most of our engineers are physically located in North/Central/South America and Europe.

1. http://www.toptal.com/faq#where_are_your_developers_located

Freelancer and sites like it are is designed to provide the lowest common denominator in skills at the lowest possible price. It's a rat-race to feed on one's own body to prevent starving to death.

freelancer is full of people who can afford to work for far less than what is considered minimum wage in North America and Western Europe.

freelancer cares only about people who give them projects so they can take a cut. charging people to work was not enough.

it's time someone came up with a new freelance site. - make it only accessible in North America and Western Europe. (the commodity prices work in other parts of hte world but not where the basic living costs are far higher) - Guaranteed minimum hourly wage. - rigorously filter projects being posted (no more build me an Android app for $5, "my newphew can do it bro why not you?") - No bidding or fixed priced contracts. Hourly rate projects only.

What for? Sure I understand that it is good for coders in North America and Western Europe because it protects them from the competition, but why should the consumers care? Although there is a negative stereotype about South Asian coders, I don't see a reason why a coder from outside of the developed word should be inherently low-skilled. My impression is that the main body of coders from South America and Eastern Europe, at least those who can speak English, are just as good as the main body of North American or Western European coders. Then there are a lot of really good people from South Asia, it's unfair and senseless to exclude them from this market. I am pretty sure any sane person would have problems with this kind of racial profiling even if there was no other way to establish whether or not given person is fit for the industry, which is not even the case.

Well, exclude regional profiling and basically you have invented toptal.