Interview with Ian Ippolito: Founder of vWorker.com

Ian Ippolito is the founder and CEO of vWorker (formerly known as RentACoder), a company that connects employers with virtual workers and makes doing business more affordable and safer than traditional work arrangements.

vWorker.com

vWorker has over 300,000 workers and 100,00 employers in hundreds of fields and was called “One of the 100 most brilliant companies” by Entrepreneur magazine.  It has been profiled in the Wall Street Journal, Business Week, Fast-Company and many other journals and magazines as a company exemplifying the shift to the new world-wide digital economy. It is also a 4 time (2007, 2008, 2009, 2010) consecutive winner of the INC 5000 “fastest growing private company in the U.S. award”.

Ian is a former computer programming consultant and founded his first company (Exhedra Solutions, Inc. which is the parent company of vWorker) in 1996.  Before vWorker, Exhedra created the accolade winning developer site: PlanetSourceCode.com which currently houses over 29 million lines of source code and receives 9 million page views a month.  It also created several award-winning shareware products such as Help Maker Plus.

In his spare time he enjoys traveling, enjoying good food with good company and weight lifting.

Ian Ippolito: Founder of vWorker.comWe had an email interview with Ian.

Q1. Tell us something about yourself. What prompted you to start RentACoder?

I started RentACoder.com back in 2001.  I had created a site called PlanetSourceCode.com in early 90’s, which was the first site to allow programmers to upload and share source code.  It had a decent regular user base (a few million visitors each month).  The problem I had was that I was flooded with personal requests from people who wanted help with their programming projects.  As an IT consultant, it really pained me to have to turn down so many paying jobs!  That’s when I realized that there was an need that was not being met in the marketplace.  So I created the site to do that.

Q2. When you started, what type of vision you had for it? Did you envision it as a global marketplace?

I had seen too many conflicts occur in the traditional consulting world, and wanted to create something better.  I saw way too many programmers get “stiffed” by employers who never paid them.  And also saw too many bad programmers “milking” good employers and doing very poor work.  So, I came up with the concept that every project would be escrowed in advance, to protect the worker from being “stiffed”.  And then every project would also be protected by an arbitration process run by people who could actually test the programs. So good programmers would always get paid..even if their employers didn’t want to.  And good employers would always get their money back…even if their bad programmers didn’t want to refund them properly.

From the beginning I thought it would be a global site.  I knew Planet Source Code had a global user base, and I hoped I could bring them over to the new site.  Fortunately, for RentACoder, I was successful.

Q3. Initially, the projects posted on the website were verified before being open to bidding. What made you change that?

Actually, at first there was no verification of projects at all.  But unfortunately a few bad apples posted bad projects (example: “please create a computer virus for me”).  So we had to create a verification process.  But by that time there were a lot of projects being posted…more than the staff at the time (which was just myself and two employees) could handle.  So we came up with a system where the first several times a person posted, their project would be verified.  Then after that we assumed they had proved they were trustworthy and could bypass that. If a bad project escaped through, we would rely on our users (who are extremely proactive) to let us know about it.

However, as the traffic grew, even that system no longer worked because we could not keep up with the traffic. Employers were getting very upset that their projects were taking so long to approve, so we had to find a better solution.  So we created a computer program to go through the pending verifications and approve the ones it felt were okay.  It was able to process about 50% of them, which allowed a human to focus on just the ones it wasn’t sure about. The program isn’t 100% perfect, but when it lets one through (or when a person who can bypass verification posts something they shouldn’t) the site users are quick to let us know about it so we can remove it.

Ian Ippolito: Founder of vWorker.comQ4. When the question of name change came, what type of issues you had? I mean you knew that it could decrease the traffic and perhaps even customers.

The people most attached to the name were the virtual workers who were programmers.  The people who hated the old name were all the virtual workers who were not programmers (writers, marketers, translators, etc.).  These workers thought the name was hurting business (which it was).  And the employers at the time (who bring the jobs and thus the traffic) really didn’t have a strong opinion either way.  So we figured the name change would probably bring more business to the site, and that is why we changed it.

Q5. What is the present comparison with the name change—have you got better results?

Yes.  As a result of the name change we suddenly received a huge influx of press coverage, including appearances on CBS news, FOX news, etc. In the past, the name “Coder” had always made people think we were a narrow thing that was not of national interest.  But once we became about “Virtual Workers” we were suddenly very topical and interesting for the media to discuss.

Q6. Do you feel in the past 4-5 years, quality of bidders have decreased significantly? At the same time, a lot of top-performing workers on the site have not got any work altogether. What are you views?

No, I don’t believe it’s accurate to say the quality of the bidders has decreased.  We did an employer survey early this year and allowed them to select bid quality as a problem and few did.  The #1 common issue that employers actually have is that the # of bad/spam bidders has increased significantly.  For example: in 2003 the average project got 12 bidders, and out of those would be 3 good ones.  In 2011 they now get 35 bidders, but 20 are spam bids and still only 3 are good ones.  So it gets very difficult for employers to weed them out.

However, we have some things coming up later this year that will deal with this issue. We are going to have a spam-score so that people that get reported for too many copy-and-paste bids will get warned and if they continue it their bidding privileges will be revoked.  And second, we’ll be implementing a bidding point system, that limits the # of bids that people can make at one time.  This will force them to make real bids, rather than spaming across as many as they possibly can.  Workers that have established they are “good workers” (by doing a good job on projects, passing certifications, etc.) will get more bid points to spend.  New workers will start with just a few and have to prove themselves with their actions to earn more.  This will not only help the employers, but is good news for the good workers as well, because it will be much easier for them to be noticed (and command a fairer/higher price) in the bidding, since the spam bids will have been removed.

And we also will have some other “top-secret” features coming out in late 2011 that we believe will revolutionize bidding and allow employers to more quickly weed out the “bad” bidders and identify the “good” one than ever before.

Regarding top-performing workers not getting any work: again, I really haven’t seen this happening.  Every month more and more workers hit a landmark completed project (50,100,150,etc.).  And of course, most of the top 10 are so flooded with requests that they don’t have to even bid and they cherry-pick only the best ones…just like they always have.  What *has* happened is that we’ve been very aggressive regarding certain “top-performing” workers who were very good at winning projects (i.e. excellent sales people)…but not as good at actually completing them (i.e. mediocre workers).  And these people are indeed feeling a squeeze…so perhaps this is what you’re referring to.  However, true top-workers who actually do a good job are always in demand.

Q7. What type of team you have for vWorker?

There are 15 physical employees.  Most do customer service and arbitrations.  We also have 20 or so virtual workers that we outsource non-core functions to, and we’re always looking for good, fresh talent.

Q8. Do you expect a bigger company could offer you a buy-out offer?

Yes.  I’ve been approached several times and have had too many offers to count from venture capital firms.  But I enjoy going into work every day and making the big decisions, which would change if we sold or took on additional investors.  Of course, I can’t predict the future.  But right now I’m happy with the way things are.

Q9. What type of future goals you have for vWorker?

We have some very exciting plans for the rest of 2011 and the next several years, but I can’t reveal too much because our competitors are very quick to copy everything. One thing that is coming up very soon is a beta of a new feature for a “tech-sherpa/project manager”.  Many non-technical customers have said it’s too difficult to use an outsourcing site because they simply don’t know how to create a spec, evaluate which worker is the best to pick, and/or manage the worker and QC their work.  They need a knowledgeable guide that can do this for them, and that is what this beta will connect them with.

Q10. Given that there are millions of websites made almost everyday, what are 3-4 most crucial factors for a web-startup?

1- Identify a real problem and solve it better than anyone else.

2-Be adaptable, humble and a good observer:  You should be excited about your idea when you’re dreaming it up.  However once your idea hits the reality of the marketplace, odds are that it will not work like you expected.  The difference between the successful entrepreneur and a drop-out is that the successful notice what is not working, have the humility to let go of their initial preconceptions an ideas and then change it into something that does work.

3- Be persistent and patient: Success is rarely an overnight process.  You need to prepare and pace yourself to run a marathon, not a sprint.

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