A new kind of recruitment
by Peter Switzer
Adelaide-born Matt Barrie is a man in the fast lane of the online world. He not only stands on the doorstep of a mega-successful business but he could help solve current job market problems with his outside-the-square operation.
More than that, over time he could threaten the jobs of many workers in the Western World and at the same time help distribute income from rich to poorer countries.
Sounds like some big claims but this guy, who is the founder and CEO of Freelancer.com, has taken out the Best Export Achievement and the People’s Choice awards at the Australian Interactive Media Industry Association Awards and he has been named as The Entrepreneur of the Year by BRW.
In a nutshell, Freelancer.com permits businesses to put a job or contract for services onto the website and people or businesses around the world can bid to do the work. It’s virtually a market made up of businesses with demand for business services and supplying businesses or people who do the work.
The great tectonic shift
“By 2008, I started to see that the internet was about to deliver what I thought was its next great tectonic shift to society – disruption of the global labour market,” Barrie explains. “Not many people realise that with the world population at seven billion, only two billion people are currently on the internet and incredibly, the other 70 per cent of the world’s population are still not connected.”
The other five billion, he points out, are connecting now at double and triple digit rates. “What’s more they are on an average wage of less than $10 a day,” he explains. “They are poor, hungry and driven – motivated, self-skilling and desperate to increase their standard of living – there’s a hell of a lot of supply coming online in the labour market.”
When he started he worked on a prototype and did the business plan but he found out that he was behind pace.
“There were a number of entrenched leaders in the US who had raised tens of millions, and in one case $100 million already from top tier venture capitalists,” he recalls. “Undeterred I started to do a survey to see if I could buy rather than build my way into the space.”
Showing the usual entrepreneur’s characteristic of not letting anything get in the way of making a dream come true, Barrie pursued an option agreement to purchase GetAFreelancer – a website founded in 2004 with over 500,000 users run by a Swedish gentleman who lived on a fish farm in Vanuatu.
“He was truly living the outsourcing dream – had half a million people on his website, and no employees,” he says. “He had one customer service agent in the Philippines and two outsourced programmers in the Ukraine.
“The site looked horrible, designed in several shades of grey in the style of the 1950s – communist utilitarian – and absolutely awful. However, he was doing something right as the site was teeming with people from the developing world.”
The obvious Eureka realisation for Barrie was that they didn’t care about how the site looked. The freelancers were making money, earning orders of magnitude more online than they could earn at home and performing jobs that mostly didn’t exist in their home country – website design, search engine optimisation, and so on.
“I closed the deal in May of 2009 and then the site was ranked about the 5000th biggest website in the world,” he admits. “I was a founding team of one.”
An IT background
Before seeing what happened next, let’s backtrack to understand Matt Barrie’s IT and business DNA.
“I originally trained as an engineer, with first class honours in both Electrical Engineering (BE Hons I) and Science (BSc Hons I) in the early 90s,” he says proudly. “In 1997, I went to Stanford University in California, USA where I graduated with a Masters in Electrical Engineering in the middle of the dot com boom.”
Google started when he was at Stanford and a classmate started PayPal. To complete the credentials, Barrie also has a Masters in Applied Finance.
After working in Silicon Valley with a startup, he returned to Australia and worked briefly in venture capital, before acknowledging it was too early in his career to provide management advice to technology companies.
“I founded and was CEO of Sensory Networks, which was a leader in high performance pattern matching chips, used in security applications,” he says. “And I built that company up from nothing to operating in four countries and supplying market leaders such as McAfee and LG with OEM hardware, raising about US$30 million in venture financing in the process.”
And in true entrepreneur form after a six-year toxic relationship with a couple of his venture capitalist partners he walked out of the company in December 2006 empty-handed. But he did not rest, teaching at the University of Sydney in the Engineering department and in 2006 he won the State Pearcey award for his contribution to IT&T. Last year, he was named Alumnus of the Year at the University of Sydney by the Engineering and Computer Science Faculties.
Clearly, we are talking blue chip DNA for an entrepreneur in the IT space but how has he grown this new business?
“I ran the site from home through most of 2009 with an office admin who I was paying $20 an hour,” he reveals. “When we hit one million users we decided it was time to get an office.”
In August 2009, he bought the domain name Freelancer.com and rebranded the site.
In late 2009, he signed a lease for a small office above a nightclub in Kings Cross but he discovered that some nights they had to stop working at 6pm because the office was directly above the dance floor. When the DJ cranked the music on at about 140 decibels the 10 engineers above were a little stressed. They had to move out.
“In March 2010 we were shocked when we discovered that multiple Pulitzer Prize winning journalist, Tom Friedman, mentioned us in the editorial section of the New York Times,” Barrie says.
This is what he wrote and it has to be worth millions for Matt Barrie:
“If I just have the spark of an idea now, I can get a designer in Taiwan to design it. I can get a factory in China to produce a prototype. I can get a factory in Vietnam to mass manufacture it. I can use Amazon.com to handle fulfillment. I can use freelancer.com to find someone to do my logo and manage my backroom. And I can do all this at incredibly low prices. The one thing that is not a commodity and never will be is that spark of an idea.” (New York Times Editorial 2010.)
Big, bigger, biggest
Nowadays, Barrie says Freelancer.com is the world’s largest outsourcing marketplace with over 2.4 million users from 240 countries, regions and territories worldwide.
“Used by SMEs globally to outsource small projects – usually under $200 – to the developing world, over one million projects have been outsourced to date for some US$85,000,000 of freelancer earnings,” he summarises. “Over 10 million bids have been made through the platform.”
The business now has 75 employees – 35 in Sydney in engineering and marketing and 40 in the Philippines performing customer support for millions of users 24 hours a day, seven days a week and 365 days a year.
“We’ve completely re-architected the website to make it feature rich so that two people on the other side of the world can work together,” Barrie adds.
By February this year they were ranked at position number 245 for websites in the world according to Alexa and are ranked 20th in Bangladesh for traffic.
“We have overtaken Microsoft.com in that country and we’re also bigger than Apple.com, Amazon.com, Linkedin.com, PayPal.com, Bing.com and MSN.com according to Alexa,” Barrie says.
The business has acquired and amalgamated a number of other marketplaces and websites along the way including Freelancer.co,uk, the largest freelancing marketplace in the UK, EUFreelance.com in Europe, LimeExchange – a New York-based marketplace, Freelancer.com.au in Australia, Freelancer.de in Germany and Webmaster-talk.com – the third biggest webmaster forum in the world.
Telling a success story is always easier than making it happen and finance was the big challenge for the business, especially raising the original funds to purchase GetAFreelancer.com. The site did not look good, the background of the owner was whacky – a Swede in Vanuatu – and Barrie had walked out on his last venture capitalist deal. However, determination and perseverance, he says, came to his rescue.
Asked to reflect on his experience, Barrie advises don't spend a dollar on costs unless you know how it precisely will drive revenue, and SEO is still the king for getting traffic to your site cheaply.
“Generate lots of original content, optimise that size and focus on the conversion funnel,” he suggests. “Also, use analytics, measure everything and create a dashboard in real time so you know what's going on.
“And finally, hire freelancers from our site to help you!”
First business: Selling customised printed mousepads when I was in first year at uni to corporates. The bottom fell out of the mousepad market pretty quickly.
Career highlight: Running Freelancer.com and winning BRW Entrepreneur of the Year would have to be up there.
Best piece of business advice you ever got: Never spend a dollar unless you're damn certain you know how that's going to drive at least a dollar of revenue.
The worst: What, do you think you can succeed when [insert name of big company in the US] has already done it?
Most frustrating part of doing business: Finding good people is always tough. We're on the lookout now for talented front-end designers and software engineers!
Favourite marketing technique: Anything that's free – SEO, PR, etc.
Business leader you most admire: Peter Thiel
If you’re looking to work on your business rather than being stuck in it, book in for a complimentary business assessment today with Switzer Business Coaching.
Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
Published on: Monday, December 05, 2011blog comments powered by Disqus