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An Exclusive Interview with Ian Ippolito, Founder and CEO of vWorker.com

by Carey Giudici, WhichLance.com

It has taken almost a decade for the internet to catch up with you. Back in 2001 you dreamed of working only when you choose to, on projects that match your schedule, professional background and interests.

Today almost any business can tap into the skills and capabilities of freelancers everywhere, without breaking the bank.

What has made it possible for the industry you envisioned in 2001 to grow and prosper like it has?

It’s been very gratifying to see workers enjoying the same extraordinary level of freedom that only a select few could experience just a decade ago.

Many factors have contributed to this amazing boom.

For example, anyone who operate a virtual office needs a fast infrastructure. In 2001 many of us were still on dial-up. Today broadband reaches everywhere except the most rural areas.

Emerging economies around the world have also invested tremendously in infrastructure over the last decade.  It was once normal for overseas workers to be unproductive half of the working day because of all the power outages and brownouts. Yesterday, on the other hand, I spoke to  a programmer in Russia who not only has better power than we have in our vWorker office (24/7 and redundant)--he also has an internet connection twice as fast.

The emergence of open source and rapid development tools in the software industry has had an enormous spill-over effect on internet based businesses.  Creating a new business website used to require months of planning and development; by the time it was ready to go live, the market had often changed.

Development was expensive, too: a new website might cost you $10,000-$20,000.  Today a quick and dirty version of your great new idea can be fully online in just a few days, ready to experiment with. And you won't need a second mortgage to pay for it, either, since it costs a few hundred dollars or less. There are many more entrepreneurs building many more types of businesses that require virtual workers to keep up with their lean and agile DNA.

Finally, the last decade has seen the economic emergence of BRICs (Brazil, Russia, India, China) and dramatic changes to the virtual workforce that grew out of that. More people in those countries have educational degrees and training needed to perform highly skilled work--and they're hungry and eager for our business.

And people in those countries have quickly figured out, codified and now routinely follow the advanced business processes they need to provide U.S. businesses with round-the-clock development support. This makes their products and services more compelling to business buyers than ever.

Overcoming technological, educational and economic constraints in the third world could double the number of freelancers worldwide. What do you realistically consider the limits on growth in our industry over the next ten years or so?

While many in the emerging world are actually moving at great speed, there's indeed a lag among poorer countries unable to keep up. But this should change over the next decade or so. Even countries known as perpetual laggards are now moving pretty quickly. The Economist recently published an article showing that 6 of the 10 fastest growing economies are in Africa! I expect to see this trend continue over the next decade.

The greatest threats to our industry seem government-related. The U.S. government is financially strapped, and looking at years more of recovery. It's very tempting for it to levy an internet tax within the next decade. Although might help solve the government’s short term problem, it would also stifle innovation and this key industry's sustained growth.

The pressure to remove net-neutrality rules is mounting, and ISPs want to charge more for prioritized service.  It’s a complicated issue, but we may see companies having to choose between paying extra for faster internet, or remaining stuck on the cyber equivalent of a dusty country road. This would seriously hamper our industry, and the many businesses that depend on our services.

A protectionist backlash in developed nations is also possible.The U.S. was a great champion of globalization back when times were good. But with the financial collapse, people seem to be looking for a scapegoat.  Some anti-globalization legislation has already been discussed, and I’m sure we'll see much more.

Some of your site's features--the Expert Guarantee and rating system for example--seem designed to reduce the uncertainty facing companies and freelancers who work with people in other regions or countries. How big an issue do you consider this built-in doubt factor? How does vWorker to increase the peace of mind and engagement for long-distance business relationships?

It’s definitely a huge reality. Meeting someone face to face, we get a feel for who they are. I can also pop into their office and make sure they're doing what they’re supposed to. But in the virtual world, I must deal with an unseen stranger whom I’ll never meet in person. We must work extra hard to overcome trust issues if we are to make safe, stress-free transactions possible.

Vworker provides the employers a 100% money-back guarantee. When I hire a traditional employee, I can't be sure they’ll do the job right, spending time at the water cooler or playing solitaire instead. But in our virtual environment, we're proud to guarantee performance.

The triple-point-guarantee says that if an employer doesn't receive 100% of the promised contracted work, on-time and in the industry-expected manner, they'll get all their money back.  And with our honest-billing guarantee, we monitor the worker’s webcam and desktop.  If they’re fooling around or not working on the project, the employer will also get their money back.  This make the experience even safer than traditional work relationships.

A money-back guarantee also protects the employer financially, and the Expert Guarantee protects their time. The worker guarantees completion, or can forfeit a security deposit.  This helps us weed out unqualified workers, and allows employers to pick the best workers the first time out, rather than the second or third.

We have built in many other protections, too. The rating system you mentioned reviews and reports on past performance. And unlike eBay--and unfortunately a few other sites in our industry--the ratings are protected with a double-blind system.  Neither party can see their own rating until after they've rated the other party. This prevents unfair ratings-retaliation, ratings-trading and ratings-fraud, and allows employers to get comfortable with their worker before hiring them.

Your site mentions that vWorkers receive 36-80% less than traditional workers for the same results; yet this can be a very good income for them. Do you think the industry in general, and your company specifically, affects the economies of other countries and the potential professional advancement your workers who live there?

Without a doubt. Outsourcing makes it possible for many BRIC countries to experience a decade of dramatic economic growth.

The best part of my job is reading thank-you letters from workers. One recently wrote that before discovering vWorker he had no car or job, and was about to lose his apartment.  Although sceptical about us at first he took a chance, and won a project.

He was happy to get that first paycheck, and then the second and third..Six months later he moved into a new apartment in a great section of town.  He bought a new car, and started to get out more. Soon he met a certain lady, and a year later he proposed and she said “yes.”

His appreciation for how we helped “turn his life around” is the kind of prize that makes all the long hours completely worth it.

Do you see companies dealing with economic distress feeling tempted to shop for price above quality? Has vWorker experienced any increase in the number of disputes, or disappointment about the quality of completed projects?

In these challenging economic times, price is more important than ever to companies. That’s a primary reason they consider virtual staff and consider us as a provider of this service.

But as companies look for ways to “cut out the fat,” the good ones aren't ready to completely abandon quality. The number of employers choosing the lowest bidder hasn't changed much in the last several years--still under 20% (currently 18.52%).  Perhaps we help keep that number low by educating employers on the pros and cons of always choosing the lowest bidder.

There has been an increase in the intensity of some arbitration, but not in the overall percentage of projects that going to arbitration. Perhaps this is the result of imposing a penalty when someone loses an arbitration. It shows up on their record, which can lead to less future work; and if they lose too many, they're booted from the site.  So some people who consider that approach may decide  to squeezing their dollars that way isn't worth it, and look elsewhere for savings.

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Ian Ippolito is the Founder and CEO of vWorker.com, formerly RentACoder.com