Mark Frazier-Opening Online Markets

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Opening Online Markets
    Overview of Trends

            May 16, 2007
          Skopje, Macedonia
What We’ll Cover

1.   Why Online Markets?
2.   New Forces Driving the Opportunity
3.   Success Examples
4.   Regional Activity To Date
5.   Potential for New Jobs Creation
1. Why Online Markets?
Why focus on online markets for remote services
                             • First wave of offshoring
                               – slow turnaround, big
                               companies (100,000+
                             • Second wave – fast
                               turnaround work via
                               telecoms, big companies
                               predominate (1 million+
                             • Latest wave – fast
                               turnaround, open to all
                               (tens of millions of jobs)
1. Why Online Markets?
1. Why Online Markets?
          The third wave of global ICT opportunity
           –   High-end R&D
           –   Software development, testing and maintenance services
           –   Secretarial services
           –   Graphic art and design services
           –   Web-based research services
           –   Tutoring and mentoring services
           –   Transcription and editing services
           –   Web page design and development
           –   Help desks/customer support
           –   Electronic publishing
           –   E-learning course development
           –   Software translation/localization
           –   Computer-aided design/GIS
           –   Indexing and abstracting services
           –   Translation services
           –   Multimedia editing and animation
           –   Imaged claims processing
           –   Remote security systems
2. Driving Forces
What is bringing this new kind of work within
 reach of jobseekers and entrepreneurs in

• Affordable telecoms

• “Anytime, anywhere” learning

• New online markets that are friendly to
  small/new firms
2. Driving Forces

Driving Force: Affordable Telecoms
• A six orders of magnitude cost reduction is underway
  (Nathan Myhrvold, Microsoft)
• Affordable two way satellite internet solutions are now
  emerging in global market
• High bandwidth, increasingly cheap wireless networks
  can share “always on” new internet access

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2. Driving Forces
Driving Force: “Anytime, Anywhere”
• Old way: structured, classroom-
  based learning – was fine for
   unchanging content
• New ways are needed to be
  competitive today:
   – “anytime, anywhere” learning
   – Scenario-based learning and
   – Engaging/interesting content
     to hold audience
2. Driving Forces
Driving Force: eBay-style markets for
sourcing of “remote services”
3. Success Examples

Perspectives from Rentacoder’s Founder
3. Success Examples
                                      In 2002, I have lost my own company after an
                                      economic crisis in Turkey. After that I worked for 3
                                      years to pay the bills of the company, but in Turkey
                                      it's not easy to find freelance job. If you find, it's
                                      more hard to get the money after you complete the
                                      I have subscribed RAC about 1 year ago. For the
                                      first couple of months, I have worked for only one
                                      customer. 3 months ago I have discovered how
Name:  Serhan D. Kiymaz               strong RAC is. I have bid on some projects. Prices
                                      were starting from 9$ to 1000$. Many bids were
Age: 30                               accepted. All customers are happy with my work.
Location:Istanbul, Turkey             I'm getting paid in every 15 days and I earn about
Screen Name: Serotizm                 2000$/mo.
                                      Since 3 months, I can pay all my bills, I can go out,
                                      I can save money. I don't take any jobs from my
                                      country anymore. RAC is really good and enough
                                      for a developer.
                                                           -Serhan D. Kiymaz
3. Success Examples
                                               Before RAC, it was very, very hard to find someone who
                                               needs an application, web site … and it was even harder
                                               finding someone who will actually pay for it. Getting paid
                                               was a big problem.

                                               I heard about RAC, but I didn’t take it seriously, until 1 year
                                               ago, when I tried it for a first time. I was wondering if I
                                               could make some money there, how will they send
                                               payment, and will they send it at all?

                                               So I made a few smaller projects, to test if it really works.
                                               And money came! I remember being happy, and amazed.
                                               And my buyers were amazed too. After that I started
                                               working more and more on RAC. Now I’m Top Coder,
                                               currently Ranked #720 out of 139,722.
Name:   Sasa Salamon
Age: 25                                        I work as much as I want, and I know that if I give more
Location: Vukovar, Croatia (formerly Zagreb)   time for it, I’ll earn more money. That’s the way it goes.
Screen Name: N_E_0                             This way I can control my income. Now I am somehow
                                               sure about my future because I can earn money and there
                                               are people who need my services. That’s very good to
                                               know here in Croatia.
3. Success Examples
                                  My RAC story begins 6 months ago, when I stayed out of work.
                                  Like any other eastern country in transition, my people also
                                  suffered from lack of work. In addition, we also had problems
                                  with civil wars, that took part in our region, if there is anything
                                  civil about the war.

                                  I started looking for the job over the internet. I had no idea that
                                  something like RAC exists. After couple days, and 1001 googl-
                                  ed pages, I find some site that acts as agent between coders
Name:   Vladica Milanovic         and buyers. At first, I didn’t believe that it can be true, I thought
Age: 28                           that it is some kind of trick. After carefully studding terms and
Location: Sokobanja, Serbia       the procedure of getting some job, I got much more confidence
Screen Name: Pera                 and started testing the waters of freelance programming. It took
                                  me about 50 rebuffed bids and two months later first job
                                  landed. After my first job, new one came quickly and so on.
                                  There are many returning buyers that gave me new projects.
                                  Only after four months I am thinking of founding software

                                  Sitting back relaxed in the chair, with your PC in front of you.
                                  With no superiors watching your every step, with no work time,
                                  you work only when you have inspiration. This could be the
                                  story of some famous artist. No way this could happen to some
                                  programmer, until Rentacoder…
4. Current Regional Activity
                         Market Trends in 2006: Revenues
                      Completed projects on
•   Southeastern Europe revenues are small but growing quickly. Note: This is despite
    only “word of mouth” advertising of this opportunity only.

     Country                                             US$ amount                                     # of jobs
     – Albania                                           $1643                                               35
     – Bosnia and Herzegowina                            $14,048                                           249
     – Bulgaria                                          $109,221                                        1,072
     – Croatia                                           $19108                                            238
     – Macedonia                                         $9535                                               69
     – Romania                                           $12,84942                                      13,657
     – Slovenia                                          $4900                                               41
     – ------------------------------------------------------------------------------------------------
     – 2006 Total:                                       $1,443,400                                     15,361
                                                                                        (+21% from 2005)
     – 2005 Total:                                       $1,042,441.24                                  12,667
                                                                                        (+56% from 2004)
     – 2004 Total:                                       $664,167.52                                     8,435
                                                                                        (+169% from 2003)
     – 2003 Total:                                       $246,523.57                                     3,723
4. Current Regional Activity
         Comparison of Registered Freelancers
                 In Southeast Europe

    Romania is well represented, but other countries in the area have yet to take
    advantage of online market opportunities

     Romania                                           13,074

      Bulgaria                                           1,654
      Albania                                               22
      Bosnia and Herzegovina                               285
      Croatia                                              536
      Macedonia                                            240
      Slovenia                                             233

 Note: Only 20% of registered coders are typically active (from any country)
1. Introductions and
Opportunity Overview
   Potential growth in Southeast Europe

  Kosovo   2,100,000             1        1,206   1,205
5. Potential for Jobs Creation
 What is the potential for online market job

              Kosovo          1       1,606

              Kosovo          2       2,142

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