What are the best "result driven" payment structures when outsourcing a large project?


We may outsource our MVP, and could use some input and advice as to how structure a good payment plan when using a service like Odesk, or Elance. Any input would be very appreciated. Thank you


asked Aug 27 '13 at 07:44
164 points

1 Answer


Unfortunately, Odesk and Elance are typically 'low trust' environments. In these environments, people are always concerned about being screwed, and will typically be looking to see what the cash payment is for your project. A pitch of 'trust me, we'll pay you this bonus when XYZ happens' is unlikely to be valued very much. The bonus will be discounted so much relative to the actual cash that it's almost not worth offering a bonus ... in which case you are on straight hourly pay fee-for-service.

The best I could suggest would be to use Odesk and Elance to identify good people through getting a couple of small projects done. Once trust has been built up, offer them a bonus structure. The problem is they will want their base Odesk/Elance rate plus a bonus, so you can only do this for low cost people.

Alternatively, and perhaps more usefully, approach potential suppliers directly, ideally through someone who can give you each a mutual referral (try LinkedIn if nothing else). If there is already some trust built up through the mutual contacts, you may then be able to get into a 'bonus' situation because now there will be a higher degree of trust, and people will listen to 'trust me'.

answered Aug 28 '13 at 03:28
Kamal Hassan
1,285 points

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