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I’m beginning to realize that many of the technologies that drive our favorite internet sites really don’t create any soft of competitive advantage.

Just how easy is it to enter the industry?

I am, by no means, a developer. I have zero programming experience, but I have been around enough startups and followed enough business models to comment, somewhat intelligently on the issue.

I’ve had several experiences with “outsourced” development. I worked on a Microsoft team that outsourced a customized toolset application to India, I’ve befriended several entrepreneurs who’ve outsourced (or hired permanent) help from abroad and recently I’ve hired a Hungarian team to redo DeParisRedinger.com Of all these experiences, the website experience was the most interesting.

Elance.com, the perfect example of globalization at work.

I’m sure most of my readers know about Elance, but I certainly didn’t. Luckily a local website programmer/designer forwarded me that way. After receiving some rather steep bids on our website (I’m talking $5,000+), I eagerly submitted project specifications and waited. Within 24 hours, I had 8 bids from experienced web programmers/designers.

I fired up Skype and right away I had eager salespeople requesting more details and fighting for my business. They came from China, Nepal, India, Hungary and the US. The best thing about it was that the average bid (including US bidders) had moved down to $2,000. I was getting excited. My final bid ended up being $800 dollars for a rather robust website with content management, file management and other much-needed features. I happily accepted a Hungarian team’s offer after finalizing terms over Skype.

If I never met the team, why would I hire them?

Elance provides all the infrastructure necessary to protect myself. It provides reviews, an escrow account, a rating system, an experience metric and a phased development. The site facilitated the transaction and removed the risks. Additionally, because the cost is so low, I had little fear over a failure.

Elance reveals a world that is much cheaper to enter than you may think

The most interesting thing on Elance are the bids for other, richer projects. I’ve seen Yelp Clones, Digg Clones, Content-Specific Portals, Social Networking Web Apps, Sports Betting etc. The cost of these sites often fall under $10k. I find this simply amazing. While I havn’t decided to foot the bill for my own clone, I do believe this speaks to the commoditization of technology.

While the tech is a commodity, the ability to execute an idea is the competitive advantage

VCs always explain they “invest in people, not the idea.” With so many eager foreigners ready to build that idea (for the cheap), I thoroughly believe this. Maybe I’m stating the obvious, but Elance was a very clear example of the lack of any barrier to entry. I find it fascinating and hope that my readers get the chance to experiment.