Everytime I see someone advising people who want to sell software online to “just go to Rentacoder or Elance!”, I cringe. It’s just not that simple.

Let’s take Joe Marketer, for example. He’s come up with a grand idea for a new piece of software, and other members of his mastermind group agree it’s an awesome idea. He’s done his market research, and he knows he can sell it for $97, and with a few lucky JVs, he could make a year’s salary from this one product.

The only problem is, Joe’s not a programmer. So, he surfs on over to Rentacoder and posts a project. In order to make sure the coders understand what he wants, he posts a very comprehensive project explaination. Within 24 hours, he’s got 16 bids ranging from $100 to $1000 to create his new software product.

Joe can either go for cheap, and hire a $100-$200 programmer, or he can shoot for the $1000 programmer with lots of good feedback.

Chances are, since Joe is still working his full time job, and is still working hard to try and make ends meet, he’ll choose the lower cost programmers. He’ll go back and forth with them for a couple weeks, until these lower cost programmers score a new, higher-paying job.

Joe gets the run-around for another couple weeks. The programmer tells him some things have come up, and when the deadline passes, Joe still doesn’t have his software. “I’ve invested 4 weeks of time into this project, I don’t want to start over from scratch…” Joe thinks to himself, so he extends the deadline for the project. In the meantime, the cheap programmer has completed his higher paying job, and is trolling for more higher-paying work. If he gets some, Joe will get put on the back burner again.

If Joe does happen to get his software actually created, it’ll be full of bugs and hardly professional looking. After all, the cheap programmer is only going to put $100 worth of work into it… especially if he’s doing other, higher paying jobs at the same time.

Joe is so excited about his new software that he gives it a quick once-over, and declares the project completed. The programmer gets paid, and he and Joe go their separate ways.

Fast forward to launch day. Joe has done his legwork, and has 3 or 4 heavy hitters lined up to promote his new software. Joe makes 300 sales, and grosses $29k in one day. Unfortunately, a lot of his customers are having problems with the software. Because Joe is not a programmer, he doesn’t have a clue how to fix it, or even what the cause is.

Joe frantically tries to get ahold of the programmer he hired, but he gets no response. Joe is left no choice but to hire another programmer to examine the code and try and figure out the problem.

While this is going on, his customers are getting fed up with Joe’s inability to fix the problem. They demand refunds. They talk about Joe on forums, and post nasty things to Joe’s blog.

By the time Joe’s new programmer finds and fixes the problem, Joe’s reputation is tarnished. “He’s the guy that sells buggy software!”, they say. Joe ends up refunding a bunch of sales, and the heavy hitters in Joe’s market will think really hard about doing a JV deal with him ever again.

Don’t be like Joe. Rentacoder and Elance are not the place to go to get software created that you plan to sell, especially if you are not a programmer.

Rentacoder and elance are the places to go to find programmers to work for you on a long term basis.

Post simple, cheap jobs there for software or scripts that are for your own use. If you find a programmer who’s dependable, responsive, and doesn’t charge too much, contact him outside the site (after the project is done - watch out for the TOS of the site you’re using), and offer him a freelance job outside the site.

If the programmer comes through on that second job, that’s when you offer him your *real* job. And don’t just offer him 200 bucks, either. Offer him his asking rate PLUS a percentage of the profits in exchange for long-term support, upgrades, and bug fixes. This will help ensure you have a knowledable person ready to fix any problems or answer customers’ technical questions on launch day and beyond.

Don’t fret about losing a percentage of the profits - your programmer will save you thousands of dollars worth of time, stress, and headaches. What’s more, after that first product works out well, you’ll have a go-to guy for all the new product ideas that pop into your head in the months to come.