The key to being successful on these sites is to view them as a way to meet and get to know longterm clients. It's much easier to charge higher rates once someone has gotten to know you and the quality of your work. I often did one or two projects through the site on a fixed rate while we got to know each other, and then would work directly with them on an hourly basis after that.
It was a long road. I have had lot of non-related issues and difficulties but I almost got there. I made $10K doing it last year and I may make 3 or 4 times that number this year.
You are one of the persons who changed my life, although it was a simple response. Thank you.
I'm in Uruguay, we have a decent developer culture here, but I want to go the freelance route as well (I'm sick of my current job - it's safe and pays a reasonable local wage but is Dilbert-esque).
My programming skills are similar to what you had at the beginning. Did you blog about what you went through?
My goal is to quit my job on April (I get a small bonus at the end of March which, coupled with some little savings, will help me through the first few months), but to start my first freelance job in January to test the waters.
One of the things I loved about freelancing was that it was really easy to find an excuse to learn a new piece of technology - I just used it on the next project I worked on.
Short answer: Yes. Just be sure to differentiate on quality rather than price. Your fellow oDeskers are racing to the bottom on price. Let them. Casually walk to the top on quality and you'll find yourself all alone with a nice stack of work from good clients.
oDesk/elance/etc is where cheapskates who don't know what they want or how to ask for it go to get what they pay for from guys in India and Romania who don't know how to accomplish the work they're being paid to do.
On the other hand tweaking a couple buttons could be extremely valuable to a business that relies on it's website to generate leads. Smart clients don't care how much stuff costs they care how much money it will make them.
This is one of those places where a reasonable amount of extra effort yields a disproportionate amount of benefit. You don't make linearly more money positioning yourself as a real consultancy; you make much more money.
Here's what happens: No matter how you position yourself, billing $500 an hour to the zero prospective customers you (the general "you") have right now is still not very profitable. Most developers have about as much idea of how to find customers as they do about how to perform open-heart surgery. Connecting developers and clients is the one area where oDesk shines — and since it's the same area where engineers are weak, many can't help but consider it.
I'm not going to berate anyone for using oDesk, especially if they've found an oDesk groove that works for them. But I'd strongly encourage freelancers --- especially prospective freelancers --- to put lots and lots of effort into figuring out how they're going to do customer acquisition outside of sites like oDesk.
Whatever you may think about how convenient oDesk is, you are at the nadir of your professional competitive positioning on sites like that, and will probably (and avoidably) get your worst possible bill rate as a result.
I'd generally like HN'ers to be better at freelancing (it's the best way to start a new company, and it's the direction the industry is moving long-term), and so I'm prickly about things like oDesk which make it harder, not easier, to be a going freelance concern.
Your strategy though would be to build up a resume with oDesk. You're probably going to hit a limit though - I mean I've worked with $20/hr Eastern European developers that would be $100k developers in the Bay Area/NYC so it will come down to: what is your reputation and how much can you command.
After you build up a portfolio, you're going to have to use it as a spring board to get a fulltime job or fulltime onsite contracting for like $40/hour, etc. at a company.
From there you can basically build a "normal" software career and get the industry contacts, start networking as a programmer and if you decide can go back to remote contracting for a better-than-living-wage.
This isn't the path I took, but I know a lot of developers who have took this path, worked their way up the ladder throughout the 90's/2000's around the US, then 'retired' to a good life with their family in say Kansas/Nebraska (insert midwestern state) doing contracting work and getting to enjoy life the way they want (life Silicon Valley/NYC isn't for everyone).
REMEMBER, software as a career is going to be mostly networking and people skills in the long run - good luck!
Twilio also endorses oDesk as a platform for people to find qualified programmers http://www.twilio.com/blog/2011/06/twilio-partners-with-odes..., maybe the answer is to specialize and differentiate to become more successful when competing against $10 per hour international outsourcers.
The downside to freelancing is once you're in that niche it's hard to crawl out of it. I have been doing solely WordPress stuff on sites like Elance,etc. for the past 9months I have reached a point of boredom yet I can't get anything outside of that because everything in my portfolio is WordPress. So now I am screwed.
I realize a college student/single guy does not need all that much, but for a 29+, with a family, I think that's the minimum (again, with all the self-employment taxes, insurance etc).
I know I could get by on $60k per year but it really depends on what constitutes a 'living wage.' :)