Crowdsourcing marketplace Freelancer.com is extending the idea of contests — where individual workers pitch ideas and hirers choose the best submission — from its design categories to every tyoe of work it offers through the site. It's understandable that a model which has proved successful in one area is being extended to others, but I'm not sure how well this will work when it comes to development projects.
The mechanics of a contest for the hirer are simple: you describe your project and then set a budget for the winning entrant. The minimum rate is $30; there's no absolute maximum, and Freelancer notes that the higher the budget, the better the level of entry you can expect to receive.
Obviously, no-one is going to submit completed code in the first stage, but I can still sense potential issues. A logo has to be relatively unique, but a contest entrant could potentially reuse the same submissions multiple times. An unscrupulous entrant could also steal open source code but then not acknowledge it, creating a potential legal risk for the hirer in the future.
More broadly, the give and take necessary in any software scoping process is absent here. If the proposal isn't sufficiently developed and contest entrants point that out, they're essentially providing consultancy for free.
That's my initial take. Your thoughts?