Digital cottage industries thrive

Date: 25 October 2009

Digital cottage industries thrive

By Maija Palmer, Technology Correspondent

InVictorian times, women who wanted to supplement the household income took in sewing.

Today their 21st century counterparts are logging on to the internet in the evening and making money from blogging, freelance research or selling goods on Ebay,as widespread broadband internet connections spawn a growing range of digital cottage industries.

The number of British people with an Ebay business has grown 160 per cent in the past two years to 178,000. Peopleperhour, a website that allows people to advertise freelance and homeworking services, has seen the number on its books grow from 5,500 a year ago to 21,500 today.

“We’ve seen a huge rise in interest in homeworking,” says Emma Jones, founder of Enterprise Nation, a website for home-based businesses. “We get around 60,000 visitors to the site a month, and in the last six months there has been a change in the character of inquiries. It used to be just people who were already running a business from home as their main business. Now there are a lot of people who are holding down a day job but looking for a second income.”

The more technologically savvy can make money from designing websites or, more recently, from creating mobile phone applications such as simple games or productivity tools.

About 40,000 applications have been submitted to Apple’s App Store, a site that sells small computer programmes for the iPhone, many created by amateurs armed with nothing more than a little bit of programming knowledge and a good idea. Mobile apps that make it into the top 100 list can generate thousands of pounds for their creators, although very few will enter this league.

Companies are also expanding their roster of virtual workers. Arise, a US company, is recruiting people in the UK to work from home as call-centre staff, fielding inquiries from Littlewoods customers by logging on remotely to its computer system.

Claire Travers Smith, a 28-year-old television producer, is one of 1,000 self-employed researchers working for AQA 63336, a mobile phone question and answer service. She fields queries on anything from train times to the meaning of life, and is paid 30 pence per question answered. This makes her about £600 a month, which helps pay the bills when she is between television contracts. AQA’s most industrious researchers can make about £3,000 a month.

“It is great – you can just sit at home and work in your pyjamas. All you need is an internet connection,” says Ms Travers Smith.

She is now looking to expand her online work to become a publisher of mobile phone text alerts, a service recently launched by AQA. Users subscribe to receive messages on certain themes. Ms Travers Smith, for example, is offering a service which teaches subscribers a new word each day, and one that sends text messages about interesting or quirky activities to liven up a dull afternoon. Both were her own invention but AQA provides the system that allows her to publish them and takes a cut for doing that.

Ms Travers Smith would earn a few pennies per message delivered, but with even a couple of dozen subscribers, this begins to mount up. “I already Twitter and blog just for the love of doing it, so it would be nice to get a little bit of money for doing something similar,” she says.

“Technology is a key enabler for people doing these things from home,” says Ms Jones of Enterprise Nation. “Everyone needs a website now, and people are using technology creatively. They are getting on Twitter to promote themselves, using online project management software and technologies like Skype to run businesses that just couldn’t have existed before.”

Other opportunities for extra cash are centred on the blogosphere. Google’s Adsense programme allows people to place adverts on their own web pages. While most produce little income, the more popular bloggers are negotiating their own contracts with advertisers, bringing in larger rewards.

Not everything works. Teresa Steventon set up a number of websites on Zlio, a company that allows people to set up virtual shops promoting goods such as books, shoes or fashion sold by mainstream retailers. The aim is to direct prospective purchasers to those retailers’ own sites and a small commission is earned if sales result. Ms Steventon’s Miss Shoe sitewas one of the most popular shoe shops on the system but she made less than £8 in 18 months.

“A little bit of money may be all you ever make,” she said. “I was spending a lot of time building up the site but I wasn’t earning anything.”

The downside of cottage industries – in the 1800s as now – has always been the low rates of pay. It may be that the largest gainers will be the big businesses that tap into this trend by providing services to aspirant digital entrepreneurs. For example, Moo.com, which prints customised business cards, has seen a surge in business from people looking to promote their new digital sideline.

Venda.com, which builds and runs websites for organisations such as the British Library and companies like Laura Ashley, recently launched a service to help small businesses and sole traders set up sales websites for £50 a month.

However, even with only pin money in prospect, financial pressures in the downturn mean many will still be tempted to log on and give it a go.