Here's what i did to build http://www.cloudshuffle.com from a single dev(me) to a team of over 6 devs(+ a designer) in various countries. Also, from building social network clones(for $200) to building proper webapps for well known startups and companies like Compete, Hubspot.

* Sign up for all freelancer Marketplaces: Elance, Odesk, Guru, Freelancer, RentACoder.

* Sign up for RSS feeds for jobs(full time/freelance) in your domain.

* Start bidding, sending out emails to all of the above that apply.

* You're bidding against devs from 3rd world countries(so you will have to price somewhere in the median atleast until you get your first decent folio piece done)

* Also it doesn't matter if your request doesn't exactly apply. Don't be self-selective. Also even if you don't expect to get that job, apply still. Get your name out.

* Be very communicative, friendly and more open than a simple 'Here's my folio' etc. You're trying to sell yourself, so figure out what the client want, customize your pitch. This part will take a bit of hit and trial on your end to figure out how to get the first client reply. If your post looks like others, then you won't get one.

* Work on the side on your own project, something that's production worthy and you can showcase if the above steps haven't worked till then.

* Reply to posts on HN, Ask HN like Who's hiring + Who's hiring a freelancer. Even add yourself to HN contractor list and anything similar you see elswhere.

* Market, Market, Market every chance you get. I used to spend atleast 3-4 hrs initially just sifting through job posts, replying, emailing everyday.

* Remember to raise your prices sooner than you think.

* Recently i've been trying out Google adwords, which haven't really led to a lot of hits. But i've been getting like 1 really good query for like 100 clicks. For the average amount i make per invoice, that ad costs are very minor even at the ridiculous CPCs to hit the front page.

* A lot of people mention word-of-mouth here. This is really the best way. For every satisfied client you're essentially expanding your network exponentially and getting in touch with people you would never have come across. But initially since you might not have a portfolio, it will be difficult to get work this way. Also until you're able to price your work higher than average, you won't get the right kind of clients. And without the right clients you won't get paid higher. So it's a vicious cycle you need to get out of by piling up showcase work as soon as possible.

* With lower rates it will be difficult to sustain work, since you would have to take on more work before the current one is over. Hence your focus suffers and work quality too. So you're hampering your prices, word-of-mouth network further if you take on work and underdeliver. I've been guilty of doing this(probably still am).

* So as soon as you get too much work to handle, double your rates.

PS: I'm one of the third world dev that people on HN are very fond of :-)

PS2: Since i posted the link to my site http://www.cloudshuffle.com at the top of this post. So far i've gotten 51 visitors in 20 minutes. Cheeky i know! but it was on-purpose to prove my point about marketing yourself when you get a chance.

PS3: Also a weird point i noticed. Almost 95% of the traffic so far is European, and not American. That's completely different from Who's hiring/freelancer thread trend i've been seeing for the past 6+ months.