Outsourcing 2.0: oDesk CEO Gary Swart (Part 4)

Sramana: Tell me more about the demographic and psyche of this community that you have created. Who are your contractors? Are they small companies or freelancers?

Gary Swart: We are favorable to individuals. I think of them as remote workers. These are people who do not look for a different gig every day. They are looking for one client long-term. These are people who are skilled, and they are located all over the world. Our top three geographies are Asia, Eastern Europe, and the United States. We think the recession and globalization have fueled the entire business.

Sramana: Is Latin America big?

Gary Swart: Latin America is not as big as we think it should be, but we are not doing anything to promote it, either.

Sramana: Where are your employers located?

Gary Swart: In August we did over $10 million worth of work. Most of that work originated in the United States. Most of the employers are on-shore, and most of the contractors are off-shore. It illustrated natural arbitrage.

Sramana: The core of your business facilitates that arbitrage.

Gary Swart: It definitely does. We are also providing a mechanism for you to manage and work with those contractors around the world legally. There is a lot of complexity when working with an individual. Elance does not have this problem because it is mostly firms that subscribe and bid on jobs. Even if you hire a firm you are still working with an individual. We are big on knowing who the individual is and knowing who they say they are. With oDesk, if you see a company that has 500 contractors, you will know exactly which contractor you are hiring to do your work.

Sramana: What percentage of your workforce represents companies putting their people online for you to bid on?

Gary Swart: That is not a big deal, it is less than 30%.

Sramana: How has your revenue ramped over the years?

Gary Swart: Our revenue has doubled each of the last two years. Before that, growth was faster. I have been with the company since September 2005, and we have grown massively. We will do $120 million of services through the platform this year, and we take 10%.

Sramana: So you are an approximately $13 million company?

Gary Swart: We have some other services in our business because we are facilitating pay. We have also built a global payment platform that enables us to transfer money easily. Our business model is to take a percentage of hourly wage plus other monetization strategies.

Sramana: Can you tell us more about your other monetization capabilities?

Gary Swart: If a U.S.-based company contracts with a remote worker in Asia through oDesk, our billing and tracking solution will automate the entire process. You don’t have to submit an invoice or worry about collection. oDesk submits the invoice the employer and regardless of whether we collect the money, we credit the contractor’s account.

The contractor then has a choice to make regarding that money. They can have that money wired into their bank account, which is the most cost-effective way to gain access to that money. There are not a lot of companies that do international ACH money transfers, but we built the banking infrastructure to do that. Because we are doing that internationally, oDesk can make money on foreign exchange fees when we convert dollars to local currency. PayPal will charge 3% and we will charge 2%. We participate in the hire, manage, and pay.

This segment is part 4 in the series : Outsourcing 2.0: oDesk CEO Gary Swart
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