Outsourcing 2.0: oDesk CEO Gary Swart (Part 2)

Sramana: I just hired somebody on oDesk, and the way I structured the project it paid a fixed amount for a project to transcribe 30 interviews. It is staff augmentation, because I need that flexible resource to be able to augment my staff.

Gary Swart: You can use it that way; however, the genesis of oDesk was for time-based pricing. We have added fixed-price capabilities, but the majority of our revenue remains time-based projects.

Sramana: How did the founders get going?

Gary Swart: When Odysseas left Intacct, they had the platform and they focused on expanding it. His friend Stratus was in Athens and still is today; he is our VP of development and helps manage our global development team, which develops all of our products today.

They started oDesk by trying to sell the platform itself and found that to be a tough road. They were looking for companies that had outsourced relationships and tried to sell them the software to manage those outsourced relationships. What they found was that companies liked the idea of the platform but really wanted to see the workers supplied as well.

They then supplied the initial set of workers from their own network. If they knew a good Java guy, they would connect that Java engineer to the company that needed help. Slowly they built up to a couple of hundred of suppliers who would do work for the clients attracted to oDesk. That is when I came into the company.

Sramana: How did they find you?

Gary Swart: I came in through Sigma Partners just after they did the A round.

Sramana: How did Odysseas find Sigma?

Gary Swart: He did a lot of pitching. He met the guys at Globespan, specifically Venky Ganesan. He liked oDesk but wanted a partner and brought in the Sigma folks to help with the A round. They did the A round in two phases, one of which was to bring in a CEO, which is how I was brought in.

Sramana: How much was that round?

Gary Swart: It was two $3 million phases for a total of $6 million.

Sramana: How did Sigma find you?

Gary Swart: Early on in my career I worked for Pure Software as a sales associate. They were acquired by Rational, where I built the entire inside sales organization. Rational was later acquired by IBM. I left IBM to co-found a small startup called Intellibank, which was a lesson in focus, among other things.

Sramana: What was Intellibank about?

Gary Swart: We did everything. We were Salesforce.com meets Documentum meets Microsoft Project in the cloud. We called it extended relationship management. The funny thing is that today there are some really successful companies doing pieces of what we did six years ago. If only we had focused and done just one thing! The cool part of the story is that we ended up selling the company, and a tiny sliver of the company became Koral, which was sold to Salesforce.

This segment is part 2 in the series : Outsourcing 2.0: oDesk CEO Gary Swart
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