Outsourcing 2.0: oDesk CEO Gary Swart (Part 3)

Sramana: How did you go from leaving Intellibank to being the CEO at oDesk?

Gary Swart: In the process of raising money at Intellibank I ran into Greg at Sigma, who told me that they liked me but not Intellibank. Sigma then asked me to come run one of their companies. That is why I ended up here.

Sramana: What happened when you joined oDesk? How did you get to know them and bond with them?

Gary Swart: When I came in through Sigma, oDesk was small. There were fewer than 10 employees. They had really cool technology and good traction but it was not scalable. It was a high-touch business that had people in between the buyers and the sellers. There were some business doing marketplaces, like Elance, that were not as successful. Elance was not doing very well. When we looked at it, I could not see us being a similar business because it was not doing well.

We recognized that we could give away the match free and monetize everything that happens after the match. That is what we are doing today.

Sramana: How did you get your first customers?

Gary Swart: The customers were coming in via marketing efforts. To this day we have never had a salesforce.

Sramana: What kind of marketing do you do?

Gary Swart: We do a lot of search, both SEO and SCM. We did a lot of social media advertising as well.

Sramana: What types of keywords would you focus on?

Gary Swart: We had thousands of keywords. We focused on keywords like “PHP programmer.”

Sramana: You were trying to catch the people looking for contractors with those keywords. How did you catch the contractors?

Gary Swart: The contractors have always been viral. We have never had to advertise for contractors. Today we have 740,000 contractors in our network, and we acquire them at the rate of 1,500 a day. They come now because they recognize the value we deliver for them.

Sramana: Today you have critical mass, but I was more interested in how you got started.

Gary Swart: It was chicken and egg. It took a lot of in between touch to get the flywheel started. You as a buyer of services would come in, and we would have to talk with you and do the match because we did not have the marketplace, feedback and test scores. We did not have enough liquidity so we had to facilitate that match by hand and then build the online marketplace. The marketplace, however, was just the fuel to get people billing by the hour.

If you think about oDesk, we are a global employment platform. We allow companies to hire and pay as if they had a remote office because of our backend infrastructure. We guarantee work by the contractors and payments by the buyers. In a remote environment how do you know that someone really has worked an hour and how do you course correct and manage that worked?

How does the contractor assure they get paid by someone half way around the world whom they have never met? We take the risk of collecting payment from the buyer. We pay the contractor whether we collect the money from the buyer or not.

This segment is part 3 in the series : Outsourcing 2.0: oDesk CEO Gary Swart
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