Outsourcing 2.0: oDesk CEO Gary Swart (Part 8)

Sramana: Transcription is not necessarily easy, especially if you are doing highly technical transcription. Transcription is just an example. Translation is another area where there is a ton of work.

Gary Swart: There is a lot of work in translation. We have large customers coming to us asking for translation. They do not want PhD translators. They want Web-savvy, on-the-ground, in-country translators who have a driver’s license. They want people who have driven around their country and know the city or country. They want people with context. Where else can you go and get 100 people on the ground in Belgium in less than 24 hours? They need to speak Dutch, Flemish, and French, and have a passport along with a driver’s license. oDesk is the choice because we are the only place in the world to do it.

Sramana: How do you differentiate from the other providers in your category aside from Elance?

Gary Swart: If you look at their growth rates, you will see they are growing around 10% to 12% a year. oDesk is doubling year after year. We are the only company in the space that focused on individuals and time-based work. That is what we are really good at and that is what we will continue to invest in. It is just a different business.

Sramana: None of the others are focused on the individual worker? Freelance.com should be focused on the individual worker.

Gary Swart: They should be, but they are now focused on fixed-price. Their systems are scoped for defined jobs done at a fixed price. Who can afford to compete in those jobs? That is what happens at Elance. That is what happens in all the markets as well. As an individual, how many jobs are you going to be able to afford to bid on when you have to pay to bid every single time and the average job has hundreds of competitors with a total price of a couple hundred dollars?

It is just not worth it. You are competing against firms willing to do work free because they are using those markets as a lead generation service. Firms will use those marketplace jobs to train their workforce and perhaps generate some new business that they take offline. It is a race-to-the-bottom-marketplace where the only people who can afford to play are the firms. The problem is that when firms win the job, the buyer of services has no idea who is doing the work. Furthermore, the buyer don’t care. The buyer just paid for a deliverable. When the project is done, you release the escrow. It is great for the buyer. As soon as the scope on the job changes, there is a loser. The contractor has to renegotiate.

Sramana: oDesk is doing a time and materials model, which takes care of it.

Gary Swart: It does take care of it. That is the way the world works. We pay by the hour. We also offer fixed price but we don’t offer escrow. oDesk is fundamentally a different business. If you have a fixed-price project, go to one of the marketplaces. That is what they do. If you want to hire someone, then you should do it through oDesk.

This segment is part 8 in the series : Outsourcing 2.0: oDesk CEO Gary Swart
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