The new way to work: ODesk

So who are you?

So I'm Gary Swartz, CEO of Odesk.

Yeah, it's been a long time since I've been here.

It has been, yeah.

I think we did an interview in 2007. Is that right? Wow.

A lot's happened since then and nice to see you again. Of course I've seen you at events but we haven't had a chance to catch up, so glad you could come by.

So what is Odesk? Bring us up to date on what? Odesk.

So Odesk is a marketplace for online work teams. We enable customers to hire, manage and pay remote talent. So hire talent, find and match with the best talent from around the world. We have about 525,000 providers in our network. Buyers come to us to find.

Isn't that crazy? I think when I was out here there was 50,000 providers, if that. Right.

And now we have more than, I don't know, more than 4x that who are active on a monthly basis and over 525,000 in the network with more than 1,000 signing up every day. So buyers come to us to hire that talent then to work with that talent remotely as if they were in the same office. And then Odesk handles all of the payment and the compliance and the statutory around the world. So you don't have to worry about it.

Yeah. What's been happening? You were just about to show me what's been happening due to the recession in terms of work and how work trends are changing and all that fun stuff. Yeah.

So let me talk about that first and I'll show you the results of some of that. So what's happening is in this economy, buyers are. Buyers are looking for more cost effective ways to get things done so they're trying to do more with less. They've had to lay people off.

Right.

Jobs are. Unemployment's at an all time high and in that same time, Odes jobs are up over 470%. So we're seeing more people turning to sort of temporary contract online work in the last couple of years. So the economy is one of the megatrends. The Internet enabling you and I to work together remotely as if we're in the same office. And of course outsourcing and home shoring or whatever you want to call it, remote work is a trend that's also growing.

Oh absolutely. Inc Magazine, I think, just did a whole magazine working out of their houses. They didn't go into the office. And that's a change for that team.

I think we were mentioned in one of the Ink pieces talking about this trend. So we think that's a trend that's growing because companies can save money by not having offices and the like they can tap into.

So why do you guys keep coming into office?

Well, some of us do, right. So we have a. You're in our office. You can see we're a small office here in Menlo.

There's people working. You can hear them in the background.

Now if you were here yesterday, it would have been a very different picture. Tuesdays are work from home days at Odesk and there were only three people here yesterday. So to put it in perspective, we're only 34 employees. We have 70 full time equivalents that come to work at Odesk every day from around the world. And I can show you that. So we have our developers. Our QA team is managed by a guy who lives in New York. His wife's an opera singer. He lives in New York, he manages a team in Russia. He comes to this office once a year for a couple days. Our QA team is in Russia. Our developers are not co located, they're distributed all over the world. Our support team is managed by a stay at home mom in Tennessee. They're located throughout the world as well. So we eat our own steak and have only 34 employees and then about 70 full time equivalents that we've hired out of our network to build, to run, to deploy, to support, to market our service on a daily basis.

Yeah, what I found really interesting about your service was I can actually watch. So I can part out, I can bid, I can come out with a project that I need done, like a brochure or a website or whatnot. And I can actually watch the people do the work and see if they're actually doing what I'm telling them to do.

That's true.

And head off problems at the end because I can check in with them five or six times during the day and make sure that they're actually getting to where I think they should be getting to.

Well, you can, yeah, we like to say you can manage by walking around even though they're remote. And so it's like I'm sitting in the cube next to you. And it's less about sort of the monitoring, it's more about collaboration and communication and real time visibility to the work. And so I get up and walk around the office and say, hey, how's it going? And that's really powerful because you can course correct in real time.

Right.

You don't have to wait for a product to get thrown over the wall. That's not good product. And what you mentioned, Robert, is interesting about people working on projects or you can put a spec out and have people deliver to that spec. What we're finding is people are contracting much more for the long term. You find somebody you like working with and maybe they've done some work for you a couple of times and the next thing you know, they're on your payroll, if you will, for the next foreseeable future.

Right.

Six months, a year. And we're seeing longer and longer term assignments or engagements through our platform because people like that communication, collaboration and cooperation aspect of our platform.

Yep. What's been happening, what other trends are you noticing happening in work and how has your business changed since that last time I was here three or four years ago.

Yes. Let me start there. How's the business changed? Our business has doubled in each of the last two years. So if you were here in 07, we doubled from 07. 08, we doubled from zero to 09. We expect to double again this year. And so far we're three and a half months in. And those trends are that we're actually more than doubling now year. So we're seeing some really significant growth in our business. I'm very happy to show you some charts, but essentially about 2% a week growth. So again, back to those mega trends.

Right.

The economy forcing people to do more with less, the Internet enabling you and I to work together remotely, and then of course, outsourcing or the willingness and the need for smaller businesses tap into a global workforce that's not located in their current geography. And so all of those trends we're seeing manifest themselves in our business.

Are you seeing any qualitative difference in the kind of work that's being submitted to Odesk?

Yeah, we are. So if you think about our business on three dimensions, one of those dimensions would be the category of work or the type of work where we started mostly with technical work that led to adjacencies like QA and documentation and tech writing, which then led to adjacencies like business process, outsourcing, think marketing and translation. So we're seeing pretty aggressive category expansion. We're getting pulled out that X axis into all kinds of remote work. So, quick example, I was at a dinner and a guy said he needed an Arabic translator. And I said, gee, you know, I don't know. And I got on my iPhone because we have an iPhone app. And we did a little search and we found there were 100 Arabic translators.

Wow.

And he Went home. He ended up hiring a woman in Dubai for 10 bucks an hour who was thrilled to be working from Dubai for $10 an hour. And it worked out great. I didn't even know we had Arabic translators. So we're seeing liquidity in categories as we, you know, as the platform matures and as our buyers have success in one category and then say, what else can I do on this platform?

Another way to think, how small of a project can I hire you guys or hire somebody on Odesk to do, can it be a couple of hours or does it have to meet a minimum number of hours?

No, it can be any size project. You can do a fixed price project. You could say, hey, I have this simple logo or website design or something where it's fixed price and you very much know what your spec is and you post that spec and somebody delivers and you pay when you're satisfied. However, with that said, most of our work is time based work. I need to hire you to do this job and the specs may change, my requirements may change as I get into it and I don't know how we're going to work together. With all of that said, our average job on odesk is about $5,000.

So that's interesting. I wouldn't have expected that.

So we're seeing longer term engagements. What's happening is you end up with a great marketer or somebody, a writer or blogger, social media expert or somebody that you really like working with and the next thing you know, you keep them on your payroll, if you will, and you use them when you need them. It's a flexible bench of talent, available, willing and ready and able to work for you.

Wow, this is like crack for consultants, isn't it?

It is. So we think for consultants we're delivering pretty good value, right? One is we guarantee payment if you log your time in our time tracking and billing system. We take the risk of collecting the payment from the buyer. So it's not about the quality of the work, it's if you worked an hour, I'm going to pay you for that hour at the pre agreed hourly rate whether we collect the money from the buyer or not. And so that guaranteed payment is pretty powerful for providers. And we pay every week again, whether we collect from the buyer or not. We also give them the ability to post and set their own hourly rate whenever they want. They can change their rate higher or lower. And there's really good evidence of people that have doubled and tripled the rate in a year because they're worth IT in the global economy and of course they can market their skills online and we take all the hassle out of time tracking and billing and automating. Now, on the buyer side, we guarantee work.

Right.

So what I'm doing is because I'm giving you transparency and visibility into the actual work that's being done, you get guaranteed work, you know that you're only paying for actual hours worked. And similarly, I eliminate all of the payment hassles. Right. How are you going to pay your providers, especially if they're located around the world and if they're in a different state, are you going to have to worry about state taxes and unemployment and worker classification? We take care of that for you so you don't have to worry about it.

That's really cool. I just saw an iPad on your desk. How is that changing how you view odesk? And how are we gonna see an iPad app soon?

Well, we have one, so we have an iPhone app.

Right.

But that looks ugly on the iPad.

It does.

You hit the 2x, it's a little bit furry. So you might want to ask that question a little bit louder. And we'll see what Duncan says about it.

We'll.

We empower our product teams to build the product that they think is going to move the needle. And so we have a product team focused on that and they'll decide whether or not. I do have to mention one thing though. Our iPhone app we had built out of our own network. So our whole system is API driven and we needed an iPhone app. We went out to our marketplace, we found somebody, we ended up collaborating with them and they built our iPhone Apple and we pushed it out to the market.

It shouldn't be too difficult because if you already have an iPhone app, building an iPad app's not that difficult. It might take a rethink of the UI and maybe a little bit of new code, but you're already probably 75% of the way there.

I was playing around. Our website works very well. So our web app on the iPad is great. I can check on the team working and know how much I'm paying and what's being built right now.

It's interesting to see how. I was just at Citrix yesterday and they showed me Windows 7 running on the iPad. So they're starting to sense or build things to enable at home, work and intimate at homework. I just set up a desktop sharing program on my Mac so I could get to it on my iPad. So I don't even have to walk upstairs anymore. Oh, I Need a file? I need to show my wife a picture I took. I'll just sign into my computer and look at it on the iPad. I'm too lazy to walk upstairs.

Oh, you got to hook me up.

I need to know.

Cost 30 bucks.

There's several of them, so I'm trying them out to see which one's the best. What's happening with the. What's changed about the technology at oDesk? How you guys are built? Is it still the same old thing or are you moving to cloud?

Yeah, we're moving to cloud. Well, we re architect a lot of our system and made it much more open. So our customers are asking for more integrations and more functionality. And if you try and keep up with doing all of that, then you can lose focus on your business. So by way of example, one of our very large customers, whom I'm not allowed to mention, but a very large customer here in the Bay Area wanted integration with their project management system. They wanted to be able to assign tasks and projects directly into oDesk without having to post a project, hire the providers, etc. And so we had to build that middleware functionality to support that. And so what we did was we opened up our platform, we hired a Django and a Python developer in our network, and they did the integration. And then we turned around to that customer and said, hey, need any more? They were like, wow, this is fantastic. How did you do it? We said, if you need any more, here's your guys. This is your professional services group to do more. Similarly, customers have asked for integration with basecamp and with Atlassian and with Bugzilla. And rather than have to take on that onus ourselves, we can now push it out to the network and say, here it is. It's an open platform you built. So, you know, really, that openness as a. Or, you know, platformization as a strategy was big for us. So any feature we do now, we sort of re architect with that openness in mind.

Are you guys in the Google App Store?

We're not in the app. The Google App Store.

What are you thinking of that? Because that's something that I'm tracking and it's interesting to see what Google's trying to do.

Yeah, I'd love to introduce you to our CTO and let him chat with you about it because we think there's. We believe that there's some really interesting possibilities there.

So what's the challenges for you as a CEO lately?

Challenges for us are useful, scalable and known. Big, big businesses.

Do you Think we're ever going to see a CEO job available? I need a CEO for a couple hours a week.

So you think about ebay, right? Ebay started with Beanie Babies and Pez dispensers. Then they went to chat.

Sorry, go ahead.

One of the other changes we're seeing in our business is that we're getting pulled up the size of firm access, so size of buyers that use Odesk. We're aggressively getting pulled up, up that axis as we're getting pulled out the category axis. And similarly there's a third axis which is location of buyer and provider. How global are we? And we're getting pulled in every direction pretty nicely. So because of the economy, we have larger buyers saying, hey, why not us? Can we have a flexible bench of talent? And you know, that's the large customer that needed a flexible bench of rated, ranked, tested talent on demand, directly connected to their project management system. And they want to be able to assign a task or a project or work to be done, have somebody take it down, do it, submit it, get rated on it and get paid for that work that they've done for the time they've worked on it. And we've done that. And so we think that the larger customers are waking up to this new way to work as well as we move out the category axis. Now there's some types of work, CEO, high end consulting, et cetera, where you still want that heavy relationship from the McKinsey, if you will, or from the, from the firm. But I think as this, as the world and the world of work changes, I think we will move out and up that category. Access into Rolex, car, town house, whatever it is.

Yeah. You're not tracking how all these social tools that are moving into the enterprise are changing work, are you? That doesn't really affect you too much like Salesforce Chatter or Jive or social text.

Not directly. But what we are doing is we've created an online jobs report where we look at supply and demand in each of the categories and I'm very happy to share that with you just to show you what's going on in the world of work. According to Odesk. So in the month of March, almost $9 million through the platform and work, and I can give you all the statistics on that work. What skills are they looking for? So I can tell you. IPhone is massively up and to the right. Next month I'm sure I'm going to say look at iPad massively up and.

To the right, which is really the same thing. If you haven't built an iPhone app yet. Now you need both an iPhone and an iPad developer. And they're the skill sets are almost overlapped, they're saying.

But yeah, and so you're gonna overlap that development. You're gonna say, hey, build me something that's scalable to both. Right. But similarly, you know, so what's going on with social text versus WordPress versus, you know, I can give you those statistics.

Oh really?

Yeah.

Do you share that with the public?

We do. It's publicly facing, yes.

Okay.

Not only do we do it on our website, but we create an online jobs report which I just got for March. And so I can show you what countries where the dollars went by country, where they went by skill, what the average rate is by skill, the average feedback by country, and all the statistics around online work.

Can you tell me what's the most popular programming language, for instance?

Yeah, I can.

Yeah.

According to oDesk. Yeah. I mean, I don't know offhand. I know, but we can look at our report.

Really?

Yeah.

Interesting.

So we think there's some cool, you know, as again, as this category grows, that data becomes really interesting too.

Yeah. What else is going on here?

You know, we're just doing our part to try and change the way the world works. We think that we're bringing a lot of value to buyers. We think we're clearly bringing a lot of value to providers and we don't see the trends slowing anytime soon.

Do you offer health care through your system? Is there a way to buy health care?

There is. So we have two, two ways to work on Odisk. So let's talk about the US So what we've done in the US is some of our buyers have come to us and they've said, you know, this doesn't really look like a 1099 contractor anymore. I've been working with this provider for more than three months. The work is somewhat regular. They don't have any other clients. I'm directing the work. Even though they've never been on site, it's their hardware and software. It feels more like an employee relationship. Can you help us with that? And so the first thing we did was we said, sure, we can help you with that. And we now offer a W2 option. This is really powerful. So again, in these long term engagements, Odesk has your back so you don't have to worry about worker misclassification. Check the box and we'll worry about it for you. And we'll take care of all of the withholding, the taxes the fica, the futa, all of the withholding, the unemployment and benefits. So we offer benefits for 401k and college savings plan everything through our network.

Wild.

Yeah. So we, we can help you.

Did you ever imagine you would do all that when you started Odesk?

You know what's funny is we kind of, we kind of started thinking about that. And so I think as we built.

The platform, so I don't remember you talking about, you know, oh, I'm going to build a place for people even to be almost full time employees and get benefits.

And clearly the market wasn't there. So that would have been so far ahead of the market, you would have buried yourself in compliance issues before you were ready. We took the approach of let it be a problem when it's a problem or an opportunity when it's an opportunity. And that opportunity is now. So the market asked for it from us, they came to us. We have clients with 25, 30 people working through Odesk every day that are us. So it's an onshore buyer and an onshore provider. And now we can protect you. So we offer, we'll take care of the 1099 on your behalf or if you want, check a box and we'll take care of the W2 and providers like that also because now they're getting benefits. Now through that process, what happened was other providers said, hey, that's great, but I'm not full time, can I also get benefits? And so we offer, we're about to offer, we've got it structured, we just haven't launched it. But we, we will offer benefits to anybody in our network who wants to take advantage of it, whether or not they're working full time or not. And we've done some interesting things there. We were able to go out and get a product that is really price competitive. And we offer two products. We offer a basic, we will offer a basic everyday plan and you can combine that with a catastrophic plan. So the everyday plan is nice because, because you can say, hey, if I have to go to the doctor, if I break my leg, there's a maximum payout per year. But it could be really powerful if you're a freelancer or part time worker and you need to get coverage. Similarly, you could say, you know what, I'm willing to pay for my doctor visits, but I need catastrophic coverage. What's that going to run me? And by offering two and putting the two together, we've come up with something that we think is really price competitive and offers great benefits to our Network of providers.

Very cool. What does your iPhone app let you do?

IPhone app lets you pretty much do everything. So you can see your team working for you.

So you can be at a cafe in London and be watching all this.

And check in with your workers and chat with them right there and say, hey, how's it going? I see you're working on bug 352. You think we're gonna be able to push tomorrow? How's the progress? So you can see what they're doing. You can collaborate with them in real time. You can see how much have they billed by team room by any way that you want to measure that.

Very cool. What a wild world, huh?

Yeah, I think we happen to time a couple of megatrends well. And yeah, it's wild. And we don't see it slowing. We see this. If anything, it's extreme. I mean, our numbers show that this is actually accelerating.

Well, thanks so much for giving me a little look at what's going on.

Yeah, my pleasure. Thanks for coming by. Always happy to catch up.

Very cool. So we're here with Gary, the CEO of Odesk, and you were just showing me what it looks like to hire somebody or to work with people on Odesky. So what's on your screen?

Okay, so what you're looking at here is we eat our own steak, right? So here we are. This is our support team. And you can see who's working right now. So I can see that a Oliver guy working for us in the Philippines is on right now. He's working on tickets. I can see his latest screenshot. I can see his activity logging. So what has he done? So his green status bar, his keyboard strokes and mouse events. And here you can see Bea working on chat. And so I have real time visibility. I can simply click here and chat with her. Right. So I have real time visibility into the work as it's happening.

Now. How much of this is on your iPad as well?

This is all on our. This is all on our iPhone app. So this is what we built on our iPhone app.

Wow.

And so I have the ability to just click here and chat and say, hey, how's it going? I see you're working on chat. I need you to switch and work on tickets instead or reprioritize based on what our needs are. And then I have it organized by team. So here's our support team, here's our development team, and I can see what developers are working on right now. And here I can see Andre and I can double click and see exactly and what I like, it looks like.

Twitter a little bit because they can put a little status message in what they're working on.

Yeah, exactly. And then, you know, I really should show you this. But what we can do is you can report on these tasks, so you know what tasks they're working on, you know how long they worked on it, you know how much they're paying them. You now have time per task, time per defect, time per thing. Right. And so we use that in reporting. So I can show you what's the most expensive feature last week, last month, this year. And so this funnels right into our web app, where I can come in and just very quickly run a report on that and say, okay, how much have I spent on that feature or that piece of functionality?

Yeah, that's really cool.

Time analyze. So really, it's taken the power of. Of Twitter, which we've put into our work environment, and, you know, just our own version. And we call it work streaming.

Right.

It's exactly what you've done. So here I just ran a report, and I can show you that last week bug250.53.

Where is that?

You can see the actual bug was my most expensive feature last week. 910 bucks on that. So I know I have granularity down to how much on the front end, the back end, this feature, that feature. So because they're reporting on what they're doing on a regular basis.

Wow. And we also, while the camera was off, we looked up iPad developers or who had iPad listed in their title, and then you could see how much they'd been paid in the past and then what their rating was, and all sorts of fun stuff to figure out if this guy is really a good developer or if he's a crappy, you know, somebody who's just starting out and trying to pull our leg.

Yeah, exactly. We want to give you all of the tools to make a good hiring decision with full transparency and visibility and previous work history and the like. So, you know, we just did a search on iPad. We found 50 people with iPad in their title. So they're putting iPad in their title. They're pretty serious. And then we can drill in specifically to an iPad developer. And so let's look at this guy, Nitin. And here's Nitin. He's $25 an hour. He's got perfect 5 feedback. So if I come over here and just look at his feedback, Perfect five based on his skills, quality, availability, deadlines, communication and cooperation. Yeah, I can see he's in Chennai. And here's his previous work history. These are just the top four or five of his jobs. He actually has 12 jobs he's done if I want to drill in and see more. And I can actually see the comments that the buyers have said about him. Yeah. So you now can make a good hiring decision based on the wisdom or the knowledge of the network working.

That's awesome. Thanks.

Cool.