Outsourcing 2.0: oDesk CEO Gary Swart (Part 10)

Sramana: Are contractors starting to hire other people and build their own agencies?

Gary Swart: That is the real entrepreneur empowerment we have. One of our favorite contractors started on oDesk for $6 an hour three years ago. Today he bills at $33 dollars an hour. He has worked 3,000 hours this year with a perfect five-star feedback.

The companies that hired him wanted more and more of his time, so he told them about his friends. He had his friends work for him and he started a business. Now his reputation is on the line, but he started a business and employs 30 of his buddies. They can all work from their houses, but he has built an agency. His reputation and relationship with the clients is what makes others want to work for him.

Sramana: So his friends want to work for him because his reputation score lets them get work?

Gary Swart: Yes, he is adding value. He should be adding value otherwise his friends would be right to leave him and go work for somebody else. If they leave the firm, their reputation stays with the firm because the firm was first.

Sramana: How many cases like this do you have?

Gary Swart: Hundreds. There are companies in South America, Asia, and Eastern Europe. There is also a guy in Saudi Arabia doing that. The individuals who create virtual contract agencies are adding value to the equation. They find the talent, scale it, train it and form processes that work.

Sramana: In a lot of cases there is infrastructure which must be considered. I do 1M/1M Roundtables. This morning I had a guy working on a rural BPO business. I am coaching him, and I told him to focus on SEO. He is a computer scientist and should be able to find others in that geography. However, they have to deal with power and bandwidth. These are rural areas in India. If he takes care of all of that there is no reason why he can’t build an agency.

Gary Swart: Which will in turn deliver incredible value to the buyers of these services. It is saving them a lot of value. We see a lot of situations on oDesk where the new agency that has to get situated will do so by competing on price. In the U.S., people are not willing to compete on price at that level. They don’t want to compete.

Sramana: There are some people who would rather be on welfare than compete.

Gary Swart: I have an example of a woman who was very vocal. She was one of those people. She was older and handicapped. Then she got a couple of jobs which were lower paying. Within two months she was at $25 an hour and became a huge proponent. She flipped because she did good work and got great feedback. In turn she could raise her rate. She got more clients than she knew what to do with. She then started a service where she was outsourcing the work, and she was the middleman. She built a very nice business that way and became a huge oDesk fan. She went from advocating against oDesk to advocating for it.

Sramana: This 20% youth unemployment is ridiculous. There are kids who are sitting idle and wasting their time.

Gary Swart: We have jobs for them. There are great ways for them to earn money.

Sramana: This has been a great story. Thanks for the time.

This segment is part 10 in the series : Outsourcing 2.0: oDesk CEO Gary Swart
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