History of oDesk

oDesk was founded in November 2003 by Odysseas Tsatalos and Stratis Karamanlakis. The pair had known each other since attending high school together in Athens, Greece. Odysseas, very much the brain child of oDesk, had since left Greece for California to further his studies and secure work in the field of IT.

The pair stayed in touch over the years and in 2003 they joined forces to found oDesk. The company was incorporated in Menlo Park, California. The pair used collaborative technologies to communicate and work together in real time, overseeing the development of the oDesk platform and building the business up first with Odysseas' savings and then with his lines of credit.

After 18 months Odysseas' wallet was running on empty. 1 and a half years of supporting themselves, their families and a team of developers had taken its toll and the pair agreed it was time to turn their attention to achieving long term sustainability and attracting investment to support that goal.

It was at this time they decided to get Gary Swart on board as CEO. Gary had plenty of experience to bring to the table and was considered key to securing funding. He continued to work on organic growth of the business while working up the business plans and financials to get oDesk ready for investment.

Meanwhile Tsatalos and Karamanlakis continued their long distance partnership with Tsatalos taking the reigns as CTO and Athens based Karamanlakis the role of VP of business development.

Seed Funding

on 25th April 2006 the first big breakthrough in funding was announced. Swart had brung home the bacon and the firm announced it had been successful in obtaining $6m in first round funding from two Californian Venture Capitalist firms, Globespan Capital Partners and Sigma Partners.

This vital cash injection would be used to further develop the business model and ensure it was able to meet the growing demand from its buyers, for quality, affordable talent. This demand was already growing at a rate of 20% per month by now.

Within a matter of weeks, Thomas Layton, CEO of OpenTable.com was appointed to oDesk's board of Directors. He joined a representative from each of the VC firms that provided funding, together with Odysseas Tsatalos and Gary Swart. It was hoped Layton would bring his vast experience in developing Internet start-ups to the table and help guide strategic development of the business. Although not widely reported, it is understood that Layton could bolster the executive team at oDesk and help them secure 2nd round funding.

Within months, oDesk had once again struck gold in terms of investment. On September 27 2006 the firm announced it had secured an additional $8m of backing, headed up by Benchmark Capital a leading Silicon Valley VC firm who had already invested in Ebay, Red Hat and MySQL. This second funding boost gave oDesk the much needed liquidity to bolster its position in the market, expand its marketing efforts and grow its revenues.

Enhancing the Product and Service

In August the site started beta-testing online skills tests for its global workforce and in November of 2006 it formally announced the launch of its free online skills tests which had been developed to ISO 9001 standards.

On the same day (7th November 2006) oDesk published a press release announcing it had teamed up with O'Reilly, the leading publisher of technology books and resources to produce the oConomy section of the oDesk website. The oDesk oConomy would be a barometer of health for the company and the wider technical outsourcing market.

By the end of November 2006 the company felt ready to scale up operations and pursue a dominant mass market position. To facilitate this growth and the transition to a mainstream outsourcing marketplace oDesk made the bold move of slashing its fees from 23% to just 10% a figure which remains in place to this day and remains one of the lowest in the industry.

At the end of March 2007 the firm introduced its fixed price model which was similar to the business model in place at many of the existing freelance marketplaces. This flexibility would enable small businesses to tender projects on a fixed price basis instead of an hourly paid basis or choose which of the two models best suited their needs.

oDesk was now a one stop shop for micro-outsourcing, an SME who had ongoing requirements could taken on a regular remote worker and monitor them using the suite of tools which were in place to facilitate this, while those who had a one-off requirement and were more comfortable hiring someone on a fixed fee basis now had the recourse to do either through one marketplace for the first time.

In April of 2007 the firm reached the $10m billings threshold and announced that more than 7,500 technology projects had been completed through its online outsourcing platform. Later that month oDesk announced the launch of its Pre-paid MasterCard released in conjunction with Payoneer, a leading provider of e-payment solutions.

By September oDesk had logged more than 1,000,000 hours of work by its global workforce which stood at 22,000.

The First Awards, Rewards and Recognition

By 2007 technologists, the media and big business were beginning to recognize the achievements oDesk had made in a relatively short space of time. The company was named one of the top 100 privately owned technology companies by Red Herring, they won the WebAward Standard of Excellence in the professional services category.

At the end of October oDesk was nominated as a rising star in Deloitte's Fast 500 Technology Companies list for North America.

More awards and money in the bank

In June of 2008, oDesk secured a third round of funding worth a total of $15m from DAG capital and its existing financial backers. The funding was much needed to help the company continue its ambitious growth strategy and climb to the top. It had tripled its turnover in each of the previous years and by now the total value of work done through their online marketplace had exceeded $32m. It had also increased its user based to over 80,000 freelance providers. By September 2008 these figures had increased to $43m in billings and 125,000 freelance providers.

In October 2008 oDesk was shortlisted as a 'Rising Star' in Deloitte's Fast 50 Technology Companies, Silicon Valley. In January 2009 the company was nominated as one of 200 finalists for Red Herrings Top 100 Global Award.

During July 2009 more than $65m worth of projects were posted on the oDesk platform and more than 400,000 hours of work were recorded.

In August 2009 oDesk was placed 110 on the Inc. 500 list of America's fastest growing private companies due to sales growth of 1,470% in just 3 years. By the end of the year oDesk was focusing on the homegrown freelance workforce, home-shoring was set to be big for 2010 and beyond and oDesk wanted to be ready for it.

Key benefits for homegrown talent

In December 2009 the firm announced a range of benefits for US based freelancers which were previously only available to full time employees of US companies. Group medical care, retirement plans and education funds were opened up to the American freelance workforce. In addition to the benefits to the freelance worker, the move meant freelancers would be less likely to shop around on other marketplaces for work and more importantly less likely to consider disintermediation as an option.

During 2010, oDesk has continued on its path of growth with billings climbing to more than $25m USD per month by the end of 2010. oDesk is set to be a dominant force in the online outsourcing and freelancing space for many years to come.

References

http://www.bizjournals.com/sanfrancisco/stories/2007/07/16/smallb4.html

http://www.freebase.com/view/en/odysseas_tsatalos

http://www.toptechnews.com/story.xhtml?story_id=030000YRMLB0&full_skip=1

http://www.odesk.com/w/odesk-announces-$6-million-series-a-funding

http://www.odesk.com/w/thomas-layton-ceo-open-table-joins-odes-board-of-directors

http://www.odesk.com/w/odesk-announces-$8-million-series-b-round-led-by-benchmark-capital

http://www.odesk.com/w/odesk-o%27reilly-parter-globalization-mashup

http://www.odesk.com/w/odesk-rolls-out-free-skills-testing-for-software-developers

http://www.odesk.com/w/strong-growth-enables-odesk-to-slash-fees-nearly-60-percent

http://www.odesk.com/w/odesk-adds-fixed-price-jobs

http://www.odesk.com/w/record-$10-million-spent-outsourced-technology-projects-odesk-global-software-development-marketplace