Yesterday I went to Lunch 2.0 hosted by Dave McClure who’s helping out at oDesk. No, it wasn’t as big as the one I hosted at Hitachi Data Systems, but it was the perfect way to end the week, beers, pizza on an outdoor patio in gorgeous Menlo Park.
Outsourcing as a Web Strategy
At the Future of Web Apps conference, Kevin Rose (founder of Digg) said he started his website for a mere $2000 using outsourcing websites. Outsourcing is one of the fastest and cost-effective ways for small and agile web companies to get moving. Having access to specialized talent is key in today’s fast moving environment. Having to hire a full-time specialist for small web team can be challenging. I’ve read other articles predicting the future of the common knowledge worker to be consulting for various companies, and be focused on a very specific specialty. With oDesk you can quickly get moving with quality and manageable development services. Finding specialized services using the web is what the long tail is all about.
The Global Specialized Workforce
I got a product tour, and here’s some of the key features and benefits of oDesk. As an outsourcing solution, it allows web managers and web strategists to find cost-effective and quality web development services. It also enables a global marketplace for developers, designers, and engineers to connect and find the right type of clients for their services.
Interesting observations from watching the oDesk for sale and offerings section on the homepage: “Mobile” development is the highest cost with the least supply. Someone wants to build a PatPerPost clone. QA services are the cheapest. There are more .net developers than any other skillset.
Find Talent or find Projects
oDesk displays the price per hour of any particular web skill set. You can then bid, negotiate, and interview talent in an easy to use interface or connect using your own preferred communication tools. For every request for development you put, you receive at least 20 qualified leads (much better than the random submissions for craigslist).
Reputation Management for Quality Services
The benefit is the social network and reputation management. Like eBay, oDesk allows the purchaserse to rate the Quality of Service of the developer.
Time and Progress Management
oDesk also has a unique feature that allows managers (buyers) to watch what the developers are doing in remote locations. It takes screen shots at random times, and can even do a webcam shot to oversee the developer. Although that model is not perfect, there’s a greater degree of knowing exactly what you’re hired programmer is doing. I’d guess that the oDesk application gives more accountability to what folks are working on that in many corporate office jobs where folks can easily hide in cubes.
Unlike project based systems, oDesk prides itself in only allowing web teams to pay for the exact hour amount rather than a fixed price. This protects both the buyer as well as the hired developer who will never have to worry about that nagging scope creep. oDesk gets a marginal cut of the transaction costs, this is really like a micropayments model that leans well on a transactional business model.
Web Strategy: Adoption, Community, Extended Value, Upstream
The product looks pretty good the world needs services like this. I suspect Marketing is going to be pivotal. I’d say oDesk has is a service that needs to quickly be extended to web buying teams, so the key challenge will be to gain fast adoption if larger players like eBay, Google, Monster, SimplyHired, Craigslist and other established web companies enter this space (or smaller guys like Rapleaf offer widgets or plugins to existing reputation profile sites).
Cultvating their existing community of developers and buyers is a fantastic way to do this. Additional values beyond reputation management, project accountability and pricing will need to be offered –a complete ecosystem with value added relationships will be needed. The community will be a competitive advantage.
When the other larger players enter this space, I suspect a price war on margins will reduce profits. More and more of the revenues will be kicked-back to developers. As you know, where the best talent goes the buyers will follow. Whoever can pay the developers just a slightly better margin or offer a stronger value may cause them to jump, esp if they can share their reputation profile on a public webpage in other systems.
They’ll need to quickly evangelize to the Web 2.0 communties, move to small market, then up the chain to medium and larger markets. At some point, extending to other service verticals (perhaps accounting or research) will be key for long term sustenance and mainstream adoption.
Three cheers for oDesk!!!
oDesk is the connective tissue for the global work force, rapid web development, and connecting specialists with paying clients. Never before has the world been able been able to benefit from the long tail of employment and oDesk helps to deliver this.
Again, many thanks to Dave and the oDesk team, here’s to yet another great Lunch 2.0 event!
oDesk Front Lobby
Host Dave McClure welcomes Mark and GF
The PR2.0 Gals
Manage and Watch your remote Workforce with Screenshots, Click Tracking and Webcams
Product Demo with Sergey