Enter the O-Desk, next level of entrepreneurship

by Magnus Penker on January 7, 2011

Today I will share a recent happening but before that some words about trust. Trust can be one-dimensional, two-dimensional or transformational meaning that ether you have trust or not in your business partners (one-dimensional) or you can have both trust and distrust at the same time (two-dimensional) and an evolving trust, the transformational trust theory, meaning that trust is build up in three steps:

  1. Calculating whether do to business or not with a person or an organization
  2. Developing knowledge about your business associate
  3. Developing mutual identification

Recently I used odesk.com (the world’s leading network for freelancers, very competitive pricing) to find skilled people for a project. We applied game theory by asking +20 people giving them a chance to do a micro-delivery before selecting three of them going further with the larger project. The same project, the same task. This way we mitigated the risks, reduced the costs (even if three person did the same job) and finally increased the capacity being able to scale up with higher speed. At the first thoughts  it seemed crazy to ask three people to do the exactly same task. However, this way we

  1. could in a secure way select the right people (without knowing them, taking references or even being sure who they were)
  2. do it faster (quicker to find and start up than other free lancers) with less risk of delays or bad quality (=game theory applied on development)
  3. deliver cheaper than if it was made locally in-house or by sub contractors or freelancers

Basically what we did was to add game theory to the existing trust theories – meaning:

  1. Instead of only play with safe cards, take a chance of finding new possibilities on the global arena. Skilled and motivated people in other parts of the world, ready to take chance.
  2. Make it in small portions with redundancies (three persons doing the same task) to mitigate the risks (= give the same small task to several people in the same time. Still cheaper since the fees are approx 10% of equivalent local services)
  3. Evaluate, motivate, build trust and relationship
  4. Build common a ground and eventually identity

By the way, ODesk freelancers actually get better paid that if you go through offshoring companies paying less salary (classical offshoring companies cut approx 70-80% of the fee, while ODesk take 10%). Moreover the freelancers constantly get ranked by their clients building the freelancers reputation and brand towards better assignments and finally increased compensations still profitable for all involved.

About Magnus Penker :

Director-level consultant defines corporate strategy, sets direction, executes growth and turnaround business plans. Read more at http://www.linkedin.com/in/magnuspenker

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