So Tsatalos figured out a way to collaborate with his old friend using a webcam and shared computer screen before such technology was in fashion. Seven years ago, they co-founded a company based on their experience, a venture called oDesk that lets employers manage freelancers across the globe as if they were in the same room. Coincidentally, oDesk’s technology allows the 45-year-olds to continue their trans-world partnership. Tsatalos (his full name is pronounced oh-DE-say-us tsa-TAL-os) is oDesk’s chief technology officer. Karamanlakis is oDesk’s Athens-based vice president of development.
Based in Menlo Park, Calif., oDesk has become the world’s largest online marketplace for freelancers — based on monthly hours worked and payroll — by making it easy for employers to find, oversee and pay contract workers, all on the Web.
Colleagues attribute its success to Tsatalos’ infectious enthusiasm and uncanny resilience in the face of adversity. A fidgety fast talker with darting brown eyes, an easy smile and a penchant for pacing, he embodies the company’s core message of workplace mobility — an unlikely executive whose nervous energy puts him in near-constant motion. He wears shorts and a T-shirt in the office and can just as easily be found toiling in restaurants, habitually armed with a small device that affords him Wi-Fi anywhere.
“My personal vision is to see a world that can work from wherever they want,” says Tsatalos, who packs big ideas in run-on sentences. “People don’t have to move to where their job is. They’ll move to where their family and friends are.”
Distinctive yet controversial
ODesk’s most distinctive, and controversial, feature takes frequent snapshots of workers’ computer screens and records their keystrokes and mouse clicks so employers know when they’re working and what they’re doing. Most are paid by the hour.
That draws criticism from privacy advocates. But oDesk is at the forefront of a shift in the U.S. workforce from full-time staffers to freelancers and other temporary workers who could be 25% of the labor force in a few years — more than double the present share.
Many cost-conscious employers are recruiting specialized workers for short-term projects instead of beefing up permanent staff.
ODesk’s network includes 215,000 employers and 733,000 contractors in 150 countries, figures that have nearly tripled each year. Its pool of freelancers includes software developers, writers, graphic artists, customer service representatives and administrative support staff. With oDesk taking a 10% cut of their pay, revenue has mushroomed from $518,000 in 2006 to an estimated $12 million this year.
Besides the monitoring system, oDesk software lets employers quickly sift through candidates’ résumés and view other employers’ ratings of them, much the way eBay buyers rank sellers. And it takes care of all the messy details, paying contractors electronically and handling any legal issues, such as complying with overseas labor laws and non-disclosure pacts.
Competitors such as Elance and Guru offer some similar features, but oDesk was the first to put it all together, says IDC analyst Michael Fauscette.
Career choice displeased parents
Tsatalos relishes his company’s success, citing his determination to defy his conservative parents who wanted him to become a doctor. With no kids to play with in a mostly commercial district beneath the historic Acropolis, Tsatalos took up arguing with his two sisters about politics as his sole hobby until he bought his first small computer as a high school senior.
“You can take a beautiful thing in your imagination and make it reality,” he says of programming.
But when Tsatalos announced before heading off to college that he would study electrical engineering, which then included computer science, his mother, a university professor, gasped: “You mean you are going to be putting lamps in people’s houses?”
“I was the disappointment of my family,” Tsatalos says. As his father, a government lawyer, realized his son wanted to be an entrepreneur, he grew more dismayed. “He said, ‘You don’t have the street smarts of an entrepreneur,’ ” Tsatalos says. “I was always trying to prove my father wrong.”
After attending college in Athens, Tsatalos came to the U.S. in 1988 to get a Ph.D. in computer engineering from the University of Wisconsin, where he gained a reputation for toiling up to 55 hours in a row with no sleep. He also began a string of ventures that offered great promise but ended in disappointment. Before getting his doctorate, he came up with a plan to put computer kiosks in art galleries to let patrons browse all of a featured artist’s paintings, charging the $10,000 start-up costs on his credit cards. It fizzled.
He later co-founded BroadQuest, an early developer of online comparison shopping. But just as it was about to be bought, turning Tsatalos into a multimillionaire, the acquiring firm shut down.
Tsatalos quickly co-founded another start-up, called Intacct, that aimed to put accounting programs on the Web. Tsatalos tried to persuade his manager to hire Karamanlakis to improve the service, saying the two friends could work together via teleconferencing. The manager refused, arguing the firm would have no control over Karamanlakis’ activities. They collaborated anyway for six months, with Tsatalos working each night until 4 a.m. after his regular job.
Ruminating the next year about his boss’ qualms about remote work, Tsatalos conceived the idea for oDesk: “How can you bring the trust, visibility and control (of a shared office) to a remote relationship?”
Tsatalos launched the firm by charging $50,000 to his credit cards. He and Karamanlakis hired low-cost freelance software developers, mostly in far-flung locales such as Siberia and Ukraine, who both developed the company’s software and used it themselves to provide transparency to the co-founders.
But the large corporations Tsatalos initially approached were unmoved. They said they managed employees based on their output, not their hours. And outsourcing firms said the monitoring software would only make it tougher to recruit contractors. “Complete failure, too,” Tsatalos says, with a smile.
ODesk took off by happenstance. Tsatalos’ computer industry associates asked if he could find freelance software developers to work cheaply. He placed online ads, and overseas programmers soon flooded his inbox. ODesk got a cut of their pay, provided monitoring and guaranteed developers’ payments. The company ultimately raised $29 million in venture capital.
Greg Gretsch of venture-capital firm Sigma Partners says he was hooked by Tsatalos’ perseverance. “He got knocked down hard, dusted himself off and got back in the game and was still incredibly enthusiastic.”
Tsatalos concedes that while he devised the idea for oDesk, Karamanlakis is “more execution-oriented.” Karamanlakis calls Tsatalos “more instinctive.”
‘Heavy-handed and intrusive’?
There are critics. Peter Weddle, who researches online job sites, calls the monitoring “heavy-handed and intrusive.” Tsatalos says freelancers still can protect their privacy. The service takes six screen shots an hour of the contractor’s computer. The contractor views each shot and can choose not to send one to the boss if he or she is on, say, Facebook. But an employer can opt not to pay for that 10-minute interval.
“We’re creating the environment of a cubicle,” Tsatalos says. “You should … be able to say, ‘Now, I’m closing the door.’ ”
Freelance animator Donavon Brutus, 23, of Tampa, who was laid off last year, typically works for two to four oDesk clients for an average 35 hours a week and earns 80% of his former salary. He calls the monitoring “a little intrusive, but it helps you stay focused.”
Things are going so well that a year ago, Tsatalos’ father saw an article in a Greek newspaper about his son and called him to express “disbelief and hidden pride.” Yet his father doesn’t see how a company that isn’t yet profitable can be deemed a success.
“I’m still not at the point of feeling I have actually proved it to my parents,” Tsatalos says.