I Outsourced the Wrong Job--and It Nearly Killed My Company

By Steve Kickert, OnePlace, Minneapolis
One of the things that gives startups an edge over big competitors is their ability to move and adapt quickly. My mantra with OnePlace has always been "Ready, fire, aim." Of course, this aggressive approach can lead to mistakes. In many cases it's easy to recover from mistakes made early on, but not always. One mistake I made at the very beginning-hiring an outside firm to do our marketing-almost killed the company.

The mistake
Most small businesses outsource jobs like legal work, accounting and tax prep-things that don't require attention on a day-to-day basis. My business partner, Denis Ahearn, and I are engineers, and I had recently been the CTO of a technology firm. Our new company, OnePlace, helps small businesses communicate more efficiently with collaborators via its online project-management software. Neither of us had any experience in marketing. There are a lot of marketing firms in Minneapolis, so we figured we would stick to what we knew and hire somebody else do the rest. We outsourced 100% of our marketing. It was a big mistake.

The marketing firm we hired wrote our press releases and built up our email list; they optimized our website for search engines and set up a Google AdWords Pay Per Click campaign so that when people typed in search terms like "project management" and "team collaboration," links to our site would pop up; they were also in charge of PR and media relations. Although technically they did their jobs, there were a few fundamental problems with the way they worked that quickly became evident.
Skin in the game
When outsiders come into your business, they usually have preconceived notions of how to do the job they've been assigned. So Denis and I weren't involved in the planning process. In fact, there was no planning process at all, and as a result, there was no core vision or consistent message to our marketing campaign.

I started seeing friction early on: We weren't converting hits on our website into subscribers, and the marketing people didn't seem to care one way or the other. They just kept doing what they had been doing before: optimizing our website, sending emails and managing Pay Per Click.

The thing is, our company couldn't afford to just outbid the competition to show up in search results. We needed to get creative, and the people we hired just weren't cutting it.

It was then that I realized how important it was for a company's marketing people to have something at stake in the success of the company-they had to have some skin in the game, so to speak. They need to go to sleep every night planning their next move, and wake up in the morning ready to go.

The firm we used was not very good at what we needed them to do. That, however, does not make them a bad company. One of the main issues was that they came from SEO roots and what we needed was a full-fledged marketing team that could help us with core messaging, brand building and marketing campaign development. Part of the problem was that I tried to outsource marketing leadership when I should have just outsourced parts of the marketing execution.

Social media
We also began to realize that using social media-Facebook, Twitter, etc.-was an economical and effective way to market our business. But the person who projects himself into the social media sphere on behalf of a company needs to understand the company's core message. An outsider's responses to questions and comments on, say, a Facebook page will often come across as cold and sterile because he can't really speak with familiarity about the company he is supposed to represent.

Going in-house
We wound up hiring two in-house marketing people at the end of 2009, which grew our company to four employees. We hired a marketing manager who is in charge of social media and communication, as well as a business-development person who is in charge of marketing strategy and execution.

OnePlace is not yet profitable, but since we hired our own marketing people in the first quarter of 2010, the number of companies subscribing to our service has increased by about 500% and we are seeing a continuing increase of about 20% a month. All told, we have about 3,000 individuals signed up for our service.

A place for outsourcing
All this is not to say outsourcing is not a very useful tool. Ironically, one of the principal applications of OnePlace is to help small businesses collaborate with consultants and other outsiders. We outsource all of our hosting to Amazon, and I've never even met our graphic designer in person, but she does a great job. In business it's all about the people you surround yourself with. That's especially true with something as fundamental as marketing.

Before Steve Kickert founded OnePlace, he was the CTO of HighJump Software, which specialized in supply chain optimization. In 2004 he helped sell the company to 3M, and did independent consulting work for about a year before he started his own company. He has been working in the software industry for more than 20 years.
-As told to Harper Willis

Resources

• Learn how outsourcing to save money may backfire.
• Read about how to use outsourcing to improve your company
• Consider the "The True Benefits of Outsourcing."