A guest post by Dennis Yu, CEO of BlitzLocal, driving calls for local professional service firms.
People think I’m a snob because I hire maid service– I don’t do my own laundry or wash dishes. Haven’t for years. The maid will even run errands at the mall or supermarket for me. Think of it this way, if your time is worth $100/hour, then 3 hours to do your laundry is $300 of your time you can purchase for only $50. Bargain.
What is your time worth? How much more money could you make if you got another day or two each week? Or maybe if you could work 10-20 hours less each week– what is that time worth to you?
Tim Ferris is the self-proclaimed master of outsourcing, which is why he can claim to have a 4 hour workweek. If you are able to delegate efficiently– meaning that you can lay out work in such clear precision that the workers do the job flawlessly without your intervention, then it may be possible to sit back and watch your “factory” operate– build websites, PPC campaigns, mail letters, spam Craigslist, answer the phones, or whatever it is you might do.
Consider outsourcing to be a multiplier on your time. You might get a 10 times multiplier– a project that takes you one hour to define and manage can result in 10 hours of work being done. Instead of working 40 hours a week, you can work 4 hours and get the same output. And if it’s something that needs to be done at regular intervals, then your multiplier is even greater. You can continue to set projects in motion and layer them on top of each other.
The multiplying effects of setting up such a system require that you understand the the task well enough to do it yourself. If not, the requirements will be vague and incomplete, causing the folks who follow your instruction to fail, as you haven’t accounted for where things can go wrong or how to do things most efficiently. In that case, you’re still multiplying– except now you’re multiplying waste!
What should you NOT outsource?
- Your secret sauce: If this is the core of what you do– your unique value in the marketplace, your special secret– then don’t outsource it. Consider that these wage workers might not be in the United States, where intellectual property laws and labor laws are different. You don’t want folks running off with your ideas.
- Complex tasks that tie into the rest of your operations: Outsourcing is great for simple, repetitive tasks for which you can easily swap out one non-performing laborer for another. But if the work involves building upon an existing system you have or some form of cumulative knowledge, the come-and-go nature of freelancing will cripple your innovation.
- Your relationships: You can’t outsource industry partnerships, any more than you can outsource your wife or best friend. This requires your personal involvement and/or that of your people. With the exception of secretarial work, you must be in charge of your business and manage relationships that matter to you.
Freelancers are perfect for tasks that are process-driven. Call centers, repetitive engineering tasks, and most forms of marketing are 
great. If you can measure it, that will probably work, too. If you can define a clear process– writing a TIGHT requirements document– and have a clear way to measure progress (a way to easily verify whether something was done well), outsource it.
I’ve found rentacoder.com and elance.com to be one of the most awesome things that I’ve found– you get folks bidding on your projects, working for ultra cheap and great quality. They don’t argue, either. As long as you can spot the bullshit artists, you get a great deal. And when the project is over, you don’t have to keep paying them. Some we’ve even hired full-time, but when outside the system, sometimes things break down.
If your outsourcing isn’t going well, it’s your fault for having either written poorly defined requirements or chosen the wrong company. The products that come off the conveyor belt are only as good as the guy who designed the factory and the quality of the workers. Minimize your risk by avoiding these classic mistakes:
- Working with folks who are aren’t directly doing the work– Agencies or other middlemen are just outsourcing on top of your outsourcing, who may yet outsource to someone else. Whoever is doing the work at the end of this chain, by the time they get the message, likely has no clue what you want.
- Choosing freelancers that have less than awesome ratings or have negative feedback– If they had problems with earlier clients, no matter how well they explain why, they’ll likely be saying the same things about you, too.
- Working with folks not in the US-- It’s not about being racist, but understanding the practical realities of speaking good English and improving your odds of finding a great resource. I’m not saying you won’t find gems in India and Serbia– just that it’s harder. The apparent lower price has serious downsides.
- Paying on a retainer– We have blown tens of thousands of dollars each month on shops we’ve hired to do design or even PPC. What happens is that initially they do a great job, but after a couple months, they get lazy, feel entitled, and start doing less work and of lower quality. They may even ask for more money– as they feel they’ve “got you”.
Thus, pay per project and always bid it out– there are hungry people out there who will compete to do great work. Don’t you just love capitalism?
So consider what your time is worth and maybe you’ll find maid service to be a business advantage versus a luxury. Steve Forbes (yes, that Forbes– the guy who owns Forbes Magazine) has a private jet and he names it the “Capitalist Tool” It’s not about living luxuriously, so much as saving him time to get to places. Imagine dealing with airport crowds and having to connect to get to where you want to go. If your time is worth $10k an hour, then a $20k flight to save 4 hours is a pretty good deal.
Now consider what your time is worth and learn to live like a lazy marketer– outsourcing things you don’t want to do or don’t like to do.
