The Outsourcing Conspiracy Report

The Outsourcing Conspiracy Report

Reader Comments (39)

  1. Brian;

    I am VERY much looking forward to diving into your free report.

    I think you create brilliant stuff that everyone needs to pay attention to!

    Keep up the great work!


  2. Interesting I was having a discussion about Tim and the 4 hour work week recently. I think his book came out with the wrong message to a lot of folks, it came across as “how to be a slacker and get paid”. I met Tim at blogworld last year and am pleased to say my initial “slacker” judgement of him was wrong, he actually works harder than most people I know. The thing is he’s really efficient, he’s got lifehacking down, and not the fake BS lifehacking you read on blogs, he’s actually doing it.

    He also gave a talk at TED recently which is worth watching

    The problem with outsourcing is people do it on price not value. Just because something is cheaper doesn’t mean it’s better or worse, you really have to look at somethings value.

    For example a $20 toaster is cheaper than a $50 one, but if the $20 lasts 3 months and the $50 lasts 3 years, the $20 is cheaper but it’s not a better value. However if you only have $20 then you’ve got a problem.

    So outsourcing and freelancing aren’t good or bad, but you have to learn how to make value decisions not just price based ones.

  3. Yeah Michael, Tim is fantastic. He might be a little annoyed with me right now, but he’s too intellectually honest to let the true flip-side of outsourcing turn into a grudge.

  4. Nicely done. There’s a part in there that reminds me of all of these people that buy training and fitness magazines to do the latest and greatest yet fail to get the basics under their belts first:

    it doesn’t work for all people. in fact, you might say that it’s the least suited to those that need it most: beginners.

  5. I am a virtual assistant and run my own business but you might also refer to me as a “freelancer” or a choice for “outsourcing”. I am going to read your report, however, I am just hearing about the book.

    In the Virtual Assistance world, this is the basis of our work. We provide an “outsource” solution to the Administrative Assistant/Executive who would normally be hired to do on-site services as an employee.

    About 95% of Virtual Assistants have had many years of Administrative experience in small, medium and/or corporate business working on-site, many with more than 20 years “under their belts”.

    Our rates whether they be hourly, packaged, bundled or on retainer are not as low as on-site staff but a big selling point is that we provide our own equipment and software and save employers in the costs of employee benefits, unemployment insurance, national pensions, sick pay, vacation pay and the cost of providing equipment, software, office furniture, etc.

    There are good Virtual Assistants that bring their many years of experience and good business ethics and expertise to their clients and there are Virtual Assistants (all over the world) who offer cheap rates and less than satisfactory services to their clients.

    And almost all Virtual Assistants, when they become busy because they get many referrals for the excellent services they offer, do not turn down new clients but form working relationships with sub-contract (freelance if you will) employees (or teams) who help them keep up the same level of excellent timelines and high quality work.

    Generally, I find that “freelancers” don’t get the best reputation because of the few “bad apples” out there but there are more than enough highly qualified and experienced “freelancers” in whatever their field may be including Virtual Assistance.

    Just felt it important to put in a good word for outsourcing within this discussion.

  6. Thanks for the headsup there Brian. First time I am seeing no email address asked to give a report, fantastic.

  7. Diane, the VA industry is invaluable, and I don’t think that’s really who we had in mind with this. I suppose some VAs do “oversell” themselves as an all-in-on outsourced solution, but for the most part VAs do what they promise — assist the business owner, but not run the entire business or even core functions of it. 🙂

  8. Hi Brian:

    I look forward to giving this report a closer read.

    Even without scrutiny, however, I agree with your premise—and I’ve been on both sides of the fence.

    I’ve paid for outsourced work and found it impossible to supervise from a distance. I ended up paying more, getting less and doing a lot of the work myself.

    But I’m also a freelancer who works full time with businesses and agencies.

    From my end I see an increasingly number of corporate departments hiring freelancers for projects that rely on short-term tactics with no long-term strategy. Deadlines are tightt, resources stretched and CMOs expect miracles.

    In your report you say hired guns aren’t expected to come up with a project’s creative vision. Instead freelancers are expected to be the worker-bees, realizing a grand vision through our skills—copy, design, coding, whatever.

    But truth be told, clients often don’t have a clue about vision for the project. They haven’t given much thought to customers’ need or how the marketing tool fits into the business’ long-range goals.

    It’s left to us freelancers to do the competitive research, develop a USP, positioning, etc.

    There certainly is “another side of the story” with outsourcing. Unfortunately the story often ends with crappy work that serves neither the client nor the business.

  9. Diane – with this report, I see how it could immediately put you on the defensive, as we are kind of attacking your livelihood by pointing out all of the flaws in outsourcing. If I were a freelancer, this report would probably make me sick.

    But try to put that aside for a second and think about this: what if you’re not *really* a freelancer? What if you’re an online entrepreneur that has simply chosen freelancing as a business model, and other business models, such as partnering, are also available to you?

    Just because you’re a VA doesn’t mean you have to work as a freelancer. You might, in fact, make more money by partnering with your clients rather than letting them pay you a fee. It would instantly set you apart from your competition.

    I’m not saying that’s necessarily the right choice for you. Maybe it’s not. Still, it’s something to think about. Ultimately, the purpose of this report isn’t to criticize anyone; it’s to point out the flaws in a business model that most people accept without question.

  10. Hi Jon:

    True enough! I specialize in Social Media Marketing and have been approached by many Marketing Strategists/Coaches who want to “collaborate”.

    As well, I don’t think of myself as a “freelancer”. I gain clients for specific services but since I do have experience in other areas, I am often approached by the same clients for more services as an integral part of their business operations, since I often “share” comments, suggestions and ideas to help their businesses grow.

  11. Thanks for this Brian, it did seem like partnering was going to work into the discussion one way or another.

    Sharing the responsibility instead of the delegation makes a lot of sense to a certain segment of the business world, which you hit on the head. Having people invested in the business helps to address the weaknesses you point out with outsourcing.

    However, this assumes that one can find others well situated enough to defer income until a later date. Not an easy task.

    Realistically a blend of partnerships and employees/outsourcing is the answer for most. Honestly, it is a living arrangement of sorts and will always be changing — there is no perfect balance.

    Thanks again.

  12. Thanks for putting this out there… its time has come – I have literally 10 years of outsourcing experience, mostly offshore web development…

    I can only speak for myself at this point and my experience… so here it goes…

    It takes a lot of trying and sifting to truly find a hard working, caring and SKILLFUL outsourcing partners one can come to rely on… in my 10 years I’ve been through a combo of companies offshore and freelancers… and ONE performed and executed to the level where they actually earned their money and new business – the others were so distant in location and more importantly caring about MY projects.

    Anyway… I’m glad someone had the time to step up and write a revealing perspective of the other side of outsourcing for small business entrepreneurs

    Thanks Guys!

  13. Outsourcing can be dicey. It’s nobody’s fault really. It takes a huge commitment from both sides to make it work. Thinking about software development, principles from agile development are really apropos for any outsourced task.

    The sad truth is that most fail. So when something goes wrong, you need a throat to choke

    Alas, the secret to ANY relationship? Communication, communication, communication. (I say that just as my wife is done chewing me out for conveniently “forgetting” to tell her about our past due cell phone account… and the fact that we’re dangerously low on diapers!)

    Raza Imam

  14. This is an interesting report… one of thing things I repeatedly tell my small business clients who are considering outsourcing is that, although it can a brilliant tool for increasing your flexibility and capacity, you have to be careful.

    Too many people still adopt an “out of sight, out of mind” approach to managing outsourced relationships, and that invariably ends in tears. Managing freelancers is a skill that needs to be developed and practiced. Tim Ferriss does confront that fact in his book, but I think a lot of readers gloss over it.

    I use a mixture of partnering and outsourcing, and I’m very happy with it – most of the stuff I outsource is “grunt work”, which can be done by anyone with a half reasonable skill level. However if it’s really important and requires a lot of thought and initiative a partner is usually the way to go.

    That said in my experience getting too involved with the wrong partner too quickly is far more costly than an outsourcing mistake.

  15. Iain, I agree with that completely. But at least the partnering mistake isn’t an upfront loss. 🙂

    People definitely need to understand the ins-and-outs of partnering, as with anything. What they don’t need is rose-colored evangelism of outsourcing that kills their cash supply before they even get off the ground.

  16. Nice report. I agree wholeheartedly.

    Partnering isn’t perfect either, because people aren’t perfect, but I’m more likely to share a project than I am to outsource.

    Now, if I could just find partners for the 50+ public domain works I have that need to be turned into reports, audios, courses, membership sites, etc.

    Got any suggestions 😉

  17. Recently I read somewhere that if you want to grow, don’t think like a freelancer, think like a business owner. I’m downloading the report, and even if it is an “attack” on freelancers I think we should be open to all thoughts and arguments because they help you grow.

    If some people think that working with freelancers is not as profitable as it is made out to be then this is a good point for freelancers to brainstorm and improve the way they work.

    The general perception with freelancers is that they don’t perform important tasks and even freelancers themselves suffer from this attitude. When they are working for a client (freelancers) they are mostly indifferent to the overall business of the client and this indifference is manifest in the way the service is delivered. Both clients and freelancers think that this partnership is only cost-based and everything stems from there. The freelancer thinks: you are paying me lousy money so why should I give my 100%? The client thinks: I am working with this freelancer because currently I cannot afford a full-time employee and besides I’m saving lots of money.

    The result is, a bad experience on both the sides.

    The first solution is that freelancers should shrug off there image of cheap stakes and should charge according to the services they can deliver and then they should actually deliver those services. They should get work not because they charge less but because how they do that work. The clients must also understand that some freelancer charge less not because they are desperate, but because the overheads are low.

  18. that’s the ‘4-hour work week’ ruined then.

    I was on page 52 and then I read the post above and the PDF.

    It turns the book into an account of someone’s personal experience rather than the guide for life that it is sold as.

    I’ll read on but read the book in a different light.

  19. I use partnership model regularly, mainly because the clients would want to save every penny they can. This makes good business sense to both my clients and me. Most of the time it’s a cut in the profit. Sometimes it’s leads or referrals to other clients who pay high. Either way, both parties stand to gain from this arrangement.

    But Brian, not all freelancers in India are found on elance and by definition not all are cheapstakes 🙂

    Indians too possess the ability to think and solve problems and are quite capable of performing above “average or slightly above par” work.

    To a certain extent your report might just come across as India-hater. This might just risk pissing off Indians, who incidentally are the 2nd largest ethnic/geographic group to populate your site after U.S. (pardon me if I’m wrong in this).


  20. Always love to see anything by Jon. This is hot stuff!

    I’ve been on the other side, moving away from working with clients and toward only doing partnerships. It’s just not a good use of my time to put a bunch of time into a freelance project when my work isn’t used effectively. Plus I make a lot more $ in partnerships. 😉

  21. Awesome report!

    I couldn’t agree more.

    I was asking those questions myself the last days, after seeing that while outsourcing has some benefits, there are just too many problems that come up…

    So I’ve ended up doing many things myself, and some of them are very time consuming.

    As can see… This report seems perfect for my situation.

    Thanks for writing it,


    PS: The horizontal formatting also made it much much easier to read than most reports.

  22. I felt a bit shafted tgat you turned this thing into a sales proposal at the end.

    While an interesting take, it seems as foolish to me to call “partnering” a magic bullet. As with outsourcing, or doing it all yourself, or building your own team, they all have ins and outs.

    Someone else said that communication is the real key to a successful relationship, whether with a partner or vendor or employee. I tend to agree.

  23. Thanks for shedding some much-needed light on this complex subject. I gotta admit I only first heard the term ‘outsourcing’ about a year ago on a webinar feed featuring a well known IM extolling
    the virtues of outsourcing.

    Two to four bucks an hour, IT’S A SNAP. Easy! elance,baby! You could almost hear him dancing in the background. I thought ‘so THAT’S how they do it’!…..( I have to admit, it
    sounded like THE answer). HOW you went about it was
    not elaborated on.

    So, the post, the report,and the healthy debate, out-in-the-open among
    intelligent people is much appreciated. It helps alot!


  24. Brian – put that way (not being an upfront loss), it sounds like a choice between risking a moderate loss now with outsourcing, or a big loss later with partnering!

    I think the main point of the report is absolutely right though. Outsourcing is another tool in the box, not a panacaea.

    One thing is eminently clear though. If you want to run a successful, sustainable Internet business in 2009 onwards, technical/creative skills (copywriting, graphic design, programming etc.) are not enough. You need good networking, leadership, teamwork, project management and communication abilities too.

    Just like in the old days, but a whole lot more fun. And you can still run the whole thing in your underwear if you really want to (unless webcams become compulsory 😀 )

  25. Diane, the VA industry is invaluable, and I don’t think that’s really who we had in mind with this. I suppose some VAs do “oversell” themselves as an all-in-on outsourced solution, but for the most part VAs do what they promise — assist the business owner, but not run the entire business or even core functions of it

  26. Somehow I missed this first time around. This articles fits well with my “Red Clay” philosophy for outsourcing. (Dirt farmers are DIY or nothing.)

    Anyway, two more pertinent observations.

    First, I agree about Tim Ferrriss. I suspect he works about 80 hours per week “being Tim Ferriss.”

    Second, the download link is broken, and in fact, the name won’t resolve. Which is a bummer, because I’d like to read the report.

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