Episode Number 8 is posted under Outsourcing

Outsourcing Tips For Digital Entrepreneurs with Derek Gehl

Outsourcing Tips
Entrepreneur Ignited Podcast by Derek Gehl 5 Secrets to Outsourcing Your Digital Empire
00:00:00 00:00:00

Summary:

In this episode I’m going to conduct outsourcing training where I will share my top five outsourcing tips to successfully outsourcing your business,whether you’re just starting out or you’re already growing a digital empire. Included are the rules I never break and everything I’ve learned about methods of payment, how to hire the right people, how to communicate and build loyalty, and the importance of taking your time. Remember to listen to episode 7, my interview with Monty Hooke, for more strategies for outsourcing your business.

Transcript: Outsourcing Tips For Digital Entrepreneurs

Hi, my name is Derek Gehl, and this is the Entrepreneur Ignited podcast. In this episode, I’m going to be revealing my five outsourcing tips for digital entrepreneurs.

The reason I want to talk about this, is because in episode 7 of the podcast, I did a really info-packed, value packed, interview with an outsourcing guru by the name of Monty Hooke.

We talked about what he’s discovered in the world of outsourcing; going from a guy who was unsuccessfully outsourcing to being the CEO of a company that has over 200 full time employees in the Philippines and is now outsourcing for and managing the back end outsourcing for hundreds of companies around the world.

I wanted to kind of expand on that a little bit, it’s fresh in my mind, and lately I’ve been doing a little hiring and recruiting – trying to improve efficiency in my virtual teams.

So I what I wanted to do with you is share what I consider my five secrets to building a successful virtual empire, if you will. I’ve been outsourcing for a very long time now.

When I sold my last company with real offices and employees, in 2009, I went from having an office in Vancouver, an office in Austin, TX, totalling over 100 employees, and when I exited that company I made a commitment to myself to never saddle myself with so much overhead or such a large team all in one place.

To leverage the new technology and opportunities that are available to us to run incredible companies and leverage talent from around the world, no longer being limited to the specific geographic regions around us.

When I started outsourcing in 2009, I’ll be honest, I sucked at it. I made every mistake in the book. I lost a lot of money, and a lot of opportunity on projects.

The goal of this podcast is to share with you the five truths of outsourcing that I follow, and if you follow these truths you can be massively successful building a virtual empire, or even just outsourcing components of a traditional business, lowering your overhead, and capitalizing on the talent that exists globally.

In many cases, it’s a fraction of what you’d pay for in your local markets.

So, let’s dive in. Let’s understand first that when we’re outsourcing there are two types of projects that you can outsource.

A contract with a fixed deliverable. Through the life of your business, especially in the smaller stages, there might be a lot of those smaller contracts; a logo, or a website, for example.out

But as your business grows, you’ll find more and more that you’ll need to hire ongoing contractors to work with you on an ongoing basis.

So one of the things that I’ve found–and this isn’t one of the five secrets or truths, I just wanted to share this with you–is that when I’m hiring contractors to do short, one off things, I’m always of the mind that I’m looking for somebody that may be a candidate for ongoing work in the future, if they’re good.

I’m always gonna put in a little extra effort to make sure that I get the best people even when I’m hiring for short term.

So the five secrets that I’m going to reveal here apply to pretty much any of the major outsourcing platforms. Whether you’re hiring directly, or through E-Lance or Upwork.

This wouldn’t necessarily apply to a 99 Designs, or a Fiverr, where you’re just throwing stuff out there, we’re talking about larger projects, or hiring for bigger, ongoing projects.

The goal of this podcast is to share with you the five truths of outsourcing that I follow, and if you follow these truths you can be massively successful building a virtual empire

Secret number 1

Outsourcing Tips #1Let’s get started. Secret number 1: this is a big mistake I see people make all the time; hire for mastery, not a jack-of-all-trades.

What I mean by that, is all too often in writing projects or web design projects, people will say, “I need to hire a writer that can write SEO articles, ad copy, and e-books.”

And that’s a jack-of-all-trades; someone that is mediocre at most things but not usually great at anything. So if I want to hire a copywriter, I don’t look for article writers. If they don’t write copy all the time, I’m not going to get the best result out of that.

Or sometimes, people will say, “I need a web designer.” So not only designing, graphically, the whole website, they need a coder as well.

I’m not saying you can’t find that magical person, occasionally you come across those people – I have a few on my team – that are really good at a few different things.

But in general, if you want to go out and build a website, you’re better off to find a whiz-bang graphics designer that specializes in graphics, and then to hire a crack coder that can code the design into a high functioning website. If you look for both, in most cases, you get mediocre results.

My message to you there, is make sure you hire people that are masters of specific skills. Not jack-of-all-trades. That’s rule number one, hire for mastery.

Secret number 2

Outsourcing Tip #2Rule number two, take your time hiring. This is something that’s a bit fresh in my mind, and the reason why, is that we’ve been looking for a really good graphics guy.

We had a guy with us for awhile, and they moved on, and now we’re looking for another person. As entrepreneurs, we’re usually impatient, and we want someone hired yesterday.

So I’d love to just place an ad, and hire the first person. But I’m advertising on a few different boards, and we frankly have not been getting a lot of great applications. What I see a lot is someone posting an ad, leaving it up for a week, and then saying, “there’s nobody out there.”

When you’re hiring, it’s a fishing expedition. You cast your line out there, you get a few nibbles, you’ll throw a few back, but you keep your line out there, because you’re eventually going to catch the big one. It can be a process.

You cast your ads, update them, make sure they’re front and centre, and you’ll get a consistent stream of resumes. Maybe you’ll luck out and be able to hire the first person that applies, but it’s more likely that it’ll take you a week, or two weeks, or a month, or longer.

Take your time. Don’t be in a rush. Don’t settle for the first person if they’re not the right fit; and don’t try to make them fit if they don’t.

Another mistake I see people make with outsourcing is not putting the time in to interview people that you’d put into hiring a full-time worker. Starbucks will bring a person in for two interviews. Why?

Because looking at a resume, doesn’t tell you anything about a person. It’s a piece of paper that opens the door for an interview.

You can’t make a hiring decision off a resume. You need to do a real interview.

If you want good talent, you need to get on Skype and interview them. The fact is, if somebody isn’t willing to get on Skype and talk to you – you can get so much more information about a person when you talk to them, rather than via a chat.

The other thing we’re doing, when we’re actually talking to someone, is validating that they can actually communicate with us in our English.

We need to be able to communicate. Even if chats look good, or emails look good, when we get into the heat of a project, if they can’t communicate via voice, we won’t be able to communicate.

Check references. Here’s a trick I learned in hiring. Ask for examples and references, but don’t let them pick who they give to you. When you’re interviewing, ask, “what was the last contract you did?” Then ask, “how did it turn out?

What would you say that the manager of that contract would have to say about you? How would they describe your performance?”

And then you ask if you can reach out to that person to confirm. If they say no, they’ve probably got something to hide. Pick your own references. If you let the candidate pick their references, they’re going to give you people that don’t have anything bad to say about them.

Now, when I go to this detail, I’m looking for an ongoing contractor. I want to know that this is the right person.

Finally, when you’ve decided, don’t roll them straight into a huge project to start them out. Give them a small project, with quick turnaround, pay them for it, but make sure they deliver a good result. If they can’t complete that small project, it’s unlikely they’ll be able to deliver on a bigger project.

So the moral of the story is, take your time to hire. Don’t take the first candidate that runs in the door, or the first application you get, and when you do get some applications, make sure you interview them. Use Skype, or just voice chat with them at least.

Make sure they can communicate. Check their references, but don’t let them pick.

You choose the references based on projects in their resume. And lastly, start small. Give them a test project.

That one has subsections, but it’s so important.

Secret number 3

Outsourcing Tip #3The number three secret, whenever possible, pay for a result, or an outcome, not hourly.

What I mean by that, is all too often, people don’t really know how long a project will take, so they say, “I’ll just pay you ten dollars an hour.”

But the fact is, contractors that are paid hourly have no motivation to complete a project on time, to spec, as quickly as possible. Not every contract out there is there to screw you. That’s not the truth.

I trust some of my contractors that bill hourly implicitly. I know they do good work. But it’s when you’re getting started, make sure that when you start a project, pay for the outcome.

I will pay $500 for the completion of the website. Here’s the specific deliverables. Again, I’d still have deadlines in place, but the point is that you’re not going to pay them hourly.

I know that sometimes you’ll need to pay hourly, because sometimes you can’t pay for an outcome, like ongoing work. You can still do this successfully, however.

When someone is billing you hourly, make sure you set an expectation of the deliverable relative to the time. You should be able to answer on average 13 customer support tickets per hour.

Set the benchmarks so you can measure productivity. If you don’t, you leave yourself open to inefficient spending.

Pay for the result, not the time put into it.

Secret number 4

Tips for outsourcing web developmentSecret number four is a big trap that people fall into. Outsource a task, or a process. Not an objective or an outcome. One of the biggest reasons entrepreneurs fail at outsourcing is that they outsource an outcome rather than the process.

What I mean by this is, let’s say, good SEO equals increased traffic and better rankings in google.

If you went to Upwork and said that, you are outsourcing an outcome. You’re definitely going to get applicants, but will they do a good job? No. They won’t.

When you’re outsourcing, to capitalize on low cost labour, you can’t expect that people are going to have the skillsets to create your desired outcome.

If you go to a professional SEO firm and spend ten thousand dollars, fine, they could probably achieve the objective. But you’re going to spend a fortune.

If you want to outsource and capitalize, you need to step back, look at your outcome, and work to understand SEO. Then you need to create a series of tasks that will lead to that outcome.

Building backlinks, using YouTube. Breaking it down into tasks. Then, you can go out and outsource those tasks. You can build a team, or use a single person, to complete the processes.

That will create a strategy that’s going to drive your outcome. You can’t expect to go out to hire someone at a low cost and ask them to create an outcome that you don’t know how to create yourself, or what would cost you a lot to accomplish in a first world country.

Websites. Let’s talk about websites. So I see people say, “I have this widget. I want to sell this widget.” They go on to Upwork, and say, “I need an ecommerce website, with an About Us page, a Blog, and a shopping cart, and I like the colour blue.” That’s it.

They get a ton of bites, and they’re expecting an outcome that will sell the product. I guarantee that the average designer you’re going to outsource to is not going to be able to accomplish your vision.

If you want to spend a ton on professional teams, they might get close, but what we’re talking about is building teams, leveraging low cost talent. They’re very good at processes, but not outcomes.

Outsource the task, or the process. Not the objective or the outcome.

Secret number 5

Tips for outsourcingWhich brings us to secret number five. That is, the more you put in, the more you get out. The foundation of this is communication. Where I see people fail the most, is in their communication.

You need to remember that if you had a team in your office, and you’re communicating and having meetings, and disseminating knowledge and ideas on a daily basis, that creates a team.

The mistake I see is people go out, hire a few people, directly or indirectly, and fail at communicating. If you build a team, you need to have consistent, reliable communication, at quite a few different levels.

The first level you need is clear expectations and deliverablesfor your projects.

For example, when I want to outsource a website to my designer, who I’ve now worked with for years, even today, I’ll still mock it up, I’ll type the text, lay out the colours. When he gets it, it’s all laid out. I’m gonna put in the time up front to make sure they understand.

In order to effectively communicate with our developers, when I was building software, we did the entire user interface for the software and had the full write up on what every input and button would do.

It was very clear on what we were trying to communicate. If you want a lot out of people, you need to put a lot in.

Because you’re not in an office, you need to be willing to put in the effort up front. A project brief. A detailed outline. Not one or two sentences. For big projects, this can take hours or days to complete.

If you don’t put the time in, the results will not be good enough. You’ll have to go back and put that time in later. It’ll cost you more money and lost opportunity. Make sure you communicate.

There’s another level of communication, that as you start to foster and grow your team, you’ll need to be aware of. The team level.

Making people feel as though they’re part of a team. It’s easy to have contractors all over the world, and it’s very impersonal. If you can foster an environment where people feel included, just like you’d do within a company, you’re going to get a far better result and loyal base of contractors.

Here’s the deal: freelancers, if they get a better offer, they’ll take it. Unless you create a good team environment where they’re happy to stay with you. You do this through communications.

We have weekly team meetings, and I treat my team like I would a physical team in an office, with information and praise for a team that’s doing well.

So there’s two levels of communication here. The team level, and the detailed level that they need to understand to successfully meet your objectives.

So there’s my five secrets to successfully outsourcing your digital empire. Just to recap:

  • Number one, hire for mastery, not jack-of-all-trades.
  • Number two, take your time to hire. Find the right people.
  • Number three, whenever possible, pay for a result, not hourly.
  • Number four, outsource a task or process, not an objective or an outcome.
  • Number five, the more you put in, the more you get out. You need to effectively communicate with your team.

So I hope you’ve taken away some valuable tips and strategies that you can now apply to your business and leverage the huge talent pool that exists out there.

Thank you very much for listening to this Entrepreneur Ignited podcast. If you like what you hear, I ask, head to iTunes and hit subscribe, leave a review, and never miss another episode.

We’d love to hear from you. Twice a week, we’ve got new episodes coming out. One with me, like today, and an interview with an industry expert.

So, thank you very much, head over to EntrepreneurIgnited.com/podcast, where you’ll find this episode, a transcript, shownotes.

Have a productive day, a productive week, and we’ll see you next time. This is Derek Gehl, signing off the Entrepreneur Ignited podcast.

    Join the conversation, add a comment using the form below.

  • Sampath Subramanian says:

    Hi Derek,
    Now, I understand all the critical areas I should have focussed in the past.

    I clearly failed on all the 5 critical factors and no wonder why my project failed.

    I appreciate your time on sharing this information.
    Thanks
    Sampath/Canberra

    • Derek Gehl says:

      I’m glad you found it valuable! Outsourcing is powerful but I’ve made many mistakes along the way as well. 🙂

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