Outsourcing 101 Course Podcast

My journey, my $1,000,000 mistake

Episode 7 of The Outsourcing 101 Course Podcast


In this episode James Mackay shares his journey and the reason he lost out on one million dollars. 

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In this episode I’m going to share a story that will either make you roll your eyes, feel sorry for me or laugh at me. Maybe you’ll do all three.

Back in the late 1990’s I started working at my family company. It was a software publishing company called Manaccom. We put software programs into boxes and sold them through retail stores.

By about 2006 we could see the end of this business model was approaching. Downloads would replace store bought software and we needed to act to prevent our business from collapsing. So we sat down and had an all day brainstorming session. At the end of the day we realised we were in a bit of trouble. There was no way we’d be able to maintain our position as a software publisher because developers would go direct to consumers or at the very least they would go through online malls. We see that now with the App Store and similar.

Obviously we needed to come up with a plan. We decided to maintain our focus on software but split it into two areas: corporate software licenses and web applications using the cloud as the backbone of the technology.

It was decided that I would run the web app section of the company and other people would do the licencing.

And then came the hard part: what exactly would we develop? Our goal was to make solutions to solve problems and our offering had to be able to have global reach. We dabbled in a few areas to test how they might go but eventually we settled on two solutions:

First we constructed a web app called 2Large2Email which was basically a way to send large files across the internet. Bear in mind this was nearly ten years ago so this was a pretty big deal.

The second cool little app that we made was called Ecofiling. Strange name, I know, but basically this cool little web app allowed small businesses to have a file storage system in the cloud so employees could store, check and edit documents in a controlled space. So I guess it was a little like Box – or box.net as it was known back then.

Now, I know this episode is called My journey and my one million dollar mistake but may it should be my one billion dollar mistake. Because here’s the funny thing:

One day in about 2007 I pitched a cool little idea to the board of the company. Twitter had just started to make a name for itself but it was in that period of its life where, every second day, they would be having the “fail whale” because their system had done down again.

But anyway, I took inspiration from Twitter and pitched to the board that we should develop a Twitter like app but only for photos. People could share pics, follow other people and make comments on them. I couldn’t believe it but the board said no – because Twitter was a flash in the pan and no one would want to waste time sharing photos.

Instagram didn’t agree and they went on to sell for a billion dollars. Ahh well.

So back to the story. 2Large2Email and Ecofiling were the first projects I ever worked on where I used outsourcing to deliver projects.

We had a couple of amazing employees – shout out to Ben and Nigel – but to complete the task we also employed copywriters, voiceover talent and extra developers.

Employing short term contractors in this capacity showed me just how scalable outsourcing can be: I needed small jobs completed quickly and painlessly. Outsourcing provided that for me.

The good news is that 2Large2Email and Ecofiling were both successfully launched and operated with customers around the world. Our own company depended on Ecofiling so we knew it worked and it was robust.

Then things started to fall apart.

I had options and shares in the company, which, if I still had them today would have been worth at their highest, nearly two million Australian.

And guess what? The company that my parents started in my bedroom in 1986 was sold to a company on the Australian Stock Exchange. Not long after, I was sacked by email while overseas on a business trip. Classy, huh?

But guess what the worst bit was. I had all my options stripped away from me, reducing their value to me to a big fat zero.

Obviously I learnt a lot of lessons in my time at Manaccom, including that nothing beats being your own boss. I also learned that outsourcing can be an efficient and effective way to get stuff done.

Oh, and eighteen months after I was sacked that company went into administration. Bummer.

When I left Manaccom I started another online company, this time a drop ship ecommerce company. This went really well and a year and a half after I started it, I sold it for more money than I could have dreamed possible.

Again, it showed me how much value outsourcing can add to your company. I’m not saying that I sent all the work offshore but I am happy with the results we got. We outsourced a lot of copywriting, image editing, development and that kind of work.

Since then I’ve dabbled with a few more start ups and they have all had at least some input with outsourcing. Because, let’s face it – I don’t have the technical ability to do all that stuff myself.

So there you go. My story and my $1,000,000 mistake. But you know what? I look at the positive side – if I had never left Manaccom I wouldn’t have had all the new opportunities open up before me.

Over all this time I guess I have become a bit of an expert on outsourcing. People ask me ALL THE TIME how they get started… what the secrets for hiring freelancers are…. How to save money…. How to MAKE money…. You name it, people are asking me. And that, fellow outsourcers, is the reason I have put together all these resources. So you too can enjoy the benefits that come along with outsourcing some or all of your tasks.

If you’re struggling with it, there’s always a solution. We can help either through this free podcast, the free video training, Outsourcing All Stars or a mentorship.