Photography: Paul Keller

For businesses, it seems to be all the rage. Identify your core competencies and outsource everything else to a company far away, ideally in India. Customer service units are famous for it but outsourcing has also come to include production units as well as backroom accountancy departments.

Even individuals can do it. Tim Ferriss has built himself a career teaching people how they can outsource their lives until there’s little left to do but eat and sleep — and there are plenty of people in Mumbai who would be willing to do to both of those for you too.

The result is that anyone watching CNN could be forgiven for thinking that the entire US economy is now located somewhere south of the Himalayas.

Of course, it’s not quite as simple as that. Even as call centers are filling up with South Asians learning to talk like Canadians, jobs are flowing back to source countries. In November 2007, InformationWeek reported that 20 percent of its top 500 companies had taken back offshored tasks in the previous year.

America – Europe’s India
Much of that trend is likely to be a result of dissatisfaction with the quality of the work but just as jobs flow out of the United States and into the sub-continent then back again, so new work is pouting into America from foreign companies. A report by Prof. Matthew Slaughter for the Organization for International Investment notes that the number of jobs at US subsidiaries of foreign — usually European — companies had risen from 2.6 million in 1987 to 5.4 million in 2002. And many of those jobs came with pleasant European standards such as four-week vacations.

That sort of insourcing though is really another form of outsourcing. It would certainly look that way to a European. The same could be said of the type of insourcing described by Thomas Friedman in “The World Is Flat.” Explaining how UPS has moved from basic parcel delivery services to a general logistics company that makes international business easier to manage, Friedman reveals that UPS doesn’t just bring broken computers back to the company for repair. It repairs them itself under Toshiba’s supervision and ships them back to the computer firm’s customers.

Again, for Toshiba, that would be a simple form of outsourcing. For UPS though it’s precisely the opposite. Fixing silicon isn’t the company’s forte but it does it because it can and because it’s in everyone’s interests: Toshiba’s customers get their machines back faster; Toshiba can focus on production and design rather than repair; and UPS gets to supply an extra service.

Insource or Outsource?
For entrepreneurs and small business owners though, this mixture of inward and outward job flows, of insourcing within the business and outsourcing to other firms, is fairly confusing. When should you outsource and when should you keep the work close to home?

The criteria usually quoted for a job that can be outsourced include significant wage differences between the source company and the outsourced firm; work that is easy to set up; and perhaps more importantly, work that is repeatable so that once the system is in operation it doesn’t need constant supervision and re-training.

There are other factors to consider as well though.

Logistics, for example, could be one reason either to pass the work to someone else or keep it to yourself. The workers at UPS’s Louisville hub tasked with resoldering chips are unlikely to be cheaper than those anywhere else. But by allowing UPS to do work that was essentially mundane, Toshiba was able to cut out some of its logistics, speeding up repairs.

That could only work though because the outsourcing cuts effort rather than adding to it. It also works because customers don’t really care who fixes their computer as long as it comes back like new. (Similarly customers do care if the customer service person has an accent so impenetrable they can’t understand a word they say.) While Toshiba will get the blame if UPS doesn’t do the job properly, it’s not the sort of work that the company has to do.

But customers might feel differently about buying a Toshiba computer that was actually designed and manufactured by Lenovo. Or watching a Tom Cruise film in which the star had outsourced the acting — but not the stunts — to a stand-in (although then again, maybe not.) There are some tasks — in particular, those tied closely to the company’s core field — that the firm has to do itself. Tim Ferriss might be an expert on outsourcing, but even he does he insources his own interviews… to himself.

One general rule then will be to understand not just what you consider to be your core competencies but what your customers consider them to be too.

And finally, outsourcing has to be cost-effective. Wage differentials might be attractive but if the productivity levels are significantly lower or the time and expenses involved in managing the outsourced work much higher then you would still be better off following InformationWeek’s top 500 companies, and follow the new trend of bringing the work back home.

If you are wondering if there is already a market for what you want to offer and in case there is, get to know more about it (price, quality, etc.) you can’t trust only on Search Engines, instead we suggest you use Stumbleupon as you will probably find what you want to find if it matches your interests. The good thing is that the site doesn’t need to be search engine optimized or high quality, if other users recommended it you will find it.

Pros of using Stumbleupon for Marketing Research:

• Find websites you never saw when doing the same search on search engines: search engines sort the websites by relevancy (and they have to be optimized), so if you do a search for “web design firm” you will find a list of websites that just have got lots of links pointing to that page, this doesn’t mean they are quality websites. When using stumbleupon and using the search function, you will find webpages that users like (lots of value, this means that the website is either really high-quality or has something that people love) and that are relevant with what you were looking for.
• Read what people think of a website: this can be seen on the reviews of webpages, this will help you learn what you should and shouldn’t do when creating the website for offering your product/services. You will also be able to check the user’s age, gender, etc. to see how they react to different things and find different patterns.
• Find other people who are looking for the same thing you are: when you check the review’s page, you will see all the stumblers that reviewed a website and you can as well check all the reviews that users made. You may find out that another stumbler is reviewing all the businesses in the niche you want to target and that he might be working into it (possible business partner).
• Find what you look for: if you use other tools to do the research, you might find websites that were designed and optimized to be found by using that tool, on Stumbleupon you won’t find Stumbleupon optimized pages as it is impossible. It will just list what is relevant and people like at the same time.
• More Reality: using Stumbleupon would be like making a public poll to lots of people, you will get the real thought of people on the topic of your desire.

Cons of using Stumbleupon for Marketing Research:

• Relevancy: you can eventually get some webpages that don’t fully match what you were looking for, this doesn’t happen much though.
• Time: it takes more time than with search engines, just some more seconds, but if you do this 100 times a day you will notice the difference in time.
• Toolbar Install: You need to install a toolbar and register, some people just hate installing them and others think they are all adware.
• Incorrect Reviews: some reviews might be wrong or might be spam.

Which buttons you will be using?

To do the market research we will only be using some buttons:

• Stumble: the button on the left, after clicking it you get shown a new page. We will use it to browse new websites after we have checked one and what people think of it.
• Reviews of this page: this will show you what people think of this website on Stumbleupon and if you like the review of the user you can even see more sites he reviewed.
• Channels: this will let you change between websites, images, videos. The most important we will be using here is the search function.

So, what’s next?

You don’t need to know anything else to do market research using Stumbleupon, just follow these simple steps:

1. Click on the search button (channel), and type the main keywords for what you want to research, for example I will type “web design firm”. The first website I got was a company providing web design services (just what I was looking for), there I was able to check all the company info including how much they charge per design and what it would include.
2. With the same website open I then clicked “Reviews of this webpage” button, this showed me what people thought of this company, some of the reviews I found useful where: “great price/quality” and “their web design speaks for them”. This made me learn to things I definitely needed for my web design company.
3. Repeat steps 1 and 2 until you don’t find any more websites of the topic you are looking for. Making the search “web design firm” in Stumbleupon showed me at least 15 new web design firms I had never seen before when doing the same search on search engines. You can as well, combine this with search engines: just make a search for “web design firm” on Google and then check if it was submitted to stumbleupon and if someone has reviewed it.

Extra research

As I said previously, what you can do to make a better research on the market is check the user’s profiles that reviewed websites inside your niche to see their age, their likes and dislikes and try to find a pattern that applys to all of them. This will help you a lot when creating your website to offer your product/services as you will know much better who you have to target.

That’s all what you need to know! It wasn’t hard, was it?