The recent implosion of my former employer and formerly one of the largest SEO firms in the industry makes an interesting case study for any business oriented jabroni like myself. But seeing as I do not want to rehash my MBA career, I threw together my thoughts in a response to Garrett’s post asking why a once successful industry leading business failed.

There are a multitude of reasons that I believe have influenced the downfall of this once powerful company but here are my top 8:

1. Letting Your Talent Walk Away – First it was tech-savvy Jason Dowdell. Then it was your company face Andy Beal. And finally Ben Wills walked away from the company without any effort to keep them. Now, I can’t speak to exactly why these people felt they should leave but I would suspect it has something to do with managements egos and not wanting these people who are in the trenches of the industry every day have any influence over the direction of company.

2. Hard to Mass Produce a One Size Fits All Service – Like any service industry it is hard to develop a product to sell that applies to all of your consumers. Imagine your plumber trying to use the exact same pipes and fixtures in your house as your neighbors, it just wouldn’t work, everyone’s house is different and just b/c copper pipes worked for my internal plumbing, doesn’t mean it will work for yours as well. This is the same theory that can be applied to WebSourced’s SEO services. From the time I started there in 2003 we tried to fit everyone’s website into our service rather than fitting our service to their site.

They eventually started selling services a la carte, but by then, it was too late. The damage was done.

3. Not Adapting To Change – Now, a lot of sites had the same general problems and all needed meta tags, keywords and content, along with linking and small site fixes but as the web got more competitive and search algorithms got more advanced, we as a company should have changed. But to my knowledge up until the day I left and well beyond, Websourced was still using the same metatag generator with keyword stuffed tags and directory linking strategies. Both of which have negligible benefit for SEO.

Also lack of technology was a major issue. Rather than building tools for the future WebSourced relied on outdated tools like the previously mentioned metatag generator and the constant use of excel spreadsheets rather then web based applications and tools to help the employees do their job.

4. Management Not Managing – This is probably the single most important aspect of why the company, and any company for that matter, failed. We all know the Martin’s lead the company down the crapper, but why is the question. Jeff like to apply the theories he learned from GE to Websourced, and while in principal that is a good idea, it is hard to apply the same theories from an old long standing Fortune 500 company to an ever changing and rapidly growing start-up. You need two different types of people for each of those. At one point while working there, I started a list of things NOT to do as a manager based on JM’s actions. I think good managers know the power is in the people, and your job is to keep them happy. I guess this also goes along with #1 and the next point.

5. Management Not Listening - There are tons of points about how the management did not do its job and listening to its people is a good way to summarize a lot of issues into one. I remember at one point, I asked JM “Why?” and he pulled me aside and chewed me out, gave me a lecture about how I shouldn’t ask those types of questions. Now if I am a manager, its exactly what I want my people to do. Another example and a major issue was the overwhelming client load. Marketing people were overloaded with clients. You can’t work people like pack mules and expect to get the best out of them. With 20-50+ accounts people weren’t given the opportunity to excel. How can you empower your employees when they can’t even get to each client at least once a week. I think Schultz or Swiller at one point did a spreadsheet to show that there was not enough time in the week for him to touch every client even if he worked 28hrs a day. Everyone felt like that.

When you get to that point, everyone is stressed to the max and client service suffers.

6. Unbalanced Workplace – Department favoritism, chaos and obnoxiousness -Websourced was a Sales dominated organization which is tough to have in a service industry. Especially, early on when things seemed to be going well, sales was filling up the board, clients were piling on in boat loads, and everyone got $50 weekly bonuses pretty often. What went unnoticed until those bonuses dried up, were what type of deals were being made. The sales department was making unrealistic promises to clients because what did they care, once the contract came in, they got paid and the new client was a problem of client services. This built up a lot of tension b/t the two halves of office and any attempt to talk to a sales manager fell on deaf ears, they loved their own and would protect them.

Not only was the sales department making ridiculous promises that no one could have fulfilled, they were obnoxious. As an account manager, I shouldn’t have had to hide under my desk to talk to my clients. Maybe one of the most uncomfortable situations just about everyone in client services has been in was being on the phone with a client and having the music from the huge speaker crank on. Not only can you not hear, but try explaining that to a client when they ask “what is all that noise?”. So many times I wanted to be honest and say, “that was just our sales department raping another client.”

I think the straw that finally broke this camel’s back was when I was a Paid Search account manager with 35+ accounts. Now, I handled the accounts fine, although I did not like having that many, but at one point I got an account assigned to me who did not have a website! Surely, I thought this was a mistake but after approaching the paid search sales managers and the sales girl who made the deal, none of them knew this guy didn’t have a website. I almost lost it. How can the sales girl make this deal? How can the sales managers approve it? Its a minor detail and how no one knew, was beyond me. This guy had an affiliate account and he used ppc to drive traffic, but the way his deal was set up, as performance based, there was no way to track it because he couldn’t add any tracking b/c it was someone else’s site. I put in my two week notice less than a month after and never looked back.

7. Unbalanced Workplace – Money - One of the must frustrating things was watching the sales department, lie, cheat and overpromise their way to BMW’s, Benz’, Flat screens, BBQ Grills, watches etc. At one point a sales girl made one and a half times my salary in commission on ONE DEAL, then followed that up a week later with another deal worth twice my salary. That was very annoying but even worse was the inconsistency among our department. Some BC’s were making $80k and could barely tell you what a metatag was. They relied so heavily on the tech department whose salaries ranged between 20 and 35k and maxed out at 45k. Just because one person could talk on the phone and one could do an SEV doesn’t make one more or less valuable than the other. The pay scales were just stupid. Personally, I’m not complaining because Al and I were able to double our salaries (and Jen Den’s) by threatening to leave, but having some tech people make $20k is just not fair especially considering that sales’ base salary was $18k, so even if you sold nothing you got paid almost as much as some tech people. Its hard to live on that.

I don’t even want to get on the topic of raises, who just about everyone eventually asked for and so many times it was “waiting for approval” “raises are coming”, or “your next on the list to get a raise.” It was bogus and people got hosed. Maybe its like this with any company but it seems the more ass you kissed the more responsibility you got. Free lunches were nice but you can’t expect people with any dignity to do their job for years and not expect a raise b/c you give them chicken nuggets, pizza and cold Chinese food.

8. Lack of Training – With such a new industry it is hard to find people with the right kind of experience but marketing people were thrust into roles they did not understand. They were only taught basics and basically just passed around the SEO for Dummies book as their training manual. It is not these people’s fault, they were not given the chance or tools to really learn SEO/SEM. Forcing them to use the tech folks as a crutch rather than a Co-worker. This strained relationships when the answer to keep clients happy was, “we’ll get you some more metatags or another analysis.” Work started piling up, getting backlogged, and not getting done which strained team relationships and client-Websourced relationships. It was a snowball that was growing with each passing bizflow assignment.

Sales wasn’t trained either and that was part of the problem. They were told to sell and just sold at any expense. They didn’t know the boundaries nor did they really care (only a few did), in my opinion.

Conclusion: There were a lot of issues that plagued this once promising company and most of them started at the top. I purposely didn’t mention the sexual harassment behavior, embezzlement, wasting of millions on a SEM webservices product that was poorly planned and poorly executed, but all played a contributing factor in the downfall of this company. I had a unique cube location right near JM’s office and overheard many conversations that I shouldn’t have. Relating to #7 at one point JM would brag about how he had a unique skill about getting tech people to work for him cheap, because people wanted to work for him. While that was pretty arrogant and stupid to even say, it was not the most absurd thing to come out of that office from the brothers and cousin. The company got too big for its’ britches too fast, and the end result was inevitable.

The company that was created by accident from a guy selling websites (PM) to people was doomed from the beginning because they failed to see what they really had before it was too late.