You get burned when you outsource a crucial business function before you know how to judge it.
I’ve seen it and I’ve done it, usually when you’re stretched and trying to keep too many things moving at once.
Marketing feels vague and product feels too technical, so you bring in outside help to “handle it”.
That can seem sensible, like you’re finally out of the weeds. Sometimes it is.
A lot of the time, though, you’re using outside help to avoid learning a function you still need to understand.
That’s where the trouble starts. You hand away part of the business before you understand it well enough to judge it or spot when it’s going wrong. 👇🏻
You skipped the hard bit
Melissa Kwan ran into this twice. She kept hiring agencies to do the hard work she didn’t want to do, then got poor results because she didn’t even know the basics of marketing.
She never really took that on because she told herself it wasn’t for her. In the end, she put “the most important revenue role” in someone else’s hands.
If the function is still a black box to you, you don’t really know what you’re buying.
You don’t know how to write the brief, how to interview for the role, or whether the person in front of you is excellent, average, or just saying the right words.
Melissa realised that “you cannot hire someone to do a good job if you don’t even know how to interview for them… It’s not that they’re not good. It’s that I don’t know how to direct them.”
You think you’re fixing a capability gap. What you often create is a visibility gap.
A product doesn’t stay finished
Melissa ran into the same problem again when it came to product. The issue was never just agencies. It was handing away a core function.
She hired a dev shop that was meant to cover everything: PM, developers, technical lead, the lot. The deal was milestone-based. It sounded sensible, but the product didn’t really work, the shop kept burning time, and the moment real users arrived the gaps started opening everywhere.
Once a product is live, it keeps breaking, changing, and needs fast decisions. A dev shop isn’t built for that kind of urgency. “A dev shop will never be able to fix that. They’ll be like, yeah, maybe next week.”
A project can be outsourced. A live product usually cannot be treated like one.
If what you’re handing away needs constant judgement, fast iteration, and real ownership, you cannot afford to have all of that understanding sitting outside the company.
Agencies optimise for the incentive
Gary Das found a similar issue in his marketing spend. He was paying marketing companies to get leads for his mortgage business, and all they cared about was getting leads because that was the metric they were paid on.
They weren’t bothered if anyone answered the phone, if those leads became appointments, or if they ever turned into clients.
That isn’t a moral failure. It’s an incentive structure. Outside help usually optimises for the metric it gets paid on, and that metric can sit one step away from what actually matters.
If you don’t understand the function well enough to see that gap, you can burn a lot of time and money while everyone involved still claims the work is performing.
You can outsource execution, but you still have to own the result.
You still need a clear view
Damon Flowers gets to the practical fix. If you’re hiring for something technical and you don’t have the background to judge it, bring in someone independent who does.
Tap your network and get somebody to shadow the work, review it, or tell you whether what’s being built is what should be built.
You don’t need to become the world expert in every function. You just need enough understanding to know what good looks like. If you don’t have that yet, you need someone close enough to the business who does.
The damage starts when you lose visibility. When something gets blindly handed off, you start losing sight of the pipeline, the cost, and the key metrics that tell you whether the engine is healthy or leaking.
The problem is outside help plus founder blindness. Melissa found the fix almost by accident. The outsourced dev team kept burning through time and money without getting the product working, so David, who had been her boyfriend for seven years, stepped in pro bono to help her get unstuck.
Once she saw what he could do, it made no sense to keep paying an external agency for poor results. She brought him in as CTO and co-founder, sorted the equity, and now he runs the remote engineering team in Vietnam.
That also gave Melissa room to focus on what she needed to own herself. She could bring marketing in-house, rework the messaging and positioning, and stop outsourcing a critical part of the business she had already spent years avoiding.
Some knowledge needs to stay inside
“Do you want to have your own army, or do you want to pay mercenaries?”
Yannik Schrade’s point is that you need to think hard about what your moat actually is. If the team’s skill set and knowledge of how to solve the problem are part of that moat, building that expertise internally matters.
That’s why he’s in favour of having your own team, where the capability compounds inside the business instead of leaking out through outsourced relationships.
A lot of founders miss this because they treat everything as a resourcing problem. Some tasks are just execution. Others are where your edge starts to form.
If the function shapes revenue, product quality, or how the business learns, handing it away too early can do real damage. It can stop the company from building its own judgement.
Where outsourcing actually works
Liam White is a good example of where outsourcing does make sense. He realised that if his sauces business wanted to stay lean, it made more sense to find a manufacturer and keep the internal focus on sales, marketing, and product. The manufacturer had expertise it would’ve taken years to build in house, and outsourcing let them scale faster.
Harvey Armstrong and Sam Holmes are beer lovers, not beer makers. They work with professionals on producing Prime Time, keep control of the brand, and use outside expertise to scale without pretending they need to own every technical detail from day one.
Joe Averill makes the same point with fractional talent. A startup may not have the money for a full-time CFO. Fractional support gave him access to higher-level capability without the full-time cost.
So this is not an anti-outsourcing argument. It works when you are buying specialist help or capacity you do not need to keep inside the business. It breaks down when you use it to avoid understanding a core function.
The rule that matters
If the work is core to revenue, product quality, customer understanding, or your future moat, you need enough understanding to judge it.
That doesn’t mean doing everything yourself forever. It means not handing away the part of the business you still don’t know how to see clearly.
The expensive mistake isn’t paying too much. It’s handing away a function before you know how to see it clearly.
Great piece!
You don't need to *do* the function. You need enough understanding to write the brief, read the output, and spot the leak.
That's a week of learning, not a career.
The expensive mistake isn't outsourcing.
It's outsourcing before you've done that week.
This is one of those patterns that’s so easy to fall into when you’re stretched: outsourcing looks like progress but it’s really just deferring the learning you still need. Deloitte’s outsourcing research consistently flags oversight failure, rather than supplier failure, as the primary reason these relationships break down. As I see it, you need just enough working knowledge of a function to know whether you’re being well-served or simply well-managed. What’s the function you’d most warn founders against handing over too soon?