For a technology that didn’t exist 20 years ago in any meaningful way, digital marketing and website construction is now a massive business. In the U.S., the latest guesstimate is the segment generates $20 billion annually as 16 million websites are created every month, according to DazeInfo, an industry website.
Louisville has more than a few mature web-design firms. Most are chasing mega-clients such as Louisville-based health insurer/health care provider Humana, vying to build those $200,000 projects.
But at eight years in, Oohology co-founder Mark Palmer and CEO Sean Breslin are doing a double-take, asking themselves if they’re leaving money on the table. If turning away businesses – even the smallest businesses – is a smart long-term strategy.
Though industry insiders question whether we’ve hit saturation on firms chasing Louisville’s larger business, a surprisingly large majority of businesses large and small have no web presence at all. In 2012, Google introduced an initiative to get more small businesses online. At the time, Google execs said Kentucky Get Your Business Online was aimed at the 71 percent of state businesses with no Internet site.
Until recently, Oohology engagements averaged about $40,000 for creating a website and marketing, running up to mid-six-figures. By comparison, Makespace will build a new website using template technology for as little as $4,500.
“We were turning away $200,000 (per year), maybe up to $500,000,” Palmer said.
“We’ve always known we were leaving money on the table, but we were focused on Oohology,” Breslin added.
In order to try to capture some of that revenue, Palmer and Breslin reverse-engineered Oohology.
“We built Oohology on the back of Makespace,” Palmer said. “Makespace has always been a separate brand, an in-house,web-development piece.”
(Full disclosure: In the early days, Insider Louisville was a client, and Makespace helped us solve major technical problems.)
Now, Palmer and Breslin relaunched Makespace this week, making it a separate business catering to startups and small businesses that are not willing to budget for – or that really don’t need – the high-end design and expensive functionality Oohology brings to projects. Makespace will get companies online in one month as opposed to three to four months to do a comprehensive build at Oohology, they said.
In one week, Makespace has signed several new clients, including E.H. Construction, a large general contractor based in Shepherdsville, and Foxhollow Farms, the Crestwood farm famous for its grass-fed beef and society events.
Most new companies or non-tech companies need essentially a shingle to hang on the Internet. The biggest complication is that designers and developers aren’t cheap even when it comes to building online brochures. Breslin and Palmer figure it costs $100,000 per year to hire one.
The Makespace gambit is essentially vetting the entry businesses today that have a decent chance of becoming the big Oohology client tomorrow.
In this ultra-competitive market, where every hire-and-fire gets broadcast via the advertising agency grapevine, Palmer and Breslin have little good to say about the state of the industry here. And if you know these guys, you know they don’t hold back.
“We wouldn’t feel so bad if we had a good group to hand (small clients) off to, but they come back six months later saying, ‘We got burned. That 8k I spent was for naught,'” Palmer said.
“There are 99 of these for every Oohology client,” Breslin said. “It doesn’t have to be that way.”
Now, the question is, “How can we spare people that experience?” Palmer said.
Competitors are skeptical.
Building inexpensive sites is a tricky corner of the developing business, says Taylor Trusty, CEO of Blackstone Media, one of Louisville’s longest-living web firms.
To make a profit building websites for small businesses, firms have to be super-efficient, “really good at operations and process,” Trusty said. In Louisville, firms tend to build and roll out 60 to 100 sites per year. But Trusty referenced a friend who runs a company in Los Angeles that creates 1,000 websites per year, with 50 employees working around the clock. “It’s a factory. And he lost a lot of money early on … he spent years getting to this point.”
Pip Pullen, a partner in Mightily, sent IL this statement:
First, even though they’re functional and have a place in the communication spectrum, by their nature they reduce a brand to its least, most utilitarian value. This says something about the company that both sells and buys the product.
Second, and related, this essentially negates the worth of the people who’re asked to make these sites. Designers and writers spend years learning their craft … they’re passionate and talented people. To tell them to switch gears and crank out Yellow Pages ads in their spare time is insulting and disrespectful.
That said, if you can find clients who don’t care about how they appear and staff who only work for the money and not the satisfaction of doing good work, these sorts of products ought to sell like cheap, shitty hotcakes.
But Palmer and Breslin said Makespace isn’t about cutting corners … it’s about creating sites that have the distinct Oohology bold look with only the functionality companies need, reducing the overall cost.
“Look, if we work with (smaller clients) for years and we never get a penny out of them (in profit), so be it,” Palmer said. “After 600 websites, we know how to do this shit in our sleep.”
But Palmer is not too shy to say there’s a profit motive.
“The more we make our clients, the more money they give to us ….