Adam Schultz

Here are my 2 cents as to how and why MarketSmart Interactive Failed. I know I’m a little late on this, but for some reason, I still feel compelled to get it out.

Until 2004, when the company reached its pinnacle of success its primary focus was on meting customer demand. They were identifying needs, creating solutions and delivering on what was promised most of the time. The people in charge of delivering solutions as this point were knowledgeable and flexible.

Then, two movements converged. The industry changed and so did the focus of MSI.
1. SEO became SEM and tips and tricks could no longer bring the kind of results that a concerted and organized creative marketing effort did.
2. Websourced started answering to shareholders before answering to clients.

Continued attempts to deliver what needed to be creative marketing efforts as engineered solutions over promised and under-delivered on a mass scale leading to 1.4M in bad debt from contracts canceled before their natural terminations.

Now, the upper management at CGIH/THK had to come to terms with a very difficult truth. The cash tree was dying. They could no longer fund the growth of a diversified but not all profitable group of companies with a single cash cow. They also had no clue how to effectively synergize their companies due to, amoung other things, acquisition deals that did not make it profitable for the principals of each silo’d company to want to work with the others.

I think that at this point the decision was made to let the company bleed until it was small enough to absorb into MSA. MSA had a smaller, more boutique clientele with a completely different organizational structure and business strategy. They changed the name of the company to MarketSmart Interactive to both shake the bad press and to better align the the companies. MSI was only given as much rope and they could weave on their own. That wasn’t even enough to hang them selves with. It wasn’t enough to do much of anything.

This left them with the business equivalent of a bag of rocks. So they moved rocks the rocks around, brought in middle management and moved the rocks again. They let some rocks out of the bag, moved them around again, let some more out, moved them, spilled a few more. Finally, last Friday, they dumped the rest out and threw away the bag.

This is all just my opinion. I had no inside information leading me to this conclusion, no seat close to the door of management. It’s the only scenario that makes sense to me based on the behavior of upper management during the eventfull rise and fall.

Here are some links to other XMSI employees and their thoughts about the final resting of MSI/KWR/WBS: Evan, Garret, Cord, JP, Stephen, Andy.

What do you think?

UPDATE 06-08-07 – Click here for an updated explanation.