News | DistributionWhy Mr & Mrs Smith insourced its booking platform: Case studyThis article was originally published onBy Sean O'Neil | October 1, 2013 It's been four years since Mr & Mrs Smith, the UK-based luxury hotel guide, brought its information technology (IT) functions in-house, building its own booking system.This month, the brand's main UK website, mrandmrssmith.com, will be switched to a new template with responsive (mobile-friendly) booking pages and new functionality, such as a simplified booking process that takes it from a three-step journey to two steps.The system is sophisticated enough to handle complex partnerships, such as a just-launched program that enables 300 Smith hotels to be booked via British Airways' website, BA.com.But many small start-ups may be surprised to know that the technology was built from scratch by a co-founder without technical experience.Today, the move looks savvy: The brands' various websites draw 700,000 visitors a month. The company earns £6 million off of £30 million in bookings a year. [The numbers are self-reported.]But back in the late 2000s, it was a risky bet.At the time, Mr & Mrs Smith faced a dilemma that continues to perplex many entrepreneurs today: Should you bring your IT in-house?Studying the example of Mr & Mrs Smith might help small, consumer-facing startups decide the best answer for themselves.In-sourcing before it was trendyIn 2005, the company engaged an agency to integrate a third-party booking system from Travelintelligence to handle its booking and fulfillment.But as time went on, the founders were frustrated by how roughly half of their profits were being diverted to third-party IT costs.Co-founder Tamara Heber-Percy decided to bring the IT in-house and learn on the job how to be a CTO. She taught herself how to build a tool to handle reservations via a centralized database.The investment cost about £100,000, plus her labor, at the time.She built the company's own booking, rates, and availability management system, which lets properties log in by extranet or else update by any of big 10 channel managers.There's also a direct connect with Sabre's Synxis -- though it remains the master system that powers its own website and it doesn't get rates or availability from the GDS.DIY spiritHeber-Percy learned the language and the rhythms of technical projects in her earlier career as a marketer. For instance, she was in charge of ordering at Honda for a while; the work there taught her how to use a spreadsheet with lots of macros."That is where I started to build something on a computer to get an output."But she had no background in software development, and when her startup decided to build its own content management system, she had to hit the books to learn the trade and started to recruit a team of developers one by one - now a team of nine based in London and Melbourne."People kept telling us, 'You're never going to make it unless you integrate with a global distribution system [GDS],' but the thought of that integration filled me with horror."For context, Mr & Mrs Smith's inventory -- about 900 boutique, independent properties worldwide -- is much smaller than any GDS's."We had a lightbulb moment," says Heber-Percy. "Do we really need a GDS? No, we can we do it ourselves."Opportunity to innovateWhen you build something in-house, like Mr & Mrs Smith did with their Smith Availability Management System (SAMS), there's a chance to tweak things you don't like in one-size-fits all third-party software applications.Heber-Percy notes: "We don't work on grid format, or Excel-type format, that a lot of the off-the-shelf rate management systems use. We have an easier-to-read calendar which lets you click on dates to change rooms and feel more intuitive for our property owners.""We use Enet for micropayments. We work with hoteliers on a variety of payment structures, such as agent or merchant models, so we can do what a property wants -- whether it's take a deposit or full prepayment or wait until the guest has completed his or her stay."The challenge of staying up to dateMobile is a growing market for Mr & Mrs Smith, as it is for nearly all travel companies. "We made the same mistake other companies did by creating a dedicate mobile site, and it's rubbish."The year Heber-Percy has been making the brands' websites "responsive", so that it appears well no matter what size screen is being used. Two out of three of its site are fully responsive already and have been in A/B testing for usability with users. The main Mrs and Mrs Smith website has been left until last."It's an exciting time. It's a joy to see something you work on be useful."Mistakes along the wayLearning on the job has its drawbacks, though. For one, you can't blame anyone else when things go wrong.Recalls Heber-Percy: "Probably the biggest mistake I've made was four years ago when pushed live a load of changes to our website and the website went dark for almost three days.""I will never ever do that again. It dropped years off my life -- to see your site down and the revenue literally stop coming in. To see the users go to zero on your analytics chart."Frustrations, tooSays the co-founder, "I'll do all of the search engine optimization [SEO] myself, it's yet another thing I'm self-taught in.""Our SEO ranking in the UK is fantastic relative to our competitor set. But when you launch the US site, we're nowhere in organic search. I've struggled to move the meter on that for four years, such as by restructuring page titles, etc.""A year ago I gave up and built a new site specifically for the US market, divorcing it from the main site. We launched it on a .com domain this summer. Hopefully that will solve the SEO problem. But that's one of the risks of doing it yourself. Sometimes you don't get anywhere and leave money on the table."Having advisors helpsGetting fresh perspective and plugging gaps in your knowledge is key, she says. You can't take a John Wayne approach of going it wholly alone."We've got amazing advisors helping us, and I wish I had sought out their help sooner.""On the technical operations side, we have someone who helped with algorithm work. On the travel strategy side, one of our advisors used to run British Airways Holidays and was a C-suite executive at Travelport."Advice for other entrepreneursSays Heber-Percy: "Ultimately I don't believe in telling new entrepreneurs what to do.""When we first wanted to publish our guides, we were turned down by every publisher we approached. They said that what we wanted to do with our guidebooks would never succeed. We couldn't use the paper quality we wanted, we couldn't visit the hotels the number of times we wanted, we couldn't use the photographers we wanted.""So the lesson I drew from that experience is that naiveity is a wonderful thing sometimes.""Entrepreneurs shouldn't be intimidated to tackle technical projects or reinvent their niches.""Sometimes you have to ignore the complexity others are attempting to foist on you."