Productizing to $10k/month: How to use a productized service to accelerate your transition to software – Brian Casel – MicroConf Europe 2015 Talk Recap

The MicroConf Europe 2015 Talk Recaps can be found on the central “hub” page.

Website: casjam.com
Twitter: @casjam
Slides:

 

Key Points From the Talk

  • Build a service first, learn, develop software from there
  • Customers want results, not tools
  • Combining a Done For You Service with software delivers results

Talk Recap

  • 3 goals:
    • What a productized service looks like as an actual business
    • Combining a productized Service and (SaaS) software
    • Showing opportunities to use productized service to transition from freelance to products
  • Restaurant engine history
    • freelance developer/designer – living project to project
    • Plan/Dream: within a year transition from freelance to customer
      • build software
      • first customers
      • $10k/month
      • Quit! (and focus on product)
    • Fast forward a year:
      • some customers, growing – not quite $10k/month
      • ready to take a leap of faith and quit freelancing
      • no relation between time and money lead to a number of bad decisions
      • within a year back to taking client work
      • This is how it went
        • build software
        • first customers
        • $10k/month
        • Quit! (and focus on product)
  • Factors of Resistance (things that slow you down)
    • Client work
    • Day job
    • Bills
    • Kids
    • Family & Friends
    • No experience (working in a product business)
    • No chops
    • No help
    • No network
    • No idea
    • RISK
      • time investment with little to no payoff initially (hard to sell to family & friends)
  • Actual timeline for Restaurant Engine
    • Build software
    • First customers
    • Quit freelancing
    • Resistance, Mistakes, Back to client work,
    • Re-Focus
    • $10k/month

The Path of Least Resistance

  • Audience Ops – actual timeline:
    • Launch
    • First Customers
    • $10k/month
    • Building software
    • Launch software
  • SWaS – Software With a Service
    • Software product with a “Done For You” component (DFY)
    • The Software provides the tool
    • The Service delivers the result
    • Services = higher form of onboarding – ensures great experience
  • SWaS is easier to buy
    • no/minimal learning curve for the customer
  • SWaS is easier to sell
    • you are identifying ONE problem
    • you’re delivering the perfect method to solve ONE problem
    • “Onboarding/learning curve” no longer a valid objection by the customer
    • Cancellations become less of concern as customers are seeing results –> customers are happy –> lower churn –> higher LTV

Case Studies & Tactics

  • LeadFuze – DFY cold emailing lead generation
    • “Invisible Software” – they use software internally, but customers never see it
    • software streamlines & scales the Service
    • Used revenue from the Service to turn internal Software into a SaaS product
  • owning the tool is optional!
    • build your service on top of existing tool
    • Leverage popularity of existing tool OR keep it opaque
  • Test Triggers – runs & manages A/B test on your websites
    • built on top of Optimizely
    • 3 clients ($1500 MRR) within 30 days – from 50 hand-crafted outreach emails
  • AuditShark – security auditing software
    • enterprise sales territory –> 6 month sales cycle
    • “The Service sells the Software”
    • 3 sales in the first month of offering the DFY service
    • much faster & more efficient delivery of service, thanks to tool
  • Podcast Motor – DFY podcast editing & production
    • “Launch with a day job”
    • 20+ paying customers in less than 6 months
    • Targeting business podcasts
    • Re-investing all business revenue to grow team & product
    • Plans to launch a software component later

But Can it Scale?

  • Benefit of SWaS: revenue and results (and business lessons!) from day one (for the founder)
  • customers want the RESULT, not the tool ==> DFY component for Restaurant Engine
  • I removed myself to the point that I spend <3 hours/month managing the business
    • outsource and automate using freelancers
    • First: Get the solution right – then: remove yourself from the delivery
  • Focus
    • on one problem, one solution for one ideal customer
    • standardized and predictable delivery of the solution
    • come up with a marketing plan for your ideal customer
    • Your DFY solution is a no brainer value proposition
  • Audience Ops
    • “10x The Speed”
    • 4 months in:
      • 90% removed
      • $10k/month MRR
      • self-funding software product
    • If you’ve done it before, you can do it again 10x faster

Price on Value. Scale the Costs.

  • value-based pricing is key
    • price high, charge upfront
    • tool + service == more value – charge accordingly
  • Streamline with predictability
    • lowers costs
    • delegate work / remove yourself
    • software boosts efficiency

Leverage Everything

  • leverage existing software to deliver a service

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About Christoph

Christoph lives in Munich, Germany and is bootstrapping his own SaaS application as a part-time entrepreneur.

He likes to write on this blog about anything of relevance to single-founder bootstrapped software startups.

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