Productizing a Service Business?

Productizing a Service Business?

There’s this holy grail in the location independent entrepreneur movement. It’s developing a product. Something that sells over and over and over again after developing it once. This is where passive income can be realized.

Much like book writing used to be, once you’re published the money keeps rolling in for a couple years allowing you to write your next masterpiece as you see fit.

But a lot of us location independent entrepreneurs follow a path to get there. Typically we start our dreams working for the man. I wished I was smarter when I started out of college (shoot even before that) but I didn’t have the exposure to business that would have given me the insights I have today.

When we’re working for the man we start exploring how to break free, how to spread our wings. The ultimate goal even if we cannot state it is to have a product, to have “stable” revenue coming in while we take a week off to go scuba diving.

However something comes in there, almost devilish like that tempts us with the sweet candy of money. That devil? Service, also known as Consulting.

Service Business

There’s a lot of good that can be said about the service business/consulting gig. First you get to know your clients and customers really well, you get to make some really good money (remember that devilish candy?) and you get the benefits of running your own business while choosing your location.

The negatives of a service business are all too familiar to me currently.

  • Instead of one boss you have 14 bosses all who innately demand priority (It’s not their fault!)
  • Stop working, stop getting paid (You’re trading hours for dollars)
  • Reinventing the wheel every time
  • Convincing a new client to buy from you is akin to selling your body, it becomes soul crushing

productized service

Productize Your Service

So the next step, the natural progression is to develop a product from your service based business, aka productize your service. This solves a couple pain points, first the selling is much easier, it’s a system with a proven track record that they’re buying, not your mind/body. Second the productized service allows more outsourcing of the actual work so you can scuba dive.

Essentially without writing code or doing a CAD of your physical product you’re developing a product of someone elses time and selling that in a repeatable, predictable way.

I’ve tried this.

Developing the product offering was easy.

But I got the target wrong, or the product/market fit was wrong. See it here for yourself. It’s a sweet idea that has the potential for greatness. However it hasn’t sold well yet.

So do I develop another productized service?

Or do I skip that step and go right to a product?

I’ve been reading some insight into a rising star in the productized service business model about lifetime value of the client being increased by the utility of the product you offer. An example of productized service with high utility is website hosting. You just need it and you need it every month. Whereas website design you need infrequently and it’s a bit more of a luxury and commodity at the same time. Not a great space to play in when looking at the lifetime value of the client.

So what product or productized service can I develop?

Typically I’m like the cobbler who’s kids go shoeless. I can help others develop great product and productized service ideas, but it’s like I’m too close to the service in my own business to step back and see the product right in front of me. Real quick here’s my brain dump of issues/potentials based on the services Connex currently offers

Services to Productize

  • SEO
    • The market is flooded with service providers, tools, and productized services
    • Productized services have deservedly gotten a bad rap in this industry
    • To do SEO right it needs to be custom, I could not live with myself doing anything else
  • Social Media
    • Again a flooded market with service providers, tools and productized services
    • Again to do it right it needs to be custom, I could not live with myself doing anything less
  • Online Ads
    • Plenty of tools, great service providers and a couple of productized services.
    • Market still seems flooded
  • Email Marketing
    • Market is flooded with tools and service providers. I don’t know of many productized services here
    • This has potential. We offer a service where we increase open rates through segmentation and list reactivation
    • Content generation here is flooded
    • The tools all offer Conversion Rate Optimization functions.
  • Data Analysis
    • People have tried to develop a productized service here (visual.ly and Quill Engage are the two best ones) but the problem cannot be solved through a simple repeatable process
    • To be honest, helpful and thorough it’s more service than product.
    • Could sell weekly or monthly analysis reports, but it’s still a service
    • Hard to sell because there’s very little need for it. Businesses run well without looking at their online data all the time. Those that need to pay close attention (ecommerce) already do in house.
  • Conversion Rate Optimization
    • A lot of tools, some service providers but very few productized services.
    • Too custom, too much service based not enough product.

What about you? what productized service will you be developing or what would you be interested in buying?

 

 

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Defining Success

Defining Success

I’m a parent, husband, friend, entrepreneur, boss, vendor, and follower of Jesus.

Each of those have a metric for defining success. But in reality we need to define failure in order to truly define success. It’s my belief that there is a significant space between success and failure that we spend most of our time in. This space can both help us and harm us.

Define-Success-Spectrum

Using the illustration above, we can chart our actions and inactions on a spectrum of success and failure. I’d argue that most people are wired to look at this as black and white, the arrows on each side, not the line between. Either I lost 50 pounds or I didn’t. Achieving a goal is success, anything short of that is failure.

This is what I’m currently struggling with right now.

I want to be the father I never had. My goals include specifically: not abusing my kids, caring for them, encouraging them, and more. When I loose my cool and give them a harsh consequence, or yell at them I feel and tell myself I’m a failure. Because I didn’t achieve the goal. However if I were to define failure first: something like abusing my kids. Then even when I don’t attain the perfect father behaviors I’m still not failing.

Defining the land between Success and Failure

So what do we call this land between?

It’s not success and it’s not failure. Life is not black and white.

I don’t know, but I can give a couple more illustrations.

My service/consulting business took a 90% hit in revenue this summer. I’d call that aspect alone a failure. But is the business a failure? Am I a failure?

I’ve run a great business which has employed various people for 4 years. I’ve helped others experiment and live dreams they never thought they could. I did too for 6 months. I’ve been able to work from home, coach my kids’ soccer teams and experiment with new business ventures along the way. Frankly I built a cool business that afforded me the luxury of not working 80 hours every week, some weeks I barely worked 20 hours.

So that’d be a huge success in those aspects.

But I failed in bringing in enough new clients to handle the natural churn in the industry I’m in.

Failures Define Success

yin-yang

One cannot have success without failure. And like the yin and yang, there is a spec of failure in our successes and a spec of success in our failure. To illustrate this I’ll dig into the startup scenes current philosophy of failure. Basically they’re cool with experiments (businesses) failing as long as there is some learning happening. The spec of success in the failure of a business is the learning that happened. So Dodgeball sold to Google and later the founder Dennis Crowley left Google to found Foursquare. Dodgeball was a success in that it was acquired, but a failure in that Google killed it. The learning that Dennis acquired is partially not to sell your dream to Google, but more importantly he wanted to not sell at all.  I’m certain there were significantly more learnings that were acquired during his time watching dodgeball fizzle at Google, but the lesson is that Dennis felt a sense of success and failure at the same time.

So in startup world failures can be successes as long as you harness the learning to propel you to a new success in the more traditional view of the word.

There’s no In-Between

Is this possible? Could everything that’s not achieving success be a failure to achieve that goal? The phrase that surfaces: “you’re either growing or you’re dying”. Could it instead be like the largest organ of the body, the skin. It’s both dying and growing at the same time. The skin’s goal is to keep a semi-permeable separation from the inside to the outside, sometimes it lets the wrong stuff in (radiation), or the wrong stuff out (hernia). Would we consider the skin a failure for 99.999% of the time keeping stuff out?

But in other conversations, a 0.001% failure is unacceptable. (That’s 5-6 minutes of downtime per year).

Life is too complex to be that black and white. the middle, the grey, the in-between is where we find ourselves most days. My faith heritage refers to this as working out your salvation, the belief is that we’re saved not based on what we do, but we need to improve while still here on earth.

So are we called to live in a constant state of discontent? Of not-quite-failing, but not-quite-achieving? It’s not directionless, we’re always trying to hit the mark of success but will we ever hit it?

We cannot call this part of the spectrum failure can we, are their degrees of failure? If so then there are degrees of success. I’ve failed to maintain a location independent sales funnel, but I have succeeded in providing value for my clients while location independent.

Has Zuckerberg hit his mark of success? Sure he’s a billionaire, but I doubt his goal was to become a billionaire. Very few people ever have the satisfaction of success especially in the entrepreneur camp. We seem to always be striving for something, some problem to solve. With Facebook as a public company Mark’s success could be wrapped in the current stock price, but that’s a fickle measure of success. If your business made it… if you IPO’ed and made a multi billion cash out. Would you cash in, call it a success and walk away? (plenty have) Or is there something more to achieve?

Success is a moving target

I once defined career success as making $50k in a year. This was way better than what my family grew up with, I figured that’d set my family up for future success and a life of living fine. However other factors come into play, and it’s not just inflation. And $50k is no longer enough to define success.

Lifestyle matters, and I’m not looking to own a boat and a fleet of cars, no I enjoy living and immersing myself in different cultures. Career success is now defined as can I live the lifestyle I want?

Yet it’s constantly a moving target. If success if defined by achieving goals and each time you achieve a goal you set a new one success while attained will never be obtained.

We define success by defining goals, achievable or not. these goals become the measure of success and conversely the measure of failure. So whatever word we use to define the middle it must have a directional element to it, not just an aimless middle. A moving, a growing, a heading. We need a word that describes the motivation, the struggle, the push, the drive.

I like how Jammer Hunt breaks failure down into 6 failures:

Abject failure

This is the really dark one. It marks you and you may not ever fully recover from it. People lose their lives, jobs, respect, or livelihoods. Examples: British Petroleum’s Gulf oil spill; mortgage-backed securities.

 

Structural failure

It cuts — deeply — but it doesn’t permanently cripple your identity or enterprise. Examples: Apple iPhone 4’s antenna; Windows Vista.

 

Glorious failure

Going out in a botched but beautiful blaze of glory — catastrophic but exhilarating. Example: Jamaican bobsled team.

 

Common failure

Everyday instances of screwing up that are not too difficult to recover from. The apology was invented for this category. Examples: oversleeping and missing a meeting at work; forgetting to pick up your kids from school; overcooking the tuna.

 

Version failure

Small failures that lead to incremental but meaningful improvements over time. Examples: Linux operating system; evolution.

 

Predicted failure

Failure as an essential part of a process that allows you to see what it is you really need to do more clearly because of the shortcomings. Example: the prototype — only by creating imperfect early versions of it can you learn what’s necessary to refine it.

So what if we put descriptors on Success as well? Eugene Eric Kim started that here.

Minimum Success

The bare minimum indicators of a successful project.

 

Target Success

I also call this “stretch,” because these scenarios should be hard, but attainable. These are the scenarios for which you aim. They should have about a 40-70 percent likelihood of happening if you do your work diligently.

 

Epic Success

Success beyond your wildest imagination. You are not expecting any of these to happen, but they are within the realm of possibility, and you are overjoyed if they do.

So is there room between Minimum Success and Common Failure?

In the illustration of my business, the Minimum Success would be to pay myself a wage that allows us to live at our minimum budget. the Common Failure would be to not have a location independent sales method in place. I could argue that it is more of a Structural Failure. But I still think the middle is where we spend most of our days, avoiding Structural Failures and fixing them when they occur. Dealing with Common Failures as par for the course and all at the same time achieving minimum success.

I nominate that we use the term insistent middle.  Insistent Definition: “earnest or emphatic in dwelling upon, maintaining, or demanding something; persistent; pertinacious.”

I live in the insistent middle. I demand success, movement. I am persistent. I am earnest in this.

My success is never giving into failure as the end.

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What If?

What If?

A little over a year ago Becky and I asked a very dangerous question.

What if?

On one hand I strongly urge you to ask that question. Ask it a lot.

But like the choice between the blue and red pill you cannot go backwards, you cannot return to bliss if you start asking that question.

However, reality will become more and more evident and clear.

red-pill-blue-pill

And so we asked,

  • What if we could sell our house?
  • What if we sold most everything we owned?
  • What if we could travel with kids?

And we did just that. We changed courses so dramatically, from living in the countryside attempting to hobby farm to world travelers trying to find a home. We named it Home Along the Way. We made home wherever we found ourselves.

We answered a lot of questions.

We did sell our house and became nomads.

And we have found the sweetness of reality.

  • Reality that our kids love traveling. They miss their grand parents, but they love moving to new houses, they loved exploring new places, meeting new people.
  • Reality that Becky and I still love traveling, and can totally do it with 4 kids!
  • Reality that my wife is a packing ninja, not only does she plan ahead and have exactly what we need along she’s able to shed stuff along the way and still have everything we need.

But some harsh realities set in as well.

  • We don’t handle the heat of South East Asia too well.
  • Life outside of SE Asia is expensive
  • Word of Mouth marketing fails when ‘out-of-sight, out-of-mind’ comes into play

And so yesterday we bought tickets to return back to the US.  This is due to many factors, the most major one is that Connex’s revenue has dropped 90% in 6 months. The trip was budgeted at 50% of revenue and in SE Asia, unfortunately both of those changed and so the cold, harsh reality of the bank account dwindling has finally set in.

Three months ago, I freaked out in an email thread with a friend of ours. Freaked out about money, about failing, about life. Her response has clanged in my brain ever since.

What if,

What if you come home broke and penniless?

That’s it. That’s all the words of wisdom a friend offered. And it rattled me. It still does. What if nothing works, you spend all your money, return to the States, homeless, and car-less?

What if?

What’s the worst that could happen?

We’ll find out. We fly home tomorrow, October 1. It’s crazy how we’ve only been gone 6 months (it’s felt like  a LOT longer!) and how we’ve felt on the other side of the world despite being connected with technology and communication channels. Yet in the end, the total time from decision to boots on the ground is less than 48 hours. The fast switch from “We’ve decided to go back to Michigan” to actually being in Michigan is only 48 hours. 16 of those are spent sleeping and another 16 in an airplane. Thus there’s only 16 hours left. That’s one day of awake time.

Will we set up camp in Michigan? Will we buy a house? Will we settle down?

If the kids have any say in it–no, we will not.

Each one wants to stay in Michigan for a time but asked us to promise them we’d leave again. Even the 4 year old (separate from siblings) said he didn’t want to go back unless we were for sure going to go travelling again later.  They’re addicted to travel just like their parents.  So, we’re treating this “return” to the US more like the next stop in our travels than an end destination.

What happens next?  Well, we do what we have done in every other country…find a house and set up “life” in that area.

What will the future hold? We don’t know.

Does Connex become a hobby, or do we land a couple of large clients again?

We don’t know. I haven’t given up on Connex yet, but it needs to grow soon.

What would you do if you lost 90% of your family’s income?

 

Travel as a Lifestyle from a Digital Nomad Family

Travel as a Lifestyle from a Digital Nomad Family

I gave up.

Or better stated I quit.

And this isn’t my first time quitting!

On one hand we are told never to give up, that persistence pays off. Shoot, Angry Birds was Rovio’s 52nd attempt at making a game.

Yet on the other hand we’re told to say no to things that distract from the priority, from the goal.

The really insidious things are those goals/priorities that we don’t know we’re signed up for.

I quit those things. Er, I quit two of those things.

  • Keeping up with the Jones’ and
  • The American Dream

Background

We have 4 kids, and we homeschool them. This effectively makes our family a location independent family.

I run a digital marketing strategy agency. I’ve been running that agency for 4 years since I quit the best job I ever had working with the great people at ddm. But the whole time I was building that agency I was working from my basement in Newaygo county. Quite literally from the woods of Michigan.

I was struggling with some of the decisions we had made, and frankly as an entrepreneur who loves to start things I was unable to keep up with some of the commitments we were making. For example, we committed to being a one car family and with 4 kids we drove a minivan.

Driving a minivan as a parent is no big deal. But using the minivan to meet with clients? I mean we were running a quarter million in annual revenue for four years why was I driving around in a minivan?

But I struggled with that, why do I need to keep up with the Jones’? Why do I need to feel bad when others show up to meetings in BMWs?

The dream for me is not to own a certain car. These things perish. And I know that if I work harder while my kids are young I could afford that BMW… but what am I sacrificing?

And then there was the farm, the weeds, the fencing needed to get a couple horses, the hay, the cows, the fruit trees we planted that didn’t get enough attention. We had a sweet little hobby farm but as a starter and not a finisher I was unable to keep up with it all.

And it was sucking the lifeblood out of me.

And doing damage to our family.

Selling it all

So we did what anyone with 4 kids would do.

We sold our house and 90% of our belongings.

We become homeless.

Yeah okay maybe not anyone with 4 kids.

But seriously, I espoused that stuff is not important, yet somehow I was stuck in the middle ground of having stuff and needing to maintain the stuff we had while not wanting more and better things.

If you say your stuff doesn’t own you… I challenge you to sell it all. Could you part with 90% of your stuff and life continue on as normal? The obvious answer is yes, but yet we don’t do it.

Why?

Because stuff brings us some strange level of comfort.

We left: Begin the Digital Nomad, Travel as a Lifestyle

After selling everything we had (and before some of it sold!) we left. We started out vagabonding in the Philippines and various other Southeast Asian countries.

For now we’re committed to 9 months of travel as a lifestyle. Of being homeless by choice.

From the woods in Michigan to the Beach in Bali.

We’re 1/3 of the way through our initial commitment. having visited and lived in 8 cities in 4 countries we’ve been on quite the journey so far.

and now I’m inviting you to join us.

Digital Nomad Famil: Kortmans at Petronas Towers in Kuala Lumpur

Kortmans at Petronas Towers in Kuala Lumpur

Join Us!

Here’s the simple ways to join us. Feel free to pick one or all of them :)

 

 

Laymen’s Guide to the Kolbe Score

I was looking for a definitive explainer or a guide to the Kolbe Score and I couldn’t find one, mostly because consultants make a lot of money explaining how the kolbe works and they are old skool in that they don’t want to give away the information that they consult with.

And mind you I’m very un-trained in the Kolbe score reading land, but this is a layman’s explainer for how to use a Kolbe score (specifically in teams).

First off, a Kolbe score shows your instincts, your natural desires of how to act. This isn’t Myers Briggs’ “are you an Extrovert or Introvert?” It’s more of a how well do you work with teammates to get things done?

It’s also a holistic view of people, we all need to work on areas that are not our strengths. Instead of an excuse for laziness (well my Kolbe score says I’m no good at doing it that way) see it as more of a prediction of where problem areas lie between two individuals.

Kolbe scores on 4 modes, Fact Finder, Follow Thru, Quickstart and Implementor.

Fact Finder

This is your propensity to seek out information before acting, or before making a decision. Are you more likely to read a recipe, watch a video, and witness a demonstration before cooking a new dish? Or are you more likely to read the ingredients, see a picture and go from there?

Follow Thru

Are you a systems creator, or a person who bypasses the system to get the task done? Those who score high here are able to document processes and develop repeatable systems. Those who score low here adapt to find ways to accomplish the tasks through multitasking or other shortcuts

Quickstart

This describes your propensity to do stuff without knowing the outcome. Typically a high quickstart person will be heard saying stuff like “I don’t know, let’s just try something” They are an experimenter. Those who score low here will want to stick with tried and true plans. Middle of the road will check things out before trying them.

Implementor

We’re all Implementors in a non-physical sense. But this Kolbe measurement measures how we work with physical space, do we work with our hands to create something physical? Those who score low here can see things, they can understand how physical objects work together. Those who score high here can create physical solutions to problems.
Now that you know what all four of the modes are what are these predicting?

First off there’s a 9 point scale in each, the lowest you can score is 1, the highest is 9. In one area, say for example Quickstart, a 1, 2 or 3 will push back when they are in a situation where they need to do something that hasn’t been proven to work. a 4, 5 or 6 will be middle of the road, they can fluctuate and operate well with a proven plan or without by trying some new stuff. A 7, 8 or 9 will feel like the lifeblood is being sucked out of them if they need to repeat a proven process without any experimentation.

So the key is knowing which of the 4 you are in the high, middle or low sections and seeing how that blends with other teammates.

Real life example, I’m currently a 5-4-9-2 Which means I’m a middle of the road Fact Finder and Follow Thru, I enjoy getting more information, but can take action without all of the information. I also can create systems, but I have a greater tendency to develop a shortcut, or multitask to get things done.

I’m a high quickstart, almost off the charts :) which means I like trying new ways of doing things just because. For example my commute home, I’ve tried over a dozen different ways, and will frequently change up for no apparent reason, just because I wanted to test a theory.

I’m a very low Implementor, which means I have difficulty working with my hands to create solutions. I would be a terrible mechanic. In the scene from Apollo 13 where they dump out the parts and say build a solution — I’d be the guy at the white board drawing a solution (I can picture it) versus actually taping together parts to make a solution.

Great so now you know more about me, my strengths and weaknesses, but so what? Well, lets look at where conflict might occur.

Kolbe Score on Conflict

Fact Finder and Follow Thru, I’m middle of the road and so I work will with folks who are either high or low in both, the only potential issue is with someone who is a 9 in Follow Thru (I’m a 4) I might struggle with always having to do the system, the repeatable task.

Quick Start, I will cause someone with a low quickstart (1, 2 or 3) anxiety. As I’m not sticking to the plan, to the proven track record, I’m always out there trying new things, doing things different just because. Conversely I’ll get frustrated with a low quick start for not trying new things, for not experimenting and just doing something because its “the way its always been done”.

Implementor, I will actually block a high implementor from working with their hands because I’m (naturally) so opposed to doing stuff with my hands, I may end up wanting to draw it out, or wanting them to explain it to me without using objects or something like that. Whereas the high implementor wants to build it, put it together physically.

Like I said in the beginning the Kolbe is not an excuse for laziness, just more of a helpful tool in predicting and explaining inter-personal relational difficulties or successes.

Oh and yes kolbe scores change over time, I used to be a 7-6-5-3 and now I’m a 5-4-9-2 which means I’ve moved into a more experimental phase in my life, wanting to operate out of trying new things more than finding all of the information (high fact finder). I’ve also lowered my system building tendency and my tendency to work with my hands in the physical space.

So where do you see yourself? High, Medium or Low in the four modes?