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.
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
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
- 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?