I don’t know everything he does, but one thing that’s potentially nice about a product business is that it makes a bit easier to make the business be not all about you… “work on the business, not in the business”. If it’s straight up consulting, it’s completely the opposite, which is why you can’t really sell your consulting business in most cases: it wouldn’t work without you. Productized consulting, if done right, lets you build something that does not revolve around you, but it’s trickier because it’s so easy to be an integral part of things.
I guess one factor may be that most Saas are not very close to their customers, as Ian and Andrey have said in one of their podcasts. They never talk to their customers, the customer is just a number to them. Which is why you see all these anaytics and tracking- go to any Saas website, and you will see 200 javascripts being loaded. It seems customer research has been outsourced to analytics companies.
And the less said about tracking, the better. I remember, a few years ago, when I bought car insurance. After that, every website started showing me ads for insurance. I bought a ticket to India, and soon everyone was showing me cheap tickets to India. That’s when I started using ad and script blockers. It’s so creepy and sleazy, but many (though not all) Saas types use it.
With productised consulting, or something similar, you have to actually talk to your customers. You can’t hide behind analytics and click thru rates, like some pay per click spammer.
At least, that’s my guess. Mr Mackenzie will probably enlighten us with a blog post soon
One on one customer development is a topic I hear talked about quite often on blogs and other podcasts so I’m not sure why you think this. At Microconf it was brought up often as well.
Just a couple Startups for the Rest of Us ago was about how custdev takes them 10-15 hours a week in followup calls and emails.
I have some theories on this, and have been pretty vocal in the past on why starting with a SaaS was a big mistake.
First off, my first business was a consultancy. This taught me how to sell. Most engineers are sufficiently removed from the sales cycle that diving straight into SaaS, which is much more than just “getting to write code all day”, is a bit of a shock for a lot of former FT devs.
But more importantly, the delay between “breaking ground” and “making a living off this” is pretty large with SaaS, and can easily demoralize someone. It’s not uncommon for a SaaS to take years to become livable.
If I could start over, I probably would have transitioned slowly from time-based consulting to more recurring revenue / productized consulting stuff (see Nick Disabato’s Revise service.) I’d then work on the books and workshops that have been HUGE in giving me a runway of cash along with an audience, and then I’d work on a SaaS once that foundation was in place. Transactional products are generally an easier sell than subscription products, and the value (revenue) is captured typically upfront… which is good news if your aim is to replace your income.
I think any real business is going to be a bit of a shock after having been an employee focused on one thing. That’s good though, in many ways, it forces you to learn a lot and grow a lot, and from my point of view has been unambiguously positive.
But more importantly, the delay between “breaking ground” and “making a living off this” is pretty large with SaaS, and can easily demoralize someone. It’s not uncommon for a SaaS to take years to become livable.
That’s an excellent point and something I’m struggling with myself. But what I’m doing ( www.liberwriter.com ) is fairly close to a productized consulting thing, and I do get paid up front, so I’m not sure that that’s a recipe for quick success either.
I think the thing about consulting that’s tough is that it is so easy to fall into the trap of being your business, wheres with a product it’s clearer you have to build up systems around it, because you are no longer simply trading your own time for money.
Another thing that I think can be trick about trying to grow a consulting business is that people skills are fairly important because to scale up at all you’ll have to bring reasonably competent people on board. I guess you need that with any business, but it seems that scaling a consultancy is trickier from that point of view because it grows more linearly with the number of people involved.
I’m talking from my experiences as a consumer. Many Saas I pay money to take weeks to reply to my questions, and then try to upsell me. It’s the same with their email lists/email courses. They all end with “…and if you have any questions, email me.” I usually do, but never hear from them. Till now, only one person has replied back, out of the dozens of emails I sent.
I think in all these blogs/podcasts, we only get the sexy version. Amy Hoy called it the Karate kid version, where all you do is wax off/on, and within weeks you are a kung fu master.
But I’m only speaking as a consumer, and stand to be corrected.
I wish more people would emphasise this. The only version I hear about is: “I put up a landing page, got 10,000 signups, out of which 100 converted, and six months later I’m making 100K a month. And now, off to drive my Ferrari.”
This whole “don’t start out with Saas” paradigm that has been gaining steam lately frustrates me. Particularly because a lot of it originates from the very same crowd that not too long ago was telling us that Saas apps are The Truth, The Light, and The Way.
Now, perhaps this is just a natural progression; it’s possible that all the started-with-Saas folks have been at it long enough to have finally identified the downsides. But as someone who has struggled monumentally just to get a decent prototype built (only to get frustrated and destroy it - but that’s a talk for another day), to suddenly be told by the same crowd that sold me on doing a Saas app in the first place that I shouldn’t be starting out this way…grrrrrrrrrrrr.
That said, Brennan’s comments really strike home with me, because I am also steeped in consulting, and if he has learned lessons that indicate things other than Saas might fit more comfortably with an established consultancy, well…then I should probably at least give it some thought.
I don’t know if I’d recommend starting out consulting and then moving through those phases if you just have a regular job now and want to have a product. If you want to have a product, build a product! Many of the same techniques for buildings lists, etc still apply and you don’t need that in between step (and years).
On the other hand, if you’re already a consultant and making good money trying to extract yourself is going to be difficult. There it seems more reasonable to me to work in phases on your way to a product.
That’s exactly why I send a personal email with my phone number when people sign up for a paid account on http://pageproofer.com . I tell them to call me if they have any questions. Someone called me today about the sales tax that gets added for Canadian customers. A quick 5 minute call and a happy customer. I figure at this point answering the phone is simple, offers great customer service, and gives me a chance to speak directly with customers. It might not be scalable but for now it works.
More on point with this thread I’m starting a SAAS after 10 years of solo consulting. My problem is that consulting $$$ is like crack while SAAS revenue slowly trickles for now.
It’s hard to give attention to the SAAS even though watering it now will likely result in larger returns down the road.
Totally agree that consulting money is like crack. I stopped taking client work and am having massive withdrawals. Turning down 5-figure checks is very painful and, at times, feels very stupid on my part.
@Christopher, I was nodding hard while reading your post. Yeah! That is frustrating indeed!
I believe so, yes.
I see many advantages in beginning with infoproducts. The biggest being something you can build faster and start to learn sooner what most people I believe struggles with… selling the damn thing.
But I really wanted to understand from @brennandunn if he believes it would be better to start with infoproducts and than move to SaaS or if its a matter of doing it in parallel and in a way the infoproducts are part of your “bigger” solution. In other words, aren’t you afraid of making infoproduct after infoproduct and never migrating to SaaS?
If I could do it all over again, yes, I’d start with infoproducts and move into SaaS later. Revenue was my focus, and infoproducts did that faster for me. They’re also my primary acquisition channel for my SaaS, so it’s like… paid lead gen.
At the end of the day, your customers want a better business. As engineers, we can be a bit biased toward software… but the medium is immaterial (software, book, video course, whatever)… the customer just wants to be better off than they were before. Once I realized my SaaS touched ONE part of their business, the floodgates opened to benefit all the other sides of their business. And a rising tide floats all boats…
