Problem: How to Transition from a Service to Product-Based Company
Matthew Black and his consulting agency (Black Ops) had a great thing going. While the beginning of the business process had the typical start-up hiccups, they eventually grew their business enough to make it onto a “start-up businesses to watch” list. It was after that recognition that they realized the benefits of specialization and focusing their efforts.
This was a great way for me to call up all of my friends and say, ‘Hey! Remember that time when we wanted to work together? Well, hey, I have this agency. Tell me about your problem and I can solve it.’ And I just did it over and over and over again. And soon enough I had a pretty successful consulting agency.
Steps to transitioning business in order to specialize in one thing
I do believe that there is a smart way to do this and, sort of, a “leap of faith” way. I’m going to go over the steps that we went through and the steps that we validated on that transition.
Step 1: Analyze your processes and look for repetition
Look for systems and processes you repeat often with each of your clients. Are your clients asking for (relatively) the same things? Do you keep having to rebuild projects which involve the same steps? Jot down the processes which have a tendency to be repeated and make a note of them.
From a consulting standpoint, were we doing this same job, over and over and over? Were we learning about how to sell the same set of services over and over and over? Was there a repeatable pattern there?
After about the fourth or fifth project we were finally like, “Hey, don’t rebuild that. Take that core piece of that strategy or that core piece of that creative and let’s turn it into a framework, right?
Step 2: “The Hybrid” AKA Test with your current customers
After building the initial product, Matthew didn’t take it to market just yet. Instead, they turned back around and brought it to their customers. Matthew calls this phase “The Hybrid.” He and Black Ops (his consulting agency at the time) were able to test and tweak this initial product with this build-in market from their consulting business. However, they also had to pick and choose which clients could come with them on their journey and who didn’t really fit.
To be honest, that was the most confusing part of the company because (especially when we’re doing consulting projects with such large brands) the pains, and the requirements, and the solutions are so hyper-specific to those brands. But a product really can’t be [hyper-specific], right?
Step 3: Know that the final step is never really the final step
No matter who your target market is, no matter what product you are selling, or how you categorize yourself, you will always be learning something new about the market and the industry. No matter how much you learned and the prep that you did during the transition phase, the amount you will be learning will always increase after you’ve launched. To this day, Matthew and his team at Mav (the product which came out of Black Ops) are still adjusting and learning.
When you launch your app, or your SaaS product, or whatever it may be, it’s almost like, when people say, “Hey, we’ve launched it! This is the final step; let’s celebrate!” It couldn’t be further from the truth. It’s actually more like you’ve worked tirelessly over the last year to start this grocery store and the launch day is actually just you opening the doors. Your work is just now beginning.
Step 4: Learn to charge for it
If people are willing to pay for your product because it solves a problem they have, that is the truest form to tell you whether or not you have something that is going to work.
One of the truest forms of knowing whether or not you have this product-market-fit (or, you know, whatever the kids are calling it these days) is if someone is going to pay you.
Matthew’s Personal Mission Statement
I’m really focused on enjoying the day-to-day of this. If I can do that, I’ll be a happy guy and if I’m a happy guy, I can accomplish anything.
It’s really easy to start comparing yourself to other people in the industry. But if you take all that aside, slow down, and start breaking things into really small chunks, and start thinking long-term, you’ll become much more successful. Make sure you’re focusing on the basics, (talk to your customers, taking care of your team, having fun, etc.) everything else is accomplishable.
A few books on the fundamentals of SaaS selling, which Matthew suggests
Predictable Revenue: Turn Your Business Into A Sales Machine With The $100 Million Best Practices Of Salesforce.com – by Aaron Ross and MaryLou Tyler
He also suggests books that help you define what you’re working with, who you should be going after, how you should be going after them, and unlearning service industry marketing tactics (versus product industry marketing tactics) is important. Matthew suggests learning these things as soon as possible.