Today I had lunch with a successful entrepreneur that bootstrapped and sold his first company five years ago and is in the middle of his second startup. His second company, much like his first, uses his domain expertise around a complex problem where he sells annual contracts with a combination of consulting, customized product, and data. Being so services intensive, the offering requires a minimum six-figure annual contract, thereby limiting the companies he can go after. Now, in order to grow the business, he wants to productize the offering, make it more self-service, and sell it at a lower price point.
Here are a few of his challenges:
- The offering is so specialized he’s worried about making it usable as a turn-key product
- He’s done all the selling to date, wants to hire a sales rep, but hasn’t had good experiences hiring sales people in the past due to a lack of results
- The lower-end market is more competitive and commoditized, but still has opportunity for growth
His goal is to build an enduring, sustainable business with a strong corporate culture. Productizing a service is extremely difficult, but with his timeline and resources he’ll be successful.
What else? What other challenges have you encountered productizing a service?