Productize your service business

On the last Lisbon’s WordPress MeetUp I had the pleasure to speak about GOMO‘s strategy to develop premium WordPress Themes and Plugins, in few words, how to convert a service business into a products based business.

Services vs Products revenue

The starting point of my keynote was a graphic showing GOMO’s monthly income of last year, which looks like a roller coaster! This shows the risk of having a service oriented business, depending on a few sources of revenue, a few set of customers. If we lose one customer or we don’t win a project we could get in trouble in a question of months!

On the opposite, if we were a products oriented company we might have a very stable revenue graphic, where instead of depending on few customers, we could have thousands of customers, thus reducing the dependence on one customer. In the end, services vs. products it is all a question of risk management (idea inspired on The Low-Risk Entrepreneur from Planscope).
For a company like GOMO, service oriented, without empty time-slots to dedicate exclusively on building products it is not easy to change this paradigm. This is why we’ve implemented a productization strategy last year.

Productization

According to google, productization is The act of modifying something, such as a concept or a tool internal to an organization, to make it suitable as a commercial product.

But in day-to-day practice is the act of rethinking the entire project workflow to breakdown a custom service delivery into small deliverables, where some of them will be developed as products, in a way that these could be re-used on other projects or sold individually as products.

Service approach vs Product approach with WordPress

And here comes WordPress.

By design, WordPress is itself a product, and empowers developers and designers to build modules to modify its presentation or functionalities. These modules are Themes and Plugins, and could be developed as individual products. On top of those we could build child-themes as projects, custom styled to our VIP customers.

By using the productization approach we move away from the logic 1 project equals to 1 paycheck to a logic with the potential of earning multiple paychecks with the same effort.

And then what?

After having built some great products as parts of bigger customer projects (services), what could we do with them?

There are so many possibilities! We could share them on WordPress.org or on GitHub and help other fellow developers and designers, the WordPress community! Or, we could monetize them by selling them on a Marketplace or on our own website. In the end, all comes down to share knowledge and give back to the community, freely or for some amount of money in return. One of the two is far better than keeping the code hidden or just for the use of one customer… this reminded me what Zé Fontainhas said on last year’s WordCamp Porto:

Everything that we don’t give back will be lost forever.

Start today!

So, get back to your organizations and re-think your entire processes! Start productizing today as it is a powerful strategy to reduce the organization risk, increase your revenue potential and grow your business!

One of the biggest advantages of
selling products is that you are
no longer trading time for money,
so you can be making sales while you
are working on your tan in Thailand.
— Troy Dean

Credits: Graphics by Frederico Leonardo