October 1, 2019

Can software development be a productized service?

Zencentric

As for I do some custom development (SaaS apps) at some moment I started thinking if I can turn it into a productized service (PS in what follows).

I checked many articles about it including

https://productizeandscale.com/why-productized-service/
https://www.autogrow.co/productized-business-examples-benefits/
https://www.proposify.com/blog/how-to-productize-a-service
https://www.indiehackers.com/@Vinrob/240be4b578 by @Vinrob

but none of them didn't give answers to my questions:

  1. If it's even possible to make PS for such non-linear thing as software development (SD), especially development of SaaS apps?
  2. How I could organize the process? It involves many different participants like product manager, developer, tester, designer and probably others. And the process itself is not as simple as accounting or designing a logo (sorry, Robin :)
  3. Unit economics? I have no vision of how much I would charge to have a good balance.
    For example, I want to hire only good developers that I would pay at least $25-$35/hour. If I charge a client, say, $4,000/month I have to occupy a dev full time. But there is no profit at all. If I occupy a dev only part-time (for one project) it means that a customer doesn't have a full-time developer for this pretty high price.

So, what do you think about these problems?

Thanks!

  1. 1

    Yes, of course it can. It is also important to understand the basic software development models. Their pros and cons are well described in this article https://innovecs.com/blog/software-development-models/. The success of your company depends on this.

    1. 1

      Thanks for your response.
      I think I know pretty much about the development models. My question was if it's possible to have a profit when service is a productized one. If it's the case, I charge the same price no matter how much work it should be done, and it can cause problems if the price is wrong. On the other hand, it should not be high else it doesn't make any sense to productize it.

  2. 1

    Of course it is needed. Without good developers there will not be a good project or even a startup. I can recommend Inoxoft https://inoxoft.com/technologies/node-js/ which is just a good leader in the web development market. With the help of js you can do a lot of cool things that this company just understands. I recommend.

    1. 1

      Thanks for your opinion! I will check them.

  3. 1

    Absolutely! Probably the most famous example of a productized service bootstrapped startup is WP Curve, and it sells software development.

    Check out Dan Norris's videos on how he built it from nothing to a 7 figure business in 18 months.

    1. 2

      Thanks! I will check his videos.

  4. 1

    Short answer - maybe, but I haven't seen anyone pull it off successfully.

    The closest that I've seen work is companies offering support + maintenance as a service. $x per month to keep your {insert tech stack/platform} site live and updated. Companies will pay $100's p/m to not have to deal with servers, patches etc. Combine that with minor bug fixes on some kind of hours per month model and it can work.

    1. 1

      Right. I didn't take into account that all PS are pretty linear and standard. Thanks.

  5. 1

    Probably not. As you identified, it’s too many different skills and processes to try package as a single service.

    What about offering one part of the process as an offering. Like testing? Set up a company’s unit testing and have price plans to run unit tests on a daily/weekly/monthly basis?

    Or do tech spec documents for $1k a go. Do 3 30 min skype interviews with a founder about their SaaS idea and write a detailed tech requirements doc for them to take to a software developer.

    1. 1

      Or do tech spec documents for $1k a go. Do 3 30 min skype interviews with a founder about their SaaS idea and write a detailed tech requirements doc for them to take to a software developer.
      Yeah, I actually thought about something like that. Not sure if I would like to do only product management. (And I really hate testing haha :) So, I have to try!
      Thanks!

      1. 1

        Do you have a part of the process that is your favourite?

        One other option could be to design only a very specific type of app, to keep the number of processes and skills you need to process on day 1 to a minimum.

        Like airdev.co , who only build web apps on bubble.io. Could you build internal workflow automation software using Zapier, Airtable and custom code? Or maybe be a specialist Twilio development company? Or specialise in a vertical, like Marketplace apps - "We build your Uber for X"

        1. 1

          Yeah, I'm trying to get a vertical - it's SaaS applications.
          The problem is I love the whole process of development. I can't imagine myself doing only coding, or only testing or something like that.
          As for automation, that's right, I see so many pitfalls in the process of development and thinking how to automate them.

  6. 1

    🤔 I think the high variability of general software uses, and requirements would make this tough. The point of the service is it’s mostly repeatable. Something like Salesforce might fit though, seems to be ongoing and expensive, or Wordpress stuff for lower end, not sure with this one though, yet it’s still niche in some sense.
    Many dragons 🐉

    I was recently describing manypixels to a successful founder that I know and pointing out the fact that the designs are static assets that are delivered, and “finished” no need for testing, upgrades or bug fixes :) which sounds low risk and pleasant compared to custom dev work.

    1. 1

      Right. I didn't take into account there are too many aspects involved. Too many people of different occupations and PS are more for something pretty repeatable.
      Thanks!

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    This comment was deleted 6 months ago.

    1. 1

      There are then only a few basic type of apps: social network, CRM, retail, auction, membership/video platform.
      Well, my idea is to work on SaaS apps only. So this is pretty niche but the problem is SaaS apps may be still very different and require different logic.
      Of course ,you need to build this library of core sites to begin with, and manage expectations,
      I'm thinking to extend the boilerplate itself but still don't know how it can be done in a better/faster/convenient way.
      Thanks for your advice!

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        This comment was deleted 6 months ago.

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          Wow, that's interesting! Thanks a lot for the links!

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            This comment was deleted 6 months ago.

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              Well, I checked them... they still have kind of templates. And it's in Django what I really don't like. It's a monstrous and hard to install (I remember I wasted the whole day making the beast work - with no success :))