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9 Comments

SAAS vs Productized Service

Hey Indie Hackers !

Ok so here's my story : in the past months I spent some time developing a user research methodology. Now that it's completed I face 2 choices.

1 - Starting a productized service : crazy easy to set up, can use my methodology as its full potential.

2 - Building a SAAS in the user feedback niche : not that hard to build but will take some time. It relies on some principles of the methodology but can't exploit it to its full potential.

Eventually, running a SAAS or a website is a big objective of mine and this one is a good opportunity to dive in. But I'm not sure if working on both will be sustainable (including my current work as a freelancer) and if having to push 2 offers will affect the overall chances of success.
A common advice would be to validate with the service then build the product, but they don't quite work in the same context and both already have profitable actors doing fine in the same area.

I often hear that service agencies can't do products. What is your experience ?

on August 9, 2020
  1. 2

    Rob Walling of Microconf fame recently had a quick chat with Meryl Johnson about similar issues. Good food for though.

    MicroConf On Air - The Pro's and Con's of Productized Services with Meryl Johnson
    https://www.youtube.com/watch?v=J-xw97M93QQ

    1. 1

      Thanks, I'm definitely checking this out !

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    Pick 1. - Build a base which you can then use to develop 2.

    Why would you choose a harder path with 2 if 1 is so much easier to pull off?

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      I guess I enjoy building things... But when keeping the business side of it in mind it surely makes more sense to push 1 first

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        Yep, here's how I see this:

        • your through line on a business is going to be your customers, not your products. products can, will, and should evolve over time.
        • small products can lead lead your customers to bigger products.
        • it's much easier to sell services than products, with productized services splitting the difference.
        • success with productized services and smaller (like, MUCH smaller) products earns you revenue AND trust.
        • when you have enough revenue to cover all of your expenses, or enough trust to ask your customers to try things they aren't used to, you can build products that don't need to make money right away. until then, better to optimize for what people already want and are ready to buy.
        1. 1

          Thanks for your replies, they definitely are insightful !

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        I'll add that the reason service agencies struggle with products is two fold:

        • it's very hard to be your own client. a client will always advocate for themselves and demand your time/attention, but you need to advocate for giving your products time/attention.

        • selling services is very, very different from selling products (especially at the beginning. services can be tweaked and modified to make the client happy, whereas a product is already built and needs to both serve the customer enough on day one to be valuable AND (depending on your price point) you need to be good enough at communicating the value without having an in-depth 1-1 sales conversation with every new customer.

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    I am pretty sure Moz started as an agency and then went full product. The makers of Postmark did the same thing. There are plenty of examples out there. I think you can do the productized service to start generating money to pay for the SaaS product and do both.

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      There seem to be a consensus about this situation. I'm going to look at what the two references you gave worked it out, and focus on my service for now.