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Progress Thread SaaS Startup Thread, 2nd Time Entrepeneur

Discussion in 'Process / Progress / Execution Threads' started by Young-Gun, Feb 9, 2017.

  1. Young-Gun
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    Young-Gun Bronze Contributor Read The Millionaire Fastlane Speedway Pass

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    Hey ya'll, Young Gun here. Not quite so young (a couple of years since I've last posted here).

    I'm still running my first business (a high-end tutoring company + blog + related infoproducts).

    There have been some good successes: I've hit low 6-figure income (not profit) for the past 3 years... and I'm proud of the work our company has done for kids and families.

    However, it's been very stagnant for me in terms of growing scalable profits, and I've learned some uncomfortable lessons.

    I could have put even more effort into growing my tutoring business the past couple of years, without a doubt. But I've also been working hard. All my friends and family would say I stress too much, but I know I could push myself much harder... that's a topic for another day, though.

    More to the "Fastlane" point... Specialty tutoring is just not a highly-scalable model. Yes, I have options to scale. Give me 20 years and I could scale nationally as a chain in 20 major cities and make a few million in profit a year, I'm sure of it. Teaching is a relatively fulfilling occupation, and I'd be my own boss the whole way.

    I'm also pretty sure I could make a bit of supplemental profit from infoproducts in my niche. I've experimented before with some minor success, but nothing exciting... nothing to justify the time I invested.

    Ultimately the specialty, high-end tutoring my company does is a *niche market.* It's also a service-based business. There's only so big (and so fast) it can grow. I can throw paid advertising at it, but % profits decrease. Payroll and office expenses scale just as quickly as profits.

    To reiterate an important point that I'm trying to make for first-time entrepreneurs, my entire system is a tutoring service... highly dependent on HUMANS, people-time, and physical proximity. There's only so much you can automate when it's face-to-face teaching, or any other personal service.

    That's not the greatest, because aside from the major scaling issues, I'm *highly* introverted by nature. I hate personnel management, and I'm easily disappointed by employees' performance. I love teaching, but it gets old after a while, and dealing with parents of students can be truly exhausting for me.

    Here's where I'm going with this. I think something has to change.

    I want to make a LOT of money. I mean, one of my dreams is to have my own yacht (sailboat or motoryacht) that I can cross the world in.

    I'm talking, goals of 8-9 figure networth before I'm too old to enjoy it.

    I *know* this is possible, and that I can achieve at least some taste of it.

    The tutoring business is never going to get me there in time.

    I think it's time to turn to a SaaS model and start a new business.

    -------------------

    I understand the "big picture" of entrepreneurship pretty well after 7 years of running my company. Even a simple tutoring company will teach you a lot about marketing, execution, and good business ideas. Plus, I've made an effort to stay relatively "cutting edge", so I'm skilled with website development, email lists, automation, etc.

    Now, here's why I think SaaS is the way to go for any serious entrepreneur in 2017:

    Software Ownership is *the* greatest, most scalable, most profitable global business model in human history. I am 100% certain of my reasoning behind this.

    [With one other contender - the global Financial Markets are the only equivalent alternative in terms of scale and profitability, but I'm not really interested for multiple reasons]

    And, Software-as-a-Service (monthly recurring charge) is the best distillation of the Software Ownership model.

    ------

    So, I turn my thoughts to starting a Software Company as soon as possible.

    To answer the question before you ask:
    No, I don't currently know how to program.


    I've started studying the Python programming language for about a week, learning via the internet, free books, and hands-on practice.

    I think that with a few more weeks of hardcore study, I should be able to know "just enough" to create basic software mockups, Alpha versions, or at least instruct other developers in what to build for me.

    -------------

    Next part of the process is Idea Extraction / finding pain points in a sizable market.

    I think I should go after local / small businesses. Find a problem that TONS of small businesses deal with... ideally, something they already *pay money* to solve.

    This must be a problem that can be solved through subscription software.
    I have some ideas already, but I'm not going to share the specifics quite yet. It's too easy to kill ideas before they're hatched.

    -----------

    Anyway, this gives the general idea of where I'm coming from, and where I'd like to go.

    I think a Software Ownership business, focused on developing SaaS solutions for small local businesses... built around uncovered "pain points" through customer development and conversations with potential customers. Then aggressively marketed...

    This is a much better chance of hitting the Fastlane than my current tutoring business. I'm still proud of my company, and especially what I've learned.

    But, I'm about to be 30 years old, and I have relatively little to show for all my hard work, other than the lessons I've learned... and my self-respect for putting in the hard work.

    It's time to make my financial dreams come true. If you're curious, I can post pictures of some of my dream yachts... ;)

    EDIT: I included one XD

    [​IMG]
    Riva 88 Domino Super
     
    Last edited: Feb 18, 2017
  2. Young-Gun
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    Young-Gun Bronze Contributor Read The Millionaire Fastlane Speedway Pass

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    I also wanted to take a moment to think more about SaaS from a Fastlane perspective.

    I'd like to expose my thinking, so if there are weak points, ya'll can point them out *NOW* before I invest all the blood, sweat and tears.

    Does a good SaaS business fulfill the NECST commandment of MJ's book, The Millionaire Fastlane?
    With careful setup and customer research, I believe Business-to-Business SaaS *absolutely* is the essence of a Fastlane business model.

    -------

    **NEED: This is the 'clutch' commandment for a SaaS Fastlane startup.
    Get this wrong and you will waste time.
    Get this right and you can literally make billions.

    As we will see below, the SaaS business model checks off most of the NECST commandments automatically, simply by virtue of how a SaaS business works. NEED is the only commandment that is *not* auto-satisfied by the SaaS model.

    Essentially, the level of *NEED* behind your SaaS business determines about 90% of your chance at ultimate success.
    Small need, small market = no success.
    Huge need, huge market = big success.

    Therefore, extensive Customer Development into the NEEDS of your potential customers is the single most important step in getting your Fastlane SaaS startup correct.

    -------

    ENTRY: Three major obstacles to a SaaS business prevent the field from being saturated:
    1) The time + quality of Customer Research and Pain-Point Development.
    2) The challenges + time of Software Development and creating a good solution to the common customer problem.
    3) The time, challenges, and costs of Marketing and Advertising your Software Solution to get Sales.

    -------

    CONTROL: Pretty simple. If you own the SaaS software and control the payments, you control the company.

    Even better if you also own:
    A) a simple Website + Blog for organic search traffic.
    B) a simple Mailing List Subscription + Subscription Freebie Reward and simple Auto-Responder Sequence to promote your product.
    C) a documented Customer-Development Process to expand into new niches and SaaS products.
    D) a proven and profitable Sales System that operates completely in-house.

    -------

    SCALE: This comes down entirely to the NEED commandment.

    Because, if you're running a SaaS company, you already are:
    - Online
    - Global
    - 24/7/365
    - Product delivery NOT based on human time / effort
    - Minimum of Customer Service, if well-designed product (see below):

    To help make scale easier, make sure to KEEP IT SIMPLE, STUPID. Don't add a gajillion bells and whistles to your SaaS product.
    Always keep it simple and focusing on developing a full "SELF-SERVICE SYSTEM" for customers.

    If your SaaS solves a widespread NEED in a simple way, it should be easier to scale than nearly any other business model on the planet.

    -------

    TIME: Similar to scale.
    Once the SaaS product is designed and built, there will be some time required to troubleshoot, add key features, bug-fix, etc.
    But, once you have a stable product, solving a real NEED that businesses all have, it shouldn't take much time to keep things running.

    As soon as possible, hire someone to do:
    - Customer Service and Inbound Sales (phones and emails).
    - Outbound Sales (once you know your business metrics, set up a commissioned sales force).
    - Technical Solutions (disaster prevention: you need someone to monitor the uptime / repair broken service while you relax).

    -----

    The SaaS business model requires minimum upkeep, with low expenses and high profit margins.
    You are exposed to a global market, online, 24/7/365.
    Recurring Revenue is baked-in to the model.

    It's all about that Customer Development stage.

    Find the real problems that other businesses face.
    Identify the simple challenges that could be overcome by software.
    Develop that software as SaaS.
    START SELLING!
     
    Last edited: Feb 18, 2017
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  3. Young-Gun
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    Young-Gun Bronze Contributor Read The Millionaire Fastlane Speedway Pass

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    A bit of progress tonight. Planning out SaaS Customer Development campaign to start next week.
    Working on my email scripts to send to decision makers.

    I will *not* rely only on email to reach potential customers for Customer Development conversations.
    Instead a multi-pronged email / phone call approach will work better.

    But, starting lead / customer contacts with well-written email scripts works well for me.
    It helps me organize my thoughts.
    This is something I know about myself from running my current business.

    -----------

    Campaign: SaaS Customer Development
    Mission: Idea Extraction, Part I

    Key Objective: Identify 5 COMMON NEEDS of Small / Medium Businesses that could be solved by simple software (SaaS).

    Sub-Objective 1: Obtain productive phone conversations with 20 - 50 Decision-Makers / Potential Customers.
    Sub-Objective 2: Identify 10-20 common needs of businesses (without judging yet if SaaS is a good solution to the problem).
    Sub-Objective 3: Whittle down list into top 5 common business problems that my new SaaS product could solve.

    -----------

    My *BIGGEST* flaw as an entrepreneur has always been - I live inside my head.
    I am a hardcore introvert.
    I have great ideas - doesn't mean they'll connect with the outside world in a big way.

    And, I'm a good hustler. I like working hard (as long as I enjoy the work).
    Guess what?
    That doesn't matter either.
    If you hustle for 10 years to build something no one NEEDS, your work will go *completely* unrewarded.
    The universe does NOT owe you a reward just for working hard.

    I've learned this time.
    START with the outside world.
    Then go inwards, and use my introvert powers to solve the problem.

    There's nothing wrong with having a "hypothesis" about what SaaS products could be good.
    In fact, as a small business owner myself, I can easily come up with ideas.

    However I have a history of creating cool things that don't get bought.
    Because, I start "from inside myself" like an introvert tends to.

    This time, I will truly learn.
    My ideas don't need validation by the market.
    You talk to the market, let the MARKET GIVE THE IDEAS.

    Stop trying to come up with cool ideas.

    Talk to people with REAL NEEDS and REAL PROBLEMS (and REAL MONEY).
    Get them to open up. Listen intently.

    Take notes. Their problems are gold to you.
    And you make the world a better place by solving them.

    The SaaS Customer Development mission continues.
     
    Last edited: Feb 10, 2017
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  4. Harti
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    Harti Bronze Contributor Read The Millionaire Fastlane Speedway Pass

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    I'd change the order here:

    Find the real problems that other businesses face.
    Identify the simple challenges that could be overcome by software.
    START SELLING!
    Develop that software as SaaS.
     
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  5. Richard1990
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    Richard1990 Contributor Speedway Pass

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    This might give you some inspiration:
    [​IMG]
    --
    Wrong. Software is difficult because software is not what people buy. They buy expertise.

    The most scaleable, profitable global business is a brand. Microsoft, Apple, Tesla or the Trump Organization. Investing into a name will give you ability to work in multiple verticals (which don't work)... more importantly, will position you to dominate part of a much larger one.

    My most ardent recommendation would be to treat SAAS as a cost center (so you're not worried about turning a profit) and work on providing your own service.

    Sell your tutoring biz; become a freelancer and work on providing solutions to as many businesses / individuals as possible. Only after doing this will you gain necessary insight into what a company may need. Then you can think about making it SAAS.
     
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  6. Eric10x10
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    Eric10x10 New Contributor

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    Completely agree.

    Great insights overall.

    I really like where your thoughts are going on this topic so far.
     
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  7. Young-Gun
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    Young-Gun Bronze Contributor Read The Millionaire Fastlane Speedway Pass

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    Great point. Rep transferred!!

    This is exactly how my introvert thought process needs to be subverted again and again on this business project.

    SELL before developing.
    Yes.
    Pre-Sell the concept, get some money in the bank.
    PROVE that people will pay for what I offer.

    First, see that potential customers will vote "YES" with their wallets.. with actual cold, hard cash.
    *Then* do the work to build it.

    This goes for a lot of stuff - not just SaaS.
     
    Last edited: Feb 18, 2017
  8. Young-Gun
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    Young-Gun Bronze Contributor Read The Millionaire Fastlane Speedway Pass

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    Thanks for the feedback and inspirational story!

    I understand that nobody buys software. Actually, they don't buy expertise either.
    What people pay for are solutions to their problems, pain relief, bragging rights among friends, etc.

    Brands are also important, but a brand by itself doesn't make you a cent.

    I disagree with your vision of SaaS. In my vision, it should absolutely be profitable from the beginning.
    Even if that's just $25/month.

    The entire point of the exercise is to bootstrap a small software project to immediate profitability.

    I definitely do NOT want to become a consultant. Sounds like a great way for me to blow another few years "tutoring" companies on a 1-to-1 basis, like I'm currently tutoring students... instead of building a scalable, automated, global business model that doesn't require my personal time every day.

    That sort of gradual transition isn't necessary at all in my opinion. But I don't mean to sound condescending. I truly appreciate everyone's advice :)
     
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  9. Richard1990
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    Richard1990 Contributor Speedway Pass

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    Agreed, brands not that big of a deal and you are 100% right about bragging rights etc. Wanted to highlight "software" not the Utopia many believe.

    Here is another great resource: Open Startups: Real time revenue metrics of transparent startups (down currently). Another great one is Buffer

    I didn't imply you become a consultant, probably more a freelancer.

    If you need advice on tech stack, I have experience with Rails and some native development, you can message me if required.
     
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  10. Young-Gun
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    Young-Gun Bronze Contributor Read The Millionaire Fastlane Speedway Pass

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    There's one more business model (other than SaaS) that keeps going through my head:

    Lead Generation for Local Services.
    @Andy Black is an examplar of this business model (from what I can tell, reading his posts).

    Lead Gen is something I've thought about many times before, but reading Andy's posts on Lead Gen is refreshing my interest in it as a business model.

    Your business just gets the local leads (most likely from Adwords + microsite Landing Pages), then sell them to local providers to handle.
    I find this a *very* appealing business model that should never really go out of style.
    Every business in history has NEEDED leads... and always will.

    The concept of Lead Gen is ultra-simple, and I love that.
    KISS - keep it simple, stupid. Usually a good strategy.

    Plus, Lead Gen has many NECST benefits in common with SaaS business.

    Lead Gen seems weaker in the following areas, though:
    - Entry... it's easier to do Lead Gen than SaaS.
    - Control... you have less control in Lead Gen than SaaS because you sell Leads to some other provider.
    - Time... seems like SaaS may scale your time better... although both are good.

    Lead Gen may be stronger in the area of SCALE - since literally every business, EVER, depends on their leads.
    Meanwhile, a SaaS will have to fit a business *niche*. Even a big niche is not as big as "every business on the planet."

    So, Lead Gen is one more field I might consider for the business if I find a big NEED for it during Customer Development.
    Lead Gen is extremely scalable, potentially 24/7 and Global, and I have a lot of experience in Lead Gen since that's essentially what 33% of my time is spent on in my current business.

    -------

    Business plan aside -
    I need to get on the phone and talk to potential customers.
    What DESPERATE NEEDS are currently shared by a lot of small businesses around the country?

    It's Friday afternoon and I don't want to start cold-calling businesses at the end of the week - I'd rather plan for a fresh start on Monday.
    Also I work on Sat/Sun for tutoring, so as an Introvert it's important to conserve some "people energy" for work over the weekend.

    The great news is - Monday through Friday, my "official" work hours as a tutor don't even start till about 4 pm.
    I have to answer a few emails throughout the morning / afternoon, but mostly I have free time.

    So, lots of time during the upcoming week for Customer Development during business hours of OTHER businesses.
    Might make it slightly easier to reach someone for an open-ended conversation about their Business NEEDS.

    -----

    Funny thing is? With all this thinking and writing, I'm making excuses for action.

    I could start calling now, today (Friday).

    However, I'm not in the right mental state, and I don't feel prepared.

    I feel my performance on this project will be better if I prepare a solid plan. A general guideline for my phone conversations... and start calling / emailing Decision Makers on Monday.

    Sometimes you just gotta trust your gut, and go with your personal / natural energy flow. Can't force it.
     
    Last edited: Feb 10, 2017
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  11. Young-Gun
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    Young-Gun Bronze Contributor Read The Millionaire Fastlane Speedway Pass

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    I would love some feedback, guys!

    I keep thinking: SaaS vs Lead Gen.
    What's the right Business Model for me?

    Most important question - I need feedback!!
    - Which better fulfills the NECST commandments of Millionaire Fastlane? And... why?

    Less important questions:
    - Which business would I enjoy more? (probably whichever business model is more successful)
    - Which business am I more capable of? (I believe I can learn whatever necessary for either)

    ------------------

    So, NECST analysis seems crucial.

    Lead Gen NECST Analysis:

    NEED rating: 10 / 10.
    Almost every business wants more leads.

    ENTRY rating: 5 / 10.
    Basic Lead Gen isn't very complicated. Also, a variety of ways to get started. And, you're competing with similar businesses who are already established Advertisers. Competition seems "moderate to high" depending on niches.

    CONTROL rating: 7 / 10.
    You control a Lead Gen system for one or more niches. You connect with local providers who buy your leads. But, you don't control the service providers themselves. Is this a problem? Not necessarily. Less management, but less control. It's a tradeoff. Overall I think you control "enough" of the business, as long as you sell the leads to reputable Service Providers.

    SCALE rating: 7.5 / 10.
    Lead Gen on the internet is Location-Independent, 24/7. The potential national / global market is enormous. There are a few snags in scaling up. Who builds and optimizes the Adwords campaigns? The Landing Pages? Who answers the phones? How are leads tracked? Who finances the Adwords spend?

    TIME rating: 6 / 10.
    Once the correct lead-gen system is established, there should be NO need for Owner Involvement in the day-to-day management. This requires designing the business correctly (mainly, who actually talks to / closes the incoming Leads?)
    One problem: it takes TIME to scale up a Lead Gen business. Someone has to research promising Niches, set up Adwords campaigns and Landing Pages... this all must be optimized over time... and you have to connect with good local providers who will buy your leads.

    There's also more time required to optimize and update the whole system over time.
    This *could* be handled by employees, but that's a whole new can of worms.

    SaaS NECST Analysis:

    NEED Rating: * / 10.
    A SaaS business requires extensive Customer Development to find a problem worth solving.
    DO NOT build a SaaS business around any NEED below a researched, proven "9 / 10"- level business problem.

    ENTRY Rating: 9 / 10.
    Although the media makes it "seem like" there are a gajillion software startups everywhere, that doesn't mean it's easy. The vast majority of humans would never take on the challenge of building a Software Company. SaaS has a high entry barrier, which is a good thing.

    CONTROL Rating: 10 / 10.
    Complete control. You control the Software that solves a common business NEED, and you control the online distribution, payment processing, and customer service for that Software.

    SCALE Rating: 9 / 10.
    A SaaS business built around a common business NEED is extremely scalable. Once the initial software is produced and brought to an acceptable level of quality, it's all about Marketing, Sales, and Word-of-Mouth... getting more businesses on your platform as fast as possible. Cost-of-goods sold is *very* low, and profit margins are *very* high. The SaaS should be engineered to be SIMPLE and self-explanatory. The goal is complete Self-Service for customers so that recurring payments continue month after month with minimal need for customer service.

    TIME Rating: 7 / 10.
    A lot of upfront time is required for Customer Development and Building The Software. Then, more time is required to Improve the Software to a mass-market level. Finally, TIME is required to market your SaaS product. It takes time to find the best Traction Channels to rapidly scale up your Sales Funnel. You will also need TIME to build and tweak an effective sales and marketing funnel to turn more prospects into hard cash. However, after a *significant* set-up phase, the time commitment can drop off. Also, a (small) sales team on commission could eventually take over the owner's main job of finding new customers. All businesses take time, but a well-built SaaS eventually reaches a point that it requires far less time and attention compared to many other businesses.

    -------

    OK, here's the verdict by this analysis.

    NEED comparison: TIE.

    If we follow the advice to only build SaaS product around a common 9- or 10-level business NEED, then it's a wash between SaaS and Lead Gen.
    Every business NEEDS leads, but our hypothetical SaaS would be equally NEED-based, and pre-validated.
    So, it's a wash on NEED.

    ENTRY comparison: SaaS WINS.

    SaaS clearly has the higher barrier to entry.
    It's much harder to build a SaaS than to get started in Lead Generation.

    CONTROL comparison: TIE.
    SaaS clearly has a higher level of control. But, there's probably "enough" control in a well-designed Lead Gen business model.
    Basically, this is another "wash".

    SCALE comparison: SaaS WINS.
    At first I thought both business models had equal scaling potential.
    However, now I think SaaS has the better scaling potential.

    SaaS = build it ONE time, then sell the product over and over. Recurring revenue, low customer service. No finances needed, if bootstrapped. Expenses *stay relatively flat as you grow* - the definition of scalability!

    Lead Gen = build it again and again, then sell it again and again. NON-recurring revenue, medium customer service. Finances needed for Adwords spend. Expenses *increase as you grow*.

    In terms of total market, Lead Gen is probably bigger global market.
    However, in terms of "Easy Scalability," I still think SaaS wins handily.

    Since my goal is not to become a BILLIONAIRE, but a centi-millionaire in a shorter time... my gut tells me SaaS is the winner in SCALE, for my purposes.

    TIME comparison: SaaS has an EDGE.

    I'm a realist. Any serious business takes a ton of TIME.
    Whether SaaS development or Lead Gen, we're talking an enormous commitment.
    I think SaaS wins, though. Develop product once, sell again and again, recurring revenue, low customer service.
    Lead Gen requires solving the same problems multiple times, selling multiple times, non-recurring revenue and moderate customers service.

    FINAL VERDICT: I think I've talked myself back into SaaS.
    Both models are good.
    But, down the line - do I want to be starting over, again and again?
    Or do I want a polished Software Product that I sell multiple times for monthly recurring revenue?

    I think the SaaS approach would help get me to this quicker (see below).
    Your thoughts?

    [​IMG]
    Nautor's Swan 90 S "Solleone"
     
    Last edited: Feb 17, 2017
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  12. Andy Black
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    Andy Black Any colour, as long as it's red. Staff Member Read The Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    These might help:
    I especially like the second where they start by wondering why everyone is running to SaaS. They figure it's a play for people who have some wins under their belt.



    Lead gen? SaaS? Does it matter what label a business is given really? Judge your actual business against CENTS if you have to, rather than a label people put on businesses.

    People can take what looks like a slowlane skill and turn it fastlane, and some people can make a j.o.b. out of anything.

    I think it's more the jockey than the horse.



    One of those podcasts talks about the 1,000
    day rule... In the first year, LEARN a skill. In the second year, SELL that skill. In the third year, SCALE that skill.


    What about an academic exercise... if you're a tutor currently, then how could you scale that skill? Can you sell it at will? Can others? Could they need your help? Could there be things that you wish existed to make your life easier as a tutor?

    Is there any way to "grow what you know"?



    Maybe @eliquid might have some thoughts? I believe he knows a bit about both SaaS *and* lead gen...
     
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  13. Young-Gun
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    @Andy Black You're totally right, at least as I'm interpreting you: the NAME you give it doesn't matter that much. What matters most is that it produces results.

    That said, for my second business, I want to take everything I've learned and optimize / validate the business concept BEFORE I invest years into it.

    There's definitely *so much more* I could do to scale my Tutoring company... it's just... after 6+ years... I think there are better models to pursue. I've experimented with Online Tutoring, which is great, but most customers don't LOOK for it. It's a bit ahead of its time right now.

    Like I mentioned earlier, I've also tried a lot of Infoproducts in my niche.. I've actually written 6 textbooks and published on Amazon... and 3 video courses.
    These just do NOT make enough money to justify.
    There's potential.. but not THAT much potential.
    Not "MotorYacht Money" ... that's my opinion after 6 years.

    Also, it's VERY expensive to run a tutoring company, relatively speaking. Payroll for good teachers gets expensive. It's tough to scale... it just is. So dependent on 1-on-1 personal time... if it's not the owner, it has to be a highly-trained tutor or customer service rep.

    Furthermore....
    Cheap or "budget" tutoring is not very profitable.
    Meanwhile, expensive "elite" tutoring is profitable, but has a much smaller market of customers.

    "Why not teach more subjects?" I hear you thinking...
    Well, trust me when I say: the more subjects you teach, the more complicated everything becomes.
    The complexity of additional subjects barely pays itself back in profits.

    So, it's very tough to expand horizontally to additional tutoring subjects. Because then you need new personnel, new marketing, new curriculae...

    Like anything else, it's typically better to be known as "the Elite Tutoring Company for X in Y city" than "The Tutor Every Subject Company, Everywhere."

    And this is just the tip of the iceberg in terms of the difficulties of TRULY scaling a specialty tutoring company. It's expensive, time-consuming, complex, and based largely on Personal Connection.

    In other words, every tutoring solution is a "custom solution" to some degree. It's hard to avoid that, while truly providing an elite 1-on-1 Tutoring service that actually helps the kids who need it...

    It's been SO educational to take the tutoring business this far, but I no longer feel this Business Model is my ideal Fastlane vehicle. More of a PowerWheels training car before I try to hop in a Lamborghini and hit the REAL Fastlane.

    It actually causes me some anxiety - I feel like I'm wasting time on a tutoring business model that I know has a somewhat limited potential (compared to other options).

    Plus, I'm just getting a little bored of it :)

    Hope this makes a bit more clear why I'm so adamant about having a smarter, faster, more SCALABLE model in place - with a bigger potential market.

    I agree it's more the Jockey than the Horse - but I think we'd all agree, the BEST combo is a great Jockey ... on a great Horse :)
     
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    Waspy Float like a butterfly Read The Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    It took you 7 years to create the business you have today.

    In 7 years time, with 7 more years of growth and expertise, will a 14 year old tutoring business be earning more than a SAAS which is yet to be conceptualised?

    I don't know. I just felt the question needed to be asked.
     
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    I love this question. Thanks for asking it :)

    It's tough to know, isn't it?

    But if you look at the existing markets: I see a LOT more fast-growing SaaS companies (even with mediocre products) than fast-growing Specialty Tutoring companies (even with great products).

    Much more than that, my reasoning / conception of the problem is that SaaS is simply a more efficient business model than tutoring is... by a factor of 5x, at least.

    A much bigger market, with a much higher profit margin.

    So, in the absence of proof, my gut tells me YES.

    Yes, 7 years of hard work on SaaS would be more profitable than another 7 years on tutoring.

    Both my gut and my reasoning brain tell me YES.

    Hell, I believe I could be more profitable in 5 years of SaaS than another 7 years of tutoring.

    But, there's no way to know without trying, is there? Again, thanks for asking a very wise question.
     
    Last edited: Feb 10, 2017
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    One more thought - I'm not planning to get OUT of tutoring... this would be a gradual transition.

    I'd probably even keep the local tutoring company running indefinitely - it's a nice fallback, and I know it still has plenty of potential.

    I'm lucky to have the business I have :) but, my ambitions continually crave a "bigger" project with more impact and faster scaling.
     
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    Andy Black Any colour, as long as it's red. Staff Member Read The Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Ha. What about a lead gen SaaS in the tutoring space? (Only half joking.)
     
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    Why isn't your SAAS based around education?

    You know the market, you know the customers, hell, you have a pre-existing customer base to sell it to!

    It works for music, languages, math... I'm sure you can make it work for your niche

    EDIT: @Andy Black beat me to it (sort of)
     
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    Not sure how to reply to two people at once, but great minds think alike :)

    The exact same thought has crossed my mind.

    On my "short list" of good ideas, niched Lead Gen with a SaaS approach is high on my list.

    I have a couple other simple subscription software ideas as well - all based around NEEDS my business has.
    Not revealing the ideas quite yet, because I think the "idea" will be less important than my actual Customer Development research.

    That said -
    You're both right, and I agree 100% - starting with my OWN business problems and needs is a great idea.
    After all, my small local business is the *exact* type of Ideal Customer for my SaaS.

    I've been thinking about this, and keeping a list of ideas. Might use this list as "prompts" when I'm doing Customer Development, but only AFTER I've gotten Decision-Makers to open up about:
    • Their daily problems
    • Their biggest problems
    • Their biggest annoyances
    More than anything I need validation from OTHER businesses too.
    I don't want to tell them my ideas... instead, I want to listen to their problems.

    I think coming up with ideas is relatively easy for me ... market validation is what I'm after, most of all :)
     
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    It's a great idea :)
    The main reason I don't want to do this is... I'm just not that interested, personally!

    At this point in my life, I'm much more gung-ho about entrepreneurship and helping other businesses, than I am about tutoring and education.

    I fear that I'd find an Educational Software startup extremely boring... even though I could be professionally effective at it because of my experience.

    It is a great suggestion though, it's just that I think my life needs to move on to a new chapter!

    I was the epitome of a "Book Smart" kid all my life. Then became a tutor. It's kind of like... time for some broader horizons, I feel. ;)
     
  21. Young-Gun
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    Thought I'd share the draft of my Customer Development email (below).

    The ONLY goal of this email is to get Decision-Makers on the calendar for a 15-minute phone call with me.

    I'd be thrilled with a 5% response rate.
    More realistically, I might get a 1-2% response rate.
    But, if I contact 500 small businesses in the U.S., that could be 5-10 phone conversations for Customer Development.
    And that should be enough to get a step closer.

    Feedback welcome.

    ---------------------------------------

    Quick Question For [TK NAME] at [TK BUSINESS]

    Hi [TK APPROPRIATE NAME],

    I’m currently developing a new software product that I think would be very useful to local [TK INDUSTRY].

    Your personal input would be extraordinarily valuable, and would help me refine the software into something that would be useful and exciting for your business.

    I’d love to learn more about the challenges you face in the [TK INDUSTRY] industry. Would you be free on [TK DAY] at [TK START TIME] for a quick 15 minute phone call with me?

    If you’d be available to help, just let me know the best number to reach you and I will give you a call.

    Thanks for your time, and please have a wonderful day!

    - Young-Gun, founder of XX Co.
     
    Last edited: Feb 10, 2017
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  22. Young-Gun
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    Ok I listened closely to both. A lot of encouraging thoughts. I really liked the "Location Independent" podcast.

    An interesting thing - they mentioned "the sliding progression" of Entrepreneurs throughout our career.
    If I recall, he said:
    - Intern, to
    - Employee, to
    - Freelancer, to
    - Consultant, to
    - Service Business, to
    - Product Business

    I definitely agree with that. Service Business is a great way to learn (often easier to boostrap and get started)
    But, it's much harder to scale a Service.

    Productizing a service is one way.

    But, it seems like a weaker compromise. You still have to grapple with many of the "Service Business" scaling issues.

    I feel ready to build an actual "PRODUCT". Something we build once, and sell again and again.

    Software still seems ideal for my goals.
    Infinite replication at minimal cost.
    Easy online global distribution, no shipping, no storage.
    Minimal customer support.
    Recurring revenue.

    Thanks again for sharing the links :)
     
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    From what you've written, it seems you have an idea of what you're willing to do.

    Maybe try explaining what you actually want, then perhaps we could refine it into an offer you could approach businesses with?

    Nothing wrong with saying, "I really like warehousing and feel there's something in warehousing systems I'd like to try and improve. I just like how it all works". Obviously won't make money but may give something specific to focus on.
     
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  24. Young-Gun
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    Good ideas! The difficulty with explaining to Businesses *exactly* what I want my SaaS to do for them is... I want *them* to tell me exactly what they NEED. Then I'll focus on solving that Need with my SaaS.

    (Of course they won't literally tell me what they NEED most, but by listening to their problems and needs of Small Business Decision-Makers I should get some clues to figure it out).

    ----------

    I think getting a *crystal clear* idea of what my Imaginary Software can do to help many small businesses is my first Mission.

    This idea must be VALIDATED by potential customers before I invest time into building it.

    I'll be taking notes by industry, and looking for patterns of NEED.

    Spending some personal time to Connect the Dots of NEED, create Ideas for Software, and get more feedback from my potential customers.

    The end of this phase will be "pre-selling" when I actually try to get paid BEFORE I've built the software... simply on the basis of how beneficial the finished SaaS will be for their business.

    At that point, the Customer Development phase will (mostly) take a break, and it's time to Build the SaaS until Alpha version (minimum viable product).
     
  25. Young-Gun
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    Progress made:

    - Selected some likely industries to interview and work with.
    - Built a spreadsheet of 50 local businesses, decision-makers, names, and phone numbers to start my Customer Development calls.
    - Created a short interview checklist designed to draw out the pains and needs of the business owners I call.
    - In addition to my questions asking what potential customers need, I also have two hypotheses for potential SaaS I could build for other small businesses, based around needs that my own business has.

    So, I'm ready to start calling potential customers.
    I have a couple ideas.
    And I have a script to draw more ideas and needs from them.

    But, I'm stalling when it's time to pick up the phone and cold-call.

    That's the next step it's going to take.

    What's worse? The pain of staying stuck where I am, daydreaming about my yacht, while worrying about my bills?
    Or the pain of a couple awkward conversations and being hung up on by random strangers on the way to validating a fantastic business idea?

    I need to get over my fears.
    But, if you have any words of advice, I would gladly accept them.
     

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