{"id":4861,"date":"2016-12-01T12:27:02","date_gmt":"2016-12-01T12:27:02","guid":{"rendered":"https:\/\/marvel7077.wpengine.com\/?p=4861"},"modified":"2016-12-02T12:25:42","modified_gmt":"2016-12-02T12:25:42","slug":"the-product-spectrum","status":"publish","type":"post","link":"https:\/\/marvelapp.com\/blog\/the-product-spectrum\/","title":{"rendered":"The Product Spectrum"},"content":{"rendered":"

In the previous few years I\u2019ve gone from being a freelance designer to working exclusively on my own projects (some very successful<\/a>, and some less so<\/a>).<\/p>\n

And I\u2019m not the only one. Every day, more programmers and designers join the tide of hopeful bootstrappers launching a book, an online course, an app, or some other kind of product.<\/p>\n

But sadly, success as an employee or freelancer doesn\u2019t always translate into success in the marketplace, and many have to fall back on their boring-yet-stable day job when the bootstrapping experiment doesn\u2019t pan out.<\/p>\n

So what makes the difference between success and failure? I believe I can offer a theory that can at least provide a few clues: <\/p>\n

I call it the Product Spectrum.<\/h3>\n
<\/div>
<\/svg><\/div>

\"When moving across the spectrum, the bigger the gap, the harder the jump.\"<\/p><\/span><\/blockquote>\n

First, let\u2019s consider a grid:<\/p>\n

\"grid\"<\/p>\n

On the X axis, we\u2019ll chart a product\u2019s customer base size, from 1 to a few billions:<\/p>\n

\"customer-base-size\"<\/p>\n

And on the y axis we\u2019ll chart the service\u2019s monthly average revenue per user<\/a>.<\/p>\n

\"average-revenue-per-user\"<\/p>\n

Let\u2019s try and approximately plot the location of a few products.<\/p>\n

For argument\u2019s sake, we\u2019ll consider full-time employment as a \u201cproduct\u201d in which you sell your own time for several thousand dollars a month to a single employer.<\/p>\n

This gives us something like this:<\/p>\n

\"full-time-employment\"<\/p>\n

Freelancing would be next. Most freelancers don\u2019t charge as much as a full-time monthly salary to each of their clients, but they can also take on more than one client at a time.<\/p>\n

\"freelancing\"<\/p>\n

Next up would be productized consulting, such as Nick Disabato\u2019s Draft Revise<\/a>. Nick charges a bit less than traditional consultants, but by standardizing his process he\u2019s also able to take on more clients and generate a more stable revenue stream.<\/p>\n

\"productized-consulting\"<\/p>\n

Going further, you reach the domain of \u201cinfo-products\u201d, a.k.a. eBooks, video courses, and so on. Nathan Barry<\/a> has to be one of the best examples of this model, and usually sells his material in three packages going from something like $40 to $250. A successful eBook can easily get a couple hundreds of sales.<\/p>\n

(Of course, this is not recurring revenue. But unlike freelancing or running an app, an eBook does not always require constant attention. So the average revenue per active month of work<\/em> often ends up in a similar range.)<\/p>\n

<\/div>
<\/svg><\/div>

\"Unlike freelancing or running an app, an eBook does not always require constant attention\"<\/p><\/span><\/blockquote>\n

\"info-products\"<\/p>\n

After info-products come more traditional SaaS B2B apps like Intercom<\/a>, Mixpanel<\/a>, or Vero<\/a>. Products like these, when started can charge around $100 a month, and have thousands of customers.<\/p>\n

\"b2b-saas\"<\/p>\n

You then have small businesses or B2C apps like Buffer<\/a>, which started at $8 per month having tens of thousands of customers.<\/p>\n

\"b2c-saas\"<\/p>\n

And finally, we get to huge services like Twitter and Facebook, who aggregate a huge userbase by offering a free service, and then monetize it through ads.<\/p>\n

Because of this revenue model, their monthly revenue per user often ends up lower than a dollar:<\/p>\n

\"social-networks\"<\/p>\n

Because I picked the units myself, these data points end up nicely aligned. And this is what I call the Product Spectrum:<\/p>\n

\"product-spectrum\"<\/p>\n

So here\u2019s my theory: when moving across the spectrum, the bigger the gap, the harder the jump<\/em>.<\/p>\n

\"jumping-between-products\"<\/p>\n

It makes sense if you think about it. The skills involved in being an employee aren\u2019t all that different from those required to be a consultant.<\/p>\n

Similarly, running a productized consulting service isn\u2019t that far from packaging your knowledge as a video course.<\/p>\n

But on the other hand, there\u2019s a huge<\/em> gap between being an engineer at a big company, and producing, marketing, and selling a video course from scratch (although some have done it<\/a>!).<\/p>\n

What\u2019s more, things get harder as you move down the spectrum. So while making the transition from productized consulting to eBooks isn\u2019t too hard, going from eBooks to SaaS apps is another matter altogether.<\/p>\n

So here\u2019s my advice: if you\u2019re fed up with your day job and thinking about taking that big jump into entrepreneurship, don\u2019t rush into the deep end of the spectrum right away.<\/p>\n

Instead, maybe take a moment and ask yourself what the smallest<\/em> step would be.<\/p>\n

This post was originally published on Sacha's Medium profile<\/a>. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

In the previous few years I\u2019ve gone from being a freelance designer to working exclusively on my own projects (some very successful, and some less so). And I\u2019m not the only one. Every day, more programmers and designers join the tide of hopeful bootstrappers launching a book, an online course, an app, or some other kind of product. But sadly,… Read More ￫<\/a><\/p>\n","protected":false},"author":70,"featured_media":4877,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-4861","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-viewpoint"],"acf":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\n\n\n\n\t\n