Over the past few years, the freelance economy has taken off around the world. From South America to Asia and everywhere in between, it seems as if everyone is looking to make some extra money from freelance work. Unfortunately, many freelancers are starting to realize that there’s a limit to what they can earn. There are only so many jobs that can be completed in a day, and thus only so much money that can be made.
While it might sound silly at first, the freelance economy can learn a thing or two from the world of software development. In recent years, software giants like Microsoft and Amazon have made software-as-a-service the new industry standard. Under this model, software products are no longer a one-time purchase, instead becoming a recurring subscription with a monthly fee.
Here lies the genius of the as-a-service model; Products or services that were previously bought once for a flat fee can now generate ongoing revenue, which translates to more income. The enticing prospect of increased income begs us to as a question: How can individual freelancers and up-start businesses from other industries turn their one-time service into an ongoing revenue stream?
Thankfully, there’s a simple answer to this question. Enter productization, which enables any individual or organization to take their existing ideas, services, or skills and transform them into marketable products capable of generating ongoing revenue.
What Is Productization & Who Is It For?
By definition, productization is a strategy that turns a business capability (think idea, service, or skill) into a commercially viable product. At its core, productization is all about taking existing services and transforming them into products you can build a company around.
For example, a consultant who specializes in social media marketing may spend most of their time meeting with clients and working on assignments. To take their business to the next level, the marketing professional decides to encapsulate their best tips and tricks in an ebook, which can be sold to a limitless number of customers.
This is productization in a nutshell, and it’s positive effects are exciting for any professional looking to increase their sales potential. This method offers a clear avenue for both freelancers looking to grow their careers and small businesses looking to expand their reach. Whether it be creative services or professional advice, if it relies on an idea, service, or skill, it can be productized.
Examples Of Productization In Action
To better highlight how productization can be an asset to any freelancer or business, consider the following examples:
- Software: A financial technology start-up has a piece of software that allows it to integrate with major stock exchanges. Instead of keeping this idea to themselves, the firm productizes the software into a product available to anyone.
- Creative Services: A duo of freelancers specializing in audio editing realize their opportunities for growth are limited. Recognizing the continued popularity of podcasts, they create a paid platform that offers a do-it-yourself guide to podcasting success.
- Consulting: An engineering firm offers industry-leading training modules on key topics to its own employees. Sensing a business opportunity, the training is productized into an online platform available to any company for a monthly subscription fee.
While these are just a few examples, they help to highlight the power of productization. Regardless of the niche or industry, if an idea, service, or skill can be reformulated into a product, it’s bound to help drive growth.
The Benefits & Drawbacks Of Productization
As is the case with any new approach to business, adopting productization has its pros and cons. Thankfully, with this method the good outweighs the bad. Benefits of productization for freelancers and companies include:
- Simplify Time-Draining Tasks: When implemented correctly, true productization can mark the end of service proposals, negotiating hourly rates, or dealing with unexpected scope creep on projects.
- Increased Customer Satisfaction: Attempting to juggle numerous projects with different pricing agreements is bound to leave some customers unsatisfied. As productization implies the purchase of a product with a transparent pricing structure, customers have a better understanding of what they’ve purchased.
- Improved Processed & Organization: Each service-based project brings with it a different set of requirements, which means there’s never really an opportunity to improve processes. Once a service is fully productized, freelancers and businesses alike will find it much easier to improve their operations.
On the other hand, there are a few drawbacks associated with the adoption of productization, including:
- Losing Past Customers: When shifting to a productized business model, you may lose the business of some clients. Not to worry, as this business will eventually be replaced by product-driven revenue.
- High Upfront Investment: Implementing a successful productization effort will require considerable time and effort. Perfecting the final product offering is a process that can take months or even years.
Now that we’ve covered the pros and cons of productization, let’s jump into a quick overview of how to get the process started.
How Can I Productize My Idea, Service, or Skill?
While there are multiple ways to go about productization, here are a few vital steps to consider:
- Make a list of all the services currently offered
- Narrow down the list to the most promising services
- Research a problem or market gap that these services could satisfy
- Develop a solution (i.e., online course, ebook, subscription, etc.) that can solve this problem
- Conduct market research on competitors, pricing models, and other key factors
- Test your new product with a few customers
- Start to scale (and improve!) your product in the months and years to come
When it comes to productization, it should be noted that there is no one-size-fits-all solution for navigating the process. These steps are intended to serve as a basic blueprint and can be modified as needed to serve the needs of your productization-based transformation better. As long as the resulting product manages to deliver value to its customers, the freelancer or business associated with it is sure to see growth.