For most startups, the natural course is to raise money. After all, investment gives a necessary runway of capital that will allow you (and your team) to survive as you develop and attempt to sell your product.
For the last few months, I’ve rejected a few investors in favor of raising money the old fashioned way: by selling stuff that people will buy. I want to show you how can, quite literally, invest in your own products and fund the development of slow growth products (like SaaS) while remaining 100% accountable to your customers and by not getting in bed with an investor.
Building Planscope While Consulting Full-time
Building a product on the side is tough. There’s a very valid reason that most founders I know raise money: it allows you to focus completely on your product and still pay your bills. When I was building Planscope, I was juggling running a full-fledged consultancy with the development of my product.
After I launched Planscope (to an audience of 300+ eager people – mailing lists work!) I’ve enjoyed a pretty steady growth rate over time. An 8th grade Algebra student could tell you that, given the trajectory of Planscope’s growth over time, it’ll be bringing in lots of cash in a year or two.
But subscription revenue to the tune of a few thousand dollars a month isn’t going to pay for my mortgage, cars, and kids. Not yet, anyway.
So I kept consulting, which fortunately had one unintended side benefit: I got to be an actual customer of my own product. You see, Planscope is a project management tool for freelancers and consultants, and was born after crawling Internet forums and realizing that the same themes and topics were being discussed over and over again. I flipped that pain around, built a product around it, and the rest is history.
Entering An “Over-satured Market”
But still, project management. Over-saturated market, right? At least that’s what I’ve been told. Frankly, a better way of putting it is: project management software is something a lot more people need than, say, cat tracking software. Hence, there are a ton of products available. But because it’s such a fragmented space, where there are hundreds of worldviews and specialized project management needs and workflows, it’s pretty easy to carve a niche.
However, convincing people to uproot themselves from Product X and switch to your product is tough.
But what I did next quite literally shocked me. I found a way to build out a runway of cash that I could live off of and create a new avenue of growth for Planscope.
Why Infoproducts Are Great Sales Vessels
A side effect of having a somewhat homogeneous customer base that you talk to from time-to-time is that the same questions come up.
After all, I knew how to build Planscope because I simply responded to the pain points that people were vocally complaining about. Why couldn’t I apply that same logic to a book?
I quickly realized that pricing was something that a lot of freelancers were really unsure about. I kept getting questions about rates, and me being Mr. Open Book would always be open to sharing what I charge. Apparently I charge significantly more (to the tune of 10x) than some of my customers. And let’s just say I ended up with a lot of people wanting to know my secret sauce.
So I wrote the book, and more than $13,000 in sales later it was probably the best product decision I’ve made so far.
- Books are largely impulse buys. Learning how to raise your rate is a lot more immediately appealing than a new project management tool, even when the latter can (when used as intended) do just that.
- Books educate readers. While a great SaaS product can do the same, it’s not always immediately obvious.
- Therefore, I included plenty overtones within the book about how the philosophy of my other product, Planscope, jibes with the philosophy of the book.
- People who pay money to improve their lives are the kind of customers you want, regardless of what your product is (a book, a web app, etc.)
The number of new Planscope subscriptions sold because people read my book, agreed my line of thinking towards working with clients, and decided that they wanted a project management application in line with that philosophy is staggering.
Cultivating Your Customers
I used to think in one-off transactions. This customer has bought my project management app, they now have what they came for. They’ve bought my book, so be it.
Until I wrote the book, I never realized just how powerful providing additional forms of value can be. But after taking the advice of trailblazers like Amy Hoy and Patrick McKenzie, I created an email list around people who have already paid me for content.
And I started giving stuff away for free.
Once a week, I’ve seen sending out an email to my list (now approaching 500) with just advice and opinions I have about freelancing. Topics have included everything from selling high-value consulting services at cocktail parties to a teardown and analysis of Neil Patel’s personal consulting site.
The reception has been overwhelmingly positive, and because I ask subscribers to chime in with their thoughts and what they’re planning on doing with this information, a lot of conversations were spawned.
Remember how I mentioned that conversations with my Planscope customers led me to write my book? Do you really think those conversations with my mailing list subscribers were dead ends?
Escaping Consulting And Being Your Own Investor
It was clear that a segment of customers who have read my book, many of whom found my book through Planscope, were wanting to scale their freelancing business. And because in a past life I bootstrapped my freelancing business into a brick-and-mortar consultancy of ten full-time employees, readers looked to me for advice.
Remember a few things:
- This segment understands value. They’ve bought my book with the intention of better their lives. I can’t stress how valuable a list of people who have historically paid you for something is.
- They are expressing a pain (“I want to build products like you, but can’t because I’m consulting full time!”)
- They look to me as a subject matter authority on a solution to that pain point. I’ve successfully blazed that trail, and I’ve been delivering free value, directly to their inbox, all the while.
Knowing this, and realizing the substantial amount of value I can deliver to this audience, I started working on an intensive 2-day workshop for freelancers who want to build their own consultancies (…and then bootstrap products, travel, or whatever else can come with being in charge.)
After over a month of cultivation and buildup on my mailing list, I launched sales of my workshop to my list and ended up with $14,000 in sales in just 3 hours.
Talk about building a runway of capital!
Brennan, Are You Just Creating A Lifestyle Business?
I’m creating a business where I’m delivering high amounts of value to a specific audience (freelancers and consultants) using an assortment of products. In the lingo of 30×500, a class that I’m co-teaching with Amy Hoy and Alex Hillman, this is “stacking bricks.”
These products aren’t siloed off – Planscope sells books, books sell seats at my workshop, ad infinitum. And with each product, my customers are bettering their businesses.
Once my current contract is up, I don’t think I’ll be returning to consulting (unless it’s short engagements with businesses who want to replicate what I’ve done on a larger scale.) The amount of sweat I’m putting into building high quality infoproducts in exchange for money right now is essentially replacing the time I would have spent consulting, and it’s delivering new customers that are perfect candidates for long term efforts like Planscope.
Want to observe how I’m delivering high quality freelancing advice to my readers of my book? Sign up for for the mailing list (or buy the book.) If you join, you’ll see first hand the strategy I’ve been using to already move $14,000 in product to a very, very warm list.
Or maybe you have dreams of building a product of your own, and would rather fund development through high-value consulting than take an investor’s money? My workshop on building consultancies might be perfect for you – after all, Planscope came to be because I worked on it while my team paid my paycheck.
Is this a “sit on a beach and do nothing” lifestyle business? Not really. Have I created the lifestyle that I want that allows me to help people similar to me, make a sizable amount of money, and doesn’t involve trading an hour of time for a chunk of money (and allows me to sit on a beach every once in a while)? Absolutely!
Want more products advice like this?
Here's something I wrote that I think you'll like, "How I Changed The World In 2013"