If you’ve never heard of a productised service (or productised service for those of you over the pond), I don’t blame you.
I learn’t about it on a podcast featuring someone called Brett Williams. Brett started a company called DesignJoy which is a company that offers design design services to businesses for a monthly fee. These services include web and app design, logo design, print design, basically any design work you can think of. Once a business subscribes they can revise a design as many times as they want. They can also pause or cancel their subscription whenever they want. This idea to me was mind blowing, ‘why has no one done this before?’
Then I looked at the design joy website and saw Brett charges for a subscription. Five thousand a month. Five thousand dollars! That’s a lot of money. No one would pay that much for designs? I thought that at first but I was wrong. Brett has around 20 clients. So if you do the maths, 20 clients at $5,000 dollars a month that’s $100,000 every month, over $1 million a year!! And what’s more, Brett is the only employee of DesignJoy!
Has your jaw hit the ground? Mine did when I first heard this. The guy is a genius. He’s been able to figure out how to sell his design services like a subscription product and he’s making bank!
Surprisingly there are plenty of design agencies that have this subscription model. This isn’t a new thing in the design world, but I haven’t yet seen this in the world of web development.
There aren’t any ‘web development as a subscription’ companies out there at the time of writing which makes sense. Web development can be an ongoing process and it’s more difficult to predict how much work can be done in a month. However, this doesn’t mean it can’t be done.
Let’s first talk about why a client would choose the subscription model in the first place.
You are a startup founder
Imagine you are a startup founder who has managed to secure £250,000 in pre-seed funding. You have an amazing idea for a web-based product and you need a developer just to create a working prototype so you can validate your idea. Here are your options.
You could hire a freelance senior web developer who, in the current market will cost £550-£650 a day. If we say £600 a day that’s £15,000 a month and £180,000 a year. That’s a serious bite out of your pre-seed money. That’s not to mention the money that goes to the recruiter who helps you find this developer.
2. Permanent employee
You could hire a permanent senior developer. Going down this route, you would either need the help of a recruiter, or you would need to find and go through CV’s yourself. Let’s say you go with a recruiter. You would still have to interview a bunch of developers to determine who is the best fit for your product. Then once you find that person, they could command a salary of anywhere between £75,000 and £100,000 a year. That’s excluding any perks you might have to offer them to get them on board (stock options, gym membership, private health, etc…)
3. Traditional web agency
I actually have the least amount of experience when it comes to pricing with this option so the estimates could be completely wrong. This route would involve being pitched by multiple companies to find the best fit. Then going to one, maybe two “discovery” meetings with said company until they understand what you want. They could charge an initial feel of 20,000–40,000, but then charge an additional fee for between £5,000 and £10,000 changes you want. Or even to £850 a day for a dedicated senior developer.
4. Productised service
Now if we go with the one man (or woman) DesignJoy model and imagine they do web development, that is £4,000 a month which is already cheaper than any other previous option. However, like the traditional web agency this company will have any other clients, so you won’t get 100% of their attention. But you see their price upfront, you don’t have to interview anyone, go to any meetings, you can get the work started straight away.
What option would you choose?
Option 4 would be the cheapest, easiest to budget for and plan around, but might not necessarily be the fastest service if one developer is juggling multiple clients. So if you’re money conscious and have time on your hands, that could be the best option for you.
How option 4 could work
Let’s talk about how this imaginary company could work.
Similar to DesignJoy, the could have only one price for everything and everyone, with a discount for a yearly and quarterly subscription. The subscription can be paused or cancelled at anytime. Each client get’s their own Trello board (or similar) where they can add tasks and see the progress of their tasks. All the code and designs that are produced by said company are owned by the client.
Where this company would have to deviate a bit from DesignJoy is in the promised turnaround time. DesignJoy promise that each task will be done in 48 hours. The web development process is different from the web design process. It’s difficult to predict with that level of certainty how long a task will take. Unexpected things come up all the time so instead a subscription could pay for hours. For example £4,000 a month for 40 hours of work. If they client wants more hours, like 80 or 120, they can pay for it.
During this time the client can request as many changes as they like. If the client pays for a month and they’re unhappy with the results from the first 16 hours of work, they can have a full refund.
Where is this all going
Earlier this year I wrote about a company I’m planning to start with my wife called Orva. As someone who has worked (and still works) in a digital transformation consultancy, the thing I’m not looking forward to when running my own company is the admin and marketing. Things like creating pitch decks, figuring out pricing and how to split the payment into percentages, sending cold emails or cold calling potential clients, chasing up clients for payments and a few other things. Having clients pay by subscription eliminates a lot of these tasks and frees us up to focus on creating awesome products.
That’s why I’m planning to make Orva a productised services company.
I haven’t yet figured out how I’m going to structure the pricing, but when I do, I will update our site, and maybe write a new Medium post about it.
If you have any questions, or what to challenge this approach I’m open to it. Feel free to send me an email or leave a comment in this article.
Also if you’re interested in becoming a client and taking advantage of early bird pricing. Feel free to also send me an email.
I’m looking forward to any feedback.