ScreamingBox Technology & Business Rundown

Dave Erickson 0:00
Do you have a love/hate or hate/hate relationship with the b2b service business that you have built up? Want to turn it into a business that you love on this ScreamingBox podcast, we're going to grow our understanding of how to productize a service business so that you can love it again. Please like our podcast and subscribe to our channel to get notified when the next podcast is released.

Dave Erickson 0:40
For BtoB service providers, attracting ideal clients who are primed to buy your services can be a long and costly road. So what can you do to jump start growth? Welcome to the ScreamingBox technology and business rundown podcast. In this podcast, my co host, Botan Seres and I, Dave Erickson, are going to try to grow our understanding of the productization of services with Jay Malone, founder and growth strategist of Profit Ladder. In 2010 Jay founded a digital agency called New Haircut, and spent 14 years as a b2b service provider. After many years of struggling with business growth, he started productizing the services his business offered, and as a result, was able to stabilize revenue and grow his company. After seeing the results he generated for his own business, Jay started Profit Ladder, where he helps b2b service providers grow their pipeline and profits by creating scalable offers from their high ticket services. Jay, welcome to the podcast.

Jay Melone 1:43
Hey guys, good to be here. Thanks for having me.

Dave Erickson 1:47
All right. Well, let's start at the beginning. What led you to start trying to productize your services? Oh, man.

Jay Melone 1:54
Well, I started my first business in 2010 and it took me the better part of a decade to realize that selling is as much, as much your job as a business owner as anything else. They should probably tell you that before you dive happily into entrepreneurship. So the work that I was selling at New Haircut was long complicated programs that I would help with big companies, so the sales process was long, and then even, like, the pitch and proposal process just added weeks and months to that process. And I really never wanted the job of marketing and selling, but I was the guy, I was tagged to do that job. So to answer your question, really, what I was looking to do was to make my job easier, because I went into business to do the work that I enjoyed doing, that I had spent a career earlier as an employee, doing, and so I was trying to find a way to make selling easier, draw clients to me, draw the right clients to me, and ultimately sell them the right level services that I that I could see that they needed. And if I could educate them along the way without me having to jump into every single conversation and sales call, it would make my life easier, and ultimately, I could work with the right people that really needed our help.

Dave Erickson 3:19
But all those YouTube videos say that running your own agency is a piece of cake.

Jay Melone 3:26
Yeah, right, yeah, you know, like, that's the other piece too. It's not just, it's not just running the company, but then at a point we were 35 people. So now I'm not only selling the work and doing the work, but I'm also managing people, and, you know, hiring and firing, and there's so much more that comes along with it. So, like all those pieces, take away from my ability to serve my clients, and then you wind up saying yes to anything to sort of like, just bring money in and stay afloat. And if I could systematize and or productize the work that we were already selling and doing, except without our team actively involved in it, then we would just have more time to do great work.

Dave Erickson 4:12
Yeah, it seems like with many b2b service companies, the clients really want to talk to the founders when it comes to sales, because they have the history and they have the understanding and everything, basically, that builds a relationship, but it puts a pretty big burden on the founders and the owners to try to do everything.

Jay Melone 4:35
Yep, yep, yeah, and so you wind up having these calls with lots of people that are just kicking the tires, not really ready to buy, or no intention to buy, or maybe they discovered that they can't afford you, or now is not the right time. And so what do you do from there? So like the classic sales playbook, is to drop them into some kind of nurture sequence and do your follow up sequence with them once a month check in and send them a case study, all you know, all the all the outbound stuff. And instead, if you could identify that, or even if, even better, if they could identify it by going through the sort of funnel that you already built for them. So they're educating themselves. They're getting access to your, to your tools and your knowledge, your expertise, then they're, it almost puts the ball in their court. So they say, like, I get what they do. I see the value in it. I can afford this thing for now. And if it helps me, then I'll go, you know, they'll become my go to person that I'm going to come back to when the time's right, or when, when, when the money's Right, yeah. And so, like, to go back to your point, I'm not involved in any of that. There is a lot of what is happening in the background. My, my favorite sales calls are when people start the conversation by saying, hey, you know, so I just got to tell you, I used one of your tool kits a year ago. It was so great. I've been following you since then. I also, like, took your mini course that you launched, and it's perfect timing, because we got this project, and I'd love to talk with you about it. Talk with you about it like that's, that's so teed up for me, and they already know what I do, they know how I work. They know if I'm the guy that they want to work with. So it's more about it's almost like a negotiation at that point, as opposed to me showing up with a fancy slide deck to convince them that I'm the guy to work with.

Botond Seres 6:21
That sounds like your team is quite good at laying the groundwork at this. But for those of us unfamiliar with the term, what exactly is productization? Productization.

Jay Melone 6:36
yeah, so I'll use, well, so like i You guys probably have a lot of folks in your network that are in software engineering and whatnot. Is that true? Yeah. So, yeah. So my first job out of college was at Accenture, and I was one of the weird ones that actually wanted to write code. So I spent seven years building, building systems for, in telecom and whatnot. And then what I did is I then got a job at a couple startups in New York City, all still in tech, eventually, kind of like moving into a product role, which is just really like the intersection of tech and business. And so I took all that that knowledge and I started New Haircut, because my idea was, I wanted to help companies launch great solutions in you know, like with as little guesswork, keeping their their cost to a minimum, and the the frameworks and the tools that we would use were all built up from my expertise of doing this, not only as a job, but then bringing it into New Haircut, packaging it into software deliveries, like website delivery, packages, all these things that we offered to them, but they all required people. They required my team to deliver the stuff. They required the marketing and the sales from me and from team members to get people in the funnel and figure out if it's, if it's helpful. And so what we started to do is, instead of us having to show up and always get, you know, having to be there and put in time to get paid, we said, what if we took the frameworks and expertise that we have around these different things that we do, just package them into more or less like Do It Yourself versions of hiring us. So the first things that we did, we used a couple, we used a couple innovation frameworks. One was called a design sprint that came from Google. Another was a problem framing methodology that we developed. And so what we said is, instead of us showing up and spending two, three weeks to do the thing, let's package it into toolkits. We'll teach the person how to do it. We'll give them all of our tools and templates and resources that we would otherwise use if they had hired us and instead of you paying us 10, 20, $30,000 to do it for you, have at it for 200 bucks. 250 bucks. Here's all of our best stuff. Try it on your own. And so that was productizing, taking our tools and frameworks and packaging them in a way that someone could look at it, buy it, and use it without really ever having to interface with with a member of the team and on the back in the background for us, what would happen is they would use it, and some people would be successful and be like, thank you so much. This was great, but a good portion of them would say, I like this and if I got this far using your tools, I can't imagine how much better it would go if we hired you to do it. And that was that became our sort of like upsell client that we wound up working with.

Botond Seres 9:37
That makes tons of sense, actually, is it kind of like and sorry if this is a terrible comparison, but some personal trainers on YouTube, for example, they have all of these videos on how to do this exercise or how to do that diet, but they also offer some more detailed programs that you can buy in like PDFs or video format. And then finally, at the top tier package, you can actually hire them to be there in person.

Jay Melone 10:06
Exactly. Yep, that's exactly it. Because, you know, like, before you hire I've hired trainers too. Before I hired a trainer, I'm like, am I gonna like, if I'm gonna spend an hour every morning in the gym with this person, do I like them? Like, do I like their style? Do they like to chit chat all the time, because I'm not a chit-chatter when I'm in the gym. So, like, there was some risk in just showing up and hiring them. The money was, you know, like spending I could hire them for a session or two, but if they could show me how they trained somehow, and I could use it to get like a six pack for myself, or probably, probably not, but at least start the journey of getting a six pack, then I would trust them a little bit more, and by the time I hired them as a trainer, I would know that they were the person I wanted to work with, or not. But at least at that point, I would have saved us all a lot of hassle.

Botond Seres 11:00
Well, it makes a lot of sense, because this way many clients can really dive deep and figure out for themselves if what we are offering is the right thing for them. Right?

Dave Erickson 11:12
Is there a kind of a type of service, or types of service that best fit productization. What? What? When you think about services, or when a business is thinking, Okay, I want to kind of productize some of our services. What guidance can you give on what services they should be focusing on productizing?

Jay Melone 11:34
So most of my clients are, they're kind of, they're, they're experts in whatever they do. So I work with a lot of consultants, coaches, people that run agencies, people that provide fractional services, which has become like a whole market in itself. And so they've developed expertise over their career. And I work with people in higher education and marketing and product and technology, legal, I work with lawyers. The, the common thread across all of them is they just have some expertise in whatever it is that they do, and to get access to them is typically not, not cheap. They're not selling their time for 10 bucks an hour. These are people that make $100, $500, $1,000 an hour. It's complicated sometimes, in what they do, how they do what they do, which is what, where their expertise comes in. And so the typical path to figuring out if there's a match there is to do the whole sort of like, pitch and proposal dance, and you go back and forth, and you see our case studies, and you're trying to figure out if it's a good fit. So if those people that have that sort of expertise can take chunks of that expertise, their knowledge, their tools, their frameworks, and package it and sort of put it out there, whether you make it free or you charge for it, I think it's it's that expertise that is the common thread that makes it viable for anyone. So, b2b, b2c doesn't really tend to matter. Industry doesn't tend to matter. I think it's just the the thing is that you sell a service that can be expensive, complicated to sell, and you're looking to add more people to your funnel that get what you do, make it easy to buy and sort of like start the relationship with them from an easier stance than just like a hard pitch.

Dave Erickson 13:34
What about kind of, the productization of flow? So I see this mostly in like marketing agencies, where, you know, they, let's say there's a marketing agency, and they produce content, and, you know, they're, they're, they're services, they will produce a flow of content over a period of time that is used for social media, it's used for their websites, whatever they want to do, but it's kind of like a flow. It's not like you're buying one thing or one package. How would you productize, kind of a flow, which is normally done on a retainer of some kind? Is there a way to do that?

Jay Melone 14:15
Yeah, actually, I wrote what I found and then wrote a story about Julia McCoy, who built a content strategy agency, and she did it for several years. And what would happen is her employees, or her or some of her favorite clients, would come to her and say, How do you How did you do that thing? How do you, I'm trying to do this. How would you do it, whether they were like retain clients of hers or friends or competitors or employees, she would pay attention to the things she was answering over and over and over again, because that purely indicates that there's interest, that people are trying to do this thing, but whatever exists out there is not helpful enough for them to get it and to do it well. So the first thing she did is write a book which is very much productizing. It's just it's a longer road than I think, like most books take a year or more to write. But the things that I'm talking about, toolkits, templates, courses, ebooks, package content like that. Most of them that I help my clients with is like a two month start to finish. But she started by productizing, by taking her brain and putting it into a book to answer all those questions and help people. And then people that read the book wound up hiring Julia and her agency. And then she just, she kind of like continued to pursue that. So from her book, she created courses, and a lot of the same people that were interested in the book, then went and took a course. I did the same thing with like Alex Hormozi. He's written 100, 100 million dollar leads and 100 million dollar offers. I read the book, and then he has training on his website where he basically, like, opens up his playbook, because Alex gives everything away for free, because he's a multi multi millionaire, and I just appreciated, like, having the context from the book, and then him showing me how to use it with slides and sort of some of the templates that he created. And if I, if I could hire Alex at that point, it would be a no brainer to hire Alex to help me have $100 million offer pipeline, similar.

Botond Seres 16:25
Jay, you mentioned the New Haircut a couple of times, and I do wonder, where does that come from?

Jay Melone 16:33
Yeah, I get that question a lot. Hopefully people will start asking me where the name Profit Ladder comes from. But I think New Haircut has a little bit more of a catching into it. So when I started the company, we were very much a web design agency, so a lot of the stuff that we did was sort of brand identity and new design. So it was sort of that new look, new feel. You know that kind of feeling when you get a New Haircut. I mean, for me, I don't know that's not exciting to shave my head these days, but other people, maybe more so. So that's where that name came from.

Dave Erickson 17:07
Yeah, we get a lot with ScreamingBox. People always ask us how we came up with that for our agency, but that's a longer story. You know, you've mentioned a couple of different components of productization, but maybe you can kind of, you know, walk us through, let's say I don't know, we're a marketing company. We provide marketing services, and we want to productize some of our service offerings. What are kind of, the steps we would have to go through to kind of figure out, okay, what, which ones are we going to productize, and how do we productize it, right? Yep. How do we turn it into a product?

Jay Melone 17:43
Sure. Okay, so I think the first step that a lot of people, especially early to being a business owner, Skip, is being in the trenches of doing that marketing work like sleeves rolled up for a couple years, because it's it's the nuance of of doing that, applying that elbow grease to see where people get stuck, where they ask questions, where they have curiosity, to go deeper into the way you do what you do, and then also just kind of building up your your ability to solve for related but different personas, and really getting, kind of clarifying, this is what I do. This is exactly the problem I solve. This is who I do it for. This is my niche. So doing that work for a number of months or years is really, really sort of the foundational step, and that's where I'm different than somebody that sells, like the side hustle, like rags to riches, kind of stuff. Like, I want to work with people that have clear expertise, but they're getting devoured by like, serving their clients and not having enough time to grow, and they go through those feast or famine cycles. So the first step is really just to do the work and do it one on one, and get really clear. And then what I do, the first step, I have my system is called the reverse flywheel. Jim Collins wrote a book with the name flywheel in it. I can't remember the full name of the title, but it's basically about like, how do we move people from where they're at in their journey to the next piece, to the next piece? And by going here, it feeds them to the next part, which feeds our business. So as we get customers in and they leave reviews, those reviews turn into new customers, we create a set of toolkits and templates, and then there's a sequence in there where they talk about it, and the next person finds out about it, and that deepens our mastery in the workshops that we do, which brings in the next cohort of people. So you just kind of like go around and around, and so the first step down where the name Profit Ladder, this next rung down the ladder from your sort of if the goal is to sell more of your premium signature service. The next rung down the ladder is something that is a little bit more packaged. So for a marketing agency, they may sell, like some SEO package, or they may, they may have like a six month program with, like, brand identity, website development, SEO, you know, like optimization, all that stuff takes three to six months, and they sell it for $30 grand. It's, it's sort of a retained package that they sell $30 grand is chump change for really big companies, but still the time, like when people have to commit to a three or six month program, it's the time that feels costly to them and feels risky. So my first step is that I help them find something that they can deliver in one week. And there's a lot of tension that comes with that, because they say, like, What do you mean one week? You know, the thing that we do is six months, like, there's no way I could diminish the value that I provide. And still, I help them work through it. Everyone has the same reaction to it, and I always help them find that one week thing that they can deliver and sell for less than five grand. So that's sort of the Met, those are the two magic numbers I'm going to do this thing. It takes one week. It's, it's 2500 bucks. It's 3500 bucks, and you're going to get a, b and c. That is not only very clear and easy to say and communicate. It's super easy to buy you. It's either a yes or a no, I get what that does, I need it, or I get what that does. I don't need it. So, first step down the ladder is that what I would call a packaged offer. And now you're able to serve more of your one on one clients, and more of those people wind up upselling into your signature offer. So now you've kind of made the job of sales a little bit easier, but you're still actively doing all that work. So you haven't solved your sort of your delivery the time it takes you to deliver, but hopefully you've made your job of selling a little bit easier. So you went a little bit of time back there.

Dave Erickson 21:58
And then made it. You made a kind of a piece of work that's small enough that you know you're not working on it for a long period of time. That piece of work, I guess, is easier to bring in somebody and train them to do it if you start getting, you know, more of that. So okay, that seems to be a key piece.

Jay Melone 22:18
Yeah, and then as you continue to develop and like hone that craft that you have, the next move is to find ways to go from one to one to one to many. So people do this by creating training. So a marketing agency, like for New Haircut, we taught our innovation frameworks, so we would do public workshops where we taught people how to run their own design sprint. So instead of me showing up and charging $30, $40,000 for a two week sprint, which is great, nice and profitable, but also still hard to sell, we would teach 30 to 40 to 50 people how to run their own design sprint. And in the room, there'd always be a small handful of people that said, I love this, and I'd rather you do it. Can you just come and run our sprint for us? That became our next client. But now on top of that, I've sold one two day workshop to many people. So in two days, I was making the same that it took me to run, making two weeks to four weeks run, doing the sprints. I was charging $30 to $40,000 across 30 to 40 attendees to just learn how we did what we did. So it went from one to one to one to many training is a favorite thing that people that that makes it easy. People also do masterminds. They do sort of like a hybrid program, where they provide a bunch of content, and then they meet a regular cadence to sort of like coach and help people through a process. But now, instead of selling one thing to one person, you create one offer, and you get many people buying into it, and your revenue actually increases. So your profit really spikes in those cases. And then from there, really, the next rung down is where all the productization starts to happen. So you take your expertise and all the what winds up happening as you're moving down that ladder is you, you create a template to help one person because they got stuck on a piece that you're like, oh, everyone always gets stuck here. Let me create something that I can just give to them, and they can do it, and then when we meet, we'll be, we can hit the ground running, that template becomes an asset for your productized offer down the rung. So that keeps happening over and over and over again, while your expertise continues to build. So at a point you're able to productize all of that knowledge, all of the templates, all of the assets, all of the guides that you've created, the documents, and you can package those into courses that become either done with you or completely do it yourself. But as you see, like it took all of those reps of doing it, one on one and then with groups of people to see all the different pain points, all the different ways people communicate, challenges, frustrations, doubts that they have, to the point where you're so confident that you can package it into a thing that many, many different people at different stages can benefit from.

Dave Erickson 25:12
It seems like there's, kind of almost two types of productization. There is a productization of knowledge, experience and learning, and then there's the productization of actually doing the service. And they both relate to each other. You can use the knowledge and learning productization of what you do to feed into getting clients to pay for the actual you doing the work. But then there's also making chunks of work that they can buy easily, versus the let's get on a phone call and, you know, talk for a long time and then figure it out method, right? That there's, there seems to be a third component to this as well, which you mentioned a little bit about funnels and walking them through a process that they can buy this stuff. Can you talk a little bit about that?

Jay Melone 26:10
I'll just speak from my experience of both being on the side of selling and buying a service, when the only thing that I have to to go off of I'll actually speak as a consumer. So I've bought plenty of services from marketing agencies, development agencies, when what I have to make a decision is a deck and a story and case studies of other companies, the best sales people, the best sort of like, founders, can, they can surely sell, for sure. But if you could somehow put those tools in my hands, or, like, let me figure it out for myself, then I'm gonna come back and know for sure that this is exactly what I need, and I understand now how it works, and I can see how I can use it for this project that I have coming up. That's the difference between, I think that's where productization comes up, and that's where it it, it graces people through your funnel, instead of like, pushing and nurturing and really trying to, like, close them so that they buy the one thing that you have, your signature thing. They can buy multiple things along the way, or they can, if they're free, they can experience them and use them. So you, you give your customer sort of control of when is the right time for them to buy, and the only thing that your job is to give them value at every step of the journey along the way. And so by the time they land in your inbox, this is where the funnel development comes from, by the time they land in your inbox, they're, they're charged and ready to go. And then, like, as you put those things out into the world, it draws the next person in at the top of the funnel. And you know, like at the very top, you've got your LinkedIn content and your blogs and your newsletter and all those things, and those are all products, if you think about it, they're all productized offers, because they're taking what you do, they're communicating value, and they're drawing people in. Where I got stuck for the longest time is that that's where I would stop, and then the person would drop into my email newsletter, and it would be like a hard sell to get them from free newsletter content to $50,000 package. And that's a huge leap. So I was trying to, like, make it easier, to step them closer and closer to buying my signature offer.

Dave Erickson 28:36
So it seems like processes, templates, kind of the things that you use in providing a b2b service internally are things that, if you turn those into kind of downloadable products, whether they pay or free, it gives people the ability to kind of see how you do things. And that, in itself, kind of, builds a trust. Would you say that?

Jay Melone 29:05
Yep, how you do things and the advantage for them, that's a great advantage for you, they're seeing they're sort of like glimpsing your expertise. For them, you're solving, you're enabling them to solve their own problem, like a related problem that they're stuck on that naturally, sort of like, if I solve this thing, I'll be ready and interested in the next stage in, in the process. And if they go far enough down in the process, they arrive at, like, I need Jay's signature offer, or, you know, Dave and Botond's signature offer, because they've helped me through these other smaller problems along the way, right?

Botond Seres 29:42
Jay, all this moving from a one on one business model through one on many and then finally the productization is, sounds quite scary, so I do wonder what, what do you think some of the common fears are in people who are trying to climb this ladder, and what's the best way to overcome these fears?

Jay Melone 30:07
Yeah, actually, if you don't mind, what seems scary to you?

Botond Seres 30:14
Me personally, yeah, it seems scary to Well, the one to one parts, I'd like to think that's that's going quite well, one to many. I have some experience in, not very much, but specifically packaging that up and just expanding on the many to many aspects seems quite daunting, if not scary.

Jay Melone 30:37
Yeah, no, that's a really good point. That's why I asked, because I was curious. Yeah, like, so personality wise, I'm fairly introverted. Like, my work has forced me to be on stage in front of groups of people, but I definitely get, like, one of the fears I hear from people is I don't want to be on camera, I don't want to be on stage, I don't want to teach. Coaches in particular that I work with. I have friends that do coaching work that coach, like high up executives on trauma, like childhood trauma work, so like for them to place a like a course or some sort of, like, do it yourself worksheets in place of that relationship that they have with their coaching client that, like, they get really panicked about that. They see it as you know, like cheapening the value of what they do. So there's, like, two things I think, that are, that are bubbling up, what building on, what you said is, is being a trainer. I had to teach myself how to be a trainer, and being in front of groups, and, like, educating and leading people through, through things. So it was scary for me, and when I saw I actually was really surprised by how much I enjoyed teaching people, just the joy that people were like, holy, holy shit. Like, I can use this, and it's gonna have these kinds of effects in my business. And at first, I probably wasn't the best trainer in the world, but I but that energy in the room really fueled me, and it actually made my work better by, you know, like they always say, if you want to really learn something, teach somebody else that comes from, like the surgery world, learn one, do one, teach one, something like that. I kind of, I think I butchered that a little bit. But so back to your point, like, training is definitely a fear that comes up, like being in front of groups. And then the one that's related to that is you not being there to hold your client's hand and make sure that they're successful. Is another, It's a really, it's a big one. And then, like, the third sort of, like, cousin of that that's very related is, Why would I ever sell a $200 thing when I'm selling a $50,000 thing, and it's literally the thing that I lived for three years when I first built toolkits for New Haircut. I would build the toolkit. I'd love it. It would, like clarify all of my work. I feel great about it. I'd put it out. People would use it, and then I would get cold feet, and I because someone would drop into my inbox and say, Hey, I've got a project, and we've got a $100,000 budget, like, lined up for it. And I'd be like, yeah, yeah, the hell with the tool kits. What am I doing? But I didn't realize that the tool kits were either directly or indirectly related to that person dropping into my inbox. So if you only think about it , the, the pitfall is to only think of it as how much money will I make from this thing? And that's why I, you'll hear me talk less about passive revenue. It is a thing that happens when you build, when you productize. But people want to have more impact, more scale, more reach in the work that they do, without doubling and tripling the hours that they're putting in. That's what I think that for me and the kind of people that I want to work with, it's that's the problem, that's the core problem that I want to help them solve, and if they generate some additional passive revenue streams in the process, I think the ultimate goal and the ultimate win that comes from productizing is making sales easier and just being able to do your highest, your like your highest quality work, serving your your best clients that have come to you because they know that you're the person they want to work with.

Dave Erickson 34:36
I bet one of the big fears that you probably encounter also is the fear of well, if I do this, I'm going to be giving away all my secrets and everything that you know that makes me special. How do you deal with that, that fear?

Jay Melone 34:49
Yeah, yeah, yeah. I'm going to cannibalize my work that I do. And no one's going to pay me $10,000 when they can get access to a $200 thing and then they. Keep going like the line of thought on that goes to and even if I do do this like anyone can watch YouTube videos for free instead of paying $200 bucks for my thing. And it's the same reason that you read a book instead of searching the internet for all the answers that went into the five years of research that that person took to write the book, because they've condensed it for you, and they made it easier for you to learn the thing that's all in the book, that's that's what the product is all about, and that the in the analogy of like a productized offer in a book is easiest for people to understand. You're packaging everything into a thing that's just easy for, for people to get but they're not getting access to you. And that is a huge difference. And everyone, everyone is smart enough to know that if I buy Dave's like, online develop, access to your online development community for $47 bucks a month, that's great, and I get these templates and Dave's insights and his like, I get free access to his monthly workshop that he does where he teaches a thing, amazing. And there's no way that that compares to me sitting in a room with you and you helping me build a platform, or, you know, like your, your expertise. But I think it takes me pointing that out for people to realize that it's apples and oranges when you compare a $200 course to 10 years of your wisdom.

Dave Erickson 36:26
This methodology of using productization to kind of move people to your higher ticket services is built on this idea, on this unspoken concept, for anybody who's taken courses or anything, that even if you take the course and learn how to do it, actually doing it is harder than it seems. The courses say, of course, you do it this way, but there's so many what ifs and branches of action and decisions that happen on any path you take, you will probably get frustrated trying to do something and say, Okay, I need help, right? Yeah, yeah. And sometimes online communities can help with some questions, but it's a lot of work to take someone's process and methodology and apply it to something that you're doing if you don't have their experience. And I think that's kind of the base that productization is kind of built on, is that, yes, people will get this stuff, but they will come to a point where they want you and you just, I guess as a business owner, have to have the the confidence that that's what will happen.

Jay Melone 37:40
Yeah, yeah. Yeah. And here's the counterintuitive point, and also a pitfall that I fell into, and most people do, is they'll cross that, that chasm of I need to hire Dave, when I hold back my best stuff. So I'll gate this thing. I'll show them like, for just $200 more, you can get at, like, all the crappy telemarketing things that we grew up watching, those don't work in like, the opposite works. So the mistake I made was I built these toolkits that had, you know, access to literally, like, 10 years worth of my my expertise and product. And so naturally, I was like, Well, I can't, I'm only selling them for 200 bucks or 400 bucks, so I can't give them everything. So I'm going to take this piece out and this piece out and this piece out, and I'm going to tell them that I took those pieces out and if they want it. And then to sell more of the tool kits, I made a free tool kit, and I made it, like visually apparent, like locked content that they had to upgrade to. And, you know, like, I get that that works in the world of software, where you're going from like $20 bucks to $30 bucks, but when you're going from $200 to $10,000 premium service, that's such, like, there's such a leap in knowing that there's so much more expertise waiting for you if you hire that person, I think it's like what you said, Dave, it's when you give everything you've got in that thing, you're only going to draw the right people to you because they're naturally they're going to hit a wall at some point, no matter how much you give to them, the further you get them down the path, the more likely they are to want to continue and to make it really, really work for whatever project they have. But if you make them stumble through it, and you only get them a quarter of the way there, then they're just going to kind of check out, and they're going to know that you built this thing to upsell them to the next thing. So I like to think about it as like, here's a toolkit. I put everything into it, use it, and it should get you to the end. And if you get stuck, or if you just trust me to do it the way that I do it, then I'm here for you, but I hope that it works for you. And it it, it takes like. Some, some mindset training to get yourself to that point. Most people, like my early days, want to hold back.

Botond Seres 40:07
Oh yeah. So I did notice that Jay that most, most productized stuff on the internet tends to give away the, the best, the core things first, and then charge for the the details, the all these small nooks and crannies of a given Well, methodology, let's say so, like to go back to the analogy of the personal trainer. I, what I noticed is that the first thing is they do give away the basics and the best exercise is the best diets, the best everything. Then if we want to learn more, then they give tons and tons more details, and I suppose, personally, even more. And that is kind of counter intuitive, because I just, I cannot even count how many times I heard this mentality of, if I give away anything for free, I'm gonna be poor for it, which just never, never really made sense to me, because my experience has been, the more you give away for free, The more you get back for free, or even,...

Jay Melone 41:24
Yeah, let's say, Hey, I agree. It's um, you know what you shouldn't give away for free is, like, one off, completely custom stuff. I think that is, that's dangerous. Like, if you find yourself doing a couple weeks worth of work because you're trying, that's way too much. Couple of Yes, right, right. Like, so why I also like productizing is it gives you a platform to decide if you want to give something away for free. So like, maybe you charge $200 bucks for an offer that you came up with, but you're like, Man, I really want to work with Nike, and I've been chasing this guy for a long time, and I know he needs my help, but it's been so hard to, like, get a meeting with him. I'm just gonna send him this thing. And I did. I would do this all the time. Be like, Hey, I created this thing. I charged $200 bucks for I want you to have it because you said that you were doing this project, and get stuck on these three pieces, and it's exactly what the toolkit will help you solve. Give it to your team if they find it helpful. I'd love to talk with them if they need an hour of coaching through the process, I'm happy to give it to them, and that makes it so easy for them to say yes to that. And it also doesn't tie you up for weeks at a time. You can give an hour at a time, but like now, you've got this great piece of valuable content and an offer that you can give away at, sort of like your disclosure. But like, I actually, I want to, like, I was thinking, while you were talking about the trainer analogy, I was thinking, you know, like, if I, if I downloaded a 10 minute ab workout From a trainer, and I did it for three months, most likely what's going to happen is I'm going to feel maybe a little bit tighter in my abs, but I'm probably still eating ice cream at night and or whatever is happening, but I'm like, I don't really have the result that I was looking for, like I'm doing the work and I trust it, and I really like how this guy trains. But I wonder if there's something else I'm not doing that's where the trainer that like, it's not only like he must know or she must know. Have some other other exercises, other things I can be doing. Maybe they can also help me with my diet and shit. Maybe they can just hold me more accountable to not eat ice cream every other night. That's, you know, like, that's, I think that's the analogy that I tend to think about. And it's the same with training as it is with, like any other expertise, it's just like people hit a ceiling where they're just like, I just, I need that person's help.

Dave Erickson 43:58
Yeah the, I did everything that you told me to, but it still isn't working right. Is bound to happen 90% of the time.
Jay Melone 44:05
Yeah, yeah. And like, just to, just to, like, double click into that, I did everything you told me to do, and it's still not working, because what you created is a hot piece of shit that is where the, sort of, like, the online courses market has a really bad rap. And I, like, let's go back to Botond’s question. That's another fear that people have. Like, I don't want to be caught up in this sort of, like, over-promising that I can make you a master whatever in a weekend. And I'm like, well, that you, we were not going to do that. You're going to create something, like really, really valuable, that helps a person through a really specific pain point that you know is important for them to get fixed. So, yeah, go ahead.

Dave Erickson 44:49
I think the key to that is creating some templates or courses that are so simple and small. So that if somebody were to follow it, they would definitely get a good result, right? So something like how to make an SOW that, you know, it would be really hard for somebody to fail at that, right? If they follow, kind of, the guidelines or a template that you have, then it should be saying, hey, how do I spec out a mobile app? Well, yeah, that might be something much more difficult for them to achieve a good result on, or something like that. So it may be that going for more simplified content or templates, I think the concept of a template is good because then the burden of, quote, doing it, isn't on the person who downloads it, they just fill it out, right? Or they go through the steps, and then there's not the worry of fear, not. And then, if they take some of your bigger content, where they definitely are going to go through it and probably run into some variation that isn't in a course, right? Because there's millions of variations on everything, they'll at least trust you because you've already given them a piece of content that they quote succeeded in.

Jay Melone 46:08
Yeah, yep, yeah. Which brings up another challenge that people have, so they sort of like building on what Botond was asking, like, where, what are sort of initial fears and objections people have once I get them past the idea that productization will work, the next one is, well, if I'm going to do this, I'm going to pack everything into this thing. And the simple question I ask them is, when's the last time you've completed a four week course? It's like, if you have the option to learn everything about marketing in two months, versus just teach me how to write great, like, catchy headlines in two hours. Like, I'm definitely going to do the two hour thing, and then if that works, then I'll go to the next thing, and I'll like, oh yeah, after a headline, I have to figure out, like, how to do images that, you know, like high converting images, or, like, write calls to action, like, but just teach me the first thing first, and just chunk it down. So yeah, and the fear behind that is, if I only help people with a catchy headline, they're going to think that's all I can do, and they're not going to get great value from it. And they're going to, you know, assume that, like, my stuff is cheap and quick and, and I've got nothing else up my sleeve.

Dave Erickson 47:26
Yeah, I saw on YouTube, I was trying to look something up on how to do something in WordPress for a friend who's putting together a hobby site. And I found this tutorial that this WordPress consultant was doing. It was an eight hour video on everything you need to learn about WordPress. And I'm like, who's gonna sit through an eight hour video learning every aspect of WordPress? Like, I don't even know, and, and the video had like 21 views, or something like that, like, you know? So, yeah, it doesn't make a lot of sense unless you break the content into digestible pieces, right?

Jay Melone 48:06
Yeah. I mean, for that guy, maybe it was a good idea to record eight hours of content, but exactly what you're saying, like, what the public sees is 20 chapters of that thing that steps them through, part one, part two, part three, part 20, like one chunk at a time, minimize time to value. Like time to value is a critical component when I work with clients to try to help them think, What does this offer need to do? So how quickly can your client get a win by using this thing? And it's always especially when you're doing training or educational experiences. How can you get the person just to take the next step, to go to the next chapter, to go to the next part of your course, or your framework, just one thing at a time until they're at the end?

Botond Seres 48:52
So speaking about that guy with the eight hour video, that is actually one of my fears, like, what if my like, if I won't put a video on YouTube, for example, then I would not want to put that up there without editing it first, and that's because I fear that there would be way too much just dead air in there. But I suppose it's the same for PDF or a book if there aren't any or aren't enough editorial rounds, the content can feel repetitive or stale I imagine.

Jay Melone 49:31
Yeah, yeah. So when I'm doing educational kind of offers with clients, I have a I have a framework, framework that I help them go through to chunk out, sort of like the big arc that we're trying to teach, and then the mini arcs within, and then the components within those which you become, sort of like the lessons. And then from there, we can map out all the assets that they'll need. So we need three videos, one template, and. Then, like a Q and A at the end, or a quiz at the end, and that makes it really easy to sort of like, map out what you're what you're creating, so that you're not just kind of like blind, just just working your way through it. And then there's also just tools in general, like you guys use Riverside, you know, like chopping out dead air is getting easier and easier and easier. There's also, like, such great, affordable talent that will take your video and chop it up into 20 bite sized lessons. So they're like, the, the excuses that that guy have, has to launch an eight hour YouTube, Wordpress, how to do, how to do WordPress in eight hours. Like, there's, there's plenty of options he had at his disposal if he looked a little Yeah,

Botond Seres 50:46
You can just chopping the video up into smaller pieces and giving more descriptive names could help.

Jay Melone 50:52
Yeah, literally, just cut, like, take the rest to the next one, and now you have, instead of one long video, 20 shorter videos, even that probably would have been better.

Botond Seres 51:03
And could that work in productization? If there is, like one massive product and it is chopped up into smaller pieces, is that something that works?

Jay Melone 51:13
I mean, in general, I think brevity is valued more than ever, but I think people are also used to more and more AI powered content. So I think that's the other thing that comes up is, how can I compete? Like, there's so many people that are on YouTube, that are have newsletters, that have offers, that have courses, like, how can I ever compete in that sea and what I tell people is like, there are other people that appreciate your experience, resonate with your personality and your story and your background and where you came from, and they want to buy from they'd rather buy from you than from some other person, even that other like, I have customers. There are, some of my competitors are $20 million companies that have been doing what I'm doing for 10-20, years, but I still have customers because people follow my story. They find how I do what I do. They resonate with my personality, and they'd rather work with me than with some, some other titan. It's, I don't know, it's a big world. I think there's, I

Dave Erickson 52:18
I mean, even if you put out a YouTube tutorial on how to make a scope of work, and 50 people see it. All it takes is two or three of those people to contact you, saying, Hey, I tried to make a scope of work. Can you look at this? This is a project I want. I'd like you to be involved in the project somehow that makes it worthwhile. It's not, it's not really about volume, in a sense, volume helps, obviously, but it's really about, you know, the quality of people who are hitting it and that it they, they get from you something that makes them want to do business with you.

Jay Melone 52:52
Yeah, that's why I tend to work with the people I do that have sort of that signature offer. And I'm not working with the Creator Community and sort of the side hustle community that is about a volume game the Justin Welshes of the world. Now all the names are escaping me, but like those, those folks that are only selling low ticket offers, that's not my crowd, and that's not what I, that's not the promise that I want to bring to my clients. I want you to have the one thing that if you could just sell a handful more of those per month, it would significantly change the trajectory of how your business can grow, because you can sell, instead of 30,000 a month, you're selling 120,000 a month. That's a massive change for a small business, which is a totally different game than going from, like, having no, no passive revenue to $10,000 of passive revenue like this, just, it's, it's just a different market. And, um, you know, that's, that's that creator game that I'm less interested in playing.

Botond Seres 53:56
Jay, in your opinion, what is the future of productization?

Jay Melone 54:04
Well, I, I think, with the with the help of the pandemic, and with all of the sort of like all of the rise of the one man solopreneurs and small businesses that have that have sprung forward in the wake of, like, all these big companies and massive layoffs, like, I think becoming an entrepreneur has become even more in fashion over the last five years or so. And when you're a small business, it's hard to, it's just hard to scale. You need an injection of cash, you need to have a great network. You need to have, like clients that are ready to go. And so I think, I think the old way of prospecting and pitching until your fingers bleed is just wearing thin with people on both ends. I don't, I think fewer entrepreneurs want to do that work, and I think fewer people want to be sold that way. I think they want to sort of like the freemium model that exists in the software industry, of like, let me try it, and then I'll buy it. It just, it continues, sort of like to roll out from consumer only products to the b2b world. So I can only see it growing and sort of the freemium to premium model in the service based business world is productized offers. So I see it as a great future. And I think AI is going to only to accelerate what you're able to do, not to just create a shitty, completely AI built course, but to give you outlines and tools and make things faster. So I think it's, think it's going to be a really good weapon for people to have at their disposal.

Dave Erickson 55:46
Yeah, I think AI is really good when it comes to content, for doing outlines and structuring things and some research. But you know, your, your voice is important, and that's what you're selling, is your expertise and voice. So if you can use AI to get you some structure and outlines and you put your voice in it, it should be a winner. Yeah, all right. Well, Jay, maybe you can talk a little bit about Profit Ladder, what you do, and what type of clients you're looking for, so that we can get an understanding of that as well.

Jay Melone 56:19
Yep, so I work with b2b experts, consultants, coaches, agency owners and fractional executives. If you have a high ticket offer, and if you're selling a service and you're trying to sell more of it, you're trying to do less or less sales and marketing and do more of the work that you started the business to begin with. Then we can work together. I can help you develop a funnel of offers that bring your ideal clients to you, and also start to generate additional revenue streams for you. You can come to Profit Ladder.net. I have a free newsletter there where I share strategies and stories and tips on a weekly basis, and I also host a free master class where I actually teach you my reverse flywheel frameworks that you leave with a short list of offers that you could put into your funnel.

Dave Erickson 57:10
Jay, thank you so much for being on our podcast and helping us grow our understanding of the productization of services.

Botond Seres 57:16
Well, we are at the end of the episode today, but before we go, we want you to think about this important question,

Dave Erickson 57:24
How will you start productizing your b2b service business?

Botond Seres 57:29
Four dissonance, please subscribe and create notifications to join us for our next ScreamingBox, technology and Business rundown podcast. Until then, start productizing your business.

Dave Erickson 57:42
Thank you very much for taking this journey with us. Join us for our next exciting exploration of technology and business in the first week of every month. Please help us by subscribing, liking and following us on whichever platform you're listening to or watching us on. We hope you enjoyed this podcast, and please let us know any subjects or topics you would like us to discuss in our next podcast by leaving a message for us in the comment sections or sending us a Twitter DM till next month, please stay happy and healthy.