This is the free version of Trends PRO #0017 XaaS: Anything as a Service
Some things require a human touch.
Property management, podcast editing and website maintenance are problems with solutions that have not been automated.
Anything as a Service describes a service that solves a recurring problem with a fixed scope and fixed price.
- Video Editing
- Property Management
- Social Media Management
- Virtual Assistants
- Content Generation
- Graphic Design
- Lawn Mowing
- Lead Cookie
- A4E Accounting
- WP Buffs
- There will be more XaaS marketplaces. Mentors use MentorPass and MentorCruise. Fitness studios use ClassPass and FitReserve. Will ClassPass for graphic designers emerge?
- The best XaaS companies will not use (or need) marketplaces. They’ll own their own distribution. See opportunity #7 in Trends #0013 — Online Courses to understand why this matters.
- Begin with XaaS to build domain knowledge then move to SaaS. Craig Hewitt built Podcast Motor before Castos. Jane Portman offered productized consulting before Userlist. Robin Vander Heyden used his experience at ManyPixels to build ManyRequests.
- Pair a one-time productized service with a maintenance plan for recurring income. See Restaurant Engine and Hotel Propeller.
- Build on top of ecosystems. Leverage existing communities. WP Bellhop and WP Buffs are built on WordPress. Bean Ninjas and Xendoo are built on Xero.
- Build a value ladder around your XaaS. Listen to Russell Brunson explain why you should have a do it yourself, done with you and done for you offer.
- Build lead generation tools for “sticky” services like bookkeeping and property management. They have higher customer lifetime values and a higher cost per lead than other services. See Trends #0016 — Growth Tools.
“XaaS has lower margins than SaaS.”
There’s no free lunch. XaaS is faster to revenue but comes with higher marginal costs than SaaS. All else equal, would you prefer XaaS or consulting?
Anything as a Service means Platform-as-a-Service, Infrastructure-as-a-Service and Data-as-a-Service. Not lawn care, massages and bookkeeping.”
Anything means anything. For this report, I narrowed the scope to anything except for software and one-time services. Recurring productized services.
“You can’t make money with a white-label service like WP Buffs.”
Retailers sell the same products. What’s the differentiator? Service. Convenience. You can add value to standardized products.
“Some of these services will be automated in the future.”
The purpose of this report is to identify opportunities right now. Look at what’s not going to change if you want to play long term games.
“Atrium didn’t work out.”
Atrium failed as a venture play. Maybe the XaaS model is not venture scale. They tried to go fully automated towards the end but it was too late. Bench raised $49.1M and the jury is still out.
“The marketplace model won’t work for all XaaS.”
Marketplaces may not work for “sticky” services like bookkeeping and property management. Some services have lower switching costs. ClassPass for copywriters?
- Growing a Productized Service from $0 to $50,000/month — Robin Vander Heyden wrote a book (in 24 hours) about how he helped build ManyPixels.
- Offering X as a Service — Ed Gandia explains how to find out what your clients need on a regular basis.
- The Ladders of Wealth Creation — Nathan Barry describes the major types of income as time for money, your own service business, productized services and selling products. Check out The Stairstep Approach to Bootstrapping by Rob Walling.
- From Productized Service to SaaS — Patrick McKenzie makes a great case for starting a productized service before a SaaS. Quotable moment: “Turn a repeatable outcome into a repeatable income.”
- Stair-Stepping From Productized Consulting to SaaS — Jane Portman, co-founder and CEO of Userlist, shares how she made the jump from productized consulting to SaaS in an interview with Brian Casel.
- How to turn a Service into a Product? — Brian Casel explains how to move from a customized service to a productized service. Pick the right customer, pick a valuable problem and build a predictable version of your service.