Generating revenue from sources other than the billable hour is a key part of scaling a consulting firm. On this episode, Robin Way, Founder & CEO at Corios, shares how he is generating revenue from training products, licensing tools, and generating reports. He will talk about how he went from a single source of revenue- the billable hour- to four sources of revenue.
TRANSCRIPT
Greg Alexander [00:00:15] Welcome to the Pro Serv podcast with Collective 54, a podcast for leaders of thriving boutique professional services firms. For those that are not familiar with us, Collective 54 is the first mastermind community focused entirely on the needs of leaders of boutique processor firms. My name’s Greg Alexander. I’m the founder and I’ll be your host today. And on this episode we’re going to talk about quote unquote productize and a service. What do I mean by that? What I mean is generating revenue from things other than billable hours. And we’ve got a great role model with us today. And I’m going to walk through three examples as to how he’s done this. His name is Robin Way. He’s a collective 54 member. Robin, welcome. Please introduce yourself.
Robin Way [00:01:01] Thanks, Greg. Yeah. Good morning. So I’m Robin. I am the CEO and founder of Curious. We’re based in Portland, Oregon, and we build data engineering and data science assets and processes for clients in the financial services, health care and energy sectors. And gosh, I’ve been in this field for over 35 coming up on 40 years now, back when we just called it math and statistics. But it’s a pretty sexy area and I’ve had the opportunity to sort of see this field create and recreate itself probably four or five times over. And hopefully I’ve learned a few things along the way.
Greg Alexander [00:01:41] I’m sure you have. So this concept I’m going to talk about today is called prioritizing in the service. Again, the benefit of doing so is generating revenue for something, for something other than the billable hour, you know, selling access to an asset as opposed to selling your time. So my team has told me you’ve got three examples of this and I want to dedicate the show to that. The first one is I understand you’ve built a self-paced training product. So my question would be, you know, how’d you come up with the idea? Why did you do it in the first place? Tells the story of this training product.
Robin Way [00:02:13] Sure. Well, our sweet spot is helping our clients move from a really old discipline of doing analytics and data in their organizations to a much more modern way, using open source programing and cloud computing. And the biggest change that our clients face is not a technical challenge. It’s a human challenge because people write code. Code doesn’t write itself well. As long as chatbots make our entire industry disappear, which I really don’t think it’s going to. So people struggle with learning new things and it’s scary and it’s uncertain and they feel threatened by by gosh, this is the way I’ve done stuff for 20 years. And everybody that we help looks like me. Gray hair, gray beard, you know, they’re older, they’re getting ready for retirement. How in the world do they keep their job long enough without sacrificing, you know, the end of a career? And also, how do they learn how to interact with their with the young startup kids in their twenties and thirties who speak completely different programing languages than they do? So we wrote a we built a training product. Where these students can take what they know. We built the course knowing what they know because I’m one of them. And I walked through the same journey myself five years ago so that they can understand how to write in these new environments, new languages, using what they already know and hopefully make it a little bit easier. And some of the research we’ve done suggests that’s one of the best ways to teach someone something new and scary is provide them side by side examples. Here’s what you know, here’s what it looks like in the new thing on on the other side of the page. And self-paced, because as I watch a lot of these other training platforms like Coursera and Udemy, everybody’s busy. Nobody has the time to sit down in a classroom anymore for 8 hours. Besides, they just be sitting on their phones, you know, chatting and Instagramming. Who knows what they’d be doing. So make it available to them on their pace and their cadence. I let their boss influence how much time they spend every week. But what’s I think more important from a business perspective as an entrepreneur is I also don’t have to sit in a classroom for hours a day. If I can scale the number of students we reach from, say, ten over the course of one business day to, well, gosh, hundreds in the course of a week, that’s a that’s a desired future state for this pipeline, for this new product. But that’s the point is unlike. US from the confines of what a person can do in a billable hours. And because otherwise, you know, we’ll just I’ll be doing this until I’m in my eighties and I don’t really want to do that. Yeah.
Greg Alexander [00:05:17] So it’s a great example and highlights the benefit of doing this. You know, if you can create a a product, if you will, when I say that term, I don’t mean become a product company, but I mean productize your expertise. Then you’ve decoupled, you know, the billable hour your labor with the revenue stream. And training products are great way to do that. In fact collective averages do the same thing. We’ve built companion courses for the two books, The Boutique and the found a bottleneck and same idea. I mean, if I had to stand in a classroom and teach the concepts in that book, my God, it would take hours and hours and hours these days. You know, with the self-paced e-learning technology that’s available, everybody can kind of learn it on their own when they have the time. It’s a highly scalable activity. So that’s a great example. Let’s go to the second example, which is this, as it’s been described to me, a code translator. So what does that mean?
Robin Way [00:06:11] Yeah. Yep. Well, this kind of goes hand in hand. It’s kind of like the peanut butter to the jelly of the training product. Okay. So when these students have been writing their data analytics workflows for years, maybe ten, 20 years, or maybe they inherited code from somebody else who was at that business has left and all they know is, oh, I press go on this piece of code every Monday and I get a PowerPoint out the back end of it. So they if they know this, the task that this piece of code is doing. And we ask them right now, take what we just taught you and now convert this this code from one language to another. It’s a lot like like that. You, the translator sitting in the UN building, York, you know, they hear they’re listening to French and they’re translating the Spanish on the fly.
Greg Alexander [00:07:00] Interesting.
Robin Way [00:07:00] That’s not easy to do. And it’s tedious, time consuming error. So we wrote these three code translators that basically translate English to French, to Spanish, to Mandarin, to basically the target languages that they’re going to use when they’re moving to their target state, you know, moving to Python or Spark or whatever on the cloud, because that’s the destination where all of our clients are eventually moving. And by doing so, we’re taking the tedious, low value work and automating it. It’s it’s not it’s a it’s an art and a science. It’s not completely automatable. And frankly, that’s where just like with the training product, if we teach the low value skills, that allows us as consultants to be advisors and, and, and people who empower our clients to realize, okay, now I can focus my dollars for the careers consultants on the higher value stuff, which is also a good way of not getting caught up in battling offshore consultants who could do something similar at a much lower billable rate. Yeah.
Greg Alexander [00:08:12] Another great example, right? I mean, all of us as merchants of expertise, we have to realize that what was once a unique high value activity eventually will become a commodity. And and if you don’t automate those things through technology, the code translate is a great example of that. Eventually you can have all kinds of fee pressure and you’ll become a commodity. So by providing, you know, tech automation and prioritizing and service, you can still meet the need the client has. But but not with labor, with a product which then allows you to push up market and work on more strategic things that they’re willing to pay a high dollar per hour for the labor. Okay, that’s a great example. The third one was less intuitive to me. It was described, I think, incorrectly. So I’m going to give you a chance to describe it to me. It’s called the AWB inventory software. What is.
Robin Way [00:09:06] That? Sure. Yeah. Let me let me set the stage for this. So this is actually the product that is at the start of the client lifecycle. So you think about classic consulting first come on in and help the client size up what the size of their problem and the nature of their problem is. Then do the work and then teach them how to do the work themselves. That was we’ve sort of tackled these products in reverse order. That doesn’t matter for the podcast. But we this third product is at the the first stage in the client lifecycle. We’re going to inventory. Just how big is your problem? Where is it worst? Okay, what should we do first, second, third. So this is an inventory product that we built know about four years ago. And what we’re doing now is we’re converting it or sort of upscaling it to put into the US marketplace. That’s basically, you know, Salesforce has one and Microsoft has one where basically you can download plugins into your software, you can download software that runs in your own computing environment. They’re up. The upshot of all this is. We want the client to do an inventory. Either way, that gets us to where we really want to be. The sweet spot of our lifecycle is creating value. The inventory itself just tells us how much value there is to create and we want to accelerate the pace of that project the way that we do it today without this this downloadable plugable piece of software that we put up on marketplaces. Instead, we come into their environment. We have to do 3 to 6 months of sale and three months of delivery. By using this upgraded version of the technology, the client can download themself and run themself. We’re basically taking months and months, maybe almost up to a year, and we’re reducing down to a couple of well, because the client can dip their toe in the water, they can try before you buy all those kinds of nice for the client who says, gosh, I don’t know if I can sustain an organization the time to do this inventory. If it’s going to take me six months, I got I got a day job. So if we can crunch that down to a couple of weeks, then they can go, Ah, you’re right. I have a huge problem and I really need you to come in and fix it. That way we get to the sweet spot, the place where it’s going to be hard to dislodge a or or to question the value. So that’s, that’s the third product. Okay.
Greg Alexander [00:11:33] Another great example. Now, I know some of our members, they’re going to hear that example and they’re going to say, why the heck would I want to do that? I sell a consulting project. I spend three, six, nine months in quote unquote, discovery. I’m billing the client for that work. If that gets reduced to two weeks, I just cut my revenue stream dramatically. I think that’s the wrong way to look at it. But what would you say to those members?
Robin Way [00:11:59] Yeah, well, inventory. Yeah. So in my line of work, the inventory is not the value. Anybody I mean, the classic complaint about consultants is I pay in my case, I’m paying Robin paying this guy to come in and look at my watch and tell me what time it is. Right. There’s no there’s no value in that. So. Plus the inventory. A lot of that 3 to 6 months of pre-sale is just us sitting around waiting for the client to say that they’re finally ready. So we’re not building that whole time. We might, you know, we have a flat fee for that service. It’s maybe 250 grand. If we do it the hard way, we might give it away. Mm hmm. You know, practically, we might charge a nominal fee of ten, 20, 25 grand for the trial before you buy a service, because that’s the way in the tech space. A lot of software is sold is get me hooked with the freeware, with the shareware. And then when I realize, Oh, I love this, I want more and I want to know more about careers, then they bring us in. And now we’re talking about a much more sort of a platinum level relationship where they see, Wow, you guys know a ton. I had no idea our problem was this bad. Come and help me now. We’re into the the part of the relationship I really want is is is that is implementing the value and bringing them to the promised land and not just reading their watch for, you know, for, you know, for what is. Really should be a cost of sale. Yep.
Greg Alexander [00:13:37] Excellent example. What I would add to that is there’s probably a lot more demand out there that our members could capture if they could take something like discovery. I use that term broadly from six months to two weeks. There’s a whole bunch of customers in the market, one who will now probably hire you because they don’t have to go through that six month grueling process. You know, the value prop gets done in two weeks. So the demand will go up. And then, of course, as Robyn said to us, what you get to, what you really want to get to, which is fixing the problem, not diagnosing the problem a hell of a lot quicker. Robyn, one more question on this. So these three examples are training product. The translation product and the inventory product are all great examples of products and services do charge for them.
Robin Way [00:14:23] Great question. Kind of. So we. So I’d say there’s two dynamics in the market for know we are a we are in the ecosystem of Amazon Web services. We are a premier solutions provider in the AWG ecosystem. And RWC is all about commitment to the clients and about delivering time to value. So what that means is the clients have come to expect. I want results fast that I can scale and I want to be able to fail fast. And if an experiment is going poorly, throw it away. Figure out what does work and go with that instead. So. The the realities of this market are you have to bring to the client what they have come to expect. And that means changing the way that you work as a consultant and finding your one niche. Because Amazon will eight of us will tell you as a as a process of company, do not present yourself as, Oh, I can do anything, I can do some data science stuff, I can do some data migration stuff, I can build you a new app, be good at one thing that’s very discretely defined that you are the best in the room app and stick with that. And that’s what we’re trying to do.
Greg Alexander [00:15:54] So when you say you kind of charge for this, so are you.
Robin Way [00:15:57] Oh, yeah. Let me come back to that. We call these accelerators, okay. If I tried to for example, we’re trying to take a customer from state A to state B, Once they’re at state B, they have no need for a recurring software fee because they they solve the problem. So we’re not selling it as a SOF, as a recurring software revenue. Now, some people will go, Well, what are you creating these products for their aid, their differentiators be their accelerators. Everybody wants, they want to know. I can just pay you for hours or you’re bringing hours plus something really compelling and distinctive. Yeah. And I want to know that you’re going to reduce the operational risk of the engagement, and you’re going to leave me stronger than I was before. So they’re really accelerators for value. I’m not selling them for a price because because we are trying to sell our expertise, their expertise in a bottle.
Greg Alexander [00:16:59] And therefore, the reason we are charging or kind of is because you’re getting more deals and you wouldn’t have had these deals otherwise.
Robin Way [00:17:05] That’s right. Yeah. Got the right to have the right.
Greg Alexander [00:17:07] All right. Well, we’re out of time. Robin, This was an awesome example. Three examples on how to productize a service on behalf of the members in the collective. I appreciate you being here very much.
Robin Way [00:17:17] Yeah, you too. Greg, this was great. Thanks for inviting me.
Greg Alexander [00:17:20] Okay. All right. So as a call to action, let me speak first to the members. So first things you should attend the Friday Q&A session, which is the private session that we’ll have with Robin, and you can ask your questions directly to him. Secondly, you might check out the companion course for the boutique book. In it, one of the tools is called the Revenue Mix Tool, and it teaches you how to develop different revenue streams and therefore have a broader revenue mix, which is what Robin demoed for us today. And then also for those that are playing around with the founder Bottleneck, there’s a template in that companion course called the High Potential Employee Development Plan. And if you’re wondering, Hey Greg, I want to productize my service, but who has the time to do that? It’s a great project for a high potential employee to take on, to develop themselves and create more value for you so directly to that. And then if you’re not a member and you’re listening to this public podcast, first you should consider being a member. You’ll get access to great people like Robin and tools like the ones I just share with you. And you can do that. A collective fifa.com fill out the contact us form and some will get you get in contact with you regarding that. But if you’re not ready to join but you want some more of this outstanding content, join our newsletter which is collected for Inside.com. And if you do so, you get three things. You get a blog on Monday, a podcast on Wednesday and a chart on Friday. Okay. With that. Thanks for being here, everybody. Robin, again, Thank you. And until next time, thanks for listening.
