People reading Leapfrog into butter have approached us with practical questions on how to go about achieving what we’ve proposed in the mentioned post, namely:
“…with little up-front investment and in a surprisingly short amount of time you can tap into the revenues of one of the most exciting and growing global markets… you can definitely get rich. And yes, even sooner than you may think…”
We have compiled a few Q&A’s we think might help you get the ball rolling.
Ok, so I’m actually planning to use your platform to solve problems for other companies and gain profits. How do I position myself in the market? As a “Workflow provider”, “Solution provider” or “App developer”?
You could start by positioning yourself as a “workflow solution provider” or “an automation and optimization consultant”. Choose a name that your customer will be able to understand and that indicates the value you can bring to your business. Before you position yourself, keep in mind that the services you can provide will range on a continuum, from:
You work with the customer to understand their needs and then match it with a customized solution that you build for them (or by making use of a ready-made solution), charging a once-off set-up/consultation fee.
You will enter all their users’ names, emails, roles, etc. into Kotive so that they can start to work immediately. But from then on they pay the monthly fee directly to Kotive as per one of the payment plans. This is similar to a developer using Wordpress to design a website for a customer and getting a once-off payment.
At Kotive we are often asked to build workflows for customers even though they know our product is DIY and how easy it is to build their own solution. Customers are more than willing to pay a once-off set-up fee as they do not have the time to get to know the finer details of how the Kotive designer works. This can be a viable business but I do not think it would be my first choice as there are more lucrative options available.
The other extreme of the continuum is where the customer outsources an administrative responsibility to you. You position your business as a service company that manages a specific administrative burden. For example, you can partner with companies that provide professional training. They develop the curriculums, get the needed accreditation and have the specialists who present the courses, determine training dates and market the courses.
Your business handles all the administrative duties. You receive and process the online registrations, send out invoices, follow-up on payments and handle cancellations. On the day of the training the presenter receives a list of attendees to indicate who was present at the training, and after successful completion of the training event a Pdf certificate is emailed to all the attendees.
In this scenario you would make use of the Continuous professional development workflow to help you with the administrative tasks. But you can also arrange for the catering on the day and for that you can have a second workflow. In this scenario you will not even inform the training company that you make use Kotive workflows. They will only get appropriate notifications when needed and maybe see a published form now and then where they have to fill in some details. This will be the most lucrative option as you will charge the customer much more than the monthly cost of Kotive. What is more, you can sign-up many other training companies and do the same for them.
You could even expand the business further to become something like “Uber” – the largest taxi company in the world and they don’t own any vehicles. Uber is a software company. Thus in our example you could become a training company without having any training curriculum, facilities or presenters. You connect leaners with an appropriate training company and you use technology to manage the administrative process, from registration to certificate.
Using software gives you an advantage since you can ensure from the beginning that you optimize all processes and that no time or money is wasted on tasks that could be automated. In one case study we’ve found that a professional training business that uses the above mentioned workflow saves 170 employee hours every month by automating this one process. This advantage resulted from the exercise of automating their most demanding administrative function - they can now consider how to expand the number of registrations they handle each month and so increase the benefit even more.
And then you have options in-between that are variations of one of these two extremes. An example is where you make use of workflows to automate your own business in order to become more competitive. Think of the highly unlikely situation where you use software to make a garden services business more competitive. Here you could look at the Billing for garden services workflow but the truth is that this is only the tip of the iceberg. There are many aspects within this business that could be optimized with software solutions.
The 4th Industrial Revolution is about understanding how you could optimize every business with the aid of software. As we have quoted before: “We believe that every industrial company will become a software company.” General Electric, CEO Jeffrey R. Immelt
A different option that is another variation of one of the two extremes.
Here, for example, you can take the two workflows Tutor request and Tutor feedback and set it up as an App in your Maker account. You then sell these solutions to different schools on a month-to-month basis. You collect the fees from each school. You can even consider asking a school to pay a little less than Kotive’s monthly pricing model because you’re able to sign-up various schools to use the same App. This is an example where you get residual income; once you have made the sale you’re not working continually to receive the monthly payments and you are free to duplicate the same model to get more customers in numerous industries with numerous workflow Apps.
The calculations for the Tutor App example
You get 10 schools as customers for your Tutor App and each school has a maximum of 10 tutors. You choose Kotive's Premium pricing plan that gives you a total of 100 users & 10 organizations/teams. It costs $329/month*.
You resell the solution to each school for $70/month. In total you make $700/month for 10 schools. A profit of $371/month (112% markup).
If your customer (school) decided to build their own Tutor App in Kotive and get their own account they would need at least the Smallbiz pricing plan costing them $109/month. You are saving them $39/month.
* Pricing plans subject to change.
In conclusion, I would not limit myself to only one option, but I will let the customer’s situation determine what I offer. Small businesses that desperately need a solution but do not have much money might lean more towards option one and so on.
How do I start to get customers? Where do I begin?
Keep in mind that my target market is mainly small businesses (10 - 50 employees). They are often overwhelmed with the administrative burden but do not know that there are software solutions that can ease the pain of this burden for them. And when they are desperate enough to start looking for software solutions, they do not know where to start looking and often end up with a friend of a friend who tries to hack a solution together in Excel or Access. 😜
With this in mind you will know that your customers will not likely find you on the Internet so you will need to find them. You can still try to find customers remotely by joining and becoming active in small business online forums but you also need a more direct approach.
The first approach
Start to work with your immediate circle of family and friends and set up meetings with the ones you think might need a solution to streamline and automate some administrative burden. Look at the five benefits listed at the top of Kotive’s home page - these are the benefits you would want to communicate to your potential customers.
The Business Process Savings Calculator is a very useful tool in helping customers calculate the value of automating their repetitive tasks.
The first meeting will be an exploratory discussion to find the most pressing administrative need of the company. (Workflows are often described by our customers as a virtual personal assistant.) To take the initial pressure off yourself, tell the customer that you first want to understand their unique administrative or workflow challenges, and then you will come back when you have found a worthwhile solution for them.
Set out to understand the flow of the tasks, the end goal, the people involved in the different tasks, and business rules or conditions that are applicable in the process. In preparation for such a conversation you can read the useful Field Guide to Agile Workflow Design.
After the meeting you can go home and try to figure out how to build the solution and whether you can do it with Kotive. Sometimes they need a solution that is outside of Kotive that you might not be able to provide.
After you have done your homework, schedule a follow-up meeting with a “1st round or draft” workflow to take to the customer and so take the process further.
Lastly, always ask if they know someone else who might also find value in your services. Always try to get a referral a.s.a.p. With referrals you can double your network of contacts – one of your most valuable resources.
The second approach
In this approach you go outside of your own network of contacts and start with “cold calling”. Cold calling is the attempt to get business from potential customers who have had no prior contact with you. The conversion rate for cold calling is much lower than when you connect with people you know or have been referred to. The challenge with cold calling is also that you have to work very hard to avoid being seen as a scammer. You have to “dig deep” to understand the potential customer and target your communication around their reality.
An example is to take the workshop registration workflow solution and start to search for the contact details of small businesses that do event coordination and planning. Try to get as many businesses’ contact details in preparation, to send a series of outbound sales (cold) emails.
You might want to read the post on email writing tips for cold emails before starting with this. You definitely do not want to send out emails that people consider to be spam!
The aim of your outbound emails is to get an online demo meeting with the customer where you can shortly explain the solution to them, see how it matches their needs and how your solution might need to be adapted.
Basically the cold email is a way to start the sales conversation. See Dan Ostlund’s series on sales – it has very important information you need to understand and apply.
I find it difficult to start because I feel like there is so much more that I don’t know. I don’t know the limitations of Kotive. For example, what if a customer needs some really complicated solutions, can Kotive do it?
By starting discussions with friends, you allow yourself to start in a safe environment and so gradually find your feet in understanding workflows and how Kotive can be used to solve workflow-related challenges. Always set up a meeting as an initial discussion to understand the customer’s problem, then go away, think about their needs and see if, and how, you can solve it and add value to their business. Do not make the mistake to “over promise” in your first meeting. Rather play it safe, go and do your homework, come back and outperform the customer’s expectations.
You can have a look at the different solutions that have already been built with Kotive. This will help you to get an idea of what can be done.
These solutions are “projects” of Kotive Makers. For each solution there is a blog post (a narrative that describes the pain and the relief the solution can bring) as well as a detailed guide that explains every step of the solution including the business logic (think of it as the specification page of the solution).
The email course on how to start a business with Kotive will adequately train you in what can be done with Kotive. If you work through the detailed guides of some of the solutions you will get an idea of what Kotive is capable of.
And lastly, we would gladly assist you when you start to build a solution and run into any trouble. You can also ask if something is unclear to you in the way the solutions have been built.
In our experience people struggle more to get the logical flow of tasks as they occur in real-life, than to build it with Kotive.
How do I get paid?
Depending on which option you took as set out in the answer to question one, you will have different payment options available to you:
Charge a once-off fee for consulting & designing workflows (option 1): you will agree beforehand with the customer on what the deliverables will be, when you’ll deliver for them and what the payment will be. It is advisable to charge a 50% deposit fee before you start and the remained after the customer has seen the finished product. You invoice the customer directly for consulting and designing and gets paid into your own account. Since the customer will pay Kotive on a monthly basis, they need to signup for their own Kotive account and then make you a Maker in their account.
Charge monthly support/admin fees. (option 2)
Collect the money on your customers’ behalf, take your precentage commission and pay Kotive directly. (option 4)
What if my customers find out about Kotive? Will I not lose my business?
Our main aim is to make Kotive known to the market. Yet, businesses regularly ask us to build Kotive solutions for them and they are willing to pay us for it. There is definitely a market out there that needs workflow solutions but will not build it themselves even if they know about a DIY solution such as Kotive. They choose to remain focussed on their core business. Although adapting existing workflows is even easier than building them, these customers also keep coming back to us to make further changes to their workflows. It seems that during the process of using and working with a workflow they start to discover new and better flows of work.
Lastly, when you consider the other extreme of the continuum (in answer to the first question) it is self-evident that Kotive is, as far as the customer is concerned, only a small portion of the service you are providing them with.Found this post useful? Help us spread the word...
Questions and answers to guide you on how to position yourself as a workflow solution provider and earn recurring revenue.