#2 š” Shoestring Club - Testing, testing, 1-2-3
How to build and operate profitable digital businesses from scratch
Welcome back! I had a lot of fun putting my virtual pen to paper in the last issue introducing Shoestring Club and outlining the opportunity to create digital businesses quickly and (relatively) easily.
This week I want to dive into why productised services are a great starting point for those looking to start their first digital business and how you might test an idea out (before building anything or investing too much time). Iāve enjoyed going through this process for the last few days and actually building a project just for Shoestring Club (just like I promised) to act as a practical example for yāall š¤ .
š¦ Productised Services
So what is a āProductised Serviceā and why do I think they are a great place to start for a digital business? Well productised services are basically a service - say career counselling or web design - that are then taken and put into a neat little product shape. The idea being that by standardising your service offering you simplify your business; making it easier to run and communicate value to customers.
Some good examples of this might be a cyber security audit of a website that has a report with recommendations (Y) for a fixed price (X). Rather than having a number of variables the customer knows they will be paying X and getting Y.
Now the reason why productised services are a good first step are two fold:
Usually you have a skill or some knowledge you can package up into a neat little box
Having something in the market allows you to learn more about the problem space
Building a productised services may still seem hard but basically you need a few things for it to work:
A big enough market - meaning that it might not be huge but that there are enough people with this problem to make it worth your time
A growing or at least steady market - youād want to see more people with the problem over time otherwise youāll end up in a fast race to the bottom on pricing
An evergreen problem - something that either has a new cohort of people with the problem or the problem is recurring and a mixture of both is the sweet spot
A repeatable process with a finite number of options and pathways - you want to create a āproductised serviceā not just a service
Know someone who might be interested in learning more? Share Shoestring Club with them!
š Our Worked Example - Stackswap
I was a pretty quick to start using Substack - it was easy, quick to setup and addressed a lot of the issues that plagued creating a newsletter previously (having an official address as well as a nice āreply-toā email for starters).
However being largely in the free newsletter realm I wasnāt as aware of the impact that growing a paid newsletter on Substack could have on revenue - especially if you were looking to turn it into your main hustle.
Now donāt get me wrong a 10% charge really isnāt all that much when you look at the benefits that Substack brings but it is definitely a lot when you have other options at a fraction of the cost.
Enter Ghost - originally billed as a blogging platform meant to be an alternative to a bloated Wordpress ecosystem - theyāve now built out a feature set for newsletters that definitely rivals Substack.
ā Step 1 - The Problem
So what is exactly is the problem? Well as great as Ghost sounds it can be a little tricky to set up with self hosting and requires a bit of hunting around for instructions and leaning on some technical knowledge (they do have a hosted version that is easy as pie it just costs a little).
As well as this essential issue of not knowing how to set it up - people have loss aversion - so the idea of trying to shift to Ghost and having the potential to lose something (subscribers or content) due to a mistake in set up is a real barrier.
This may come across as a little weird given I am writing this newsletter on Substack myself but for many writers Ghost is simply a powerful alternative with a higher barrier to entry. Bottom line - you canāt really go wrong but if you need that extra 10% to make it work for you then Ghost is a better option.
š Step 2 - The Opportunity
With over 500,000 paying subscribers now reading Substack newsletters that means that there are a large number (and growing) of newsletters earning a chunk of subscription revenue. Many of these paid newsletters however will likely have dozens of subscribers rather than hundreds and thousands however as they grow the 10% that Substack takes (plus Stripe fees) will start to make more of a difference.
Even with dozens of subscribers that can equate to hundreds of dollars a year lost to the Substack platform that could be spent on coffee to fuel the writer or reinvest into their passion project. Luckily - as I pointed out earlier - you can self-host a Ghost newsletter site for ~$70 a year of fees and get the added benefit of being able to use PayPal as a payment provider if you are somewhere Stripe is not an option. Not to mention Ghost is much more extensible and allows you to create a website, blog and newsletter all in one under your own domain.
Taking a step back (you canāt take my consulting phrases away from me sorry) and looking at the broader things going on I see two big trends that mean this is an opportunity to invest time in (beside it being fun).
Newsletters are here to stay and if not newsletters ā content creators. With the growing number of tools and support for independent and small collectives of creators there has never been a better time to turn a passion for content into a serious income stream. So anything in this space is going to have some potential for upside and growth if executed well.
Tool stacks are popping up everywhere - not just in the creator economy - and many people will want to swap at some point. This is true for platforms in general as we see competition and niche solutions increasing - driving a need (or at least a desire) to swap your technology stack. So in this way I see opportunity to go beyond the original use case at some point and look at other high volume but also high friction stack swapping opportunities such as accounting platforms, ecommerce solutions, and even just website builders.
š” Step 3 - The Idea
So the idea is pretty simple - setup/migration service for self hosted Ghost newsletters for a fixed fee to get people set up and going quickly and with piece of mind. Yes - people can do it themselves by looking at the how-to guides but most of these are incomplete and if you have a slight deviation you need to do some hunting around for answers.
This requires a few things for me - the ability and knowledge to setup and migrate a newsletter to Ghost (done), a way to manage the workflows (will probably use emails and folders to start with), and a lead capture/payment solution (simple Carrd website and Stripe will do for now too).
Thatās it - not exactly the groundbreaking innovation you may have been thinking of but it works - I have a stepped out process I can follow for each customer which means I can outsource it and automate it with time. It is also niche enough that I can test it quickly, easily and cheaply!
š§Ŗ Step 4 - The Test
There are a multitude of ways you can test an idea but regardless of how you do it it is an essential step. Testing an idea without having to build your idea fully de-risks your choices and gives you a deeper understanding of what your solution should look like at launch. For some ideas like mine your test may actually be pretty close to your eventual launch idea (all I really need is a front end and some backend processes) and for others you may need to break up your idea and test multiple things.
To test an idea well I think you need to boil your idea down to the critical assumptions so you can develop an experiment for those. For example you might need to test whether people want information on that topic at all, whether they would buy something online rather than in-person, or whether your new product idea resonates.
For my idea my key critical assumptions are that:
People want to move from Substack to Ghost
People are willing to pay for help
In my opinion there is sufficient evidence points for my first critical assumption - people already move between them and there are a number of guides that have popped up (and a well liked and shared) to support that. I am fortunate that I donāt need to test this but this wonāt always be the case. Iāve also supplemented this with asking the question on Twitter and discussing it with newsletter writers currently on Substack.
The second one is whether people are willing to pay for help. The best way to test willingness to pay is to actually provide them with the option to - which is called a ādry walletā test. The added benefit of doing this with a productised service means I can still follow through with the service and bill them for it!
I needed a couple of things to build the test, a landing page, a domain (optional) and some copy.
Landing Page: I like using Carrd for landing pages - it is quick, easy to extend and has a bunch of integrations and tools that donāt require coding to set up. I used a template from the Carrd options, filled in the blanks and set up buttons for people to ābuyā my productised service (took me about 15 minutes).
Domain: I am one of those poor souls that buys a domain for my projects - old habits die hard. I went with stackswap.co to reference to Substack component but also because I wanted to play into the broader āstack swapā narrative I highlighted earlier.
Copy: I like writing and copywriting is something that I think is a skill entrepreneurs should work on - it helps with so many aspects of running a business from internal communications through to marketing.
There you have it! You can check out the finished test product here and Iāll publish some results in the next issue :)
š¢ Want to try running a side-project?
I keep coming across two types of people:
Makers like myself with ideas, building great little side-projects and then having too many but not wanting to let them go
People that might be studying or working full-time and are really interested in a side-project but might not feel ready to do something from scratch
So I am considering doing some matching for people to āapprenticeā under a maker for 3-6 months so they can learn a few things and get a feel for it before deciding to commit as a co-founder or go do their own thing!
This would be good for people from any sort of background (and remote first of course) to help round out skills/awareness as well as just build some confidence to get going.
Right now I have my own projects I will be opening up to this (but keeping it limited so I can mentor/coach the apprentice) but also looking for other makers that might keen to find an āapprenticeā that might turn out to be the best co-founder you ever had.
Know someone that might want to learn to be a founder by taking on an existing project or someone that has a project or two they would love to find a co-founder for? Let them know to get in touch with me!
š The status report
This past week has been a little more inward focused so movement has been small (and that is ok by me).
š Aesko
Things are largely ticking along with Aesko at the moment as I am wary that I donāt yet have my processes set up to deal with a large volume of orders (3PL is on the to-do list).
šŗ What I did
Testing out some affirmation posts to see what that does with engagement on social media
Physical welcome cards designed and printed for addition to orders going out to reinforce narrative
š² What happened
A few orders came in sporadically during the week (organically from Google of all places so I need to find out where from)
Got some great reviews from some of our early soft launch partners and a few glowing social media posts
š What I learned
Validated my initial assumptions around making the product locally - has supported a lot of positive customer conversations so far and I think this can be a really important factor for health and wellness companies as a whole
š” Stayy
šŗ What I did
Finally launched the partner program for Stayy that has a revenue share arrangement with select hosts, host coaches, property managers and platforms
š² What happened
Had our first partner onboarded for the partner program (validation!)
Received a few knock backs when going cold to property managers about the value proposition
Sitting at about 20 users now which is great from a testing/support point of view
š What I learned
Probably more a reminder than a lesson but consistent posting across your channels is just good business hygiene now - we felt like we have lost some traction on Instagram because of this so building a process to help with content generation now
May need to refine messaging and cold email approach to increase chances of success