How We Make $7.5K/Month With A Productized Service
Hello! Who are you and what business did you start?
Hello Readers, I am Junaid Ansari, and with Amin Memon, I have co-founded Draftss.com which is a productized graphic design & frontend code service on subscription starting from just $89/week.
With Draftss you can get all kinds of design services from branding, logo, illustrations, landing pages, app UX/UI, t-shirts, packaging, ads, pitch decks, social media graphics & just about everything else within graphics. Along with designing we also provide frontend code in HTML/CSS or on WordPress using builders like Elementor, Divi, Beaver, Oxygen, WPBakery, Visual Composer, and several other independent builders like Webflow, Unbounce, etc.
One of the best propositions that our customers love at Draftss is that they can add us to their team in Slack, Trello, Airtable, Asana, Notion, Zeplin, Jira board, Git, etc. If there is a tool that we haven’t supported officially, we even go ahead to check it out if it is easy to manage and integrate it within our list of tools. We even support IMs like WhatsApp and Telegram if you prefer it over any other tool.
We started by providing only graphics initially. Soon after the launch, a majority of our customers requested to code their landing pages too. Since we also had a tech background we started providing a one-stop solution to both design & code. So we added WordPress & HTML/CSS to our list of services.
Based on customer requests, we have been forever upgrading our arsenal whether it is about supporting a variety of integrations, supporting design software, a wide range of WordPress builders, etc. Lately, we have been receiving a lot of Shopify & WooCommerce requests. Soon we will be adding WooCommerce to our list of supportable services.
In 2019, we made $66,000 ARR serving 54 clients for whom we created 8000+ designs & coding 100+ pages. In 2020, we have kept our focus on automation as our primary objective toward Draftss. Last month in July 2020, we hit a $9.6k MRR.
What's your backstory and how did you come up with the idea?
We have been running a design agency for the past 10 years as a side business. After gaining inspiration from some of our competitors in this domain providing a productized service, we came up with an idea for an even better process that is more optimal and efficient bringing out better results at a more affordable cost comparatively.
The most effective method we tried for our validation was initiating a conversation with every person who visited our website to understand more about what they were looking for and what would make Draftss an ideal provider for their needs.
We wanted to productize the design and code service domain, where a design team is like a product subscription. You buy a Design or Code subscription and equip yourself with a design or/and development team that can get everything done for you. Subscribe when you require projects to be completed, unsubscribe once you are done.
We quickly set up a minimal landing page to validate this idea. We used a decent portfolio from our past works and pushed the prototype website to live within a week. We first published a Show IH post on IndieHackers and hurray! We received our first 4 customers. We had added the Experiment Plan at $29/per task assuming that our customer would want to try our services first and then opt for the Monthly Package.
Take us through the process of designing, prototyping, and manufacturing your first product.
Since we were already running a design agency, we had design resources if we got any customers interested in our proposition. We mocked up a landing page as an MVP to try it out. Our first biggest pain was finding the right payment processor. We shortlisted a few payment processors.
Paddle didn’t support productized service. Stripe was not available in our country. So we went ahead with 2Checkout. 2CO was simple to set up, but painful customer support and their documentation were straight from hell. But we had no other choice. It was only 6 months back when we got into the Stripe Beta Program for our Country and we finally made the switch to Stripe.
So the overall cost to setup was something like: Domain ($10) + Landing Page (Made our own) + Contact Form + 2checkout ($0 setup fees) + Tawkto (Free) + Hosting ($15) + G-suite Email ($10) and we were ready with our MVP product.
Initially, we wanted a dashboard for our customers but it was a lot of time investment to start with, so we used third-party tools to manage our projects. Over time, we improvised our landing page, put more processes in place, started better onboarding, added more great designers to make the productize service better.
Gradually we started offering more services, like HTML/CSS, WordPress, Webflow, Emailers, onsite-and-remote team to a completely remote team.
Since the inception, we made the dashboard thrice but didn’t like the outcome so we ditched it and recreated it from scratch. We are almost done with our final version of the dashboard and it should be soon out. We are considering to open-source the dashboard for everyone to use it freely.
Describe the process of launching the business.
To test the feasibility of the idea, we created the MVP and presented it in front of IndieHackers from which we got 4 customers. Next, we got hunted on ProductHunt which led to further validation of such a service and voila! In 3-5 days, we were able to convert 11 customers. By the end of the first month, we made around 3.3k MRR.
The most effective method we tried for our validation was initiating a conversation with every person who visited our website to understand more about what they were looking for and what would make Draftss an ideal provider for their needs. Based on feedback we improvised our landing page further, edited our FAQs, added more designs to our portfolio, optimized images for faster load time, and many other UX/UI changes to make the landing page more beautiful and crisp.
We re-launched our services on several listing websites and blogs. The traffic picked up and we were consistently getting users who were interested in our services. At this stage, we received extensive requests from early users who were interested to try out our services.
Since launch, what has worked to attract and retain customers?
During the launch phase, we offered a $29 plan where people can test 1 task before subscribing for a longer duration plan. We noticed very few people subscribed for the $29 Experiment Plan (2-3 customers in total) and others directly opted for monthly plans.
It took a few months to appear on the front page of Google and we started ranking in 3-6 positions for our desired niche keywords. People loved our landing page and we have been constantly optimizing it based on heatmap analytics, customer feedback & visitor engagement. At present most of our customers reach out to us organically via SEO or by reference from our past customers.
Productized services usually have high churn rates. Depending on the type of service you provide. Consider offering an exclusive annual subscription to clients with huge discounts for better lifetime value.
There are 3 main categories of customers who use our services:
The first category and the most popular users of our services are founders who want to start something new for which they require a logo, a brand new website, and some marketing materials to promote their ads and validate their MVP. Once their initial requirements are done, these customers churn and come back to us in the future when they require more designs, again for a short period before churning again.
The second set of customers are professionals from senior management of a startup who require creatives from time to time. Such a set of customers subscribe for anywhere between 3-6 months and churn once they exhaust all their creative requirements until they require once again.
The third set of customers are enterprise clients that stay subscribed annually. Such customers have infrequent requirements so we create special customized annual plans for these customers based on their needs.
The churn rate in our service is pretty high, maybe due to the type of customers who are using our services. People subscribe to our services, get their desired results, and unsubscribe because they have no further requirements.
A significant proportion of this churn is a happy churn. When happy churn customers have any requirements in the future, they subscribe once again and get their tasks done. We are still testing out how to make the most out of this situation and retain the happy churn customers by offering significantly discounted annual subscriptions so they can stick with us for as long as possible.
How are you doing today and what does the future look like?
After almost 2 years since the launch, we have finally arrived at a stage where the internal process is completely automated in our service business. Currently, founders only do a handful of things like, hiring the talents, resolving customer grievances, network marketing to get customers, consider service upgrades based on customer feedback, all of which we are soon going to automate too.
From Day 1 we have been profitable. There were only setup costs and operational costs that were balanced with the customers signing up and gradually we stopped the agency model and pivoted into a complete subscriber model.
A lot of our competitor’s primary source of getting customers via Ads. We just started testing paid ads and will soon invest heavily to find out if this leads to a significant increase in customer acquisition or not.
At present, almost 70% of our customers are organic and the remaining 30% of our customers are past customers who signed up with us again or come to know about Draftss via network marketing on various social platforms like IndieHackers, Reddit, Facebook Groups, HackerNews, etc.
Our operations are mostly related to serving the design & code customers.* *The core idea of our process is to ensure that each design that is created is done by a designer who does it best. Normally, other companies in a similar space will have founders doing the designs themselves or assign a designer who takes care of all kinds of tasks that a client requests.
We believe that one designer cannot do the best UX/UI, the best Illustrations, the best logo design, and deliver the best results in every category. We believe that each designer has its core competency and we push them to bring out the best results within their competencies.
We look forward to a company where everything is automated and the founders do not play a role in the operations of the company and only focus on scaling it and keeping a birds-eye view on the overall venture.
Through starting the business, have you learned anything particularly helpful or advantageous?
The productized service model seems very lucrative since the customer brings in a good amount of revenue, but a productized service is hard. You get lots of varied types of customers with different demands that you have not positioned yourself for. Some customers will end up falling in love with your service some would hate you to hell.
When starting a productized service business make sure you have a kickass team. The better the team the better your service will be and naturally, happier customers. Word of mouth is a really strong form of marketing. Make sure you give your best to the customers. They are going to talk about you in their social circle.
If you are a solo person managing your entire productized business, it isn’t a business, just a different form of freelancing. Get into productized service if you are all up for building a team and automating the entire process that works without you.
Productized services usually have high churn rates. Depending on the type of service you provide. I believe content writing and similar services that are recurring will have less churn. Less recurring problems have a high churn. Consider offering an exclusive annual subscription to clients with huge discounts for better LTV.
What platform/tools do you use for your business?
Here is the list of products & services we use at Draftss:
- Stripe & 2Checkout - For Payments
- ChartMogul - Subscription Analytics
- FirstPromoter - Affiliate Management
- TawkTo - Free Live Chat
- HelloBar - Exit-Intent Popup
- UberSuggest Chrome Extension - Keyword Stats directly on Google!
- OpalStack - Best Python/Django Hosting
- Snov Mail Tracker - Nice & Free Email Tracking
- Google Meet - Video Calling
- Bubbles Chrome Extension - Providing Feedback on Website
- Google Analytics - Website Analytics
- Hotjar - Session Replays & Heat Map Analytics
- Google Forms - Using it to survey & collect important details when hiring
- Loom - Video Recording. Majorly for explaining tasks
- Edit This Chrome Extension - To quickly edit the text & see how a certain copy would look/feel
- Web Whatsapp - Communication
- Voxer - Better IM-like Voice Communication
- Unsplash / Pexels - Free Stock
- MailJet - Promotional Emails
- DownNotifier - Website Downtime Alert
- PorkBun - Domain
- Ngrok - Local Host Tunneling
- SEMRush - SEO Analytics and Link Building Outreach
- Growth Runner Daily Google Analytics Report on Whatsapp
What have been the most influential books, podcasts, or other resources?
Recently, I loved watching the Deal or Bust by Nathan Latka. Very insightful, lots to learn, and a great watch. Some nice popcorn time for all Founders. Nathan Latka is a killer host!
Advice for other entrepreneurs who want to get started or are just starting?
Don’t spend too much time perfecting everything. It’s never going to be ‘perfect’. It will improve throughout time-based on how people interact with your product.
There are so many no-code tools available to get a landing page done for you. Notion, Carrd, LaunchACo, etc, use any of them, put your idea on the landing page, put a pricing tab, a contact form, and live chat client. Go tell the world about your product, talk with them, and see if they are interested to try it out. If they are! There you go, now you can go ahead and start building your product better.
Talk to your customers. In the end, your customers are the people who will keep your product afloat, give your vision a direction & help improve your product to make it more convenient for them. We still have a few customers from our first 10 customers who are signed up with Draftss to date.
Where can we go to learn more?
- Website
- Twitter: Junaid Ansari | Amin Memon
- IndieHackers: Draftss
- Email: [email protected] | [email protected]
If you have any questions or comments, drop a comment below!
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