Productized Service Business: From Zero to 7-Figure ARR as a Digital Nomad

This week’s visitor started his aspect hustle with the aim of getting simply 10 purchasers in 90 days. 4 years later, he’s now the proud proprietor of a 7-figure enterprise!

Productized Service Business: From Zero to 7-Figure ARR as a Digital Nomad

Justin Tan is a Facet Hustle Present listener who was impressed by Russ Perry’s story in Episode 248 of how he started Design Pickle.

In 2014, Russ was working a inventive company when he began to hate the whole lot about it. Not desirous to really feel like a prisoner of his personal creation, he sought out a brand new enterprise mannequin, one which provided dependable, reasonably priced, and scalable inventive work at a flat fee.

Justin took inspiration from that mannequin and utilized it to video enhancing. And so, Video Husky was born.

Justin’s story is considered one of many examples of what can occur once you mix a demonstrable enterprise mannequin with a novel thought and an untapped market.

Tune in to The Facet Hustle Present interview to listen to how:

  • Justin discovered his first purchasers
  • he scaled right into a full-time enterprise
  • he made the final word choice to step away

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The Inspiration for Beginning Video Husky

4 years in the past, Justin was simply working Fb advertisements for numerous companies in Hong Kong.

He seen that he saved encountering the identical downside: Purchasers couldn’t produce ok movies for him and his group to advertise.

Realizing this, Justin took inspiration from Design Pickle’s enterprise mannequin, which he had heard about from a earlier Facet Hustle Present episode, and utilized that to video enhancing.

He introduced on a buddy who was a talented video editor and set the aim of getting 10 purchasers in 90 days.

“In my thoughts, if we might get there, that will validate it.”

Touchdown the First 10 Clients

However touchdown these 10 purchasers wasn’t simple.

On the 86-day mark, Justin had solely 4 purchasers, 3 of which got here from his earlier Fb advert enterprise.

Sadly, none of them have been match.

With solely 4 days left earlier than the deadline, Justin determined to publish a particular provide in a private forum for entrepreneurs.

It turned out {that a} good variety of the group’s members have been YouTubers who have been fighting video enhancing.

And people who weren’t YouTubers knew individuals who have been.

That obtained the ball rolling, a lot in order that Justin went from 4 to 10 purchasers within the run-up to the deadline.

In actual fact, the sudden demand was so overwhelming that he needed to convey on one other video editor to assist handle their new purchasers.

Pricing a Video Enhancing Service

On the time, Video Husky actually solely had one competitor: Vidchops.

Vidchops has an analogous enterprise mannequin in that it costs purchasers a flat fee to make higher movies, develop their companies, and save time.

Nevertheless, the shortage of rivals raised the query of, how a lot can we cost for this?

Once more, Justin determined to look to Design Pickle for inspiration.

Design Pickle was charging round $370 monthly for its providers on the time. “I figured video enhancing is the next worth,” Justin mentioned.

And so, he set Video Husky’s beginning worth at $495 monthly.

At the moment, Video Husky has two packages: the starter “Pom” plan at $549 monthly and the superior “Eskimo” plan at $749 monthly.

However these numbers didn’t seem out of skinny air.

In accordance with Justin, he needed to take loads of issues into consideration when setting costs, corresponding to the dimensions of the movies, the time it takes to edit a video, the editors’ talent degree, and extra.

Accounting for these variables was additionally necessary in figuring out whether or not editors might do duties on a sustainable and repeated foundation.

Instruments and Tech

Justin makes use of three core instruments in his enterprise. The instruments he makes use of are:

  • Wrike – That is the undertaking administration platform Justin and his group of editors, account managers, and buyer success brokers use.
  • Stripe – That is the software program that Justin makes use of to course of funds from purchasers.
  • Microsoft Teams – That is the platform Justin and his group use for each inside and exterior communication.

Challenges of Scaling Right into a Full-Time Enterprise

Turning a aspect hustle right into a full-time enterprise isn’t any stroll within the park.

However for Justin, scaling was made much more troublesome by the truth that he himself wasn’t a video editor.

“I don’t know what’s exhausting and I don’t know what’s simple.”

Not all movies require the identical quantity of talent degree to edit. Some editors are additionally higher suited to work on some movies than others.

Resulting from his lack of knowledge in video enhancing, Justin struggled to match the appropriate video to the appropriate editor.

“I simply saved on throwing movies and purchasers to our editors and hoping it will all work out,” he defined.

However he would later come to seek out that it’s higher to have editors construct relationships with their purchasers by having them work with the identical purchasers.

That manner, they get accustomed to the purchasers’ desires and the way they will greatest ship that.

How COVID-19 Affected Video Husky

As was the case with many companies worldwide, the COVID-19 pandemic hit Video Husky exhausting.

The corporate misplaced a number of purchasers at a time when it had 40 to 50 editors, successfully placing them within the purple.

“There have been a few months the place it was not fairly,” Justin mentioned.

However he discovered a silver lining in that the pandemic compelled him to reassess how he ran his enterprise. In the long run, he realized he wanted to present it a greater construction.

To try this, Justin labored with an organization known as CleverProfits, which helped him undergo his enterprise’s bills.

To him, that have was eye-opening. He realized he was working Video Husky with a marketer’s mindset, not an proprietor’s.

To be a fully-fledged enterprise proprietor, he needed to perceive the numbers, work out the unit economics of his enterprise, what gross margin regarded like for a productized service, and way more.

Deciding to Step Away

Regardless of the expansion and success that Video Husky steadily loved through the years, Justin discovered himself feeling burnt out.

By the point 2021 got here round, he felt annoyed and disgruntled. “I wasn’t paying consideration. My eye was off the ball.”

Realizing his shortcomings — one thing that’s uncommon for founders — Justin sought the recommendation of his entrepreneurial coach, Taylor Pearson.

Associated: Taylor Pearson on The Side Hustle

Working with Taylor made Justin notice that his position as CEO of Video Husky wasn’t proper for him anymore.

He was left with three choices:

  • Promote the enterprise
  • Work within the enterprise and receives a commission some huge cash
  • Rent a common supervisor and get an affordable quantity of dividends

He selected the third possibility, having acknowledged that:

  • he not associated to their purchasers
  • he didn’t benefit from the every day work of being a CEO
  • another person is perhaps a greater match for the position than he’s

Surprises Alongside the Manner

Wanting again at his four-year stint as founder, supervisor, and CEO of Video Husky, Justin recalled two stunning classes alongside the way in which.

One took place from stumbling on a YouTuber who taught folks find out how to be a mermaid and monetized that by promoting mermaid tail costumes.

“If she will be able to do that, you’ll be able to construct a enterprise off of something,” Justin mentioned.

Justin additionally got here to seek out that their greatest shopper was value much more than their worst shopper.

The actually good purchasers accounted for 70% of Video Husky’s income, which represents round 80% of the corporate’s revenue.

In distinction, the actually dangerous purchasers weren’t solely unprofitable, however additionally they actively misplaced the corporate cash.

“There’s one thing to be mentioned about doubling down in your greatest purchasers.”

What’s Subsequent?

Since stepping away from Video Husky, Justin has taken on a consultant role for different productized service companies.

As a part-time marketing consultant, he helps companies scale up by way of each income and the dimensions of their group.

Justin has additionally been having fun with dwelling a nomadic life together with his girlfriend, Alyssa Medway.

Alyssa presents her grant writing expertise to not-for-profit organizations and community-minded companies which might be looking for funding to ship impactful tasks.

Justin’s #1 Tip for Facet Hustle Nation

In case you can afford to, rent a digital assistant.

Obtain Your Free Bonus: 101 Service Enterprise Concepts

101 Service Enterprise Concepts

Assured inspiration on your subsequent revenue stream!

Enter your e-mail to obtain the total record now:

You may additionally obtain my greatest aspect hustle suggestions and weekly-ish publication. Choose-out anytime.

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