1975 – Embracing AI and Productization: Future-Proofing Your B2B Services with Vecteris’ Eisha Armstrong

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1:05With us right now, it's Aisha Armstrong. Aisha, you are executive chairman and co-founder of Vectoris. You're found on the web at vectoris.com. But I think most people may know of you as the author of the books, Productize, a very popular book, Fearless, and the upcoming, the forthcoming book, Commercialize. Well, Aisha, it's great to have you. Oh, thank you, Josh. It's such a pleasure to be here. Back in 2021, I read Product Size. I loved it. And I'll share with you, Aisha. Listen, I'm with you. I think folks need this information, particularly if I am being empathic to the world of solutions providers, agencies.

1:52We work with a lot of agencies and consultants and coaches who may be offering, you know, larger ticket engagements. It's account based sales likely, you know, have ups and downs quite a bit. And product ties answers a lot of questions and I think provides a roadmap that might be exceptionally valuable for our friend listening to us. Aisha, would you mind maybe just sharing a little bit about your kind of your main thrust in the world and your impact? Yeah. So what I saw in the market was more and more professional services providers. So like you said, consultants, law firms, agency owners who wanted to get away from trading their time for money to selling their intellectual property.

2:40and how could they scale their business in a way that allowed them to have better margins and perhaps even increase the value of their business with maybe more recurring revenue, predictable revenue, things like that. And productization, when you take a service and you standardize it, perhaps you automate it using technology, you sell it based on value rather than time and materials, that is a great way to scale your business. And it's a great way to increase the valuation of your company. So that's what we saw was this increased interest in productization, but then not having the skill sets or the people who really had a product mindset to be able to do that successfully.

3:33And so it may seem easier said than done when we think about what it takes to productize and package up what has maybe been historically a very high touch, high attention service to an audience that demands it. How do we thread the needle on providing a solution that consumers or our potential clients want versus, you know, and I'll just put this objection out there. I think just offering courses alone might be a little challenging today. Yeah, that's a great, great question and observation, Josh. So, in fact, that's one of the big mistakes that we saw a lot of entrepreneurs, professional service firm leaders make when they try to productize is they create something that the market doesn't really need or want or is willing to pay money for.

4:29So one of the things that I like to talk about is does your product idea, does it solve an urgent and expensive customer problem? And if you can't articulate what is the urgent and expensive customer problem that your product is solving, then it may not be a great idea. And the other thing that we found is that there tends to be a lot of hesitancy, especially from professional services providers who are so used to showing these beautiful deliverables to their clients to kind of test half-baked ideas. But that is actually the best way, Josh, to test a product idea, put together a couple slides, maybe some wireframes before you really invest in development and get market feedback on it.

5:13So that's something that is a muscle that we try to build in organizations and entrepreneurs that we work with. Well, let's share maybe just a bit, Aisha, about how to get good market feedback, because there's certainly, I'd say, the way to get bad market feedback would just be, hey, I've been running a small boutique agency. And then you just pull your Facebook friends and say, should I do this? And I'm sharing this ridiculous, absurd way of doing this, because that's exactly what I did many, many years ago. And boy, do I wish I did not do it that way because you need real true product validation before you invest a lot of effort in here to make sure that this is something that the market is not just wants to support you, make you feel good about, but they're willing to give you money for.

6:07Exactly. Yes. Very good point. Yeah. So there are right ways and wrong ways to do market validation. Certainly, you want to start with understanding what are your customer problems. So not even talking about concept ideas yet, but validating, you know, what are their goals? What are the challenges in reaching those goals? What might the root causes be of those challenges? And what are they currently doing to address those challenges? And there's all great, you know, different ways to do that research and, you know, best practices on how to ask those questions. But the best way really, Josh, is to try to sell them something.

6:43And so you can mock things up. You can put up web pages, perhaps if it's something that can be sold via e-commerce. You could pitch them on being a beta customer, a paid beta customer, because if somebody will pay for a beta, it's a pretty good likelihood that there's some value there. and really kind of getting over that discomfort of this isn't developed yet. It's not fully baked. I don't actually have it built yet. Can I really try to go out and sell it? The answer is yes. And that is one of the best ways to validate that there's market appetite for it. Yeah. Aisha, can you maybe share some examples, particularly maybe folks that were kind of SMB, B2B world people and how they were able to identify an opportunity to create a product that was appropriate for their audiences.

7:38Yeah, yeah. And you mentioned training courses. So we were working with an innovation consulting firm and they worked with large Fortune 500, CPG, financial services type companies. And they had this great methodology for how they worked with their clients. and they wanted to create a training program where they could hopefully kind of asynchronous, you know, e-learning with a little bit of synchronous learning over Zoom. And they were going to go and develop it. And we said, how about we sell then build and go out and see if we can get 20 people for your inaugural class. And if you can, then that's a good indication that we should go ahead and at least do the first MVP version of what that training looked like.

8:25But they didn't spend an ounce of time on development until they had sold those first 20 seats for the class. And then they spaced it out. And between week zero and week one, they built the content for week one. They then recorded the week one training so that they'd at least have that video that they could use for later versions. Then they built week two in between week one and week two. So it was really kind of a build the ship while sailing in addition to not building until they'd sold those first 20 seats. And again, that can make a lot of people feel uncomfortable, especially for those of us who are perfectionists, but it's a great way to test.

9:03And they were very upfront with people about how they were doing it. This is not our finished version. This is our beta. So we're gonna give you a discount, but they were still charging the money for it. And again, that's helping them assess whether or not there's appetite for it. We've seen the same thing with software products. So especially IT services firms that we work with who perhaps have developers on staff, and they're always coming up with these great software products that they could be creating. And it's like, okay, whoa, whoa, whoa, before you go down the path and develop something, let's go out and see if some of your current clients might be willing to pay to co-develop it with you.

9:41And they're getting a big discount. Perhaps they get industry exclusivity for the first year, year and a half. They get to really put their fingerprints all over the product roadmap and really design it for their purposes, but they're funding that initial development. So not all of it is coming out of your pocket. And again, that's a great way to test, is there market interest in it? It's also a great way to get money in the door to start paying for development. Well, I'll share with you, Aisha, how we implemented Productize. And to be fair, I think we need a refresher because it was a few years ago.

10:16So it was kind of in the back of our brain, you know, kind of the key learnings from that. And we finally implemented late last year. And it was, you know, to provide the feedback. So the feedback that we were getting seemed to kind of move us in a certain direction. So again, I didn't want to spend a whole lot of time developing something that the market didn't want. So we did our validation, came up with a way where, you know, historically we've replaced, we work with a lot of B2B folks and we help them keep their sales schedules and their partner development schedules filled without having to do lead gen or ads or that sort of thing.

10:51But, you know, it involves leading with a lot of generosity, a lot of go-giver stuff, and it's been fairly high ticket. Like we have to charge about$4 ,000 a month to do what we do. So obviously in our total market, you know, there's 95 % of the population that we just were priced out of. We can't really work with. So we came up, it's like what we did in our instance, I'm sure you have some similar examples. We basically took the exact same system that our own pod coaches use to build, implement, and operate these systems for our clients. And we basically just opened up our playbook and we've done that at like one eighth the cost.

11:28So now we have a$4.97 a month solution. Now I wanna share with you, but you know, kind of my story here And then I'll share with you a couple of observations. We're very, very new in the market with this. So there's still a lot yet to come. But what I can tell you already, and I'm sure this is going to be something that you're going to love to talk about, is that when you have bigger clients and they get to the end of the life cycle or whatever reason, they decide that they're going to stop working with you. As an agency, when you lose a big client, you feel it really hard. Now, with the number of low-ticket clients we have, you know, it's like if a low-ticket client comes or goes, okay, that's fine, you know.

12:11But what's nice about that is that, you know, if there's someone listening to us, you're B2B right now, you're a consultant, coach, agency owner, B2B service provider, you're high-ticket, and you're sick of that up and down. You're sick of that instability. I think, Aisha, offering low-ticket solutions to kind of provide that cushion and that stable base. And again, I can speak for ourselves personally. Wow, am I grateful for that? Because we can count on that. And it's just you're spreading risk over a much larger pool. Yeah. No, that revenue diversification can be incredibly valuable. And I think it's a great strategy.

12:52and it's certainly one that we see a lot of organizations do, which is how can we take what we're currently doing that costs a lot of money and offer it to a more price-sensitive segment. The problem that we see with this and just kind of the cautionary tale here is, and it's why we're writing this new book, Commercialized, it's coming out in the fall, is that a more price-sensitive market segment is likely one that you're not currently targeting. So what we see is organizations then underestimate the effort that is going to be required in order to reach and sell that more price sensitive segment.

13:34And they may also underestimate the customer success investment they have to make on the back end to retain those clients. Now, I know it's a lower price point, but the way that you get a great flywheel here is not through selling, you know, and then churning, but it's through selling and retaining those lower price point customers. So those are just two watchouts, I guess, that I would say are important is if you're going after a new market segment, make sure in your business case, you're thinking about how you're going to market and sell to them because you're probably not doing that now. And then second, what type of investment do you need to make in customer success to retain them long term?

14:15It's absolutely true. So when we started emailing our list, we saw that by and large, our list wasn't necessarily interested in that. They were more of a crowd that, you know, again, they just want it done for them. They don't want to be scrappy and DIY it and that sort of thing. So that you're absolutely right. Right. You know, the audience is going to be a little bit different. You know, and are there any other? Man, those are really great. I agree. I'd say that the two kind of warning signs that you pointed out are probably accurate to our experience. And yes, product development took us twice as long as we thought it would.

14:59Because all we thought was, shoot, all we're doing is just taking our internal stuff and just, you know, providing a podcast in a box and providing this in a box. And no, we found out that to provide that for a noob audience was going to require a lot more handholding, right? We've built the IKEA furniture dozens of times to our brand new customer. Now, at that lower price point, they're having to build that piece of furniture for the very first time. So they're going to need a pretty handy-dandy menu. Any other, are there any, you know, between the time that Productize came out, And again, I know you've got additional books that have hit the market since then, but are there any other addendums or any other maybe updates that you would make today versus what you were talking about when the book originally came out a number of years ago?

15:46Totally. I mean, Gen AI was not on our radar. And I tell you, Josh, that has just really spiked demand for interest in productization because a lot of the professional services providers that we work with are realizing that generative AI can do a lot of the things that they used to do and that their team perhaps is doing. So productization is not just creating a new product for a new market, but it's also starting with how can you standardize and automate what you're already doing for clients? The client experience may still be the same, but you're just doing it more efficiently because it's standardized and automated.

16:25And Gen.AI has created the occasion to really go back and look quite, quite carefully at what can be automated using this technology. And then the second thing is it should be giving providers more time and information to really up-level what they're doing. So improve the quality of their deliverables or perhaps start to go after customer problems they couldn't previously solve. So it's an opportunity for innovation and new solution development. And then the last thing I'll say is that it's a competitive threat. So we know, based on our work, based on our research, that our core client base is being disrupted by people who are using this technology more effectively than they are.

17:14So if you're not already thinking about it, you're behind. Oh, totally. Yeah, and I'll say, too, that there is the conversations that we had with ChatGPT is the platform that we used are probably like if I were to take, you know, kind of like the two or three main threads that we worked with or the conversations, they're probably about book length. in terms of like, you know, and we really ideated hard. We really, really, and we do a lot of pushback. Don't just accept the default, you know, answers to questions that you get, but you really have to use it, I'd say, as more of a, you know, kind of a mind mapping process.

17:58You know, the default output is not necessarily the right answer, but it can help the humans within the organization that truly know the market or truly know your superpowers get closer much faster through the help of, you know, kind of this enabled guidance toward getting to that point of productizing in this case. Yeah, yeah. And it's trainable. So you initially think of it as kind of a not so bright intern or new college graduate. But if you're investing in training it, you can rapidly upscale it to do the work that you have people doing right now, for better or for worse. All right. So Aisha, your new book that's, again, I think it's not coming out till the end of the year.

18:43Is that right? It's coming out in September this fall. September. Well, then that's pretty close, especially based on when this episode releases. And it's called Commercialize. Give us a sneak preview of what Commercialize is about. Yeah. So we noticed, as I alluded to earlier, that a lot of entrepreneurs, professional services providers were underinvesting in the go-to-market of their new products. Yeah. And they didn't fully appreciate how difficult it might be to market and sell a product versus marketing and selling a service. So what we've done with commercialization is really look at all the steps in the go-to-market process from selecting your target markets, your pricing, your packaging, your messaging, your marketing tactics, and your sales channel.

19:29All of those key decisions that you have to make as a leader in order for your new product that you've developed, you've spent all this time developing it, in order for it to hit your goals. So it was one chapter in product ties. It's a whole book now. Well, I just joined the street team. I'm excited for it because I think that, again, I absolutely agree. That's a huge part of this. It's not a build it and they will come. I mean, as much as gurus might tell you otherwise, it is a lot of work. too. But that said, if you can get there and open up and truly start serving that new market, it really is exciting.

20:09Aisha, your website is vectoris.com, V-E-C-T-E-R-I-S to our friend listening. Just click around in your podcast app, open up where we've got the information or the notes for this episode. We've got a direct link to that. And I know that you've got some resources on your website. Aisha, do you mind sharing maybe next steps from this podcast conversation that our friend can go to? Yeah, so we have a great section, a knowledge share section where we have a lot of articles and tools that people can download to help them think about what their productization opportunities might be. Or if they have some product ideas, what are the next steps to really do that market validation?

20:47How do you ask these questions well to test it? How do you invite your clients in to co-create with you? And then what does successful go-to-market look like? So articles and tools, lots of things on our website. please feel free to download those. Yeah. Do you also offer services then that you can work with folks? We do. We do. So we have our own product. We've drunk our own champagne and it's called the Productize Pathway. And it's a year long program that we take entrepreneurs and larger firms through to help them build productization capabilities. So it could be starting with what's your productization strategy.

21:24It could be testing and developing a couple of new ideas, or it could be really refining and taking existing products to the next level. I love it. All right. Well, listen, Aisha Armstrong, executive chairman and co-founder of Vectoris. Your website is vectoris.com. And to a friend that's listening, listen, you may know Aisha's work already. Productize is in Amazon and everywhere. I read it back in 2021. Your other book is called Fearless. And the new book upcoming is called Commercialize, which is perfect for the market. Aisha Armstrong, thank you so much for joining us. Oh, it's my pleasure, Josh.

22:05Have a great day.

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