Which business models provide fastest return?

[Steve Samuels]

Hi All,

I'd like to start by saying that I'm not trying to get something for nothing!

I run a small IoT engineering company, we are slowly growing, but currently we are completely service based. We would like to start transitioning to product and SaaS offerings. Basically, anything that we can get a slightly more passive, longer term income from, rather that a constant stream of development projects.

We are currently at the point where my whole team doesn't need to be working on client projects for us to break even, and we have enough working capital to focus on some internal projects that aren't immediately profitable.

So, what I'm trying to decide is where we should best focus our effort to try and generate some products/subscription service offering to generate a little extra recurring revenue. I'm not expecting to come up with something that makes us 10's of £K's per month right away, but perhaps something that we could produce over a 6 month period and get generating £1-2K/month, just to free up some capacity and make us slightly less dependent on client projects to cover 100% of our costs.

I don't expect you to give me your product ideas, but any experience of what models can be developed and marketed in say 3-6 months and start generating some recurring revenue.

Our main skills are in developing 'smart' or IoT products. Developing electronics, web applications, AI and machine learning systems, etc.

We have a long list of 'physical' product ideas that we'd like to work on, but I don't see any of these taking less than 1 year to develop and take to market. We've been looking at developing 'Intelligent' plugins for popular web applications, such as better product recommendation systems for Shopify, etc. The thought being we could develop this relatively quickly, there is an active marketplace of people who pay for such plugins, and they result in monthly monies!

Hopefully I've made my question clear. If anyone has any experience, insight or suggestions about what sorts of things we could explore to make the most of the fortunate situation that we are currently in, that would be greatly appreciated.

Thanks all!
Steve

 

[fisicx]

I build Wordpress plugins and make money with subscription upgrades. And there is a whole load of paid for extensions and plugins for most platforms. So yes, there is a marketplace for premium products.

Example: https://woocommerce.com/product-category/woocommerce-extensions/

 

[Steve Samuels]

Thanks for the response. How quickly do you find you start getting customers? I imagine there is quite a lot of competition for wordpress, is it hard to stand out from the crowd in this space?

 

[fisicx]

Find a niche. If you can provide something that is poorly supported you can start earning money within days of launch.

People don't want IoT or any other hip acronym. All they want is a solution to a problem. For example: a booking system that integrates with AirBnB, Tripadvisor, hotels.com and so on. You publish a free plugin with one or two integrations and charge for all the rest.

Or you offer a free plugin and charge for custom builds (this is very lucrative).

 

[Alan]

Yes, there is a market for plugins for WordPress and possibly Shopify ( but I have zero experience in that ) , but I would suggest it would be best to develop a client need that can be commoditised into a SaaS or plugin solution.

My best selling plugins both sprung from client projects, whereas the plugin that have has zero sales were good ideas of mine. I can't speak for @fisicx but I have a suspicion his may follow the same pattern.

I'm not sure what IoT projects you work on or what could possibly be of interest as SaaS or plugins, but thats my two pennies worth.

 

[billybob99]

I'm in the same space as you (kind of), more native mobile dev stuff, but been thinking about everything you said for a while now, especially the SaaS aspect.

It's all been covered by everything above though, you need to address a client need and pain point. At the end of the day you're looking to solve a problem that people will pay you for, if it just makes their life that little bit easier.

I could have a ton of ideas and build them all, but chances are they won't fly, because I built it from my perspective instead of from my potential users perspective.

 

[The Byre]

Hopefully I've made my question clear.

No - not even slightly!

As youy have couched your question in jargon, you will only get answers from people who know what the hell IoT, SaaS and all that stuff means.

Some where in your request, I suspect that there might be an interesting question at the root, but as long as you obscure your meaning with jargon, you can only get answers from one small section of humanity - and I am not in the section!

My industry is riddled with jargon and acronyms, but I would not use them outside of my industry, as nobody has the slightest idea what any of it means!

 

[Gecko001]

If you can use your experience of what you do at present to develop these subscription products then that is fine. You will probably have an advantage over competitors who do not have your experience.

However you have to watch your focus. Will it direct your focus away from your main business. Will your present clients regard you differently. Will they come to regard you maybe as not so specialist or not so centred on the things that they want from you?

 

[Steve Samuels]

@The Byre
Thanks for your response. To try and state my question in plain English. I own an engineering company, have the ability to make custom electronics and software for cheaper than a lot of other startups, and we have some extra capacity at the moment.

I would like to make best use of this capacity to start up some revenue streams that are not purely consultancy/service based, and was wondering what business models had a short start up time, but perhaps a high technical or financial barrier to entry.

E.g. Dog trackers are a currently growing market, and any keen entrepreneur wanting to get into this with their own product and brand would need to spend 10's of £K developing their product, and would likely have a lot of technical risk in doing so. We can create products like this, with minimal cost to ourselves, and low technical risk, as this is the kind of thing we make regularly.

In that example, it would take us at least 9-12 months to have a business up and running and generating turnover, and at the moment we don't have enough resource to dedicate to such a project/product.

That's why I was keen to understand other models that may provide a faster return (3-6 months to get relatively passive income).

If that's not clear, please let me know why, and I'll try to clarify.

@Gecko001
Thanks for your comment. Hopefully this wouldn't affect customer perception, as we wouldn't be marketing our main brand along with these other projects, but more likely spinning off seperate brands/companies, which the main company would own.

Additionally, we would be looking at trying to create some products or SaaS offerings that are complimentary to our consulting services, which should reinforce our position as specialists in the field if we choose to publicise the information.

Our longer term goal as a company is to have a healthy split between developing IoT solutions for our clients, and for ourselves, so we can start up and sell off these other companies. That's a more rapidly scalable model than pure client development, but I'm hoping there is an interim step we can take to generate some additional revenue stream. As we have very good IoT and AI skills, we have significantly lower technical and financial barrier to entry in these rapidly growing markets than many other companies do. We are on a slow growth curve, and I'd like to speed it up!

Thanks for your input guys!!

 

[Noah]

@The Byre
Thanks for your response. To try and state my question in plain English.

Thanks for this pleasant surprise. I was expecting the usual defensive "Well, you're obviously not the target of the OP so shut up and go away!"

On the other hand, we did miss out on another entertaining forum spat; swings and roundabouts...

 

[The Byre]

It looks to me as if you are either heading towards product licencing (you develop and they manufacture) or more probably, working together with some company that markets the stuff.

 

[Steve Samuels]

@The Byre
As it's a business related question and not a technical one, then it's a perfectly fair request to strip out the jargon. To go slightly on the defensive, I think it is important to include the jargon, as a I may get a more relevant answer from someone in a similar industry due to their experience, and the 'jargon' provides them with more insight about my situation.

As I am the one asking for help, it's on me to communicate my question, not on you to understand it, and if that means restating it in different ways for different audiences, then I'm happy to do so.

With that being said, and hopefully a clearer question presented, do you have any thoughts?

Cheers,
Steve

 

[Steve Samuels]

P.S. We do have marketing experience, and a digital marketer within the company, and I own another business which is eCommerce, so we have a decent amount of capabilities in addition to the technical team.

We are working towards the revenue streams that may be slower to come to fruition at the moment. I'm just optimistically looking for a quick(er) win.

 

[madams_ba]

I might be going completely against the grain here, but...

Would there be the option of using your teams expertise to create informative/impartial content on a blog/website. And grow that. If your team have expert knowledge, then it's a great foundation for doing this. Then you could generate income from advertising / guest posts. It may not make you thousands straight away but it can certainly be a nice cash cow over the long term. It's true, there's lots already out there but if you can establish a niche, and a following, there's always different ways of making money.

 

[mattk]

Do your IoT products run apps? I'd have thought there is a lot of potential growth and a nice fairly passive income in producing apps for these new devices.

This isn't my area of expertise, so apologies for being a bit vague.

 

[mattk]

Another idea, how about security related apps/utilities for IoT devices?

Most seem horrendously insecure (how many people even change the default password), so a subscription-based utilities or even some kind of services for consumers to secure their devices might have legs.

 

[dan19900]

Would of been better 6-12 months ago but have a look at cryptocurrencies, there's quite a few related to IoT that got $30 million thrown at them during their ICO that don't even have a working product, many of their valuations now over $100 million just for their worthless tokens.
Some examples:
https://www.iota.org
https://iotex.io
https://atonomi.io
https://ruffchain.com

 

[Steve Samuels]

@mattk Our devices are all bespoke for our clients so far, but most of them are extremely low power, therefore don't have an operating system to speak of, so Apps aren't an option for that.

We are working on a secure scalable IoT platform that will really accelerate IoT related product development in the future, but that's not a quick win. Lot's of development goes into this as it is not a trivial problem.

@dan19900 If I had any idea how a company has the balls to pitch for investment for a cryptocurrency, when they haven't implemented it, then I'd be on it. It may just be that I'm missing something, but I struggle to see the value propositions of may of the blockchain companies that are getting pre-development investment for such things. They're wither doing something very right, or very wrong.