How to automate a software service business.
Recently a lot of the people I come across in the tech industry are either working on some kind of Artificial Intelligence, machine learning, IoT (Internet of Things), or big data aggregation. Being a technologist, I’m well aware that A.I. and machine learning are the future and the implications for humanity will be amazing. But as a human being I am also aware that A.I. can and will put a lot of people out of work, but it doesn’t have to be that way.
While the intentions of the engineers working on A.I. projects now may be doing so for the future benefits of humanity, the reality of what they’re working on in the short term can be implemented against their best intentions by mega-corporation to reduce costs, overhead, and improve profit margins. In other words, as things currently stand A.I. is going to benefit an elite class of tech-savvy corporations first and mostly leave everyone else behind. Which is why I’m working on solutions to help everyone, from startups to enterprise to automate their businesses allowing them to remain relevant in the future.
It is actually a misconception that bots and software work for free, in reality someone has to pay the hosting bill. While software solutions will be cheaper in the long run than paying actual people, initial infrastructure and hosting costs may actually increase.
So where does this leave entrepreneurs and startups?
I learned from my last startup that an à la carte business model is no longer a sustainable online business model if you cannot consistently drive new customers to purchase your products. This is particularly true of software services. While A.I., chat bots, and machine learning will all be used as sales, support, and marketing tools in the future that still means you need a product that creates ongoing value for the consumer and has a sustainable business model.
Most business services in the future will be in self service marketplaces. The next generation of consumers does not like being sold over the phone, they don’t watch tv, and they have been conditioned to pay recurring monthly fees for on-demand services that provide continued value. Think monthly recurring revenue services like Netflix, monthly box subscriptions, and software solutions like Slack that make consumers lives easier. The self service model works digitally and physically, and it is one of the few scalable ways to grow a business without having to hire a large sales team. It also provides for predictable recurring revenue which is critical for managing burn rate, bootstrapping, and attracting investors.
With that said, the freemium model and free trial model also work and are even more powerful when combined with a self service model. People want to try products and services for free before they pay for them, and know the upfront cost of what they’re trying. By providing a free trial or even a free version of your software service you can show consumers the value your service creates for them, leting the service upsell the consumer. This enables software developers and business development to focus on the quality of their services and improve conversions rates at the same time by improving the product to create more value for the customer.
By offering free trials you can also: collect emails, build a list, engage consumers to survey them on what they do and don’t like about your service, as well as automate marketing towards your list to improve conversion rates. While A.I. and chat bots can integrate into this process in the future and will be beneficial tools in aiding in upselling, marketing, and support they won’t be creating a business model for you or solving infrastructure scalability issues any time soon.
Scalability = DevOps
For automated service business models to work they need to be built to scale. This means minimizing the cost per trial, reducing infrastructure overhead per customer, and providing a scalable solution for managing free trials, prospects, and marketing automation to convert prospects to paying customers. Once converted to a paying customer a scalable system is needed that enables small customers to scale all the way up to the enterprise level. Whether you are targeting volume customers or large enterprises you ultimately need a solution that is ideally capable of both enterprise and small deployments.
What this means is every software service based application has similar requirements including data isolation between customers, security, uptime, high availability, geo-location, and multi-cloud support. As well as all the other networking attributes associated with cloud computing, and more recently container solutions such as Docker.
To be able to compete in tomorrow’s business world, most software services are going to require developer operations automation, cloud infrastructure management, and business service automation to be successful.
This is why I’ve teamed up with a former IBM / VMware executive, and a former Salesforce engineer to solve this problem once and for all. We believe software companies should be focused on building better software services, and not have to worry about learning how to manage and scale cloud plumbing.
We know this model works because we have already brought on several partners that have proven this model works sustainably into the millions of dollars when leveraging the economies of scale that become available using Docker containers and our multi-instance system architecture. All a software company needs to do is provide their software and tech stack, we can then put it in a container, automate the deployment of that container, and deploy it to customers through a free trial management system with built-in marketing automation, customer management, and billing.
By using our solution you can easily deploy any application (commercial or open source), with any tech stack, and on any cloud provider.
If you’re interested in learning more you can shoot me an e-mail trent @ stratus5.com or visit Stratus5.com and try it for free yourself.