Yesterday, I talked about how the concept of the reduced work week as envisaged by Timothy Ferriss’ Book mostly applies to repeatable, products or productizable services. But I think there’s more to it than that. Even in the product realm, not all product-based companies lend themselves to greatly reduced time and effort with the result of maintained or increased revenue.
Products that are Sold vs. Products that are Bought
Having been in the startup and consulting business for a while, I know that everything a company offers has a “sales cycle” — that is the amount of time it takes to go from interest in a product to actual receipt of payment or purchase order for that product. Some products have very short sales cycles of minutes (such as books on amazon.com or items on eBay) whereas others have very long sales cycles (especially large consulting projects sold to large companies that involve lots of decision-makers).
There have been tomes written about sales cycles and the such, so no point in going into that here. The real insight is that to achieve the sort of work/time balance proposed by the FHWW book, one needs to strive for a business in which products are bought vs. products that need to be sold.
What’s the difference?
A product that is bought requires that a company make its product easy to understand, easy to find, and easy to purchase. The emphasis is on marketing — increasing the awareness of a product, its value, and differentiating it from others in the market so as to facilitate the sale. But the sale is not facilitated by a person — it doesn’t take someone calling you up and convincing you of those merits to make the sale happen. Rather, users who are interested make the move to purchase the product. The customer is in control of the sales cycle and as such all a company can do is focus on marketing, order processing, support, and improving the quality of the product.
On the flipside, a product that needs to be sold is one that requires a person to communicate a products benefits. A sales person needs to find leads, qualify them, make the pitch, differentiate the product, prepare the proposal, and then shepherd this proposal through the close. For individual sales, the aspects of the proposal and close might be simplified, but the remainder is the same. Sales-oriented products require people involved, which means it requires time. Reducing the work week to 4 hours in these instances can have a significant, detrimental impact on revenue.
The punchline: go for Products that are Bought, not Services, or Products that need to be sold
The aspiring 4-hour-a-week entrepreneur or employee not only needs to shy away from services that require in-person delivery, but also products that require in-person sales (whether really in person or via phone). If you can’t make that transition, I can’t see how the reduced-hour workweek can be a reality unless you outsource the sales process itself. Even in the case where sales is outsourced, you’re just automating an inefficient task. You’re better served simply trying to change the way the product is offered. If you can find a way to make it so it’s bought rather than sold, you’re gold.
Quick note on blog test: this is my first attempted use of a trackback, and using the instructions at the Optiniche blog by Teli Adam, I think I’ve managed to make it work. Maybe.