There are two ways to make money in software:<\/p>\n
Services:<\/b> You build what the customer asks for. (Consulting, Dev Agencies).<\/p>\n<\/li>\n Product:<\/b> You build what the market needs. (SaaS, Tools).<\/p>\n<\/li>\n<\/ol>\n Most founders start in Services because it pays the bills immediately. But if you stay there, you are not building a business. You are building a Job with Overhead<\/b>.<\/p>\n The Math of Servitude<\/b><\/p>\n Service Business:<\/b> Product Business:<\/b> Code is the only form of leverage that can work while you sleep. A service agreement requires you to be awake.<\/p>\n The “Golden Handcuffs” Trap<\/b> Services are addictive. You send an invoice, you get paid. Products are brutal. You build for 6 months, you get $0. The “Trap” is that successful service founders get used to the cash flow. They become too afraid to invest the time\/money required to build the Product. They die rich (cash-heavy) but poor (asset-light).<\/p>\n The Protocol: The Bridge<\/b> If you are in Services today:<\/p>\n Do not quit.<\/b> (You need the cash).<\/p>\n<\/li>\n Identify the Pattern.<\/b> What problem do you solve manually for every client?<\/p>\n<\/li>\n Codify the Solution.<\/b> Build a tool that solves that specific problem<\/i>.<\/p>\n<\/li>\n Sell the Tool.<\/b> Initially to your existing clients, then to the world.<\/p>\n<\/li>\n<\/ol>\n Use the Service to fund the Product. But never confuse the two. The Service is the Fuel<\/b>. The Product is the Engine<\/b>.<\/p>\n #DhandheKaFunda:<\/b> Wealth is not determined by how hard you work. It is determined by the disconnect between your inputs (time) and your outputs (revenue).<\/i><\/p>\n","protected":false},"excerpt":{"rendered":" There are two ways to make money in software: Services: You build what the customer asks for. (Consulting, Dev Agencies). Product: You build what the market needs. (SaaS, Tools). Most founders start in Services because it pays the bills immediately. But if you stay there, you are not building a business. You are building a […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[75],"tags":[81,110,111],"class_list":["post-8560","post","type-post","status-publish","format-standard","hentry","category-blueprint","tag-dhandhekafunda","tag-businessmodels","tag-wealth"],"acf":[],"_links":{"self":[{"href":"https:\/\/61.notredamme.com\/utpalmv-v2\/wp-json\/wp\/v2\/posts\/8560","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/61.notredamme.com\/utpalmv-v2\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/61.notredamme.com\/utpalmv-v2\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/61.notredamme.com\/utpalmv-v2\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/61.notredamme.com\/utpalmv-v2\/wp-json\/wp\/v2\/comments?post=8560"}],"version-history":[{"count":0,"href":"https:\/\/61.notredamme.com\/utpalmv-v2\/wp-json\/wp\/v2\/posts\/8560\/revisions"}],"wp:attachment":[{"href":"https:\/\/61.notredamme.com\/utpalmv-v2\/wp-json\/wp\/v2\/media?parent=8560"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/61.notredamme.com\/utpalmv-v2\/wp-json\/wp\/v2\/categories?post=8560"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/61.notredamme.com\/utpalmv-v2\/wp-json\/wp\/v2\/tags?post=8560"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
Revenue = Headcount \u00d7 Hourly Rate<\/code>. To grow, you must hire. Complexity grows with revenue. Margins are eaten by management overhead. You are selling Time<\/b>.<\/p>\n<\/li>\nRevenue = Users \u00d7 Subscription<\/code>. To grow, you do not need to add humans linearly. You are selling Code<\/b>.<\/p>\n<\/li>\n<\/ul>\n\n