

Ask HN: Project based pricing or try and build a Saas app? - xm1994

Don't know which way to go on this one, client needs a work order + inventory app. I was about to simply quote a price for a bespoke app, then thought why not charge them nothing... build the app ourselves and have them subscribe to it as the first customer. I would ask that they pre-pay a year on sign up.<p>One possible issue arises if they decide they don't need it after I've already paid to build it.<p>There has been a lot of discussion on project/value based pricing vs hourly, but how about we throw subscription based pricing in as a third option?<p>Thoughts or suggestions?
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patio11
What did they offer you such that "Work for free and bear all project risk" is
an attractive option?

1) Charge for bespoke development as per usual.

2) Negotiate such that you own the IP after the project is over.

3) Use the IP to build the SaaS.

4) If they want to migrate to your SaaS and take advantage of ongoing
improvements for your standard monthly rates, wonderful. If not, maintenance
at your prevailing contract rates or via a negotiated maintenance contract.

~~~
xm1994
Letting them pay for development and keeping the IP would be the best of both
worlds and I should try for that. If it's not an option my thinking was I get
free domain knowledge via access to their employees and business processes and
a baked in customer for the saas. I have plenty of Saas ideas with neither of
the two where I could possibly be completely wasting my time.

~~~
tptacek
Your client just wants their business problem solved. If they are a reasonable
client, unless they made it very clear to you up front, they do not want to be
in the business of designing, implementing, testing, distributing, supporting,
and maintaining supply chain management applications.

They want order management capabilities they don't have. They want to get
those capabilities without hiring 1-3 more full-time people, each at a fully
loaded cost of between $120-250k, all of them with ramp-up time and each with
a 33+% chance of not working out.

Solve their business problem, collect your rate, and feel comfortable that
you've generated a win-win. Get your contracts reviewed by a lawyer (you
should keep a lawyer on hot standby for contract review all the time) and make
sure that you retain IP. There are lots of different structures that
accomplish that.

It is a _good thing_ that after completing this engagement, you will be well
positioned to offer this service to a next client, and a next, and even "all"
the clients at scale using a SaaS offering. It's what makes you a valuable
consultant. You should not be entertaining the idea of giving your services
away simply to capture the side effect of getting better at delivering supply
chain products afterwards.

Incidentally: something that I am _continuously_ learning the hard way, even
as I tell myself every damn time that I know this, but then proceed to make
exactly the same mistake again and again: _free has a negative signaling value
in consulting_. Don't do free. Free is terrible. It scares buyers, generates
more uncertainty than it dispels, and it sets you up to fail.

By all means, help people out gratis, do favors, be accessible. But when your
client _needs_ something done, put a price tag on it or pass the work up.

------
statictype
If you plan on making a SaaS product, what is the target market you plan on
selling to?

Small businesses? FM companies? Large organizations?

Are they the type of market that would look for a subscription based service
or will they seek a more traditional sales channel with hand-holding?

How do you plan on handling the actual process flow for work orders? Each
subscriber may have a slightly different way in which they want it to work.

It could certainly be possible that you can build and sell an SaaS product but
you may want to do some market research first.

(Disclaimer: Our company sells FM related software and WO and Inventory
Management is one part of it.)

~~~
xm1994
The requested solution is to manage the warranty repair order process and
related parts inventories at multiple 3rd party authorized service centers for
a manufacturer.

My (possibly naive) idea is to build a re-usable solution that is something
like a desk.com CRM app with an inventory module and the ability manage pre-
defined services.

Target market? Could be another manufacturer like my client, or service/repair
centers by themselves.

There are lots of GREAT CRM/support services: desk.com and zendesk.com just to
name a couple. It doesn't seem like I can tie parts to their support cases for
the inventory management aspect of the solution.

The closest I can find is this force.com app:
[http://www.servicemax.com/products/inventory-and-parts-
logis...](http://www.servicemax.com/products/inventory-and-parts-
logistics.html)

If I can make the workflow flexible enough to cover different cases this could
be even be extended to work as a field service tool by later adding a
scheduling module and a maps/routing module for field technicians.

