Awesome! Startup Life Log: Post 2! This series of posts are a transparent look at what makes Widgetware tick. We post the good, the bad, and the ugly, as well as some general advice we’ve learned over the past few years. In this post, I talk rant about startup life, when to scrap paying for a service, and how to write a monthly service breakup letter.
When do you not need a service?
Okay, so maybe I shouldn’t be writing a blog post about this especially since we sell Software as a Service. It’s like a car salesman saying don’t buy your car here. Then I realized, I’m not a car dealer and I only build products that I use to save me time and money. So judge for yourself. When we were completely overhauling our business we had to make some tough choices on what to keep and what to scrap and having a post like this would have saved me so much heartache. So here goes.
For any small business or startup’s journey there will come a time where everyone gets together and discusses whether or not they should invest in paying monthly for a service. This is a very important topic because tacking on service after service can nickle and dime your profit margins, also you might not have a ton of capital to wield on all the services you actually need. After the phone bill, internet bill, banking fees, a CRM, marketing, etc… money can get tight. So how do you know when to drop a service?
This is tricky. A lot of times you can be wholly convinced that you absolutely need a service, but likely that is not the reality so here is a simple set of general rules that could save you a ton of time and money.
List the Services you pay for
First things first, make a list of all the services you use. Likely, you are going to automatically prioritize your list. Meaning that the first things you list are typically going to be the ones that are most important to you. The ones you have to look up in old emails or notes, these make good candidates for the scrap pile.
Condense
Second most important thing you should do is look for service overlaps. If you have two services that basically do the same thing, then scrap the one you use less. Chances are, if you have two or more related services, at least one service offers almost exactly the same thing you need from the others. This is also a great time to investigate the services you use and see if there are features that can help you part with the other services more gracefully. Not only does that save money, but it could consolidate your workflow.
Look for Open Source replacements
If you haven’t already cut a few things, here’s a great opportunity to take a plunge. Just use a search engine and query, “The name of the Service you pay for” + “Open Source.” You will be blown away by how many people, just like you, who took a stand against paying an outrageous monthly bill for a few things they can’t live without. Sure these replacements may have a small learning curve to get them up and running, but the money you save will almost always be worth it. Plus, you get the added value of really learning a system you are using. Who knows, you might be able to contribute back to the community if you improve an existing product. For example, we dropped our CRM software and replaced it with an open source version of MediaWiki and blended our workflow with a Invoicing/Time Tracking service we use. Turns out, we have way more flexibility and we save $50.00 a month. That’s $50 a month more towards marketing or beer at our company BBQs.
Look for cheaper and quality replacements
This is kind of a no brainer because hopefully you shopped around before you signed up to a service. Still this is a good time to take a moment and search the market for newer cheaper alternatives. If the service you are paying for isn’t being competitive it’s time to drop them. It’s how a business like theirs knows that it needs to keep on its game.
Write a Monthly Service Breakup letter
Okay, this is cheesy, but this will help you I promise. There are a lot of services out there that you can only cancel by making an actual phone call and talking to a diligent representative whose job is to keep you from canceling. If you’ve ever dropped a Gym membership then you know exactly what I’m talking about. The concept is, make it hard to quit, and make the person feel guilty for trying, because if it’s uncomfortable to do then a company can squeeze an extra $75 a month until you muscle up enough courage to get out. Might as well slap a surgeon generals warning on the side and call it a pack of Marlboros because this can be tough to get through.
So don’t resort to asking a tough talking friend to get you out of it, it’s time you kicked this teenage puppy love style. Write down a short concise letter that explains that you are canceling your service and a short summary of why. They are going to ask you why you are leaving about a dozen times, and if you hesitate they will pounce. Even if you have to read word for word off your break up letter, that’s okay. Don’t be bullied into another month of servitude when you’ve come this far already. If the representative is persistent and the conversation is dragging on, all you have to do is say, “I’ve summarized why I am quiting in an email and will send it to you the moment that you confirm my service is canceled, until then I prefer not to answer any more questions.” That’s called a velvet dagger ultimatum. It says you are done talking, time for business, without being a complete jerk or getting to the point where you are so frustrated that you hang up the phone. To them, a pissed off paying customer is worth more than a non-paying nobody so don’t just hang up when you’re frustrated.
That’s about it. Hopefully after reading this you will be armed with the tools to start stripping services and saving some hard earned dough. Have you ever written a service break up letter? If so I would love to hear all about it in the comments below!
