A three-part business model framework and productising what you know
Part 2 on business models ft. a Founder who has pivoted his business model twice in his journey to disrupt the traditional agency model.
Hello, today we continue the theme of business models. In today’s post you’ll find:
Founder Profile: Q&A Rick, 150birds founder on designing business models for maximum impact and alignment with personal goals.
Further resources for you to design your business model or consider alternatives
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Q&A with Rick Koletavitoglu, Founder of 150birds
150birds is disrupting the global knowledge economy with a subscription workforce. Hear how Rick came up with the concept and created the business around his unique experiences and goals.
Rick has been on the journey of being an employee at a large-scale business; through to being a freelancer, to setting up a services-based marketplace to now building a subscription-based software product. He talks about how customer needs, market demand, and his own aspirations for his business have led to the business model he has today.
Tell us about yourself?
My career started out working for three venture-backed startups and a fellowship with Terrance Matthews, the first welsh billionaire, where I learned a lot about company building. I then founded a marketplace bridging the gap between social media influencers and brands looking for influencer marketing. This evolved to a full-service agency providing an A-Z of influencer marketing. We grew to having a 65% market share in Turkey. I then moved to Silicon Valley to do freelance marketing for two years before starting my business now.
What inspired 150birds?
There are a lot of inefficiencies in existing marketplaces like Upwork which make it impossible for freelancers to do meaningful work on a long-term basis because the nature of these marketplaces is based on highly transactional short-term work, where it is a race to the bottom on pricing.
So in response to this, we created an offering that finds longer-term and higher-paying work for freelancers who can plug into our platform to access client projects.
But 6 months ago we pivoted to our current business model, from a marketplace to being subscription-based. This now has upfront pricing, 24/7 customer support, which puts our customers front and center. This is very different from the traditional agency-based business model mechanics that are based on scarcity since you’re charging by the hour.
So since we pivoted to this business model we did end up cannibalising our own sales at the start but that’s just part of it. We are now seeing gradual adoption and we believe this is the future.
How and why did you make this pivot?
We were looking for continuity; to answer the question of how do I productise myself.
I noticed as a consultant that whilst I was making a bunch of money it wasn’t scalable and would never buy me my financial freedom. This is the issue of all agencies. The business model is not scalable as the more clients you have the more employees you have to bring on.
This created the grounds to start tinkering and try and automate it myself. In parallel, I saw that the world is changing (I started this company right at the start of the pandemic) so we weren’t sure whether remote work was going to take off at that point. Now we are seeing it’s absolutely possible to have autonomous and asynchronous work. This is going to lead to people leading more meaningful lives as a result of the way we are operating; we are trusting more.
So did your drive to help people find more meaningful work influence your business model?
As a freelancer, I’d find that half the time I was hunting for new work, which left me with less time to do the work itself. To compensate I’d then have to jack up my prices. This functional vicious cycle that you put yourself into as a consultant left me wishing there was a platform where I could be matched with projects that I had an affinity to.
So you designed a solution to a problem that a previous version of you had. Can you explain how you’ve financed these businesses?
I made a bit of money selling my previous company, and then from freelancing in San Francisco. We’ve been bootstrapped for a long time as we were not VC-backable. Now, we’re figuring out how to make things more scalable like the development of buyer personas, competitor tracking, and auto-generating annual marketing plans. So now we are digging deep into how to leverage AI to make a lot of this more self-serve and less human-driven. There are 100,000 marketing agencies in the US and it’s an outdated, antiquated model which has misaligned incentives between themselves as the clients. This is what we’re disrupting.
Where is the platform at now in its development?
It’s a ticketing platform where freelancers can either accept or reject jobs (around 3months long) which are currently being guided by a Strategist internally who does the lion’s share of the work. That’s not an in-house hire yet as we’re still early-stage to afford one but we work with people externally.
Once we have figured out the methodology and process flow it became much easier. We figured out the price point so that we could be a lot more affordable than the national average for marketing agencies because we’ve cut out all of the overheads and have flexible staff.
Will you be seeking VC funding down the line?
I think so, right now I’m on the Y Combinator cofounder matching platform. My bottleneck is that I’m not technical so I’m trying to get past the limitation by finding a counterpart who I can bring into this company who has over ten years of experience building these platforms, managing teams in the marketing and advertising world and who sees things similarly to how I do.
So you’ll be fundraising together? Any other milestones you are working towards?
Yes because it’s a joint vision. We’ve done some things in the last 18 months but I see the value that a technical cofounder can create for us. For any tech company, I think there are two key qualities in the founders. One is to be able to sell and the other is to be able to build.
So far I’ve been limited as to what I can build. With a technical cofounder what is possible becomes so much greater, I want to replicate what I can do as a human. What I’ve understood is that for early-stage companies there is a lot of experimentation. You just don’t know what is going to work. This function is so dynamic and constantly evolving that it requires a beginner’s mentality to stay on top of things and stay anew on what is possible and how things can evolve and change.
Having VC funding makes things a lot easier, it means you have a lot more capital at your disposal. Right now I haven’t paid myself a salary in close to 2 years so being able to invest in a team, advertising, etc would be great.
What other learnings have you had around your business building?
The hustle never stops! Expect 10 years of iteration. The hardest part is the early days because there is so much ambiguity you don’t know what’s going to work. But customers are the best form of validation; finding people who are willing to pay their hard-earned cash for whatever it is you’re offering.
Once you start putting yourself out there and getting customers you soon gain confidence.
Is there anything you’d do differently if you did it again?
Slow down, don’t rush, know that things take time. Crypto, for example, has been around for 12 years and is still very early stage. Good things take time. As long as you’re making gradual progress on the day-to-day it’s a good day. If you’re working on something that could be disruptive then you want to give yourself 10 years. If you’re taking market share away from the existing services in any way, then you’re making a difference.
Any other advice on business models for the readers?
I think productised services are the future. We are seeing a lot more continuity in the subscription-based business model. Providing upfront value becomes key - so finding ways to nurture that relationship early on is a key nugget e.g. can you provide 50% off like we have on the first month.
Thank you Rick! In two weeks’ time we have another special guest, Alicia Carney, on product positioning and putting customers first, so stay tuned!
All this talk about business models, productised services and automating yourself left you wanting more?
On choosing the right business model
HBR’s ‘What is a business model?’ provides some helpful learnings. Its from 2015 so last week I did a summary and included some more recent examples like Glossier. Read How should you design your business model.
Questions to help you design your business model with a 3-part framework.
Download your free template:
Got a services business? Then there are so many business models for how to serve your clients. Catherine Watkins is a bit of a hero of mine and you’ll see why when you read this post ‘Is your business model right for you?’ She always brings business advice back to the question; what do YOU love to do?
On productising yourself
The name Jack Butcher has felt almost zeitgist-y this past year. His message is clear: you can Build Once, Sell Twice. Learn more about what this means on this interview with Gumroad podcast host Justin Mikolay.
How To Productize And Systematize Creative Services & Build A 7 Figure Business. You know a title is well thought through when it needs no further explanation. Another talk for you if you’re trying to automate what you build past the 1-1 client work and into something bigger. Please let me know if you’re on this journey already I’d LOVE to interview you!
Growing this newsletter is one of my biggest goals for 2021 and I’m close to my target of 1,000 subscribers by the end of the year and I’d love your help. If you get value from this I’d so be grateful for a share on your socials/with friends. 🙏
A Podcast - Deep Thinking about Content
I was featured in the Brew Time podcast by host Fiona who discovered me via my post ‘How the desire to maintain a personal brand may be harming your business’ and interviewed me on my own content strategy. Loads of advice for people just starting out too. Podcast episode Deep-Thinking Content here.
A Free Event - Master yourself as a Founder
The journey your startup goes on will largely depend on you, as the founder.
It's time to sharpen the saw. Inspired by the book ‘7 Habits of Highly Effective People’ by Stephen Covey, this workshop is focused on the 7 Habits that make startup founders successful so that self-mastery can become your superpower in business.
Zero fluff, only practical talk. Tickets here.
Thanks as always for reading! Next week we’re looking at finding your people aka your niche/tribe/customers in your business building journey. See you then!
Ellen Donnelly, Founder + Chief Coach, The Ask.