Ditching Hourly

DH ### Paul Giese

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Introduction

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Jonathan Stark: Hello, and welcome to Ditching Hourly. I'm Jonathan Stark, and today I am joined by Paul Giese. Paul, welcome to the show.

Paul Giese: Thanks, Jonathan, for having me. I'm glad to be here.

Jonathan Stark: Today, we're going to talk about Paul's business success. It's sort of a small firm business success, and there's a bunch of interesting aspects to it. But first, Paul, could you tell me a little bit about who you are and what you do?

Paul's Background and Business

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Paul Giese: Yeah, sure. So, Paul Giese, I'm the founder of Optimal Data Consulting. We provide data migration services to clients that are implementing NetSuite. I have an accounting background and kind of fell into this very niche area of the NetSuite ecosystem kind of by accident, and been doing this for about six or seven years. And yeah, really excited to kind of share some of my experience and stories about, you know, running a solo business today.

Jonathan Stark: Great. So, we have to start with the background. I don't know if I knew that, but I didn't remember. You started in accounting?

From Accounting to Entrepreneurship

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Paul Giese: Yeah. So, I studied accounting at Baylor and went and did kind of what most accounting students do. Went into public accounting, worked at a big four firm for about four years, and then worked in industry for three different companies and implemented NetSuite at one of those in 2016. And then, shortly after my son was born... I mean, I've always had the entrepreneurial itch. And at that kind of moment, I was like, I need to do something. Otherwise, I'm never going to... I'm just never going to do it. And so I started teaching myself how to code in the pre-AI days, where you were actually writing code. I'd made the classic mistake of building a tool with a bunch of features and a lot of cool things that I thought was cool. But then when it finally came to selling it, nobody was interested.

Through that, though, I put on to my... I was in the process of trying to start to sell this thing that I built. And the HR at my company was like, Hey, you can't do this. You work for us. You don't work... You can't have a side business on your LinkedIn profile. And so I was like... At that point, I was like, I'm all in. Talked to my wife. And I was like, Alright, I'm gonna go do fractional accounting consulting. And so I took the leap then. I'd always had a knack for the system side of the accounting area. And so I was helping clients migrate, basically implement accounting systems in the biotech industry in Boston. One of my first clients was like, Hey, can we bring over our detailed transactions from our QuickBooks instance into NetSuite? And me just being like, Hey, yeah, I can do that. Let's see if we can write some code to do it. And that was early 2019. And 100 clients later, I'm still doing that. I mean, I still remember the first kind of project, working at like 3am on a Sunday morning, because I couldn't sleep. And I was like, Man, I got to get this working. But that's kind of really the origination story of where optimal data came from.

Finding the NetSuite Migration Niche

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Jonathan Stark: That's great. Okay, it does make sense now that you sort of walked through it. It's much more of a step-by-step progression than I expected. So that's awesome. Thanks for sharing that. So were you sort of tightly positioned around this particular expertise right from the jump around just data migration for NetSuite? Or were you kind of taking all comers at the time? And how NetSuite specific was it and how migration-y was it?

Paul Giese: Yeah, I'd say at the start, it was really more, I'd say, industry focused. So the biotech industry is highly concentrated in a couple different areas in the US. There's a high concentration in the Boston area and in the San Francisco area. And there's a couple other pockets throughout the US. But so I'd say it really kind of started in the biotech space, where it's like, hey, if you know somebody who needs help with kind of a system implementation, I can help you. So whether it's implementing Coupa for purchasing or NetSuite for the accounting side, there were a couple other different systems that I was kind of helping people with and kind of doing some ad hoc type services. But what really ended up happening is that when a company decides to implement NetSuite, you know, the company will hire a third party implementation firm to kind of lead the implementation. And so I kind of served as like, I guess, an additional internal resource for the client to kind of help with tasks, mostly being data migration related. And Sickich, which was the partner that I was kind of working with at the time, or my first client was working with, was like, hey, well, this guy, he did all this data migration, like, and we've got other clients who might be interested in kind of that detailed transactional migration service. And so they actually were the ones that started kind of referring me to other, their other clients that were kind of going through the same process. And so that kind of was 2019. And that's kind of when I was like, okay, well, it seems like there's a business here. I've been trying to sell this other random accounting software that's going nowhere. But this is something that people are interested in. And then my wife had worked at HubSpot. So I was a really big inbound marketing guy. Like, I kind of really resonated with that approach to sales and marketing. And so she had gotten a lifetime account because she'd worked there. And so I was like, well, I'm gonna use this account. Like, I'll throw up a couple blog articles and see what happens. And I think like, two or three months into COVID, I like got my first inquiry. And then I was like, oh, man, well, this is definitely something that people are interested in, if people are reaching out in the website. And then it kind of slowly narrowed down to where kind of I think I started in the biotech industry, but slowly realized like, oh, well, I don't want to implement Coupa. It's much easier if I just have one kind of playbook to implement NetSuite. And then kind of like over time, I iterated on the process, kind of improved my solution. And it kind of just snowballed there till all of a sudden I was like, well, now I'm only interested in doing NetSuite because I've got such a good process. And it's a lot easier to market that than to kind of say like, hey, I'm a general IT generalist in the biotech space.

The Benefits of Specialization

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Jonathan Stark: Yeah. Yeah. Yeah. And once you get a taste of being really good at something and having all these tools to help you do it and get rid of all the frustration, or not all the frustration, but get rid of the really frustrating, tedious parts, it's really hard to go back to that kind of like no tools, let's just figure it out kind of mode in my experience.

Paul Giese: Yeah, I completely agree. And I mean, at the beginning, I think I kind of lacked maybe the confidence to know like, hey, like, there's more deals are going to come in eventually. And so I would like say yes to things. And then, you know, you'd later regret it. You're like, oh, man, I really should have said no to this project. And now I'm kind of stuck doing it. And I've gotten a lot more disciplined over the years to know like, hey, like, you got to say no to these things that are not kind of on the path to kind of improving your process. Unless you really think there's significant upside to saying yes, which most of the time, it's like there's probably not as much upside as you think going into the project.

Jonathan Stark: Yeah, I've heard that a ton of times where someone did they were starting to get a beachhead in a specialization and an expertise. And they get, you know, they're still getting leads from their past connections and referrals and for generalist stuff. And they're like, oh, I like money. I'll take money. And then you said it perfectly. It's like you just regret it. It's there's not it wasn't worth it. You're like, this isn't worth it. This feels like moving backwards or something. Yeah. Yeah. I mean, I think it just distracts you from, you know, being able to kind of specialize.

Paul Giese: And like really hone in the process. I mean, it's like it's a product I serve, right? Where you're just like, hey, if you have this strict playbook, and you know exactly like how the project is going to go for the most part, obviously, there are always kind of things that are unpredictable, like, you know, internal politics, or, you know, there's always some unknowns, but the fewer unknowns that you are, the more of the unknowns that you can control, the easier it is to kind of do more of the value-based pricing, or like, just kind of knowing, like, showing off your expertise in the sale, right? So it just really, I think, lends itself so well to just saying, like, yeah, no, like, this is what I do. And I'm not gonna leave my lane. And if somebody wants something else, it's like, Oh, cool. Well, I've got, you know, these two or three other people who you should talk to, and maybe they can help you or something like that. So you can still add the value, but you're not kind of being stuck delivering work that you don't know how it's gonna go, or you're just kind of along for the ride for a project where you don't know what's gonna happen.

Jonathan Stark: So people listening who haven't had the experience of having something dialed in, probably this, hopefully, it's resonating with them a little bit. But that feeling and I started out here, that feeling of kind of like, I'm smart, I'm technical. And, and the way that consulting air quotes works, is that you wing it every time, because everything's different, everything's bespoke. And that's part of my value proposition, I can start wherever you are. And I can, you know, be you can drop me behind enemy lines, and you'll be glad you did when I come out the other side. And so they, a lot of people think that that's the only way that these engagements can go like, that's normal, that's, it's not just normal, it's the way. And, you know, I and Paul are both here to tell you that there's another way, maybe you like being a commando and going behind enemy lines and it being different every single time. But there's significant business downsides to that approach. And it's, and to a certain extent, it can be not that great for clients, because if there's a job that needs to be done, and you and there's a specialist that can do it, the client's probably way better off with the specialist, like you don't want your, your GP to do hand surgery on you, you want a hand surgeon, even though maybe the GP could figure it out, you know, so it's not good for the client, if there's if they have an option that's specialized. And the other thing I want to iterate or emphasize is the referrals thing, where if once you're in your lane, and you are saying no to things that are outside of your lane and referring the client to other people who you know are good, well, guess what, a lot of times, and you know, you can tell me if this is happening in your case, but a lot of times, those people who are probably other NetSuite people are going to refer you for the data migrations. I don't know if that's ever happened, but...

Paul Giese: Oh, yeah, 100%. 100%. Yeah. And I think like, yeah, yeah, we'll go ahead. Yeah, I was just gonna say, I mean, I think when you get that specialization, you can kind of refer people out, it just, it also makes it so much easier for people to think of you when they're looking for a referral, or like someone to refer, like work to that they might not be interested in. So, for example, like, if the partner's like, hey, we got an inquiry from a client where... Or a prospect that said, we just acquired a company, we want to migrate 5 years of detailed transactions into our NetSuite instance. And this happens all the time. For me, it's like the partner will say, hey, well, we don't really do that. But we know this guy, Paul, who's got a process. And so that's... Honestly, that's where I get most of my business comes from those types of referrals. And just, I don't know, Jonathan, if you can relate to this. But for me, when I'm thinking about referring work to other people, if you're a generalist, I mean, I could probably think of like 10 generalists in the NetSuite space that I'm like, oh, yeah, those guys are good. They can probably handle kind of general support. But it's like, hey, but if you're like a nonprofit specialist in the NetSuite space, well, I know one guy who does that. And I always think of him whenever that specific scenario comes up. And I pretty much always send nonprofit referrals to him. And so I think that that really kind of keeping that... That's just another reason to kind of... When you're framing your business.

Becoming Easy to Refer

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Jonathan Stark: If you can specialize, then you kind of become the one person who does that one thing. People will just think of you whenever that one thing comes up, which might not be as often as a general inquiry. But again, then you're competing with 10 other people and somebody thinking about that one versus just your one thing, right? So when you're really specific, then Rolodex moments happen, which is what you're describing, where people refer data migrations to you and you refer nonprofit work to this other person. It's way better to be the one and only at something, even if it's small or rare, than it is to be just one of many who can kind of do whatever. I'm picturing there's an old pre-AI, somebody photoshopped a gigantic... Or no, no, it's actually a real thing. It's a real thing. So dear listener, you can Google this. For some anniversary, like the 100th anniversary of the Swiss army knife, they created a massive Swiss army knife that had so many components that you couldn't even fit it in your pocket. And it was like, that's a generalist. It's useful, but people aren't thinking, you know, when you're the one and only, I mean, you need to be the one and only at something that there's some demand for, or you're not going to do that well. For example, you were the one and only, the accounting software tool. That was the only one of those, and maybe nobody wanted it. So you're sort of sitting at the... It's interesting because you have a little bit of a hybrid double specialization, because you've got a platform specialization with NetSuite, but you do a very specific thing inside of that, which is data migrations. And I'm just curious, is there... Would you say it's any deeper than that? Is it post-acquisition data migrations for NetSuite companies? I mean, is that a really common thing? Well, I'd say probably the other specialization would be like accounting data.

The Three-Part Expertise Moat

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Paul Giese: Maybe the third kind of prong to that list is like, hey, there's very specifically the accounting data, which is the challenging component. Understanding the debits and credits of how these different transactions work in your accounting software, along with understanding NetSuite and how that data works, and understanding how the legacy systems data works. I fit into that one small part of the implementation. The challenge with that part of the business is that the window from which somebody needs my service is very small. The customer who's actually buying my service probably finds my services relevant for maybe two to three months, depending on the timing and how long their implementation goes. I'd say that's the biggest challenge. There's no real recurring revenue. But that's where the partner ecosystem is so important because the NetSuite partners are all selling and implementing NetSuite. When data migration is a challenge for them, having the relationship with them is paramount to my business success. That's where the recurring revenue and the longstanding relationships work. Especially on some of your past episodes, you guys were talking about how the internet's dead and SEO is dead. I would definitely concur with that. My web leads have gone basically to zero as these shifts in how internet marketing are playing out in the new world of AI.

Jonathan Stark: Mm-hmm. Okay, so let's not go down that route. Yeah, yeah, yeah. You're tempting me. So if you could speculate, though, about why Sickature, one of these other partner firms, why don't they do the data migration themselves? Why would they refer that out?

Paul Giese: The data migration is definitely the least glamorous component of these projects. If you think about it, a lot of the implementation firms, their consultants typically will know NetSuite really well, and they might know accounting data well, but they might not. It depends. But they certainly won't understand, or they probably don't have the expertise to get the data out of the legacy system. The client will understand accounting. They might know their legacy system and how to get the data out, depending on how tech-savvy they are. And then they most likely won't know how to get the data into the CSV templates. That's where I think the expertise of what I'm bringing bridges all three of those areas. Because of that, the partners view it as a high-risk area. Technically, clients really only need an opening balance sheet, an open AP, and an open AR at the go-live date to start working in NetSuite. For them, it's like, well, we can sell this and do all this work without the risk of the project going wrong or us taking responsibility for making a mistake in the client's legacy data. I'm just not that nervous about messing up something like taking on that liability. It's interesting, like Oracle acquired NetSuite, I guess in 2016 or 2017. NetSuite used to do their own data migration at the very beginning when they were competing with Peachtree and QuickBooks Desktop. At some point, they stopped most likely because they could sell the licensing without taking on that risk. You actually see that same dynamic being played out with some of these AI native ERPs where they're doing the data migration work today to win the customer. Eventually, though, you would think they're going to take that risk off once they get big enough to compete.

The Opportunity for Specialized Firms

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Jonathan Stark: That's a great point. So for the dear listener, to the extent that this is visible, I don't know how visible this is, but when you hear of these companies that are kind of bootstrapping their way into the market, trying to get some market share, they're starting out, and they are doing this white glove concierge onboarding type stuff, they are only doing that because they have to. This decreases the switching cost for new customers. New customers might think, oh yeah, this is going to be a big pain. But the company says, no, no, no, we'll do it all for you. Don't worry about it. That always goes away because it's a SaaS. They don't want to be doing that. They don't want to be an integrator or a consultant. They want to get recurring revenue, probably B2B or enterprise sales. So, an interesting signal to look for is if someone listening has a platform specialization where they're aware of a platform that they like or use that's currently doing these kind of white glove concierge full-service onboarding things. That's a potential opportunity. Anyway, that's good. That's a good one.

Paul Giese: If I were discovering or trying to find another service, it's finding what's the least exciting part of the process, the implementation, or the thing that you're trying to get into. If you can develop a core expertise in that kind of thing, there's probably a lot of opportunity. Because if there's a lot of pain and it's not fun, there's probably an opportunity if you can become an expert in that area and find a way to automate it in ways that maybe somebody else or other groups haven't figured out.

Jonathan Stark: I totally agree. And there's an asymmetric risk happening there that you alluded to, but I want to call out, which is that it's really not as risky for you to do it as it would be for one of these other companies because of your background. To you, you're like a fish in water and they're a dog in water. Maybe they could swim, but it's riskier and it's boring and it's, ugh, I don't want to do this. It's not programming real. I mean, I'm sure you write stuff, like code stuff, but yeah, it's tedious. It's not recurring. They probably end up having some support contract, which is what they want to sell. And the data migration is going to happen once.

Paul Giese: Yep, exactly. Yeah.

Jonathan Stark: And actually, come to think of it, I had some history, well, we don't need to go into that story, but I actually have some experience in this space too, migrating people from FileMaker to MySQL when the web was really taking off. Anyway, let's talk more about specialization. We've talked about how it gets you great referrals. You even mentioned a little bit about the referral inbounds not really coming from other places because you're kind of the one and only for this thing, this almost, I don't know, this dirty job, so to speak, that they trust you to do. You're the one and only. Okay, great. How does that make your business better? Everybody wants more leads. It sounds like you're getting a good pipeline of deal flow, so everybody wants that, has to do with being the one and only. But, you know, if you were, for example, billing hourly, if we're going to move into pricing now, if you were billing hourly and you got better and faster at your process and creating boilerplate code or boilerplate documents or code or tools for yourself, it wouldn't make sense, but that's not what you're doing. So can you talk a little bit about how you price these projects when they come in?

Moving from Hourly to Fixed Fees

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Paul Giese: Yeah, let me kind of tell the background of kind of my pricing journey because it, you know, as I, because I started right with just consulting, doing kind of a generalist, I'd say in the biotech IT space, I definitely started just doing hourly work, quickly realized like, hey, this, you know, I've written code. I need to like have some kind of fixed fee. So at first I was, I charged like a small technology fee, like say $3,000 plus the hourly work. And that was kind of my model for a couple of years. And then eventually, like, as you said, right, you realize like, okay, well, I've got to process down, you know, the way to like manage kind of the risk or to kind of like communicate, I guess the value of what I'm providing. I came up with this model where you would price based on the volume of the transactions that you're migrating, right? So that would be like, hey, if I'm moving 10,000 unique transactions versus 100,000 transactions, I'm creating more value by moving 100,000 transactions, therefore you should pay a higher fee. And when I did that, like, I don't remember, it was a couple of years ago that I kind of moved to that model. And I, you know, when I moved to that model, I probably, a couple things, one, my revenue significantly increased. But I also like realized like that mentally, you know, I never like intentionally would sandbag, you know, your hours, but it's like, hey, like I'm definitely incentivized to take my time, you know, but now it's like, oh no, I'm like really incentivized to like make this process as efficient as possible because any hour that I spend, like I'm not getting paid any extra by, you know, whether it takes 50 hours or 30 hours. And so it's like, I want to shave down the hours as much as I can so I can focus on sales and marketing. And I really, I was really surprised when I finally made that jump of how freeing that was and sort of the like, not only I think, not only was it freeing, you know, financially, but I also like no longer felt bad about, oh, I made a mistake, like should I bill this to the client? Like, you know, it's like, no, now it doesn't matter. It's like, you know, it's like I can make a bunch of mistakes and hopefully I'll learn and that's a value that will eventually, you know, bake, you know, go into the, to executing the next project. Yeah. But I think like that, that was kind of a journey and it really was a pretty, like it really like freed me up mentally because in it, it like was like, okay, well, I can take my time. I can slow down as I'm executing these projects because I don't need to feel bad about billing this, but it's like, I can slow down and meticulously analyze and say, okay, Hey, how can I make this workflow work better for me so that the next time this isn't a problem. And that like in that I think is compounded, you know, significantly over the years and especially now with like these AI tools where it's like, you know, it used to be like, okay, well, I have to dedicate a whole day to like figuring out, like debugging my code. And now it's like, well, I'm just going to have, you know, Claude code. Like, this is the bug I'm seeing. Like, can you help me debug this as I'm doing it, as I'm executing the project? And, and so then you kind of see the like fix real time and it just kind of like snowballs into the, to the point where you're like, whoa, now I, now this process is like really efficient. And, and you kind of gain all these like little micro efficiencies where you can shave off like 15 minutes there, 20 minutes there, and then over time you go, well, okay, now this, when a 50 hour project is now down to like a 20 hour project, and I think that that's just, again, just another value of like saying, Hey, like I have one process, I know I'm going to have the same thing again for another client, you know, in, in a couple months and it's just worth spending the extra time now so that next time it's easier. Um, and if you weren't like specialized, right, it's like, well, then you don't know, you're, you're not necessarily going to get that benefit the next time the project comes around because, you know, you're just taking on any project that comes up, right? And so nothing compounds, you're starting from zero every time. Yeah, exactly. Exactly. Yeah.

Jonathan Stark: So there's a, a flip side to that, that I want to call out for the dear listener, which is that, that freeing feeling when, yeah, I had the exact same experience. I never, I actually tried to work very quickly because when I was billing by the hour, because I knew that it was so common to go over budget that, and I hated that. I hated having to go to the client and say like, Oh, I'm not 90% done, 90% to go. And I know we burned through the budget and I know you're getting tense, but you know, there's, you've asked for all these changes that you didn't tell me about upfront and like, I hated that. So, so I, and I thought I was really fast and then I switched to fixed prices and then I found out what really fast was because my brain just started giving me ideas that never would have occurred to me before, including things like buying plugins and, and footing the bill or buying, buying like code and footing the bill, as long as it was, as long as it was high quality and it was going to save me time, I never would have thought of something like that before. It just changes the way you think like financial incentives are really important. And when you switch to a fixed price, you are finally aligned with the customer in the sense that you both want it done well, as quickly as possible. So let's switch to the getting it done well piece because the, the flip side of wanting to save time because you're not getting paid any more money if you spend more time, flip side of that is people can start, if in theory can start cutting corners. And so I have sort of a two part question when, have you ever had any clients when you present them with a fixed price that are nervous about that and ask for some kind of guarantee or something, or has that never really happened? And, and on your own side, like what do you, what have you offered without being asked in terms of, um, basically a quality guarantee, something like that?

The Freedom of Fixed Pricing

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Paul Giese: Yeah, I mean, so there's a couple of different ways to answer that. I haven't had too many clients push back and be like, "Hey, how do I know that you're going to deliver?" I think that's probably because a lot of times I'm coming in through the implementation partner. I'm assuming that the implementation partner has said, "Hey, we've worked with Paul before on past projects." There's a level of trust between the implementation partner, the client, and myself, right? We're all kind of on the same page and working together.

I think the other component that has worked well is when it might be a legacy system that I've never worked with before. There's a risk where I have to say, "Hey, I think I can do what I'm saying I can do, but I've never worked with your legacy system before." We just have to be flexible around what we can do. I can always load your data as individual journal entries. That's a pretty safe fallback, and we can adjust the compensation accordingly if needed.

Another component is adding in a discovery phase where I might charge a small fee, like $3,000 to $5,000, to load a quarter's worth of data into your sandbox. You can look at it there and see if I can do what I'm saying I can do. If you're happy, we can sign the full engagement. If not, you're just out that small discovery fee. That kind of de-risks the project. Honestly, that serves as much for the client as it does for me because it's my name on the line. I care deeply about the work I'm doing, and I don't want to be telling people I can do something that I can't do.

I think that's a huge value for working with a solopreneur. The solopreneur is the one selling and delivering. It's not like you talk to a salesperson and then they throw you onto a team that has no context, and the salesperson promised you the world and now they're gone. People have probably been burned by that before. I think that's a real value that someone who's a solopreneur can offer. I'm the one who's doing the work, I really care, and it's my name on the line. For me, it goes back to that partner relationship because that's so important. I want to make sure that everybody stays happy because I want this partner to continue sending work to me. I'm relying on them for future deals. It's almost like you said, it's one of the advantages of it being...

Building Trust and Reducing Risk

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Jonathan Stark: You know, when I was doing consulting, I was always competing against bigger companies with a deeper bench. Maybe not as much expertise, but a deeper bench. So they'd be like, "What if you get hit by a bus?" and those kinds of questions. I talked to a guy at Deloitte, and he was like, "Oh, I'm a TAM." I'm like, "What's a TAM?" And he goes, "It stands for Technical Account Manager." I said, "What's that?" And he goes, "I'm the guy that comes in and tells the client that what the salesperson sold them isn't what they're getting." That's a common experience, you know, based on the number of lawsuits pointed at Deloitte. So, you mentioned that it was sort of a number of transactions pricing basis. Is that still what you do? It sounds like you do something different now. So how are you pricing?

Paul Giese: That's what I do today; it's based on the volume of transactions. I really like that because I think it correlates. Most of my clients understand that the more transactions you move, the more value there is. If your pricing is based on some kind of gauge like that, I think that makes sense to people. Obviously, people do sometimes push back on the price, but I think they understand what they're getting. For me, the more volume there is, that kind of protects you against complexity. If you've got more transactions and there's more complexity, you're obviously getting compensated more for that risk.

Jonathan Stark: Okay, so you mentioned you're a solopreneur. In your email, you mentioned a couple of contractors or something that you have or are working with. Let's talk about that a little bit. It doesn't sound like you have mini-me's, which is the consulting model where you try and hire junior versions of yourself so that you can do the arbitrage of them not needing as much money and you can bill them out double their hour, essentially what you're paying them by the hour. That's not what you're doing, right?

Contractors, Delegation, and Quality

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Paul Giese: Yeah, I've tried a couple different things over the years and kind of where I've landed now is I have a woman who's a sales consultant. I have an accounting background, developer. I think I committed the cardinal sin of entrepreneurship, of building something before you sell it. So sales is definitely not my expertise. I mean, I've definitely learned kind of a sales process, but I think she's kind of helped get me, I think she used to sell NetSuite and now it's like, okay, now I understand how a sales organization works and having metrics and understanding like, hey, here's the cadence for following up and all that good stuff. And then I've got a woman who is a part-time local woman here in Austin who is now helping me execute on some of the projects because now that I've standardized a lot of these processes and workflows, that kind of frees up my time to focus on the more complicated projects as well as sales and marketing. And then I've also been working with a marketing agency that helps with some social media stuff. I've experimented over the years with a variety of different social media ideas. I've posted, I don't know if you know who Justin Welsh on LinkedIn is, I took his course and followed a lot of his stuff for a while. But I think this stuff is constantly evolving as you well know, and so just trying to find some other people who can help me grow the business essentially.

Jonathan Stark: Okay, so that's interesting because there's a couple of interesting things going on here. So one, you described it as a productized service, but you are pricing it differently for different clients, but it's based on a very easy to measure proxy. So I would still call that productized. It's almost like tokens or some kind of usage-based or number of subscribers in ConvertKit and that's what your monthly fee is. And so because the provider, you in this case, or ConvertKit or Moonclerk or anybody, they know, like if you have a ton of transactions or you have a ton of subscribers or whatever, you're probably doing better. So it's very safe to say that the client is going to get more value out of the engagement than someone who is just getting started and only has a hundred transactions or a hundred subscribers. So even though the price changes from client to client, I would still categorize that as a productized service for sure. Because the variability, I think the key feature of a productized service for me is that the variability is really low. So based on the number of transactions, you've got a real good idea of what your level of effort's going to be.

Pricing by Value Instead of Volume

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Paul Giese: The volume of the transactions impacts some level of effort, but it's definitely not like if you go from 10,000 transactions to 100,000, the effort doesn't 10X. Right, exactly. So it's not necessarily, like the level of effort for me is probably about the same, but again, you're pricing based on value, not on effort.

Jonathan Stark: Right, and there's a similar type of situation, even if you were doing, let's say you were doing podcast booking for someone, not you, but say someone's doing podcast booking, it's like basically a PR agency specialized on getting people on podcasts. If you had some kind of a project with me, solopreneur, you know, soloist, then, or you also take clients that are like, I don't know, Fortune 50, like Staples or Costco or something like that, and you're getting executives at Costco, one executive at Costco booked on podcasts, you're doing the, air quotes, exact same thing, you're getting one person booked on podcasts, but working with me is gonna be different, fundamentally different than working with the CEO of Costco because there's gonna be all these other people involved and you're gonna have more meetings and there's gonna be more red tape and all that other stuff, even though ultimately you're gonna do the exact same thing. But to your point, you can probably charge 10 times more, maybe 100 times more to get the CEO of Costco booked on stuff, but the level of effort, even though it does go up, it doesn't go up 10 or 100 times, it's just some red tape that you have to deal with, like even just getting yourself into their payment system will be a pain. So yes, for a bigger company or for more transactions, it's some amount of more work, whether it's red tape or whatever risk or something, but it doesn't go up linearly. Anyway, so interesting point to call out, it's not something I talk about very often with productized services, so I figured it made sense to call it out since you brought it up. Okay, so the other thing that you just mentioned is that you've got so much process dialed in that you can tell where the hard parts are and where the easy stuff is, and so you can hand off some of the easy stuff to someone without a real risk of it causing a problem for you. Do you think that your growth in the future, unless you're perfectly happy where you are, if you're gonna grow in the future, would it be adding more juniors, or do you think it would be keeping headcount roughly where it is and, say, doubling your prices?

Paul Giese: Oh, that's a good question. It's probably a mix of both. I mean, my view of price is probably if you're getting pushback on half your projects, on the fee, you're probably priced at the right rate, and I probably don't get pushback as much as I should. So, I mean, and I think the other lesson is when you're selling B2B services, like the budget's there, I'm always kinda like, what, there's always a little bit of like, whoa, okay, this is what we're doing. It's not like it's me writing a check to get my drainage fixed in my house or something like that, right? Yeah. And so, I think there is an element of, hey, like, certain clients are, if you're PE-backed and the PE parent is like, hey, we want all this data brought into your NetSuite instance, and we need the reporting, like, for them, they're not paying, the cost isn't a driver. It's like, hey, we want speed, reliability, and a partner who we know we can rely on to get this done right the first time. And so, that's kinda what you're, I think that's what those people are paying for, and the cost is maybe not the primary driver. As far as growth, yeah, I mean, I do think they're, like, I don't know if this is ever, I think there's enough judgment in this data migration process that I don't, I think if somebody were gonna fully automate it, they would've already done, they would've fully automated it already, because I think the desire to get to that spot is probably there. I mean, this is a big enough pain point that somebody's definitely tried to do that. And so, I think, like, you can't automate the full, like, it'll never be just, like, click a button and it all does it, or an AI agent's gonna do all this data migration for you. I just don't. I think that that's realistic. I think there's always gonna have to be an expert human in the loop who can kind of review and make sure that what's going on is right. And so I think that that would also require some level of growth. But I mean, I think for me, I like doing my own thing. I like having a small firm. For me, the answer is I wouldn't want to get too big. I kind of like the solopreneur or small firm operator. Life is pretty good, I think.

Testing the Ceiling on Price

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Jonathan Stark: Yeah, well, I obviously agree. I'm just curious. So what, do you think, I mean, you're probably younger than, I know you're younger than me, and you've been doing this since 2019?

Paul Giese: Yeah, 2019, yeah.

Jonathan Stark: Yeah, is there, this is just totally random. If you don't have an answer, you don't have an answer, but do you see a point at which you are thinking about selling the business? Like, do you want to build the business in a way where it would be sellable someday, or is that not even on your radar?

Paul Giese: Yeah, I think that's a long-term goal, is to get to the point where you can sell the tool. I don't know what that looks like. You know, from my understanding, like, I mean, I think a lot of the reason that I've been motivated to kind of, well, among other things, to bring somebody else on is that, like, if I sell the business, you know, I don't want 70% of the value to walk when I walk. And so that's why having the documented processes and, you know, a code base that's solid, to me, like, that's a big value. And so if you can prove, like, hey, if I get to the point where, like, I'm doing mostly sales and the really technical delivery, and I've got, you know, a team of one to three other people who are kind of doing most of the delivery work, then I think you could prove, like, hey, like, there's value here. And if Paul, like, sells, it's, you know, half the value is not walking out the door with Paul. I mean, but again, like, that's kind of my, like, hypothesis of what I've read and heard from other people. But, you know, I think for now, I like what I'm doing. But I think that's definitely, I think that's the long-term goal.

Jonathan Stark: Well, it sounds like you're well-positioned to be the one who does create that button that just imports all the data someday, maybe.

Paul Giese: Maybe, we'll see. But yeah, data is so messy. There's so many exceptions.

Jonathan Stark: Yeah. Well, this has been super cool. I really appreciate you coming on and being so transparent. I hope and I think it will inspire people to, I mean, just believe in the specialization and niching down. You've got an interesting, a couple of interesting things. It's sort of like a triple specialization. That's very, it's diversified in a way. Like if NetSuite started shrinking as a platform, you'd still be the guy who does sort of migration of financial data. There's a lot of other platforms you're touching. So you could pivot relatively easily. And you've got a productized service that is so dialed in that you can delegate it to a junior and have other people helping you, making up for revenue from it to outsource things to or delegate things to other people. And you've got variable pricing on the productized service. So you've kind of avoided one of the main downsides of productized services, which is you don't end up leaving money on the table when a big company buys something for a price that they would have paid more for. So you've really got it dialed in. This is really good.

Lessons and Closing Thoughts

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Paul Giese: Yeah, cool. Thanks. Yeah. A lot of lessons learned over the years, so.

Jonathan Stark: Well, cool. Where can people go to find out more about what you're doing? Maybe refer clients to you or get in touch with you on LinkedIn or something.

Paul Giese: The best way is either follow me on LinkedIn. I'm pretty active on LinkedIn or to reach out on my email. I said, Paul at optimaldataconsulting.com are really probably the two best ways to reach out to me.

Jonathan Stark: Great. Well, this has been awesome. Thanks so much, Paul.

Paul Giese: Yeah. Thanks, Jonathan. Thanks for having me.

Jonathan Stark: All right, folks, that's it for this week. I'm Jonathan Stark, and I hope you join me again next time on Ditching Hourly. Bye.