Software Is Eating The World - Now Fieldwork Is Next

By Luke Krueger, Co-Founder, ICwhatUC

Nearly a decade ago, famous Silicon Valley investor Marc Andreessen wrote about how software is eating the world. In other words, more and more major businesses are being run on software. For all his commentary and the ensuing growth of tech startups, it seemed that Mr. Andreessen’s words would never touch the fieldwork industry. For years, the prevailing assumption was that the fieldwork industry could never adopt a software as a service (SaaS) business model because of the structure of fieldwork.

But as the SaaS model creeps further into the services industry and companies innovate on the idea, there is an opportunity for fieldwork to adopt the same mentality. Done well, fieldwork companies can realize increased incomes levels and coveted 10x multiples on valuation similar to those seen by successful tech companies all over the world.

Here’s how a SaaS makeover might look in fieldwork.

The SaaS building block: customer pain

From cell phone subscriptions to complicated business technology, people use SaaS solutions to solve ongoing pains. This already exists in fieldwork, where customers are faced with challenges like maintenance, touch ups, and preventative measures.

Applying a SaaS mentality to fieldwork, there are two critical opportunities in 2020 and beyond:

• Customers are demanding both privacy and convenience, no longer willing to give one up for the other.
• Customers are willing to pay more for companies that offer both privacy and convenience.

Since privacy is a constant (you never want your private information leaked) and convenience is a matter of having a problem and wanting it solved, there’s an opportunity for a subscription-based service.

Applying SaaS revenue structures to fieldwork

The SaaS model scaled well because software’s fixed costs are incredibly low – it costs almost the same to deploy 100 customers on your software as it does to deploy 10,000 or more. Currently, the fieldwork industry has multiple different fixed costs that scale linearly, meaning you never really get major economies of scale. However, that doesn’t mean you can’t adopt both a SaaS mindset and business model.

The solution is for providers to change their mentality about what they sell. Specifically, providers need to shift their mentality to selling outcomes, not hours. This is another fundamental part of the SaaS market – you use software because it provides an outcome on a regular basis, not because you inherently value the software itself.

In the fieldwork industry, here are a few examples of how that shift might look:

• Home visit → Selling the outcome of a regular diagnostic and issues fixed quickly.
• HVAC not working → Selling the outcome of regular cleaning of your HVAC.
• Paint is chipping on the house → Selling the outcome of regular paint touch ups and a fresh coat every few years.

The downside of the SaaS revenue model is customer churn when someone stops subscribing. However, this model is still far more predictable and smoother than a lumpy pay-as-you-go model. With a pay-as-you-go model, customers must take action to buy. With a SaaS model, customers must take action to unsubscribe. Put simply: inertia works for you instead of against you.

Lower cost base with technology

A typical hallmark of SaaS technology is unlimited usage, which seems impossible when you have high fixed costs and physical products like fieldwork does. However, technology has opened the door to creating a more efficient backend system. For instance, in the HVAC industry, a pay-as-you-go version of monthly inspections and annual cleaning would require 12 at-home visits. With a SaaS model, you’re incentivized to switch to remote, video-based inspections and only go in-person for cleaning. This helps lower the backend cost base and plays right into customer expectations of speed and convenience. All that’s left to do is picking a purpose-built tool for the job (hint: don’t use FaceTime).

The other part of the SaaS model that helps the fieldwork industry is the concept of preventative maintenance. Too often, customers will ignore the little things and then gripe about a huge bill to fix a big problem. With a SaaS model, you know that you have income coming in every month, so you don’t have to chase those huge bills. This aligns your business to offer more preventative tips and services that not only provide ongoing value (which is the value proposition of subscribing) but also help customers save money because they won’t be hit with those huge bills as often (which incentivizes them to continue subscribing).

A 21st century business opportunity

The SaaS model has typically focused on the white-collar world and ignored industries like fieldwork. That is changing now. Customers clearly have ongoing pains, and the ongoing virtual service model is the perfect solution. Now that technology solves these problems, why can’t fieldwork adopt these solutions? All the pieces are in place for a new revolution and consumers are begging for it. Ten years after Marc Andreessen penned his op-ed on software eating the world, it’s time to embrace that reality and let SaaS take over fieldwork as well.

Luke Krueger is a Co-founder of ICwhatUC, an industry leading augmented reality virtual work platform that helps the mobile workforce execute remote work.