Hey there!
Let's talk about something that's been on my mind lately - software pricing. It's getting out of hand, isn't it? I mean, you start with a free plan, but before you know it, you're being nudged to upgrade to a paid tier. And suddenly, you're shelling out way more than you'd planned.
Commodity software, luxury prices
Look, I get it. If the software is super complex, a high price makes sense. But here's what doesn't sit right with me: even when there is a sea of competitors offering similar features, the prices don't budge.
Take scheduling software, for example. When I launched NeetoCal, there were already 30 competitors out there. Thirty! That's a crowded market; by definition, it's a commodity, and you'd think the prices would be low. But no - what we're seeing instead is luxury pricing.
This is where Neeto comes in. At Neeto, we're challenging this trend by building affordable alternatives.
Growing Neeto the organic way
Let's be real — getting new customers is no joke. Most companies have marketing budgets for running ads on Google, LinkedIn, and similar sites. The playbook is simple: take the money earned from customers, give a chunk of it to companies like Google, and bring in new customers through ads.
I've got two problems with that. First, handing over money to a trillion-dollar company never felt right. Second, I'm terrible at it. I don't have the energy to keep up with monitoring keyword performance across multiple platforms week after week. It's just exhausting.
So, we took a different route. At Neeto, we're skipping the middleman and letting our customers spread the word for us. How? By offering affordable prices, we make it easy for our customers to continue using Neeto products.
Every time someone shares a booking link, they're promoting NeetoCal. When someone shares a NeetoRecord video, they're promoting NeetoRecord. It's organic, and it works.
It's a win-win - affordable prices for our customers and organic growth for us.
Building Neeto with two-person team
We're building around 20 products at once. Each product got two engineers. Just two. (Okay, sometimes three if we're feeling fancy.)
Why not add more engineers and go faster? Because more people = more meetings = more coordination = more overhead. Our engineers don't just code - they plan features, write docs, provide support and even talk to customers.
This lean approach isn't just about simplicity - it's about cost. We need to keep our expenses low, which means small, efficient teams.
The sustainability question
Neeto products are very price-competitive. Our pricing is so competitive that people ask, "Is Neeto sustainable?"
The short answer is: not yet. Neeto doesn't make enough money to stand on its own today. Neeto is backed by BigBinary, a Ruby on Rails consulting company I started over 12 years ago. If I look at BigBinary and Neeto combined then today we are profitable. BigBinary is not only supporting Neeto but is playing a crucial role in ensuring Neeto products are affordable. How? Let's take a look.
A few years ago, I decided to bring fresh talent into the mix by hiring new graduates (we call them "freshers" in India) from various colleges and training them in Ruby on Rails through our in-house BigBinary Academy program. The "BigBinary orientation" is a six months program.
A question that bothered me was, "What these freshers will do after the training." Typically, most consulting companies put these freshers on the client project as "junior engineers," and they bill a lower rate for these junior engineers. BigBinary has a reputation for delivering quality work, and putting freshers on the client project would dilute the brand. I needed to find a different solution.
The obvious solution was to give these freshers some dummy projects to work on so that they could get some hands-on experience. From my personal experience, working on dummy projects does not bring seriousness, and it's not fun. I wanted these freshers to work on real projects. They should see errors. They should have a reason to see the log and hunt for a transaction ID. They should get support questions from our customers. To solve this problem, I invented Neeto.
These freshers will work on Neeto and learn Ruby on Rails, React, and SQL in the real world. I pulled eight senior engineers from consulting work and made them "tech leads" in Neeto. And the work in Neeto began.
Now, the issue was who would be the "product manager." What features should they develop? What products to build? We were using Calendly and Loom, so we started working on NeetoCal and NeetoRecord. We have seen our customers use Zendesk and Intercom, so we started working on NeetoDesk, NeetoChat and NeetoKB.
We used Balsamiq, so we started building NeetoWireframe. We had seen our clients use JIRA and Asana, so we started building NeetoPlanner.
We didn't want to increase our cost by hiring tons of "product managers," so we let our engineers be the PMs. As I mentioned earlier, we assigned two engineers to each product.
These engineers would examine the competitive landscape, decide on the main feature to build, and then go and build it.
Let's talk numbers
So BigBinary hired a bunch of freshers, trained them for six months and let them work on Neeto. How BigBinary is benefitting from this endeavor? Good questions. Let's talk numbers.
When I hire freshers, I typically offer around 25,000 USD as the salary in India. For their first six months of employment, they are in the "orientation" phase, where they learn various topics from BigBinary Academy.
After six months, they will join the Neeto engineering team, where they will work for 18 months. They have now spent a total of two years in the company, and the total cost of their time in the company is around $50K.
I believe in these two years, these freshers gain experience equivalent to four years of work experience in other companies. Now, I'll try to put these freshers into client projects.
To keep Math simple, let's assume that the salary is the same: $25k. At the end of the third year, the total cost to the company would be around $75K. If I want to recover the full $75K in one year of client work, then let's see what my billing rate needs to be.
Let's assume that the fresher will work 46 weeks out of 52. Each week is 40 hours. So the total working hours in a year are 46 * 40 = 1840 hours.
Now, let's divide 75,000 by the number of hours. 75000/1840 = 40.7
So, if I bill the fresher for the whole third year at $40/hr, the fresher would have paid for their costs at the end of the third year. In this Math, the BigBinary has not made any profit. However, the 18 months of work in Neeto didn't cost Neeto anything. The whole 18 months of work were a surplus.
Now, let's look at the fourth year. If I can put the fresher in a client project in the fourth year at the same billing rate of $40/hr, then BigBinary will make some profit in the fourth year.
I've kept math simple by keeping the salary at $25K. The salary goes up yearly, but you get the idea.
Most consulting companies that dabble into products leave the consulting behind if they succeed in the product. Not me. First of all, BigBinary has been doing consulting for over 12 years, and we are good at it. Second, BigBinary and Neeto have a very symbiotic relationship. They help each other.
When engineers have worked on Neeto for two years, we know very well what they are good at and which areas they need to improve upon. This means BigBinary gets thoroughly vetted engineers for client work.
Neeto benefits from BigBinary's financial support. It provides room for Neeto to grow and develop a good product market fit before It can stand on its own.
This is how I've been running both BigBinary and Neeto. In the beginning, I mentioned that Neeto is currently not profitable on its own. Still, if you look at BigBinary and Neeto combined, the joint entity is profitable since BigBinary Consulting is making enough money to pay for Neeto's work.
Since I shared all this information online, I received some comments about why I'm sharing my secret recipe. Well, first of all, there is nothing secret about it. Secondly, execution is everything here.
Building a consulting company is challenging, building a product company is hard, and creating 20+ products is even more difficult. Building 20+ products and running a consulting company is not for everyone. It requires a lot of discipline and a long-term goal.
Competing on price
Business books love to say, "Don't compete on price." But isn't competing on price the essence of capitalism?
I agree that competing on price is not for everyone. If I had brilliant new ideas to bring to the world, I would also create innovative products. However, my strength is not bringing new ideas but implementing the ideas already out there in a cost-efficient manner.
Closing thoughts
Neeto is an experiment on many fronts. It's an experiment on building 20 products at once. It's an experiment on building products with freshers with no experience of building products. It's an experiment on building products without "product managers". It's an experiment on mixing consulting with products. It's an experiment on building products without any marketing team, without any SEO and without any external VC funding.
Will this experiment work out? Only time will tell.
We publish product metrics every month. To see how we are doing, subscribe to the Neeto blog.
I hope you enjoy using Neeto products, and if you have any questions, feel free to reach out to me at LinkedIn or Twitter.
