Resist the Temptation: Product, not a Service. Here are 5 Reasons Why

We did not resist the temptation of San Sebastian sweets

We did not resist the temptation of San Sebastian sweets

Will not build a service business, will not build a service business, will not… oh snap! I just did.

The allure of immediate revenue from services is too strong of a temptation for many to resist. Software companies often walk an especially slippery slope: bespoke software systems (aka. custom made software). It’s almost impossible to say no: the customer is willing to pay for the development of the first version of your product, and actually use it and give you feedback?

But a bespoke software system fitting the needs of one client, and a product loved by many have so little in common.

Vision vs. Empathy

With a bespoke system, empathy comes first, vision second. You build exactly what the customer needs. You answer their specific requests. You immerse yourself in their world to really understand. You make it fit their way of working, and their environment. And everyone has their own way of working and slightly different needs.

With a product, empathy matters, but only in function of your vision. You envision a product, and then check if a large number of customers agree. And then obsessively iterate until you discover a product.

Yes, you have to discover it. First envision, then search hard until you find it. 

Treat the Product Business as a Startup

And I don’t believe you will easily switch back to a product, after a couple of projects. Changing tracks back to product development is virtually impossible… A product and a service business are very, very different. Product requires investment of time and resources, focus and a freedom to search for a new business model. And a strong visionary entrepreneur (intrepreneur) to drive this process.

Let me break this down.

1. Time and commitment. Employees of a service business are very busy delivering. You don’t build a product company between answering customer calls and running after pressing deadlines.  A startup project requires a real commitment. Count at least 20h-30h a week of focused work for 3-4 months just to develop the idea and have an initial validation.

2. Yes, a startup project. Developing a new product for a mass market is by definition a startup project. Startup is a temporary organization designed to search for a repeatable and scalable business model. You’re not only building a product, but a complete business around it.

3. Focus. Discovering a product (and the business around it) is more often than not  about deciding what not to do and not to implement. A service business can afford to be much more opportunistic. Master the illusive art of focusing.

4. The entrepreneur. You’ll need a focused, visionary entrepreneur to become the driving force behind the product. A “gets sh*t done” person – able to deliver high quality execution under conditions of extreme uncertainty.  The entrepreneur will soon need a team of committed,  creative and hard working people to jump in the adventure.

5. A mind-shift and a different approach. Service is a one-to-one relationship. You deliver exactly what your customer needs. The better you can understand the specific situation, the better you can tune the service for your client. Product also thrives on deep understanding of your customers. Many customers. It’s not about fine-tuning to meet specific request of one person. It’s about zooming in, scoping down, and finding that sweet spot – the product – that many will love.

Ever wondered about these funny terms of “customer discovery” and “customer development”? The terms and the approach behind them are counter-intuitive. You envision a product, and you find customers for it. And because this doesn’t work the first time, you start iterating. You have to discover the product.   

Have it all covered? Good. Doing this in practice is hard. That is exactly why I keep blogging about a thing or out I do figure out the hard way.  You can subscribe to my posts here.

You think you can pull it off differently? Do let yourself be heard – comments are open as of… now!

 

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