As a digital service company, my last company I ran in Belgium before going to Türkiye and start Stage-Co, I often had harsh discussions with our internal management team about creating a product of yet another solution we delivered to a customer. Sometimes we even spend more time and effort into a project to make it product-ready. To no avail. Products never came out leaving me very very disappointed. When I hear investors pushing startups towards a product I can relate to the difficulty it represents and to be honest, I always made good money with services and even sold some companies based on services only. When I listened to one of the podcasts of Enis Hulli, a partner in 500Istanbul, interviewing Foriba, I heard again the confirmation. There is nothing wrong with starting as a service. The same story for Insider, that also started as a service before making a product. Some advantages of starting as a service:
- Low setup cost
- Short time to market
- Lower risk
- You learn the real needs of customers
I hear you talking about the scalability of course. True, multiplying revenue with a minimal incremental cost is not possible but you don’t want to feed those who failed with a product at the start versus those who started as a service. Here again, the team is the important game changer.
This only confirms my frustration that I should have forced towards products in my latest company. Though I also realize today that the team and knowledge you need to productise is totally different and it was clear we did not have that team at that moment. Amin.
I have my moments I kind of like Country and Western. Geoge Jones had about 150 hits and had a very turbulent life. “Where Grass Won’t Grow” is kind of a sad song but illustrates nicely that seed on a rock cannot grow. A lesson many startups should realize before starting the product adventure without understanding and connecting with customers. Listen here.