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RodinStar / Startup

Are you in a Product vs Service dilemma? Maybe I could help you!

Back in 2011, when I co-founded WowMakers with my best friends, we didn’t have much idea what to do with it. We had a good experience in graphic design and a passion for it but our ultimate dream was to develop a world class product from India. We had many ideas at that time but we were not sure what to choose or how to grow it into a business.

This lack of confidence and fear of failure made us take the safe service-backed product model. Just like many Indian startup entrepreneurs today, we thought we could play it safe by starting with a service business and developing a product in parallel.

We knew if we had money coming in from the service business, we could maintain a team to develop the product. What we didn’t know was, we were trying to ride two roller coasters at once!

It took two years and a lot of blood and sweat. But we were able to formally release our product to the public only a few weeks back. If we had a chance to start all over again, we would have decided to start working on our product idea from day one

Let me tell you why:

    1. If you are not too bad, you will survive doing projects and generate income from service. But it demands one thing from you constantly: your time.To do any kind of service, no matter how simple it is, you have to bring in sales, talk to clients, hire people, get projects done, pay salaries and meet all the expenses. It is a full time engagement. You can’t run it as a side business if you want to generate money from it.
    1. We started service to support the product. Our priority was product. Few months into services, we started generating a decent revenue and hiring more people because we had to make profits. Only then could we develop our product. Finally we fell into an endless loop of projects. Paying salaries takes up a lot of focus and energy, it left us with little time for thinking of ways to get out of this loop. Service became our priority. Bringing in more projects became our main objective. Developing the product wasn’t. Our priorities changed.
    1. India has already received enough abuse for being the “outsourcing nation”. When you do service, even if you’re an entrepreneur, you are still getting hired to work for others. I respect those who are successful in the service and outsourcing business. But because of this fixation with services, we haven’t been able to give birth to a WhatsApp, Instagram, AirBnB or Uber. We have to change that. We can do it. Some of us are already killing it. But I think the majority is still either aiming too low or playing it too safe.
    1. You can start a service business at any time. It’s no big deal. Every product has a time-window inside which it is born, grows, reaches a peak and dies out. SMS reached its peak five years ago and now it barely exists. Smartphones are going places. Wearable devices and 3D printing are yet to catch on. So it’s important to ride a wave and develop a product that fits it’s time window.
    1. The most important lesson learned: If we had begun with product from day one, by this time we would have at least identified whether the product would work or not. With this knowledge, we could have generated a revenue, made a pivot or started working on a new idea.

So, if you are in a service-product dilemma, think no further: do your product first. You will thank me later. Good luck!

Our story continues: Luckily in our case, service business was doing good so we split the founding team into two. Two of us are taking care of service while me and my co-founders Jaseem and Nithin are working full-time on our product CrowdStudio.

(This post originally appeared on YourStory.)

About the Author :

I’m Vivek Raghavan, a startup entrepreneur from India. I Co-founded WowMakers and CrowdStudio, along with my friends. Connect: FacebookTwitter

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If you want to read more on the topic,
go through Alok’s PPT on Products vs Services

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14 Comments

  1. Profile photo of Vivek Raghavan

    Thanks Asha! 🙂 

    I would love to hear Rahul’s insight on this topic! 

    Just gone in to Alok’s PPT. He just killed it, as usual 🙂

  2. Profile photo of Jaykishan Prithiani

    @Vivek I am sailing in same boat.

    This is very much my situation : We knew if we had money coming in from the service business, we could maintain a team to develop the product. What we didn’t know was, we were trying to ride two roller coasters at once! 

    We are App development co. and i want to shift to product base (my product is already in market – but i am not able to shift my gears to take it further), as you said i am still in loop and waiting for break point to get out of it and only concentrate on my products.

  3. Profile photo of Rahul Shelke

    If you have to choose between service or product and you have a product idea then I would recommend going with product as Vivek has mentioned in this post.

    But I understand the income part. So you need to have income to at least take care of your day to day expenses. So what would you do in this case?

    I would recommend Teaching in colleges or institutes, especially for techies. Teaching requires you to spend 2 to 4 hours of each day into lectures or practicals and rest of the time you can utilize for your product development. This also provides opportunity for you to get connected to students who will be happy to help you into development part with an expectation of learning something from you. So its a win win situation for you. You get time as well as resources to get things done. Initially it will look slow process since they will require some learning time, but once they get hold of it they will multiply your efforts. At the end, the time required for you to develop product will be less in this case than working in service sector in parallel to developing your product.

    Hope this helps someone who is looking out to start!

  4. Profile photo of Vikram Kohli

    Good article Raghav. Recently got a mentoring and guidance on same topic from Alok. Summarizing the inputs given:-

    1) Product building and then acquiring customers for your product need hell lot of money. And actually money is required once product is build and traction is required.

    2) Be in service industry. Learn how to do actuall dandha and learn on other peoples money

    3) Investors give money to great teams. So focusing on team with right skillset(techni + domain guys + one thick skin guy who can handle all pressure)

    4) From outside perception for product startups is very cool but in reality its not.

    And from my own experience of first startup getting users is difficult , making them pay for your product is even more difficult.

    Best wishes for CrowdStudio Raghav with alot of traction and paying customers 🙂

  5. Profile photo of Vivek Raghavan

    Thank you Alok 🙂 Checked it out. To the point, as usual!

  6. Profile photo of Vivek Raghavan

    Thanks Rahul,

    Doing a part time job to support your startup might also be a good option. Have you tried it yourself or know anyone pulled it off?

  7. Profile photo of Vivek Raghavan

    Thank you Vikram. 

    Completely agrees with your points, especially on the 4th point!

    Thanks for your wishes to CrowdStudio 🙂

  8. Profile photo of Rahul Shelke

    Hi Vivek,

    Yes I did this myself, though not as a full time lecturer. I was giving lectures as a external faculty for one of the program recently started by VJTI, where someone from industry takes any one of the recent trend and teach about it to students for one semester. These lectures are once a week for 2 hrs. And per lecture amount was more than enough for my own monthly expenses. 

    Also, one of my friend is working as a faculty member in a college along with building his own product. When he introduced about his product to students, few of the students came forward and started to help him building it. They themselves divided their work in team and learned python, jquery, bootstrap on their own. Now my friend only work on developing core of the product, algorithms and guiding these students, rest of the time consuming tasks like front end development, database management, etc. are all taken care by his students and without any monetary expectations. From his experience, I recommend everyone to try this way if possible. 

  9. Profile photo of Ananthakrishnan V S

    Exactly right Vivek.We got into the services model,and got stuck there doing jobs for people,with no time to work on our game,which was the thing that we were so hyped about doing from the beginning.

    Its always best to work on your product first,but the services thing did help us lean to handle customers.

    I know you guys started wow makers at SV,where we were virtually incubated till last year.Have you guys moved somewhere else now?

  10. Profile photo of yyogiraj

    I concur! Quite appropriate, services is like running on a treadmill, you burn but reach nowhere. Not discounting the great value service industry brings, but….you got it there.

  11. Profile photo of Rohit Khandelwal

    Dude Vivek ! Thanks for writing this. Have been circling around this for sometime now. Alok’s ppt and your article do a great job of structuring key points and insights ! Saved a ton of time.
    Keep sharing. All the best.

  12. Profile photo of asha chaudhry

    thanks so much for commenting on vivek’s post rohit! rodinhooders like YOU are the only reason i keep handpicking and re-sharing our old, yet valuable content, especially over weekends. to me, even if each incredible article helps one single entrepreneur a day, it’s so worth everything!

    your comment in my inbox made my sunday 🙂

  13. Profile photo of Rohit Khandelwal

    Thanks for sharing the article, was really helpful.

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