What do you think which one is better?
Good insights in the existing comments.
Having done both, I'll add this:
I prefer product-based models because the daily job of building something for many, incrementally improving it every day is almost like art. Service-based feels a lot more like being an employee and just executing what the client wants, which I've found much less fulfilling.
Starting service-based and moving to product-based seems to make the most sense.
I never thought about product-based models the way you just described it (i.e., never thought about my product to be like creating art). That's awesome and really refreshing to hear as sometimes I feel completely overwhelmed when trying to continuously improve what I'm building for my audience. Thank you!
Your reply is very resonating. True that we should move over where it makes the process more fulfilling & that which makes sense
thank you for this - this is incredibly motivational
Simple answer is that product-based is scalable and service-based is heavily restricted by labor.
Right now, Prentus is service-based but I am building the MVP so that the process can be automated. Only then will I be able to scale to 1000s of customers. Until then, I can only really handle up to 20 customers/apprenticeships MAX.
Completely Agree with the Scalable part. Good luck :)
Based on my limited experience. I think to start off a Services-based business is a tad bit easier to start off mainly because of the lower investment due to the lack of inventory you would be purchasing.
Both product- and service-based businesses sell a product. The main difference is that the product business actually sells a physical, while the service business sells his/her skills as the main product.
In the service-based business, clients invest in the salesperson or owner, which makes the client relationship even more valuable.
Product-based businesses can be assured that their product is going to be the same from customer to customer, making the customer experience fairly predictable.
Both have their pros and cons. I have been involved in setting up 2 Service based startups in India and I was lucky to have a ready team with me at all times.
I am just in the phase of starting a product-based business, and already I see my investment and risk more than that of my earlier Service based startup.
It all boils down to your ability, skillset, the team you have with you.
A service can be started, adapted, and start earning faster than a product. A product is much better at marginal revenue. There's also the cases of productised service making products on the side, THEN becomes a SAAS company. For a lot of IHers I think getting paid now would be brilliant!
This post is one amazingly detailed one on Productised Service: $15k/mo running a productized service and step-by-step guide to start yours
Awesome. I will check this out