Product Companies Vs. Service Companies

Episode 146 | Product Companies Vs. Service Companies
Date: 2013-08-20
Link: Startups For the Rest of Us
Services are customizable (for a price) while products are prepackaged.
You can scale a product company a lot higher with less people.
Adding infrastructure is cheaper than adding people.
Typically with a product company you’re less dependent on a single customer.
With a product company you can generally take time off and customers don’t notice.
It takes time to hit scale.
Service companies tend to charge exponentially more per customer because there is a human that needs to deliver those professional services.
It is easier to customize your service offering on a per-customer basis.
You can prepackage your service offerings as if they were a product.
In a services company cutting costs generally means firing people.
Service companies tend to have lower margins than product companies.