Which is better for your start up? I say service, qualified by the fact that I have just been involved in a product launch. The main advantage with a service is that every customer experience is new production run. You can change the delivery – instantly. Not so if we have just produced 10,000 widgets. We must sell first, then adapt and improve. Services have the following advantages:
- Lower start up costs
-
Shorter supply chains
-
Reduced cash traps
-
Direct selling to consumer
-
Ability to change marketing mix quickly
-
Possible electronic duplication
-
Ability to leverage your employee skills
This is not to say products don’t have advantages. They are just more difficult to launch. Of course, both products and services can be successful. But for our first start up foray, we should try to make it as easy as possible.
But are product ideas easier to protect from imitation than service-based ideas? Your lead times are also potential competitor’s potential lead times. First mover advantages, channel monopolies etc might all be easier with products… but you’re right that they’re riskier and require “lumpier” up-front payments…
great comments Dr Dre. The negatives for a product serve as protection in reverse.
Steve