Why Startups Need To Follow the Hard Product Path

Four steps to a stronger company and a higher valuation

How a service model evolves into a product model

The modernization and automation of these traditional services begins with the streamlining of how they’re engaged, delivered, and paid for. What happens next, for those especially innovative companies anyway, are changes to the execution of the service itself.

Step 1: Stick to your positioning

The first thing to do is decide what your company is going to be.

Step 2: Keep the wizards behind the curtain

Success doesn’t happen overnight, and neither does the transition from service model to product model. If you switch over to a product model right away, you’re going to have to do a lot of educating, a lot of onboarding, and a lot of support.

Step 3: Sell out of the death spiral

At my last startup, we had a huge hiring problem. The way we were going about hiring was producing awful results, but we were so busy trying to fill positions that we never took the time to consider changing the hiring process. That’s a death spiral.

Step 4: Don’t chase bad product business for service money

The last temptation of a service model is sneaky, because it’s often disguised as a product use case. Bigger customers with deeper pockets can request all kinds of enhancements, one-offs, and special favors that they’re more than willing to pay for to make your product fit their needs. This can happen even when the customer sees the value in your product, because they’re not ready to let go of the status quo. So they’ll look for compromise, and by compromise, they mean customization.

  1. They see you as their own private development shop. They’ll request so many deviations from your product’s feature set that you’ll need to build a custom version just for them.
  2. They’ll go through on-boarding but never “get on board,” expecting your team’s hands at the keyboard forever.

I’m a multi-exit, multi-failure entrepreneur. Sold ExitEvent. Building TeachingStartup.com & GetSpiffy. Former Automated Insights. More info at joeprocopio.com

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