A Service-based business sucks! Products are cool. A Service-based business sucks! Products are cool. A Service-based business is not sexy. It is boring! You need a product to be a cool business, right? If you had told me 10 years ago that I would be running a service-based business, I would not have believed you. I used to be part of the problem. I thought services suck, but then I found myself providing services to keep my business afloat. I kept trying to pivot the company from a service-based business to a product business. All for the wrong reasons. Here is why: Reason #1 – Services are tightly coupled to the owner/founders. Reason #1 – Services are tightly coupled to the owner/founders. As division5 grew, I noticed our customers were more connected to me than to the business. I was doing the communication, I was solving their problems, and essentially making sure the service we provided was right. division5 I hadn’t set up a structure to decouple myself. In my defense, I couldn’t; we didn’t have the money. In order to build a structure, you need to pay people. So, I did most of the stuff myself. I thought services would always rely on me. As we kept growing, though, I started hiring more people and built better systems. The more systems I implemented, the less I was needed. Reason #2 – With services, you don’t build an asset; with a product, you do. When you provide services, oftentimes, you need to hire people who do the work and find customers who need the work. So, your product is the outcome of the work someone in your company does. If that person leaves or if that customer leaves, you are left with nothing, and you need to hire someone else or find a new customer. What I failed to realize back then is that you can build systems and processes that strengthen the service and lower the dependencies you might have. For example, you might tightly couple the expertise to your business and share it with new people when they join. This way, someone leaving does not impact you as much as it could. Reason #3 – Services don’t scale. Reason #3 – Services don’t scale. When I heard stories about product companies increasing in valuation and growing super quickly, I started believing that service companies don’t scale. As a matter of fact, I was having a hard time scaling, so I inherently assumed it was something to do with my type of business. The thing is, every business scales. They just have different bottlenecks and different challenges. Oftentimes, your business doesn’t scale because of your inability to scale it – as it was in my case. Build the right systems, hire the right people, solve the right problems, and you will grow. Don’t cheat on your business. Don’t cheat on your business. So, as I attempted to build the product that would grow my business, I failed to grow the actual business. You know, the one that was bringing in profit and solving customer problems. And I did that over and over again until I learned what was probably the most important lesson I have learned in my entrepreneurial journey. If you want to grow a big business, you need to focus. If you want to grow a big business, you need to focus. If you want to grow a big business, you need to focus. Don’t follow the trend, don’t follow your passion, that cool idea you thought of yesterday? Drop it. Don’t diversify. Keep doing what you do until you improve every aspect of it. If you stick with that service for an extended period of time, your service will improve, and eventually, your business will grow. But changing directions causes you to start from zero once again. The Truth: Service vs. Product The Truth: Building a successful service-based business has been one of the most rewarding experiences of my life. It’s not about being sexy, it’s about solving problems, building relationships, and making a real impact. About the author: Engjell Rraklli Entrepreneur, 3D visualization expert, and host of 'Scaling the Unscalable' podcast. Enjoyed this article? Subscribe to get notified about new posts. Subscribe to get notified about new posts.

The is an opinion piece based on the author’s POV and does not necessarily reflect the views of HackerNoon.

Taking a Deeper Look at Service vs. Product

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