Should a Startup focus on

Product OR Services

Disclaimers

• Oxymoron?

• Ideas and Thought Process

• Not a subject matter expert

• Product Bias?

• Land of Services

What is a startup?

• Business vs Startup

• Life-Style Business

• High Growth

• Technology Oriented

• Risk – Reward Ratio is high

Origins

• With Conscious Intend

• Fun Explorations - Accidents

• Why should I work for someone else?

• Struggle with a Problem

• Spot unaddressed need

• Derived from work or personal experiences

On Product

• Sell IP• Innovation Oriented• Funding is relatively easy

– A piece of paper can get money– I mean compelling business plan.

• High Risk • Entry Barrier – High (with patentable IP)• Team

– Small number of highly specialized people– Large Pizza Teams

• Fixed Overhead

Financing Cycle

Product Statistics

• 75% of value of US public companies are derived from IP

• $6.5M – Statistical Average of Founder CEOs of Public Companies

• 20%-60%-20%::Success-Lifestyle-Failures

On Services

• Sell Time• Not fundable – Typically!• Low Risk• Revenue from Day 1• No 10x growth• Entry Barrier Low• Team

– Large number of people with common skills• Delivery excellence – Process Oriented• Variable Flexibility

Acknowledgement

The graphic in next few slides are excerpted from

S-Business: Reinventing the Services Organization

James A. Alexander and Mark Hordes.

ISBN 1-590-79054-5.

www.alexanderconsultingsbiz.com.

Types of Service Companies

Services – Value Potential

Customer Expectations

Buyers

Buying Strategy

Service Strategies

Value Propositions

Acknowledgement

The graphic in last few slides are excerpted from

S-Business: Reinventing the Services Organization

James A. Alexander and Mark Hordes.

ISBN 1-590-79054-5.

www.alexanderconsultingsbiz.com.

Blended Scenarios

• Boot strapping with Services• Product within Services• Services for Product

• Open Source• SaaS

– Delivery Model

– Pricing Model– Quality Ownership– True TCO

Summary

Product or Service– Base it on your strength / expertise– Have Solid Focus– Good founding team

• Just 1 – An easy option to give up too soon• 2 people is too small – result in stale mate• 3 is a perfect team• Anything more than that is a crowd

– can’t even co-ordinate a common meeting time!

Q & A

Thank You