sharing small pieces of rocks or jewels I find on the way

Archive for April, 2018

Product VS Service: Strategy for software companies

Many think that product is the only solution for software business. “We need to make another Joomshaper or another WeDevs, otherwise we can never make money. We need to make a pathao, so many million users etc” But, I think that’s not right.

How many companies are allowed to make another google? If Microsoft makes a better search engine, will people use it? Can you compete with it? How many PhD do your company has? What’s your strength to fight against those generics? Pathao got a head start of Uber in Motorcycle for 1 year. But, now see how much tooth and nail they are fighting. I know many of my friends who used to only use Pathao now uses Uber. In India, Flipkart is having serious trouble to fight amazon.

And even then, how many e-commerce failed there. I have lot of respect for people who fights those fight, Elius bhai of Pathao, Nizam of WeDevs, Kawser bhai of Zoomshaper, respect who has been able to do that. But, that’s not the only solution.

Coming back to my point, solution, how many companies would make windows, how many companies would make active directory, or photoshop or Zend studio?

Now, let me ask, how many companies would use those software? Installing windows, installing active directory, using Photoshop to make beautiful design, Zend studio to code beautiful websites?

There would be large need of solution providers, always. There is a very very big profitable market out there.

Which path to choose? Product – long time of suffering, you get very low salary as entrepreneur, then have to pitch a lot of people to ask for money, then after long tedious journey of not making any profit, one fine day after long time, you earn a lot of money. You have to put in lot of time, sacrifice your family and kids time, it’s a tedious journey.

Service – you start making decent money within 1-2 months, sometimes may be 6 months, you are never a billionaire, you are never a Mark Zuckerberg, but you have decent profit, you earn the livelihood of many people in your company, you generally most cases don’t need to close your company, company profitability and moderate success possibility is lot higher than products.

The truth about service is, it’s possible to make it profitable and very decent business, if you focus on making it profitable, learning what needs to be done, believing that it’s possible to scale and still make it profitable. People think it’s not scalable.

BCG is a service company, they made $5.6 Billion in 2016, Ogilvy had $10.6 billion sales in 2010, I can go on. In India, infosys $10.2 Billion. India has at least 100 times more service company than their startups – my hunch. Statistics might differ, but every time I go a conference, there is another or 10 other Indian companies competing with me in service.