As a part of Nasscom Mentor program, we get to meet several companies. Most of the companies are in the software service business. One of the regular advice I give them is to have a small product initiative.
- A service company comes across several customer problems and provides solutions. This gives them knowledge and insights into specific customer needs that are not filled. These are great starting points for product ideas.
- Having a product portfolio, however small, increases your credibility in the eyes of the customers. They know that to create a product, you need to have ideas, done some research, implementation and a lot of testing.
- Free tools and products related to your service act as good marketing tools. For example, Hubspot offers several grader products free. Their website grader has been used by more than 3 million.
- Product initiatives help build an innovation culture inside your company. Your team will be encouraged to think in terms of identifying adjacent problems, observing patterns of issues in your market or industry.
- Products augment services and helps you differentiate yourself.
- Product building activity, allows your team to sharpen their skills, especially when they are between projects. They can explore emerging technologies like Cloud or Mobile computing.
- Over a period of time products can generate a revenue stream of their own. Even if they don’t they will reduce your cost of marketing and lead generation.
How Do You Bootstrap a Product Initiative?
If you are convinced of this approach of augmenting services with useful and relevant products, you can try the following:
- Start really small. A one or two person team working few hours a week.
- Conduct Innovation Workshops inside your organization. List problems, brainstorm ideas and identify a few useful products.
- Conduct product sprints. These are short bursts of activities to create products in a weekend or a few weekends.
- Distribute these products free and observe who and how people use them.
- Iterate based on what you learn. Show case these products on your website, mention them in conversations with customers. Create a community around these products and have conversations.
Do you need help or have questions? Please leave a comment here or contact me through Twitter.
An insightful read. The best example I can think of is http://deskaway.com/about/index.php. I am sharing the link to the about us page because they have narrated their journey in an insightful way. Completely quitting services line may be a long shoot, but why not.
I am sure a product, when successful has the ability to generate higher revenue. It might help you with stand economic influences better. Being in the SME segment and serving SME segement, your cost advantage can be an advantage no more. As mentioned in the post, the ability to innovate and catch the trends when they are on the up will help you to charge a premium. You always need as reference or POC, nothing like a successful product to boast your service capabilities.
Thanks. “nothing like a successful product to boast your service capabilities.”. Exactly my point. I have instances of winning six figure project contracts in 3 meetings just because we had a product that was well known in the market place in one of our previous startups.