As an entrepreneur, while dreaming of starting a company, one usually adopts 3 business paths: either start a product-based company or start a service-based company or have both: offer services and have products too. The options stated have their pros and cons, and most importantly, the founder’s vision also decides which option to opt for.
Service-based startups involve little to no startup cost. The founder can start his own company with limited resources and build business through his connections. The service-based company generally requires only a small set-up and does not require a huge capital investment, the founder can bootstrap his business.
Service-based startups can start earning revenue faster. The service-based startups need to understand and analyze the requirements and start delivering them.
Service-based startups and explicitly software service-based startups are usually flexible and adaptable. They can be started from anywhere. Many people have started the operations from their homes too.
Product-based companies usually require massive investments. It takes time for a product-based company to generate revenue. The product-based startup ideas, take a lot of time and resources to conceptualize, design and create the product.
However, once the product is in the market and has developed traction, and you have developed some interesting revenue models like subscription based, then you will start generating revenue monthly/quarterly and it contributes to the sustenance of your business.
Many founders also go with a hybrid model, they start as a service-based company and then gradually even build their own products on top of the services offered by them.
I would like to understand from others which options you have opted for and what challenges you have faced!
