Is it preferable to have a service based IT Software startup or product based? In both the cases, how do we approach the unknown customer in market to crack the deal?
No one can tell you whether you should make a product or service, we have good examples in both the categories. Rather than asking what you should build, try to answer what is needed in the market. If you want to make a software product/service for B2B purpose then talk to your target customers what solutions they need for their business infact what problems they are facing. This could be best understood when you yourself work with that particular industry.
Both -software as a service as well as a product have their own pros and cons. If you provide a service solution then your cost goes down, thus becomes less risky, on the other hand if you provide service related to a product then your dependency on that product increases and it is less attractive from funding point of view.
Software based product (ofcourse depending upon what is the quality of your product and what problem it is solving), might attract good investment in initial months itself, at a much higher valuation than a service providing startup but at the same time might be a costly affair to start.
end note: product based startup can make you big, provided your product solves a problem. you may add services along with your product later on.
Let me just put this there,
“Why not Both?”
What you will need is right time to and right decisions and doing that is simple enough. Most businesses fail due to the emotional attachments or inadaptability. Remove this from your work culture and rest should work out fine. Hell this is an idea for free. Find people who can work on your product as well as work on any freelance work that you could get from teir 2/3 companies (You are getting both the product and services working simultaneously). This seems hard for many people but if you put a good thought on it, it’s actually pretty easy as well as cost effective.
Then again if you are having investors then this won’t work. Figure out what you would want the company to do and rest will take care of itself provided you are adapting to latest trends.
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