Software and a Service

You may not need to choose the red or blue pill

There’s an interesting internet debate circulating about whether or not you should transition from a service company to a product company. This got me thinking about where my company landed recently.

Like Allan and Amy, we were a design/dev/consulting shop inspired largely by 37 Signals to become a “product company.” We bootstrapped our software product, Pathwright, for about two years before deciding to go all-in with it, but with a twist: instead of dropping our various services we started doing them only for Pathwright customers.

Since March we’ve been ramping up our software product and our services and are pleased with the results so far:

1. Our partners are more successful because we offer services they need along with a product they need. Our services feed our product and our product feeds our services.
2. We reached profitability and grew our team without outside money after one quarter.
3. We’re understanding our customers so much better and working with more serious customers, in bigger ways.
4. (It’s still hard and slow.)

While not right for everyone, software or services is rarely the single best option for solving any important problem. If you’re thinking you must be in transition from one to another to fit into a neat business category (“Services”, “Product”), you might be missing out on the reason for your business in the first place and a big opportunity at the same time.