The Difference Between Products, Services, and Companies

While thinking about what kind of scalable business you might want to start, try to remember the difference between a product, a service, and a company.

When planning their companies, many people allow their vision to become too narrow.  While a company may be built upon a great idea for a product or service, the entrepreneur must remember that a company cannot survive on one single product or service.  For example:  Let’s say you come up with a great idea for a dog bed designed for large dogs.  It is without a doubt THE solution to any problem a large dog might have with a bed.  Furthermore, everyone who has a large dog and sees this bed wants one immediately.  Surely a great company, right?

It is a great product, that’s for sure; but the growth curve for this type of company will be a bell-shaped curve with fast initial growth. As the market for your product gets saturated and imitations start to appear the growth curve will slow and then decline, perhaps establishing itself at a lower level plateau.  This is not the growth curve you want for your company. 

The growth curve you want for your company starts at the bottom left corner of the chart and rises at a moderate but steady pace for many years.  If you analyze the growth of that company you will see that it is made up of many different products and services, each with its own bell-shaped curve.  Fit them all together in a synergistic mix and you get long-term sustained growth and scaleability as each product is replaced by a newer model.

Back to the dog bed example:  You can either sell your dog bed invention to a larger pet products company or you can create synergistic products and services to expand your commercial footprint in the marketplace.  You might create different styles and colors of beds around the original design and you might adapt the original design to suit smaller dogs and even cats.  You could add canopies, blankets, pillows and other accessories that would match the style of the pet owner’s furniture.  You could even offer an interior decorating service that specializes in creating an attractive pet corner for the discerning pet owner’s home.

Your products are many different types of pet beds and a wide variety of accessories for those pet beds.

Your services are associated with helping the pet owner find the best combination of bed and accessories that will meet his pet’s needs as well as compliment his home décor.

Your company is a research and development engine that is constantly working on different products and services to add to its existing mix.  Your company is also a global marketer of these products and services, picking up ideas for new products and services as it opens new markets in other countries.

The key is to remember that your good idea for a product/service is only the beginning.  The important part of that product/service is how you use it to create a research and development and marketing engine around it.