Business or Product?
Business or a product? Knowing the difference could mean the success or failure of startups.
It’s essential that one makes this distinction and does so early on. Early decisions, business model, long-term trajectory, costs, and workload will vary drastically depending on which path you choose. Making the right decision now could mean the difference between a windfall of profit and a complete mess.
A product—put—is a thing, could mean an idea, physical development, platform, proprietary methodology, tangible creative output, or technology. For the sake of this article, we’ll use a product to explicitly indicate that one can sell the rights or which you can license to another entity (as opposed to building a business around it).
A business is a means to serve individuals, other companies, or communities by providing them with services or products, whether those created by the same person who is selling them or a person is simply reselling, licensing, or marketing the product. For the sake of this article, when we talk about businesses, we’ll focus on companies that leverage products of your creation.
If unsure which better applies to someone, the situation can consider that one may have a business if:
By nature, to provide value or generate revenue, one relies on the public or other companies to engage with his service or product offering(s); or On their own, product offerings wouldn’t likely provide value to other similar businesses or competitors, so one would probably not be able to license it.
One may have a product if:
Someone has an idea that’s novel or interesting, and that could provide value to established businesses or competitors in an existing market; and The sole point of building a business around an idea would be to take the concept to market (that is to say, there is no more profound vision or mission driving one’s decisions)
Details aside, the core principle here is relatively simple. If someone has an entrepreneurial goal, they should decide early on whether to have a business or a product and make decisions that reflect that goal. They should remind themselves often of their approach. Sometimes the choice is obvious, and sometimes it’s not. Regardless, one needs to stick with their decision with everything they have got. To quote Einstein, “keep things as simple as possible, but no simpler. And then go crush it.”