Recently I was talking to an entrepreneur that had a working product and a handful of paying customers. We got to talking about the market and amount of custom, one-off services required to on-board a new customer. Halfway through the conversation, he paused, looked down, and said something to the effect of “I wish we could automate more of our functionality but it’s going to require serious consulting services for each new account.” Without missing a beat, I responded that there’s nothing wrong with needing a services component to make customers successful. While entrepreneurs dream of everything being automated, self-service, and high margin, plenty of super successful companies have a required services component.
Here are a few thoughts on consulting services within product-based startups:
- Productize the services whenever possible to ensure consistency and scalability
- Make sure the consulting fees relative to monthly fees are inline (see our lessons learned with Post Mortem on a Failed Product)
- Consider partnering with other consulting firms or independent contractors to grow services capacity without more in-house staff
- Allocate product engineering cycles to add functionality that reduces the amount of consulting effort over time, if possible
Consulting services are common even within product-based startups. Entrepreneurs would do well to embrace services to make customers successful and find a balance between consulting and product revenue.
What else? What are some more thoughts on consulting services within product-based startups?