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I Have So Much On My Plate, I Can Never Get Done What I Really Want To Get Done – Part 2

Products are consumed, but services are experienced.

Why is that important?

A product will have certain specific features and will be priced accordingly. If you and I buy the same phone with the same specs from the same store at the same time, we will pay the same price. It makes no difference if you use your phone for work and I use mine for photos. We’re both paying for the same exact tangible product.

Scaling a product business relies a lot on supply and distribution channels, manufacturing, sales, etc. Services are mostly intangible, so they must be scaled differently.

With services you must consider two factors:

  1. Staff and resource utilization to deliver, and
  2. Capturing value in the pricing.

The nature of the solution—its complexity and specialization—should drive what resources and which staff you allocate.

A useful way to allocate is to first categorize any service you might offer on where it lies in the following dimensions:

  • Key Person Brainpower − This is a service that can only be delivered by one or very few key people in the company. E.g., the heart surgeon who is the only one that can do a certain kind of surgery. If you offer these types of services, often they are unique and can only be done by you.

    This highly specialized and unique aspect means it’s difficult to pass on the knowledge to staff, so these kind of services are impossible to scale. If you insist on offering such services, your pricing should be very high. The client has to compensate your time on the specific problem and also the opportunity cost you incur in neglecting the rest of the company to focus solely on this specific problem.
  • Experienced Acumen − Here your company is offering solutions to problems that have been faced before and which have been successfully tested by fire. Clients come to you for specific problems because you have already solved these same problems for others before.

    Unlike key person brainpower, these solutions can be taught to the right staff to deliver. As a result, they are inherently scalable. Companies that market their unique intellectual property to solve specific problems fall in here, as it’s the trained staff who will ultimately deliver the solutions.
  • Execute, Rinse and Repeat − Here your company is offering systems and processes to solve client issues. These don’t rely so much on intellectual firepower as on following your company’s patented templates or methodology to diagnose, prescribe and solve the client’s issue.

    This is like the 21-point engine inspection program you might pay for when taking your car to the service station. This type of service is often the most scalable because it’s inherently process/system heavy. In fact, it can often be automated as underlying technology becomes more advanced.

After analyzing the complexity and required specialization, you should have an idea of the value your solution provides for clients and on whom you should focus your attention.