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To Service or Not To Service?

Team YS
3rd May 2012
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Previously, Shephertz founder, Siddhartha Chandurkar shared his startup story. Here he shares his opinion about servicing.

Before I started Shephertz, like everybody, I met a huge number of established and aspiring entrepreneurs, angels, venture capitalists, corporate managers and engineers etc. most often than not when they ask about what ShepHertz does and how does it make revenue. I have always mentioned about our product offerings i.e. App42 and our service business. Majority of them raised their eyebrows when I mentioned the word Service.

One question which I was always asked post that was, Do VC’s perceive your company in the right way when you are doing Product as well as Service Business together? Is it a death trap for a Start-up to do product development and service simultaneously?

I don't know whether VC/Angels perceive us in the right way or not. You have to keep the lights on. Nobody is going to do that for you. Businesses don't work and salaries aren't paid based on what people think, but on what you face and execute at a daily level. At the end of the month you have to take care of your burn in terms of salaries, admin and other operational expenditures. The show must go on. One approach is to wait for that Angel who is going to bail you out and the other is to be in control of the situation. Funding is a very important aspect of entrepreneurship but it is not the only thing on which the company should be formed. If you take fund- it’s not the end. It’s the beginning; you have to create value for your customers and stakeholders. You still have to manage your cash carefully and judiciously. It won’t be long before you exhaust the money and you will be back to square one. In my opinion, through my limited experience as an entrepreneur keeping funding as the main goal is like putting the cart in front of the horse. Endeavour should be to create a great team and build value for your customers through your offering, funding will follow.

Services business though it has pulled us back in terms of time; at the same time it has given us much more. If your idea doesn’t make any sense 3-4 months later because of any unforeseen delay, believe me you should consider dropping the idea and pursue some other one which is more resilient to time and competition; since times and competition are always going to change. Of course it should not get perpetually postponed, if service is sucking your time and not leaving you anytime for your product, if it’s getting difficult to balance both and risks the launching of your product within an acceptable time; you will have to stop service. You have to limit yourself in taking only that much work which you can handle. There is a high chance of one getting sucked into only service because it gives you immediate revenue which is very lucrative and difficult to resist. We somehow managed to find that balance. We took projects which we could handle in parallel with our Product development and have enough money to survive.

Service has also helped us build our team. We have tried to take work which is aligned with the skills, which are needed in our company. This helped us to build the ideal team required for our start-up. It has helped us to survive and fund our product development. There has been no interference in our creative decision making because of the service work. Whether we will succeed or not, time will tell but at least we know we have got a valid chance to make an attempt in what we believe. Without the revenue which we have made through service, we would have gone under.

Now that our product has been launched, angels and VCs are reaching out to us and we are also actively pursuing funding we have decided to further limit Service and focus completely on our App42 PaaS Product line, its enhancement and support. Apart from completing our prior commitments, we will prefer only those projects which involves license sale of our Products with its customization, white labeling and integration, than mere project work. So in reality it is not service in classical sense its actually supporting the license model of App42.

Investors with whom I have met have appreciated that; for nearly 2 years we managed to keep our heads above the water and yet develop such an extensive and comprehensive product line. Whether it’s doing service, consulting, teaching or some other way through which you are earning revenue, find a way to Bootstrap which suits you. Every start-up and entrepreneur has to go through it.

Do what is best for you and helps you to achieve your ultimate goal. Don't lose focus of what your companies’ vision is and what it wants to be. Everything else will fall up in place irrespective of the approach which you take; there is no right way to reach your destination, the right way is the one which works for you.

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