Converting to a Product Organization

Converting to a Product Organization

Spring2 Innovation endeavors to contribute to other organizations and blogs as part of getting the word out on innovation.  Our article on how service organizations can move to product organizations is being featured in the Ottawa Network Blog (http://www.theottawanetwork.com/blog/how-can-service-organizations-move-towards-being-product-organizations ).

This article stems from working with a number of organizations to take an initial product to market after having been successful as a service provider.

Many factors drive a company to want to productize and in most cases it is for one of three reasons:

1) Increase Revenue

With a service organization revenue is based on the number of employees in the organizations and the number of hours they can work.

2) Exit Strategy

Having a product organization makes selling the company easier. The founder/owner isn’t as pivotal for the success of a product organization

3) Cash Flow

In product organizations cash flow can be more consistent once the product is in market. With services you rely on getting contracts and then get paid at the end of the contract. The time for bidding on a contract, getting the contract, delivering the contract and getting paid can be quite long where potentially no revenue is coming in.

 

Read more of our article on the Ottawa Network to find out more on how you can create a product organization from a service organization.