What Comes First: Digital Product or Service?

06.12.12

 

You’re on the verge of starting your online business and are toying with the idea of launching a digital product but not quite sure if that’s the best place to start.

A digital product could be an ebook, ecourse, telesummit, membership site, software-basically anything where you do the work up front but are able to sell repeatedly or scale one to many.

Whereas a service would be anything you do 1-1 like coaching or would require on-going implementation work like social media management, copy-writing, website design and so on.

Basically, a service is one where you are trading time for money while a digital product is one you are able to sell repeatedly without having to reproduce your effort each time.

Based on that you might think that that the obvious choice would be to launch a digital product.  Who wants to trade time for money?! Isn’t the whole point of an online-business to sell digital products generating you passive income so you can go off and do other things?

Active and Passive Income

I’ve read the 4 Hour Work Week, too and understand the allure of passive income but hear me out. I’m not saying it’s impossible because I do know many people who are doing it successfully but it did not happen overnight.

And even when you do have passive income, you may still have active income. Taking a look at many of the top business coaches, you will see that along side their digital products they also offer coaching, at a higher price point. Why? Because it keeps them in touch with their customers and the new types of problems they are having. This allows them to fine-tune their existing offerings as well as come up with new products. See where I am going with this?

Before passive comes active income and there’s nothing wrong with that!

3 Reasons Why You Should Hold off on the Digital Product (for now) and Offer a Service:

  • Shortest path between you and earning your first dollars. Starting an online-business is a work in progress, why not start validating your ideas BEFORE you invest a lot of time and effort into a product
  • Low to no-cost. Starting to offer your services is a lower cost investment upfront. Add a buy now button to your website combined with Skype et voila you’re ready to offer coaching to anyone anywhere in the world. Same goes for offering your social media management or copy-writing-services.  Granted you have to do the work to find customers but the point is you are open for business and ready to take on customers.
  • Problem Validation:  Working with people before you start with a digital product allows you to better identify pain-points and tailor your services (and eventual product)

As for the product, as you work on on your serviecs start to spot the trends:  what are the common problems that your customers are facing? Is there a way to productize your offerings like turning your 1-1 WordPress training into a video series that your customers can do on their own time?

Did you start with a product or service when you first launched your online business? Leave me a comment below, I’d love to hear about it!

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Sandy Sidhu

Sandy is the founder of SidekickPM where she helps women entrepreneurs bring their ideas to life by supporting them with the techy aspects that gets them stuck and overwhelmed. She supports women entrepreneurs through coaching, digital programs and online training such as The Tech Training Vault.

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  • http://searchbyburke.com/ Charlene Burke

    By starting with a service you can also build your customer base to market to once you have a digital product. It won’t take long to find out if the digital product is worth the effort.

  • Sandy Sidhu

    Absolutely! It’s much easier to launch to an existing customer base then create something and wait for people to show up. Thanks for the comment, Charlene!

  • http://www.facebook.com/profile.php?id=536437808 Kylie Pengelly

    Love it Sandy! It is a dilemma. Building integrity is so much easier in the face-to-face world, so offering a service is a great start to building this online.

  • http://carefulcents.com/ Carrie Smith

    I think starting with a service is also a great way to connect with people who could potentially buy your digital product down the road. If you offer consulting, web design or writing services, these clients could turn into paying customers once you build that professional relationship up. It’s a smart strategy for sure!

  • Sandy Sidhu

    Absolutely! And a great way to learn what other painpoints they may have. Thanks for your comment, Carrie!

  • Sandy Sidhu

    So true, Kylie! Starting with a service definitely helps build the know/like/trust factor! Thanks for your comment :)

  • Tania Belkin

    Sandy,
    I agree, service is important for many reasons. You will also get insight into
    what people want to know more of.

  • http://www.epreneur.tv/ Tehmina

    Totally agree with you Sandy! I believe that everyone has unique skills and experience that they can package up and deliver as a service, free or low-cost initially then at a higher rate. But product creation brings with it a steep learning curve that is just beyond many people unless they get a mentor or specialist help.

  • Sandy Sidhu

    for sure! And as you talk to more people you can start to spot the trends and see what you can offer as a product. And you’re right, putting together a product is no easy task and could require help. Thanks for your comment!

  • Sandy Sidhu

    Right on. Talking to people keeps you close to what potential problems they are having and allows you to adjust your services. Thanks for your comment, Tania.