6 ms·

Palantir is a classic example of what is a hybrid services => product business. It was a _very_ long road for them to get to a point where their product could a

Palantir is a classic example of what is a hybrid services => product business. It was a _very_ long road for them to get to a point where their product could actually scale without massive implementation effort, but I think they’re finally getting there (they offer a cheap self service option now AFAIK)

safety1st 2y ago
One of the interesting bits of information that came out of Microsoft's acquisition of Github was that at the time, the majority of Github's revenue was enterprise deals. Enterprise is a code word that product businesses frequently use for services - yeah sure you have a product, but here are these guys who want to use it to the tune of $10M/year but you will need to do custom development just for them, so what is that? That looks a lot like a conventional service business running inside the same company as your product business. Microsoft actually seems to specialize in that sort of thing (selling a software product, and then offering some quite expensive, bespoke enterprise consulting services for it). But they are not the only ones, looks around the industry and you'll see it everywhere. The only real drawback to this model when you're small is that it dilutes your focus and multiplies complexity and cost because you have to manage multiple very different lines of business simultaneously. But if you can overcome those challenges it can make a lot of sense, be an expert at a particular problem, sell a product for the average Joes who have that problem, do bespoke consulting services for the money-laden enterprises who have their own complex versions of it.
- pylua 2y ago
  The other drawback to buying expensive consulting services is that your company does not have the domain knowledge of the solution.
  - HeyLaughingBoy 2y ago
    That's not necessarily a drawback. That's the reason people hire plumbers instead of learning plumbing: they have more important things to focus on.
    - Brian_K_White 2y ago
      But plumbers don't hire other plumbers.
      - rascul 2y ago
        That's not necessarily true. Plumbers sometimes own plumbing businesses that employ other plumbers.
- onionisafruit 2y ago
  That’s not how GitHub’s enterprise deals worked. It was the same product for all enterprise customers.
  - disgruntledphd2 2y ago
    Not quite, the onprem version was older and didn't have Actions for ages, for example. But to be fair, basically all enterprise deals involve services as you generally need to train people in how your thing works if you want to get enough adoption for when Finance come looking for operational efficiencies.
    - onionisafruit 2y ago
      It's been a while, but I think that enterprise customers all had access to both enterprise cloud and on-prem. What I was really getting at though is that there was no custom code or consulting with the vast majority of GitHub's enterprise deals.
      - bryan_w 2y ago
        I think its less about custom code for Large Company Inc., but rather, when Large Company Inc. had a bug or an feature request that was prioritized and perhaps released to them first
kiliantics 2y ago
When it comes to analytics or machine learning type products, the scaling without massive implementation effort problem seems to be pretty universally hard to solve. Of course the usual big names seem to manage this on some level but startups seem to get stuck at building a handful of great solutions for a handful of clients/problems but unable to increase the number without also increasing the effort proportionally. Do you know of any examples of small scrappy places that have figured this out? Is there any good writing on what kind of organisational and engineering approaches are necessary to make this step?
- disgruntledphd2 2y ago
  This is because data is basically a service business. Like the value is the specific data and it's hard to build a product that works for customers without a lot of custom work.

safety1st 2y ago

One of the interesting bits of information that came out of Microsoft's acquisition of Github was that at the time, the majority of Github's revenue was enterprise deals. Enterprise is a code word that product businesses frequently use for services - yeah sure you have a product, but here are these guys who want to use it to the tune of $10M/year but you will need to do custom development just for them, so what is that? That looks a lot like a conventional service business running inside the same company as your product business. Microsoft actually seems to specialize in that sort of thing (selling a software product, and then offering some quite expensive, bespoke enterprise consulting services for it). But they are not the only ones, looks around the industry and you'll see it everywhere. The only real drawback to this model when you're small is that it dilutes your focus and multiplies complexity and cost because you have to manage multiple very different lines of business simultaneously. But if you can overcome those challenges it can make a lot of sense, be an expert at a particular problem, sell a product for the average Joes who have that problem, do bespoke consulting services for the money-laden enterprises who have their own complex versions of it.

pylua 2y ago
The other drawback to buying expensive consulting services is that your company does not have the domain knowledge of the solution.
- HeyLaughingBoy 2y ago
  That's not necessarily a drawback. That's the reason people hire plumbers instead of learning plumbing: they have more important things to focus on.
  - Brian_K_White 2y ago
    But plumbers don't hire other plumbers.
    - rascul 2y ago
      That's not necessarily true. Plumbers sometimes own plumbing businesses that employ other plumbers.
onionisafruit 2y ago
That’s not how GitHub’s enterprise deals worked. It was the same product for all enterprise customers.
- disgruntledphd2 2y ago
  Not quite, the onprem version was older and didn't have Actions for ages, for example. But to be fair, basically all enterprise deals involve services as you generally need to train people in how your thing works if you want to get enough adoption for when Finance come looking for operational efficiencies.
  - onionisafruit 2y ago
    It's been a while, but I think that enterprise customers all had access to both enterprise cloud and on-prem. What I was really getting at though is that there was no custom code or consulting with the vast majority of GitHub's enterprise deals.
    - bryan_w 2y ago
      I think its less about custom code for Large Company Inc., but rather, when Large Company Inc. had a bug or an feature request that was prioritized and perhaps released to them first

kiliantics 2y ago

When it comes to analytics or machine learning type products, the scaling without massive implementation effort problem seems to be pretty universally hard to solve. Of course the usual big names seem to manage this on some level but startups seem to get stuck at building a handful of great solutions for a handful of clients/problems but unable to increase the number without also increasing the effort proportionally. Do you know of any examples of small scrappy places that have figured this out? Is there any good writing on what kind of organisational and engineering approaches are necessary to make this step?

disgruntledphd2 2y ago
This is because data is basically a service business. Like the value is the specific data and it's hard to build a product that works for customers without a lot of custom work.