Build a services company. Fund your dream startup.

Hey there,

When you think of building your first startup, no one tells you that a services company might just be the ideal company to build. You see, because services companies are not “sexy”.

Instead, we think of grand ideas. Typically, these are ideas of building a product company. Find a problem → Build a kick-ass product → People love the product → You are successful. That’s the dream.

But, I have a counter-theory. Build a services company first. Let it be a “VC investor” for your future dream startup.

Let me explain.

A first startup is tough

As a 1st time founder, a LOT of things are new for you. You are literally trying to create something from nothing.

This is especially when you are building a product company. Surely you need the time to build the product first. Then, if you manage to build it and market it well, you need to start iterating with users to make your product better.

As a result, building a product company requires a wide set of skills from day 1 - marketing, product, sales, team building, and more. And of course, you need all of this while somehow either managing to make money or raise money.

Making enough money to break even will take time. While raising money adds a whole new dimension of work to your plate.

Services companies are sexy

In contrast, a services company as your first company can be a smart move. Let’s break this down:

1. Easier take off
To start things off, you just need yourself and one solid skill to monetize. It could be anything from marketing to building products to sales and what not. It results in there being no lag before you can try to find customers.

2. Low upfront investment
This also means that you don’t need any huge investment upfront. That’s a big headache off your plate.

3. Make money soon
As a result, you have the ability to start making money from Day 1. The beauty is that happy clients will bring in more clients. So, the game plan is simple and focused.

4. Tons of learnings
What’s more, as you get going, you can start building it as a company. You get more clients than you can handle as an individual, so you start hiring.

You are also making money, so you can afford some experiments in marketing & sales. Slowly but steadily you learn all the tricks of building a company.

Foundation for your dream startup

Overall, it sets you up very well to build your dream company. You learn the requisite skills and earn the money you would need.

We approached Flexiple like a pure services company early-on, powering it with a simple Google Sheet. While over the years we have added solid tech, the money & skills we accumulated in the early years really helped us.

It has given us the needed leverage as we scale Flexiple and also as we build buildd :)

Of course, this isn’t the only way to build a company. But, if you want to control your destiny while improving your odds along the way, this is certainly a path to consider!

Best,
Karthik

P.S. Please consider forwarding this to a friend! It would really help my two startups.

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