Quick Observations on Services Businesses (Part 2): Productization and Commoditization

This is the second post in a series I’m writing on running a services business1.

Also, For the sake of this conversation, I’m discussing services in the context of people who want to grow their business significantly, as opposed to maintaining some sort of local maximum.

Many services businesses achieve stable success leveraging their personal networks and local community. As I wrote in the first post in this series, though, those sources of new business can be a local maximum for a company that wants to scale. Large, densely-packed metro areas lessen the effects of the ceiling, but those environments are generally much more competitive and noisy.

No matter where you are, though, if you want to grow a services business, there are generally two main paths (in my observation and experience, at least) companies tend to follow. (There are certainly hybrid business models, but that’s another post for another day.)

My working names for the two paths are “productization and commoditization” and “specialization and customization.” Today we will talk about productization and commoditization.

Continue reading Quick Observations on Services Businesses (Part 2): Productization and Commoditization

1. You can see a full listing of posts in my series on services businesses here.