Ask HN: Services vs. Products – How to Combine the Two Under One Brand? | Hacker News Reader

Ask HN: Services vs. Products – How to Combine the Two Under One Brand?

30 pointsznq14 comments

Hello HN,

You might know Mobile Jazz[1] already from various other posts[2][3] and comments here on HN. Especially those about remote work, company culture and doing things quite a bit differently than most other companies out there.

We’re originally a pure service provider. We started with app development, then integrated a web dev shop and later on extended our offering to backend development, hardware and in the recent years also medical technology. I believe we’re doing a decent job, as all our work comes by recommendation from people who’ve worked with us before and have been very happy with the result, but also the relationship with our team.

While we’re still pretty much focused on helping others in developing their technologies and products, we’ve also been building quite a lot of internal libraries (most of them are open source) and tools for ourselves as developers, to make our daily work a bit easier, more productive and more fun. The one product that we’ve been actively promoting and that also had quite some traction during the past 12 months is Bugfender[4]. But besides Bugfender, we have additional products in the pipeline, that work technically, but need some more cosmetic work in order to be launched to the public.

The dilemma we’re in right now is the following: we’ve a strong brand (“Mobile Jazz”) that is associated with a successful technology and innovation services company. But now we also see that our products (at least one of them) is having a success that we can't ignore. From a company and team perspective I see no problem in doing both: services and products. However from a branding and marketing point of view, the target audience is a completely different one (“people that are strong in their industry but lack a technical background” vs “developers that need tools to make their day-to-day work easier and more productive”).

...continuing with the question in a comment below due to the 2000 char limit...

...Continuation of the above question...

So my question is, does it even make sense to put everything under one brand? We’re hesitating to create too many brands, because it means having a lot of duplicated effort for brand-building and marketing. We're also an engineering company at the core and marketing and brand-building is not necessarily what we're good at or enjoy doing.

I currently see the following options:

1) Put both services and products under the name of Mobile Jazz. Products like Bugfender will appear on the website, blog and social streams of Mobile Jazz. The disadvantage is that we’re targeting completely different audiences and the mixed messages might be very confusing.

2) Leave the services branch continue under the name of Mobile Jazz, but create a new separate brand for each product with its own blog and social streams, e.g. bugfender.com. This way the marketing can be very targeted to each specific niche, however the disadvantage is that every product needs a lot of marketing effort despite the shared audience (“developers”).

3) Leave services continue under the name of Mobile Jazz, but create a new umbrella brand for products with its own blog and social streams. This way we can address the shared audience (“developers”) with just one targeted marketing effort. Disadvantage: we’re marketing developers in general, but maybe not enough the niches that our products are for.

Maybe I’m overthinking all this. But I believe someone else must have been in such a situation before. Would be great to get some feedback or maybe just a different perspective.

[1] http://mobilejazz.com/

[2] https://news.ycombinator.com/item?id=9346726

[3] https://mobilejazz.com/blog/working-remotely-from-a-tropical...

[4] https://bugfender.com/

(EDIT: formatting)

As a consumer, it's good to know a certain brand that I associate with high quality or plainly trust to "get it right", is standing behind a new product that I just found.

I think you've answered your question, at least for now.

Only disadvantage of #3 is if it's not fine-grained enough. You know you need _at least_ a macro level split (New umbrella parent company (that nobody really knows/cares much about), sub-companies are "Mobile Jazz" and "product brand"). If products grows enough, it may need it's own splits too, but keep it one for now.

To make money providing services, you do what the customer asks. To make money providing products, you build what the customer needs.

I realize how tempting it is to lump it all under 'writing software' and calling it a day, but the culture at a services company is very different from a product company, in my experience. Plus it's really hard to give your customers a USP when you're essentially saying 'we do everything!' which you don't, unless you're 5k people big.

"From a company and team perspective I see no problem in doing both: services and products."

Yeah I'm going to have to disagree on this one. Sure it's fine in the beginning, but it's just a major pain once you start having regular release cycles and project deadlines that don't match, conflicts when some employees are more 'service providers' and others more 'product builders' (the two require different personalities, imo), cash flow and compensation differences and many more.

There are many companies who were in this position once, and all that I know made a choice of one or the other (usually product, that's where the money is if the product is good; services is a cost plus business). There were a few talks on this topic on the BoS conference in Dublin earlier this year, it's probably a recurring theme - I'm sure there have been more talks on it over the years.

Thanks! These are really interesting points. And I've to agree, the mix of the two is already a kind of a problem, although not necessarily a big one. But yes, we do give priority to our service clients at the cost of delaying product release cycles, which is not ideal.

I have to agree, if your customer base for services does not majorly crossover with your products. I've seen many successful models that sell a high priced product and sell services on top of it. For example, Joyent will sell you the whole cloud and then sell you support for implementation all the way down to NodeJS. I've seen this with other successful (often Node) shops, such as Pivotal and Hashicorp (Golang).

This aligns the service with the product, so there's no reason for the product to lag behind. I myself have tried to create a product while also providing separate services, that can work to bootstrap a product company but is hard to maintain past a few clients.

As another commenter mentioned, if the customer base is different the support questions will be very different. I'd see the product needing at least a separate dedicated engineer and support.

Yeah you're right on that boundary condition - SAP 'sells' software but they make the real money on the 'services' they provide to get that software they 'sell' to work. So indeed I do mean product/service where 'service' is something generic and the 'product' is an offshoot of developing the service (or not even that) but where there is little overlap in customers or even customer profile. Which I think is the situation the OP is asking about.

> SAP 'sells' software but they make the real money on the 'services' they provide to get that software they 'sell' to work

SAP makes "real" money on software. Their professional services business is big but nowhere close to their license business (you can see the breakdown in their 10K), which is why they have a massive network of partners and integrators.

Yes, SAP doesn't do all the services themselves. It's debatable whether in the context of this discussion the service revenue of the partners should be included for comparing. Regardless, I don't think the point of the ration services:product in their profit is material; that wasn't what I was going for. My point was: when services and product aren't symbiotic, it's a pain to combine them in one business, in non-intuitive ways.

This is what I will do in this situation:

1. Keep the "Parent Brand" going. In this case, Mobile Jazz. Have the mobile jazz website list all your "children" brands including Product ABC or Service XYZ whatever. Make a portfolio page showing all the children brands on this site (children can be product or service)

2. For each "child" brand (which is a product or service), setup their own website separately and market them as needed. On the footer of the website somewhere, mention the parent brand as "ABC is a sister/child company under Mobile Jazz". Also perhaps on an "About" page of the child brand, mention Mobile Jazz as the parent to establish more trust and reputation.

That way, you establish the individual products/services as their own brand but still link them all with Mobile Jazz.

If a child brand becomes huge, no problem. It still has its own branding anyway.

Fun fact: Did you know that the popular invoice service called "Freshbooks" is actually a child of "2NDSITE Inc". I remember freshbooks used to have this in their footer but now they have it in their terms and conditions.

I think that using different brands for products and services makes sense if your organization has a very clear division between the product and service parts and you have no gains joining that parts, like getting cross-selling or upselling.

In that case I would use a single brand for the services and another one for the product divisions. In the end they will be different business units with their own budget, right?

For instance, support will be very different for one kind of business than the other.

...Anyway...

DO use different branding -at least a minimal one- for all products just for discoverability. I mean, every product should have its website (like a brochure) and might have a blog, twitter account, facebook page, and so on. Use that accounts for _minimal_ stuff like announcing bugfixes or new releases. If the product goes well, invest in marketing (hire or buy) but it's very important to secure the social assets now.

Thanks for that answer. Makes totally sense, that a product brand might eventually outgrow it's parent brand in terms of marketing reach.

The worst thing possible is mixed messaging, so what I should do is draw a clear line between Mobile Jazz "the services company" and Bugfender "the product". So each with their own marketing channels etc. However, to get traffic (potential customers) across I would think its a good idea to make some noise on the Mobile Jazz website (since it already is a strong brand) to get people across towards the Bugfender website to help build its own seperate brand. Also make sure that people can see that Bugfender is a product of Mobile Jazz (due to brand building), so I would make sure to include "Bugfender by Mobile Jazz" instead of just "Bugfender" in all my messaging. At least until it can stand on its own two feet.

My two cents. Hope it helps :)

That certainly helps reassuring what we were already thinking.

We're still doubting though whether we should go for option #2 or option #3. Because we still have a lot of great stuff that our developers produce (blog posts, experiments, open source) that could benefit a single brand targeted towards developers in general. It will be more difficult to share those "achievements" amongst multiple product brands.

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