#Episode01: Cred, Urban Clap, Bjyu's: Decoding the concept of A Product And A Service

Welcome to the Chatter Box Series, where we dive into the lively world of product management in India—think Koffee with Karan, but with a focus on strategy over celebrity gossip! In this series, we’ll explore everything from product strategy and market insights to design principles and user journeys. We believe that innovative solutions to today’s problems must be crafted with a product-focused approach, especially in a country like India, where scale and customisation, both matter. Join me for engaging discussions and insights as we explore how to create product magic together!

Understanding the Evolution of Products and Services

In our rapidly evolving world, the distinctions between products and services have become increasingly relevant. As we navigate through life, we encounter both—often intertwining—elements that shape our experiences and influence our choices. But how did these two concepts evolve, and how do they relate to one another in today’s marketplace?

Image source: Geeksforgeeks

The evolution of products and services can be traced back to the earliest days of human civilisation. Initially, goods were handcrafted by individuals, making each item unique. These tangible items served essential needs—food, shelter, tools, and clothing. However, as societies grew and economies developed, the need for efficient production and delivery of these goods emerged.

Imagine a small village where a blacksmith creates custom horseshoes for every horse. Each horseshoe is crafted individually, making it a service-oriented approach. However, as demand increased and the village expanded, the blacksmith learned to create standardised horseshoes to sell in larger quantities, marking the transition from service to product.

As technology advanced, particularly during the Industrial Revolution, mass production techniques allowed businesses to manufacture goods at scale. This era solidified the concept of tangible products—items that are standardised, can be sold in bulk, and have a fixed pricing model.

While products were being standardised, the concept of services emerged as a complementary force. Services are inherently different; they are intangible and often customised to meet individual customer needs. For instance, while one can buy a ready-made dress (product), seeking a tailored fit from a designer (service) represents customisation and personalisation

The modern service economy gained traction in the late 20th century, where industries like hospitality, healthcare, and personal care thrived on customer interaction and tailored experiences. In today’s world, services have become integral to the product offering, enhancing user experience and satisfaction.

In the late 1990s, Amazon started as an online bookstore, focusing primarily on product sales. However, it quickly realized the importance of customer service, leading to innovations such as personalized recommendations based on purchase history. This blending of product and service is what helped Amazon become the e-commerce giant it is today.

Today, the lines between products and services are more blurred than ever, with digital transformation driving the rise of "product-service systems" or "servitized products." Companies like Apple and Netflix embody this evolution—Apple combines hardware with digital services like iCloud and Apple Music, while Netflix offers content as a service with personalized algorithms shaping user experiences.

This shift from pure products to hybrid models allows businesses to build deeper relationships with customers, prioritise user satisfaction, and adapt swiftly to evolving market demands. As we look to the future, the fusion of product and service will continue to redefine industries, making the customer journey richer and more tailored than ever before.

Why is understanding the difference Imp for building product offerings?

Understanding the distinction between product and service isn’t just a business tactic; it’s essential for crafting solutions that don’t just flop like a poorly executed dance number.

In today’s fast-paced startup ecosystem, where companies pop up faster than new seasons of Koffee with Karan, this distinction can significantly impact product development and decision-making—think of it as your startup’s secret sauce, minus the calories!

Take Fintech platforms like Cred, for instance. They’ve mastered the art of building automated features—like reward points for on-time payments and sleek credit score tracking. Using Cred feels like discovering a genie in a bottle, except instead of granting you three wishes, it rewards you for being financially responsible. But when it comes to more complicated issues, like loan repayment restructuring or fraud resolution, users might feel like they’re trying to navigate a maze without a map. That's when the service team comes in.

By knowing which parts can be product-driven and which need a human touch, Cred can allocate resources effectively, allowing them to shine in the spotlight while keeping the drama at bay

Now let’s chat about Byju’s, the EdTech giant that had taken online learning by storm—like a kid storming the kitchen when the smell of fresh "theplas" wafts through the air. Their product team is all about creating standardized, interactive learning modules that let millions of students engage independently. It’s as if they’ve invented a super teacher who never runs out of patience (unlike your mom when you used to ask her to explain fractions for the tenth time).

But just like that one friend who needs constant reassurance during a horror movie, students occasionally need some personalized help. Byju’s cleverly mixes its high-tech features with one-on-one tutoring sessions for tougher topics, striking a balance between scalability and individualized support. In a world where students are juggling 10 subjects and TikTok dances, that tailored support can be a game-changer!

Let’s not forget about UrbanClap (Urban Company), the home services startup. Their product side boasts a user-friendly booking platform and standardised service options that make scheduling a breeze. But what happens when a technician shows up late or forgets their toolbox? It’s like prepping for a big family gathering only to realise you’ve run out of biryani—chaos ensues! That’s when UrbanClap’s service team jumps in, managing follow-ups and complaints like an overworked chef trying to salvage dinner.

This clear separation between product and service allows UrbanClap to maintain high standards across locations while giving customers the flexibility they expect from in-home services—because nobody wants to watch a technician struggle to find their tools while you sip chai and wonder where the biryani is!

By thoughtfully distinguishing between product features that can be automated and scalable and those that need a personal touch, companies develop robust and adaptable solutions.

Understanding this balance is crucial—it enhances customer satisfaction, streamlines operations, and ultimately drives sustainable growth. In the wild, unpredictable world of startups, making these informed decisions can mean the difference between being a fleeting trend (remember that dalgona coffee phase?) and a lasting success!

So, grab your chai, kick back, and read through

Products and Services: A Symbiotic Relationship

At their core, products and services share a symbiotic relationship. A product is often the tangible manifestation of a service, and services can enhance a product's value. As technology continues to evolve, the lines between products and services blur, leading to new opportunities for personalisation.

Personalisation serves as a bridge between products and services, allowing businesses to customize user experiences without losing the efficiency of product offerings. For example, consider the smartphone industry. While smartphones are products, they come equipped with numerous personalized features—like custom notifications, user interfaces, and app recommendations—that cater to individual preferences.

Spotify, the music streaming service, exemplifies personalisation perfectly. The platform provides a standardised product—a music streaming app—while simultaneously offering personalised playlists and recommendations. Users feel a sense of ownership and connection, bridging the gap between a product and service experience.

Below is the difference at a high-level to differentiate a product and a service:

FACTOR	PRODUCT	SERVICE	PERSONALISATION	OVERALL INSIGHTS
Customisation	Limited customisation options	High degree of customisation (e.g., bespoke travel packages)	Custom trainers with unique designs allow for individual expression while retaining standardisation.	Products often have fixed specifications, whereas services can be tailored to unique consumer needs.
Pricing	Standardised pricing (e.g., laptop price)	Variable pricing based on customer needs (e.g., consultancy fees)	Subscription services offering tiered pricing based on user-selected features, ensuring cost-effectiveness.	Product pricing is usually fixed, while service pricing allows for negotiation based on requirements.
Quality Consistency	Consistent quality across units (e.g., Coca-Cola)	Quality may vary based on the service provider (e.g., hair salons)	Apps that adjust performance based on user feedback, ensuring a more consistent experience.	Products maintain uniform quality, whereas services can fluctuate based on execution.
Scalability	Highly scalable with mass production (e.g., cars)	Limited scalability due to individualised attention (e.g., massage therapy)	Streaming services that tailor content recommendations, balancing personalisation with wide reach.	Products can scale easily, while services face constraints due to personalisation.
Availability	Typically available for immediate purchase	Requires scheduling (e.g., dentist appointments)	Online retailers allowing for instant ordering of personalised items, merging immediate availability with customisation.	Products are readily available, while services often require scheduling, affecting consumer choice.
Brand Loyalty	Product communication,quality and performance	Built on provider-client relationships	Skincare brands offering personalised regimens based on individual skin types foster loyalty through attention.	Brand loyalty for products is based on on a lot of product factors, while for services, it relies on relationship strength.
Customer Experience	Involves customer service but centres on the product	Integral to satisfaction, focusing on interaction	Apps providing tailored learning paths enhance the educational experience and engagement.	Customer experience is vital for both, with services placing greater emphasis on interaction.

Economies of Scale

One of the biggest reasons why product-oriented businesses have surged in popularity is their remarkable ability to achieve scale. Think of it this way: customization is like inviting everyone to your wedding and then trying to make each guest happy with their favorite dish. Sounds lovely, right? But then you’re stuck in the kitchen whipping up a five-course meal for 200 people while your in-laws question your life choices.

In contrast, product offerings are like ordering a gigantic pizza—everyone gets a slice, but you only need to worry about getting the order right once!

In the realm of services, customization is the name of the game. But with every tailored experience comes a corresponding increase in expenses, and let’s face it, no one wants to see their profits doing the cha-cha—up and down, up and down!

On the other hand, with products, there's generally a learning curve involved. You might start with a modest offering, but as you refine your product based on user feedback, you can eventually scale it without proportional increases in costs. It's like perfecting a recipe; once you’ve nailed it, you can serve it to a crowd without breaking a sweat (or your budget).

This bifurcation between products and services is crucial for understanding the value generated for users, optimizing resource utilization, and mapping out automation opportunities.

Now, let’s dive into economies of scale. This concept is all about how companies can reduce costs per unit as they increase production. In simpler terms, it's like buying in bulk at your favorite snack shop—more bags of chips mean lower prices per bag.

In a product-driven model, the curve isn’t a straight diagonal line when plotting income (Y-axis) against expenses (X-axis). Instead, it flattens out as income increases, meaning expenses don’t rise in lockstep with revenue. So, while your income might be shooting up like a rocket, your expenses can stay relatively stable.

In conclusion, viewing companies through the lens of these two very different operational modalities can shed light on their growth potential and scalability.

Understanding these principles can help businesses navigate the complexities of product development and service delivery, ensuring the decisions for solving a problem are taken with a long term perspective