18 November 2005

Product-based vs. Project-based

"If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle." -Sun Tzu

I am not a sales person, but the reason for my uncanny ability to seal deal is the quote above. It's real and simple, If I can't do it then I will not push myself with all my faith to do it, because I am already aware that I lost the battle before it even started. So there's no sense in wasting my effort and money. The Art of War is a *thousand-year* old value proposition. I am not charismatic, smooth-talking salesman, that is never me. And some sales people in the IT industry has much to learn with Sun Tzu. Take for example a consulting company that has evolved into a project-based model and runs into customer's "quagmire" and will repeatedly run into it again and again and again because the company has only knew itself and not the adversities that it will going to face. Either they don't know it or choose to ignore it for the sake of profitability. Project-based ventures are so risky, the majority of "70% failed software projects" falls on this category. Leaders cannot afford to be conservative as well as this kind of trait will chip away their resources little by little. This kind of venture is so exhausting that there's nothing left to earn when the project is "done". That is if you got paid in the end.

Product-based venture on the other is much simpler and less riskier. There's not much concept to prove. Customers "knows" what they want; it's usually what others have. So there isn't really much effort in selling a product, rather than a project whose derivative is yet to exist. And since the product already exists, it doesn't have to be a hard sell I don't think so, not in my experience. Most of the times a demonstration can already sell by itself. The fun part in product-based venture is that all the painstaking tasks are only in the initial part of the product development. And the best thing about product-based venture is being paid promptly for a delivery well done. Then repeat business comes next. Such is an Art of War.

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