Why don’t more tech companies start as service companies?

Alex Dunsdon
2 min readApr 18, 2017


What is the biggest reason tech companies fail?

Simple, no product market fit.

No demand. No one wants it. You haven’t solved a problem for them.

Most companies get to this problem early on (most die – some slowly, some quickly) but when you’ve started out on the vc merry-go-round it’s difficult to recover.

And a lot of money gets burnt along the way.

This is insane.

Because all great businesses ultimately have started by working out:

  1. Their audience
  2. What biblical pain they are solving
  3. How to delight their first thousand customers

Before scaling.

So here’s what’s bothering me….

Why don’t more founders get paid to consult, to really understand customer needs before building things.

Or even build things together with those customers?

You have the advantage of keeping more equity. And the time fear – “what if a competitor gets their faster” – rarely matters when you have produced the product people want.

I guess selling time is an extreme version of ‘do things that don’t scale’ but you’re setting up FTW from the start.

So, I guess what I’m saying can be boils down to:

Sell a service first. Then productise.

Why doesn’t this happen more?

Maybe we’re in a time of easy money where any (insert here) tech gets funded?

Maybe many founders love building tech more than solving real problems?

Maybe I’ve had too many Easter eggs?

Tell me?

If you liked this and want more then this is 😊 Me , 💵What I invest in,⚡A belief in corporate innovation and 😱A movement I helped start by accident . Also check out www.thebakery.com and www.saatchinvest.com



Alex Dunsdon

VC Partner@SAATCHiNVEST. Seed investor in Citymapper, Farewill, Ometria + more. Chief of Staff@Redbrain. NED@Picassolabs. Founder Linkybrains.com