A note on how service practices and product portfolios can compound, instead of competing for attention.
There is a tension that quietly defines most consulting-adjacent practices: the services they sell today, and the products they might build tomorrow. The conventional wisdom is that these are opposites. Services are the present; products are the future. You either pivot from one to the other, or you hold both and watch them compete for attention until one wins.
We think this framing is wrong. Services and products, held inside the same practice with the same operating logic, are not competitors. They are one thing observed from two angles.
Why the conventional framing fails
The argument against holding both is familiar. Services are time-for-money. Products are leverage. Services demand constant client attention; products demand patient capital. Put the two inside one organisation, the argument goes, and services will eat the team every time because revenue is immediate and product work is not.
This is true for practices that treat services and products as separate businesses. It is not true for practices that treat them as expressions of the same thesis.
The difference is structural. A practice that runs two businesses under one roof has two P&Ls, two teams, two roadmaps, and two narratives. Leadership spends its time arbitrating between them. Each business treats the other as overhead. The team with the harder near-term pressure wins most of the arguments.
A practice that runs one thesis with two expressions looks different. The services are not a separate business; they are the applied edge of the practice, where the thesis meets customer reality. The products are not a separate business; they are the compounded form of the thesis, where repeated patterns become platforms. Both feed the same thing.
What compounds
When services and products share a thesis, three things compound that otherwise do not.
Pattern recognition across engagements. A practice that has shaped five ventures in a category sees the shape of the sixth faster. That pattern recognition is a services asset — it makes every new engagement sharper — and it is a product asset — it tells you which platform is worth building before someone else builds it.
Distribution for products through the practice. Products built by a practice with deep customer relationships start life inside a real market, not a hypothesis one. The practice’s clients are not a captive channel, but they are informed early, tested against, and — when the product is right — natural first customers.
Rigour for services through product thinking. Services practices that build nothing tend, over time, to drift into advisory posture. The work becomes deliverables. The deliverables become decks. The product discipline of shipping something that has to work in production keeps the services work honest, because the practice is still in the business of building things that survive contact with reality.
A practice that holds both services and ventures is not two businesses. It is one, organised around compounding.
What makes it work in practice
Three structural choices seem to separate the practices that make this model work from those that buckle under it.
The first is holding the two under one operating discipline, not two. The same people who shape service engagements shape ventures. The same rigour that applies to a client build applies to an internal one. There is no dedicated “ventures team” quarantined from the main work — ventures are what the practice does when a particular shape of work warrants equity, not employment. This is strategically important because it is the only way to prevent the practice drifting into a dual-identity firm that can neither commit to services nor to products.
The second is treating ventures as portfolio stakes, not escape hatches. The failure mode we see often: a practice starts building a product, decides the product is its future, gradually abandons its services work, and — two years in — has a product that is not quite enough of a business and a services line that no longer exists to fund patience. The practices that avoid this treat ventures as part of the portfolio, not as replacements for it. Services do not fund ventures; they are both funded by the thesis, and the thesis is that both compound.
The third is choosing ventures that the practice can actually carry. Not every promising product idea belongs inside a practice. The right ventures are the ones where the practice’s accumulated pattern recognition is the thing that makes the venture possible. Anything else is a side project in disguise, and side projects do not compound.
The implications for how the practice is structured
A practice built this way makes different choices than one that treats services and products as separate businesses.
Engagements are chosen, not accepted. Not every paying client is a fit, because every engagement either strengthens the practice’s thesis or dilutes it. The practice that says yes to work outside its thesis ends up with services revenue that doesn’t compound, and a thesis that quietly erodes.
Ventures are co-developed, not built in isolation. The practice is rarely the majority owner; the founders or investment groups it works with hold the operator stake, and the practice takes a portfolio position. Shared rigour, shared upside, shared risk. This keeps the practice honest — the ventures must stand up without it — and keeps the ventures honest, because the practice’s stake in each is bounded.
Capabilities are integrated, not siloed. Product, systems, and ventures are not departments. They are expressions of the same practice drawn on for different shapes of work. A services engagement might use all three. A venture might use all three. A perspective piece draws on the accumulated thinking across all three. The work compounds because the practice is shaped to let it.
What we recommend
If you are running a services practice and thinking about building products, do not separate them. Do not create a ventures division. Do not hire a ventures team. Instead, choose ventures the practice can carry, structure them as portfolio stakes rather than operator stakes, and hold them under the same discipline that shapes your services work.
If you are running a product portfolio and thinking about offering services, the same advice applies in reverse. The services are the applied edge of your product thinking. They will only compound if you hold them inside the same practice that holds the products.
The two expressions need each other. Practices that try to run them separately discover this late, after the separation has already cost them something.