Product or Service Firm – Your Most Important Career Decision

Posted by Arjun Moorthy

May 14, 2011 10:18:00 AM

Coming out of undergrad as a computer engineer in the late 90s, I joined a young tech company like many of classmates.  A few of my classmates, particularly those at the top of the rankings, went to investment banks like Goldman Sachs and high-end management consulting firms like BCGMcKinsey & Co etc.  At the time, I felt joining such firms was to waste my engineering training but I always wondered if I should’ve gone down that other path with its brand prestige.  Years later I worked hard to get into a top consulting firm but when I finally did get into BCG I realized that my initial decision actually wasn’t a bad one.
investment bankers work so much 200x300

This isn’t to say I was unhappy at BCG; far from it.  BCG has a fantastic team and taught me several skills crucial to advancing my career.  Many are soft skills – presentation and communication (particularly with executives), logical structuring of analysis, how to ramp up quickly and focus in a brand new area.  However, the most important thing I learned was that consulting firms, investment banks, law firms etc are service businesses and not product companies - and that I personally am more aligned with product-driven organizations. 

4 key differences between Product and Service firms

Product companies Service companies
Your impact (via the product) can last long after you leave the firm Your impact likely ends when you leave that firm
Predictable work pace and lifestyle, even in seasonal businesses Unpredictable hours – you are always at the client’s mercy (I’ve worked many a Sunday and vacation)
Relatively low variable compensation (and even gross comp.) until you get to senior levels Large variable compensation driven by yearly results - higher average comp. than product-companies.
Career development usually not a priority in firm as primary asset is product/equipment Career development usually a high priority as primary asset is people


The distinction between service businesses and product businesses is not the typical career guidance that you get when choosing your first job out of school.  Yet it sets your expectations about work lifestyle/environment and what you believe you’re good at.  Hence, many who start in one path find it hard to switch later on because they become accustom to this style of work.  That this innocent job decision can determine so much of your career is still astounding to me.

Topics: first job

Career Advice I Wish I Knew Earlier 

Hello.  I started this blog to distribute some of the best career advice I have been given over the many jobs I've had.  I've been fortunate to work for and with some great bosses like Brian Halligan, Francis DeSouzaNancy Kamei, and Rick Roberge, and some unique companies, like The Boston Consulting Group, that invest heavily in making each employee a success even after leaving the firm.

The advice and training I received here stands in contrast to my experiences with some not-so-great bosses and companies I've also worked for.  I'm continualy amazed at how valuable good advice has been in my career so I hope to pass on the good advice, and insights from mistakes I've made, via this blog. 

Thanks in advance for your comments, particularly when you can improve upon the ideas posted.

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