tldr; "One common approach we see is for bootstrapping teams that have a basic understanding of customer needs to start by offering a service. Once they get uptake on their service offers, they start to take advantage of existing solutions prospects are using to create a "system integration" or extension offering. For example, if your goal is to replace Excel where it's being used for a particular purpose, first offer an Excel template. This is more compatible with current practice, easier for prospects to trial, and easier to iterate on than a fully coded solution. Once they get uptake on the system integration offer, they can start to offer a product. "

This is often a good strategy, but it's not easy at all. If your long term plan is to develop a product, focusing purely on delivery of services means no resources for product development.

If you offer services purely with off the shelf products, you then need to compete with other service providers why may be allocating all their resources to being a service business.

On the one hand you have to offer a competitibve service, while also working towards a product.