The first time I sat down to build my side hustle, I stared at my laptop screen for what felt like hours, cursor blinking accusingly. The question loomed larger than I’d anticipated: would I sell my skills or create something people could buy without my direct involvement? It’s a choice that shapes everything that follows—your daily routine, your income ceiling, even how you’ll feel about your work on Sunday evenings.
Let’s be honest about what’s at stake here. The path you choose now doesn’t just determine how you’ll make money online—it reveals something about who you are and what you value. Some of us crave the validation of clients who appreciate our specific talents; others dream of waking up to notification sounds signaling overnight sales to strangers.
The Intimate World of Service Businesses
Service businesses exist in the realm of direct human connection. You solve problems for specific people who thank you (usually) and pay you (hopefully promptly). There’s something uniquely satisfying about this exchange that product businesses rarely replicate.
You might find yourself designing websites that transform someone’s professional identity, writing copy that helps a founder articulate their vision, or coaching someone through a career transition that changes their life. These moments—when your client’s eyes light up over Zoom or they send an effusive email about the impact of your work—create a feedback loop of satisfaction that can sustain you through the inevitable challenges.
Common service businesses include:
- Freelance writing, where your words become someone else’s voice
- Web design, transforming vague ideas into visual reality
- Consulting, where your hard-won expertise solves persistent problems
- Coaching, walking alongside someone as they transform
- Virtual assistance, becoming the invisible force that makes someone else’s business possible
The beauty of service businesses lies in their immediacy. If you have skills people need—whether from your day job, education, or even serious hobbies—you can start tomorrow. Your “product development” happened years ago when you were learning these skills for entirely different reasons.
But service businesses come with constraints that feel increasingly visible over time. There are only so many hours, and trading them directly for money creates a ceiling that’s hard to break through without working more than you might want.
The Scalable World of Digital Products
I still remember the strange feeling of waking up to find that someone in Australia had purchased my digital planner template while I was sleeping. There was something almost magical about it—money appearing without my direct involvement, a transaction completed with someone I’d never meet.
Product businesses operate in this fascinating realm of disconnection. You create something once and sell it repeatedly, breaking the direct link between your time and your income. The promise is alluring: build once, profit forever.
Popular digital products include:
- E-books that distill your knowledge into portable wisdom
- Online courses that transform your teaching into self-paced learning
- Software that solves problems while you sleep
- Templates that give others a headstart on tasks you’ve mastered
- Digital subscriptions that deliver recurring value with minimal ongoing maintenance
The math of product businesses can be intoxicating. If you create a $97 course that sells just once per day, that’s nearly $3,000 monthly without daily effort. The ceiling isn’t your available hours but the size of your audience and the value of your solution.
Yet product businesses demand patience and persistence that many aspiring entrepreneurs underestimate. The gap between idea and first sale can stretch for months, requiring faith and financial runway that service businesses don’t.
Choosing Your Path: A Question of Temperament
The choice between service and product isn’t just about business models—it’s about who you are. Some questions worth asking yourself:
How quickly do you need income? Service businesses can generate revenue within weeks or even days; product businesses often require weeks or even months of development before seeing returns.
Do you crave immediate validation? The feedback loop in service businesses—where clients express appreciation for your work—provides regular emotional rewards that product businesses might deliver less frequently.
How comfortable are you with risk? Product businesses involve creating something before knowing if it will sell; service businesses allow you to secure clients before investing significant time.
Do you enjoy direct client interaction? Some people energize through client meetings and collaboration; others find these draining and prefer independent work.
What financial resources do you have? Product businesses often require more upfront investment or the ability to sustain yourself through the development phase.
The Hybrid Approach: Flowing Between Services and Products
There’s a secret that experienced entrepreneurs know: these models aren’t mutually exclusive. The most successful online businesses often blend services and products, starting with one and expanding into the other—and this flow can happen in either direction.
The service-to-product path offers several advantages:
- First, service work generates immediate income, solving the cash flow challenge that derails many product-focused entrepreneurs. You can build your product on nights and weekends while client work pays the bills.
- Second, working directly with clients reveals the exact problems and language of your target audience. This insight proves invaluable when creating products later—you’ll understand precisely what people need and how they describe their challenges.
- Third, service work builds your reputation and audience. When you eventually launch a product, you’ll have clients who already trust you and might become your first customers or promoters.
But the product-to-service direction can be equally powerful:
- First, low-priced products like guides or templates create a lower-risk entry point for people to experience your expertise before committing to your services.
- Second, product buyers who implement your ideas often reach the limits of DIY approaches, becoming perfect candidates for your more comprehensive services.
- Third, product sales generate valuable data about which topics and solutions resonate most with your audience, helping you craft more targeted service offerings.
Consider the web designer who creates custom sites for clients, then packages her most-requested layouts into templates she sells. Or flip the script: the blogger who sells a $27 guide on content strategy, then finds readers reaching out for personalized consulting when they’re ready to implement more seriously.
Next Steps: Making Your Decision
As you consider which path fits you best, remember that perfect clarity rarely precedes action. Start somewhere, pay attention to what energizes you, and adjust as you learn.
If you’re drawn to services:
- Identify the specific skills you can offer immediately
- Create a simple offer that solves a clear problem
- Find platforms where potential clients already look for help
- Reach out to your network to find your first client
- Begin noting common client needs that might translate to products later
If products call to you:
- Research existing products in your area of expertise
- Identify specific problems you can solve better or differently
- Start building an audience before creating your product
- Plan your creation process with realistic timelines
- Consider how you might offer deeper support through services for customers who want more
If starting with a hybrid approach appeals:
- Begin with a low-priced product that demonstrates your expertise
- Offer limited service spots to your most engaged product customers
- Or start with services and document your process for future product creation
- Create clear boundaries to avoid being pulled in too many directions at once
Whichever path you choose, remember that the biggest divide isn’t between those who pick the “right” business model and those who don’t—it’s between those who start and those who merely contemplate. The choice you make today isn’t permanent. You can always pivot, expand, or reinvent as you discover what works for your skills, lifestyle, and goals.
The online business world offers unprecedented freedom to create work that fits your life, rather than contorting your life to fit your work. The question isn’t which model is better—it’s which one better serves who you are right now and who you hope to become.
