Can I Run Service and Software Businesses Simultaneously?

I had a chat with an early-stage founder trying to figure out his next move. He built a service business to help small businesses. From his work with his clients, he realized that software could create massive value for his service business and other similar businesses. So, he built software and funded that effort with the cash flow from his service business. The beta of the software is now complete, and he sees a large opportunity for it.

This founder is in a spot that feels tough to him. He’s trying to figure out how to continue running the service business and at the same time grow the software business. The financial runway he gets from the service business is important now, absent other alternatives. It pays his personal expenses in addition to funding the software development.

I’ve seen other founder friends with a similar predicament. One specific case comes to mind. My friend’s solution was to hire someone full-time who was his intellectual equal. Both were strategic and self-starting, had an owner’s mindset, and could manage people. My friend put in place an incentive plan that created alignment and transitioned the service business over to the new person. My friend focused exclusively on the software business and never looked back. The software business has become a massive success and changed his life.

If my friend had tried to focus on both companies, the software company would never have become what it is today. He recognized which opportunity had the biggest upside and turned his attention to it instead of splitting his time and mental energy.