It is a valid question to ask upon starting your company or venture and whether you know it or not it has more implications than you think. However, both scenarios are completely effective to build a viable and successful company.
Nevertheless, what are the distinctions?
If you have a single item or solution under development for commercialization, then you are a product. This could also mean that you are developing a piece of software, an application, and a user product or you are marketing an in-licensed product. This could also imply that you might be developing this product to sell to a number of different customers or customer segments.
If you have a development plan for a number of products or a platform of technologies to develop, then you are a company.
In the real world, you can find many situations where product = company that can be very successful. An example of these circumstances is the consumer good company RedBull that have developed a single product for commercialization. This strategy can prove to be extremely successful in both the public and private markets. You can also undeniably create an effective product, company and exit in either scenario.
Hereunder you can find some useful information that will help you make the distinction.
Several questions should be asked: How will you concentrate your time, energy, and money? How will you still be innovating if you have a single product strategy? Is your product better than the competition?
If this will be a company, you will have to think about the differences in your approach: how will you decide where to capitalize and participate? How will your portfolio investment strategy be? Will you be able to achieve economies of scale with your different product strategies? You have to use this thinking to your advantage.
If your company is a single product, you will have to constantly find new customers to sell your products to or make it more compelling so that customers will come back again to it.
Adopting this strategy, you can operate on many channels to market your products like for instance selling many times to the same customers as well as finding new potential customers.
An interesting question could be, depending of if you are a product or a company, is how you will create your revenue forecast. Is it by using a top-down or bottom-up methodology? If you are single product company, you will be a lot more granular upon describing how you will build up your revenue.
You need to carefully know how will be your exit strategy. There are a thousand things to think about: Will you be able to license the product, or sell it? Can the company stand on its own feet and breakthrough to a potential IPO? How does this affect the size of your rounds and financing options? Are they plausible given your product development and growth strategy?