For traditional product-based companies PSSs represent a huge jump in the dark. Thus the introduction of PSS-like features, aiming to extend the artefact-based offering, is done gradually in the earliest stages, focusing on some value-adding aspects while excluding others. The main aim of this paper is to understand how the transition to PSS is initiated from a company perspective and how these PSS embryos are supported in everyday design activities. The authors have conducted a case study in the Swedish manufacturing industry to collect issues, challenges and opportunities related to the development of service-based offering in their early beginning. As a result they introduce the concept of knowledge-intensive products, seen as an intermediate step towards the full integration of products, software and services, and discuss their implication from a product development point of view.