Is someone trying to build an agency or is everyone after those SaaS businesses?
Is someone trying to build an agency or is everyone after those SaaS businesses? What do you think about those different approaches?
Is someone trying to build an agency or is everyone after those SaaS businesses? What do you think about those different approaches?
Sure, lots of people working on services.
In general terms: (Yes, there are exceptions)
Services: Low cost, low-labor start-up. Faster to first-revenues. Location tends to matter a lot. Very difficult to scale. Building a small services company: Easy. Building a large services company: Very hard.
SaaS: Longer development/start-up time. Slower to first revenues. Location matters less (depending on the SaaS). Scales infinitely.
I've run both, and like many others I started my career with a service company. Ultimately the thing that drove me towards SaaS was the inefficiency of creative/technical services. The time lost to meetings, disputes, drama, managing scope-creep, pitching, developing client relationships, putting out fires, team building, etc. Not that it was all bad. I loved a lot of the work and made some great friends. But ultimately, I enjoy the efficiency of SaaS-building from a labor-input perspective.
If capital / runway is very limited though, there's really no better type of business to start than a services company. Especially if you're in (or near) a major city. Cost of entry is generally low, and time to first revenue is usually short.
There are a bunch of folks running service based businesses on here. Some are doing SEO, and content others are doing training. Both I think qualify as agencies though they may not lean on that term.
I really like the approach, and it turns out many Saas products get their first customers with concierge style service...at least while we're doing the things that don't scale while we work out bugs. In that sense there is a bit of the agency mentality in a lot of what people are doing on IH.
I'm looking into building both a consultancy and staffing agency on the back of AutomatedApi.com at some point. Probably won't formally do both but the lines are blurry with software dev contracts sometimes.
Agreed, agency services seem like a great way to learn by doing things that don't scale for larger, faster, short-term revenue, and then if SaaS is the preferred model, automate whatever services possible that have proven to deliver the most value.
I see folks doing cold outbound for a percentage of revenue.
It's not either/or: many agencies I've worked for also build (or aim to build) products. This works quite well for a number of reasons:
So I've run an agency for 15 years. Wouldn't do it again. I've also tried several SaaS businesses over the years, would try it again, but have learned a ton along the way.
agency tips: don't compete on price, build in monthly maintenance contracts to all your projects (to even out cashflow), specialize, avoid doing everything for everyone.
SaaS tips: study your conversion paths, figure out where you can dump money into revenue generation. repeat.
Interesting. Do you want to share why you wouldn‘t do it again?
god agency work is such a soul sucking business. imagine having dozens of bosses on every project. the only pro is that you get to make $ faster and can work on a variety of projects. but the idea that your time isn't scalable anymore is something i'm not interested in pursuing again.
I've been thinking about this and I ended up with the following pros and cons for each:
Service
Pros: Easier to start, generates revenue faster.
Cons: You have to manage a team, deal with clients, sometimes location matters, scaling is difficult.
SaaS
Pros: Less dependent on location, scales easily, you manage fewer people.
Cons: Harder to start, harder to generate revenue.
I agree with all of your pros and cons and I thought of the same things.
For "harder to generate revenue" I thought of a model, where you charge monthly fees for a specific "package" you have to build. I think thats an approach where you maybe can get a little bit like a SaaS business
Are you talking about productized services?
Kind of. Like maintenance contracts or a strategy package on a monthly bases.
Saas is the way forwards, agencies work to console saas but at the end of the day its not self sufficient, saas enables you to create a self sustainable flow
SaaS businessess has several advantages. Being a SaaS company, we are focused on creating robust products to solve business problems based on the subscription model. It is easier to run a SaaS business as the location doesn't matter; one can sell the product to any country without any difficulty. Easy to update and run.
Talking about history, previously we were a service agency. We used to develop website and products for the company in the form of the project. Although it strengthened the relationship and enhanced our brand image- the revenue was just a one-time flow. Thus we opted for SaaS-based business which along with building relationship provides us revenue over the period of time.
These are all good discussions and I agree with so much of this. What I have seen lately is disrupters. Guys like this can crush some big names that were successful just last week. https://www.notion.so/ - what is the shelf life for your SaaS?
Sometimes i think that in todays world where everything seems available as a software solution, it will be a huge advantage if you can actually deliver the knowledge and skill of experienced people to get the information the client wants without having to figure it out all by himself. But I think this also heavily depends on the industry aswell..
While harder to get going, something tangible that can be demoed and trialed will always be easier to sell than "trust me, I know how to do this".
This comment was deleted 8 years ago