Agencies Aren’t Second-Class To SaaS
Every dinner with investors seems to end the same way. Someone sighs and says they just want a SaaS company. The subtext is clear: agencies are messy, fragile, and hard to scale. Here’s my stance: agency businesses are unfairly discounted—and they can be powerful, durable, and freeing when built right.
This matters now. Markets are shaky. Bank stability gets questioned in group chats. Valuations for software have fallen hard. Yet the myth holds that software is safe and services are not. That myth needs a reset.
The Case For Agencies, From The Trenches
Hawke Media grew to 250 people without outside capital. That wasn’t an accident. Services let you start on day one, sell on day one, and learn on day one. There’s no heavy upfront spend. No long product cycles. You find a customer, deliver value, and get paid.
“The agency, you start day one. If people buy it, you keep going.”
Is it perfect? No. It’s fickle. Clients can wake up in a mood and cut you. Marketers love shiny objects, so retention takes work. But that volatility is also feedback. It forces better service, clearer communication, and sharper strategy—fast.
“The first day you get a client is the first day you start losing them.”
Volatility Isn’t A Services Problem—It’s A Business Reality
The past year reminded everyone that risk doesn’t spare software. Valuations dropped hard. Bank risks popped up. While texting with our venture team, we even rebalanced cash across banks to reduce exposure. That’s not a services problem. That’s business.
Stop pretending one model carries safety while the other carries chaos. Both carry risk. They just express it differently. In software, it’s market swings and long burn. In agencies, it’s churn and margin discipline. Pick your trade-offs—and build for them.
Churn Is A Teacher, Not A Curse
Early on, we kept deals month-to-month. That wasn’t fear. That was a standard.
“I wanted to be month to month… to hold me accountable.”
Inspired by Richard Branson’s approach with wireless plans, the idea was simple: if the work is great and communication is strong, clients stay. If not, they leave—and we learn. Churn teaches faster than any dashboard. Today we sell more annual deals, but the mindset remains. Earn the next month, even when the paper says twelve.
What Agencies Do Better
Here are the advantages many people ignore. These aren’t fantasies. They show up in the numbers and the daily grind.
- Speed to revenue: Sell services now, fund growth from cash flow.
- Real-time market fit: Client feedback hits fast, so you adapt fast.
- Low CapEx: No massive upfront build. Scale with demand.
- Optionality: Add offerings, test pricing, evolve quickly.
- Owner control: Without outside capital, you set the course.
Yes, some businesses (like accounting) enjoy stickier retention than marketing services. Fine. That’s not a reason to dismiss agencies. It’s a reason to build smarter incentives, stronger reporting, and clearer outcomes.
How To Build An Agency That Lasts
Want fewer sleepless nights? There’s a playbook for that.
- Earn the renewal monthly: Even on annuals, act like it’s month-to-month.
- Reduce key-person risk: Institutionalize knowledge, not heroics.
- Productize services: Clear scopes, clear outcomes, clear pricing.
- Watch cash like a hawk: Diversify banks, shorten receivables, protect runway.
- Resist shiny objects: Focus on what repeatedly drives client outcomes.
None of this is glamorous. It works.
My Take
Agencies aren’t training wheels for “real” companies. They are real companies. They can scale. They can print cash. They can survive hellish markets when run with discipline. If you want certainty, don’t start a company in the first place. If you want control, speed, and real customer feedback, services are a strong bet.
Build an agency you’d hire. Make results obvious. Make reporting simple. Communicate early. And make the next month worth staying for—every time.
Call to action: If you’re building, stop chasing the default playbook. Pick your model on purpose. Set a high standard. Let churn teach you fast. Then earn the right to scale.
Frequently Asked Questions
Q: Why choose an agency model over software right now?
Speed and cash. Services let you generate revenue fast, adjust offerings quickly, and avoid heavy upfront costs. In shaky markets, that flexibility is an asset.
Q: How do you manage client churn without long contracts?
Treat each month like a renewal. Deliver measurable results, communicate proactively, and make it easy to see value. Churn becomes feedback, not a death note.
Q: What systems help an agency scale past the founder?
Standardized scopes, clear metrics, documented playbooks, and account teams that share knowledge. Reduce single points of failure and make excellence repeatable.
Q: How should agencies handle banking or market risk?
Diversify banking relationships, keep only operating cash where needed, tighten collections, and monitor exposure. Protect cash first, then plan growth.
Q: Are annual contracts better than monthly agreements?
Annuals offer stability, but the mindset should stay monthly. Even on a yearly term, act like you must win the client’s business again every 30 days.
