“You are what you do, not what you say you’ll do.”
❓ What You’ll Learn
- Which $30M ARR company came from a digital agency?
- Who earns $100,000+ per month running the same playbook for clients?
- What are the upsides of running an agency?
- How to build recurring revenue?
- How to get inbound leads?
- Which agencies switched from services to SaaS?
💎 Why It Matters
Agencies help entrepreneurs earn income faster than other business models with less risk. You may also find valuable problems to solve at scale with SaaS. Or earn equity in clients.
Companies have short-term needs, lack internal skills, need to scale fast or fill a fractional role such as CFO or CTO.
Agencies help companies solve these problems without hiring and managing large teams.
- 8020 • Move faster without code.
- 021 • Get your MVP built in 30 days.
- People First • No-code design studio.
- Ideable • Build the right product faster.
- Idea Link • No-code websites and apps.
- RapidDev • Software development agency.
- Minimum.run • Validate hypotheses without code.
- Optemization • 10x your remote team’s productivity.
- Reboot • Turn your vision into products people love.
- Websterpeace • No-code projects for your favorite brands.
- Airdev • Build faster and launch products that people want.
- 9x • Tools and automations to move your business forward.
- TheFlow • Launch your Webflow site, Shopify store or no-code project.
- AKvertise • Social media agency.
- Major Tom • Full-service marketing agency.
- Digitalina • Generate leads from social media.
- Tetriz • Get more leads with sales automation.
- Optdcom • Data-driven digital marketing agency.
- Contentus • Content strategy and original content.
- Leadbird • Dedicated business development team.
- Rain Factory • Marketing for growing online brands.
- Content Whale • 42 types of content writing services.
- iPullRank • Content strategy and enterprise SEO agency.
- Delverise • Digital product and growth strategy solutions.
- Fantom • Helps SaaS companies scale with paid advertising.
- Stodzy • Helps local healthcare businesses get more patients.
- Digital Voices • Influencer marketing campaigns with YouTube creators.
- Lemonly • Get help explaining your story.
- Scribe • Get help writing, publishing and marketing your book.
- Venture Narrative • Helps founders write narratives to inspire employees and attract customers.
- ZenPilot • Operations experts for marketing agencies.
- Luhhu • Automate processes to save time and money.
- Automate Labs • Streamline and automate your company operations.
- Themelocation • White-label WordPress development and maintenance support.
- Agency owners will go from services to SaaS. See Bildr, Memberspace, Mailchimp and Basecamp. All were agencies before valuable problems were found and solved at scale.
- Platforms will try to attract agencies to their ecosystems. See partner programs (Shopify Plus Partners), certifications (AWS) and affiliate programs (Quickbooks). Platforms can improve their ecosystems while maintaining high margins.
- Show your work. Your portfolio lowers doubt about whether you can do the job. You build authority as you share. Eddie Lobanovskiy gained 200,000+ followers by posting his work on Dribbble.
- Build reusable systems and assets to become more efficient. Agencies sell on value and become more efficient over time. Jeff Lerner earns $100,000+ per month running the same playbook for local personal injury attorneys. Stodzy has a similar model.
- Find valuable problems to solve with high-leverage business models.
- Moz emerged from an SEO agency.
- Spiffy emerged from a marketing agency.
- Bildr emerged from a development agency.
- Drrac went from cloning websites to selling courses.
- IDEO CoLab Ventures emerged from a design agency.
- Everything Marketplaces emerged from a development agency.
- Procreate emerged from a digital agency. Now they’re at $30M ARR.
- Lemlist emerged from a lead generation agency. Now they’re at $1M ARR.
- Use inbound marketing to build your top of funnel. Shane Young’s 100,000-subscriber YouTube channel guides clients to PowerApps911. Brent Weaver gets 5-15 qualified leads from each talk he gives. Dan Runcie has a free newsletter and consults. Pick a channel and focus.
- Build a value ladder. Create do-it-yourself, done-with-you and done-for-you offers. Flavio has a blog (free), books ($), courses ($$) and bootcamps ($$$). Prospects will trust you more when you’ve made and delivered on promises before. Books and courses also have zero marginal costs.
🔑 Key Lessons
- Agencies have less risk (and reward) than SaaS companies. They also have higher customer concentration and marginal costs. But it’s a good place to start.
- Common paths to agency ownership include working at an agency, being an expert employee, working for a platform such as Webflow or outsourcing from day one.
- Agencies have high lifetime values and can justify doing sales that don’t scale. Sending personalized messages, doing spec work and answering 1-on-1 questions.
“This business model sucks.”
Agencies are far from perfect. But may be underestimated. Productized services are valuable and sellable businesses. Agency owners can find valuable problems to solve with digital products, SaaS and marketplaces. Some take equity in clients.
“Location-adjusted wages won’t last? What about timezones and culture?”
Premiums can be captured based on timezone and cultural preferences. Cultural understanding matters more when writing copy versus code. Some teams are timezone agnostic.
📁 Related Reports
- Productized Services • How to build a valuable and sellable service business.
- Lead Generation • How to generate leads for your agency.
- Value-Based Pricing • Why value-based pricing matters and what to watch out for.
- Digital Products • Build authority and income with zero marginal costs.
- Online Courses • How to use courses as part of your value ladder.
- Remote Work • On the future and opportunities of remote work.
- Built to Sell • A business novel on an agency owner who built systems and sold his business.
- Systems for Growing Your Digital Agency • Standardize your sales process.
- Ensuring Stability for Digital Agencies • Build recurring revenue streams.
Thanks to Matt Varughese (8020), Rick Segal (CRAAG Angel Group), Jeremy Abraham (Spiffy), Vishal Srivastava (Trainedge), Elom (Delverise), Natwar Maheshwari (Engineering Brew), Simon Daley (CodeSwaps), Kimsia Sim (GreenDeploy), Paul Martin (MusicAndBlockchain.com), Chikodi Chima (Moonshot), Vincent Haywood (Vhdigital), Lu Doan (Agent Shield), Ray Deck (Sustained Ventures), Emmanuel Vivier (HUB Institute), Ken Rossi (Liquid New York), Jose Torres (Lexia), Serbay Arda Ayzit (Contentus) and Thomas Jacquesson (Tweet Hunter). We had a great time jamming on this report.
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- 5 Predictions (150% More)
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With Trends Pro you’ll learn:
- (📈 Pro) How can agencies offer more services without hiring more people?
- (📈 Pro) How to find more leads using tools?
- (📈 Pro) How to leverage existing ecosystems?
- (📈 Pro) Who landed Chance the Rapper as a client using spec work?
- (📈 Pro) Why scaling up might not be the best for agencies?
- (📈 Pro) What are the disadvantages of value-based pricing for agencies?
- (📈 Pro) What’s the biggest competitive advantage that agencies have over freelancers?
- (📈 Pro) Read 9 lessons learned from growing an agency from 0 to $135k ARR in 135 days.
- and a lot more…