Advice on moving from a client focused agency to SaaS business model

Discussions
#1

Hello All,

I have been running a fairly successful web design agency for the past four years, a model which works well but often results in inconsistent cashflow. We have dreams of launching web applications and moving part of our income stream towards SaaS products.

Wondered if anyone has any advice on how to promote SaaS services and where is a good place to start?

We have unsuccessful launched a couple of applications in the past and therefore have learnt some big lessons the hard way but keen to hear your thoughts!

#2

Where I’ve seen this happen best (as a freelancer contracting to agencies) is by selling a product that would help your existing clients. Whether that is productised consulting (run 5 AB tests a month and produce a report) or (duh) support contracts or a targeted web application you can sell as part of your design & build services.

That’s how Basecamp started after all. Blog to white papers to software to outside their niche.

#3

You have a huge advantage here. I know at least 3 people that started as an agency than shifted into saas. Like Andy said above, try to solve a problem your clients have. You can give a call or meet with a few of them and ask them about their pains. For sure you’ll find some ideas + you already have a relationship with them.

#4

Thanks both, appreciate the advice. We have an idea already lined up to help with the sign off process which we will start to use internally before making public.

when we’re ready I wondered what else we should be doing to expand the client base of a product beyond our circle of influence? Not afraid of hard work just wondered in which areas have people experienced success before? (SEO, B2B Cold Calls, PR in tech blogs ect…)

#5

Chris - there’s a lot of great precedent for this exact move, not the least of which is perhaps the OGs themselves 37Signals - also Amy Hoy, Metalab, and many, many more.

Amy wrote about this masterfully/hilariously in a response to a post some agency made about their own failure to successfully transition to products.

Amy’s post is great and there’s a lot you can learn from her points in there. There’s also a lot you can learn from the cringe-worthy fail-post she’s responding to in terms of the wrong mindset and approach to have.

Some added thoughts:

Be patient.
The Long, Slow, SaaS Ramp of Death is a real thing. My friends and I have coined the “1000 day rule”, basically, don’t be surprised if your product doesn’t go $25k/mo recurring in month 1. Shit takes time. 3 years for a SaaS to start covering your (SMALL team’s) market salaries seems to be a common theme

Dogfood with caution
"Build a product you want to use" is fantastic advice. But there’s a catch. If you’re coming from the world of software consulting, it turns out that that’s a tricky market to develop for - it’s extremely well served.

There’s an ocean of project management, bug tracking, time tracking, client-support, etc… products available for the agencies of the world. Don’t be afraid to swim into blue ocean to build apps for more under-served markets filled with non-developers who are hungry for delicious SaaS products.

That’s exactly what we did (we make a mobile photo app for street marketing teams. Link in the profile.)

Pick up the phone.
Sell on the phone. Make cold calls.

It’s ridiculous how few bootstrapped B2B software folks do this. It’s effective, and will teach you more about your customers, their pain points, and how to sell your product than any amount of copywriting and a/b testing will, especially in the beginning.

Share your story
Document your journey and share it with the world in a blog or podcast. It’s a great platform to have, and will help others find and relate to you.

Content marketing can be like cheat codes for bootstrappers. Get it in.

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#6

Thank you for your insight, really well balanced thoughts and advice here!

Your advice of building for under-served markets is a good one. I think my own (unfounded) hesitation with this is understanding new marketing places and finding key contacts within them.

Does anyone have experience with out-sourcing cold-calling? I’v heard this is a really bad idea as they do not represent you very well and people often want to speak with the business owner?

@Crewlab do you have any book recommendations for Content Marketing ?

Thanks!

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#7

@mrchrisdesouza - my pleasure, glad it was helpful.

Don’t Outsource Cold-Calling
Especially in the beginning.

To outsource any job effectively, you need to have clear and well documented instructions. And in order to do that effectively, you need to have done the job yourself.

Not to mention all there is to be learned by doing the cold calls yourself. That’s the majority of the benefit!

Ask anyone who’s a few years in on their own product: your messaging - how you explain and sell your product - will change over time.

For SimpleCrew, our product is pretty much exactly what we had in mind we started with just the idea 2.5 years ago.

But the messaging has changed immensely.

We went from describing SimpleCrew with long winded paragraphs as a “mobile field team management application” (wtf?) to the much, much clearer “mobile app for street teams” today.

(I seriously cringe when I go over old executive summaries and product decks…)

However simple that seems in retrospect, that messaging evolved with time, as a result of literally hundreds of conversations with potential customers, investors, friends, etc…

And yes, as you mentioned - no outsource agent is going to have your interests at heart like you will. In the beginning, you need to be on your own frontlines.

Cold-calling honestly isn’t that hard. Once you get started, it’s easy. This is a must do for founders.

On content marketing
I don’t have any particular book recommendations. I’m sure one of the 37Signals books (Getting Real or Rework) covers the topic from their perspective which is a golden one to follow.

This post of theirs also sums up the whole idea nicely: Sell Your By-products

Hope this helps. Please keep the questions coming if you have them. These topics will inspire future posts on my blog - Crewlab.net.