Every time I tell someone in tech that I run an agency, I can feel the temperature drop. Not hostility — just mild disappointment. Like I told them I drive a Camry when they expected a Tesla.
In the startup world, agencies are the unglamorous cousin. Low margins. Hard to scale. No venture story. The conventional wisdom is that services businesses are stepping stones — things you do while you figure out your “real” company.
I think this is exactly backwards. Running an agency has been the single best training ground for everything else I’ve built, and I’d argue it’s one of the most underrated business models in tech.
Let me make the case.
Cash Flow From Day One
Here’s something that doesn’t get discussed enough in startup culture: most software companies lose money for years. That’s the model — raise capital, burn it on growth, pray you hit product-market fit before the runway ends.
PipelineRoad the agency was profitable in month one. We had a client. They paid us. We did the work. The economics were immediately clear.
This isn’t a small thing. Profitability from day one means you make decisions from a position of strength, not desperation. You don’t take on a terrible client because you need the money to make payroll. You don’t build a feature nobody wants because a VC told you the market demands it. You build what people actually pay for, and you learn very quickly what that is.
When we started building PipelineRoad.com — the product side of our business — we funded it entirely from agency revenue. No outside capital. No dilution. No board meetings where someone who’s never sold B2B marketing tries to tell us what the market wants.
That independence isn’t just nice to have. It’s a competitive advantage. We can be patient. We can be weird. We can take bets that a venture-backed company couldn’t justify to its investors.
The Multi-Company Laboratory
If you build one product, you understand one market. If you run an agency, you understand eight markets simultaneously.
Right now, we work with companies in commercial real estate, insurance tech, solar, BPO, food supply, and more. Each of these markets has different buyers, different sales cycles, different objection patterns, different content preferences. What works for one is useless for another.
This cross-pollination is absurdly valuable. I’ve taken a messaging framework that crushed it for a fintech client and adapted it for a construction tech company. I’ve seen an email sequence structure that bombed in one vertical and killed it in another. I’ve watched the same positioning mistake happen across five different companies and now I can spot it in the first meeting.
You can’t buy this education. You can’t read it in a book. You have to live inside multiple companies’ go-to-market motions simultaneously and pay attention to the patterns.
When we built our product, we didn’t guess at what features to build. We knew. We’d lived inside enough companies’ workflows to understand what was actually painful versus what was merely annoying. That distinction — painful versus annoying — is the difference between features people pay for and features they ignore.
Understanding Buyer Psychology
Agency work puts you on the selling side of the table in a way that product work doesn’t.
When you sell a product, the buyer is evaluating a thing. When you sell services, the buyer is evaluating you. Your judgment. Your reliability. Your ability to understand their specific situation and respond intelligently.
This is a much harder sell, and it teaches you things about buyer psychology that product people often miss. Things like: people buy confidence before they buy competence. The most technically skilled marketer in the room loses to the one who clearly understands the buyer’s problem and communicates a credible path to solving it.
I’ve sat in hundreds of sales conversations over the years. I’ve learned to read the micro-signals — the slight lean back when you’re losing them, the forward lean when something resonates, the specific questions that indicate they’re already mentally working with you versus the questions that mean they’re still evaluating.
This understanding of how people actually make buying decisions has informed everything about how we build and sell our product. Our landing page doesn’t lead with features. It leads with the problem, described in the buyer’s language, because that’s what I’ve learned works in a thousand agency sales calls.
The Margins Argument (And Why It’s Wrong)
The knock on agencies is margins. Software has 80%+ gross margins. Agencies are lucky to hit 40%.
This is true and misleading.
Software margins look great on paper, but they assume you’ve already built the product, found the market, hired the team, and achieved some degree of scale. The path to that point is littered with companies that burned through millions and never got there.
Agency margins are lower, but they’re real from month one. And they’re remarkably stable. Clients pay monthly retainers. Revenue is predictable. You can model your business on a spreadsheet and actually trust the numbers, which is more than most Series A startups can say.
The other thing nobody mentions: agencies have almost zero cost of customer acquisition in the early days. Your work is your marketing. Good results for one client lead to referrals, which lead to more clients. We’ve grown primarily through word of mouth, which means our CAC is effectively zero. Show me a SaaS company that can say the same.
The “Can’t Scale” Myth
Yes, agencies are harder to scale than software. You can’t copy-paste a person the way you can copy-paste code. Each client engagement requires human judgment, human creativity, human communication.
But “harder to scale” isn’t the same as “can’t scale.” It means you scale differently — through systems, through training, through building a team that can deliver your methodology without your direct involvement.
We’ve built playbooks for everything. Client onboarding. Brand audits. Content strategies. Email sequence design. Positioning workshops. Each of these is systematized enough that a trained team member can run it, but flexible enough to adapt to each client’s specific situation.
This is, by the way, exactly how management consulting firms scale. McKinsey doesn’t have trouble scaling. They just scale through people and process rather than code. The economics are different, but the model works.
The scaling challenge has also forced us to be disciplined about what we offer. We don’t do everything for everyone. We do B2B SaaS marketing for companies at a specific stage. That focus makes us better at the thing we do and easier to scale within our niche.
Agency Work as Product Research
Here’s the part that doesn’t get discussed enough: if you want to build a product, spend a few years running an agency in the same space first.
You’ll learn what problems are real versus theoretical. You’ll learn which solutions people actually adopt versus the ones they say they want. You’ll learn the language your market uses, the metrics they care about, and the objections they raise.
When we started building PipelineRoad.com, we already had years of data — not abstract market research, but direct experience inside our target customers’ businesses. We knew what tools they used, where the gaps were, and what they’d actually pay for.
We also had built-in beta testers. Our agency clients were the first users of our product. They gave us feedback in the context of real business outcomes, not hypothetical use cases. That feedback loop is worth more than any amount of user research interviews.
The Prestige Problem
I think the real reason agencies get dismissed isn’t economic. It’s cultural. In the tech world, building a product is prestigious. Building a services company is not.
This is, frankly, dumb.
Some of the best businesses in the world are services businesses. They employ millions of people, solve real problems, and generate reliable returns. The fact that they don’t fit the venture capital narrative doesn’t make them less valuable — it just means they don’t need venture capital.
I’ve stopped apologizing for running an agency. It’s given me skills, knowledge, and relationships that no other business model could have provided. It’s funded our product ambitions. It’s taught me how companies actually work, not how they theorize about working.
Both, Not Either
The real power move isn’t choosing between agency and product. It’s doing both.
Your agency gives you cash flow, market intelligence, and customer relationships. Your product gives you scalability, leverage, and equity value. They feed each other in ways that are hard to replicate with either model alone.
This isn’t a new idea. Plenty of successful software companies started as agencies or consultancies. Basecamp started as a web design firm. Palantir started as essentially a consulting company. HubSpot was built by people who ran an agency first and understood the pain points.
The agency model isn’t a stepping stone. It’s a foundation. And if you build on it deliberately, it’s one of the most powerful positions in business.
So yeah. I run an agency. And it’s the best decision I’ve made.