What are your thoughts on starting a startup versus a service-based business?
My thoughts are simple: a service business (agency) brings immediate income but requires managing people, while a SAS (software) trades early losses for later scalability and automation. In the early years, an agency can generate far more money—maybe 10 times more—than a startup, because you get paid right away. However, once the SAS finds product-market fit, it can scale with far less time investment since it doesn't need people to fulfill. The trade-off is time versus money. My optimal approach is to start with a service business to earn money, gain client experience, and learn financial management. Then evolve that service into a managed service and eventually a product. For example, Instantly began as a cold email agency, made early money, then built a SAS product that now scales. I recommend this path for most people today.
I think packaging automation as a SaaS product is cool. I've done this before for many viewers. You can view it as a way to improve consolidation, but essentially you can treat SaaS as either green or blue—just a label. SaaS product growth over time is tricky at first, then you hit product-market fit and scale rapidly. For most of the lifetime, especially the first couple years, you make basically no money, unlike an agency or service implementation where you can earn a fair amount right away. Agency revenue tends to be up and down and hard to scale; after 2-3 years, an agency might still be where it started, while a SaaS product could have completely overshot it. So there are pros and cons depending on the time scale you plan for. Market dynamics also help—SaaS is becoming easier to build with no-code tools. Additionally, you can package an automation as a SaaS but still sell it as a service implementation. For example, take your automation workflow and have Lovable or Bolt create a simple front end for it. If you want more nuance, check out a video where I actually built one. I don't recall which specific video it is, but there's an example: me wearing a backward baseball cap, turning a 2K automation into a 10K SaaS no-code product using Lovable to package the automation I built as a SaaS product resembling a little proposal generator. You can try that approach, but still sell it as a service. Hopefully that answers your question.
The feeling you describe is akrasia — knowing what to do but not doing it because the required activation energy feels too high. To overcome this, consider the two business models you mentioned. A SaaS model is highly scalable but requires product‑market fit and can take years to generate revenue, during which you burn runway with no income. An agency model, by contrast, lets you earn money quickly (e.g., $20k in the first month) but is hard to scale and lacks predictable recurring revenue. I recommend a blended approach: start with an agency to generate early cash flow and runway, use that revenue to fund your SaaS development, and then gradually shift from manual implementations to a SaaS product. This path takes longer to reach the same scalability as a pure SaaS, but it yields far more money in the early years and gives you proven business‑owner credibility, which makes raising funds or reinvesting easier.
An agency is just one of many scalable business models, but it’s generally harder to scale an agency to $250k a month compared to SaaS or e‑commerce. It’s relatively easy to hit $10k a month with an agency—one 10k client or a couple of 5k clients can be secured in 30 days, even by a complete beginner. Building a SaaS product that generates $10k recurring revenue in 30 days is far more difficult, as is scaling e‑commerce to the same level because of thin margins and higher workload. Agencies tend to cap out sooner, whereas SaaS and e‑commerce have longer growth curves. For total beginners, starting with a service‑based business is advisable because you lack the technical skill to create a SaaS product and need to learn how to identify and solve business problems first.
A managed service is a step below a SaaS: you build a technology solution that productizes or simplifies the service, then onboard clients to it, but the model remains high‑touch—you interact with clients regularly. It’s not hands‑off like an Uber‑style app where users never talk to a person. Because of the ongoing client interaction, scaling is harder; you can’t fully automate delivery, and you remain responsible for support, customization, and relationship management. The progression typically goes from manual service → managed service → full‑auto SaaS, so a managed service requires more ongoing effort and limits how much you can leverage automation and abstraction.