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#80 · The SaaS vs Agency Model in 2025

youtube ↗Agency Operations

I struggle to launch my AI/SaaS ideas despite confidence in building them; I get stuck between starting a SaaS or an AI agency and doubt my ability to create valuable products.

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.

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Related answers

youtube ↗AI & Automation

How should I navigate turning my AI automation work into a template SaaS solution?

Offering a managed service means you deliver the work yourself—through calls, consulting, or a done‑with‑you approach—frontloading revenue and providing a white‑glove, customized experience that clients pay a premium for, but at the expense of long‑term revenue. Building a SaaS product flips that: you backload revenue and enterprise value, potentially making little upfront (e.g., under $10 K/month the first year) but outperforming a pure‑service model in years 2‑4 if you’re a competent operator. The trade‑off is short‑term versus long‑term revenue; choose managed service for immediate cash, SaaS for long‑term growth. My own shift from pure service to longer‑term bets like content and branding followed the same pattern: first earn enough to cover basics, then invest in assets that compound over time.

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youtube ↗Client Acquisition

I posted a SaaS I made in Maker Zero recently. What do you think of it, and how would you get it in front of agencies or companies if you didn't have an audience or extra cash to spend?

If you don't have an audience for your SaaS, I would not spend a bunch of time building an audience. By the time you build the audience, I don't think SaaS as an industry will really make much sense anymore, just given that AI can virtually rebuild anything and everything today for tokens on the dollar, so to speak. What I would do instead is build a two-step process. Rather than building your SaaS, building an audience, and then selling it, I would just build a SaaS and then sell it. You do this by going outbound, not inbound. You don't need to build an audience in order to go outbound — you literally just find people that would get a lot of value out of the product you're selling and go talk to them. There are a variety of different ways to do that; obviously Maker School is a big chunk of the outbound approach. You just reach out to people that have some sort of buying signal and then put your product in front of them in a highly curated way.

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youtube ↗Offers

Do you think productizing these automations as a SaaS makes sense, and what should be considered?

Yes, you can productize your automations into a SaaS. It requires time and effort to build a production‑ready solution, including authentication and other infrastructure. My advice is to validate demand and achieve some financial stability (e.g., $10‑15k/month) before building the product. Once you have stable revenue, you can transition from agency work to a SaaS, which typically grows more steadily after an initial slower ramp.

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youtube ↗Agency Operations

Can I earn $100,000 per month without running an agency?

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.

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