When it comes to entrepreneurship, there are many paths to making business dreams come true. One way to go about it is by starting a software consultancy and using the profits to launch software products or a SaaS company.
Take the journey of NineTwoThree Studio, for example. In the first five years of our history, we developed a single product named Inigo, which was purchased in 2016 by a Canadian company. This acquisition marked a pivotal moment, as we spent the next three years integrating Inigo into the suite of products owned by the Canadian firm.
Despite being part of a larger entity, the team at NineTwoThree Studio retained our identity and continued developing multiple products. It wasn't until we ventured into building for others that they realized the greater freedom and profitability this approach offered compared to focusing solely on a single startup.
The dream for this type of business model makes sense: by working with a multitude of companies through consulting, entrepreneurs can find business ideas and use the profit from their consulting contracts to fund the creation of these products.
Starting a software consultancy can have some pretty great benefits. For instance, NineTwoThree Studio learned through our journey that the deep dive into product development for different clients, contributing to over 90 products, endowed us with a broad view of what works and what doesn’t in the marketplace. We could see beyond a founder’s vision and understand how a product would actually perform in the real world.
This mirrors the general advantages of beginning as a software consultancy. It provides entrepreneurs with a steady and dependable income that doesn’t depend on selling software. This allowed us to build a strong client base while gaining expertise across different industries. The best part is that this steady cash flow can be reinvested to create and develop a software product or a SaaS company, smoothing out the transition to a product agency business model.
Shifting gears from a startup builder to a product-focused agency in 2022, NineTwoThree Studio made a strategic pivot. This evolution came from a place of understanding, as we had built 14 startups themselves, facing marketing and selling challenges despite our proficiency in product development. Our transition highlighted a critical insight — the product is only about 10% of a startup's success.
The rest hinges on timing, product-market fit, sales, and marketing.
Armed with this same knowledge, entrepreneurs can create products that hit the mark with the specific needs and preferences of the market, increasing the chances of success.
Another major advantage is the relationships entrepreneurs build with their clients during their consultancy journey. NineTwoThree Studio’s story accentuates this, as we capitalized on the knowledge gained from our extensive experience, which now informs our current operations.
We’re not just building products; we’re guiding our clients on how to sell these products, leveraging our rich history of successes and failures.
Despite these advantages, NineTwoThree Studio’s experience also illustrates the challenges inherent in the software consultancy model. Moving from a consultancy to a product-focused agency demands a significant change in mindset.
In a consultancy, your main focus is providing tailored services to clients. For a product agency, the emphasis shifts toward creating and marketing scalable software solutions. This shift requires finding a delicate balance between these two approaches, as they come with distinct operational and strategic requirements.
NineTwoThree Studio realized that an agency’s role is not just to serve but to be an essential part of a larger puzzle. The ability to transition companies from agile product development to larger-scale operations became a crucial element of our service.
The transition from a consultancy to a product agency is akin to starting a new chapter. It's about embracing the challenges and seizing the opportunities that come with a new business model. By leveraging the financial stability, market insights, and expertise gained through consultancy experience, product agencies like NineTwoThree Studio position themselves for success in a new, dynamic environment.
So, for those contemplating this entrepreneurial path, consider the story of NineTwoThree Studio. It's a testament to the resilience, adaptability, and strategic thinking required to navigate the exciting journey from a consultancy to a product-focused business.
The journey from a consultancy to a product agency opens doors to remarkable growth and innovation. By leveraging the financial stability, market insights, and expertise gained through your consultancy experience, you position yourself for entrepreneurial success.
So, embrace the adventure that lies ahead, make informed decisions, and be prepared to grasp the opportunities that come your way. Your transition to a product-focused business promises a fulfilling and rewarding entrepreneurial journey filled with potential.