How We Saved Our SaaS Startup By Creating a Marketing Agency

How our SaaS spawned a Marketing Agency and why it made all the difference.

When my cofounder and I first started Tactycs we had big dreams. Dreams of perfect market fit and a rapidly scaling product that would replace our jobs in quick order. Dreams that I think most startup founders have.

Well... As you probably already know, perfect market fit and high scalability are very difficult to achieve, especially for new founders. Tactycs has had multiple pivots over the years, going from a large all-in-one marketing tool all the way to a suite of micro-projects and micro-tools. So far, in that time, we have not achieved a proper market fit but there is one major thing we did that has allowed us to continue trying.

We started a marketing agency.

How It Happened

The underlying thread is probably pretty obvious, we were creating a marketing tool so it shouldn't feel like a stretch to offer manual services as well. Seems obvious in retrospect but it took some key factors for us to come to that conclusion, and the acceptance was gradual.

We Were Already Building Relationships

Any part of a good early startup idea involves validation. A big portion of this validation was through discussions with our prospective audience (small business owners, with small to no marketing teams). On top of that, my cofounder, who has an education in marketing, was working at a web shop company and was the one handling the relationships there.

Through this relationship building, we were gradually being seen as reliable experts and people who got shit done. Early on we would always try and steer conversations toward the SaaS product, or in extreme cases hand off marketing jobs to other agencies. Again it seems obvious in retrospect, but we had all this opportunity for real revenue just sitting there.

I Couldn't Build Fast Enough

The real push into the deep end was recognizing that it was going to be extremely difficult to bootstrap a product that competes with so many established players and that customers expect so much out of. I absolutely could not keep up with the necessary level of feature creation needed to satisfy even the base tier of customer, all while making little to no money.

Through the early months of this process, opportunities for marketing work were presenting themselves. We would often hear "The tool needs this and that feature before we can use it, but we really need marketing help now".

We could only stubbornly ignore that for so long before we started agreeing to take on the work. Two important things immediately happened:

We were getting solid feedback because the communication channels needed to be significantly more open for us to do the marketing work
We made Money. Money that supported us personally, supported the business, and allowed us to hire. It is significantly easier to try new things when you have capital and resources behind you.

The Pushback

There were two main avenues of pushback on us doing this that are important to talk about.

Internal Bias

We were creating a startup, something cool, something flashy, something that can scale rapidly in growth. A marketing agency doesn't feel like any of that.

So what? We were already working in the marketing niche so it was hardly a departure of knowledge. In the grand scheme of things 'cool & flashy' is a meaningless qualifier.

Battling the idea that a marketing agency doesn't scale was tough. Again, so what?

What scale did we actually care about? It was never our plan to make a billion-dollar business.

What about a 6 to 7 figure business? Absolutely we were interested in that.

Can a marketing agency reach those numbers? Easily. Turns out that hitting 6 figures was magnitudes less work (and less chance) compared to doing it with a pure software approach.

Startup Mentors

Some of our internal bias was directly reflected by our mentors. We were (and currently still are) part of a local startup accelerator. There was a lot of pushback on us redirecting a chunk of our effort towards manual, unscalable, work. This is understandable as they are an 'accelerator' and have an overarching goal to make unicorns.

Well, we were never going to be a unicorn in the marketing niche. It took quite some time for mentors to start coming around after seeing the many positive changes Tactycs went through, and many still haven't. The harsh truth for them is that with our agency pivot, we are easily among their top recent performers.

Key Take Aways

It is okay to include 'traditional' business work in your startups or even do that exclusively. Fight biases, both internal and external.
It is a lot easier to run a company when you make money. This is especially relevant in today's market where angel investment is a serious roll of the dice
Unscalable work can give you the freedom to create scalable business models.