Should your agency start a SaaS?

Short answer: yes—if you want higher margins, fewer fires, and an asset people will actually pay a premium for. Longer answer: only if you stop thinking like a services shop dabbling in software and start acting like a founder assembling the right machine.

I’ll give you the full play-by-play: why agencies have the unfair edge in SaaS, what you’re missing (and why “just hire a dev” is how you light money on fire), a blunt readiness rubric to score yourself, and the first actions to take this week. No fluff. No “manifesting.” Just what works.

I’m Jorge, CEO at Startino. We build SaaS with agencies. After studying a pile of agency→SaaS stories—from Mailchimp to Basecamp to scrappy niche tools that print cash—we built a playbook for doing this the right way. Consider this article Step 1 of that playbook, written for founders who prefer hard truths over motivational platitudes.

Why even bother with SaaS?

Because it fixes the exact things that make running an agency feel like groundhog day.

• Profit: Agencies run ~10–30% margins on a good month. Lean SaaS runs ~50–70%. That difference compounds.
• Operational sanity: Agencies are built for firefighting. SaaS is built for iteration. One scales calm; one scales chaos.
• What you sell: Agencies sell time. SaaS sells competence embedded in code. That means you decouple impact from hours.
• Exit multiples: Dollar-for-dollar revenue, SaaS sells for ~5–7x what agencies sell for. Same effort, wildly different wealth outcomes.

If you feel like you’re always “almost there” but never free, that’s the agency treadmill doing exactly what it was designed to do.

Why agency founders are top-percentile SaaS founders (and most tech founders hate hearing this)

Nathan Latka has said agency owners in their 20s often become the best SaaS CEOs in their 30s. He’s not wrong. After thousands of interviews, the pattern is obvious: agencies come with three advantages that solve the three reasons most SaaS companies die.

1. Validated market insights You’re not whiteboarding random ideas and praying. Your team lives inside painful, repeated workflows. That’s where winning SaaS ideas are hiding—under the stuff your team keeps duct-taping every week. Product–market fit is faster when the pain is in your calendar, not your imagination.

2. Runway that isn’t a countdown A bootstrapped tech founder burns savings. A VC-backed founder burns someone else’s patience. You have services revenue. As long as the agency hums, you have time to figure it out without building from a place of panic. Time is oxygen.

3. Built-in distribution The first 10 users are brutal for most founders. You already know them. They’re in your client list, your referrals, your Slack communities, your Rolodex. Those initial evangelists are the difference between “we’ll see” and “we ship.”

David Hart (ex-agency founder who exited his SaaS) puts it bluntly: if he had to bet, he’d bet on the agency founder over the PowerPoint wizard from McKinsey. Why? Because you’ve been swimming in the problem space for years. You know where the bodies are buried.

The Product–Sector Matrix (and why you’re one great partnership away)

Think of two axes:

• Sector experience (how deeply you know a market and its specific workflows)
• Product experience (how well you can architect, ship, and iterate real software)

Most agencies sit high on sector, low on product. Most “code shops” sit high on product, low on sector. The strongest SaaS teams combine both. That’s the whole game.

Which brings us to the uncomfortable truth:

What you’re missing: a real tech/product partner

Not a freelancer. Not a “we’ll build whatever you spec” dev shop. A partner who thinks in product—roadmaps, architecture, tradeoffs, speed-to-learning, UX, “what can we cut without breaking the promise?” Someone who can argue with you constructively and ship fast.

Let’s be painfully clear on your options:

“I’ll just hire a developer.” This is how most agency-to-SaaS attempts die.

• Incentives are misaligned. Hourly billing rewards slowness. Fixed-fee rewards scope rigidity. You need speed and flexibility.
• “Coder” ≠ “product thinker.” They may build exactly what you asked for, which is a nice way to waste months on the wrong thing.
• Reliability risk is highest here. When things get hard, they disappear—and you can’t sue your way to a working product.

“We’ll hire an agency.” Better than solo devs… still not great.

• You pay for overhead. PMs, account people, process—nice, but not value if you’re validating fundamentals.
• They call “done” when code ships. You call “done” when customers pay. Those are different finish lines.
• Change is expensive. Every pivot triggers new SOWs, new approvals, lost weeks.

“We’ll bring in a tech/product co-founder.” This is the move that actually holds up under stress.

• You get iteration speed and engineering judgment—what to omit, what to ship, what debt to accept now.
• You get a partner who shares risk, heat, and late-night “are we dumb?” conversations.
• You get credibility with customers and (if you ever want it) investors. Real teams get funded. As a rule, “outsourced tech” doesn’t.

The cardboard-boat test: without a real tech partner, your “MVP” is a cardboard boat. It floats on calm water (demos, pilot customers). The moment you hit waves (real usage), it sinks. You can vibe-code your way to a prototype; you cannot vibe-code your way to a company.

“But equity is expensive.” Do the math like an adult.

You’re not giving equity to be nice. You’re buying speed, survivability, and probability-of-winning.

Scenario A: 4 founders (you, another agency co-founder, a third partner, plus a tech partner). You each hold 25%. Grow to a $2M ARR SaaS. Reasonable exit range? Call it ~$12M. That’s $3M per founder.

Scenario B: Same outcome without the tech partner? Great—$4M each. On paper, the tech partner “cost you” $1M each.

Now be honest: would you have reached $2M ARR without a top-tier tech partner? In the same number of years? With your sanity? Most don’t. Plenty never get off the ground. The only thing more expensive than a great partner is the 5 extra years you spend proving you needed one.

Also, salary + equity beats “50/50 or nothing.” You can structure comp competitively because you have service revenue. Mix cash + vesting to match reality.

Can you be the tech now that AI builds apps?

AI is a cheat code for prototypes and proof-of-concepts. Use it. But understand the cliff: the throwaway demo that wows your team is not the foundation your company will scale on. You’ll rebuild. It’s not a sin; it’s physics.

If you’re serious about a real SaaS, you still need someone who can:

• choose a stack you won’t hate in 12 months,
• design a schema that won’t trap you,
• instrument telemetry so you learn fast, and
• say “no” to you when your idea is cute but wasteful.

The SaaS-Readiness Rubric (score yourself, no excuses)

Rate each category 1–3. If you’re mostly 1s, fix fundamentals first. If you’re 2s with a couple 3s, you’re ready to start. If you’re mostly 3s, you’re late.

1) Client Access & Insights

• 1: 1–5 active clients. You haven’t seen enough patterns yet.
• 2: 5–15 clients. Signals exist; still noisy.
• 3: 15+ clients. Patterns scream at you. You can name three repeated, painful workflows before coffee.

2) Financial Runway (monthly budget you can allocate to SaaS)

• 1: ~$5k available. You’ll crawl.
• 2: ~$10–15k available. You can move responsibly.
• 3: $15k+ available. You can fund a partner and validation without starving the mothership.

3) Industry Positioning (how niched you are)

• 1: “We do everything.” Translation: you know nothing deeply.
• 2: Single function (e.g., SEO), multi-vertical. Better.
• 3: Narrow niche + proprietary frameworks + real authority. Best.

4) Technical Capability

• 1: No one on the team writes production code.
• 2: You have a contractor or a light in-house dev. Helpful but not sufficient.
• 3: You have (or will commit to) a product-savvy tech partner.

5) Founder Bandwidth

• 1: You can spare ~2 hrs/week. That’s a hobby.
• 2: One founder can spend 4–8 hrs/week, paired with a tech partner. Good enough to start.
• 3: One dedicated founder (or two at 4–8 hrs each) explicitly focused on the product. That’s how this gets real.

If you want to be surgical, add your scores. 12–15: go now. 9–11: fix weak spots while starting validation. ≤8: focus your agency first (niche, margins, ops), then revisit.

How to pick (and test) a tech partner without getting burned

Skip the fantasy. Treat this like hiring a co-founder, because you are.

Where to look (in order):

1. Existing network: People who’ve shipped software and stayed curious about users. Ask 10 people you trust: “Who’s the most product-savvy engineer you know?”
2. Extended referrals: Warm intros beat cold platforms 100–0.
3. Matchmaking sites: Only as a last resort, and only to widen the top of your funnel.

How to evaluate (quickly):

• Do a tiny, real project together. A prototype, an internal tool, a weekend spike. Watch for communication, speed, and judgment under friction.
• Talk compensation and equity early. If discussing terms makes them squirm, you’ve already learned something useful.
• Verify SaaS experience, not just seniority. A 15-year engineer can still ship a 2009-looking product with 2025 problems.
• Call multiple references. Not the two best friends they listed. Former partners, ex-clients, people who saw them under pressure.

Red flags (don’t rationalize these):

• They nod and build whatever you say. You don’t need a code monkey; you need a co-pilot.
• They only want hourly work and avoid upside. Wrong incentives.
• They insist on “we’ll figure equity later.” That’s how resentment compounds.
• They’ve never shipped and maintained a paid product. Different sport than “projects.”

Non-negotiables with agencies/freelancers (if you must use them temporarily):

• Code ownership in the contract, in plain language.
• Knowledge transfer plan (docs, handoff, shadowing).
• Post-launch support: what’s included, how fast, how priced.
• SaaS-specific proof: show me multi-tenant auth, billing, telemetry, migrations—not just pretty dashboards.

Okay, I’m in. What do I do this week?

1) Fill the rubric honestly. You’ll see your weak link fast. Don’t pretend 2 hrs/week is enough—it isn’t.

2) Mine repeated, painful processes. Ask your team: “What do we duct-tape every week?” List top five. Rank by:

• frequency,
• time wasted,
• cost of errors,
• how many clients experience it,
• how easy it is to measure a win.

You are not “brainstorming SaaS ideas.” You are extracting pain your agency already pays for.

3) Start the partner search now. Run three 30-min calls with potential partners. Share one real problem. Ask each to outline a week-long spike: what they’d test, how they’d measure, what they’d intentionally ignore. You’re listening for judgment, not buzzwords.

4) Validate in public (fast). Design a no-code demo that tells the story of the before/after for one workflow. Put it in front of three friendly clients. Charge something for access—even $99—for the pilot. Money is the only yes that matters.

5) Protect the mothership. Pick an internal owner for the SaaS (calendar blocks, weekly demo, metrics). A side project stays a side project.

The predictable objections (and the answers you won’t like)

“The market is saturated.” So are agencies. The internet rewards specificity. Narrow your ICP, attack a workflow nobody loves, and win by being obviously better for someone.

“We tried building an internal tool. It fizzled.” Internal tools die because nobody owns them. SaaS lives when a founder has the calendar, a partner, and paying users. Different inputs, different outcome.

“We don’t want to ‘lose focus’.” You’re not adding noise; you’re consolidating skill into software. If anything, the focus tightens because you stop doing bespoke work you can’t scale.

“We’ll vibe-code it with AI.” Great. Use it to learn. Just don’t confuse a prototype with a product. Enjoy the speed; plan the rebuild.

If you want a simple way to start without betting the farm

We run a 2–3 week Validation Workshop. Flat $3k. A few hours per week from one founder. We use the first steps of our playbook to find a candidate idea inside your operations and pressure-test it with real prospects and data. You leave with a go/no-go decision and proof. If it’s not there, we rinse and repeat until it is. Low risk. High clarity.

If that sounds useful, say the word and I’ll send details. If not, steal the steps above and do it yourself. The point is to start.

Final word

AI is compressing the value of generic services. The agencies that win won’t be the ones reselling somebody else’s tool under a shinier retainer. They’ll be the ones who own the tool, the workflow, and the margin.

You’re closer than you think. You already swim in the problems. You already have the customers. All that’s missing is the product muscle—and the guts to commit.

Score yourself. Pick the ugliest repeated process in your shop. Find the partner who’ll fight with you (and ship with you). Then build the thing everyone keeps duct-taping.

The treadmill ends when you decide it does.