Agencies who switched to SaaS
What can we learn from their experiences?
A cool, moody black and white shot from my agency, Codegent, back in the day.
If you’ve been reading my newsletter for a while, you’ll know that I made the switch from Agency to SaaS and, having recently exited the SaaS business I co-founded, have fully completed that journey. Pivoting to SaaS was the best financial decision we made and has set us up for life. But, we’re not the only ones. I thought it would be helpful to look at examples of some other agencies who have made the same switch.
Typeform (two small web agencies in Barcelona)
Agency Background: Typeform were backed by Point Nine, the same VC who invested in ScreenCloud. Typeform, known for its sleek online forms and surveys, emerged from two small web design and build agencies sharing a co-working space. In 2012, David Okuniev and Robert Muñoz, the agency founders, became friends and began collaborating. Like us, they talked about becoming weary of “over-demanding clients”. The pain is real and widespread!
Pivot: A client project gave them the opportunity to evolve their solution into a standalone product. It started as a simple requirement for a lead capture form and ended as a tool where companies could create a conversation with potential leads in an engaging and fully customisable way. Realising they had something unique, the duo spent the next year refining the concept: improving the UX, adding logic jumps, etc, with the goal of launching it as a standalone SaaS platform.
Transition & Growth: Typeform officially launched around 2013. The product struck a chord globally, as many companies were looking to increase survey completion rates and improve user experience. The small Barcelona team found their product spreading virally. They attracted early-stage funding to support their growth, allowing them to hire and scale the infrastructure.
Current Status: Typeform’s gamble to pivot from client services to SaaS paid off enormously. Within a few years, it grew to millions of users on the platform and hundreds of thousands of paying customers, becoming one of Spain’s standout tech successes. By the mid-2020s Typeform reportedly exceeded $70M in ARR and 125,000+ customers
Proposify (Headspace)
Agency Background: Proposify is a SaaS solution for creating business proposals, but it began life in a web design agency. Co-founders Kyle Racki and Kevin Springer ran a Canadian design agency called Headspace for about five years. This is an example of an agency ‘scratching their own itch’ in that they wanted a better tool for solving the tedious process of producing proposals for project work.
Pivot: In 2013, they finally built a minimum viable product of the proposal software. Seeing the potential, the founders sold their agency and raised a seed round to go all-in on this SaaS idea in 2014. That kind of (some might describe as) reckless decision was what we did. Sold our agency and raised some seed funding. It was scary but if we hadn’t done it, I don’t think ScreenCloud would have taken flight the way it did.
Transition & Growth: They raised an eight-figure Series A in 2018 to accelerate growth (after years of hesitancy about VC, they decided to bring on growth capital once revenue was strong). By 2019 Proposify grew to over 8,000 customers and was generating about $7 million in ARR.
Current Status: As of the early 2020s, Proposify continues to expand in the online proposal software market. It has surpassed 10,000+ paying users and secured a total of around $10–$13 million in funding to date, positioning itself as a leading Proposal SaaS Tool for agencies and sales teams worldwide.
Harvest (Iridesco)
Agency Background: Harvest is a popular time-tracking and invoicing SaaS tool. But it was born out of a New York agency, Iridesco run by founders Danny Wen and Shawn Liu. Another case of scratching their own itch: the duo struggled with tracking billable hours for clients. Frustrated with clunky existing tools, they built a simple web-based timesheet and billing app for their own use.
Pivot: That internal tool, launched as Harvest in 2006, was one of the early SaaS offerings built on Ruby on Rails. They followed the path that I wouldn’t usually advocate, they ran the agency alongside their SaaS which meant they were able to boot-strap it. Without external funding, they grew Harvest organically: their story and fresh design attracted attention on tech blogs and word spread among other creative agencies facing the same problems. But it was arguably a slower growth than it could have been had they properly focused on it as their 100% thing.
Transition & Growth: They launched in 2006 and by 2017 they had 40,000+ businesses using the software and a team of 50+ employees supporting it. The founders believe that this “slow, deliberate growth” was a positive thing. I think so too: they were able to boot-strap their way there. But I’m not sure I’d have the patience to wait that long to achieve a 50+ person company. Plus, there’s always the danger that someone else figures out you’re onto something and you suddenly realise they’ve raised a load of money as you wipe the dust out of your eyes when they come steaming past you at a rate of knots.
Current Status: As of today, Harvest has grown into a mature SaaS firm: over 70,000 companies worldwide use it to track time and send invoices, with over 2 billion hours logged through the platform to date. What began as a scrappy in-house agency project is now a global, industry-leading time-tracking service. All achieved with no outside funding. Impressive.
FreshBooks (Anicon)
Agency Background: FreshBooks is a cloud accounting and billing solution, well-known among freelancers and small businesses. It started in 2003 as the side project of a Canadian agency. Founder Mike McDerment was running the agency when he encountered a common pain: using Microsoft Word or Excel to invoice clients was cumbersome and error-prone. The breaking point came when Mike accidentally saved over an invoice and lost hours of work. He knew there had to be a better way. Noticing a pattern here?
Pivot: Less of a sudden pivot, more of a slow evolution, they began by building a prototype, initially called 2ndSite, that they could sell to self-employed professionals and gained modest traction. For a long time, the agency subsidised the product, reinvesting any revenue back into development. As FreshBooks started attracting more users (many of them agencies, creatives, and solo entrepreneurs), the team gradually shifted away from consulting to focus on the software.
Transition & Growth: FreshBooks grew steadily through the late 2000s, emphasising customer support and word-of-mouth among small business owners. The company famously spent a decade bootstrapping before looking to raise external investment. By 2014, with tens of millions in revenues, FreshBooks raised a growth round to accelerate expansion.
Current Status: The company reached unicorn status, valued at over $1 billion, by 2021. FreshBooks has become a global SaaS leader in its category. It now has 500+ employees and has been used by over 30 million people in 160+ countries.
Campaign Monitor (Freshview)
Agency Background: Campaign Monitor is an email marketing SaaS and was born out of a design agency, Freshview, in Sydney, Australia. Co-founders Dave Greiner and Ben Richardson were running Freshview in the early 2000s. They often needed to create email newsletters for clients but found existing email tools inadequate or enterprise-focused. In 2004, out of sheer frustration at the lack of simple newsletter software, they decided to build a solution themselves.
Pivot: After launching Campaign Monitor in 2004, the product quickly gained adoption in the design/web community. By 2006, more than 16,000 designers in 65 countries were using Campaign Monitor to send emails for clients. An impressive user base given the founders were still essentially bootstrapping it. For years, they kept the company very lean, simply reinvesting revenue. Remember, back then, VC for SaaS was still relatively small.
Growth & Transition: Campaign Monitor’s transition from agency to a full SaaS company was gradual but steady. As the customer base grew into the thousands and then tens of thousands, Dave and Ben fully shifted their focus to the SaaS business and stopped taking on design clients. The company remained self-funded for a decade, profitably growing to millions in revenue. In 2014, Campaign Monitor made headlines by securing a $250 million investment from ‘prominent US’ VC firms for a minority stake: one of the largest venture deals ever for an Australian startup at the time.
Current Status: Campaign Monitor is a major player in email marketing software (now part of the larger Marigold group of marketing products). It continues to serve a wide range of customers around the world, from small agencies to large enterprises. This all stemmed from its humble origins as a small agency’s tool.
Postmark (Wildbit)
Agency Background: An interesting example is Wildbit who created a series of SaaS products. Not dissimilar to Codegent’s own story, Wildbit started in 2000 as a two-person web development agency in Philadelphia founded by Chris Nagele and his wife Natalie. For the first few years, client projects were their main business, but Chris had the goal of generating product revenue on the side.
Pivot: Using profits from consulting, Wildbit began building its own software products to solve problems they encountered. In 2004 they launched Newsberry, an email marketing app. And in 2007, they created Beanstalk, a hosted version control and deployment service. Later in 2010, Wildbit built Postmark, a transactional email delivery service for apps. During these years, the team slowly shifted away from client work. As one product’s revenue grew, it would sustain the company while they developed the next.
Growth & Traction: Over nearly two decades, Wildbit successfully transitioned from an agency to a product company with multiple SaaS offerings. Collectively, Wildbit’s products have served over 100,000 companies worldwide, all while remaining self-funded. The steady revenue from tools like Postmark and Beanstalk allowed Wildbit to grow on its own terms. By the late 2010s, Wildbit had a solid reputation in the developer and software industry as a champion of sustainable, people-first business.
Current Status: In 2022, the founders sold Postmark and another product to a larger company. Wildbit’s journey shows how an agency can repeatedly build successful products by Productizing internal knowledge, not just once but multiple times, all with modest resources and a long-term mindset.
I don’t know enough about them, but I suspect they could have gone bigger, faster, had they focused on Postmark, rather than having a suite of SaaS products. But that’s possibly just my own bias!
To sum up
All of these examples show where agency founders decided to make the switch from project-based work, to building their own product. They all made that transition. Some were deliberate and made a commitment to go full in on their ultimate goals, others went slower and managed to juggle agency and product as they switched the balance.
What they all show is that the transition is possible and potentially highly rewarding for founders willing to make the switch. As I always say, agency owners have a massive advantage over other founders when it comes to launching a product business. The main thing holding them back is an unwillingness to make the level of commitment required to give their products the best chance of success. Sadly, you can’t just put something out there and hope that it magically blows up. It takes blood, sweat, tears and a massive amount of determination to make it happen.
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