Should Your Agency Become A Product Company?
“We’re doing the client thing until one of our apps takes off.” —Actual quote from an agency founder
One of the things many development agencies struggle with is identity.
They start out as service companies, dutifully building products for their clients.
But for many, the appeal of building work that you own — that is, products that you sell directly to customers, rather than those that you build for your clients — is high.
Too many people look at the 37Signals (now Basecamp) story and assume that the issue is black and white: either you’re an agency, or you’re a product company.
But that’s not true.
You can have both identities, and they can be symbiotic rather than distracting or diluting.
In fact, I’d argue that being both an agency and a product shop can have a massively positive impact on your team and your business.
At MojoTech, we got started with a mission to help our clients win. We do that by building and launching their products.
But along the way, we’ve encountered our own challenges that had no existing solutions that were good enough. So we built our own products (like Allocate) to solve them.
Working for clients makes us better; our team gains experience and expertise building solutions for dozens of markets, and the sheer magnitude of work means that we’re able to run thousands of tests to learn what works best in apps across industries.
But selling our own products also makes us better: our team gains experience and expertise working directly with users and learning how to successfully launch products and acquire customers for them.
Each identity feeds the other.
We’re not alone in this, nor are we necessarily the best example. Pivotal Labs and MetaLab come to mind as teams that toe the line between agency and product company in a way that makes both sides of the business more successful.
So when you think about your agency’s brand identity and long-term goals, don’t fall into the either/or trap.
You can have it all, and you can succeed because of that, not despite it.
-Nick Kishfy (@kishfy)