It's better to be an agency/software hybrid than just one
Today’s advice post is by Dan Lesley, Founder of Homestar. Dan has over 20 years building, growing, and selling SaaS tech startups.
Working as a solo founder on Homestar, my real estate CRM, taught me some unexpected lessons about product-market fit. After spending months perfecting the codebase and building out core features, I discovered that great software alone wasn’t cutting it. The lightbulb moment came during an intense feedback session with a frustrated agent - we needed to be more than just another tech vendor.
My background developing SaaS products had trained me to focus purely on shipping features. But watching our early users struggle to implement Homestar into their workflows revealed a crucial gap. They needed strategic guidance alongside the software. This realization led us to experiment with adding consulting services to complement our core product.
The shift to a hybrid software-agency model changed how we served real estate agents. Beyond the CRM, we started offering personalized advisory sessions on sales strategy and digital marketing. The impact was immediate:
- Deeper User Insight: Direct consulting work exposed pain points we’d missed in traditional user research. This shaped our product roadmap in surprising ways.
- Extended Customer Value: Agents started seeing us as strategic partners rather than just a tool provider. Their success metrics became our north star.
- Increased Revenue Streams: The consulting services created a natural upsell path. Many software clients opted into strategy sessions and workshops.
This dual approach creates fascinating synergies. Our consulting work feeds invaluable user insights back into product development, while the software platform helps scale our service delivery. The result is more responsive development cycles and stronger client relationships.
Running both sides of the business stretched our small team thin initially. Context switching between coding sprints and client meetings was rough. But the perspective gained from direct client work proved invaluable. Key lessons learned:
- Build the Right Team: We needed people comfortable moving between technical and strategic roles, rare but essential hybrids.
- Set Clear Objectives: Each business line required distinct KPIs while supporting a unified vision.
- Communicate Transparently: Regular sync-ups kept product and services teams aligned on client needs.
The hybrid model adds complexity but delivers richer value. Clients view us as strategic partners invested in their success, not just another SaaS subscription.
Our consulting work repeatedly reveals gaps between what agents think they need and what drives results. We can then improve the software to address these insights while using our services to help them implement effectively.
The expanded model requires more bandwidth but generates deeper client relationships. Nothing beats seeing an agent successfully execute a strategy we developed together, powered by our software.
In the crowded real estate tech space, this integrated approach helps us stand out. We’re not just selling features - we’re delivering outcomes through a combination of technology and expertise.
For founders considering a similar path: Let your clients guide you. If they’re consistently asking for help beyond what your software provides, exploring service offerings could unlock new growth.
This journey with Homestar has reinforced that solving complex problems often requires both powerful tools and human guidance. The software-agency hybrid isn’t just a business model - it’s an approach to creating lasting customer value through the combination of technology and expertise.