You Might Be a Consulting Company With Good Tools<br>I'm keeping the industry and product details vague out of respect for the founder. The pattern is the point.

I was talking with a founder running a software company of about ten people and roughly a million dollars in revenue. He described the business as SaaS: a platform, subscription customers, recurring revenue. At first glance that made sense. As he described how the company operated, it became clear he wasn't running a SaaS company, he was running a consulting company with good tools.

The Pitch#

He walked me through everything his company was doing. Several slightly related but also distinct problems, each aimed at a different type of customer, each with its own workflow and its own definition of a finished result. Impressive range. Interesting engineering.

One key thing he mentioned though was that his platform was too complex for any of his customers to use directly; instead it was his team using the product to create these solutions. The clients themselves weren't logging in. For a business that called itself SaaS, it isn't normal for the customers to never touch the software.

Who Logs In, and Who Does the Work?#

Whether you're SaaS or consulting has little to do with whether you write software, use AI to help build things, or have a "platform" behind the scenes. The test is simpler: who logs into the product, and who does the work?

In a SaaS company, the customer logs into your platform and does the work themselves. Salesforce is heavily customizable, but the customer is in there every day tracking leads and running reports. They experience the product directly.

In a consulting company, your team gathers requirements, builds a solution, and delivers a result. The client experiences the outcome, not the tool. Whether you used a proprietary internal platform, a stack of scripts, or raw code doesn't matter to them. They can't tell the difference, and they don't ask you to add features to "the platform," because they don't know or care that a platform exists.

By that test, my friend was running a consulting company. A good one, doing interesting technical work, with strong internal tooling. Still a consulting company.

Why the Label Matters#

It matters that you understand what you are because it affects how you scale and what your expectations should be and how you hire:

Scalability. SaaS scales because the same product serves many customers with little extra work per customer. Consulting scales by adding people: project managers and engineers, roughly in line with revenue. That path is harder and lower margin.

Team composition. A SaaS company invests in product, platform engineering, and a marketing and sales motion. A consulting company invests in project managers, requirements gathering, and delivery capacity. Confuse the two and you hire for the wrong business.

Revenue quality. Recurring fees on top of project work are not SaaS revenue if the customer isn't using the platform to justify that fee. You end up with an awkward retainer sold as a subscription: harder to defend, harder to expand.

Focus. This part surprised me most. He wasn't building one product. He was building several, each aimed at a different customer type with a different workflow and a different definition of "done." Trying to serve all of them with one platform creates a jack-of-all-trades problem. The platform gets too complex for any single customer to self-serve, which is why his team ends up doing the implementation.

So You're a Consulting Company. Now What?#

If you recognize your business in this description, you have two honest paths forward.

Stay a consulting business, and own it. Consulting businesses can be good businesses. Steady revenue, deep client relationships, interesting work. The trap is running one while telling yourself, your team, and your investors the SaaS story. Once you accept what you are, the playbook gets clearer: hire project managers and delivery people rather than product marketers, price your work as projects and retainers rather than subscriptions, and set growth expectations that match a people-driven business.

Or transition to a true SaaS platform, where the customer uses your tool directly. This is possible, but it almost never means building more. It means building less. Pick the one use case already showing the most traction, often the simplest and most repeatable one, and simplify the product until a customer in that market can operate it without you. That requires declining the adjacent, more exciting-looking opportunities. Serving every vertical at once is what created the jack-of-all-trades platform complexity that made self-serve impossible in the first place; repeatability comes from narrowing, not expanding.

You can always offer consulting on top of the SaaS platform, or better yet, bring in external "implementation consultants" to handle customer-specific customization of it. But keep in mind that the more you insulate...