#36: You Can’t Speed It Up: Why Your First $1M Is Harder Than $1M to $10M and Where Most Founders Fail
Why the first $1M in agency revenue is the hardest, where most founders get distracted or go upmarket too early, and the mindset, systems, and business model needed to scale the right way.
So the real question is: do you actually have what it takes to build a professional service firm?
I want to break down what helped me take Belkins from $0 to $1M, and then from $1M to $10M. I’ve also watched other founders try to build firms of their own. Some got to $1M. Many never did. A lot of them switched to something else before they made it.
There is no shame in realizing something is not for you and moving on. The hard part is uncertainty. You never really know whether you were six months away from a breakthrough or six years away from more pain. That is where regret creeps in. You quit and wonder, “What if I had just held on a little longer?”
That’s exactly why I want to map out a few signals that can help you judge this more clearly before making a life-changing decision.
In one of my recent newsletters, “50 Things I Know About Agencies,” I wrote this:
In your 20s, build for small businesses.
In your 30s, build for the mid-market.
In your 40s, go after enterprise.
The logic is simple.
Early in your career, serving small businesses gives you a few unfair advantages when you are trying to build an effective firm from scratch.
The biggest ones are:
Small businesses make up the majority of businesses in the U.S. Depending on how you define the segment, there are likely hundreds of thousands of companies across the country with at least 10 employees and $1M–$5M in revenue. In simple terms, you are selling into the largest market.
Small businesses tend to be more volatile. That makes it easier to find an open window to replace their current provider with your solution.
Decision-making usually sits with one person: the owner. That means you can move faster and close deals quicker.
These people are often your peers. You can find common language faster, relate to their challenges more naturally, and position your service in a way that actually resonates.
Small businesses are usually small for one of two reasons: either they are still early, or they have problems they have not been able to solve. In both cases, they are still figuring things out. That creates room for you. If you make a mistake or learn on the go, it is less likely to damage the relationship in a fatal way.
At the same time, small businesses are some of the most demanding clients on the market. They want results fast. They rarely feel like they have enough money. They often pay late. All of that creates extra hurdles, but it also forces you to become sharper, faster, and more resilient.
Most importantly, they will often give you the access you need. You can get close to the business, make a real impact, and learn in a very direct way.
When it comes to budget, small businesses are often willing to spend somewhere in the $2K–$5K per month range on almost any professional service category, whether that is a fractional CFO, consulting, technology, marketing, or sales. That is one reason so many agencies operate in this band.
Not coincidentally, most professional service firms also start here. This is where a lot of agencies are born.
The challenge
The problem is that making your first $1M at this price point is brutally hard. To get there, you need a lot of clients. That means constantly starting new relationships, managing a large number of accounts at once, and replacing churn as small businesses come and go.
At the same time, you still have to control costs and manage the army of freelancers, contractors, and vendors helping you deliver the work.
That is a lot for anyone.
Most people hit a crossroads at this stage.
They start asking themselves: do I become a so-called Swiss Army knife and learn how to manage all of this? Or do I look for a shortcut? Maybe I raise my prices. Maybe I go upmarket. Maybe I try mid-market.
And that is where the problem starts. That is also why many founders never reach their first $1M.
At this point, you really have two options.
Either you take the hard path of learning how to scale and build the full set of skills required to do it well, which, for many people, is a five-year journey,
or you drift into the danger zone, where you are no longer set up to serve small business clients at scale, but still not ready to serve more demanding mid-market clients. This decision point is where I see most early-stage agency owners fail.
You realize you do not yet have what it takes to scale a small-business client base properly, so you try to jump to bigger companies with bigger budgets. But you make that move before you have the processes, playbooks, network, qualification, or delivery experience needed to offer something truly bulletproof.
So now you get pulled in two directions.
Your small business clients still need one kind of engagement. Larger clients expect a completely different one.
You end up stuck between two models, serving two markets, with neither side fully dialed in.
That makes you undecided, defocused, and derailed from your learning curve. And as a result, you move on a much slower trajectory than you should.
The shortcut feels smart in the moment. In reality, it usually delays the outcome you were chasing.
I saw this with my own eyes many times
A quick story from my own experience. I recently advised the owner of a content agency who had two core problems.
First, she struggled to consistently attract new clients (never had time for biz dev). Second, her offer was not bulletproof (required a lot of her time), which meant retention was weak, and clients did not stay long enough if she removed her leg from the gas pedal.
Her solution was to move upmarket.
The logic sounded reasonable on paper: increase prices, work with fewer clients, land a handful of bigger accounts, retain them longer, and spend more time on each one.
She also believed that bigger contracts would mean better margins, which would let her hire more experienced talent to deliver the work.
You can probably guess what happened next.
She spent a huge amount of time reshaping her offer for mid-market clients. Eventually, she managed to convince a few larger accounts to work with her. But then the real problem started.
Those accounts consumed all of her time.
So instead of building the business, she ended up servicing a few larger clients herself. Instead of creating a scalable system around smaller accounts, she built a fragile model dependent on her direct involvement.
For several years, this has been the only thing she has been doing, because the bill had to be paid. Then most of those larger clients churned.
And she was right back where she started. That is the core lesson.
What’s the lesson?
She was not ready to be pulled into larger accounts. It took too much time to tailor the offer, close those deals, retain those clients, and keep them happy. They needed high-touch, customized care, and she had to provide much of it herself.
If she had spent that same energy on small businesses, she probably could have closed 5 to 10 clients, reached a similar revenue number, and worked roughly the same hours, but with one major difference: she would have been building systems instead of selling her own time through direct consulting.
Unfortunately, that path required something she did not want to do.
It required her to change.
It required consistent organizational discipline, tighter management of her time, better client management, and the willingness to grow through structure rather than through talent. And that is the uncomfortable truth for many founders:
going upmarket is often not a growth strategy. It is an escape from building the muscles the business actually needs.
When you intentionally choose to work with small companies and make your first $1M from clients paying $2K–$5K per month, you are choosing the hard path.
It usually takes longer. But if you keep removing the roadblocks to scale, growth becomes far more predictable.
That is probably one of the hardest decisions you will make early on.
Most agencies never reach $1M because they do not stay committed to that decision. They get distracted, impatient, or tempted by shortcuts. And sticking with it requires a very specific founder mindset.
Your playbook that works
Here is what that mindset looks like in practice.
My offer is designed for clients to stay longer.
I do not want to maximize profit margin in the short term. I want retention and lifetime value to be my north star.
That mindset pushes you to build stickier offers, stronger playbooks, and better systems for managing client relationships across every stage of the customer journey.
My offer should create repeatable value.
I do not want to do a three-month project, create some value, and then watch the client disappear. I want the client to see me as an integral part of their business.
That means the value I provide has to be sticky enough that cutting me feels painful.
Of course, not every service can reach that level. Every offer sits somewhere on the spectrum between “easy to replace” and “can stay embedded for five years.” Your job is to know where you are and push your offer as far toward the second end as possible.
Building pipeline and relationships is one of my core responsibilities.
This has to happen every day. Either I do it myself, or I have a business partner who owns it. But one way or another, it must get done.
I cannot get pulled so deep into client work that I stop building pipeline for months. If that happens, I am done.
This is where most early-stage firms fail. They confuse being busy with being safe. Meanwhile, future revenue quietly dries up.
I can manage one client through effort. Ten clients require a system.
That means I need to become obsessed with organization.
My calendar is organized.
My Slack is organized.
My inbox is organized.
My spreadsheets are organized.
I build systems, and then I actually use them.
I cannot be the mad genius who creates things and then never follows them.
And this is the part people often get wrong: building systems does not mean making them complex. In fact, complexity is usually the trap.
Founders spend weeks building the perfect dashboard, the perfect workflow, the perfect Notion setup, and then never open it again. A simple spreadsheet used consistently beats an impressive system nobody touches.
People matter more than almost anything else.
Professional services is a people-first business. If you are not good at building new connections and maintaining healthy relationships, this business is probably not for you.
And I do not just mean being pleasant on a call.
I mean genuinely wanting other people to succeed. I mean putting their success ahead of your own because you understand that, in this business, your success comes through the success of others.
This contributed a lot to Belkins’ growth. The way Vladyslav Podoliako and I worked with people, and the way our close circle of leaders worked with people had a direct impact on how successful the company became.
Managing spend and P&L is a core skill.
If you want to build an effective agency, you need to understand your numbers.
Scaling usually means orchestrating an army of freelancers, staying scrappy with tools, timing expenses carefully, and sometimes paying bills only once money from a new client lands in the account.
It is not glamorous. It is stressful. But if you do it well, you can forecast with confidence and spend exactly as much as you need to grow, without breaking the business.
None of these are magical ideas. They are not hacks. They are not secrets. They are just very grounded fundamentals.
But if you miss even one or two of them, getting to $1M becomes either extremely difficult or something you can only achieve through luck.
That is why so many founders I have spoken with in my 1:1 Intro.co sessions stay stuck at $10K–$30K in monthly recurring revenue for two or three years. They are still developing the skills required to scale.
And honestly, there is not much more to say about getting to $1M.
You sharpen a value-based, LTV-focused offer.
You consistently source small-business clients.
You build and manage your network.
You become obsessive about organization.
You run a tight P&L.
Do that well enough, and you can reach your first $1M in two to three years.
Insights after more than 50 calls with small agencies
After more than 50 one-on-one Intro.co consultations, mostly with agencies trying to get to their first $1M, these are the most common problems and solutions we ended up discussing:
