February 2025, by Karl Hughes and Manuel Weiss
The way departments get work done is changing. We're seeing smaller core teams rely on a network of freelancers, agencies, and AI tools each focusing on a specific task.
This execution-focused work is often not the core competency of the company, but it takes specialized knowledge to do it well.
Unlike hiring in-house talent, there's little ramp-up time and rarely a long-term commitment.
Unlike freelancers, clients can scale productized services up and down effortlessly, and they take very little overhead to manage.
Unlike agencies who often do everything within a particular function (eg: marketing, software development, advertising, etc), productized services are narrowly scoped to an industry, function, or both.
Productized services are extremely efficient at doing one particular kind of work.
By centralizing specialized talent, building repeatable processes, and leveraging automation and AI, productized services can take advantage of economies of scale that traditional agencies cannot. By being highly specialized, they can also use fixed, up-front pricing models to generate positive cash flow and high margins.
Instead of competing with thousands of all-purpose agencies, we believe productized services belong in a class of their own. Examples include:
The biggest problem with niche services is their limited market size.