Seems like the author is just working backwards from a conclusion, picking numbers that "work out" to $50k. Obviously growth plateaus when churn matches new + resurrected, that's just basic growth accounting. Why is $50k such a barrier? Is it even?
> Hardly anyone ever breaks through that [$50k MRR] barrier and reaches that next level where the agency generates reliably $300k+ in monthly revenue.
Why is $300k the "next level" after $50k? So if I have a $50k MRR business and 5x its revenue, I'm still not at the "next level?" I've never heard a single person say that and they present it as if it's fact and move on.
And as a reader who's worked at agencies before, he's right.
The only part he's missing is that most agency owners grind on with this because of personal (psychological) limitations, and thereby get stuck. They get mentally capped out, so they can't move forward, and they form the core of the business, so they can't sell out. All they can do it stay locked in grit-your-teeth mode, until age and/or health fixes the situation for them despite their will.
Agencies cap out very much like this, because of their fundamental scalability issues, but that's also why people enter that market. Easier to enter, because no one person can dominate it like a Google or Facebook.
The number they cap out at is very tied at the intelligence, work ethic, etc, of the founder, but it always caps out in that asymptotic graph kind of way.
The only way I've seen them successfully break out is to know this effect, and to use the cashflow to cover a product company offshoot that gets traction - basically a self-funded startup. But it's a rare case, because they we're attracted to the immediate and certain money lure of agency, vs the valley of death gamble of product.
Sometimes they end up cashing out and retiring. Most often they go bankrupt or get bought out by a consultancy looking to brand themselves as fresh.
It’s fun working in ad agencies on the uphill. You’ll be able to do great work and learn how to ruthlessly prioritize quality output. On the downhill it can really corner you with little career growth and little pay.
I’ve worked at a load of agencies and I don’t recognise what he's saying at all. What agencies sell $2k/mo packages? They are all either much larger finite projects or they have much larger retainers. What would you even sell for $2k/mo? That’s not going to cover anything beyond absolute basic maintenance to keep the lights on; it’s certainly not where agencies are making their money.
Big thumbs down, save yourself the click.
And a monad is just a monoid in the category of endofunctors.
This stuff is not obvious to everyone. The arbitrary numbers are called an example.
The point of the article is to say, when you experience a plateau and you begin to speculate why, it’s mathematically expectable.
It can hardly be controversial to call this math.
But ok, it’s not “the mathematical reason” but rather “a mathematical explanation” - the math is a property of his explanation, and the reason is growth, churn and employee psychology; while well-explained mathematically, they aren’t math.
Somehow this seems to be besides the point, being: here is a common reason for plateau’ing.
After a lengthy manipulation of the integral, he said "and then you can just plug this into a calculator and get an answer, but that's not really interesting so I'll stop here".
1. Be clear that they're examples and not some fundamental, mathematical truth.
2. Use multiple examples with different numbers to show how things could look different, even if only slightly.
The author does neither of these. #1 is violated in the title. It's not clear at all that the author is using these numbers as merely examples.