The Evolution (or Death) of the Agency, the Platform Model, and Capital Efficiency

Executive Summary

Building technology products is hard, even more so for those with limited experience. While we hear about success stories like Uber, TikTok, and Spotify, they’re just a tiny fraction of thousands of tech startups launched yearly. After 20+ years building tech products, I’ve found that most failures aren’t due to lack of commitment or innovation — they’re about running out of capital before finding product-market fit (PMF).

This post explores why traditional tech agencies often accelerate this problem and introduces a more capital-efficient solution.

The Traditional Agency Model: A Broken System

Tech agencies, dev shops — whatever you call them — all share one fundamental problem: they’re not mission-aligned with their clients. As services businesses with tiny margins, agency owners and managers constantly chase the next deal just to stay afloat. Most agencies have only 1–3 months of runway. Think about that.

Around 2013, while running a digital product studio (agency) in New York, I witnessed these challenges firsthand. Despite working with clients ranging from startups to major brands like CBS and Cargill, we encountered persistent issues inherent to the agency model:

Inefficient Cost Structure

• Agencies maintain substantial overhead: offices, marketing, sales teams
• Clients pay 3–5x salary rates for talent to cover these costs
• Companies unable to pay premium rates often receive subpar work
• Agencies frequently maintain expensive “bench” talent between projects

Quality and Relationship Issues

• Staff context-switch constantly between multiple projects
• Knowledge transfer between agency and client is often poor
• Initially positive relationships sour due to misaligned incentives
• Agencies prioritize revenue maximization while clients seek capital efficiency
• No continuity at project handoff leads to frequent refactoring

These problems weren’t isolated to us — they were and still are common across the industry. After selling the business in 2019 and later validating these issues at market-leading services businesses, it became pretty evident to me: organizations should NEVER leverage agencies or dev shops to produce or refactor technology. The costs and risks are simply too high, with failure rates exacerbated by delays, misalignment, and technical debt.

The Birth of a New Model: NoFUD Inc.

Based on these experiences, I began thinking about how companies could build quality products with external teams while shifting onboarding and talent acquisition risk. The augmentation model existed but fell short — companies like Toptal and Baires Dev charged unnecessary premiums while pushing developer compensation down. Considering that people generally like to be appreciated and compensated fairly, these staff augmentation firms also created issues with culture and team integration.

Enter NoFUD stage left.

The concept is simple: help companies build exceptional technology teams without traditional barriers, making it possible to assemble teams that are not only technically skilled but also culturally aligned, while keeping costs predictable and ensuring talent feels valued and well-compensated.

Core Principles of the NoFUD Model:

Direct Access

• Companies hire talent directly, eliminating overhead costs
• We handle vetting and EOR management
• Your dedicated Product Manager, Developers, and DevOps professionals work directly with you

True Integration

• Team members work as part of your business
• Once the MVP project completes, the team seamlessly transitions into day-to-day growth and management
• No switching costs or knowledge loss

Development Velocity and Capital Efficiency

An in-house or NoFUD team will always move more quickly than an agency because of alignment. There’s no “agency interference,” no internal agency culture building, and no “agency alignment meetings” where things often get lost in translation. This translates to two critical advantages:

1. Faster MVP delivery
2. Sustained development velocity without team turnover

Let’s look at the numbers:

Hourly Rate Comparison (USD)

Cost and Productivity Analysis ($1M Budget)

As the data shows, you get approximately 25% more productivity with an in-house team — and that’s just the baseline; and longer runway. This doesn’t factor in other benefits like eliminated context switching and talent continuity.

The NoFUD Advantage

We’ve built a comprehensive solution that handles:

Advanced Talent Identification

• Proprietary AI and human screening to curate top global talent
• Continuous quality monitoring and improvement

Seamless Network Access

• Pre-screened candidates available on-demand
• Proactive talent acquisition when needed

Simplified Compliance

• Complete onboarding management
• Regulatory requirement handling

Cost Efficiency

• No agency markup
• Flexible engagement models

If you’re considering using an agency, don’t — it’s usually a waste of capital and carries unnecessary risks. We created our “agency” offering specifically to capture those considering the traditional agency path and show them a better way forward. Our model provides your own dedicated team, with your Product Manager serving as your primary point of contact. Whether you need fractional or full-time support, we provide more efficiency, better alignment with your needs, and true continuity.

By eliminating unnecessary overhead and streamlining talent acquisition, NoFUD offers a more efficient, flexible, and sustainable approach to building tech products — one that actually helps you reach PMF before running out of capital.