From Agency to Startup: What Comes Next

I'm Kurt Schmidt, founder of Schmidt Consulting Group, and I've had two significant experiences with closing a services firm. The first was leaving a large, successful agency at what felt like its peak, because the direction it wanted to go and the direction I wanted to go had stopped overlapping. The second was winding down my own agency, Foundry, after building it into something that genuinely worked. Both times, the phrase "from agency to startup" took on a different shape. And both times, the mechanics were the easy part.

This article is for anyone staring at that same crossroads: a professional services business you built, a moment of clarity (or exhaustion) that something needs to change, and a blank page where the next chapter should be.

What Does It Actually Mean to Move From Agency to Startup?

Moving from agency to startup is a shift in identity as much as a shift in business model. You stop being the person responsible for a team, a P&L, and a client roster. You start being the person responsible for proving that your specific expertise has a market.

That's a lonelier place. The infrastructure is gone. The built-in accountability of employees who depend on you for a paycheck is gone. And so is the comfortable fiction that you couldn't really test your ideas because the organization around you had different priorities. I had a moment after leaving that first agency where every excuse I'd been carrying evaporated. I'd told myself for years that I knew a better way to run a services firm. Then I was standing outside with the keys to do exactly that. The pressure of actually being right is different from the pressure of being frustrated.

The S curve framework is one of the most honest lenses I've found for thinking about this transition. Every business and every career runs through a series of S curves: a slow start at the bottom, a steep climb in the middle, and a flattening at the top where growth slows and you're either optimizing or getting bored. The problem is you can feel your momentum but you can rarely see your exact position on the curve. I recently talked through this with Jim Cuene, and what struck me was how clearly he described reaching the top of his own S curve after decades of sprint-paced work, and how that realization made the next step obvious even when the destination was still fuzzy. The curve tells you when. The market tells you where.

The McKinsey Three Horizons framework captures a similar idea at the organizational level; most founders I work with need to apply it personally first.

How Do You Wind Down a Services Firm Without Burning It Down?

A controlled landing is possible. I've seen it done well and I've done it myself, and the difference between a controlled landing and a crash landing comes down to how early you tell people and how much you let the process breathe.

At Foundry, we told our employees six months before we closed that the business was winding down. That felt uncomfortable at the time, like we were handing people a reason to leave early. But we were. And they were professionals. Giving talented people a six-month runway to find their next role is a gift; it's also just the right thing to do. Over the following months, people put in their notices in waves. Some transitioned to contractor status. Others moved on when that option arrived. The business didn't end in a mass layoff. It faded out in a planned, humane way. Most of those former employees are doing genuinely well. Some landed at places like Shopify and Atlassian. I had full confidence in their ability to find their footing because we hadn't hired bad people, and we treated the ending with as much care as we'd treated the building.

The mechanics of winding down are actually straightforward. The emotional labor is what will wreck you if you're unprepared.

Lease negotiations, clients who owe you six figures and are nine months past due, contracts that need non-renewal conversations rather than cancellations, a building you need to get out of. All of that is manageable if your head is right. None of it is manageable if you're also processing grief about closing something you built, anxiety about what comes next, and guilt about the people whose livelihoods were attached to your decisions. Those emotional threads run simultaneously, and the only preparation is acknowledging they'll be there.

My advice: get your headspace right before the wind-down begins, because once it starts, you won't have the bandwidth to do that work.

What's the First Step When You're Starting Over?

The first step is an internal audit. I went through old emails. I looked at what types of problems people had been calling me to solve for years. I paid attention to what people thanked me for, what questions they kept asking me, what role I naturally played when I walked into a client's situation.

It's market research using the most reliable data set available to you: the pattern of your own career. The people in your network have been signaling your value to you for a long time. Most of us are too busy running the business to listen.

What I found, and what I see consistently in the people I work with, is that the market had already decided what I was. I'd spent years thinking I could help almost any business. But my network kept coming back to me as a services firm person, an agency person, someone who understood what it felt like to build something in that specific world. I had to stop arguing with that signal and start building something around it. You can't join the Navy if you've spent your whole career as a pirate. Embrace the pirate thing.

The practical exercise is simple: reach out to 10 to 15 people in your network who have worked with you or watched you work. Ask them directly how they see you. Ask what they'd call you for. Ask what problem, in their mind, you solve better than anyone they know. You'll see patterns within the first five responses; by the tenth, you'll have a positioning statement.

Why Does Mindset Matter More Than Business Planning at This Stage?

A services firm rises or falls on the mindset of whoever is running it. I've worked with agencies where the leadership was so locked in a scarcity mindset that every client conversation became a negotiation about whether they deserved to be paid. That energy moves downstream fast. Clients feel it. Good employees leave. The business stalls.

The same active applies at the individual level when you're transitioning from agency to startup. If you're operating from fear. Fear of looking bad, fear of getting it wrong, fear of putting yourself out there and hearing no. You'll make conservative decisions at exactly the moment when the situation demands something bolder.

I've been thinking about this a lot in my own transition. Building a community over the years of people I've genuinely tried to help turns out to be the infrastructure for the next chapter. It's the trusted network you can send a rough draft to at 9pm and get honest feedback from by morning. It's the people who will tell you there's too much text on your webinar graphic. Those small steps build confidence in a new direction faster than any amount of solo strategizing.

In my experience working with founders who are working through this kind of transition, the ones who move fastest are the ones who stop processing everything internally and start treating their network as a real resource. That's particularly hard for people who spent their career being the one others leaned on. Asking for input feels like admitting you don't have all the answers. You don't. Neither do I. That's the starting point.

founder psychology and agency leadership is a good place to dig in if this is where you're stuck; the mental patterns that made you effective as an agency leader don't always serve you well in the startup phase.

How Do You Build a New Offering After Closing Your Agency?

Go to the market before you build anything. I've watched people spend months designing a framework, building a website, and writing a curriculum for a service nobody has confirmed they want. The faster path is to put yourself in front of people, have direct conversations, and pay attention to what they ask you about.

I'm building a maturity scorecard for agencies right now. An ebook on getting high-paying clients. Webinars. Most of that came from listening to what my network was already asking me for, then deciding to meet that demand clearly and publicly. Gary Vaynerchuk and Alex Hormozi have both made versions of the same point: give away your best thinking and the right people will find you. The most interesting people are going to find you through what you put out there.

That approach also solves a positioning problem. A service firm transitioning to a consulting or coaching model often struggles to explain what they do. Content solves that. When you write specifically about the problems you solve for the specific people you serve, you stop needing an elevator pitch. The content does the work.

For what it's worth, if you're under 10 people and need pure performance marketing execution rather than strategic advisory, a specialist in that vertical is probably a better fit than what I do. My work is with owners and leadership teams who need to get back in the driver's seat of their business; if the execution layer is the primary problem, there are firms better suited to that than I am. positioning for B2B services firms

A few notes on where to focus in the first 90 days after closing:

• Start the internal audit before you design any offering
• Have 15 to 20 direct conversations with your network before you write a word of copy
• Build one thing that demonstrates your expertise publicly, whether that's a tool, a piece of content, or a framework
• Get comfortable with the idea that the first version of your new service will be revised several times based on real feedback

go-to-market strategy covers how to structure these early conversations to turn them into a pipeline.

Key Takeaways

• Moving from agency to startup is an identity shift first; the business model question is secondary to figuring out who you are when the infrastructure is gone
• A controlled wind-down requires telling people earlier than feels comfortable and giving the process enough time to breathe; six months of employee runway is a gesture of respect
• The first step after closing is an internal audit; go through your old emails, survey your network, and look for the patterns in what people have been asking you for years
• Your network has been signaling your value to you throughout your career; the market research is already done if you're willing to read those signals honestly
• Scarcity mindset is the primary threat to services firm leaders, both when they're running the business and when they're building what comes next
• Content and public thinking attract the right people; give away your best ideas and let the most interesting potential clients find you

I covered this transition in depth on The Schmidt List, including the emotional and strategic dimensions that rarely make it into the standard entrepreneurship content.

The question I keep returning to: at what point does the bottom of a new S curve stop feeling like uncertainty and start feeling like momentum? I don't think there's a clean answer. But I do think you know it when it shifts. And I think you create the conditions for it to shift faster than most people realize.