Trapped Between Sustainability and Scale

[Mubashir]

I’m writing this because I’ve hit a wall that I can’t seem to think my way out of alone. Maybe some of you have been here before.

Where I’m At: Started offering AI services back in mid-2023 as a solo freelancer. After about a year and a half, I felt the ceiling as an individual - so I started an agency in early 2025.We at 4 people now, pulling in a few thousand monthly through Upwork. We’ve generated decent revenue overall across Upwork and a few other channels, enough to keep the lights on and the team paid.

But here’s the thing - I can already feel the ceiling again, and we’re nowhere near where I thought we’d be by now.

The Cycle I’m Stuck In:

Upwork’s gets different type of projects, clients and no expected revenue, each project comes in with new challenges, and it feels like starting from scratch.

Upwork keeps the revenue flowing, but here’s what’s eating at me: I’ve been hearing and seeing the Upwork cycle dying a bit. More competition, tighter margins, more commoditization. And even if it wasn’t declining, the bigger issue is that we’re not creating real value. We’re renting our time in exchange for not having to figure out the harder problems like who we actually are as a company, or what problem we’re uniquely positioned to solve.

I’ve tried thinking about moving away from Upwork. Every single time, I hit the same wall: which niche? which problem, which sales channel? I’ve consumed the content. I understand the theory. But when it comes to actually making the call, I freeze.

The truth is, I don’t have deep experience in any specific industry. I haven’t worked a corporate job, so I can’t lean on “insider knowledge” the way some people do. And without that clarity, every direction feels equally valid and equally terrifying.

What Really Keeps Me Up:

The real question isn’t just about picking a niche. It’s about how to build something repeatable. Right now, every project is a one-off. Every client relationship starts from zero. We’re not building leverage - we’re just trading time for money, and Upwork is making that trade for us.

I know the answer isn’t on Upwork. But I also know I can’t risk the stability my team depends on by making a reckless pivot.

So I’m stuck. Sustainably stuck, if that makes sense.

What I’m Working With:

• A small team that knows Full stack and AI automation well

• Some solid technical capabilities around integrations, NLP, and automation workflows

• Active client work that keeps us afloat

• Zero clarity on what comes next

I know most young agencies are dealing with some version of this. That’s why I’m posting publicly instead of just sitting with it alone. If we can think through this together, maybe it helps someone else too.

If you’ve navigated this phase before especially if you’ve figured out how to build something repeatable without burning everything down first - I’d really value your perspective.

Any direction would be appreciated.

[Rassam]

every direction feels equally valid and equally terrifying.

This is the root of the problem so I want to frame it exclusively. Well-put!

The good news and the bad news is: Our entire industry is teetering along like this, even the largest institutes. The only difference is that the latter have built enough of an organic network overtime that they can sustain the business at a good enough “profit-effort” ratio.

You have to start with realising the 2 reasons which led you to launch an agency:

1. To be your own boss.
2. To sustainably make income that you will be happy with.

That means, you are not looking for unicorn scale, you definitely don’t need to be a billionaire (and if you do, be honest about it), and you want a business that frees you up not shackles you in anxieties of market cycles.

The implication of that for an agency business is:

1. You have to pick a market that allows you to hit a revenue goal that nets you enough profit to be satisfied.
2. You have to pick a market with enough sustainable demand that you can build a compounding presence overtime.

If you compare these with what you’ve been doing, you’ll instantly see the error: you are not even competing in ANY market. The market for freelance work or AI work subsumes 1000s of niches, which translates into every new project essentially being a ‘new business’. Your feeling of ‘starting from scratch’ just means: You launch your business anew at every project. And that obviously does not compound.

When launching a product, we conduct a TAM, SAM, SOM exercises etc. Regardless of what you think of those exercises, they do force you to think of picking a market first rather than the form of the solution. It can still be misleading if you start too broad (i.e., “What is the market of all businesses that require CRM” vs “What is the CRM market share in the FMCG & Retail sectors?”), but any savvy investor will sniff it out and course-correct you before you make the mistake.

We somehow skip over that exercise when launching an agency. We start from the solution (i.e., what service we’ll deliver, e.g., AI development, Web development etc.) instead of “What problem do we solve and for whom?”.

This leads to your situation where nothing you do compounds. You could do this for the next 10 years and still have no real knowledge of any industry.

And that is where I circle back to your original statement: every direction feels equally valid and equally terrifying.

Any well-defined direction is immediately an improvement over your current lack of direction.

That means, even if you pick something you have no expertise in at the moment, and stick with it for the next 6 months (assuming you have savings), you will be in a much better position than now. A repeatable $1000/mo is far superior to a risky $10,000 month, especially when you have a team to pay (if you can deliver your service solo, then you CAN afford to take a ‘hunter’ approach of doing one large project every 6 months – and that is a totally valid path too).

So, it’s not a choice between what you have now versus what you could have. What you have now is already unacceptable or you would not have made this thread. Once you accept that and are OKAY with it (i.e., imagine shutting down your business tomorrow, saying goodbye to your clients and employees, and still feeling good about it), then you can start to rebuild.

Of course, you do not have to shut it down but the mental exercise of doing it will be helpful in deciding your next steps.

What you need to do now is delegate the current business almost 100% to one of your employees, including the Upwork proposals. Be clear that if the job isn’t done then you cannot continue paying for them. Free your mind from the current mess. And then enter a searching mode.

The search can take any of the following forms:

1. Taking a job in an industry that fascinates you. Warning: you may have to kill your ego (great move though).
2. Reading books and research papers and networking with people on a specific problem of a specific industry.
3. Doing long soul-searching sessions with your favourite AI assistants to figure out very specific problems and doing small, targeted outreach to validate the problem.

Or all 3 at the same time. You can still make the mistake of choosing an idea that may run its course in a couple years especially if you are enamored with the idea of latest technologies (which is common among young founders). But it’s not an intractable problem as long as the “market” you choose to serve has a staying power, i.e., are real people not tied to their need for technology e.g. ship builders, architects, service workers, etc., you have the ability to compound.

The only wrong choice is choosing a market that can disappear any time. Like the market of people who need GenAI wrappers. When the demand for wrappers disappears, the market will go away too (get it?).

This newsletter may help you understand the mechanics of choosing the right idea. Feel free to bounce off directions you’re exploring in this forum. Best of luck!