Why Email Marketing was a Successful Services to Products Switch

I know of at least three successful email marketing companies that started out as web design firms doing custom web app development. As with most startups, the ideas that result in success come from trying something first that didn’t work out (from personal experience, my original business idea has never been what resulted in success). My question today is as follows: why is there a pattern of successful email marketing companies that originated as web development companies? Entrepreneurs continually ask me how to make the transition from consulting services to product-oriented businesses and I don’t have any silver bullets. Email marketing has some interesting aspects that made it more attainable before the market became commoditized.

Here are some thoughts on why email marketing was especially suitable for consulting companies that transitioned into a products business:

• Web application consulting lent itself well to building a SaaS web app for email marketing
• Email marketing, like any SaaS offering, is difficult to get going but once a modest amount of revenue is recurring the ability to scale it out becomes more apparent
• Customer acquisition is the most difficult part of any product-based business and many web development companies developed areas of expertise in lead generation, search engine optimization, and search engine marketing through client work

Converting from a services company to a products company is extremely difficult. Email marketing is one of the few SaaS product markets that has several successful companies that made the switch from services to products.

What else? Why do you think so many email marketing companies started out as web development companies?