IT is the preferred sector for business creators in France: 1 in 5 startups is in digital. But behind this figure lie very different realities. Creating an ESN of 3 people, a SaaS solo or a web agency is not the same business.
Here is the honest comparison.
Model 1: ESN (formerly SSII)
The principle
You recruit developers, place them on assignments at clients (staff augmentation), and bill a daily rate higher than their salary cost. The gross margin is the difference.
The numbers
- Daily rate billed to client: €500-700 (experienced profile)
- Employee cost per day: €300-400/day
- Gross margin per consultant: €100-300/day
- Typical net margin: 8-15% of revenue
For an ESN of 5 consultants billed at €550/day, 220 days/year:
- Annual revenue: ~€605,000
- Net margin: ~€60,000 to €90,000
The advantages
- Proven model, understandable by banks
- Recurring revenue (assignments of 3 to 12 months)
- No heavy R&D
- Linearly scalable (each consultant added = additional revenue)
The difficulties
- Permanent recruitment (the lifeblood)
- Gaps between projects: a consultant without an assignment costs €300/day and generates nothing
- Dependence on large accounts and their budget cycles
- Low margin if you're not rigorous on management
- Fierce competition (there are over 30,000 ESNs in France)
The trap
Many ESN creators are former employees who think "the client paid €600 a day, might as well keep the margin". Except the employer also paid for sales, HR, project gaps, legal, accounting, offices, and absorbed the risk. The net margin of an ESN is rarely what you imagine.
Model 2: SaaS
The principle
You develop software sold via monthly or annual subscription. Heavy initial investment (development), then recurring revenue with almost zero marginal cost per additional customer.
The numbers
- Average ticket: €30-500/month depending on target (SMB vs mid-market vs enterprise)
- Customer acquisition cost (CAC): €100-2,000 depending on channel
- Acceptable monthly churn: 2-5% (SMB), 0.5-2% (mid-market/enterprise)
- Break-even: generally 18 to 36 months if the product finds its market
For a B2B SaaS at €99/month with 200 customers:
- MRR (monthly recurring revenue): €19,800
- ARR (annual recurring revenue): €237,600
- Potential net margin: 40-70% once development costs are amortized
The advantages
- Exponential scalability (every investor's dream)
- Recurring and predictable revenue
- High company valuation (5-15x ARR for top SaaS)
- Ability to work from anywhere
The difficulties
- Maximum risk: 90% of SaaS fail
- Negative cash flow for 1 to 3 years (you develop before selling)
- Multiple skills required (development, design, marketing, support)
- Product-market fit is a difficult Grail to find
- Competition is global, not local
The trap
The developer who codes for a year in their basement without ever testing the product with the market. When they launch, nobody wants it. The golden rule of SaaS: sell before you code. If you can't find 10 people willing to pay for your idea, it probably isn't worth 12 months of development.
Model 3: Direct services (web agency, IT consulting)
The principle
You sell your expertise directly to end clients: website creation, custom development, digital transformation consulting, cybersecurity, managed services.
The numbers
- Direct daily rate (no intermediary): €400-1,000 depending on specialty
- Realistic billing rate: 60-70% of time
- Solo revenue: €60,000 to €130,000/year
- Solo net margin: 40-60%
For an agency of 3 people (founder + 2 developers):
- Annual revenue: ~€350,000
- Net margin: ~€70,000 to €100,000
The advantages
- Quick start (no R&D, no initial recruitment)
- High margin (no intermediary)
- Direct client relationship (satisfaction, loyalty)
- Total flexibility (choice of projects, technologies, pace)
The difficulties
- Not scalable without hiring (your time is the only resource)
- Permanent business development
- Risk of dependence on one or two major clients
- Difficulty taking vacation (client is waiting)
The trap
Remaining indefinitely a disguised freelancer. If you want to build a real company, you must eventually delegate production and spend time on sales and strategy. The transition from "I do everything" to "I manage a team that does" is the hardest milestone.
Which model to choose?
| Criteria | ESN | SaaS | Direct services |
|---|---|---|---|
| Initial investment | Medium | High | Low |
| Risk | Medium | High | Low |
| Scalability | Linear | Exponential | Limited |
| Net margin | 8-15% | 40-70% (at maturity) | 40-60% |
| Key skills | Recruitment, sales | Product, marketing | Technical expertise, client relations |
| Financing need | Yes (payroll) | Yes (R&D) | No |
Most IT entrepreneurs combine these models: direct services to generate cash, and develop a SaaS in parallel funded by services. It's the most pragmatic approach.
The best model is the one that matches your skills, risk tolerance and ambition. Not the one that's in fashion.