The Secret Playsheet for Vertical SaaS
Earned Secrets from elite vertical SaaS companies
As software use by businesses continues to grow, it creates immense opportunity for verticalised software to fill in the gaps by owning the deep industry-specific workflows that horizontal software cannot build.
While vertical SaaS has been around for a while, it has experienced massive growth over the last decade. We believe the industry is on the cusp of a transformative expansion. This growth will be driven by the use of industry insights, proprietary data, and vertically trained LLMs to build deeper and more valuable industry-specific workflows that weren't possible earlier.
India is uniquely positioned to excel in vertical SaaS markets. With our vast, affordable talent pool in engineering and customer support, we can meet the high customisation and service demands of industry-specific software, and build exceptional products.
To go deep into the world of vertical software, Blume’s Anurag Pagaria and Sajith Pai interviewed individuals from Uolo, WizCommerce, Toddle, Classplus, PetPooja, Spyne, Zenoti, PowerPlay, FleetX, Innovaccer, and Vymo. They also deeply studied successful vSaaS companies like Toast, Shopify, SiteMinder, RateGain, PlanGrid, Procore, Veeva, and AppFolio.
They distilled their observations into 12 key learnings on how to build a successful vertical SaaS company, which founders building in the space would benefit from. Here’s a glimpse.
Identifying and addressing the most critical user pain points
Establishing a wedge drives faster sales cycles and sets the stage for future expansion into adjacent workflows.
Limited TAM is a feature, not a bug (and can be gradually expanded on)
Most successful vertical SaaS companies often start with a narrow focus and gradually expand their offerings through three routes:
Adding new stakeholders / ICPs to serve in the same industry
Launching in adjacent industries
Developing more products for the same audience
SMB-focussed vSaaS companies at scale earn as much as 20% to 25% of their net revenue from transaction-based use cases (payments, marketplaces, etc).
Transaction-based revenue models unlock growth opportunities. For vertical SaaS companies, particularly those serving SMBs, incorporating payments can drive significant ARPU growth.
The majority of vSaaS companies have either a sales-assisted or a complete sales-led GTM strategy
Vertical SaaS often requires complex, industry-specific integrations and customisation, making sales-led approach far more effective than product-led GTM. High-touch sales, especially for enterprise accounts, are key to addressing specific client needs.
SMB vSaaS grow via integration, whereas enterprise vSaaS grow via customisation
SMB and mid-market buyers value integration with other products far more than customisation and also tend to stick around for a longer time based on the integrations you can provide.
To learn the full secret plyasheet, read the article below.