Thread by @siddharthm83

SaaS revolutionalized how software is built, delivered, and consumed.

But, 99% of the people in SaaS don't realize SaaS itself is getting disrupted.

Huge career implications.

Here is what anyone working in software should know 👇

Most of the SaaS companies today are Horizontal SaaS (hSaaS).

In 10 yrs, many such companies will be disrupted by Vertical SaaS (vSaaS).

✅ Pick Vertical SaaS for career growth

Here's why👇

1/ hSaaS vs vSaaS - the difference?

hSaaS - Generic software that mainly solves 1 problem and serves multiple industries. Eg - CRM, Payroll software

vSaaS - Highly specific solution that serves 1 niche industry and focuses on workflow automation. Eg - Veeva @ $600M ARR

2/ What's wrong with hSaaS?

Each industry has unique workflows.

• Sales process that is unique
• Pricing its services that is specific
• Customer touchpoints that are unique
• Types of data captured that is specific

hSaaS has no awareness of any of the above.

3/ Implication to customer

Companies spend a lot of "human time" figuring out how to customize each step, integrate various parts and make it work.

❌ Larger headcount → $$
❌ Frustrated employees → low CSAT
❌ Mistakes due to data staleness → $$

Is there a better solution?

4/ Enter vSaaS

vSaaS focuses on the customer's ENTIRE workflow.

💡 Vertically integrate and automate the entire workflow → Drive outsized RoI for the customer.

5/ How vSaaS works?

Everything is customized:

✅ Unique sales process → Customized CRM

✅ Specific pricing → Customized pricing engine

✅ Unique touchpoints → Customized user experience

✅ Specific data needs → Customized database design/capture

6/ vSaaS enable insane ROI for the customer

✅ Integration of workflow → Lower headcount

✅ Satisfied customers → high CSAT/NPS

✅ Data accuracy → Lower waste from mistakes

7/ vSaaS drives huge competitive moat

All the customizations become a competitive advantage

Become mission-critical for your customer!

✅ For the customer to quit you, they have to find an alternative that replaces the entire process → Insane LTV

8/ vSaaS is more capital efficient

Being in a niche simplifies GTM.

Marketing, Sales can be super focused on the niche market.

✅ A Smaller team is needed → Faster profitability.

e.g. @veevasystems only raised $7M, spent only $3M, got profitable and grew to $600M+ ARR

9/ vSaaS grows TAM by replicating the process across adjacent verticals

After vertically integrating workflow in 1 industry, look for adjacent industries with similar workflows.

E.g. Yembo (I'm CEO) is building the cloud for all home services (moving, painting, insurance).

10/ tl;dr

• Vertical SaaS is going to eat Horizontal SaaS
• Joining a hSaaS company in the 2020's is like joining an on-prem company in 2010's
• Many hSaaS companies that will outlast this decade will evolve into vSaaS - e.g. Rippling

Achieving Product-Market fit in vSaaS is different/more challenging than hSaaS.

I've studied many successful vSaaS companies - there is 1 primary approach to P/M fit (and one that I'm also using at Yembo)

Will be covering in my next thread. Follow me → @siddharthm83

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https://twitter.com/siddharthm83/status/1460266835568328708