Vertical SaaS Startups Require Different Go To Market than Horizontal SaaS Companies

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tomtunguz.comVertical SaaS requires a different go-to-market than horizontal SaaS companies. Vertical software companies, a recent important trend in SaaS startups, pursue customers only in a particular industry. They trade a more narrow customer base and consequent reduction in market size for a competitive advantage in that market segment.

The most salient example, Veeva, sells software to the largest life sciences companies, which are subject to a unique regulatory regime in their sales processes. A spectacularly efficient business, Veeva raised only $4.5M in venture investment before going public six years after founding. Today, Veeva’s market cap exceeds $3.3B. Similar large market cap examples exist in real estate (CoStar – $5.8B), insurance (Guidewire – $3.7B), logistics (Fleetmatics – $1.8B) among other categories.

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