Introducing the Vertical SaaS Knowledge Project

You can find the full Vertical SaaS Knowledge Project here.

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When I first started investing in Vertical & SMB SaaS, to be a vertical software entrepreneur was to be underestimated. You were deluged with (allegedly) insurmountable challenges. “Your market is too small!” “The sales motion is too hard.” “Those customers can’t produce enough revenue to justify your time.”

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Over the past decade, the investing world has caught up (a bit) and become enamored with Vertical SaaS. But the frameworks and language remain clumsy. One sniff of a post-Covid pullback, and investors went running to the hills.

At Tidemark, we know the opportunity in Vertical SaaS is just starting to unfold. The opportunity to expand is way beyond selling more seats—it’s payroll, insurance, lending, and much more. And the true frontier for Vertical SaaS companies is to extend beyond their customers to serve their customers’ customers, customers' suppliers, and customers’ employees.

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I’ve been fortunate to work with a dozen Vertical & SMB SaaS companies, most of whom have reached hundreds of millions in revenue, including CCC in automotive (NYSE: CCCS), Toast in restaurants (NYSE: TOST), SiteMinder in hotels (ASX: SDR), Dutchie in cannabis, Freshworks in customer experience (NASDAQ: FRSH), Avetta in industrial, LegalZoom in legal (NASDAQ: LZ), Kajabi in the creator economy, ServiceTitan in HVAC and industrial trades, Klook in tours and activities, and Xero (ASX: XRO) and Karbon in accounting.  At Tidemark, we know that not every company will win their category, but those Vertical SaaS companies who do can become some of the best businesses in the world.    

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Vertical and SMB SaaS aren’t just great businesses; they can be incredible platforms. In contrast to their horizontal peers, Vertical SaaS companies are inherently multi-product, can achieve a high market share percentage, and enjoy network effects. As they extend forward and backward through the value chain, Vertical SaaS companies can bring multiple stakeholders onto the software and transform industries.

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We call what we've built the Vertical SaaS Knowledge Project (a.k.a. the VSKP). While I will continue to give the stump speech on why Vertical SaaS is great, the VSKP is focused on giving Vertical SaaS leaders a guide on how to grow, covering practical topics with pragmatic depth. The writing contains novel strategic frameworks, some practical examples, and case studies demonstrating the successful deployment of these strategies. We continue to update it with new pieces on a regular basis. You can dive in here! 

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Glad to have you on board,

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Dave

Founder and General Partner, Tidemark

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