Vertical SaaS

I predict that vertical SaaS will slowly eat away at horizontal SaaS (think Shopify, HubSpot, Quickbooks) over the next 10 years, until it becomes the dominant type of B2B SaaS.

I don’t mean “vertical” as in SaaS that owns everything from the hardware to the UI. I’m talking about product feature set.

Say you want to sell flooring in-store and online. You can:

  1. Setup Shopify,
  2. Order their POS hardware,
  3. Pay for and integrate plugins for inventory management, loyalty programs, marketing and advertising, shipping and returns, reporting abd accounting, specialized product views (like 3D views of vinyl planks)…

Or you can just use Broadlume instead which does all of that. You can even go to their in-person international flooring conference while you’re at it.

My family co-owns a small bookstore here in Thunder Bay. They use Shopify with 10+ plugins, and there’s still functionality missing. They also do the ordering from distributors manually, and regularly have to add hundreds of books into Shopify one-by-one. There’s a product called BookManager that does all of that, but they’re so overwhelmed by customers that there’s a two year waitlist before someone from their sales team will even talk to you. They also run on DOS (for real), and bookstore owners still prefer it over Shopify.

Tools like Shopify, Square, even WooCommerce are great for Shopify’s original use-case: selling a few snowboards online (and only online). For a huge number of businesses though, I think you can create a better, fully integrated, “vertical” experience than Shopify-plus-plugins could ever offer, and beat them on both experience and price.