#059: vSaaS For Autonomous Vehicles, HVAC Industry Scorecard, Applying Successful Horizontal SaaS to Specific Industries
One vSaaS breakdown. One biz story. One 'how to'. In your inbox once a week.
One vSaaS Breakdown:
Industry Scorecard: HVAC
"Which industry should I build a SaaS for?"
It's a question I get asked all the time. So I'm breaking down industries one by one.
Here is Industry Scorecard #002: HVAC (Heating, Ventilation, & Air Conditioning
Market Size:
$134 Billion market size growing 5.8% YoY.
140K businesses with 614K employees.
Market Segmentation:
The market is segmented beautifully for SaaS companies.
Highly fragmented. Largely skewed towards SMB's.
Good number of Mid-Markets and Enterprise but they don't control a massive amount of market share.
Competition:
Competition is vicious here. There are a ton of software providers - both legacy and cloud. Service Titan, HouseCall Pro, are killing it from what I've heard and have big, feature-rich operating systems.
If you want to go deeper on competition, I did a write-up on Service Titan a bit ago:
Product Opportunity:
If you wan't to crack this market you're going to have to come up with something new & novel. The only thing I haven't seen a ton of in the space is:
Insurance
Buy Now Pay Later
Better Scheduling / Route Optimization
Still a tricky exercise...
GTM Difficulty:
The segmentation supports the ability to capture SMB, then move to Mid Market, then to Enterprise. So that's a huge positive..
Most companies that are winning have massive INSIDE SALES teams and are acquiring through cold calling and emailing.
Bootstrap or VC-Backed?
This is a tough question, the market size supports a vc-backed company but the competition is vicious.
if you have something new/novel you'll probably have to raise money to gain market share quickly before you get copied. So I think vc-backed it is.
That's it for Scorecard #2. What else would you like to see in the next scorecard? Let me know and I'll keep em coming...
Thanks for reading and I hope you enjoyed.
One Biz Story:
Applied Intuition: SaaS for Autonomous Vehicle Development
The former COO of Y Combinator teamed up with a Googler to build a software company that helps major car companies bring autonomous vehicles to market. They've raised $350M+ and are valued north of $3.5B. It's quite the story ⬇
Applied Intuition is a software company that equips engineering and product teams at major car companies with software that makes it faster, safer, and easier to bring autonomous systems to market. The company was founded in 2017 by Qasar Younis and Peter Ludwig.
Both grew up in Detroit and crossed paths while working at Google. Their backgrounds are quite impressive... Younis was Y Combinator’s COO & founded and sold TalkBin to Google. Ludwig was a Product Manager and Software Engineer at Google working on Android Auto & Google Maps.
Applied Intuition's product suite includes: Simulation: Import maps and create realistic scenarios Vehicle Dynamics: Models that include Cars, Trucks, Suspensions, & Bikes Data & Maps: Synthetic, Traffic Signs, HD maps, & more Validation: A testing suite that tests performance
The company works mostly with major enterprises. Out of 20 global OEMs, 18 rely on the company’s solutions. Toyota, Nissan, GM, LG are all examples of their customers. CRAZY to achieve that in only ~5 years...
Applied Intuition has made three acquisitions in their short life: Embark Trucks: Self driving software for the trucking industry SceneBox: Data management software for computer vision engineers Mechanical Simulation: Car, Truck, Bike, Suspension Simulation Software
But they aren't the only ones vying to win the market and compete with several companies in the autonomous vehicle industry, including: Aurora ($13B IPO) Foretellix ($132M raised) aiMotive ($67M raised) Parallel Domain ($44M raised) Cognata ($24M raised)
The company has raised $351.5 million in five funding rounds. They are backed by prominent investors like Andreessen Horowitz, Hemant Taneja, Mike Maples, Eld Gil, Bilal Zuberi, Lee Fixel, Semil Shah, and Jeannette Zu Furstenberg. The company is valued at $3.6 billion (!)
They also have an INSANE bench of senior experts... Rick Wagoner: Former Chair & CEO of General Motors Dieter Zetsche: Former Head of Mercedes Benz Preston Dunlap: Former CTO of U.S. Space Force General Stephen Wilson: Former Vice CHief of Staff of U.S. Air Force Crazy.
They are growing like crazy too, with an HQ in Silicon Valley and offices in Michigan, Washington DC, Munich, Stockholm, Seoul, and Tokyo. I couldn't find any revenue figures online so I'm very curious where they are in that regard...
Applied Intuition’s vision for the future is to continue to be the foremost enabler of AV development. It is absolutely INCREDIBLE what they've accomplished in such a short amount of time. I'm excited to see what happens next, and how big this gets...
One ‘How To’:
Applying Successful Horizontal SaaS Companies to Specific Industries
Looking at popular software apps and tailoring them for a certain industry is a simple, but, great way to start a SaaS company. Slack, Zapier, Salesforce, Tableau, etc.
If you look closely enough you'll find that these tools often don't structurally work for particular verticals.
Have a product or service that could benefit our community of thousands of vertical SaaS founders, investors, and operators?
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