Linear #011: vSaaS > hSaaS , Lessons From Hiring 100+ People, The WeChat Wars

One Vertical SaaS breakdown. One 'How To'. One Business Story. In your inbox once a week.

Happy Sunday folks!

Another episode of the linear newsletter here.

Let’s dive in!

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One Vertical SaaS Breakdown:

Vertical SaaS vs. Horizontal SaaS

I used to think horizontal SaaS was the best way to create a billion dollar company, but I was wrong.

First off, a quick definition of horizontal versus vertical SaaS for those new to the concept: Horizontal SaaS: Software products built for a large audience of business users, regardless of their industry ie. Hubspot.

Vertical SaaS: Software products built solely for companies within ONE particular industry ie. Procore. Ok, let's get into why vSaaS is a great way to build a $B company, as opposed to horizontal, in today's world:

Vertical SaaS companies have incredible pricing power. When you are building a solution for ONE industry as opposed to every industry on the planet, you can command a lot higher price. Your solution will be tailor-made for them, and they will be willing to pay for that.

Think about their alternative. They'd pay for a bunch of different products that they have to string together, integrate, and then maintain data connections. Many industries have NO or very little IT resources. We service a publicly traded co. with just a few IT people!

Vertical SaaS companies have far less competition. Most software is built in red oceans - markets where you have to TAKE from others to feed yourself. There are many industries out there that have been forgotten about. They run on paper / spreadsheets. That's opportunity.

Customers are in dire need of a solution. Customers are SICK of having 50+ SaaS tools. Everyone just wants an all-in-one. Something specific to them. They hate customization or spending TIME and MONEY to get something to 'work' for them. vSaaS is the answer.

Vertical SaaS companies become 'platforms' versus 'features. To build a $B company with a strong moat you want an end-to-end platform. Most horizontal software companies are FEATURES ie. eSign, email tools, etc. In vSaaS you can be the one-stop-shop for everything.

Vertical SaaS companies have stronger customer retention and NPS. When a business builds a product around a customer’s needs within a specific market, magic happens: -High Customer Satisfaction & Loyalty -Low Customer Churn aka customers actually use the software *happily*

Vertical SaaS companies don't have to spend time building hundreds of third-party integrations In horizontal SaaS, you've got to build SO MANY integrations. In vertical SaaS, you're probably looking at ~10 total integrations to open up the entire market.

Want proof? I found the Trade School market was running on paper or stringing together horizontal solutions ~7 years ago. So I founded an end-to-end vSaaS for the space. The results are real:

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One ‘How To’:

Lessons from hiring 100+ people over the last 5 years

Luke Sophinos @lukesophinos

I’ve hired 100+ people in the last 3 years. It’s f***ing hard. In the process I’ve spent 2,000+ hours, traveled to 20+ cities, and had multiple executives back out after verbal commitments and signed offer letters. 👇 Here’s 5 lessons I wish I knew when I started 👇

One Biz Story:

The WeChat Wars

Luke Sophinos @lukesophinos

Elon Musk wants to turn Twitter into a Super App. Zuck & Facebook are trying to do the same thing. They're both aiming to replicate an App that 1.3 billion people use in China every day as their 'LIFE OPERATING SYSTEM'. The WeChat Wars 👇

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