Dave Yuan, Founder of Tidemark and seasoned venture capitalist, shares insights from his extensive career and the launch of his growth equity fund focused on vertical SaaS. He discusses the importance of product-centric approaches and community-building initiatives for SMB leaders. Dave dives into learnings from recent research on 'Control Points' in Vertical SaaS and the transformative potential of AI in the industry. He emphasizes how understanding stakeholder dynamics and fostering partnerships can drive growth in capital-intensive sectors.
Dave Yuan emphasizes Tidemark's unique approach in fostering collaboration among vertical SaaS leaders to enhance operational strategies and community relationships.
The podcast highlights the critical role of understanding AI as a tool for augmenting workflows and creating opportunities within vertical SaaS markets.
Deep dives
The Genesis of Tidemark
Tidemark was launched by Dave Ewan as a growth equity fund focused on supporting vertical SaaS companies. Building on over two decades of experience investing in technology firms, Ewan identified a desire to operate differently than traditional growth equity firms. He aims to create an ecosystem that emphasizes collaboration and the exchange of ideas among portfolio companies, rather than merely fostering a sales-driven approach. Tidemark's strategy involves engaging with a community of executives to share insights and frameworks that can benefit various technology companies, especially in the SMB and vertical SaaS sectors.
Building a Supportive Ecosystem
A central theme of Tidemark's mission is the commitment to fostering a supportive community for vertical SaaS leaders. Ewan articulated the importance of leveraging shared experiences among CEOs and industry vendors, promoting a collaborative environment where knowledge can flow freely. Monthly and quarterly sessions allow CEOs to interact with seasoned practitioners who provide valuable insights into operational strategies and market trends. This approach not only enhances learning but also strengthens the relationships within the community, reinforcing Tidemark's role as a key player in the vertical SaaS ecosystem.
Insights from the Benchmarking Study
The recent benchmarking study conducted by Tidemark revealed valuable insights into the state of vertical SaaS companies. Many participants highlighted a preference for sequential product introductions rather than aggressive simultaneous expansions, emphasizing the need to build on existing successes. The study found that providing add-on services such as payments and insurance is often more successful when aligned with user needs and market demands. Additionally, it emphasized that understanding the distinct characteristics of various industries is critical for vertical SaaS companies to navigate growth strategies effectively.
Navigating the AI Landscape
The impact of artificial intelligence on vertical SaaS has emerged as a crucial factor for companies to consider. Over the past two years, Ewan observed the evolution of AI from a potential threat to a powerful augmentation tool for existing workflows. Many companies are actively incorporating AI capabilities, with a significant portion either having or planning to introduce AI products. Tidemark believes that understanding and leveraging AI within control points can create opportunities rather than pose risks, helping vertical SaaS firms stay competitive and better serve their clients in a rapidly evolving landscape.
Dave shares why he took on the challenge of building Tidemark after over 20 years in the venture asset class (and garnering Midas List recognition), how Tidemark takes on a product ethos in building its Vertical SaaS (VaaS) value-add capabilities such as content and community events among other efforts, VaaS learnings from recent research they’ve done on “Control Points” and a benchmarking study on Vertical and SMB SaaS trends, how the Tidemark thesis and lessons learned apply to digital industrial end markets, and finally where Ai is headed for VaaS now that the “Ai meteor” has landed.
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