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How to build a $1M+ vertical SaaS business (step-by-step guide)

The Startup Ideas Podcast

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"Focus on Size and Diversity for Industry Success" Vertical Saas step 1

Identifying promising industries for vertical SaaS involves evaluating key characteristics that indicate opportunity. First, consider the overall size of the industry, measured by revenue, as industries with substantial revenue potential are typically more attractive. For example, general medical and surgical hospitals generate nearly a trillion dollars with about 2,500 companies operating in that sector, highlighting the significance of revenue. Next, examine the number of companies within the industry. A smaller number, like that in surgical hospitals, indicates a more enterprise-driven environment, which can be challenging for companies, especially bootstrappers, aiming to succeed without substantial funding. Therefore, industries with a broader distribution of companies, including small businesses (a few million in revenue), mid-market enterprises ($10-100 million), and larger enterprises (over $100 million), are favorable. This diversity allows software companies to gain market entry by targeting small businesses with simpler offerings before scaling their solutions to cater to mid-market and enterprise clients. Overall, successful vertical SaaS ventures depend not just on innovative ideas, but on the size and segmentation of the targeted industry.

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