Unlike their horizontal brothers, vertical SaaS companies focus more towards catering to industry-specific needs. After all, why attempt to make your product available for different industries to use if you can aim for the jugular by addressing certain legacy business processes of a single industry itself? In fact, more and more SaaS startups are using the vertical approach which has been taking over the entire software market that as of 2014, it had generated up to $114 billion in total revenue. If you’re planning to start a vertical SaaS company yourself, you might want to take a closer look at three leading vertical SaaS companies who had decided to set their sights on specific industries, namely OpenTable, Veeva, and Mindbody.
The traditional way of reserving a table at a restaurant for two has always been to call the establishment who’ll then write down your reservation details in a notebook. But with the advent of the Internet and web-based applications, restaurants jotting down reservation details of their guests on paper is on its way out. Online reservation systems make it easier for restaurants to manage table reservations better than before.
Vertical SaaS company OpenTable had pioneered online table reservation since 1998 when the entire concept of vertical SaaS itself had yet to take flight. What OpenTable has done to transform the entire food services industry is that it replaced restaurant’s reservation notebooks with an electronic reservation book. The said piece of hardware is a black computer terminal loaded with software that records reservations made via the website of either OpenTable or the restaurant itself.
Restaurants can also manage seating arrangements requested by a diner who had reserved a table and delegation of tasks to waiters and servers using OpenTable. They’ll only need to pay a one-time software installation and training fee as well as a monthly subscription fee.
OpenTable also charges a very minimal fee to restaurants who use the said vertical SaaS for every diner who had completed their table reservation. For those restaurants who might not need OpenTable’s electronic reservation book, they can opt to use the said vertical SaaS company’s web-based Connect system instead.
OpenTable isn’t without its challenges though, foremost of which is that some diners still prefer to stick to the old-school way of making calls to have a table reserved at their restaurant of choice instead of logging in to the vertical SaaS company’s website. Other online reservation systems have also sprouted since OpenTable had pioneered the entire thing three decades ago, some of which have since introduced better technologies that aim to address restaurant reservation issues that the said vertical SaaS company had failed to address for so long.
With Veeva, biotech and pharmaceutical companies can understand their customers better, keep track of those customers’ information, and use said information to deliver better sales of their medicines.
Veeva has had its fair share of challenges over the years such as compliance with regulations surrounding the entire life sciences industry and competition coming mostly from vertical SaaS companies older than them. However, the said vertical SaaS company had managed to weather all those challenges as their annual revenue has reached up to $500 million thus far.
Another industry that has something to do with improving the quality of life of everyone is that of health and wellness. However, the said industry doesn’t get as much attention compared to food, life sciences, agriculture, and other sectors.
Vertical SaaS company Mindbody aims to change that by providing cloud-based solutions that can help small businesses in the health and wellness sector to improve their day-to-day processes and ensure more efficient operations.
With Mindbody’s online business management software, owners of gyms, salons, massage parlors, and other businesses in the health and wellness industry can schedule appointments and reservations, manage their staff, and process customer payments more easily via both Web and mobile.
Mindbody had first delved into vertical SaaS in 2005 when both SaaS and cloud-based technologies hadn’t existed yet, thus making them pioneers not just in changing the face of the entire health and wellness industry but in the field of vertical SaaS itself as well.
As much as horizontal SaaS companies are still vital to the very existence of SaaS itself, they can only do so much to fulfill some needs that only certain industries have. Enter vertical SaaS companies and their quest to make everything easier for a specific industry. Compared to taking the traditional horizontal approach, you’ll want to focus more on vertical SaaS if you plan on building a software startup yourself as it allows you to start small and get to know an entire industry better at the same time. The above-listed vertical SaaS success stories from OpenTable, Veeva, and Mindbody should inspire you once you build a vertical SaaS company of your own.
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