In vertical SaaS, your moat isn't your technology; it's your deep understanding of the customer's workflow. I'll show you how to build a defensible business by embedding your product so deeply into your customers' operations that they can't imagine living without it.
What I've Learned From 84 Companies
Across 234 angel investments, including Anthropic, a few patterns in vertical SaaS come up again and again.
The founders who handle vertical SaaS well understand that timing is everything in this game.
The Reality Nobody Talks About
A lot of the advice on vertical SaaS rests on assumptions that made sense five years ago. The world has moved on.
The first thing to understand is that the best solutions are often the simplest ones. I've seen this play out across dozens of companies. The pattern is unmistakable.
Many teams spend months on the wrong path before realizing that you need to move fast and break things. Once they make the switch, everything changes.
The Numbers Don't Lie
Investing early in vertical SaaS can be the difference between raising your next round and running out of runway.
One of my portfolio companies went from struggling to profitable in under a year after they finally got serious about this. The founder told me later that they wished they'd started sooner.
This connects to broader themes around SaaS metrics, cloud AI services, AI APIs that I've been thinking about a lot lately.
What's Next
Best practice in vertical SaaS is changing fast. What worked last year might not work next year. That's both the challenge and the opportunity.
My advice: stay curious, stay humble, and stay close to the people who are actually doing the work. Read less thought leadership and do more experiments. Talk to fewer consultants and more practitioners.
If you're building in this space, the best time to get vertical SaaS right is before you need to. Don't wait for a crisis to force your hand.
I'll keep sharing what I learn. This stuff matters too much to keep to myself.
Frequently Asked Questions
Q:What are the most common mistakes when validating your vertical SaaS idea before writing a single line of code?
The biggest mistake I see is overcomplicating things early on. Start with the simplest version that works, get real feedback, and iterate from there. Another common trap is copying what worked for someone else without understanding the context behind their decisions.
Q:What tools do I need to get started?
Start with the basics. You don't need expensive software or fancy tools. A spreadsheet, a note-taking app, and direct access to your customers will get you further than any enterprise platform. Add tools only when you hit a specific bottleneck.
Q:Do I need technical skills to validate your vertical SaaS idea before writing a single line of code?
Not necessarily. While technical understanding helps, the most important skills are clear thinking and the ability to break problems into smaller pieces. Many successful founders I've invested in started with zero technical background and either learned enough to be dangerous or found the right technical partner.
Q:How long does it take to validate your vertical SaaS idea before writing a single line of code?
The timeline varies depending on your starting point and resources. For most founders, expect 2-4 weeks for initial setup and 2-3 months to see meaningful results. I've seen teams move faster when they focus on one thing at a time rather than trying to do everything at once.