How to build a $1M+ vertical SaaS business (step-by-step guide)
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vertical sass you've probably heard the name and you're probably like yeah i wish i can create a vertical sass that prints millions of dollars well i brought on the number one guy who talks about vertical sass he's got the vertical sass bible and uh he spills all his secrets on the step-by-step way to create a vertical sass this is a guy luke safinos He's got a vertical SaaS business that prints millions himself. He's a vertical SaaS advisor to Atomic, which builds billion-dollar businesses like his and hers. this might not be the most exciting podcast I've ever done. It might actually be a little bit boring. And that's the point. Vertical SaaS is boring, but that's why there's so much opportunity.
And we do use AI to come up with some fun ideas. So watch the whole thing and take some notes. Enjoy. All right, I got my man Luke to come on and teach us about vertical SaaS, vertical software. And I know it sounds boring, but if you stick to the end of this, you're going to come out with a lot of knowledge. He's going to teach us the vertical SaaS Bible, and I'm excited to dig right into it.
Awesome, Greg. Thanks for having me, man. Looking forward to it.
So where do we start? Do we want to start with... Why vertical SaaS?
Yeah, let's do that. Let's start with why vertical SaaS. So I think my thesis on this is relatively simple and straightforward. And vertical SaaS isn't something that's new. If you look back all the way to when first people really started creating software, use cases were all tied to businesses. It was tied to how can we Better optimize, better, you know, create more efficiency, right? Create cost savings, time savings, revenue lift, blah, blah, blah. But I think somewhere in the last kind of 10, 15 years, a lot of that got lost and we got into the... sexy you know vc let's chase massive billion multi-billion dollar opportunities and go unicorn hunting and so what happened is you had a bunch of founders that moved away from industry-specific software well why because they're they're market constrained you're only going after one market
And, you know, for a VC, there's just not a lot of individual industries that can create these extraordinary outcomes that they need to see. And so all these founders started chasing really broad kind of startup concepts. And obviously you had huge winners in that, but you had a lot more, you know, grave sites. So I've looked really, I spent the last decade building, you know, a vertical SaaS business in trade schools, which is probably one of the most like, boring industries you can contemplate, but there's so much opportunity for still today in 2024 to not go build the shiny, sexy thing with limitless market size and hone in and focus on one industry, one type of business and build software tailored for them. and build really great businesses that are enduring strong retention.
You know, they don't necessarily have the growth rate that the VC guys want to see in most cases, but you can build great businesses in these settings. So I'm obviously bullish on it. I've dedicated my career to it and that's what I do.
Cool. Yeah. And it's working like you're making millions of dollars a year in revenue. And through the process, I think, and that's why I wanted to bring you on is you've kind of figured out a playbook for the different types of vertical SaaS businesses, how to think about wedges, which is like a wedge product, which is something I really would love for you to get into. How to think about picking a market for your vertical SaaS. And maybe I'd also just love you to go through pricing. How do you think about pricing your vertical SaaS? So where do you want to start?
Yeah, so let's start on... how to dive in and actually start one of these things. And so I think it's much more of a, I think vertical SaaS is much more of a science than an art. I think people believe starting a software business is this artistic thing where you gotta come up with some crazy big idea and you gotta hold it close to the vest and you can't tell anybody about it and you gotta raise millions and millions of dollars. I think it's a very like mathematical scientific approach in vertical software.
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