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Should you pick an industry or vertical to focus on first?

I have a concept for a web service that is general and applicable to a lot of people. Think email as a service.

I want to get thoughts on whether I should take it vertical (i.e. attack one particular industry) or just have it as a general service.

If I go vertical, how do you propose to do this? That is, should the messaging on the homepage be 'service for this and this industry', which will obviously alienate other possible industries, but, that is the nature of going vertical I guess. Or perhaps going vertical should be strictly in my approaching new customers and the home page should be kept general?

I'd love your thoughts on this. I understand it's a general topic since I'm not mentioning the idea, but, if you could provide any general thoughts, that would be appreciated.

all my best,
Aleks

40 Replies

Dave Angelow
0
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Dave Angelow Entrepreneur • Advisor
Board Member at HAND Austin
I'd suggest you create a survey or landing page to get input to the questions below. You'll get input from a broader ground than FD and likely a higher response rate Sounds like an exciting opportunity!! Dave Sent from iPhone
Gaurav Garg
1
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Gaurav Garg Entrepreneur
Aleks, My 2 cents.. I would recommend setting up a beach-head in a specific industry. Ideally, you will need to create a message specific to a industry, using their lingo. You need to solve a specific pain point within a niche. This will give you a specific market segment to target. Hopefully, your idea will appeal to the decision makers or you will quickly get feedback. After few wins, you may be able to claim victory in that segment and then repackage the product for the second industry and so on. IMHO, the days of creating MS Office (you can do anything with it) are gone. These days, everyone looks for an App to do something specific. As long as you do it very well, your app will catch fire. I have need Microsoft create a fantastic platform for Healthcare which is failing because it was based on the platform play. Best of luck! Gaurav
Aleksandra Czajka
0
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Aleksandra Czajka Entrepreneur
Freelance Senior Software Engineer, Developer, Web Developer, Programmer - Full Stack
Thanks, Dave.
However, I'm not trying to get answers from everybody. I want to query people who have experience in and passion for building businesses. These are the type of people that I want to discuss the topic with, not, have answer a few static survey questions.

Please let me know if you have any thought on taking a generic product vertical.

All my best,
Aleks
Jeb Stone > Analytics PhD
3
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Decision & Data Scientist / Experimental Psychologist / Business Intelligence
Hey Aleks, I wish you the best of luck with your idea. My own experience: I built a SaaS recommendation engine as a general service (Selloscope.com) a couple of years ago. Our sales have been terrible. Contrast that with all the vertical-specific recommenders out there, which seem to get news coverage all the time: Real-estate recommenders, book recommenders, music recommenders, etc. From a media coverage standpoint, it's just hard to write about general services; if you target a vertical, media gets to cover the industry and say how you make it better. My advice: Target a specific vertical that you already have the expertise and network connections to effectively sell into. Then worry about expanding from there. Best, -Jeb
Aleksandra Czajka
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Aleksandra Czajka Entrepreneur
Freelance Senior Software Engineer, Developer, Web Developer, Programmer - Full Stack
Thanks, Gaurav. Great points.

I don't think I would agree that the days of generic products are over. Think of facebook. That's generic. It's for everyone. LinkedIn, is a different version of facebook that is way more vertical.

I'm also looking for more of specific technical things to do. Like, for example, creating different landing pages for the different industries that would benefit from the product and outlining the specific solution for each industry individually on their corresponding landing page - while keeping the main home page generic.

Best,
Aleks
Aleksandra Czajka
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Aleksandra Czajka Entrepreneur
Freelance Senior Software Engineer, Developer, Web Developer, Programmer - Full Stack
Jeb,

Thank you for sharing your experience! This is very valuable.
To add to it, I find myself wondering whether your experience would be applicable to every web service product out there. (Perhaps this is for me to determine since I'm the only one that knows the idea). Imagine email. I mean, literally email. If you were to create email, would you ever say to yourself, ok, I have to go vertical now, and, risk alienating the majority of your market for at least the first few months?

And then, after this email idea becomes widely know in that industry, what then. You still want to keep that industry, but, if you re-brand to be able to accommodate a wider audience, how will your current market take that. Will they still use it? Or will they more likely say "they're no longer for us, we should move with a more specific product to our industry".

I'm very curious about the moves from 1. general idea, to 2. vertical product, to 3. general product.

A
Bill Kelley
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Bill Kelley Entrepreneur • Advisor
Business Mentor
There are multiple issues here. First: how are you funding your company? People who write checks want to see focus: a vertical or two and a plan to rollout into more verticals. Bootstrapped companies need to start where the margins are fattest and marketing costs lowest. 100% self funded companies can go where their leaders want.

I'm assuming you're in one of the first two categories, so it should be obvious that the "low hanging fruit" is where you go first. A segment that most needs your service is the best starting point.

People are pretty simple in their approach to a business service. Either it works 'out of the box' and makes them money or it doesn't. Pick your vertical and talk the language of the prospects in that vertical for quickest adoption. Then move on to the next.

You won't be ideally situated to attack all verticals. Some may be expensive or hard to address, so look for partners who are well established in those verticals. Better to get a lesser percentage of revenue from a specific vertical than to leave it for someone else to exploit.
Michael Hanson
2
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Michael Hanson Entrepreneur
Entrepreneur in Residence at Greylock Partners
I would make sure you are clear on whether your reasons for going vertical are product- or sales-centric.

Product-centric decisions would be specific feature development, integrations with external partners or data sources, or patterns of usage in a particular vertical. Those will affect your development schedule and budget, and will require discipline in prioritization and support.

Sales-centric decisions are more about where you choose to spend your PR, advertising, social, and direct sales effort, and have more to do with who you want to reach. In that case, you are crafting a message about why your technology is a good fit for a problem that people in a particular industry, region, or market have. In that case, you want to think about all your communication and sales channels, both inbound and outbound, to understand how your target vertical is going to learn about you and engage with your product and sales process. This speaks to your home page question -- you should know how (e.g.) a real-estate customer will find you and how you will engage with him or her. This probably means multiple landing pages and some SEO to make sure the right queries go to the right pages, as well as, potentially, a focused ad or PR campaign.

I wouldn't worry about "alienating" customers -- but I would worry about them concluding, in the first 20 seconds of their search, that you don't care about them. Lead with your value, and design your site to help people get to the right place fast.
Gaurav Garg
1
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Gaurav Garg Entrepreneur
Aleks,
Completely agree with your Facebook example. Albeit, Facebook started as a closed group (beach head) to solve one problem - get dates for grads. Eventually Facebook became everything to everyone.

Another case study could be DocuSign. DocuSign just acquired a company for real estate document management. Why did DocuSign acquire a real estate workflow management company? To become the biggest player in that industry.

I think we are approaching the topic from two different angles. You may be thinking execution (landing page etc), I am suggesting marketing strategy.

My experience comes from scaling IT consulting teams. While the enterprise technology remains same, we use industry specific language for marketing and sales. In my case, sales is easier if we start the conversation led by industry specific issue.

Cheers!
Gaurav
Jeb Stone > Analytics PhD
0
0
Decision & Data Scientist / Experimental Psychologist / Business Intelligence
Hey Aleks, I hear what you're saying about moving from a vertical to a general product. I'd answer that few products achieve much success without a strong sales team, and if you have a strong sales team, success in one vertical makes it easier to sell into others.
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