The Top Metrics for Vertical SaaS Companies
Mostly Growth
Is Vertical SaaS Still an Arbitrage?
Kyle argues vertical SaaS has gotten competitive and proposes vertical AI as the next, larger TAM opportunity.
On this episode of Mostly Growth, the number one podcast in product monetization, Kyle and CJ dive into vertical SaaS and the “riches in niches” playbook. From Skimmer to Rock Auto to Epicor, they unpack why obscure software companies win, the TAM trap, product attach rate, month-one churn, and gross profit per location. Plus: front vs back office, marketplaces, competitive moats, and whether vertical AI is the next wave.
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SPONSORS:
HockeyStack is an AI platform for modern go-to-market teams that unifies sales, marketing, and customer data into a single system of action. With AI agents that prospect accounts, support reps, improve forecasting, and automate what’s already working, HockeyStack helps teams move faster without guessing. Trusted by companies like RingCentral, Outreach, ActiveCampaign, and Fortune 100 teams—learn more at https://www.hockeystack.com
RightRev is an automated revenue recognition platform built for modern pricing models like
usage-based pricing, bundles, and mid-cycle upgrades. RightRev lets companies scale
monetization without slowing down close or compliance. For RevRec that keeps growth moving,
visit https://www.rightrev.com
Tropic is an intelligent spend management solution that consolidates your spend data and processes into one unified offering, enabling insights and decisive action. From spotting hidden optimization opportunities to automating painful procurement workflows and giving you the best market data to turn vendor negotiations in your favor, Tropic combines smart insights with real human expertise to keep you ahead of the curve. Visit https://www.tropicapp.io/mostlymetrics to learn how.
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LINKS:
Mostly Metrics: https://www.mostlymetrics.com
CJ on LinkedIn: https://www.linkedin.com/in/cj-gustafson-13140948/
Growth Unhinged: https://www.growthunhinged.com/
Kyle on LinkedIn: https://www.linkedin.com/in/kyle-poyar/
Slacker Stuff: https://www.slackerstuff.com/
Ben on LinkedIn: https://www.linkedin.com/in/slackerstuff/
https://www.mostlymetrics.com/p/the-top-metrics-for-vertical-saas-76a
https://www.mostlymetrics.com/p/owning-the-control-point
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RELATED EPISODES:
The Layer-Cake Playbook for Vertical SaaS Growth | with Roland Ligtenberg
Scaling to $1B+ Revenue: From ServiceNow to Samsara | Dominic Phillips
Why AI Hasn’t Hit Main Street Yet, According to Mangomint’s CEO
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TIMESTAMPS:
00:00:00 Vertical SaaS Riches in Niches
00:01:10 Skimmer & Hyper-Specific Operating Systems
00:02:27 The Layered Niche Opportunity
00:04:23 Intro
00:04:47 Defining Vertical vs. Horizontal Software
00:06:10 The TAM Trap & Multi-Product Strategy
00:07:45 Why Vertical Retention Is So High
00:08:33 Investing in Vertical SaaS Post–Product Market Fit
00:10:28 Word of Mouth, Low CAC & 95% Retention
00:10:27 Sponsors — HockeyStack | RightRev | Tropic
00:14:08 PartsTech: Zero Marketing Spend & Vertical Efficiency
00:15:02 Partnerships & Ecosystem-Driven Growth
00:16:12 Arbitrage Opportunities in Vertical SaaS
00:17:03 Vertical SaaS Business Models: Front, Back & Marketplace
00:17:47 Why System of Record Wins
00:19:27 Tech Refresh Cycles & Generational Shift
00:21:10 Building the Next Vertical SaaS: What Investors Want
00:22:03 Product Attach Rate vs. Monetizable SKU Expansion
00:23:00 Month-One Churn as the Retention North Star
00:25:32 Implementation During Trial to Lock in Adoption
00:26:14 Tracking “TAM Burn” and the Retention Waterfall
00:28:47 Gross Profit per Location as a True North Metric
00:30:02 Vertical SaaS Is Crowded—Vertical AI Is Next
00:31:30 Salesforce Army Deal Stock Drop
00:32:49 Anthropic’s Super Bowl Ad Strategy
00:35:33 Credits
#MostlyGrowthPodcast #VerticalSaaS #SaaSMetrics #GoToMarket #VerticalAI
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