SaaStr

MAY 19, 2020

Focusing on Segments That Are Thriving. Not enough SaaS companies have segmented their sales teams and marketing efforts into Green, Yellow and Red market segments. It’s worked for Zoom and Slack. Maybe not even most of you, not really.

Strategy 348

Strategy Travel Market Segmentation Onboarding 348

SaaStr

FEBRUARY 16, 2023

Another way to look at it is any vendor sort of has to ignore any market segment that is < 10% of their revenues. Many they don’t do mobile as well, or social as well, or whatever. 10+ year old platforms are powerful. But they were architected for a different age. It’s just immaterial.

Startup 303

Startup Marketing Healthcare SaaS 303

Tom Tunguz

DECEMBER 26, 2022

Vertical software companies pursue a particular market segment like car dealership management or hotel management software. A former venture capitalist, Mark Leonard started Constellation in 1995 with $15m of outside investment & a goal of buying vertical software companies with a moat & good unit economics.

Software Review 296

Software Review Investment Software Acquisition 296

SaaStr

JUNE 15, 2022

No dominant market segment. While Sprout Social is going more upmarket per the prior point, no one segment dominates it — allowing them to span from $89/month customers to big ones like Salesforce. #5. Not going massively enterprise, but enough to move the needle. #4. 15% customer growth fuels 36%+ CAGR ARR growth.

Scale 68

Scale SMB Market Segmentation Scaling 68

SaaStr

FEBRUARY 6, 2021

Third, it’s important to be in a segment where competition can’t kill you. Because it will take you 4 years >longer< to get to $10m ARR, it’s important to be in a market segment where direct competition is weak. This doesn’t mean it isn’t there. It just means that in your sweet spot of deals … you usually win.

Sales Hiring 361

Sales Hiring Venture Capital Scale SaaS 361

SaaStr

FEBRUARY 20, 2024

If you’re growing, generally, you’re focused on a market or market segment that’s also growing. economy remains strong, the stock market is at all-time highs, AI is fueling Cloud growth, and yet … many folks are cutting their tech budgets, and especially, those that sell to startups are struggling. Not shrinking.

Churn 281

Churn Market Segmentation Cloud AI 281

SaaStr

MARCH 30, 2024

One of the biggest mistakes I see after $1m in trying to enter new market segments, new verticals, where you have zero traction. Let me list some of the ones I see most often going from say $1m to $10m in ARR: Chasing the Shiny Penny. It’s one thing to invest in an area where only 5% of your business is today.

Scaling 306

Scaling Revenue Underperforming Technical Team Market Segmentation 306

SaaStr

SEPTEMBER 3, 2023

It gets you to build that new edition, go upmarket, add more value, compete in new market segments. When you have to earn more revenue from the base. But late 2022 and 2023 was different: we enforced more revenue from the base. We didn’t earn it. We forced it.

Scale 298

Scale Market Segmentation Customer Success Pricing 298

SaaStr

JULY 6, 2020

If yours is, invest more there and worry a little less about pressure to do new things, new market segments, etc. Double down there. You can screw up a lot of other things. Most products are not beloved. 4/ If you need a little more $$$, and you are doing well — we will help. I needed just a little more money, but not a ton.

Part-Time VPE 329

Part-Time VPE Scale Market Segmentation Finance 329

SaaStr

MAY 28, 2021

A market or at least, market segment, that if small now will be huge. But CRM is a big market. The ability to get to that future, no matter what. To recruit amazing teams. To break things and fix them. To pick themselves off the ground, 5, 10, 50 times. To never, ever quit. Related to seeing the future.

SaaS 328

SaaS Market Segmentation Product Marketing Marketing 328

SaaStr

JULY 18, 2021

A great look back at how Chime built its brand, where it struggled, the market segment it wanted to win, and how it scaled. #7. . #6 “Ringing the Bell on Competition with Chime’s CEO Chris Britt” OK this session was just A+. I loved it.

Scale 290

Scale Finance Market Segmentation Enterprise 290

SaaStr

MAY 10, 2024

So HubSpot had a great quarter, despite there being many challenges in the sales and marketing segments overall in the past 18 months: $2.5B ARR 23% Growth 22% Customer Growth 15% Operating Margins (non-GAAP) That’s about as good as it gets. But … that doesn’t mean it got easier.

B2C 288

B2C Mobile B2B Subscription 288

SaaStr

FEBRUARY 5, 2021

certain market segments, or verticals, or use cases, or workflows). A slightly improved version of an industry leader is rarely enough. Even the top leaders have gaps though, gaps that matter to paying customers. Important pieces of white space that they just aren’t chasing (e.g., Are you sure?

Startup 279

Startup SaaS Interviewing Market Segmentation 279

SaaStr

MARCH 8, 2020

2 often has a better product, at least for some market segments. #2 But, #2 can win with just a 30% better product than #1, if #2 is already a leader and in the game. Post-traction, with a brand. Then, it’s down to which is better for me, #1 or #2. #2 2 Can Win as a Better Partner. See above. #1s 1s can get arrogant, worst case.

Innovation 322

Innovation Market Segmentation Pricing Branding 322

Tom Tunguz

NOVEMBER 18, 2019

I found an excellent list in Kotler on Marketing that I adapted for startups. Which market segment should we pursue? How many of these questions can you answer about your business? What is our company’s story? What is our pitch? How do we differentiate our product from competition?

Product Marketing 267

Product Marketing Startup Marketing Interviewing 267

SaaStr

JANUARY 2, 2021

The #1 biggest mistake I see from $1m to $10m ARR is chasing new market segments, new categories, new areas where you have 0 or almost no traction. You’ve gotten 50, 100, whatever # of businesses to pay you $1,000,000 a year. There are 10,000 new apps out there. It’s “impossible” to get to $1m. You did it. We all want to grow faster.

Sales Hiring 312

Sales Hiring Headcount Pricing Market Segmentation 312

Tom Tunguz

SEPTEMBER 12, 2022

Ten years ago today, I wrote a post titled “ Choosing market segments on customer profitability. ” How healthy are the business’s underling customers? Today, that question matters more because of the recession than at any point in the last decade. Selling to very profitable customers benefits a startup.

Startup 246

Startup Market Segmentation Pricing Enterprise 246

SaaStr

MARCH 30, 2021

Win rates should go down as you scale, and push into new market segments. Win rates in fact should go down as you do more marketing. Marketing will bring in leads that are tougher to close. In fact, a very high win rate often means you aren’t really doing any effective marketing at all.

Scale 299

Scale Market Segmentation Leadership Engineering 299

Tom Tunguz

AUGUST 14, 2024

Executed properly, this strategy could become a competitive differentiator in a market segment, enough to win disproportionate market share. AI has the potential to change the unit economics of a business, expanding addressable segments with better efficiency.

CTO Hire 224

CTO Hire Sales Hiring Outsourced Development CTO 224

SaaStr

MARCH 25, 2021

Shopify is #1 in so many market segments, but for “bigger” SMBs BigCommerce (and perhaps less-custom enterprise deployments) is arguably #2 to Shopify. It’s much smaller than Shopify, at $170m ARR vs $3B+ ARR, but it’s still plenty big for us to learn a lot from this big but not #1 player in the market.

Outsourcing Services 295

Outsourcing Services Payments Merchant Services SaaS Payments 295

SaaStr

JUNE 15, 2023

Small markets are often, though not always, less crowded. If that’s the case, sometimes starting there and then expanding into a larger market segment can work out well. A small segment of a large market is often where most of us star t. A good example below in e-signatures.

Sales Recruiting 246

Sales Recruiting Marketing Sales Hiring Market Segmentation 246

SaaStr

JANUARY 13, 2022

And as the number of SaaS companies continues to grow and explode, and as SaaS changes and penetrates more and more market segments … it seems like there are more and more exciting SaaS companies without a natural acquirer. The fourth had an IPO, eventually. At least that I can see, or believe.

Market Segmentation 279

Market Segmentation Mobile Technology Cloud 279

SaaStr

JANUARY 15, 2021

Segmentation allows you to find cost-effective marketing channels for a specific audience and will help reduce some of the waste. In fact, Venture Harbour CEO Marcus Taylor said that he saw an 89% sales uplift & a 58% increase in average order value due to marketing segmentation.

Software Review 277

Software Review Market Segmentation Engagement Sales 277

Tom Tunguz

FEBRUARY 11, 2019

Jonathan asked: Can you share trial length by market segment? Consequently, earlier startups might have a lower conversion baseline, whereas a business at $20M in ARR has spent several years optimizing trial. But statistical tests indicate that the differences in conversion rates aren’t meaningful. This was a good intuition.

Payment Services 207

Payment Services SMB Benchmarks Market Segmentation 207

SaaStr

OCTOBER 6, 2019

” This is when you compete aggressively not only in the market segments where you have a big competitive advantage, and usually win (which usually has a much cheaper CAC) … but to win big, you also use your $20m, $40m, etc. in venture capital $$$ to compete in spaces where you generally lose.

Sales Hiring 270

Sales Hiring Scale Sales Venture Capital 270

SaaStr

DECEMBER 22, 2023

Discovering the entire market and mapping out all potential verticals early in the process. The incredible power and value of the mid-market segment. His five lessons are: A single metric that helps guide decisions of when to pivot, when to iterate, and when to pivot. Going multi-product early.

Scale 311

Scale Scaling Strategy Sales Hiring 311

SaaStr

DECEMBER 27, 2023

The LMS market segment is big, and Docebo thinks about it in two folds. At Docebo, 65% of their customers use it both externally and internally. It’s essential that messaging doesn’t get confused when communicating with these different use cases.

Sales Hiring 282

Sales Hiring Scale SMB Outsourced Development 282

SaaStr

JUNE 7, 2023

A few enterprise clients continued to come in through inbound, but the company carved out a winning market segment with the under 5K employee focus. Customer Impact : A much better PMF for SMB & Mid-Market customers. “You Twelve months later, WorkRamp went from 18 new logos per quarter to 87 new logos in a quarter.

Scale 246

Scale Scaling SMB Marketing 246

The Angel VC

JUNE 28, 2017

Michael Skok added the important element of the “Minimum Viable Segment” in this article , pointing out that “your product isn’t going to fit the entire market from day one. Minimum Viable Segment (MVS) is about focusing on a market segment of potential customers who have the same needs to which you can align.”

Sales Hiring 237

Sales Hiring Scale Product Marketing Startup 237

Tom Tunguz

APRIL 24, 2017

They both address the same market segment, but have approached it in radically different ways. The critical observation from this story is that each company matched its product and go to market strategy and stuck to it. Geotab was founded 4 years before Fleetmatics and is a bit smaller.

Sales Hiring 186

Sales Hiring Strategy Venture Capital Marketing 186

SaaStr

AUGUST 5, 2021

For instance, don’t study aggregate productivity within sales—talk about productivity within market segments and things like retention, attrition, investment, etc. . . Aggregates are the enemy of excellence. This is what Sudheesh calls the tyranny of averages. Place community at the core.

Scale 264

Scale Enterprise Finance Travel 264

Intercom, Inc.

DECEMBER 4, 2019

Today, however, the car industry has multiple brands offering different value propositions targeting specific customer segments. Brand architecture is used to help maintain alignment as you target different market segments. 3 Brand stretch. In order to grow new revenue streams, companies look to new product development.

Branding 209

Branding Underperforming Technical Team Technical Review Airlines 209

SaaStr

JANUARY 28, 2022

The go-to-market segment worked together on key metrics across the revenue board. Here are three things that helped 6sense reach this mark and beyond: Defining their revenue operating model by hiring for RevOps and not taking the common DevOps and SalesOps approach. Building an outbound motion that captures demand efficiently.

Scale 241

Scale Sales Hiring Scaling Sales Recruiting 241

Intercom, Inc.

OCTOBER 22, 2018

Your product may do different jobs for different market segments. The job-to-be-done of a Snickers bar is to provide energy and sustenance, hence the tagline, “You’re Not You When You’re Hungry” . Onboarding should be tailored for each of these jobs.

Onboarding 188

Onboarding Sales Hiring Market Segmentation Branding 188

Baremetrics

MAY 26, 2021

Value-based: This segment is grouped by the economic value the group seeks. Needs-based: This grouping is defined by each segment's particular needs. More sophisticated market segmentation strategies look at a combination of these models, or they mix and match criteria to come up with in-depth marketing insights.

Social Media 105

Social Media Market Segmentation B2C Churn 105

SaaStr

MARCH 8, 2024

Another mistake people make is going after an SMB segment when there’s a good enough free alternative. The reality is that any market with a good enough free alternative to the SMB-Mid-Market segment isn’t a compelling market. Overall, every company should try to increase the value for customers over time.

AI 273

AI Artificial Intelligence Pricing SaaS 273

Tom Tunguz

AUGUST 19, 2012

The first step in developing a sales strategy is to build a robust market segmentation. I’ve used data from the US Census to develop a segmentation that reveals some surprising facts about the SMB market and may help inform your startup’s sales strategy. Charts 3 & 4: The 4 market segments by revenue.

Marketing 100

Marketing Sales SaaS Market Segmentation 100