Verticalizing a horizontal software play

There’s a lot of buzz on the web right now about vertical software. What the startup nerds mean with vertical software, is software that has been specifically built and designed with a specific niche market in mind and has been marketed to that niche.

Although I do believe that vertical software makes tons of sense (if you play it well, you can win big), I believe that verticalizing a horizontal software play is even more interesting. It can help you to win in a variety of verticals. I also think that this model is at peak value in markets with a lot of logos that are not fully digitised yet and have non-nerd ICPs, such as the SMB market.

What do I mean with verticalizing horizontal software?

Pretty simple. The concept of verticalizing a horizontal software play equals personalizing (most of) the 4Ps for a specific market or niche in mind without losing the benefits of economies of scale. A bit like 'different' car brands (Volvo, Polestar, Lynck & Co,...) that share the same infrastructure but have completely different distribution motions.

Why is verticalizing horizontal software so great?

Mainly because it allows you to (potentially) win within different niches without having to go through the excruciating pain of building new software (over and over again). Based on a shared marketing, sales, and customer success framework that is repeatable, scalable and forecastable. If executed properly it can be a crazy efficient and effective way to win big in different markets.

How do you go about verticalizing horizontal software

Step 1: Make sure that your vision and the architecture of your product is relevant for the different verticals that you want to win over.

!: If this is not the case, then your product verticalization will be a nightmare.

To understand how to forge such a product vision and product architecture you need to be super close and in touch with the broader market and the specific verticals that you want to go after. It requires you to understand what is specific for your broader market yet shared for the different verticals within that market.

To use Willow as an example: The vision for our product is based on 3 product mantras that are relevant for a wide variety of verticals within our bigger SME market (B2B focused Professional Service Providers).

1. They all don’t have a lot of time to post on social media => Mantra 1: Cutting the time to post in half
2. They all lack the inspiration to post on social media => Mantra 2: Always know what to post
3. They don’t know what they need to measure on social media => Mantra 3: Getting ROI on your social media

These three mantra’s are super specific within the market of social media software but are very shared within our bigger SME market. Once established, it’s then about defining a product architecture that is also common over the different verticals.

To use the Willow case once again: Our product has 3 main pillars

1. Structure: A social media content calendar that we transform into a chronological to-do list
2. Inspiration: Social media post templates and a hub that aggregates relevant content for social media
3. Analytics: An easy to understand yet exhaustive set of metrics that show how the social media presence is evolving

These three pillars are one on one relatable to our product vision and therefore also one on one linkable to our broader market and the verticals we go after. Let me put two and two together ;).

1. They don’t have time to do social media: Content calendar with clear and actionable to do list, Scheduling and planning social media posts ahead, social media templates to start with, content that they can immediately share on their channels, easy to understand analytics (no necessity to dig in deep). All meant to make the whole posting on social media quicker
2. They don’t know what to post on social media: Caption autocomplete and caption generator, social media post templates, relevant content to share on their social media channels, social media calendar blueprint that immediately suggests what they should post (birthdays, holidays, specific days,…)
3. They don’t know what they need to measure on social media: Our proprietary social media health score indicates how successful their content mix, their consistency and their employee contributions are (what needs to be done properly to be successful), each post gets a score based on engagement, impression and activity, and we visualise the top line metrics (engagement, impressions and follower growth) super straight forward.

Step 2: Verticalize your marketing and sales

The completion of step 1 is a very important part of making the verticalization scalable. However, this will most likely not help you to make sure different verticals that you want to go after believe that you are the expert for their market (aka the vertical). This is where your marketing, your sales and your customer success kick in.

• Verticalizing your marketing

To put yourself front and center within different verticals, you will need to build a marketing blueprint that can be easily personalized and copied to those different markets. You need to act, walk and talk like the ICP/vertical you are going after and marketing can be a very strong catalyst in achieving this.

To use Willow as an example: One of the verticals we focus on are lawyers. So we create marketing assets specially relevant for this vertical. Based on our vertical expertise we know that lawyers look at social media mainly to (1) attract new employees and retain existing employees, (2) be and remain top of mind with existing clientele, and (3) position themselves as experts in certain very specific legal domains. These insights then led to the creation of specific marketing assets such as:

An e-book titled How to win at social media as a lawyer ??

Social media campaigns focused on linking lawyers and social media ??

• Verticalizing your sales

Another important lever you can pull to create the necessary credibility and success within an industry is personalizing your sales apparatus. By focusing specific teams within your sales department on specific markets you allow your teams to develop intimate market knowledge. Over time this will lead to sales teams that are highly effective/efficient throughout the sales journey as they know what the challenges are within those specific markets and how they need to approach calls, demos and follow-ups.

At Willow we verticalize our sales team by working with what we call sales factories. Each factory focuses on one (or two) verticals and covers the full sales journey from start to finish. This focus has led to BDRs and AEs that are very knowledgeable about the verticals on which they focus and leads to awesome conversion rates across the funnel.

By continuously talking to each other within our sales factories and through weekly sales meetings we are able to further finetune our setup by sharing insights out of calls and demos.

Partially thanks to this very focused way of working over sales and marketing, our prospects (independent of the vertical) share quite often that they are amazed by our understanding of their business and the challenges they’re faced with. Of course this helps a lot in driving great conversions across the funnel, but it also makes sure that they (and we) know if and how social media can help with tackling those challenges.

Step 3: Verticalizing your customer success

It’s one thing to have a very vertical-focused sales and marketing motion that drives conversions. However, to ensure that customers stay as long as possible you need to make sure that those customers within those different niches are continuously reminded about the fact that they made the right choice and that they get value on an ongoing basis. To enable those last two components, it can help a lot to - also - verticalize your customer success.

With Willow we do this by having specific customer success members (we call them our social media experts) focus on specific niches. In the analogy with sales and marketing, this helps to gain intimate market knowledge within our team of social media experts. Based on that knowledge gathering, our customer success team then serves as a feedback loop for product, sales and marketing. This helps with the creation of marketing assets such as e-books and webinars, but also serves as new insights for the sales teams and for the product team.

In the near future we are even planning to launch specific coaching curricula that will tackle vertical specific aspects (e.g. how to build thought leadership as a lawyer).

Ending thought

After having evaluated the concepts of horizontal and vertical software plays, I came to the conclusion that both are not mutually exclusive. The analogy I made a bit earlier about 'different' car brands sharing the same infrastructure shows that the concept of verticalizing horizontal products has been around for quite a while already. It's definitely not the easiest of software plays, as it requires a pretty complicated and well-thought through vision and architecture. That being said, the upside is pretty stellar too.