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Every VC wants to invest in the next horizontal platform, but they’re scared. So they all offer the same advice: choose a vertical, prove it out, then expand horizontally.
This is bad advice and a huge mistake.
This is bad advice and a huge mistake.
Going vertical will make early stage go-to-market easier...but you’ll win the battle and lose the war.
Imagine: you’re building a spreadsheet that acts like a database (
), but you’ve decided to focus in on a single use case. The CRM.
Imagine: you’re building a spreadsheet that acts like a database (
), but you’ve decided to focus in on a single use case. The CRM.
You start acquiring CRM users. Learn where they hang out online. Optimize your messaging. Tune the funnel. How many of those lessons are generalizable? How long will it take your team to unlearn the wrong ones when you go horizontal?
Your customer facing teams are fielding CRM-specific feature requests. They’re pushing to prioritize them. How many of those features are aligned with your vision for the horizontal product? How long until you build a feature that, inadvertently or not, undermines that vision?
Selling a horizontal product is complicated, and requires flexible sales reps, outstanding enablement and a killer ops function. How well will your CRM-selling team evolve when you decide to go horizontal all of a sudden?
In other words, as alluring as starting with a vertical sounds, it’s a siren song. If you want to go horizontal, you need to swing for the fences (and find some investors who are willing to swing for the fences, too)!
