What is Vertical Market Software vs Horizontal?
Differences between horizontal and vertical market software
90% of business acquisitions fail.
But there are exceptions.
Mark Leonard of Constellation Software has built an empire buying 500+ vertical market software (VMS) .
And turned $25 million into $40 billion.
What are these magical niche software businesses...
Software falls into two buckets::
Horizontal software - can be used across industries
Examples:
- Excel
- Slack
- Zoom
- Salesforce
Vertical software - built for a specific industry
Examples:
- Scheduling for bowling alleys
- Invoicing for magicians
- CRM for dentists
Horizontal Software
- Focus on a category
- More competition
- Big addressable market
- Big upside, exit potential
- Expensive to acquire customers
- Expensive to compete on features
This is where VC & big tech thrive.
Vertical Software
- Focus on a category in an industry
- Don't have to invest as much in features
- Cheaper to acquire customers
- Less competition
- Smaller market
- Lower upside
This is where bootstrappers & holdcos thrive.
Want to learn how Mark Leonard built his empire?
Here is my operating manual on him & Constellation.
We cover everything you could ever want to know.
