Horizontal positioning says "we help businesses grow." Vertical positioning says "we help FinTech companies launch payment products in European markets." The second one is harder to say no to if you are a FinTech founder.
Going vertical first does not mean staying vertical forever. It means concentrating your limited resources on a beachhead where you can build deep expertise, strong references, and word-of-mouth. Once you own one vertical, expanding to adjacent ones is much easier because you have proof that your approach works.
The math supports this. A company targeting "all SaaS" might convert 1-2% of leads. The same company targeting "B2B SaaS in financial services with 50-200 employees" might convert 8-12% because the messaging, case studies, and product fit are all tighter.
Pick the vertical where you have the most unfair advantages. Ask these questions:
Score each potential vertical on these four criteria. The one that scores highest is your starting point. Do not agonize over this decision for months. You can always expand later. The worst outcome is not picking the wrong vertical; it is staying horizontal too long and not building depth anywhere.
A vertical playbook is a 5-10 page document that your sales and marketing teams use to execute in a specific industry. It contains:
Do not expand to a second vertical until the first one is working. "Working" means you have at least 5-10 customers, a positive win rate, and referenceable accounts. Expanding too early dilutes your positioning without building depth.
When you do expand, pick an adjacent vertical. If you started in FinTech, consider InsurTech or RegTech. Adjacent verticals share buyer characteristics, terminology, and sometimes the same conferences and publications. This makes the transition cheaper than jumping to a completely different industry.
Each new vertical gets its own playbook, but you can reuse 60-70% of the structure. The ICP details, messaging, and competitive landscape are different, but the format and sales process are the same.
Start with one. Add a second when the first is generating consistent revenue and you have 5+ referenceable customers. Most companies under $5M ARR should focus on 1-2 verticals at most.
When you have 5-10 customers, a win rate above 20%, and at least 3 referenceable accounts in your current vertical. Also when you start seeing diminishing returns on outreach in your current vertical.
Yes, and they should. Even if your product serves any industry, your marketing and sales should be vertical-specific. A CRM can serve any company, but Salesforce built industry-specific editions to win each vertical.
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