At Connect we trust Product.
Our core belief is that a product people love is one of the most powerful ingredients for building an enduring and valuable technology company.
So our excitement doubles when we find a company that has built not one, but two products people love. Over the years I developed a thesis for a hybrid model of b2b SaaS that combines two products in one. I like to call it Super SaaS.
I characterize it as a T-shaped proposition. A horizontal tool superpowered with a vertical something: a financial product, a transactional product, a productized professional service. Paraphrasing Chris Dixon, Come for the something, stay for the tool. Or vice-versa. The horizontal layer is the workflow UX wrapped around the vertical layer, which is the industry-specific technology (ex. Fintech, Travel Tech or HR Tech).
Here some great examples of Super SaaS in the Connect portfolio that combine horizontal and vertical products.
- Lanes&Planes: travel management software+ booking product
- Soldo: spending management software+ payment product
- Side: workforce management software+ temp workforce marketplace
- Charlie: HR software+ HR services
- Accountable: accounting software + tax advising automation
- Bellman: property management software + property managers services
- Oyster: HR software + international employment and payroll services
Super SaaS companies have superpowers.
- First superpower: superior differentiation in the customer experience over a “tool-only” proposition. Super SaaS specializes in the vertical job to be done and wrapped the user experience into the related business workflow.
- Second superpower, defensibility. We all know how hard it is to build a best-in-class SaaS product. It requires an extensive set of skills, including architecture and software development, UX and UI design, user onboarding, and more. In the Super SaaS model, this is only half the challenge. Companies must also perfect the customer experience in their vertical layer. Often, the product are very hard to execute per se: they are marketed in regulated industries (eg. banking products), require incredible domain expertise (Travel-tech), and run thin margins. In the case of Bellman, it involves managing property managers and buildings, landlords, third parties suppliers.
- Third superpower: double revenue streams. You have both the traditional SaaS recurring fee for the use of the software, as well as the transaction fees for enabling the purchase of a service or the fee from providing the service. In some cases, like with Lanes&Planes and Bellman, the two fees are merged into one.
I believe the Super SaaS approach will play a relevant role in the future of B2B software solutions and I am very bullish on the potential of Super SaaS to create tremendous value for every business, from small to large enterprises.
If you are a super founder building a T-shaped SaaS and you want to strategize about it, reach out here 👍🏻