On this episode of Mostly Growth, the number one podcast in product monetization, Kyle and CJ dive into vertical SaaS and the “riches in niches” playbook. From Skimmer to Rock Auto to Epicor, they unpack why obscure software companies win, the TAM trap, product attach rate, month-one churn, and gross profit per location. Plus: front vs back office, marketplaces, competitive moats, and whether vertical AI is the next wave.

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SPONSORS:

HockeyStack is an AI platform for modern go-to-market teams that unifies sales, marketing, and customer data into a single system of action. With AI agents that prospect accounts, support reps, improve forecasting, and automate what’s already working, HockeyStack helps teams move faster without guessing. Trusted by companies like RingCentral, Outreach, ActiveCampaign, and Fortune 100 teams—learn more at https://www.hockeystack.com

RightRev is an automated revenue recognition platform built for modern pricing models like

usage-based pricing, bundles, and mid-cycle upgrades. RightRev lets companies scale

monetization without slowing down close or compliance. For RevRec that keeps growth moving,

visit https://www.rightrev.com

Tropic is an intelligent spend management solution that consolidates your spend data and processes into one unified offering, enabling insights and decisive action. From spotting hidden optimization opportunities to automating painful procurement workflows and giving you the best market data to turn vendor negotiations in your favor, Tropic combines smart insights with real human expertise to keep you ahead of the curve. Visit https://www.tropicapp.io/mostlymetrics to learn how.

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LINKS: 

Mostly Metrics: https://www.mostlymetrics.com

CJ on LinkedIn: https://www.linkedin.com/in/cj-gustafson-13140948/

Growth Unhinged: https://www.growthunhinged.com/

Kyle on LinkedIn: https://www.linkedin.com/in/kyle-poyar/

Slacker Stuff: https://www.slackerstuff.com/

Ben on LinkedIn: https://www.linkedin.com/in/slackerstuff/

https://www.rockauto.com/

https://www.mostlymetrics.com/p/the-top-metrics-for-vertical-saas-76a

https://www.mostlymetrics.com/p/owning-the-control-point

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RELATED EPISODES:

The Layer-Cake Playbook for Vertical SaaS Growth | with Roland Ligtenberg

https://youtu.be/yPxWvhPISKo

Scaling to $1B+ Revenue: From ServiceNow to Samsara | Dominic Phillips

https://youtu.be/vBY6WZBMljw

Why AI Hasn’t Hit Main Street Yet, According to Mangomint’s CEO

https://youtu.be/2D-eEPkDnPk

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TIMESTAMPS:

00:00:00 Vertical SaaS Riches in Niches

00:01:10 Skimmer & Hyper-Specific Operating Systems

00:02:27 The Layered Niche Opportunity

00:04:23 Intro

00:04:47 Defining Vertical vs. Horizontal Software

00:06:10 The TAM Trap & Multi-Product Strategy

00:07:45 Why Vertical Retention Is So High

00:08:33 Investing in Vertical SaaS Post–Product Market Fit

00:10:28 Word of Mouth, Low CAC & 95% Retention

00:10:27 Sponsors — HockeyStack | RightRev | Tropic

00:14:08 PartsTech: Zero Marketing Spend & Vertical Efficiency

00:15:02 Partnerships & Ecosystem-Driven Growth

00:16:12 Arbitrage Opportunities in Vertical SaaS

00:17:03 Vertical SaaS Business Models: Front, Back & Marketplace

00:17:47 Why System of Record Wins

00:19:27 Tech Refresh Cycles & Generational Shift

00:21:10 Building the Next Vertical SaaS: What Investors Want

00:22:03 Product Attach Rate vs. Monetizable SKU Expansion

00:23:00 Month-One Churn as the Retention North Star

00:25:32 Implementation During Trial to Lock in Adoption

00:26:14 Tracking “TAM Burn” and the Retention Waterfall

00:28:47 Gross Profit per Location as a True North Metric

00:30:02 Vertical SaaS Is Crowded—Vertical AI Is Next

00:31:30 Salesforce Army Deal Stock Drop

00:32:49 Anthropic’s Super Bowl Ad Strategy

00:35:33 Credits

#MostlyGrowthPodcast #VerticalSaaS #SaaSMetrics #GoToMarket #VerticalAI