Orthogonal SaaS

We’re familiar with horizontal SaaS (functional usage for marketing, sales, customer success, etc. that can be used by companies across a variety of industries) or vertical SaaS (industry-specific software), but what about orthogonal SaaS? This phrase refers to software products that sit at the intersection of two or more functional vectors within an organization, like product and sales for example. Candidly, I can’t really take credit for the phrase, as I’ve been inspired heavily by Dan Romero’s thoughts on the Internet. Here are a few concrete examples I can share:

• Vendor Comparison: Make it easy to set parameters you’re evaluating for and information about vendors. Crossover of product and operations.
• Freelancer Permissioning: Set access guidelines for any external parties coming into an organization (GitHub repos, Slack channels, etc.) that turn on and off automatically. Crossover of HR and product.
• Handoffs and Offboarding: Make it easy for employees changing positions or amicably leaving to easily pass of knowledge and responsibilities. I tweeted about this recently. Crossover of HR and operations.

Orthogonal SaaS probably sits as a subset of horizontal, but there’s an emphasis on recurring and hyper-specific functions. A benefit for a horizontal SaaS business is a large total addressable market because its industry agnostic. Vertical SaaS companies can take advantage of product focus and sales and marketing efficiency. Orthogonal SaaS could theoretically pull from the best of both worlds here.

It’s been well documented, but companies like Slack, Dropbox, and Airtable really shifted the conversation on go-to-market and strategy for SaaS businesses, unleashing a ‘prosumer’ wave. Instead of selling to CIOs in large enterprises, software companies targeted users or groups within organizations with freemium models and self-service onboarding. Enterprise companies can scale in a consumer form.

On the subject of orthogonal SaaS, there are a few challenges I could foresee. One is that these types of companies can open themselves up to significant platform dependency issues. Say it heavily relies on a payroll integration, what happens if Gusto doesn’t want to play nice anymore? Furthermore, within the ‘prosumer’ lens, how do you scale beyond serving startups and tech companies? What does a robust enterprise sales organization look like for this type of business?

Nevertheless, I am eager to see more of these hyper-specific SaaS products that fit nicely into organizational workflows. Even if they don’t manifest themselves as companies, but rather as tools, there’s always room for efficiency improvement.

This post was part of a larger series I wrote at the end of 2018. You can check out the other ones here. If you’d like to get in touch, you can reach me at aashaysanghvi[at]gmail.com.