vs. Sermo
Doximity
Verified real-name profiles, pre-built from records
- What it did
- Epocrates founders launch a real-name network (2010-11)
- Sermo
- Anonymous handles over a license check (2006)
Vertical Specialization
What is Vertical Specialization?
Vertical specialization is a strategy of building for one customer industry, such as restaurants, dental practices or drug makers, instead of selling a general product to every industry. The workflows, rules and records that industry needs ship in the standard product, so customers need much less adaptation than with a horizontal alternative.
Also calledvertical SaaSvertical market softwareindustry specialization
How Vertical Specialization works
General-purpose software leaves each customer to bend the product to its own rules. A specialist builds those requirements into the standard product and learns from every implementation in the same industry, so customers need far less adaptation. Veeva launched a CRM only for drug makers in 2007, with FDA limits on sales rep conduct and sample tracking built in, while Oracle sold Siebel CRM across industries. Toast chose busy restaurants over horizontal small-merchant systems.
The cost is the market given up, since the company's reach stops at one industry's size.
Pharma sales teamsFDA rep rules, sample tracking, offline reps
Which CRM fits?Adapt a general CRM or buy specialist
Oracle Siebel CRMCross-industry; drug makers ran heavily customized installs
Veeva CRM, 2007Pharma rules built in, updated every four months
How companies won with Vertical Specialization
From the win chains in Strategy Canon case studies: what the winner did, and what its rival did at the same step.
vs. Jobber
ServiceTitan
Built inside plumbing businesses, for plumbing businesses
- What it did
- Three years building at Mr. Rooter before the 2013 launch
- Jobber
- Built with an Edmonton painter (2010-11); one plain quote-to-invoice workflow for small crews across dozens of trades
vs. Revel Systems · 2013–15
Toast
All in on busy restaurants, built on site
- What it did
- Chose busier restaurants of the Micros and NCR kind over horizontal small-merchant systems (2013)
- Revel Systems
- iPad POS sold to restaurants and retail alike (Dairy Queen, Goodwill, 2014), configured per merchant type for theaters, grocery and retail (2015)
vs. Cerner · 1979-2003
Epic Systems
One clinician-shaped database for care and billing
- What it did
- Physicians define their own fields on one lifelong patient record (1979)
- Cerner
- Built department by department: PathNet lab (1984), then radiology, pharmacy and medicine systems (1987-89), unified as Millennium in 1997
Also tagged: Klaviyo · Modernizing Medicine · Parker · Veeva · Weave Communications
Vertical Specialization vs. Focus Strategy and Vertical Integration Strategy
| What it is | How to tell it apart | Example | |
|---|---|---|---|
| Vertical Specialization | Building the product and supporting work around one customer industry's requirements | The segment is an industry, defined by what the customer's own business does | Veeva's CRM built for life-sciences sales teams |
| Focus Strategy | Serving a narrow segment better than broad competitors can | The segment can be a company size or job function; vertical means industry | IKEA serving young, cost-conscious furniture buyers (Porter) |
| Vertical Integration Strategy | Owning or running connected stages of the value chain | It's about which stages you own, not which customers you serve | Tempus building its own sequencing lab |
How to tell if a company has it
- One named customer industryDefined by what the customer's business does, like dental practices or restaurants. Sales, IT, SMB or mobile don't qualify.
- Industry requirements built into the productWorkflows, rules or records specific to that industry ship in the standard product and its implementation, like Veeva's sample tracking.
- A broader market it chose to skipA horizontal version of its product it declined to sell, or general business software the industry could otherwise adapt.
- Customers picked it for the fitBuyers chose it over a horizontal or specialist rival because the industry fit meant less adaptation.
Who names it
| Author | What they call it / where it appears |
|---|---|
| Porter | Focus / differentiation focus — applied here to industry specialization; the tag label is editorial |