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Dear SaaStr: How Big Should The Addressable Market Be to Go into Vertical SaaS?

  • To succeed in the Vertical SaaS market, two things are important: widespread adoption within the industry and the ability to charge high annual fees, preferably $10,000 or more.
  • Even small businesses are willing to pay $10,000-$20,000 annually for a core app they heavily rely on.
  • If the target market does not support high fees from SMBs and SMEs, a larger market size becomes crucial.
  • To achieve $100 million in ARR, either 5,000 customers paying $20,000+ per year or 100,000 customers paying $1,000 per year are required.

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