Vertical SaaS for SMBs: Building Consolidated vs Integrated Tools

As small and medium-sized businesses (SMBs) strive for efficiency and streamlining in the digital age, the concept of vertical SaaS (software as a service) has emerged as a solution to the problem of tech stack fragmentation. However, providing vertical SaaS solutions can can come with tradeoffs, and with the improvement of integration technologies like OAUTH 2.0 and services like zapier there is also a counter trend of integrated solutions.

In a perfect world, the best solution for business would be a fully integrated vertical SaaS that is able to handle all their current and future problems in one convenient and simple to use interface (oh and also be reasonably priced). So as a software company, why wouldn't you want to build an all in one solution for your customers?

Well this comes down to a few different reasons.

  1. Increased cost of building many solutions
  2. Inability to leverage existing network effects
  3. Diffusion of specialization and thus quality

In addition, a downside for the SMBs is that they are overly dependent on one company and are therefore vulnerable to changes and price increases. This happened to my SMB where the price of our CRM was increased from two-hundred to four-hundred-ninety overnight without much we could do, since our systems were too reliant on it, which made switching non-viable.

As someone looking to bootstrap a side project I decided to take of the route of integration over consolidation. Take for instance Grapevyyn, a project I built that helps SMBs convert more of their customers into reviews. This has many advantages compared to a vertical solution because we can integrate with the existing tech stacks that companies use - which does admittedly leave us open to the whims of their willingness to provide API services. However this massively reduces the technical requirements of the project.

A technical challenge that I did run into was integrating with smaller softwares which had sparse documentation. However, this was a learning experience and allowed me to understand OAUTH 2.0 flows and webhook validation on a much more granular level than with working with an establish OAUTH provider like Google or webhooks with Stripe.

Here is a snippet of a webhook validation using SHA-256 decoding utilizing the crypto library in javascript.

exports.webhook_endpoint = functions.https.onRequest(async (req, res) => {
  // this is where we verify the request
  const verifySignature = function(receivedSignature, payload){
  const hash = crypto
            .createHmac('sha256', 'process.env.CLIENT_SECRET_KEY')
            .update(payload)
            .digest('base64')
  return receivedSignature === `${hash}`

  }

Ultimately, the competitive landscape of SMB software is in flux. My goal with Grapevyyn is to be able to differentiate by providing one service incredibly well and make the integration as easy as possible with as many platforms as possible.

The software achieves this by focusing on specific pain points of SMBs. One of these is how difficult it is to manage reviews across multiple platforms like Yelp, Google, and Facebook. Customers now a days expect businesses to be responding to these reviews as well as maintaining a high rating. I addressed this by providing a dashboard that allows users to see all of their reviews from various platforms and respond to all of them (except for Yelp because their OAUTH and API is limited).

I also addressed the pain point of gauging feedback before sending the review requests so that requests aren't accidentally sent to angry and disgruntled customers who could leave a negative review before the company has a chance to fix it. This is paired with an SOS feature, which triggers SMS and Email alerts before a negative review is left so the business can respond immediately and save an indelible mark on their digital reputation.

Vertical SaaS is certainly not out of the question and I am looking forward to see how this market changes in the future. However, for now, I am confident that the unique features and focus on customer satisfaction that Grapevyyn offers will allow it to stand out in the crowded SMB software market and help small businesses succeed in the digital age.