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This is interesting, but I think it speaks more to which "beachheads" companies are choosing rather than which markets they ultimately target. For example, with

This is interesting, but I think it speaks more to which "beachheads" companies are choosing rather than which markets they ultimately target. For example, with consumer vs. enterprise I suspect that when Dropbox did Demo Day they would have been labelled a "consumer" company although the enterprise potential was obviously there. Vertical SaaS is another example--choosing a vertical is an excellent way to start, and it can be enormously lucrative for a small team, but I imagine that "VC-style" exits will usually require branching past it.

orky56 13y ago
Great point. It also indicates to investors what startups think is a good starting off point. It makes sense to go after a vertical rather than horizontal since that is more consistent with PG's well strategy (go deep and narrow rather than wide and shallow). Generalizing quite a bit but they are more able to get traction, get subscriptions, and increase LTV early on. The sustainable business model is more mature and a better signal to investors rather than selling only the vision that might happen with more horizontal plays.