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Comment by portaouflop | Hacker News Reader

What small tiny verticals are neglected by VC backed firms?

Asking for a friend.

Any B2B vertical where customer ACV is less than $10k per year.

If the vertical has affiliated trade organizations when you go to their events, you’ll find either very few VC-backed startups or none at all.

The competition will be mainly service businesses without software chops. Sell cheap automation and price sensitive customers will move to your solution.

> Any B2B vertical where customer ACV is less than $10k per year.

I think any may be too broad. That encompasses things like:

- SMB accounting software

- Email marketing platforms

- Project management tools

- CRM software

- Website builders

- SMB HR and payroll services

- SMB IT and security solutions

- freelance/gig platforms

- SMB marketing services

- Legal/compliance for SMBs

And each of these seems like extremely saturated verticals with just a ton of offerings and competition.

This is where I get stuck. The idea of focusing on a small vertical that isn't attractive to venture capital funding appeals to me, but then I'm at a loss for ideas beyond the most obscure niches, like a bingo card creator :P

I think you're idea of a niche is a little too broad. SMB is not a niche, plumbers is a niche. Are there accounting software, or CRMs made specifically for plumbers? Probably. But you can make a better one. Don't like plumbers? Try electricians or roofers. How about solar panel installers? How about installers of a specific brand of solar panel? There may be many SMB softwares, but if you pick a niche, you will find less competition catering to that specific customer.

Ah, that's helpful. You're right, what I listed are not niches. I'm wondering if having some knowledge about a particular niche is necessary to determine whether a tool for that niche, such as a CRM for plumbers, would be distinct enough from similar tools for other businesses. Or do you think you can generally assume that there will always be some way to tailor a tool to a specific niche?

You're leaving out the big catch though, which is that if you don't have experience in these industries, the software you make will probably be terrible. The winning move is if you are a plumber that can learn software engineering, not the other way around.

In many cases, many of the things you mentioned are specialized by industry which is where there’s opportunity for you.

Take a look at Constellation Softwares verticals. They specialize in acquiring tiny software companies.

https://www.csisoftware.com/our-companies

On the other hand, OnlineOrNot is a good example of a solo founder building a solution in an already crowded space.

Thank you, I think you're spot on. Thanks for the link, really helpful.

I'm pretty sure that there are no VC-backed firms building software for chimney sweeps.

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