So one of SaaStr Fund’s latest investments is Mangomint, a vertical SaaS platform for spas and salons.
Now … that sounds niche, and it sounds crowded. And it is. There are multiple vendors in different segments, including Mindbody which IPO’d a SaaS generation ago and then taken private in a $2B Vista acquisition.
And yet, today Mangomint is at eight figures in ARR, growing 100%+, with 110% NRR from SMBs. That’s the trifecta.
So what are the learnings, and how do they do it? And why is Vertical SaaS thriving today?
I did a deep dive with founder CEO Daniel Lang here:
A few key take-aways:
#1. You really have to do it all now to build a true platform for SMBs: software, payments, payroll, marketing, workflow and more.
Toast had the luxury of taking years to build up a suite like this. Today, the customers expect it all.
#2. Automation and AI are critical in SMB Vertical SaaS … due to a lack of labor
Automation and AI are less about efficiency in SMB vertical SaaS than simply dealing with a lack of labor. Since 2020, Mangomint’s receptionists and front office labor has seen wages up +50%, and turnover increase 100%. So you have to automate a lot of this functionality. The average Mangomit customer has half the front office labor they did 4 years ago. Automation and AI solve this.
#3. Onboarding has to be much slicker for SMBs. So incent your sales team to help.
One of the lesser-discussed challenges with more complex SMB SaaS is there’s often no one to implement and managing onboarding and business process change. Mangomint incents its sales team by paying commissions only upon successful deployment.
#4. Have to be multi-product to hit 110% NRR from SMBs.
We’ve learned that lesson again and again, from leaders like Monday and HubSpot. But now you have to do it earlier. Mangomint has 3 distinct SKUs, and is soon launching a fourth. You have to have super high NPS to earn the right to sell them more products. Once you do, you have to deliver them.
#5. No Time to Waste With The Wrong ICP. Put the Customer First Fast — Including When It’s Not the Right Fit
Mangomint today at eight figures in ARR isn’t just focused on SMBs, it’s focused on the “M” in SMB (much like HubSpot historically was). Not the 1 person salon or spa, nor the massive chaings, but the middle. They refer all single-user prospects to a competitor — right on their website. They don’t waste anyone’s time here. And later, if they grow bigger and are ready for Mangomint? They’ll be there.
And finally … Mangomint met all its investors, Altos Ventures (Roblox, etc), OpenView and SaaStr Fund … at and through SaaStr Annual! Pretty cool!
More in the TechCrunch story here:
