Vertical network sector: its potential

Github is estimated to be worth around $2 billion

“The size of the market is important from my vantage point as a venture investor,” says Tenaya Capital’s Ben Boyer. “What’s the market opportunity? Science is a trillion-dollar-a-year business for industry around the world. Education is huge.”

Boyer says it has to be “billion-dollar plus – and often much more – for me to care about it. Some industries aren’t appropriate, but that doesn’t mean you’re not going to see vertical networks for other niches.”

“Investors want to know if your business model is something that can reach a $500m or $1bn market,” says Thomas Keslinke, whose vertical network Chefs Roll is designed to help catering professionals highlight their skills. “Venture capital investors are looking for scalability,” agrees Greg Stout of Proformative.

Smaller markets – particularly those where the workers make less use of technology – are of reduced appeal to investors at this stage. But as the market matures, the situation may evolve. “I’m not entirely sure if vertical networks are only suited to skilled knowledge workers,” says Boyer. “If I was starting a vertical network going after hourly-paid workers in restaurants or retail – both of which would be big markets – then I would go first for some sort of mobile application that would allow people in the workplace to trade their timeslots, for example.

“So there are vertical networks that could well suit a non-traditional LinkedIn user,” he concludes, “but most efforts so far have been focused on skilled knowledge workers.” Keslinke acknowledges the challenge. “The biggest problem is taking your message to a huge audience,” he says, “particularly when the audience is not necessarily tech-savvy”.

For more see Vertical social networks are the greatest threat to LinkedIn

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