Where to fish to land a Unicorn (in B2B SaaS)

Oji Udezue
11 min readDec 8, 2021


A framework for investing and optimizing your company’s outcomes in b2b SaaS


Ezinne and I work a lot with founders and CEOs. And in the last decade, we have worked to become decent angel investors — first across Africa and now increasingly in the USA. For some of that time I (Oji) have been a founder (consumer product) and a product management operator (B2B SAAS). I hope what follows will help give new b2b SAAS founders and investors a framework for a first filter for the opportunity size of their new startup idea. And/or how to evolve strategy, regardless of the starting point.

There’s real money to be made by building ways (in software) to help workers simplify and automate the workflows they need to create value. Unlocking more productivity in the ‘business OS’ drives tremendous enterprise value and companies that buy and properly utilize b2b SaaS understand this. This has resulted in a ‘Cambrian’ explosion of cloud first tools targeted at SMB through Enterprise companies. While there are plenty of opportunities/problems to solve, there is probably a finite set of very high value workflows that can create serious enterprise values > $1 billion. How do you identity and focus on those?

Complex knowledge work can be broken down into workflows

Before we jump to the punchline, it’s important to internalize a workflow as the unit of personal and enterprise productivity.

Peter Drucker was prescient when he wrote about the rise of knowledge workers in The Landmarks of Tomorrow. We now live in a world whose economic progress is defined by the output of knowledge work and workers in the so called knowledge economy. This kind of work is generally characterized by high creativity, team-based, relationship-driven with a very high return on investment. Much of this kind of work is difficult to automate — because of the creative and relationship ingredients — but it can be accelerated, by finding highly productive patterns and best practices. The point of B2B SAAS is to apply software and AI techniques to optimize those productive patterns and best practices. To do that successfully startups and software companies must understand the specific workflows that knowledge workers use to create value and device ways to streamline and optimize them using software. Given the variety of workflows across many kinds of workplaces, getting this right can be challenging.

Take customer support as a critical business function, for example. It’s performed by a lot of companies to guarantee the customer experience of their customers. A typical customer support professional must be assigned the right problem for their expertise, provided knowledge to quickly solve the customer problem, the ability to pass on the problem to other support professionals, communicate cordially with customers and potentially pass on unanticipated feedback to the product development teams.

All of these identified tasks are essentially workflows within the customer support discipline that have a lot of variation in how they are practiced. Because of this fact, varying customer support professionals will do them at various levels of competency.

A company that wants to build a business around automating this part of the business must identify the through thread of these workflows (say by talking to 1000 of the best professionals across many kind of companies) and distilling that into best practices that can elevate the productivity of a million customer service professionals who will use their software to add automation to those best practices. By doing this, they can help any company with access to their software deploy effective customer support much faster than organic learning or trial and error.

Two quick takeaways that are crucial to where to fish for a unicorn:

  1. Even really complex work can be broken down into essential workflows that encapsulate the most important elements of how to execute it.
  2. These key workflows can be studied to make them more efficient or at least, define a baseline of best practices that can make a competent professional immediately more productive.

This is the overall promise of your startup. Expert level performance through appropriate use of your software to speed up a defined part of a businesses’ key workflow.

The SAAS evolution is about targeting and unbundling complex workflows with software

If you zoom up a level, all kinds of knowledge work can be put through this kind of process deconstruction and ‘softwarization’. Whether it be Design, Engineering, Digital Marketing, Sales, Customer support, and many more. And this is where enterprise software as a service (SAAS) comes in. Generally, SAAS is a wave of technology that is taking key components of knowledge work and creating attractive (consumer grade) accessible cloud deployed software for it (web browser, mobile, desktop); to enhance and streamline key workflows.

(Finding the most efficient way to build these SaaS software businesses is what Product-led growth is about, but that is a different article.)

One key trend worth mentioning is that this new wave of software often makes it really easy to get started (freemium model); and so significant procurement burden is lifted of internal IT. Knowledge workers can quickly test and find software that works best for making their workflows shorter, faster, more efficient. And then their internal IT supports their choices when the value is evident.

Many companies have thrived on this demand for specialized tools that match general or specialized workflows. It’s actually fairer to say it’s a bit of a gold rush, given the number of fortunes that have been made. The B2B SaaS revolution appears to be limitless. Every entrepreneur and even established businesses want to ape the SAAS model. So, what determines success? In a competitive world, not every idea can succeed, so what framework should guide startups as they vie to find a foothold in the productive lives of knowledge workers?

Ma, does my idea (or investment) contain a unicorn?

Once your point of view as a product manager or entrepreneur changes to viewing your product as a way to target and enhance durable workflows in the enterprise, the next step is to consider where your workflow fits.

My experience suggests that there is a hierarchy of workflows that are the best to target as a SAAS strategy. Identifying them is a matter answering the questions below honestly:

  • How many people and roles in an average company are impacted by this workflow?
  • How essential is this workflow and how big a price will it attract if fully realized?
  • What is the incumbent and competitive context for this workflow?

Finite # of billion $ workflows

There are a finite set of workflows that can be efficiently targeted by any SAAS startup that wants to grow big quickly.

Here is a simple framework to use as a first filter to access your opportunity size. Note that this is not a deterministic filter, but a way to shape your company strategy. You should not despair because of your starting point in this framework, Its should instead drive clarity and help you shape strategy.

Your workflows can be categorized by frequency and broadness of applicability

High intensity, Everyone (HiEv) workflows

The most lucrative workflows to dominate are high intensity, ‘everyone’ workflows. These are the workflows that almost everyone in the enterprise participates in. For example, communications, calendaring, writing and communicating ideas, calling and speaking to team members. People perform these workflows with high frequency — usually daily, weekly on the outside. (Note that I am using ‘intensity’ interchangeably with ‘frequency’.)

The tools people often used in this category include email, team chat, calendar and scheduling software, note taking and authoring tools (like word, Gdocs, Evernote, etc.), telephony and video calling. This segment has some of the highest total addressable market (TAM) in the enterprise. If you want to be one of the largest and fastest growing SAAS companies, you need to target HiEv workflows. Or find a way for the workflows you optimize to become HiEv workflows (again this is not a deterministic tool, it’s a strategy framework).

The companies that dominate this space include Microsoft, Google, Slack, UC incumbents like Cisco and modern iterations like Zoom/Teams. By targeting these broad high intensity workflows, companies can extract a lot of value from enterprises with SAAS strategies. This market is characterized by relatively low per user prices (because of volume and competition), product bundling and is highly competitive. It’s no real surprise incumbents from a pre-SAAS world are well represented (Microsoft, Cisco) because of the huge amount of capital required to build good scalable solutions and to stay competitive.

High intensity, Niche (HiNi) workflows

The next tier of workflows that are attractive for founders are high intensity, niche workflows. These are the workflows that one or more departments (niche) use with high frequency (intensity). Usually most people outside these departments are not conversant with these workflows. As before intensity here denotes at least weekly performance of the tasks implied by these workflows.

These workflows correspond to things like support, customer success, engineering, product management, marketing, inside sales, hiring etc. They are specialized and used by experts who spend time getting good in that area. Often they will have collaborative tools that integrate other people across the company but that is usually an exception (and smart strategy). This section of SaaS opportunity also commands huge TAMs because niche workflows tend to be more complicated, specialized, and most importantly, be essential. So products can often command high subscription prices.
The companies that represent this space include Zendesk, Intuit, Atlassian, Hubspot, ActiveCampaign, New Relic, Gitlab etc.

Low intensity, Everyone (LiEv) workflows

Low intensity, everyone workflows tend to have a median use frequency of weeks (usually 2–4 weeks) and are used by most people in a company. Some examples are payroll, HR workflows, Expense filing, Travel and logistics. Note that sometimes these tools will often be a HiNi workflows for a small group of professionals like the HR department. LiEv workflows are great if you can dominate it and charge a relatively high subscription price for everyone in the organization who is empowered by it. It’s not a bad set of workflows to target but will tend to not grow as fast as the first two in terms of enterprise value. Companies that represent this space include Workday, Paycom and Ceridian.

Low intensity, Niche (LiNi) workflows

Low intensity, niche workflows are the ones to avoid or to think about how to exit via product strategy. These are workflows confined to a specific department or role and not needed often — the cycle time of use is 1–2x a month. This kind of workflow category is plagued with plenty of alternatives, low need to automate and vulnerable to budget constraints (often the first cut in a budget squeeze). Examples of LoNi workflows include surveying software, auditing, archiving, website help content publishing etc.

Software that targets LiNi workflows should be able to really drive a magnitude of efficiency i.e. shrink the workflow by a lot, e.g. 5–10x. These kinds of large efficiency gains are what makes a LiNi workflows automation tool a must have and hard to replace. Else it can be a struggle to justify the expense.

What is left out?

This framework does not specifically address certain valuable parts of the SAAS ecosystem. Specifically infrastructure and vertical SAAS.

  • Infrastructure SAAS can actually be properly understood as a HiEv workflow category because while everyone uses it, it’s invisible. Workflows like authentication, authorization, bandwidth, security, messaging are all in this bucket. However not all infrastructure SaaS will fit this model and will need more robust tools to analyze the opportunity.
  • Vertical SAAS is entirely different. It’s the case where an entire industry is so specialized that software companies have an opportunity to build an entire software ecosystem of HiEv, HiNi, LiEv and LiNi workflows that are crafted specifically to that vertical, because it’s so differentiated from the standard company type. Vertical SAAS opportunities exist in Healthcare, Manufacturing, Construction, Oil & Gas etc.

Implications of this framework

  • Your B2B SaaS startup should target high intensity workflows in order to grow quickly and be profitable fastest. It’s your best chance to land a unicorn.
  • Your existing company should hatch a strategy that leads them to high intensity workflows. If you start with a LiEv, find a path addressing to HiNi and HiEv workflows quickly.
  • Avoid LiNi workflows entirely if you can. These workflows only do well when the technology applied to them is an order of magnitude more productive than the alternatives and you can reliably command high subscription prices.
Plot your strategies along this path to win
  • HiNi workflows are where a lot of great startups are created — easier to start, easier to compete, easier to disrupt incumbents — but these companies need to find ways to migrate to HiEv workflows once they have established success, in order to get to the next level
  • HiEv workflows are very competitive and capital intensive as a result. They produce the most value and can create a wide moat at scale. Be prepared to spend a lot of money to become profitable against the head winds of incumbent deep pocketed companies. However if you find a niche there, your company can become very large in terms of value. If you have established a beachhead in a HiNi workflow, your growth strategies should evaluate moving into HiEv workflows. It’s the only thing that will help you keep your future TAM growing and justify a high risk premium for your company.

Some validation

If this framework is true you should expect*:

Given a set of top n b2b SaaS companies by market cap, where n > 30

  • The number in the cluster of companies in HiNi workflows should exceed the number in the cluster of companies in HiEv workflows because it should be relatively easier to start a company addressing a HiNi workflow.
  • Nevertheless the combined enterprise value and or revenues of the companies in HiEv workflows should exceed the combined ent value / revenues in the HiNI workflows. Again constrained by top n b2b SaaS companies by revenue and/or valuation.

*There are other validations, still thinking through them at the moment.

Top 50 SaaS companies by market cap, mapped on the workflows framework
  • Of the top 50 b2b SaaS companies circa Nov 2021, by market cap; there are 13 HiEv workflows companies. Note, we have added Microsoft 365 and GSuite to this quadrant and used a modest valuation of 20x fwd revenue multiple for the market cap of those businesses. The mean of the HiEv workflows companies forward revenue multiple is ~42x. We have also excluded cloud platforms like Azure and AWS since they are not easily classified as ‘b2b SaaS’.
  • There are 34 HiNi workflow companies.
  • There are 3 LiEv workflow companies and only 1 LiNi workflow company. Note that we excluded the vertical SaaS companies.
  • The aggregate of the HiEv workflow companies is ~$2.4T in market cap and ~$113b in 2020 revenues.
  • The aggregate of the HiNi workflow companies is ~$2T in market cap and ~$75b in 2020 revenues.

This is directionally what you would predict from this framework.

How to use this framework

This framework is a basic way to place your startup ideas within a growth potential thesis and evaluate the expected outcome of your software business. And to think of ways to become a HiEv or HiNi workflow opportunity by the application of strategy or expansion of your value proposition.

If you find this framework useful, hit me up oji@productmind.co and tell me how. I also have a google sheets workbook for the validation section in case anyone is interested in the actual numbers.

Developed by Oji Udezue & Ezinne Udezue



Oji Udezue

Decent human being. Proud African. Proud American. VP of Product at Calendly.com. Follow me: @ojiudezue