I recently had the opportunity to talk about verticalization at a Silicon Valley event. I described what verticalization means, why it happens, where it succeeds, where it fails and how it intersects with search. The focus of my talk was on verticalization of needs, rather than segmentation of users even though the two overlap. I am particularly interested in verticalization when it comes to the web and searching the web.

Verticalization is Everywhere

Look around you and you can see examples of verticalization everywhere. From the cars we drive to the sneakers we buy, to the television channels we watch. When the first automobiles came to market, many years ago, everyone drove a model T 100 Ford. Now we drive sedans for general purpose use, SUVs or mini-vans to carry our families around, or a truck if we have to move household goods. We have moved away from watching only CBS, ABC and NBC to watching one of the hundreds of channels available with a specific focus on science, news, history, travel and food. You can find similar examples all around you, if you pay attention.

What makes this verticalization possible? Most paradigm shifts or basic innovations center on building a single product and a simple product that the mass market can adopt. I use products to also represent pure web centric innovations. Yes, we go through the adoption curve where early adopters pick up our product first. We then go through the learning and fine tuning so the product is ready for the early majority, ultimately finding its way to the late majority and such. However, in this process, we are trying to build a single product that serves the needs of the mass market.

At this point three things happen in the marketplace: