How to steal SaaS ideas using category hacking

Executive overview

Most founders waste months trying to create new categories. Every major SaaS winner — Slack, Salesforce, Notion, Snowflake — entered an existing category and won it, rather than inventing one.

The framework has three principles: target departments with real budget, pick the right type of SaaS, then hack into an emerging category with a clear differentiation angle.

Category hacking beats category creation: find where the heat already is, then compete smarter.

The department pecking order (principle 1)

• Target the department that holds the budget — not just any buyer
• R&D (engineering): largest budgets; spend on tooling and infrastructure
• Marketing: second largest; companies pour money into pipeline and brand
• Sales: now a serious software buyer — engagement, enablement, and analytics tools
• Customer support/success: real market but smaller budgets than top three
• HR, Finance, Ops: smallest budgets; competitive but lower ceiling

The three golden types of SaaS (principle 2)

• System of record: where the department runs and stores everything — highest value, lowest churn (e.g. GitHub, Salesforce, marketing automation)
• System of engagement: sits on top of the record system, automates the actual work (e.g. sales engagement tools); hard to churn out, still very valuable
• System of decision: BI, reporting, AI insights — pulls from other systems; easiest to swap, lowest relative value
• Higher up the stack = stickier product = higher valuation

Finding and hacking the category (principle 3A — where's the heat)

• Map the category landscape: identify well-entrenched players and emerging challengers
• Don't chase a fundraise headline — filter every opportunity through the department and SaaS-type lens
• Look for subcategories being carved out (e.g. vertical-specific customer support tools, new customer success platforms vs. Gainsight)
• Target Series B companies in emerging categories — enough validation, still room to compete

Differentiating inside the category (principle 3B — how to hack in)

• 10x product: rebuild the core experience to deliver results dramatically faster or better
• Positioning: carve out an underserved segment — SMB vs. enterprise, a specific vertical, or a white-label angle
• Pricing: undercut an entrenched player for a segment they over-price (least powerful alone, but effective combined with the above)
• Use two or three levers together for a stronger wedge