Jonathan Vassel, CRO at Toast helped scale the company from $20M ARR in 2017 to $1.7B+ ARR in Q1 2025 and a stunning $25B market cap. A look back here at the top 10 learnings from his deep dive with Sam Blond on SaaStr CRO Confidential
Most SaaS companies sell horizontally to desk workers across multiple industries. But what happens when you’re selling vertical software to non-desk workers in a specific industry? Toast’s CRO Jonathan Vassel shared fascinating insights on how vertical SMB sales is fundamentally different—and why those differences can become massive competitive advantages.
Toast just reported Q1 2025 results showing $1.7 billion in ARR (up 31% YoY) and 140,000 total locations (up 25% YoY). The company added over 6,000 net new locations in Q1 alone and achieved $133 million in Adjusted EBITDA. Even more impressive: Toast closed its largest deal in company history with Applebee’s and signed enterprise agreements with Topgolf, showing their expansion beyond traditional SMB into enterprise accounts.
Here are 10 key lessons from Toast’s remarkable journey scaling vertical SMB sales:
1. Density Changes Everything About Territory Design
The Traditional Approach: Most SaaS companies segment territories by company size or revenue potential. Enterprise reps get the biggest accounts, inside sales gets the smaller ones.
The Vertical SMB Reality: Toast segments by geographic density, not deal size. Their field reps own high-density areas (think downtown San Francisco), while inside reps cover less dense markets (suburbs of Kansas City).
Why This Matters: Restaurant density is unlike any other vertical. “There is no other vertical that has that many rooftops,” Vassel explains. “In any city block, you may have a pet store, a drugstore, a salon—then you’ll have four restaurants.”
This density creates network effects that compound over time. When Toast reaches a certain penetration in a market, their win rates actually increase due to social proof and local ecosystem effects.
2. Social Proof Is Your Most Powerful Sales Tool
The Key Insight: In dense verticals like restaurants, social proof isn’t just helpful—it’s everything. One in five Toast deals comes from referrals.
How to Leverage This: Toast reps become “the mayor of their patch.” They penetrate the local restaurant ecosystem, which includes food suppliers, equipment manufacturers, knife sharpeners, and other service providers who all talk to each other.
The Flywheel Effect: As Toast gains more customers in a geographic area, it becomes easier to close new deals. Restaurant owners see Toast terminals everywhere and assume it must be the standard.
3. Unit Economics Enable a Distributed Workforce
The Business Model Advantage: Toast’s software + embedded payments model creates unit economics of ~$10k ACV that justify field-based sales teams. Many competitors can’t afford this approach.
The Math: Higher LTV from payment processing means Toast can afford to put boots on the ground in ways that pure software companies cannot. This creates a sustainable competitive moat.
Strategic Implication: Your business model directly determines your go-to-market strategy. If you don’t have the unit economics to support field sales, you need to find other ways to create local market penetration.
4. In-Person Still Wins (By 3X)
The Data: Toast sees significantly higher conversion rates with in-person meetings, similar to what many B2B companies discovered during the remote work transition.
Why It’s Even More Important for Restaurants: Restaurant owners and managers work long hours in physical locations. They’re not checking email all day or responding to LinkedIn messages. Face-to-face meetings are often the only way to get their attention.
The Local Ecosystem Play: Being physically present allows reps to penetrate the local business network that influences restaurant purchasing decisions.
5. Channel Partnerships Are Distribution, Not Just Lead Gen
Beyond Simple Referrals: Toast has built deep partnerships with companies like US Foods (food distributor) that go both ways. Toast shares new restaurant opening intelligence with partners, while partners refer existing restaurants to Toast.
The Network Effect: These partnerships create a web of mutual value where everyone wins. Toast gets introductions, partners get access to new business opportunities, and restaurants get better service from their entire vendor ecosystem.
Scale Strategy: As you grow, these partnerships become increasingly valuable because you have more to offer in return.
6. Data Scoring Beats Intuition for Territory Prioritization
The Challenge: Even in a dense market like South Beach Miami, a rep might have 800+ restaurants in their patch. Where do you start?
Toast’s Solution: They’ve built sophisticated scoring models that evaluate prospects based on:
- Last time they bought a POS system
- Current vendor
- Restaurant size and type
- Local market factors
The Result: Reps get scientifically-prioritized prospect lists that they can combine with local knowledge and relationships for maximum effectiveness.
7. Product-Market Fit Dictates Segmentation
The Toast Example: Their handheld server devices (Toast Go) naturally led reps toward full-service restaurants because the product has less application for quick-service restaurants.
Key Lesson: Don’t force segmentation from the top down. Let your product’s natural strengths guide where your sales team focuses, then double down on those segments.
Avoid the Trap: Many companies try to be everything to everyone in their vertical. Toast found success by following where their product created the most value.
8. Incentive Structures Are Your Biggest Lever
The Complexity: Vassel calls incentive design “infinitely complex” and describes it as an iterative process of constant testing and refinement.
The Power: Incentives can drive behavior toward specific segments, territories, or sales motions. They’re the biggest lever any sales leader has.
The Approach: Test constantly, fail fast, and be willing to adjust. What works changes as your market evolves and your sales team matures.
9. Marketing and Sales Must Be in Lock Step
Why It’s Different: In vertical SMB, marketing can’t just generate leads—they need to understand the local dynamics and support field-based sales motions.
The Integration: Toast’s sales and marketing teams work together on everything from territory planning to local market penetration strategies.
Offline Tactics: Vertical SMB often requires marketing tactics that horizontal SaaS companies don’t use, like local trade shows, industry publications, and geographic advertising.
10. Promote from Within to Win the Talent War
The Stat: 25% of Toast’s sales organization (which is large) was promoted in the last 12 months.
The Strategy: When competing for talent against established companies, Toast’s value proposition includes faster career growth. Many of their best reps came from teaching, military, or restaurant backgrounds—not traditional software sales.
The Competitive Advantage: In a tight talent market, being known as a place where people can grow quickly becomes a major recruiting advantage.
The Bottom Line
Vertical SMB sales isn’t just horizontal SMB with industry focus. It’s a fundamentally different game that requires:
- Geographic thinking over account-size segmentation
- Local relationship building over digital marketing alone
- Patience to build density rather than spreading thin
- Investment in field presence where unit economics allow
- Deep industry knowledge that comes from specialization
The companies that recognize these differences and build their go-to-market strategies accordingly can create sustainable competitive advantages that are nearly impossible for horizontal players to replicate.
As Vassel puts it: “Our strategy will not work for others because they don’t have the characteristics that we benefit from.”
That’s exactly why getting vertical SMB sales right can be so powerful—and so defensible.
