Deel is Growing 70% at $800m in ARR. Does Market Share Matter if Your TAM is Gigantic?

So Deel announced it was growing a stunning 70% at $800m ARR — and profitable.  If you didn’t see the news, it’s OK to let your jaw drop for a second:

When I read it, not only did the epic growth amaze me.  But also the fact that adjacent next-generation players from Rippling to Gusto to Remote to Oyster and more are also growing at epic rates at nine figures in revenue.  So many next-generation winners here, and more to come.

And it reminded me of something Tooey Courtemanche, founder CEO of Procore, said to me the other day on the SaaStr podcast:  “If your TAM is measured in trillions, market share doesn’t really matter.”

Now of course he didn’t mean it that black and white.  He also noted they have a dominant brand in the U.S. market and that’s a huge lift to them at $1.2 Billion in ARR.

But I asked him how important dominant market share was in vertical SaaS.  My general view is you should go for … all of it.  In many vertical SaaS players, winner takes a lot because of network effects and because the platforms become so powerful.

But Tooey’s point is that he doesn’t really measure market share in construction SaaS, because the TAM is in trillions.  He focuses on winning deals and absolute growth.

By contrast, I asked one of my other favorite SaaS CEOs, Andrew Bialecki of Klaviyo, also at $1B+ ARR today, how they achieved such dominant market share on the Shopify platform.  His answer?  Why Not 100% Market Share?

But arguably  there though, as large as the TAM is for Klaviyo, at the moment, it’s tied to Shopify.  So at the moment, Procore’s TAM may be an order or two of magnitude larger.  For now at least.  And hence the different perspectives.

If your TAM is smallish, you may need to own it all to win.  If your TAM is gigantic, you may just need to be #1 to win big.

I do think in more vertical SaaS categories, you should aim for 80%+ market share, not 10%-20%.  Per Andrew Bialecki’s point.  And I do think more founders should be more aggressive here, and aim for dominant market share.  Not just some.

But in massive, horizontal categories, absolute growth may be enough.