Vertical SMB sales isn't just a niche, it's a cheat code for massive growth. Toast scaled from $20M to $1.7B ARR by Q1 2025 by playing a different game. Here's how they built a defensible moat: 🧵

1. Density changes everything. Forget segmenting by company size. Toast maps territories by geographic density. In areas with high restaurant concentration, their win rates actually increase due to network effects and social proof.

2. Social proof is your strongest sales tool. In dense verticals, everyone talks. 1 in 5 Toast deals come from referrals. Reps become "the mayor of their patch," building local ecosystem relationships that compound over time.

3. In-person still wins. Toast sees 3X higher conversion rates with face-to-face meetings. Their software + embedded payments model creates unit economics (~$10k ACV) that justify field sales teams, a competitive edge many can't afford.

4. Data beats intuition for territory. With 800+ restaurants in a patch, you need a system. Toast uses sophisticated scoring models to prioritize prospects based on current vendor, size, type, and local factors. This isn't guesswork, it's science.

5. Promote from within to win talent. 25% of Toast's large sales org was promoted last year. They recruit from non-traditional backgrounds (teachers, military, restaurant pros) and offer faster career growth. It's a major recruiting advantage.

6. Channel partnerships are distribution, not just lead gen. Toast builds deep, two-way alliances (e.g., with US Foods). They share new restaurant intel, partners refer existing ones. It's a mutual value network, not just simple referrals.