Higharc’s Category Creation Strategy: Rolling Up Fragmented Software Markets

Higharc’s Category Creation Strategy: Rolling Up Fragmented Software Markets

Toast didn’t start as a restaurant platform. It started as a point-of-sale terminal. Square didn’t start as a business platform. It started with card payments. Both used a single, defensible wedge to enter a market, then expanded outward.

Higharc is running the same playbook in homebuilding. The wedge? Computer-aided design. The expansion? Everything else builders need.

In a recent episode of Category Visionaries, Marc Minor, CEO and Co-Founder of Higharc, explained how they’re creating the “home building cloud” category by rolling up fragmented point solutions around a proprietary wedge.

The Fragmentation Problem

Homebuilding software exists, but it’s scattered across dozens of disconnected tools. “Today there, you know, I don’t know, dozen different pieces of software that are used, especially manual kind of tools like Excel, that kind of thing. There’s a handful of point solutions,” Marc explains. AutoCAD dominates design, running on over 90% of residential projects, but it’s focused purely on design—not the full stack.

This fragmentation creates constant friction. Data doesn’t flow. Changes in design don’t update estimates. Sales teams can’t easily show buyers different options.

Most vertical SaaS companies would verticalize existing horizontal tools. Marc saw a different opportunity.

The Evolution of Vertical SaaS

Traditional vertical SaaS follows a predictable pattern: take proven horizontal tools and adapt them for a specific industry.

“I would say we’re slightly evolved version of the old school vertical SaaS, meaning we didn’t approach the problem from a let’s leverage pre existing tools and techniques and just verticalize them,” Marc explains. “So project management, accounting, that kind of thing, that’s how you would typically see a vertical SaaS company begin in a given industry.”

The evolved version? “We actually took a different route of building software that’s fundamentally unique to the industry with this computer aided design software, and that creates this kind of unique dataset that only we can maintain,” Marc says.

The Wedge Product Strategy

The roll-up strategy starts with identifying the right wedge—the product that creates the most valuable, defensible asset for expansion.

“What we’ve done is we’ve taken the bits and bobs, the various point solutions and rolled them up into a new category we’re calling the home building cloud,” Marc explains.

Marc’s comparison makes the pattern clear. “Maybe the most interesting comparison would be like a toast in that or square with spike to pay. I don’t know what they call them. Point of sale as a kind of wedge. In our case, computer design is that kind of wedge.”

Toast’s POS captured transaction data that became the foundation for inventory, scheduling, and loyalty programs. Square’s card readers captured payment data for analytics and lending. Higharc’s CAD captures design data. “Nobody has data about houses the way that we do, and then we can take that data and we can add all kinds of services around it,” Marc says.

Why the Wedge Must Be Defensible

The roll-up strategy only works if your wedge is hard to replicate. If competitors can copy your entry point, they can execute the same expansion.

This is why Higharc built web-based CAD from scratch. Building CAD requires rare expertise. “Theres a handful of people in the world who can really do that effectively,” Marc notes. That difficulty becomes the moat.

“Yeah. So it’s hard to build, takes some time, but it’s very defensible and it allows for us to have multi decade long relationships with our customers,” Marc explains.

The Expansion Logic

Once the wedge creates proprietary data, expansion follows logically. For Higharc, 3D CAD models enable estimation systems, 3D sales configurators, and automated blueprints. Each expansion makes the platform stickier. Builders using Higharc for design, estimation, and sales can’t easily switch to competitors offering only one piece.

The Category Creation Move

Category creation isn’t about inventing language—it’s about reframing the problem. Builders don’t have a CAD problem. They have a disconnectedness problem. They need a unified system where design, sales, estimation, and construction flow from a single source.

“What we’ve done is we’ve taken the bits and bobs, the various point solutions and rolled them up into a new category we’re calling the home building cloud,” Marc says. The category name positions this as infrastructure for the entire operation, not just CAD software.

The Full Stack Question

One key decision: how far do you expand? Marc is clear about where Higharc draws the line. “AutoCAD is, you know, it’s a horizontal solution. In home building, it’s focused on the design side, so it’s not full stack. What we’ve done is we’ve taken the bits and bobs, the various point solutions and rolled them up.”

The focus is on design, estimation, sales, and blueprints—where disconnectedness creates the most pain and where the CAD dataset provides the most value. Try to own everything and you dilute focus.

The Playbook for Other Markets

The pattern works beyond homebuilding. Any fragmented market with disconnected point solutions is a candidate. Find the wedge that creates the most valuable proprietary dataset. Build it defensibly. Use the dataset to expand into adjacent products. Create a category name that reframes the problem as infrastructure. Focus where your dataset creates the most leverage.

The strategy requires patience. Building defensible wedge products takes longer than verticalized horizontal tools. “It’s hard to build, takes some time, but it’s very defensible and it allows for us to have multi decade long relationships with our customers,” Marc notes.

Why This Works Now

This strategy works when incumbents have aged into technical debt. AutoCAD is 41 years old. The disconnectedness in homebuilding exists partly because the core design tool was built before modern web technology and cloud computing.

New entrants can use modern technology to build wedge products that weren’t possible when incumbents dominated. Web-based CAD with real-time collaboration and 3D visualization only became feasible recently.

Marc’s bet: if you can build a better wedge using modern technology, and if that wedge creates proprietary data no one else has, you can roll up an entire fragmented market. Toast and Square proved the pattern. Higharc is proving it works beyond restaurants and retail.

The question for founders isn’t whether the roll-up strategy works. It’s whether your market has the right conditions: fragmentation, aged incumbents, and a defensible wedge that creates unique data. If it does, you’re not just building a product. You’re creating a category.