Welcome to the Verticalist: your go-to resource for weekly analysis on Vertical AI. We are Nic and Omar, the co-founders of Euclid Ventures. Euclid is a VC firm partnering with Vertical AI founders from inception. Read more about The Verticalist and Euclid on our About page.
What We Write About
Recent Highlights: Top recent posts from The Verticalist team.
Founder Playbooks & Toolkits: Strategies in vertical company building.
Product & G2M Strategies: Tactical insights for functional vertical operators.
Market Data & Dynamics: Data-driven analysis of trends in Vertical AI.
Investment Perspectives: The overlap of VC, capital markets & vertical enterprise.
Our Show: Verticals
We launched Verticals—a weekly video show & podcast—to give Vertical AI the space it deserves. Each episode is a first‑principles, strategy-oriented debate led by a VC (our own Nic Poulos) and a Founder (Luke Sophinos), plus one top operator or investor in Vertical AI every Wednesday.
Subscribe wherever you watch or listen —> 📺 Youtube | 🎧 Spotify | 📖 Substack
Content Directory
Recent Highlights
The Exception Queue: The most defensible Vertical AI companies will capture the high-stakes human judgment currently lost: the exception queue. As those resolutions accumulate into reusable decision traces and context graphs, workflow wedges can compound into deep moats.
The Dark Marketplace: Vertical AI is coming for commerce — the winners will be the ones that learn how buyers think.
Service-Level Disagreement: We share our perspective on the VC debate on AI-Native Services, and why we believe they won’t escape the gravity of software
Software Is Dead — Long Live Software: Analyzes the public SaaS flash crash and the “SaaSmageddon,” arguing that AI is still software and that reports of the death of SaaS are greatly exaggerated — particularly for vertical companies with real workflow depth and system-of-record positioning.
Founder Playbooks & Toolkits
Clear Eyes, Full Stack, Can’t Lose?: Offers a framework for deciding which layers of the value chain to own, access, or commoditize. Argues that founders should own only enough of the stack to secure workflow control points where proprietary data and learning accumulate.
We Need to Talk About Agents: Why the “agent” metaphor is creating increasing misalignment in Vertical AI. The metaphor feels harmless — it makes complex technology familiar. But it narrows how buyers evaluate, how organizations adopt, and how entire markets take shape.
The Dispatcher Problem: Examines the commoditization risk facing AI services startups through the lens of Uber’s disruption of the taxi industry, arguing that startups relying on cheap intelligence as a wedge must build durable systems — or face the same fate as taxi dispatchers.
Dude, Where’s My Moat: Outlines why moats matter more in Vertical AI, evaluates prospective moats, and outlines a framework for planning and building defensibility from the earliest stages.
Emerging Playbooks in Vertical AI: Explores how vertical AI startups are leveraging domain-specific data and workflows to build defensible positions, transitioning from authoring layers to systems of intelligence.
A Guide to Disrupting Incumbents: Outlines strategies for startups to weaken incumbent positions by reducing complement prices, switching costs, or direct demand.
The AI-First Roll-Up: Analyzes the challenges VC-backed consolidators face in roll-up strategies and introduces the concept of AI-driven synthetic software roll-ups as a more viable alternative.
Product & G2M Strategy
AI is Solving SaaS Product Adoption: Highlights how Vertical AI is breaking down traditional software adoption barriers by embedding AI into workflows, thereby accelerating growth in industries previously resistant to SaaS solutions.
Early-Stage Product Strategy in Vertical AI: A tactical guide for Vertical AI founders on navigating early product-market fit, emphasizing iterative customer discovery, service-led wedges, and the path to becoming a system of intelligence.
The Truth About Founder-Led Sales: An exploration of why founder-led sales are crucial in vertical software startups, detailing the stages of product-market fit and the risks of premature delegation.
Nobody Wants Your Product!: A candid reminder that customers prioritize their own needs over new software, urging founders to deeply understand and address real customer problems.
Market Data & Dynamics
SaaSpocalypse Now What?: Revisits public software performance and retention, finding steady reported NRR despite an uneven recovery and broad fears of AI replacement in knowledge-work verticals. Introduces Euclid Comps, an interactive dataset of roughly 140 public software companies, and examines what the market dislocation means for founders and investors.
SaaSpocalypse Now: Examines five myths about the software selloff using public SaaS valuations, growth, pricing models, and sources of defensibility. Argues that markets are rewarding immediate AI revenue while overlooking the longer-term value of vertical data, workflows, and new AI-native markets.
The Vertical Report 2026: Euclid's annual review of VC financings and exits in vertical software and AI, covering 4,000+ deals across the US and Canada with analysis by vertical, geography, stage, and capital efficiency.
Vertical AI & the Productivity Paradox: Discussion of the “AI will kill jobs” narrative plus an analysis of where and how Vertical AI can impact labor productivity & produce significant venture outcomes
Diffusion of AI Across Vertical Markets: Examining our vision for the near-term future of Vertical AI adoption, plus our perspective on the primary gating factor for transformative innovation: talent.
Does AI Threaten Vertical SaaS?: Explores how AI-induced commoditization affects vertical SaaS, identifying strategies for companies to maintain competitive advantages.
Market Sizing in Vertical AI, Parts I & II: Challenges the traditional VC understanding of TAM and provides a pragmatic approach for vertical founders to evaluate ICPs, ACVs, and expansion strategies.
Investment Perspectives
Venture Is Not an Asset Class, It Is a Handful of Charts: Challenges the case for concentrating LP capital in venture megafunds by distinguishing individual investors’ cumulative profit dollars from fund-level returns. Argues that allocators should underwrite investment judgment, strategy, fund size, and portfolio construction rather than rely on brand or access to headline deals.
Beauty and the VC: Examines how concentrated venture capital encourages investors and founders to copy familiar startup templates across very different vertical markets. Makes the case for earned domain insight and problem finding, evaluating the founder, problem, and market together.
The Fundability Trap: Distinguishes between fundability and investability, arguing that VC consensus increasingly rewards pattern-matching on founder pedigree and hot markets over genuine business quality — with dangerous consequences for founders and investors alike.
What’s My Stage Again?: Argues that traditional stage labels like “seed” have become meaningless as round sizes span orders of magnitude, and introduces Euclid’s concept of “inception capital” as a more useful framework.
We Have Met the Enemy and He Is Us: Reflections nearly a year after our initial piece on the damaging impacts of increasing venture capital consolidation on both innovation and the emerging manager ecosystem.
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