The Founder's Guide to Vertical AI
Start here: the best of Euclid Insights
Welcome to Euclid Insights: 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 on us and Euclid Insights at our about page.
What We Write About
The Latest Vertical AI: How AI is transforming industries.
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.
Content Directory
The Latest in Vertical AI
Vertical AI's Integration Problem: Explores the challenges Vertical AI startups face integrating with entrenched systems of record and outlines five strategic approaches to overcome these barriers, from building wedge products to leveraging emerging AI infrastructure.
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.
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.
Voice-First Playbooks in Vertical AI: Presents a thesis on the potential of voice AI to redefine software interfaces, emphasizing the importance of reimagining workflows with voice as the primary modality.
The Siren Song of Services: Offers a cautionary perspective on AI-powered services-as-software models, highlighting the risks of over-reliance on services revenue and the importance of maintaining scalable software margins.
Founder Playbooks & Toolkits
Voice-First Playbooks in Vertical AI: Presents a thesis on the potential of voice AI to redefine software interfaces, emphasizing the importance of reimagining workflows with voice as the primary modality.
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
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.
The Next Chapter for Vertical Software: Discusses the evolution of vertical business models beyond traditional seat-based pricing, highlighting hybrid approaches that capture value from industry-specific workflows and services.
Market Data & Dynamics
Does AI Threaten Vertical SaaS?: Explores how AI-induced commoditization affects vertical SaaS, identifying strategies for companies to maintain competitive advantages.
The Future of AI is Vertical: Argues that vertical applications of AI offer superior defensibility and value by deeply integrating into industry-specific workflows.
Market Sizing in Vertical AI (Part I): Challenges traditional TAM assessments, emphasizing the importance of understanding market dynamics and expansion potential in vertical AI.
Market Sizing in Vertical AI (Part II): Provides a pragmatic approach for vertical founders to evaluate TAM and expansion strategies, focusing on ACVs. and customer counts.
Investment Perspectives
Swiss Cheese & Vertical Software: Introduces the WYHTB framework, applying the Swiss Cheese Model to assess multivariate risks in Vertical AI startups, emphasizing the importance of aligning organizational and market factors to achieve success.
Early-Stage VC in the Age of Vertical AI: Discusses the necessity for early-stage investors to adopt first-principles thinking in evaluating Vertical AI opportunities, focusing on long-term TAM.
An Era for Vertical Software: Explores how vertical startups, with their capital efficiency and deep industry integration, are uniquely positioned to thrive in volatile markets, offering resilient and scalable solutions across various sectors.
The Mind-Virus of Big Venture: Critiques the narrative of venture capital consolidation, arguing that over-concentration may stifle innovation and that emerging managers play a crucial role in the ecosystem.
A Banner Year for Vertical Software: Highlights that vertical software accounted for the majority of B2B SaaS exits in 2024, emphasizing the importance of founder-market fit and the potential for growth in early-stage investments.
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