Founders' Guide to Vertical AI
New Readers, Start Here — the best of the Verticalist
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 us and the Verticalist at our about page.
What We Write About
The Latest in 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.
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
The Latest in Vertical AI
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.
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.
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.
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.
Founder Playbooks & Toolkits
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.
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
Design Partnerships in Vertical AI: Discusses strategies for identifying design partners, refining a beachead ICP, and iterating on a wedge product that can deliver value.
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
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
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 Part I & Part II: Challenges the traditional VC understanding of TAM, providing a pragmatic approach for vertical founders to evaluate ICPs, ACVs, and expansion strategies.
Investment Perspectives
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.
The Quiet Death of VC-Founder Alignment: Examines how growing AUM and AI hype have shifted investor incentives at the early stage, creating misalignment between what VCs optimize for and what founders actually need.
Deus Ex CapEx: Examining the assumptions and incentives behind the economy-wide bet on GPUs.
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.
The Verticalist exists thanks to you. If there are specific themes, trends, or questions in Vertical AI you'd love to see explored, please reach out to us here or on LinkedIn.
And if you haven't yet, please consider subscribing! Join our growing community and stay informed on what's next in Vertical AI.