For 50 years, software companies sold tools.

But customers never really wanted the tool. They wanted the job done.

In this episode of Verticals, Nic sits down with Yoni Rechtman, Partner at Slow Ventures, to unpack why AI is breaking the traditional SaaS model and creating an opportunity that could be orders of magnitude larger.

Historically, businesses spent only a fraction of their budgets on software. The rest went toward people, agencies, contractors, and services actually doing the work. But AI changes that equation: software can now execute the workflow itself, allowing startups to go after the service budget instead of just the software budget.

Yoni lays out five emerging business models he believes could define the next generation of AI companies: using services to differentiate software, using software to differentiate services, AI-powered rollups, agent networks, and hardware that differentiates software.

In this episode, they discuss:

-Why customers want outcomes, not workflow software

-How AI could expand traditional software markets by 30–100x

-The difference between selling software and taking responsibility for the work

-Why many vertical AI agents could struggle to build lasting moats

If you're building in vertical AI, investing in software, or trying to understand what comes after SaaS, this episode is a framework for the business models that could define the next decade.

🎟️ TICKETS DROPPED. Vertical Software Summit — 5-billion-dollar Vertical AI CEOs confirmed to speak. Snag a ticket before they're gone: https://verticalsaasgroup.com/conference

👉 FOLLOW YONI RECHTMAN

LINKEDIN ➡️ https://www.linkedin.com/in/yrechtman

X ➡️ https://x.com/yrechtman

👉 FOLLOW LUKE SOPHINOS

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LINKEDIN ➡️ https://www.linkedin.com/in/lukesophinos/

NEWSLETTER ➡️ https://www.newsletter.lukesophinos.com/

👉 FOLLOW NIC POULOS

X ➡️ https://x.com/picnoulos

LINKEDIN ➡️ https://www.linkedin.com/in/npoulos/

NEWSLETTER ➡️ https://insights.euclid.vc/

🎬 TIMESTAMPS:

00:00 Why customers never really wanted software

06:27 The 5 business models that could replace SaaS

12:03 Why forward-deployed engineers are suddenly everywhere

16:40 The massive opportunity hiding in SMB labor budgets

17:35 How AI agents could create entirely new network effects

21:08 Why AI could make software markets 30-100x bigger

24:46 The problem with AI companies that just resell tokens

28:45 Software vs. services: who actually owns the outcome?

33:37 Why “better prompts” won't become a lasting AI moat

38:05 Is proprietary data really defensible anymore?

42:39 Why the software vs. services distinction still matters

49:18 The agent network business model explained

53:47 What happens when AI agents start spending money?

TOPICS

1. Vertical SaaS

2. Vertical AI & Enterprise Software

3. AI Agents, OpenAI, Anthropic & the Future of SaaS

4. Small Business Finance

What separates the vertical software companies that compound for decades from the ones that eventually stall?

Sahill Poddar has a unique dataset for answering that question...

In this episode of Verticals, Luke and Nic sit down with Sahil, Co-Founder and CEO of Parafin, the embedded finance infrastructure powering capital products across platforms like DoorDash, Worldpay, and Mindbody. By underwriting the businesses operating across these platforms, Parafin gets a rare look under the hood at what actually separates the strongest vertical software companies from the rest.

We discuss:

-What the best vertical SaaS companies have in common

-Why sequencing matters when expanding beyond your initial wedge

-When vertical software companies should add financial services

-How embedded lending can create stronger retention and higher LTV

-Why AI could turn traditional software platforms into databases

🎟️ TICKETS DROPPED. Vertical Software Summit — 5-billion-dollar Vertical AI CEOs confirmed to speak. Snag a ticket before they're gone: https://verticalsaasgroup.com/conference

👉 FOLLOW SAHILL PODDAR

LINKEDIN ➡️ https://www.linkedin.com/in/sahill-poddar-57302461/

X ➡️ https://x.com/llihas

👉 FOLLOW LUKE SOPHINOS

X ➡️ https://x.com/lukesophinos

LINKEDIN ➡️ https://www.linkedin.com/in/lukesophinos/

NEWSLETTER ➡️ https://www.newsletter.lukesophinos.com/

👉 FOLLOW NIC POULOS

X ➡️ https://x.com/picnoulos

LINKEDIN ➡️ https://www.linkedin.com/in/npoulos/

NEWSLETTER ➡️ https://insights.euclid.vc/

🎬 TIMESTAMPS:

00:00 What separates the best vertical SaaS companies

04:56 Why direct SMB lending became a Silicon Valley graveyard

11:16 How a five-person startup landed DoorDash

18:10 Why you should sell the minimum viable product

20:51 What the data says about winning vertical SaaS companies

26:45 How Parafin actually underwrites small businesses

34:31 Why AI needs to take action, not just provide insights

40:08 Could AI turn every SaaS product into a database?

48:58 The vertical software companies AI will struggle to replace

54:06 Sahill's favorite verticals from 2026

TOPICS

1. Vertical SaaS

2. Vertical AI & Enterprise Software

3. AI Agents, OpenAI, Anthropic & the Future of SaaS

4. Small Business Finance

AI isn't just changing startups.

It's exposing everything that's broken about venture capital.

In this episode of Verticals, Nic sits down with Rick Zullo, Founder and Managing Partner of Equal Ventures, to discuss why today's venture market feels increasingly disconnected from the businesses it's funding, and why some of the biggest trends in AI investing may be driven as much by incentives as by opportunity.

Rick argues that many AI-native services companies are being valued using the wrong metrics, that physical AI has become the latest destination for excess venture capital, and that some of the best software businesses of the last decade (including companies like Veeva) might struggle to get funded in today's environment.

They discuss:

-Why venture capital incentives have changed

-The hidden flaws in AI-native services businesses

-Whether physical AI is the next great opportunity or the next bubble

-How to identify durable moats in the AI era

-And so much more

00:00 Why something feels broken in venture capital

05:17 The hidden problem with AI-native services

10:01 Why competition kills AI margins

15:19 Is physical AI the next gold rush?

21:10 Which AI businesses actually build lasting moats?

28:03 Why robotics and autonomy are different bets

35:39 The return of capital-efficient startups

40:21 Why today's biggest VC funds play a different game

44:53 How Rick evaluates billion-dollar opportunities

46:58 The vertical AI markets Rick is most excited about

🎟️ TICKETS DROPPED. Vertical Software Summit — 5-billion-dollar Vertical AI CEOs confirmed to speak. Snag a ticket before they're gone: https://verticalsaasgroup.com/conference

👉 FOLLOW RICK ZULLO

LINKEDIN ➡️ https://www.linkedin.com/in/rickzullo/

X ➡️ https://x.com/Rick_Zullo

👉 FOLLOW LUKE SOPHINOS

X ➡️ https://x.com/lukesophinos

LINKEDIN ➡️ https://www.linkedin.com/in/lukesophinos/

NEWSLETTER ➡️ https://www.newsletter.lukesophinos.com/

👉 FOLLOW NIC POULOS

X ➡️ https://x.com/picnoulos

LINKEDIN ➡️ https://www.linkedin.com/in/npoulos/

NEWSLETTER ➡️ https://insights.euclid.vc/

🎬 TIMESTAMPS:

00:00 Why something feels broken in venture capital

05:17 The hidden problem with AI-native services

10:01 Why competition kills AI margins

15:19 Is physical AI the next gold rush?

21:10 Which AI businesses actually build lasting moats?

28:03 Why robotics and autonomy are different bets

35:39 The return of capital-efficient startups

40:21 Why today's biggest VC funds play a different game

44:53 How Rick evaluates billion-dollar opportunities

46:58 The vertical AI markets Rick is most excited about

TOPICS

1. Venture Capital

2. Startup Fundraising

3. AI Startups

4. Startup Strategy

5. Vertical SaaS

AI is making it easier than ever to build software.

So why are the best founders spending even more time thinking about what NOT to build?

In this episode of Verticals, Nic sits down with Alex Oppenheimer, founder of Verissimo Ventures and former investor at NEA and Morgan Stanley, to discuss how AI is reshaping software, venture investing, and even decision-making for founders.

From barbers rebuilding booking systems in ChatGPT to founders replacing SaaS subscriptions with their own tools, Alex argues that AI is lowering the cost of creation, but not the difficulty of building products people actually want.

The conversation explores why vertical markets continue to surprise investors, how founders should think about build versus buy, and why surviving long enough to iterate may be the single most important job of an early-stage startup.

They discuss:

-Why AI is changing the build vs. buy equation

-Why software isn't dead despite AI

-The biggest mistake early-stage founders make

-Why VCs continue to underestimate vertical markets

How AI is expanding (not shrinking) software opportunities

-And so much more

If you're building an AI startup, investing in software, or trying to understand what skills still matter as AI becomes ubiquitous, this episode offers a thoughtful framework for navigating one of the biggest technology shifts in decades.

🎟️ TICKETS DROPPED. Vertical Software Summit — 5-billion-dollar Vertical AI CEOs confirmed to speak. Snag a ticket before they're gone: https://verticalsaasgroup.com/conference

👉 FOLLOW ALEX OPPENHEIMER

LINKEDIN ➡️ https://www.linkedin.com/in/alex-oppenheimer

X ➡️ https://x.com/Alexoppenheimer

👉 FOLLOW LUKE SOPHINOS

X ➡️ https://x.com/lukesophinos

LINKEDIN ➡️ https://www.linkedin.com/in/lukesophinos/

NEWSLETTER ➡️ https://www.newsletter.lukesophinos.com/

👉 FOLLOW NIC POULOS

X ➡️ https://x.com/picnoulos

LINKEDIN ➡️ https://www.linkedin.com/in/npoulos/

NEWSLETTER ➡️ https://insights.euclid.vc/

🎬 TIMESTAMPS:

00:00 Is AI making judgment obsolete?

05:38 Why VCs still underestimate vertical markets

10:14 The new build vs. buy equation

16:00 Why software isn't dead

20:34 Where venture returns come from now

26:14 Why fund size changes everything in VC

30:03 The IPO problem and venture liquidity

33:55 Why fundraising has become so polarized

36:25 What founders should focus on next

For the last two years, AI has been a race to build the best model.

But what happens when the models become cheap, open source, and nearly interchangeable?

That's the question reshaping the entire AI industry.

In this episode of Verticals, Luke and Nic sit down with Jake Saper, General Partner at Emergence Capital and one of the earliest investors in companies like Zoom, Veeva, Ironclad, and Together AI, to discuss where value actually accrues as AI infrastructure becomes increasingly commoditized.

Jake explains why open-source models are rapidly closing the gap with frontier labs, why companies are diversifying across multiple models instead of relying on a single provider, and why the next generation of AI winners may own proprietary workflows, evaluation data, and customer outcomes, not the underlying model itself.

They discuss:

-Why the model is no longer the moat

-How open-source AI is changing enterprise software

-Why token costs are collapsing faster than expected

-The rise of AI-native services

-And so much more

If you're building AI products, investing in the next generation of software, or trying to understand where durable value will be created as AI matures, this conversation is a roadmap for what comes next.

📚 Read Emergence's Definitive Guide to AI-Native Services: https://www.emcap.com/ai-native-services

🎟️ TICKETS DROPPED. Vertical Software Summit — 5-billion-dollar Vertical AI CEOs confirmed to speak. Snag a ticket before they're gone: https://verticalsaasgroup.com/conference

👉 FOLLOW JAKE SAPER

LINKEDIN ➡️ https://www.linkedin.com/in/jakesaper

X ➡️ https://x.com/jakesaper

👉 FOLLOW LUKE SOPHINOS

X ➡️ https://x.com/lukesophinos

LINKEDIN ➡️ https://www.linkedin.com/in/lukesophinos/

NEWSLETTER ➡️ https://www.newsletter.lukesophinos.com/

👉 FOLLOW NIC POULOS

X ➡️ https://x.com/picnoulos

LINKEDIN ➡️ https://www.linkedin.com/in/npoulos/

NEWSLETTER ➡️ https://insights.euclid.vc/

🎬 TIMESTAMPS:

00:00 Why the AI moat is changing

05:40 Open source catches up to frontier models

10:58 Why enterprises are embracing open source AI

16:20 Can OpenAI win the application layer?

24:01 Why services are becoming software

31:28 The race to build proprietary AI data moats

36:38 What AI-native services get right

40:36 Why brand still matters in AI

45:49 The AI founder playbook for the next decade

48:37 The biggest AI opportunities still ahead

TOPICS

1. Open Source AI & Foundation Models

2. AI Native Services & Enterprise AI

3. Vertical AI & AI Moats

4. AI Infrastructure, Fine-Tuning & Proprietary Data

5. The Future of SaaS & AI Business Models

Compliance isn't usually where great software companies start.

It's often dismissed as a feature. A checkbox. Something incumbents can easily add later.

But in the AI era, that assumption is starting to break.

In this episode of Verticals, Nic sits sdown with Zach Rosen, Co-Founder and CEO of Brellium, to explain why compliance can become one of the strongest wedges in vertical AI, if you're solving problems where the rules are constantly evolving and enforcement is anything but straightforward.

Brellium audits every patient visit before it's billed, helping healthcare providers stay compliant with payer requirements, improve clinical documentation, and avoid costly clawbacks. Today, the platform serves providers across all 50 states, but Zach argues the real value isn't just catching mistakes, it's changing provider behavior over time through continuous feedback and training.

They discuss:

-Why compliance is becoming a powerful AI wedge

-How Brellium built a defensible network effect from real-world enforcement data

-Why training users may be more valuable than simply catching mistakes

-The two paths every vertical AI company can take to beat incumbents

If you're building in vertical AI, healthcare, or any regulated industry, this episode is a practical framework for identifying durable wedges, building defensible products, and creating moats that go far beyond the model.

🎟️ TICKETS DROPPED. Vertical Software Summit — 5-billion-dollar Vertical AI CEOs confirmed to speak. Snag a ticket before they're gone: https://verticalsaasgroup.com/conference

👉 FOLLOW ZACH ROSEN

LINKEDIN ➡️ https://www.linkedin.com/in/zach-rosen

👉 FOLLOW LUKE SOPHINOS

X ➡️ https://x.com/lukesophinos

LINKEDIN ➡️ https://www.linkedin.com/in/lukesophinos/

NEWSLETTER ➡️ https://www.newsletter.lukesophinos.com/

👉 FOLLOW NIC POULOS

X ➡️ https://x.com/picnoulos

LINKEDIN ➡️ https://www.linkedin.com/in/npoulos/

NEWSLETTER ➡️ https://insights.euclid.vc/

🎬 TIMESTAMPS:

00:00 Why compliance is having an AI moment

05:15 What healthcare compliance actually looks like

10:53 Why Brellium is really a training platform

14:23 Building alongside healthcare systems of record

18:16 Selling to providers before payers

23:29 Can compliance become a real AI moat?

27:29 The two playbooks for winning in vertical AI

30:36 Why AI makes wedge products easier to build

33:25 The biggest mistake first-time founders make

36:24 Why outcome-based pricing doesn't always work

38:12 Bullish or bearish on healthcare AI?

40:43 The next massive AI opportunity founders are missing

TOPICS

1. Healthcare AI & AI Compliance

2. Vertical AI & Vertical SaaS

3. AI in Regulated Industries

4. Healthcare Revenue Cycle & Medical Documentation

5. AI Startups, Systems of Record & AI Moats

Every AI startup wants to disrupt the incumbents.

But what if the companies with the biggest advantage are the ones that already own the data?

In this episode of Verticals, Luke and Nic sit down with Adam Harris, Co-Founder and CEO of Cloudbeds, a hospitality platform operating in 157 countries that processes more than $20 billion in transactions. After nearly 14 years building one of the industry's largest systems of record, Adam explains why AI alone isn't enough, and why proprietary data, workflow context, and trust are becoming the real competitive advantages.

Rather than seeing AI as a threat to incumbents, Adam believes companies with deep operational data are in the strongest position to win. The real challenge isn't building another chatbot; it's turning AI into a reliable system of action that customers can trust.

They discuss:

-Why the "SaaS is dead" narrative misses the bigger picture

-Why proprietary data is becoming AI's biggest moat

-Whether incumbents or AI startups are better positioned to win

-The rise of AI agents

If you're building AI products, investing in vertical software, or wondering where long-term value will accrue in the AI stack, this conversation offers a practical framework for thinking beyond the hype.

🎟️ TICKETS DROPPED. Vertical Software Summit — 5-billion-dollar Vertical AI CEOs confirmed to speak. Snag a ticket before they're gone: https://verticalsaasgroup.com/conference

👉 FOLLOW ADAM HARRIS

LINKEDIN ➡️ https://www.linkedin.com/in/adambharris

👉 FOLLOW LUKE SOPHINOS

X ➡️ https://x.com/lukesophinos

LINKEDIN ➡️ https://www.linkedin.com/in/lukesophinos/

NEWSLETTER ➡️ https://www.newsletter.lukesophinos.com/

👉 FOLLOW NIC POULOS

X ➡️ https://x.com/picnoulos

LINKEDIN ➡️ https://www.linkedin.com/in/npoulos/

NEWSLETTER ➡️ https://insights.euclid.vc/

🎬 TIMESTAMPS:

00:00 Intro

01:00 The real opportunity behind AI

09:12 From systems of record to systems of action

15:19 Why proprietary data is AI's biggest moat

20:35 Should every software company build its own AI model?

26:32 Why seat-based SaaS pricing is breaking down

30:05 The future of AI pricing and outcome-based software

35:02 How Cloudbeds approaches AI adoption internally

40:51 Why customer behavior changes slower than technology

44:24 The AI gold rush and protecting your data moat

49:44 Why many AI startups underestimate enterprise software

52:20 AI, hotel bookings, and the future of hospitality

TOPICS

1. Vertical AI

2. AI Agents

3. Enterprise AI

4. AI Pricing Models

5. Future of SaaS

For years, software companies followed the same blueprint:

Raise venture capital. Hire aggressively. Sell SaaS subscriptions. Scale headcount alongside revenue.

But AI is rewriting those rules.

In this episode of Verticals, Luke and Nic sit down with Zain Jaffer, who previously built Vungle into a business that was acquired for $780M before later reaching a $4B public valuation. After investing in startups as a VC, he's now back in the founder seat building Blazel, and unlearning many of the lessons that made him successful the first time.

One of the biggest takeaways from this episode is that AI-native agencies may look like the easiest businesses to build today, but they can quickly become some of the hardest businesses to scale.

Zain explains why replacing services with AI creates an attractive wedge, but can also trap founders in low-margin businesses that become difficult to escape.

They unpack some of the biggest debates in AI right now:

-Why the traditional SaaS playbook is starting to break

-The hidden risks of AI-native agencies

-When founders should build on OpenAI, and when they should build their own models

-Why distribution is becoming a stronger moat than product alone

-How AI is changing hiring, product development, and company building

🎟️ TICKETS DROPPED. Vertical Software Summit — 5-billion-dollar Vertical AI CEOs confirmed to speak. Snag a ticket before they're gone.

👉 FOLLOW ZAIN JAFFER

WEBSITE ➡️ https://zainjaffer.com/

LINKEDIN ➡️ https://www.linkedin.com/in/zainjaffer/

👉 FOLLOW LUKE SOPHINOS

X ➡️ https://x.com/lukesophinos

LINKEDIN ➡️ https://www.linkedin.com/in/lukesophinos/

NEWSLETTER ➡️ https://www.newsletter.lukesophinos.com/

👉 FOLLOW NIC POULOS

X ➡️ https://x.com/picnoulos

LINKEDIN ➡️ https://www.linkedin.com/in/npoulos/

NEWSLETTER ➡️ https://insights.euclid.vc/

🎬 TIMESTAMPS:

00:00 Intro

01:30 Building an AI marketing platform from scratch

08:05 The future of AI-native marketing teams

17:14 Why data flywheels are the new moat

20:31 Choosing the right ICP in the AI era

25:36 The hidden trap of AI-native agencies

33:25 Human labeling, evals, and building better AI

37:42 Should every startup build its own model?

42:10 Are OpenAI and Anthropic worth a trillion dollars?

49:23 What an $800M founder had to unlearn about startups

When ChatGPT launched, investors had a simple answer for most AI startups:

"It's just a GPT wrapper."

But what if the biggest winners weren't the model companies?

What if the real opportunity was building products that deeply understood a specific customer, workflow, and industry?

In this episode of Verticals, Luke and Nic sit down with Adeel Khan, Founder and CEO of MagicSchool, one of the fastest-growing AI companies in education.

Adeel wasn't a software founder. He was a teacher, assistant principal, and school leader who saw the potential of generative AI firsthand and decided to build for educators. Just months later, MagicSchool exploded from zero to 1 million users in five months, entirely through organic growth.

Today, the platform is used by educators in nearly every school building in America and partners with districts representing one in five children nationwide.

They discuss:

-Why domain expertise became MagicSchool's biggest advantage

-How a non-technical founder built one of the fastest-growing AI companies

-The controversial decision to give the product away for free

-How they converted massive product usage into enterprise revenue

-Why GPT wrappers were more defensible than many investors believed

And Adeel shares his perspective on the future of education, the opportunities AI is creating for students and teachers, and why there has never been a better time to build software for underserved industries.

If you're building in vertical AI, education, or trying to understand what separates lasting companies from short-lived AI hype, this episode is packed with lessons from one of the category's breakout founders.

🎟️ TICKETS DROPPED. Vertical Software Summit — 5-billion-dollar Vertical AI CEOs confirmed to speak. Snag a ticket before they're gone.

👉 FOLLOW ADEEL KHAN

LINKEDIN ➡️ https://www.linkedin.com/in/adeelkh/

👉 FOLLOW LUKE SOPHINOS

X ➡️ https://x.com/lukesophinos

LINKEDIN ➡️ https://www.linkedin.com/in/lukesophinos/

NEWSLETTER ➡️ https://www.newsletter.lukesophinos.com/

👉 FOLLOW NIC POULOS

X ➡️ https://x.com/picnoulos

LINKEDIN ➡️ https://www.linkedin.com/in/npoulos/

NEWSLETTER ➡️ https://insights.euclid.vc/🎬

TIMESTAMPS:

00:00 Intro

01:30 From school principal to AI founder

05:17 Launching MagicSchool during the ChatGPT moment

08:59 Why domain expertise matters more than ever

14:11 The fundraising challenges of a non-technical founder

20:13 How MagicSchool's product-led growth exploded

23:41 The free-to-paid strategy that unlocked enterprise sales

29:02 Transitioning from order-taking to real sales

34:07 The biggest lesson from scaling to millions of users

36:14 Why GPT wrappers became more valuable, not less

43:01 Competing with legacy education software companies

46:46 Is there still room to build in education AI?

48:05 Why education remains one of the biggest opportunities in software

Most founders think investors are looking for the perfect idea.

They're not.

At the earliest stages, investors are really trying to answer a much harder question:

Is this founder capable of building something extraordinary?

In this episode of Verticals, Luke and Nic sit down with Dan Teran and James Gettinger of Gutter Capital to unpack exactly how they evaluate founders before there's meaningful revenue, traction, or even a finished product.

They break down:

-Why resourcefulness beats pedigree

-What "founder-market fit" actually means

-How customer obsession separates great founders from everyone else

-Why evidence beats storytelling every time

-The founder traits they consistently see in breakout companies

🎟️ TICKETS DROPPED. Vertical Software Summit — 5-billion-dollar Vertical AI CEOs confirmed to speak. Snag a ticket before they're gone.

👉 FOLLOW DAN TERANLINKEDIN ➡️ https://www.linkedin.com/in/danteran

👉 FOLLOW JAMES GETTINGERLINKEDIN ➡️ https://www.linkedin.com/in/james-gettinger-452a228X ➡️ https://x.com/chess_is_ok

👉 FOLLOW LUKE SOPHINOSX ➡️ https://x.com/lukesophinosLINKEDIN ➡️ https://www.linkedin.com/in/lukesophinos/NEWSLETTER ➡️ https://www.newsletter.lukesophinos.com/

👉 FOLLOW NIC POULOSX ➡️ https://x.com/picnoulosLINKEDIN ➡️ https://www.linkedin.com/in/npoulos/NEWSLETTER ➡️ https://insights.euclid.vc/

🎬 TIMESTAMPS:

00:00 Intro

03:59 Why Gutter Capital was built differently

06:04 Resourcefulness beats pedigree every time

10:10 The traits that predict exceptional founders

17:12 How VCs really reference-check founders

28:17 The most surprising startups in their accelerator

34:52 The final advice every founder should hear

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