The Future of Vertical SaaS is Personal Software

The way that we design vertical software is primarily centered around ICPs, or ideal customer profiles. The whole point of vertical SaaS is that it is best tuned to a specific kind of customer who has a very specific set of needs. You can make that piece of software uniquely better for them than a generalist piece of software ever could be.

One interesting idea with AI is that as software becomes cheaper to create, the limit on how “vertical” you can make this software changes. It trends towards personal software for each professional. We have to recognize that each person has unique needs and each company has unique needs within each role.

I have started to see bits of this along the lines of custom CRMs. One common need for most companies is to have a custom system of record. There are now consultancies that, instead of going to Salesforce, will actually build a custom CRM for your enterprise. What is interesting about this is that it is still at the Enterprise-by-Enterprise level. It is not quite personal yet. However, it is a direct result of the production of software getting cheaper.

Over the past decade and a half, there has been an ecosystem built around vertical software for point categories with the largest companies. They were attacking very large but antiquated markets and building point software for them.

In the future, though, we might see a very different model where agentic software supersedes this. Instead of going to a single vertical platform, the unit economics will make sense for everyone to have a custom solution. Everything from enterprises to small and medium businesses, and even individuals, could choose to have a custom software stack.

There are hints of this in how much traction companies like Lovable and Replit are getting on the custom internal tools front.

I think this is interesting from an entrepreneur’s perspective. Oftentimes it means not competing directly with the large vertical SaaS players. Instead, you go a layer deeper. You get closer to the ICP to truly serve their needs. Agents serve this really well because agents can give a custom experience for each user which is fully unique to them. It fits around their profile of the customer. This creates a better customer experience and also makes your software much stickier.