Verticals: A Weekly Biz Show

Luke Sophinos

A VC and a Founder intellectually spar on Vertical Tech & AI: covering the latest news, unpacking in-depth business strategies, and interviewing world-class leaders in the space, every Thursday.

  1. 2d ago

    How Open Source Is Changing the Game for Vertical AI | Jake Saper

    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 moreIf 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 SAPERLINKEDIN ➡️ https://www.linkedin.com/in/jakesaperX ➡️ https://x.com/jakesaper👉 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 Why the AI moat is changing05:40 Open source catches up to frontier models10:58 Why enterprises are embracing open source AI16:20 Can OpenAI win the application layer?24:01 Why services are becoming software31:28 The race to build proprietary AI data moats36:38 What AI-native services get right40:36 Why brand still matters in AI45:49 The AI founder playbook for the next decade48:37 The biggest AI opportunities still aheadTOPICS1. Open Source AI & Foundation Models2. AI Native Services & Enterprise AI3. Vertical AI & AI Moats4. AI Infrastructure, Fine-Tuning & Proprietary Data5. The Future of SaaS & AI Business Models

  2. Jul 15

    Why Compliance Is Becoming AI's Biggest Opportunity | Zach Rosen

    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

  3. Jul 8

    The AI Gold Rush Is Chasing the Wrong Thing... | Adam Harris

    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

  4. Jul 1

    The Biggest Mistake AI Founders Make Today | Zain Jaffer

    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

  5. Jun 24

    He Built The Fastest-Growing AI In Education | Adeel Khan

    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

  6. Jun 17

    What Investors Actually Look For In Founders | Dan Teran & James Gettinger

    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 If you enjoyed this episode, drop a comment and hit subscribe so you don’t miss what’s next!

  7. Jun 10

    The Next AI Giants Will Be Both Consumer and Enterprise (Here’s Why) | Nikhil Basu Trivedi

    For years, venture capital forced founders into boxes. You were either a consumer company or an enterprise company. But some of the biggest companies in the world never followed those rules. Today, the line between consumer and enterprise is becoming harder to see… and AI may be accelerating that shift. OpenAI, Anthropic, and Google are moving faster than anyone expected. And for many startups, the biggest risk isn't competition from another startup, it's building directly into the AI kill zone. In this episode of Verticals, Luke and Nic sit down with Nikhil Basu Trivedi, Co-Founder and GP of Footwork VC, to discuss how founders can build defensible companies in an era dominated by foundation models, and why the next generation of category-defining companies may need to win both consumers and enterprises at the same time. They unpack some of the biggest questions facing founders right now: -Is the line between consumer and enterprise disappearing? -What actually creates a moat in the AI era? -How do you avoid building directly into the kill zone of OpenAI and Anthropic? -Which overlooked industries are ripe for AI transformation? 👉 FOLLOW NIKHIL BASU TRIVEDI LINKEDIN ➡️ https://www.linkedin.com/in/nikhilbt X ➡️ https://x.com/nbt 👉 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 03:16 The venture thesis behind Footwork VC 05:11 Why the best companies win consumers and enterprises 13:05 Should founders focus or expand faster in AI? 24:40 Network effects, moats, and what still matters in AI 31:14 The biggest opportunities in 2026 35:12 Avoiding the AI kill zone 40:27 What makes a vertical AI market worth pursuing? 42:38 The hottest AI companies in 202 49:17 Final lessons for founders building in the AI era

  8. Jun 3

    The New Rules for Building Vertical AI | Kyle Lui

    The biggest problem in AI isn't building the product. It's staying relevant six months later. Models improve every month. New competitors appear every week. And switching costs are lower than most founders want to admit. So what actually creates a moat? In this episode of Verticals, Luke and Nic sit down with Kyle Lui from Bling Capital to break down the new rules for product-market fit, market sizing, and defensibility in the AI era. They also cover: -Why AI-native companies are growing faster than SaaS ever did -Why some of the best opportunities now look “too niche” for traditional VC -How AI is changing org charts, hiring, and management itself If you are building, investing, or trying to understand where vertical AI is actually headed, this is a sharp tactical breakdown of what matters now(and what probably won’t matter anymore). 👉 FOLLOW KYLE LUI LINKEDIN ➡️ https://www.linkedin.com/in/kylelui 👉 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 03:26 The frameworks top investors use to spot breakout startups 07:19 What product-market fit actually means now 13:12 Why “AI services” are changing software economics 18:05 The hardest question in AI 24:36 The hidden advantage of routing across multiple models 31:04 Are AI models becoming a commodity? 35:47 How AI companies tap into labor budgets 39:16 Why “too niche” markets might become massive in AI 40:23 Will vertical AI become winner-take-all like SaaS? 45:14 The biggest mistake investors are making right now 52:21 The niche AI market that surprised even their LPs If you enjoyed this episode, drop a comment and hit subscribe so you don’t miss what’s next!

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A VC and a Founder intellectually spar on Vertical Tech & AI: covering the latest news, unpacking in-depth business strategies, and interviewing world-class leaders in the space, every Thursday.

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