Vertical SaaS is Dead. Long live Vertical AI.
The next generation of unicorns won't just provide workflow software; they will sell the work itself. Why we are pivoting our entire fund strategy to agentic workflows.
For the past decade, vertical SaaS has been the dominant playbook: pick an industry, build workflow software, charge per seat. Dentists got Dentrix. Restaurants got Toast. Law firms got Clio. But something fundamental has changed.
The End of Software-as-a-Service
The per-seat model assumes humans are doing the work. AI agents don't need seats—they need compute. The pricing model of the future isn't "per user" but "per task completed."
Consider this: A legal document that took a paralegal 4 hours to draft can now be generated in 30 seconds. Do you charge for 4 hours of seat time, or for the completed document?
AI Doesn't Need Seats
"We are no longer selling tools to help people work. We are selling the work itself."
The next generation of vertical software won't help humans do work faster—it will do the work itself. This is a fundamental shift.
From Workflow to Work
Old Model (Vertical SaaS):
- Provide tools
- Charge per user
- Humans do the work
- Value = time saved
New Model (Vertical AI):
- Provide outcomes
- Charge per task
- Agents do the work
- Value = work completed
Why This Matters for WRKSHP
We're repositioning our entire portfolio thesis around this insight. Our products—Sentinel, BlockGPT—are built for a world where AI agents are the primary workers.
Sentinel isn't just security software. It's the trust layer that enables AI agents to take real-world actions.
BlockGPT isn't just a coding assistant. It's a complete development team in a box.
The Opportunity
Industries ripe for this transformation:
- Legal: Document generation, contract review, compliance
- Finance: Trading, analysis, reporting
- Development: Full-stack application generation
- Operations: Supply chain, logistics, scheduling
The companies that figure out how to sell work—not workflows—will be the next generation of $100B outcomes.
This memo represents WRKSHP's current investment thesis as of October 2024.
Forward-Looking Statements: This memo may contain forward-looking statements regarding future events, market projections, and business prospects. Such statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Past performance is not indicative of future results. This content is for informational purposes only and does not constitute investment advice.