In the latest episode of YC’s Lightcore podcast, several investors discussed AI Agents in vertical fields. They believe that vertical AI Agents may change the enterprise software landscape and there is a potential for a $300 billion company to emerge.
In terms of market opportunities, the AI revolution is similar to the SaaS boom in the 2000s and may be even larger in scale. For every SaaS unicorn company, there could be a corresponding vertical AI Agents unicorn. In the past, there was only OpenAI. Now, the competitive landscape is changing, creating a fertile ecological soil. AI can simultaneously replace software and labor costs. Companies spend far more on employees than on software. Small companies will be more efficient with the help of AI. We have now reached the stage of discussing vertical AI Agents replacing teams and functions.
In terms of go-to-market strategies, if you sell to teams that may be replaced by AI, you will face obstacles. You should focus on top decision-makers. To find opportunities, start with boring and repetitive administrative work. For example, a founder discovered that dental claim processing can be completed using large language models because his mother is a dentist.
Successful cases include QA test automation by MTic, developer support chatbots by Cap.Al, and AI voice calls for car loan collections by Salient.
In terms of future prospects, AI tools may help leaders manage larger organizations and change the traditional limitations on company size and management. Vertical AI Agents may remain specialized like SaaS rather than being integrated into a single large platform.
Investors use the development history of SaaS as an analogy and point out that LLM brings a new computing paradigm. In the past, the SaaS boom was driven by XML HTTP requests, which moved software from boxes to the web and mobile. Now, large companies may not win in all vertical fields. Just like in the B2B SaaS field, no one company can monopolize. LLM may give startups more opportunities in vertical fields. For example, vertical AI Agents can integrate software and people and be customized for enterprises. As revenue grows, startups can use LLM to change their business growth methods, reduce costs, and decrease the number of employees. Currently, some vertical AI Agents companies have made good progress. For example, Outset applies LLM to the field of surveys, MCH replaces QA teams, and Cap.AI reduces the size of developer relations teams. At the same time, AI voice call companies like Salient are performing well in the field of car loan collections, but this field is developing rapidly and also facing challenges. For founders choosing vertical fields, they should find boring and repetitive administrative work and combine their own experience and relationships. In short, vertical AI Agents have broad prospects, and competition will drive their development.
