THREE DOMINANT MODELS OF TODAY'S VERTICAL AI HORSERACE

Summary from the TLDR Founders newsletter

Public SaaS market caps continue to free-fall while VC keeps investing in vertical AI at frothy valuations. There are three models emerging, and they require completely different playbooks. Model 1 sells AI-powered software to incumbents - de-risked GTM, but innovation ceiling. Model 2 acquires businesses and deploys AI to improve unit economics across a portfolio - immediate revenue, but integration nightmares. Model 3 builds the business from scratch as an AI-native replacement - maximum value capture, but cold start and regulatory hurdles. Many companies are choosing a model whose physics don't match their market.