SaaStr Annual 2024: How to Leverage AI in Your Toolkit of Vertical Software with Activant Capital, Owner.com, Alloy Automation, and DoNotPay

The toolkit for vertical application software has advanced at breakneck speed, creating opportunities to unseat incumbents and digitize whole industries. This session explores how advancement in gen AI, fintech & middleware is creating opportunities to reshape almost every industry and how modern platforms are redefining SaaS in the process.

1. How to Leverage AI in your Vertical Software Toolkit Josh Browder CEO & Founder DoNotPay Sara Du CEO & Founder Alloy Automation Adam Guild CEO & Founder Owner.com Andrew Steele Partner Activant Capital

2. How to leverage AI in your vertical software toolkit

3. Introducing Our Panelists Josh Browder CEO & Founder DoNotPay Sara Du CEO & Founder Alloy Automation Adam Guild CEO & Founder Owner.com Andrew Steele Partner Activant Capital

4. Why are we here?

5. We’re early in a software replacement cycle AI-powered software is coming for traditional SaaS

6. Software is shifting towards self-driving & outcome-based models

7. Vertical Software Companies are set to be some of the biggest winners in this new age 20x+ Market Opportunity vs. traditional vertical software Vertical software is best positioned for full agentic workflows US GDP 2023 (%) Source: US Bureau of Economic Analysis

8. And now is the time to build: the vertical software toolkit is deeper (and cheaper) than ever before Embedded Fintech (~5 years) Modern Middleware (~5 years) LLMs (~2 years) Modern DevOps & APIs (~10 years) Data

9. So how do we unlock this opportunity? Let’s hear from founders making it a reality

10. Initial Uses of AI Are they cost saving or revenue generating? ROI? ~2x internal usage of gen AI vs. externally ~10-15% increases in EBITDA margin in PE-owned assets 15%+ NPS increases with AI voice technology; ~50% reduction in call center volume Sources: Activant Research (portfolio surveys); Unsupervised Learning Survey Q3 2024;

11. Building in AI How are you navigating the model stack? ~1/3 rd of AI startups switched model providers this year ~60% of AI startups leveraging finetuning; ~50% using RAG Prompt-engineering roles up 42% from Jan 23 but new studies show AI itself is more effective Sources: Unsupervised Learning Survey Q3 2024; WSJ (2024); Cornell University Study (2024)

12. Building in AI How are you navigating the data stack? Data consistently ranked #1 constraint to AI value creation 87% of data science projects never make it into production 187: average # of enterprise apps Unstructured data is 94% of enterprise data production; only 18% report using it at all Sources: Gartner Gen AI Report; Tamr Research (2024); Matillion & IDG Survey 2024; Deloitte

13. People & AI 33% of startups have separate AI teams vs. hybrid product & AI 1.8M+ GitHub Co-Pilot paid subs (up 35% QoQ ) Stack Overflow page views down 300%+ in past 18- months Sources: Microsoft Q3 24 Earnings. Unsupervised Learning Survey (2024); SimilarWeb How are you adapting your teams in the AI age?

14. Business Model How is AI impacting your business model? ~60% of SaaS companies have some form of usage-based pricing today; expected to rise to 80% in next 5 years ~15% of SaaS companies have usage-based as core model Reported 5-15% reduction in churn with usage-based models Sources: OpenView Research (2024)

15. Q&A Any questions from the audience? Bonus Questions: Where are we on the path to fully autonomous AI agents? How quickly are incumbents adapting? What permission level are you comfortable giving AI?

16. Key Takeaways Vertical software is set to become one of the biggest winners in AI Revenue-generating > cost-saving uses of AI Building for flexibility in the model stack is important DataOps & integrations will play a crucial role in unlocking value in AI Outcomes-based pricing will become more prevalent but be part of hybrid strategy

17. THANK YOU!