Adam Kalsey

This is the blog of Adam Kalsey. Unusual depth and complexity. Rich, full body with a hint of nutty earthiness.

Product Management

The Rise of Vertical Software

15 Feb 2026

The Rise of Vertical Software with a man looking at towers of software

AI is making output cheap. That’s the headline.

Anyone can generate competent code, decent copy, solid designs. The bar for execution gets higher because everyone can reach it. When execution is easy, what you execute on becomes the differentiator.

The value has shifted to inputs. Higher quality input creates higher quality output. Garbage in, garbage out still applies—but now "garbage" means "the same prompt everyone else is using."

Taste Becomes the Moat

For building software, the valuable skill is knowing WHAT to build. Making trade-off decisions. Having taste.

If anyone can build anything, the people who know what’s worth building win. That’s not something AI gives you. That’s judgment. Experience. Understanding of a problem space that goes beyond what you can prompt for.

This is why "vibe coding" only gets you so far. You can tell AI to build you an app. But knowing which app to build, what features matter, what trade-offs are acceptable to your users—that requires understanding your users better than AI can.

Deep Knowledge as Competitive Advantage

Here’s where it gets interesting. This translates directly to a rise in vertical software. Software built for a particular industry instead of built for everybody.

The competitive moat becomes knowing everything there is to know about that industry. Understanding their work modes. How people think. What frustrates them at 3pm on a Tuesday. The stuff that doesn’t show up in market research.

AI can easily build the software. But knowing what goes into it? Knowing what to build for florists or plumbers or veterinary clinics? That’s a human problem. And it’s defensible in a way that technical execution no longer is.

Smaller Markets Become Viable

At the same time, it becomes cheaper to serve a smaller market. You can build for it more cheaply. Support it less expensively. Reach people you couldn’t have reached before.

Think about it. If you have deep knowledge of florists, you could create Point of Sale software for their unique needs. Maybe plumbers have specialized scheduling and invoicing needs that other trades don’t.

A few years ago, building for that small of a niche would have been unreasonable. Even if you sold to the majority of your addressable market, you wouldn’t make enough money to support the team size needed to attack it.

That math has changed.

Now a solo entrepreneur or a very small team can build for niche verticals. The tools are cheap. The execution is fast. What used to require ten engineers and two years now requires one person and a few months.

The New Opportunity

The opportunity isn’t building software anymore. It’s understanding problems.

If you’ve spent years in an industry—really learning its quirks, its pain points, its tribal knowledge—you have something AI can’t replicate. You have inputs that generate valuable outputs.

That expertise used to be locked away. You’d need a technical co-founder, seed funding, a team. Now you need a laptop and the knowledge you already have.

The people who win in this world are the ones who know what to build. The building part? That’s getting easier every day.

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