The rapid growth of AI products isn't due to a sudden market desire for AI technology itself. Rather, AI enables superior solutions for long-standing customer problems that were previously addressed with inadequate options. The demand existed long before the AI-powered supply arrived to meet it.

Focusing on AI for cost savings yields incremental gains. The transformative value comes from rethinking entire workflows to drive top-line growth. This is achieved by either delivering a service much faster or by expanding a high-touch service to a vastly larger audience ("do more").

The massive TAM expansion for AI relies on shifting spend from labor to technology budgets. This shift won't happen because of top-down CIO mandates. It must be driven by bottom-up product pull, where the value proposition is so overwhelmingly clear that customers are compelled to adopt it.

In the current market, AI companies see explosive growth through two primary vectors: attaching to the massive AI compute spend or directly replacing human labor. Companies merely using AI to improve an existing product without hitting one of these drivers risk being discounted as they lack a clear, exponential growth narrative.

To achieve hyper-growth ($40M+ ARR in year one), your product isn't enough. Every internal function—finance, legal, contracting, customer onboarding—must also be AI-native to process deals and deliver value at a velocity that matches sales success.

Unlike SaaS which sells to limited software budgets (e.g., 1% of revenue), vertical AI agents automate core business functions. This allows them to tap into much larger operational and labor budgets. Companies can capture 4-10% of a customer's total spend by replacing expensive human-led tasks like customer support.

The most significant value from AI is not in automating existing tasks, but in performing work that was previously too costly or complex for an organization to attempt. This creates entirely new capabilities, like analyzing every single purchase order for hidden patterns, thereby unlocking new enterprise value.

AI voice isn't just about cost savings. The technology has improved so much that it often provides a better customer experience (NPS) than human agents. This dual benefit of high ROI and improved experience means customers are eagerly adopting these solutions, creating a powerful market pull for founders.

The traditional SaaS growth metric for top companies—reaching $1M, $3M, then $10M in annual recurring revenue—is outdated. For today's top-decile AI-native startups, the new expectation is an accelerated path of $1M, $10M, then $50M, reflecting the dramatically faster adoption cycles and larger market opportunities.