Guest Post
By Mark M.J. Scott
President of Northern Pixels Inc.
2026 is the year vertical AI startups face a brutal paradox: exponentially more funded competitors fighting for the same enterprise budget.
While AI startup funding surged 85% in 2025 to $211 billion globally, and Andreessen Horowitz alone just deployed $15 billion into the ecosystem, enterprise IT budgets are growing at only 2% annually. Even more devastating, enterprises are consolidating their AI vendor relationships—spending more on AI but with fewer vendors.
This is the math that will kill 99.5% of AI startups before they reach $10 million in revenue. Not because their technology fails, but because the traditional SaaS GTM playbook they inherited—outbound sequences, demo-first sales, top-of-funnel optimization—was designed for a world that no longer exists.
In 2023 and 2024, AI founders could win with aggressive growth tactics borrowed from SaaS. But 2026 is different. Enterprise buyers are overwhelmed, budgets are consolidating, and proof is required before engagement—not after. The SaaS playbook assumes you can earn attention, win evaluations, and build proof through volume and velocity. The reality: buyers have already picked their preliminary favorite before your SDR ever gets a meeting.
The 0.5% of vertical AI startups that will survive 2026 understand this shift. They’re ditching inherited SaaS GTM reflexes and adopting market shaping GTM—the strategic approach deep tech companies have used for decades to commercialize breakthrough technology in skeptical, risk-averse markets. Market shaping doesn’t just solve one GTM challenge. It solves the three existential barriers traditional SaaS playbooks can’t overcome.
Challenge #1: The Buyer Attention Crisis—You’re Invisible Before You’re Evaluated
The Problem
70% of B2B buyers report feeling overwhelmed by the sheer volume of sales and marketing information. In response, buyers now choose a preliminary vendor favorite in the first 60% of their research journey—before they ever engage with sellers—and once they pick that early favorite, they purchase from them 77% of the time.
For vertical AI startups, this creates an existential crisis. If you’re not the preliminary favorite during a buyer’s independent research phase, you’ve already lost. Traditional SaaS GTM assumes you can “get in front of buyers” through outbound campaigns and paid ads. But the majority of buyers are conducting of their journey independently, and average buying groups now include 10-11 stakeholders. By the time you get into the deal, you’re playing catch-up against a competitor who already owns the narrative.
How Market Shaping Solves This
Market shaping ensures you become the preliminary favorite during independent research by systematically controlling the narrative buyers encounter.
Market shaping deploys three strategic assets: thought leadership that frames evaluation criteria in your vertical, third-party validators (analysts, technical authorities) who position you as the category standard, and reference customer stories that appear in buyer research—not just on your website.
When buyers in your target vertical begin research, they encounter your framing of the problem, your validators endorsing your approach, and your customer proof appearing in analyst reports. You become the preliminary favorite by design, not by luck.
Glean shaped how enterprises evaluate AI-powered workplace search by positioning themselves as the solution to “enterprise search fragmentation” before competitors could define the category—resulting in $270 million ARR, a $4.6 billion valuation, and customers like Databricks, Reddit, and Sony who chose Glean during independent research.
Challenge #2: The Budget Consolidation Trap—Enterprises Are Choosing Winners Early
The Problem
Enterprise AI budgets are consolidating in 2026, and most vertical AI startups won’t make the cut.
Gartner forecasts AI infrastructure spending jumping from $18.3 billion to $37.5 billion year-over-year—but VCs predict enterprises will spend this through fewer vendors, not more. Rob Biederman of Asymmetric Capital Partners states: “Budgets will increase for a narrow set of AI products that clearly deliver results and will decline sharply for everything else. We expect a bifurcation where a small number of vendors capture a disproportionate share of enterprise AI budgets while many others see revenue flatten or contract”.
For vertical AI startups, this means you must become one of the 2-3 “safe choice” vendors in your category, or you don’t get budget allocation at all. Traditional SaaS GTM focuses on product differentiation through feature superiority. But in a consolidating market, buyers aren’t choosing “best features”—they’re choosing perceived category leaders with proven commercial traction and strategic partnerships.
How Market Shaping Solves This
Market shaping creates the commercial signals that position you as a “safe choice” for budget consolidation.
Analyst recognition places you in leadership categories, reducing procurement risk. Ecosystem partnerships with AWS, Accenture, or vertical-specific system integrators signal your strategic infrastructure, not a disposable point solution. Regulatory readiness—SOC 2, ISO certifications, GDPR compliance—reduces perceived deployment risk.
When enterprises consolidate AI spending, they ask: “Which vendors will still be here in three years?” Market shaping creates the commercial proof—analyst validation, strategic partnerships, regulatory credibility—that answers “yes” before buyers evaluate your product.
Challenge #3: The Evidence Gap—Buyers Need Proof You Can’t Deliver Fast Enough
The Problem
Only 39% of AI initiatives in 2025 generated measurable impact, creating deep buyer skepticism. Enterprise buyers now demand proof before committing budget, but vertical AI startups can’t generate credible proof fast enough through traditional customer acquisition.
This “evidence gap” kills startups in the middle of the funnel. You need marquee customers to win enterprise deals, but you can’t win enterprise deals without marquee references. Traditional SaaS GTM says “land small customers, expand, then move upmarket”—but vertical AI buyers won’t wait 18 months for you to build a reference portfolio.
The timeline pressure is intensifying. Average B2B buying cycles shortened from 11 months to 10 months, but 58% of buyers now engage sellers earlier specifically to validate vendor claims. Buyers expect credible proof faster, and traditional organic customer acquisition can’t keep pace.
How Market Shaping Solves This
Market shaping deliberately manufactures external proof before you have a scaled customer base, collapsing the time required to establish commercial credibility.
Strategic partnerships with marquee customers become validators, not just revenue. Early customers are selected based on signaling value—regulated enterprises or recognized brands whose adoption creates reference momentum that unlocks subsequent enterprise pipeline. One strategic partner in a regulated vertical is worth 20 mid-market logos with no signaling power.
Industry pilot programs with consortia, standards bodies, or regulatory agencies create third-party proof that individual buyers can’t dismiss as vendor bias. Third-party endorsements from analysts or technical authorities validate your approach independently.
Instead of waiting for organic proof to accumulate over 18-24 months, market shaping architects a “proof engine” where every early customer, partnership, and pilot is selected for signaling value that de-risks subsequent enterprise deals. This is how deep tech companies commercialize technologies in categories where traditional SaaS land-and-expand models fail completely.
Why 2026 Is Different: The Window for SaaS Style GTM Is Closed
In 2023 and 2024, AI startups were rewarded for bold vision statements, impressive demos, and aggressive growth tactics. Investors tolerated high burn multiples. Enterprise buyers experimented with unproven vendors. The market rewarded velocity over proof.
In 2026, that window has closed. Investors demand profitability and capital efficiency. Enterprise buyers consolidate around safe choices. Proof is required before engagement, not after.
With enterprise IT budgets barely growing, and AI startup funding surging and launching multitudes of competitors, the market is structurally oversupplied. Only vendors who can break through the buyer attention crisis, win budget consolidation decisions, and close the evidence gap will capture enterprise revenue. Traditional SaaS GTM can’t solve any of these three challenges. Market shaping solves all of them.
The 0.5% Won’t Out-Build—They’ll Out-Position
They’ll ditch inherited SaaS GTM reflexes—outbound sequences, demo-first sales, MQL optimization—and adopt market shaping GTM: narrative control, validator cultivation, and strategic proof architecture. They’ll shape their markets before competitors commoditize them.
2026 is the year successful vertical AI startups stop playing by SaaS rules and start playing by new rules. The ones who make the shift will become category leaders. The ones who don’t will become cautionary tales.
About the Author:
Mark M.J. Scott is founder and president of Northern Pixels Inc., a go-to-market advisory firm specializing in AI and deep tech startups. As a 3x founder, Mark has successfully exited to AppDirect, Toyota, and Battery Ventures. He focuses on the $1-$25M revenue growth — where most founders make critical GTM mistakes that compound for years. His market shaping framework helps Series A & B startups master this phase, establishing the competitive moats and category positioning that enable sustainable growth trajectories.
