What is the difference between vertical SaaS and vertical ERP, and how do the two differ in practice?

Vertical SaaS is a relatively mature category, at least, the idea of the category is relatively mature. It's exactly what it sounds like: It's a software product that's built for a specific type of business or consumer or industry, and generally that software is very opinionated around that industry. It’s monetized through a SaaS model, per seat, or license or a measure like that. It also typically aims to absorb as much of the workflow of that business as possible. 

Let's say you're building vertical SaaS for in-person service businesses, you don't want them to use one SaaS tool for scheduling, another SaaS tool for employee management, another SaaS tool for lead generation, and stitching all those together and bringing that all in place. The vertical SaaS solves that, puts all of those tools under one roof, and absorbs the workflow there.

Where vertical ERPs are different is they take advantage of these new embedded financial products—the ability to embed payments, the ability to embed card issuing and banking and bank accounts, deposit accounts, even things like tax prep and tax filing or accounting—and allows companies to absorb cash flow into that, as well. To summarize, vertical SaaS is just absorbing as much workflow as possible, and vertical ERPs are absorbing workflow, as well as the cash flow of the business. 

That, to me, has always been a huge missing piece and missed opportunity in these vertical SaaS businesses. They have these theoretical representations of payments coming in and customers and what's the balance on the bank account and how profitable or is this part of the business or not in a given month. You could think of it as having read access to that part of the business, but the really powerful thing about verticalERPs is they actually have right access to the cash part of the business as well.