Verticals to Ecosystems

Matt Harris did this fantastic talk about the verticalization of FinTech a few year ago. The TL/DR for me is that a lot of high-value technology will be built and scaled across several customer verticals. If you have some time, I suggest watching the video below.

These horizontal technologies are compelling. I am biased for several reasons, mainly because this is an insight Dwolla has used very effectively. Dwolla is definitely not the only company who benefited from this phenomenon.

Looking at Dwolla’s website and its use cases, many verticals are represented in the applications. So while the Dwolla product is implemented in different use cases, the same product can be effectively tailored for each use case. It is a horizontal technology provider that solves A2A money movement for many purposes.

When thinking about web3, I often think that this parallel sort of fits, but other unique differences are worth appreciating. In particular, in this new context, the conversations often start with the ecosystem or layer 1 as opposed to the vertical or use case.

Blockchains have shifted the focus to ecosystems.

Each layer 1 chain has a number of potential applications, but the initial conversation is less about the vertical and more about what the ecosystem needs—solving for the ecosystem first rather than a specific vertical use case.

This shift is fascinating because if something is good for the ecosystem, it will probably be suitable for verticals leveraging that chain. When talking about retail chains like Ethereum, obvious vertical applications follow quickly. When you get into institutional chains, things like Canton emerge, and different ecosystems along with it. The opportunity starts to look a little bit more like this.

The thought is a slight shift, and some of the most intriguing opportunities seem to be cross-ecosystem or multi-chain. I’ve appreciated how welcoming the people building in this space are. Whenever I run into a snag, help is always right around the corner.

Breaking into verticals can take years, sometimes a decade. In the ecosystems, everyone seems to have designed theirs to be extremely welcoming. Because of this, progress is possible in a few hours.


Matt Harris for giving a talk that clearly lasts. Alka Gupta and Eric Saraniecki for providing feedback on various thoughts that helped inform this and some associated work. Nicole Gunderson & Brent Baker for being the tip of the spear who helped Dwolla understand the verticalized applications of it’s software in the early days. Auren Hoffman for inspiring me to use the chicken scratch notes in writing.