Garry Tan: Vertical AI moats require sitting with domain workers to build evals
Garry Tan · State-Of-The-Art Prompting For AI Agents · Y Combinator · May 30, 2025 · at 15:02
Y Combinator CEO Garry Tan explains how vertical AI founders avoid being mere wrappers by deeply embedding in customer workflows to generate evals.
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“You can't get the evals unless you are sitting literally side by side with people who are doing X, Y, or Z knowledge work. You know, you need to sit next to the tractor sales regional manager and understand, well, you know, this person cares about, you know, this is how they get promoted. This is what they care about. This is that person's reward function. And then, you know, what you're doing is taking these in-person interactions, sitting next to someone in Nebraska, and then going back to your computer and Codifying it into very specific evals. Like, this particular user wants this outcome after they, you know, after this invoice comes in, we have to decide whether we're gonna honor the, you know, the warranty on this tractor. Like, just to take one of, one example. That's the true value, right? Like, you know, where everyone's really worried about are we just rappers? And, you know, what is going to happen to startups? And I think this is literally where the rubber meets the road. Where if you know, if you are out there in particular places understanding that user better than anyone else and having the software actually work for those people, that's the moat.”
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