Upward Trajectory Fund: The Next Chapter
After selling my company and taking some time to travel, I realized something quickly: I’m not wired for a life of doing nothing. There is joy in wandering a new city with no schedule at all, but eventually I found myself wanting something more—meaningful work, done well, on my own terms, and woven into a full life rather than overtaking it. Upward Trajectory Fund grew out of the realization
A question I heard often after the exit was: “Are you going to start another software company?”
It’s a fair question. But after giving it real thought, I realized the answer was no.
As an operator and CEO—especially at a lean company—you often work with your head down. You’re in the thick of it: solving problems, closing gaps, hiring, building, rebuilding. And when something shifts, you pivot. The work can be meaningful, but it’s inherently myopic. You need that level of focus to build anything durable.
After years of operating, I wanted something different.
I wanted to remain nimble—able to look left and right, not just straight ahead. I wanted peripheral vision: the ability to notice an opportunity sitting quietly in a corner of the market, rather than being locked into the urgent demands of a single product or roadmap.
Starting With a Blank Page
So I sat down with a blank sheet of paper and asked myself:
What do I want the next chapter of my working life to look like?
I wanted meaningful, mentally stimulating work that required deep focus and continual learning. I wanted to spend time with thoughtful, intelligent people with good values. I wanted a very small team—simple, high-trust, calm. And I wanted the flexibility to work from Toronto—my home base right now—or from London, New York, Hong Kong, or anywhere else in the world if the opportunity presented itself.
Before starting Upward Trajectory Fund, I tried to imagine what that might look like. I enjoy travel — including time spent in places like San Sebastián - and I wanted to bake that sense of curiosity and exploration into the next chapter, without making it the point. Could I spend a week in London and do a few hours of deep, intentional work in the morning — without disrupting the people I work with or the quality of the work itself? Could the same be true in Hong Kong or New York? That thought experiment helped me reverse-engineer the kind of organization I wanted to build: nimble, calm, focused, and able to function no matter where I am.
The goal was never to work from every trip. Quite the opposite. The goal was to build a structure where work fits naturally into a full life—where some days mean focused work in Toronto, and other days simply mean a quiet morning of reading or thinking in another city before closing the laptop and being fully present.
Upward Trajectory Fund is the vessel that allows that rhythm to exist.
Not long after I began shaping the idea, I was speaking with a contact at the bank about what I envisioned. After listening for a while, he said, almost in passing:
“Andrew… this sounds like a vessel. A container for the next chapter of your life, not just your career.”
I didn’t have the language for it until he said it, but that was exactly right. The idea clicked into place. Upward Trajectory Fund wasn’t just an investment platform — it was a structure for how I wanted to work and live.
A Founder First
My background is in software. I built an enterprise software company and spent years learning how to scale something lean, durable, and operationally disciplined.
What I did not have was a background in investing or private equity. That changed during the sale of my company.
Over eight months, I met with private equity firms from around the world. To my surprise, those months ended up being some of the most intellectually enjoyable of my career. I learned how they think, how they evaluate durability, how they model businesses, and how they protect the downside.
Their approach resonated with me—disciplined, patient, grounded in fundamentals. It made more sense to me than chasing future possibilities.
That experience shaped the direction of the next chapter.
Why Private Equity Fit My Temperament
People sometimes assume that because I built a tech company, the natural next step would be venture capital (investing in tech startups). I understand the logic, but the truth is that I’m a fairly risk-averse entrepreneur. I like things with history, pattern recognition, and evidence behind them.
Early-stage venture capital invests in future potential. Private equity invests in demonstrated track records.
Neither is better or worse—they’re simply different disciplines. Private equity just happens to align with how I think and how I like to work.
I also find it quietly fascinating to come across a great business in an unexpected place—an organization with strong leadership, a healthy culture, and a real customer problem solved consistently. That kind of quiet excellence appeals to my curiosity far more than chasing the next big idea. It’s one of the reasons why I was originally drawn to starting and scaling up a software company that was more focused on vertical markets vs trying to be all things to everyone.
What Upward Trajectory Fund Is
Upward Trajectory Fund is an investment platform designed to thoughtfully invest capital into durable businesses over long periods of time, and to compound that capital in the most efficient and disciplined way possible.
But equally important, it is the architecture of the work I want to do:
mentally stimulating
deep, uninterrupted work
learning something new each day
a very small team of capable, values-aligned people
clarity over noise
and flexibility built into the design
We are a very small team—by design. The work is real, thoughtful, and ongoing. And as I considered what would keep me engaged and learning in the years ahead, private equity emerged naturally as the center of gravity: a discipline grounded in fundamentals, durability, and long-term thinking.
Two Phrases With Semantic Density
Two ideas sit quietly at the heart of Upward Trajectory Fund:
Ancora Imparo — “I am still learning.”
Festina Lente — “Make haste, slowly.”
They say a great deal with very few words.
Ancora Imparo is a reminder to stay curious and have humility. Festina Lente is a reminder to move with intention, not haste.
Together, they shape how I want to invest, work, and live.
A Culture Built Around People
My previous company specialized in strategic people management. Over the years, I learned how incentives shape behavior, how cultures are built, and how fulfillment affects performance and retention.
Those lessons carried forward.
Upward Trajectory Fund is built around people who value judgment, curiosity, humility, and thoughtful pacing. A place where decisions are made carefully rather than quickly, and where quality matters more than quantity.
It’s the kind of environment where good decisions compound.
Compounding Excellence
“Compounding Excellence” isn’t a slogan. It’s the organizing idea behind the Fund.
I wanted a structure where improvement happens slowly and steadily—through better thinking, better habits, better relationships, and better choices.
Upward Trajectory Fund is the place where that can happen, professionally and personally.
A Life That Doesn't End With Work
I don’t believe in retirement. I believe in staying engaged, curious, and connected.
A meaningful life, to me, is one where work matters, learning continues, and there is space for travel, culture, and exploration—supported by a structure that lifts the years ahead rather than constraining them.
Upward Trajectory Fund is the vessel for that kind of life—a way to compound with purpose.
This is where the next chapter begins.
For more articles about my entrepreneurship journey or about life in general, visit my writing page.
How We Doubled a Software Company in the Two Years Before Exit
Many people have asked how to prepare a software company for an eventual exit, what the process looks like end-to-end, and what it takes to double a business over a two-year period while maintaining profitability. I’ve heard these questions from founders, operators, private equity professionals, and friends, so I thought I’d share the experience as it actually unfolded.
If there’s a useful insight here for someone building or scaling a software company, then writing this will have been worthwhile.
This isn’t a playbook or a formula. It’s simply what happened — a two-year journey from a strong foundation to doubling the company while staying profitable. Let’s begin.
A Quiet Question at the End of 2019
At the end of 2019, I was enjoying running the company. I wasn’t looking to step away, but I began thinking more seriously about optionality. A simple question surfaced:
Do I want to run this company indefinitely, or might I one day want to sell?
I wasn’t sure of the answer yet. But I did know one thing: if I were ever going to sell, I didn’t want to sell at a plateau. I wanted the company to be operating at its best.
At the time, we were an enterprise software company that had not taken on venture capital, private equity, or debt. This meant that by necessity we had to be extremely capital-efficient.
We served professional services firms — accounting, consulting, and especially large law firms. We had over a thousand enterprise deployments and a strong presence among large law firms globally. Top-line growth was in the 15–20% range, and EBITDA margins were in the mid-60% range. The company was healthy. Nothing was broken.
We were well regarded and trusted by our customers. Over the years, private equity firms and strategic buyers reached out periodically. I never returned those calls — I was focused on building the business.
But I told myself that if I ever did decide to explore a sale, I wanted the company to be in the best possible position.
That led to a private and ambitious goal: double the company’s topline revenue over two years while maintaining profitability.
To understand why this was challenging, it helps to look at the Rule of 40 — a common software benchmark where a company’s growth rate plus profit margin should equal 40. For example, 20% growth and 20% profitability would meet that standard.
At the time, we were already operating well above that threshold. The goal was to push much further — toward a profile that combined roughly 40% growth with mid-60% EBITDA margins.
It was an aggressive target, but one I felt was worth pursuing.
The Conference in December 2019
A few weeks later, I flew to a conference. Travel always gives me clarity — I step out of my routine, and the noise falls away. Travelling is actually one of my favorite ways to solve a strategy problem or any challenge for that matter. One afternoon, I took a notebook into a quiet conference room at the hotel and closed the door.
Over the course of a few hours, a clear strategy began to take shape.
Only later did I realize that what I had written closely resembled a private-equity style growth plan. I wasn’t trying to emulate one. The approach simply emerged from focusing on the most effective growth levers available, using only what the business already had and without taking on outside capital or debt. That constraint forced discipline, efficiency, and focus.
Below are the six steps that ultimately helped us double the company while staying profitable.
1. The Wave Platform — Our Keystone
Our user interface was solid and functional, and it had served us well. As the product suite matured, it became clear that a more cohesive and modern UI/UX would help modernize the look and feel of the software and tie the entire platform together. At the time, we had six products, all built on a single enterprise software foundation.
Around this period, Salesforce released Salesforce Lightning. We used Salesforce extensively for customer relationship management, sales operations, and customer care, so I paid close attention. Lightning introduced a new user experience. The most interesting part wasn’t the interface itself — it was the strategy behind it.
If you wanted access to Salesforce’s newer modules, you had to adopt Lightning across the board. Once you did, everything else followed.
That approach stood out to me.
Steve Jobs once said:
“Good artists copy; great artists steal.”
I don’t believe in stealing, but I do believe in borrowing strong ideas and adapting them thoughtfully. We decided to create our own version of that approach — a single, unifying initiative that could anchor the rest of the strategy and give the product suite a shared identity following the redesign.
I spent some time thinking about what to call it, until one name felt right:
Wave.
The Wave Platform.
It felt clean, energetic, and symbolic — like momentum moving through the organization and across the product line.
We hired UI/UX designers, re-skinned every module, and rebuilt the user experience from the ground up. The legacy interface became “Classic.” Everything new would live on Wave.
Wave became the user experience reset the company needed, and it provided a clear foundation for the initiatives that followed.
2. Build the Seventh Product (Resource Allocation)
We had six enterprise modules in our strategic people-management suite. As part of the broader growth plan, we decided to add a seventh. One of the advantages of vertical market software is that it’s often easier to introduce additional products within the same vertical than to take a new product across many different markets.
Before deciding what that product should be, I spent time speaking with customers about their most pressing operational challenges. The same theme came up repeatedly.
Resource allocation — staffing the right people on the right projects at the right time. For professional services firms, this is the core of the business: assembling teams to do billable work efficiently and predictably.
This was before the COVID pandemic.
Resource allocation emerged as a clear opportunity, and we chose to build the new product natively on the Wave platform. In retrospect, the timing proved to be significant.
Shortly after we launched internally, COVID hit. Large law firms with hundreds or thousands of professionals suddenly shifted to fully remote work. Staffing projects — already a complex task — became much more difficult.
The new product addressed a problem that had quickly become more acute, and customer interest increased accordingly.
3. Migrate Customers to the Cloud
Another pillar of the strategy was modernizing our delivery architecture.
We deepened our partnership with Microsoft and committed fully to Azure. Over time, we built a multi-location Azure deployment, introduced a cloud program with multi-year contracts, and transitioned customers — including legacy on-prem and subscription users — to the cloud.
This shift helped:
improve performance and security
simplify infrastructure
increase reliability
better align contracts with delivered value
support the product roadmap ahead
It also created a more scalable commercial model, with the Wave platform delivered through our Azure cloud environment.
4. Update the Price Book
With Wave in place, a new product built, and cloud migration underway, it was the right moment to rebuild our pricing model from the ground up.
We introduced:
new modular pricing
new product packages and bundles
cloud incentives
a full-suite adoption model
A clean, disciplined commercial reset.
5. Charge for Implementations
Historically, implementations were bundled into our annual SaaS (Software as a Service) subscription fee. This made sense early on, but with growth accelerating, it was time for a change.
We shifted to charging implementation fees as a percentage of annual subscription value. This improved:
margins
delivery scoping
customer outcomes
And it funded many of the new hires we needed for the growth plan.
6. Rebuild the Entire Go-To-Market Engine
To support the broader strategy, we strengthened every part of the go-to-market function:
hired a senior marketing leader
hired a demand generation manager
built an outbound SDR (Sales Development Representatives) team
upgraded sales talent
redesigned the sales compensation plan
implemented a modern GTM technology stack
rebuilt the sales methodology
Together, the above six steps supported the goal of doubling the company’s revenue over a two-year period.
With these pieces in place, the organization was aligned around the Wave platform, the new product, and the cloud program.
Internal Alignment: Launching Wave Inside the Company
Before sharing The Wave Platform more broadly, we introduced it internally.
We held an all-hands meeting to walk through the direction of the company and the changes ahead. The team understood where we were going and what we were building toward. It marked the beginning of a multi-quarter, multi-year effort that would require patience, focus, and discipline.
It reminded me of the well-known marshmallow test: the work happens now, and the reward comes later. This phase of the journey was about delayed gratification and committing to a longer-term goal.
February–July 2020: Preparing to Execute the Strategy
As mentioned earlier, our financial year ended on July 31. That timing provided a natural lead-in before formally starting the initiative to double the company. There was a clear ramp-up period.
One of the first steps was a webinar for customers and prospects in February 2020, shortly before COVID. It was an opportunity to introduce Wave, along with the new product structure and bundles. Attendance was strong, and the timing proved fortunate — a month later, when COVID disrupted everything, it would have been much harder to convene that audience.
From February through July 2020, we focused on preparation internally:
officially launching Wave with the new branding and transitioning prior products to “Classic”
presenting the strategy to customers and prospects
aligning engineering, sales, marketing, operations, and implementation
completing technical work on Wave
building the cloud program
updating pricing
strengthening the go-to-market engine
By the end of that period, the plan was in place, the organization was aligned, and we were ready to begin executing.
August 1, 2020 — Pedal to the Metal
Our financial year began on August 1, 2020, and this marked the point at which the two-year clock officially started.
The objective was clear: double the company’s revenue within two financial years, by July 31, 2022.
From that point forward, execution became the focus. Across the business, we saw steady progress in several areas:
adoption of the Wave platform
cloud migrations
demand for the resource allocation product
top-of-funnel pipeline
contract value
customer expansion
By July 31, 2021 — the end of the first year of the strategy — the core elements were in place and performing as expected. The company was growing, and momentum was beginning to build.
One lesson that became clear during this period was that growth of this kind is non-linear. There is inertia to overcome early on, followed by a phase where progress compounds more quickly.
The doubling trajectory was visible, but it required continued focus and consistent execution.
End of 2021 — To Sell or Not to Sell?
By the end of 2021, I was about a year and a half into the two-year strategy. The core elements were in place, and the plan was unfolding as intended.
To sell or not to sell — that was the question.
Toronto had reopened briefly for Christmas after an extended COVID lockdown. I remember returning to the gym during that short window. Shortly after New Year’s, the Omicron variant emerged and the city went into lockdown again.
I booked a one-way ticket to Miami. I needed warmth, running weather, and some distance to think clearly.
We were roughly three-quarters of the way through the doubling plan. The Wave platform was gaining traction, the new product was being adopted, customer retention remained strong, and sales performance was steady.
At the same time, software company valuations were particularly strong.
The timing felt aligned.
I returned the call to the investment bankers who had reached out over the years and said,
“Guys, it’s showtime.”
At that point, I decided to formally explore a sale of the company. We began working with the bankers on the preparation process, including historical performance, the product roadmap, and forward-looking plans. It was a rigorous exercise, and it offered a new perspective on the business I had been focused on building day to day.
The Final Six Months — Pressure and Precision
Once the sale-of-the-company process began, the pressure increased noticeably. Private equity firms and strategic acquirers were now reviewing performance closely. As mentioned earlier, doubling a business is rarely linear, and the final six months required sustained focus and execution to stay on track.
Performance was being monitored frequently, and there was little room for error. Customer retention and growth needed to remain steady throughout this period.
I found that pressure clarifying. It sharpened priorities across the organization and reinforced the importance of execution. The team responded well, and we continued to deliver quarter after quarter.
In the final two quarters of the year — ending April 30 and July 31 — the sales team met their targets very closely. I remember a meeting about two weeks before quarter-end where I used a Michael Jordan analogy. Jordan won his championships in Game 6 rather than pushing things to Game 7, viewing it as a way to reduce unnecessary risk.
We aimed to close the quarter early for the same reason, but that didn’t quite happen. Going into the final week, I remember saying, “We’re going to Game 7.” The team stayed focused, and the quarter came together in the end.
Hitting the Goal
By the end of the second year, on July 31, we had doubled the company’s revenue. The result was very close to the original target.
Top-line growth reached approximately 40%, while EBITDA margins remained in the mid-60% range. In practical terms, this put the business well above the Rule of 40 benchmark.
The outcome reflected the cumulative effect of a series of focused decisions over time. Progress compounded gradually, and the results aligned closely with the original goal.
The company was subsequently acquired by Roper Technologies, a long-term owner of mission-critical software businesses. Looking back, I’m comfortable with the decision and how the process unfolded.
A Team Effort
Although I’m the one writing this article, the outcome was very much a team effort. Across engineering, implementation, support, marketing, sales, product, and operations, people showed up consistently and did the work required to make the plan real.
What made the difference wasn’t individual heroics, but alignment around a shared goal.
Clarity Comes From Stillness
The entire two-year journey began in a quiet conference room with nothing but a notebook and a simple question:
Do I want to run this company indefinitely, or might I one day want to sell?
Looking back, the process of growth was as meaningful as the outcome itself. The work required patience, discipline, and sustained focus, and I found that journey deeply rewarding.
An added benefit was the clarity it brought. The path helped me think more clearly about what I wanted to do next, and the conversations that followed during the sale process naturally opened the door to the next chapter.
Sometimes the most important decisions begin in silence.
Visting my writing page for more articles on entrepreneurship but also on life too.
Why I Love Vertical Market Software Companies
Why Vertical Market Software Matters
A few years before I was ready to sell my company, Roper Technologies’ Head of M&A called me directly. He said something I never forgot:
“Whenever you’re ready to go, give us a call.”
At the time, I didn’t fully grasp why one of the world’s most sophisticated acquirers of vertical market software—industry-specific, mission-critical systems—would reach out so early. Roper is an S&P 500 and NASDAQ-100 company known for buying deeply specialized software businesses and holding them forever. Their philosophy centers on customer intimacy, workflow depth, and long-term defensibility.
He explained that Roper had heard very positive things about our business—specifically our reputation, our focus on a single vertical, and the closeness of our customer relationships.
Years later, Roper ultimately acquired the vertical software company I operated. That experience shaped how I think about specialization, defensibility, and why vertical market software companies compound in ways horizontal companies often do not.
This article explains why.
Horizontal vs. Vertical Software: The Real Distinction
What is vertical market software, and how is it different from horizontal software?
A helpful way to understand the distinction is through marketing tools. Products like HubSpot or Marketo solve a functional problem — helping marketing leaders execute campaigns — and they work across nearly every industry. That makes them horizontal systems, designed to support a job function regardless of the business itself.
Vertical market software solves problems that only exist inside a specific industry. Examples include construction project management, dental practice scheduling, restaurant point-of-sale systems, logistics and dispatch platforms, law firm billing, and professional-services staffing and performance software. These systems are built around industry-specific workflows, regulations, and operating realities.
Horizontal software solves broad functions, often organized by job description — marketing software, accounting software, sales management software. Vertical software goes deep into a single industry and models how that industry actually works. That depth is what makes it vertical market software.
TAM vs. SAM: Why Vertical Markets Are Smaller, More Accessible, and Far More Winnable
Horizontal software companies enjoy massive TAMs (Total Addressable Markets) because nearly every medium to large organization has a sales leader (Salesforce), a marketing leader (HubSpot or Marketo), and an HR leader (Workday). But capturing these horizontal markets requires enormous capital, global distribution, and highly generalized products capable of satisfying thousands of edge cases across dozens of industries. Even the very best horizontal vendors often top out at owning 30–40% of their market.
Vertical software is fundamentally different. The TAM is smaller, but the Serviceable Addressable Market (SAM)—the portion of the market you can realistically reach—is often most of the TAM itself. Specialization becomes the advantage. You’re solving painful, industry-specific workflows that horizontal systems cannot serve well, and information travels quickly inside a vertical.
This creates a dynamic where a vertical software company can realistically dominate its market in a way horizontal vendors rarely can. In many industries, once you become the system used by the top firms, the rest of the market follows naturally.
In a horizontal market, it takes massive capital to capture even a small percentage of TAM.
In a vertical market, specialization becomes the force multiplier—and you can become the market.
That was my experience. When I operated a vertical software company, we were fortunate enough to reach well over 90% of the legal market segment we served—something that would be nearly impossible in a horizontal category. That level of penetration wasn’t achieved through massive marketing spend; it emerged from domain expertise, credibility, customer intimacy, and vertical word-of-mouth.
Vertical TAM may be smaller, but the cost to win it is dramatically lower. You don’t need to boil the ocean—you need to serve one industry better than anyone else.
And once the top players adopt your solution, the viral loop begins. People move between firms and bring the software with them. New managers ask for the systems they already know. Job descriptions begin to require experience with it. In a vertical, once a few leaders adopt your product, the rest of the market pays attention—and often follows.
When you own a vertical, you don’t just win customers. You become part of the operating fabric of the industry.
Multi-Product Expansion: The Most Underrated Advantage in Vertical Software
At one point, I attempted to expand into new industries. Even with a strong product, the cost of entering a new vertical was extraordinarily high. Every industry has its own vocabulary, compliance rules, internal politics, and buyer psychology. Repeating our success elsewhere would have required significant venture capital or debt financing—something I deliberately chose not to take on.
What did work—elegantly and reliably—was expanding inside the vertical we already understood.
The economic buyer already trusted us for our beachhead product. The functional champions for additional modules already existed inside the firm. And customer acquisition cost dropped dramatically because expansion revenue didn’t require acquiring a new logo.
Here’s the core lesson I learned:
It is far easier to sell multiple products into one vertical than it is to sell one product into multiple verticals.
That focus allowed us to scale efficiently and sustainably. Over time, we built a suite of seven products within our vertical market. In fact, the seventh product we introduced was one of the six strategies I used to double the company prior to exiting—an outcome that would have been far more difficult, if not impossible, had we pursued horizontal expansion instead.
Why Horizontal Vendors Struggle to Enter Vertical Markets
Horizontal vendors consistently underestimate how difficult it is to succeed inside a vertical. Their products are designed for breadth, not depth. Their sales and marketing teams speak in general business terms rather than the language of the industry. Their implementations lack domain nuance, and their roadmaps prioritize broad applicability over vertical specificity.
Vertical buyers sense this disconnect immediately.
Even excellent horizontal platforms struggle with this mismatch. Vertical buyers want precision, industry accuracy, and a deep understanding of how their world actually operates. When that understanding isn’t there, no amount of scale or brand recognition can compensate.
Marketing in a Vertical: Speaking the Industry’s Language
Marketing inside a vertical is fundamentally different from selling a horizontal product. Each industry has its own vocabulary, conferences, associations, and cultural norms, and vertical buyers can immediately tell whether a vendor truly understands their world. Horizontal companies often arrive with generic messaging, and industry insiders recognize the disconnect instantly. In vertical markets, language, references, nuance, and credibility all matter. This is why specialized vendors consistently outperform generalists: they speak the industry’s language fluently.
Customer Intimacy: An Important Moat
In the vertical software company I operated, one philosophy guided us from the beginning: know the customer deeply—not just the workflows, but the people. I wanted our implementation and support teams to understand the personalities, communication styles, and operational priorities of the individuals they worked with. That level of familiarity built trust, accelerated adoption, and surfaced insights no horizontal vendor—with thousands of generalized customers—could replicate. Over time, customer intimacy became a structural moat. You can’t fake domain understanding, and it’s one of the qualities sophisticated acquirers like Roper Technologies look for—one of the reasons they ultimately became interested in our company.
The Complexity of Vertical Product: Where Features Become a Moat
Vertical software is rarely simple. These systems evolve into deeply nuanced operational platforms with hundreds of screens, dozens of role types, intricate permission models, and hundreds of specialized reports. This complexity reflects the reality of the industry, not poor design. Vertical software users are extremely picky—and that is a good thing. They want software that mirrors their exact workflows and operating assumptions. A great vertical product fits the customer like a hand in a glove. Once they experience that level of precision, switching becomes extraordinarily difficult. This is where complexity turns into defensibility.
Plugging Into the Vertical Ecosystem
Every vertical has its core systems—the operational backbone everything else depends on. In professional services firms, for example, two accounting platforms dominate the industry: Elite and Aderant. These are the true systems of record. By building deep integrations into both, we gained visibility into staffing, utilization, workflows, relationships, performance inputs, and the real operational patterns inside each firm. And the deeper the integration, the harder you are to remove. Over time, you begin to wrap around the system of record like an octopus, touching everything.
What Is a System of Record Anyway?
A System of Record (SOR) is the authoritative, indispensable source of truth for a company’s most critical operational data. If a business were forced to cut every system due to budget pressure, the system of record would be the last one unplugged. Vertical vendors don’t need to be the system of record—though ideally they are—but they do need to be inseparable from it. That tight coupling creates enormous stickiness and long-term defensibility.
Viral Distribution Inside a Vertical
One of the most powerful dynamics in vertical markets is how naturally a product can spread within the industry. People move between firms and bring the software they’re familiar with. New hires ask for the system they already know. Job descriptions begin to require experience with it. And teams introduce it organically to new colleagues. Adoption becomes less about selling and more about becoming part of how the industry works.
Pricing Power & Price Elasticity
Vertical market buyers are willing to pay more because their use cases are highly specific and their pain points are acute. An economic buyer in a vertical is not choosing between ten broadly similar tools; they are choosing between a generic solution that only partially fits and a vertical solution that matches their workflow exactly.
That distinction dramatically increases price elasticity. Vertical software buyers care far less about feature counts and far more about whether a system eliminates real operational bottlenecks—staffing errors, compliance failures, utilization inefficiency, lost billable hours, revenue leakage, and project breakdowns. These are not theoretical problems; they are expensive ones.
Champions inside the firm—HR, recruiting, talent development, and workflow owners—feel this pain directly. When a product meaningfully improves their day-to-day work, resistance to pricing drops. They are not buying “software”; they are buying relief from a high-friction workflow that no horizontal system can solve properly.
Because vertical products remove real financial and operational pain, buyers willingly pay for accuracy, specificity, and depth. And once a system becomes embedded in core processes, the cost of switching quickly exceeds the cost of staying—reinforcing pricing power over time. Those dynamics strongly influenced how I think about durable value creation, and they carried directly into how I approach investing at Upward Trajectory Fund.
AI and Vertical Software
AI is unquestionably displacing certain categories of software, and no one fully knows where things are going. My view is that in most industries, AI will sit on top of vertical market software rather than replace it. Vertical systems often contain enormous complexity — sometimes hundreds of database tables, hundreds of screens, and thousands of features — all built around the real-world workflows of a specific industry. It is far more practical for AI to become a layer that enhances these systems than to rebuild the entire vertical stack from scratch.
We don’t know which companies will ultimately stand up against AI, but vertical software has one advantage others do not: it is more than software. It is the relationships, trust, and long-term customer intimacy built inside a specific industry. That combination gives vertical market software a better chance of enduring in an AI-driven world.
Why I Will Always Love Vertical Market Software Companies
Vertical software is where specialization becomes an advantage, where customer intimacy compounds over time, and where complexity turns into defensibility. It’s where capital efficiency thrives, word-of-mouth accelerates adoption, multi-product expansion feels natural, and switching costs harden almost by themselves. Even in an AI-driven world, vertical software isn’t replaced — it is amplified. These companies quietly run the world’s industries and create durable, meaningful value not through hype, but through depth.
That is why I love vertical market software companies.
My writing page has more articles on various topics.
Roper Technologies — A Company You Probably Haven’t Heard Of, Built to Compound
People often ask me, “So who bought your company?”
And when I say, Roper Technologies, I usually get the same puzzled look:
“Who?”
It makes sense. Roper isn’t a household name. They don’t advertise, they don’t dominate headlines, and they don’t behave like a company that wants attention. Most people outside certain corners of the vertical market software world have never heard of them..
And yet, at the time of writing, Roper Technologies is an S&P 500 and NASDAQ-100 company with a market capitalization of roughly $65 billion.
They are one of the most quietly exceptional businesses in the public markets — admired by operators, respected by investors, and studied by anyone who cares about long-term compounding. What makes Roper extraordinary isn’t just its size or financial performance, but its philosophy: quiet excellence, deep customer intimacy, operational autonomy, and a compounding flywheel built on free cash flow.
This is why Roper stands out — and why I think they’re one of the most unique companies in America.
What Roper Actually Does — in Simple, Human Terms
Roper is not a typical tech company. They don’t build consumer apps, operate social platforms, or chase hype cycles.
Instead, Roper owns dozens of mission-critical vertical market software businesses — companies that quietly power the essential workflows of hospitals, universities, water systems, laboratories, legal practices, engineering firms, and other industries most people rarely think about.
These businesses aren’t glamorous. They’re indispensable.
Once installed, their software becomes deeply embedded in a customer’s operations. Replacing it would be disruptive, risky, and often unthinkable. That’s the common thread in the companies Roper chooses: niche dominance, essential functionality, and long-standing customer relationships.
Roper favors businesses where customers don’t merely use the product — they depend on it.
The Snowball: How Free Cash Flow Builds More Free Cash Flow
If there’s one idea that explains Roper’s entire engine, it’s free cash flow — the money left over after a business pays its bills and reinvests in itself.
What’s free cash flow, really? It’s simpler than it sounds. If a business brings in $100 and pays everyone — salaries, rent, servers, all the essentials — whatever remains at the bottom of the bowl is the dough it actually gets to keep. That’s free cash flow: the money a company can use however it wants. Free cash flow is the free dough.
For most companies, growth requires spending: more people, more offices, more marketing, more everything.
Roper grows by generating more free cash and then deploying it with extraordinary discipline. The model is beautifully simple:
Roper acquires a profitable niche software company.
That company produces free cash.
Roper uses that cash to buy another great company.
That company generates even more.
The snowball grows — steadily, quietly, predictably.
It’s a compounding loop: free cash flow → reinvestment → acquisition → more free cash flow.
Over time, this becomes a self-reinforcing flywheel. The machine strengthens simply by continuing to operate. Some observers describe Roper as “a free cash flow compounder disguised as a software conglomerate.” Once you understand the model, the description feels exactly right.
From Industrial Tools to Vertical SaaS Empire
One of the most impressive aspects of Roper’s story is its evolution.
Decades ago, Roper was primarily an industrial tools company. Over time, something subtle but remarkable happened: they began selling off hardware businesses and reinvesting that capital into asset-light, high-margin, recurring-revenue software companies.
This transition wasn’t loud or dramatic.
It was patient.
It was deliberate.
And it reshaped the entire business.
Today, a large majority of Roper’s value is driven by software. Many commentators describe the company as:
“A software empire inside an industrial shell.”
Once you see the transformation, you realize how rare it is: a public company steadily reallocating itself toward durability, cash flow, and long-term resilience — without ever needing to announce a “reinvention.”
They just quietly became excellent at something better.
Customer Intimacy: The Moat You Can’t See
When I met Roper’s head of M&A during the sale of my business, one concept surfaced again and again: customer intimacy.
Roper doesn’t just buy companies that sell software. They buy companies where the software is trusted, relied on, and incredibly hard to replace.
Their ideal business has:
long-standing customer relationships
deep integration into the customer’s daily workflow
switching costs that reflect genuine reliance
a reputation for reliability and partnership
This is why churn is low.
This is why margins are high.
This is why revenue is predictable.
And it’s why some vertical market software companies fit Roper so well.
Our business, for example, had strong margins, recurring revenue, and unusually deep customer relationships in our niche. It was less about size and more about alignment — we operated with a philosophy similar to theirs, which made the fit natural.
The Federated Model — How Roper Stays Big by Acting Small
One of the most unusual things about Roper is the size of its headquarters.
Despite being a $65B company, their corporate office in Sarasota is small — intentionally small. They don’t centralize decisions. They don’t impose heavy processes. They don’t fold acquisitions into giant corporate structures.
Instead, Roper operates a federated model, meaning:
each company keeps its own CEO
each company maintains its own culture
decisions are made close to the customer
headquarters acts primarily as a capital allocator and strategic steward
It’s like a group of independent states sharing a common treasury and philosophy.
This approach preserves what made each company special in the first place. Autonomy, accountability, and closeness to the customer remain intact — and excellence is protected rather than diluted.
Roper vs. Danaher vs. Constellation (The Clear, Simple Comparison)
Three companies are often admired for their acquisition philosophies: Danaher, Constellation Software, and Roper.
Here is the simplest way to distinguish them:
Danaher
Very process-driven
Uses a centralized operating system (DBS)
Imposes consistent methods across all subsidiaries
Still more industrial in nature
Constellation Software
Ultra-decentralized
Buys hundreds of very small vertical software companies
Reinforces autonomy to the extreme
Reinvests almost all cash flow
Roper
Buys fewer, larger, more mature vertical software companies
Combines autonomy with thoughtful oversight
Focuses intensely on free cash flow
Patient, selective, and structurally stable
If Danaher is “operational discipline,” and Constellation is “decentralized volume,” then Roper is “curated excellence with compounding cash flow.”
The Rise of the Mini-Constellations
In recent years, I’ve noticed a growing trend among founders who have sold their companies. Many are now trying to build smaller versions of Constellation or Roper — acquiring niche software businesses, keeping the teams in place, and rolling them up into long-term investment vehicles.
It’s an appealing strategy. These companies are often profitable, defensible, and operationally simpler than large horizontal software platforms.
The challenge is that the space has become crowded. Many small software companies now receive a steady stream of inbound calls from would-be acquirers. For founders, the conversations start to blur together. The scripts sound familiar. The offers feel increasingly interchangeable.
Roper stands apart as one of the few organizations that has executed this strategy successfully at true scale. One key differentiator is discipline: Roper tends to acquire fewer, much larger, more mature businesses — companies with established cash flow, deep customer relationships, and staying power.
Why Roper Stands Out
Roper is the opposite of the loud, growth-at-all-costs mindset that has dominated tech for the last decade.
They value:
autonomy over micromanagement
durability over excitement
relationships over rapid scaling
recurring revenue over risky bets
long-term compounding over short-term optics
They don’t need to be famous. They don’t need to be flashy. They simply need to stay excellent — and excellence, given time, compounds.
Roper is a reminder that some of the greatest businesses in the world aren’t the ones everyone has heard of — they’re the ones quietly getting better, year after year, while the rest of the world is busy looking elsewhere.
Compounding Excellence
When I started Upward Trajectory Fund, the purpose was straightforward: to compound capital over the long term. But I also wanted a tagline that felt more aspirational — something that captured not just the strategy, but the standard. That’s how Compounding Excellence emerged. Looking back, I suspect the seed of that idea was planted during my journey working with the team at Roper through the sale of my business. Their philosophy showed me that excellence isn’t something you declare — it’s something you build patiently, through disciplined choices that accumulate over time. What you nurture compounds. And when excellence compounds, the results speak for themselves.
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