The Thanksgiving Table Theory of SaaS

The Thanksgiving Table Theory

Picture a Thanksgiving table, full of cornbread, green beans, and (hopefully not) those marshmallow sweet potatoes. The turkey, of course, sits in the center, and this giant bird represents today’s AI. It’s eye-catching but also protein-packed; it delivers on its promise and therefore warrants being the center of attention. 

But Workflow SaaS is the table itself – sturdy, dependable, and crucially, the connective tissue that brings together the turkey (AI) with the plates, utensils, and side dishes (other essential business functions).

The Thanksgiving Table theory of SaaS rests on the reality that AI products are sexy– but often narrow and switchable. The multi-billion dollar companies will be the ones who embed their AI into the broader workflows, creating embedded SaaS businesses that support AI agents, fintech, marketplaces, and more.

For example, we’ve seen many AI products that transcribe and summarize a patient-doctor’s conversation. But we’re much more excited about that AI feature sitting on a table of SaaS workflows that can remind the doctor to prescribe a medication, follow up with the pharmacist, and bill the insurance provider. Eventually, more of that workflow will become AI-led agentic work. Yet for now, the ability of AI to integrate into traditional SaaS workflows is one of the only ways to differentiate from the host of other point solutions that are all built on the same foundational models. (Sidenote: Northzone portfolio company Tandem Health is working on this very solution).   

The Evolution of SaaS: From Workflow to Embedded Platform

Traditional SaaS is evolving into “Embedded SaaS,” a concept that goes beyond mere workflow management. This new paradigm incorporates:

1 – Traditional SaaS workflow
2 – AI tools
3 – Fintech
4 – Marketplace functionalities

Companies are no longer selling just the table (SaaS workflow) but offering a complete dining experience – the table, the turkey, and all the trimmings. This integrated approach makes SaaS platforms increasingly valuable and harder to replace.

Real-World Examples of Embedded SaaS

Some companies are pursuing this Thanksgiving table opportunity by wedging into their markets with AI products, where there’s a clear “why now.” Others enter with traditional SaaS, marketplace, or fintech products. It’s striking how many companies today are not just multi-product; rather, their products are deeply intertwined and interdependent. 

A few examples from the Northzone portfolio: 

AI Wedge: GovDash is a company that started by offering an AI product to help government contractors generate responses to RFPs based on a firm’s past submissions. The AI delivers a powerful ability to interpret these procurement documents, and this was a real “hair-on-fire” problem. From there, they built a SaaS tool for contractors to automatically discover relevant projects to bid for, then a CRM product to manage all these bids that the AI shredded, as well as project management and compliance workflow tools.  

SaaS Wedge: Reonic’s wedge was a proposal-building and business management SaaS piece for solar installers, then they built out an AI-enabled design feature for optimal roof installation, a heat pump product, and will go into financing and procurement from there. 

Fintech Wedge: Finom is an SME neo-bank that started by providing pure banking products for small businesses. But owning the transactional flow created a perfect onramp for accounting SaaS products as well. The cherry on top has been AI tooling, which right now helps their customers manage inbound customer service inquiries.

The future of SaaS lies not in isolation but in integration. While it’s easy to switch out those marshmallow potatoes for roasted potatoes, it’s hard to switch out the entire table when you’ve got a bunch of other plates sitting on it already. All of these plates are also natural TAM expanders–creating an environment where savvy entrepreneurs can build multi-billion dollar companies in traditionally smaller and more greenfield markets. 

So this Thanksgiving, when someone passes the gravy, just remind them that while the turkey gets a lot of hype, it’s really the embedded SaaS platform opportunities that will create enduring enterprise value.*

*please do not do this. Your family will hate you, and nobody wants to talk about enterprise value.