The AI revolution has already minted dozens of unicorns—startups valued at $1 billion earlier than going public. Now it may create an entire new sort of startup: the one-person unicorn.
The thought even acquired a stamp of approval from OpenAI CEO Sam Altman. Talking throughout an interview with Reddit cofounder Alexis Ohanian, Altman mentioned he repeatedly speculates about when the primary founder will attain a billion-dollar valuation with out even hiring a single worker.
“In my little groupchat with my tech CEO mates there’s this betting pool for the primary yr that there’s a one-person billion greenback firm,” Altman informed Ohanian. “Which might have been unimaginable with out AI and now will occur.”
Ohanian, too, was excited concerning the risk. “This can be a radical thought,” he informed Altman throughout their interview at a September convention.
A one-person unicorn would defy the traditional knowledge that an organization wants to rent extra staff as a way to develop. “There’s going to be a brand new phenomenon the place CEOs and founders are going to be so excited to rise up and go to work with a lot smaller, way more performant, way more culturally robust groups,” Ohanian mentioned.
For a lot of, it’s a query of when, not if, it would occur. “I don’t know many individuals who don’t imagine this,” says James Currier, a accomplice at enterprise capital agency NFX.
This novel thought comes at a time when tech unicorns are going through a reckoning. Many have gone stomach up, and these “unicorpses” left founders, staff, and traders within the lurch. Former startup staff discover themselves jobless, whereas traders take a shower.
Towards that backdrop, the prospect of a one-person unicorn would characterize the top of the entrepreneurial spirit the tech trade prizes. A one-man operation utilizing expertise to construct an organization valued at over a billion {dollars} can be the apex of the founder delusion on which Silicon Valley was constructed, or believes it was. From the Thirties, when Stanford buddies David Packard and Invoice Hewlett constructed their first product within the famed HP storage, which gave garages a folkloric standing; to the notorious rivalry between Steve Jobs and Invoice Gates on the daybreak of the non-public computing period; to the likes of Google’s Sergey Brin and Larry Web page or Fb’s Mark Zuckerberg who calculated the algorithms that dominated the web age, the tech trade had all the time idealized the thought of visionary founders who compelled nice leaps of expertise upon society by sheer pressure of will.
The thought of AI enabling a one-person unicorn is the logical evolution of this development—and it’s picked up steam throughout Silicon Valley. “We’re coming into a brand new ‘golden age’ of start-ups,” says Alex Gurevich, a managing director at Javelin Enterprise Companions.
‘The expertise is ready for us’
Startups, which have lengthy had a popularity for resourcefulness, would solely discover this trait magnified by AI, which may automate lots of the processes that previously would have necessitated extra headcount. “A start-up’s inherent benefit over an incumbent is its skill to maneuver shortly, experiment quicker, carry out data-driven choice making and check by a bunch of various hypotheses on their strategy to product market match,” Gurevich says. “GenAI places these inherent benefits on steroids.”
Currier says the instruments are already out there, they’re simply ready for the suitable founder. “At this level, the expertise is ready for us,” Currier says. “So the expertise doesn’t have to get higher, we have to determine methods to use it.”
There are already quite a lot of AI startups focusing on creating instruments for particular enterprise capabilities starting from advertising to authorized work to writing code. All of which might permit a startup to iterate hundreds of various product concepts, advertising taglines, and value situations with a fraction of the time and personnel, in keeping with Gurevich. In a July weblog post titled the “The three-Individual Unicorn Startup,” Currier in contrast an AI-powered startup to a plate-spinning act the place the performer want solely spin the plates as soon as and provides them a push each from time to time to maintain them balanced on their fingers.
Dan Sutera, cofounder and chief product officer at web site design startup Muse, says the top of a one-person unicorn will possible be a salesman—one a part of operating a enterprise that also requires a human contact. Though he cautions that some one-person unicorns might get that title on a technicality, by hiring contractors who aren’t thought of staff to do design and coding work that neither they nor the AI can do. “I’d put an asterisk subsequent to somebody who reached the one-man unicorn threshold report this fashion, although it’s nonetheless very spectacular,” Sutera says. “There will probably be somebody who’s a real one-man store who hits the identical threshold. To me, that man or gal will get the prize.”
However simply because AI can do a sure job, doesn’t imply founders will essentially let AI do it. Most founders gained’t flip over essentially the most essential duties to AI the place the danger of creating a mistake may very well be particularly drastic, in keeping with NYU professor Vasant Dhar who researches belief in AI programs. Dhar offers the instance of analyzing a prolonged authorized doc—akin to a contract with a serious shopper or a deal sheet from an investor. In these high-stakes instances, an error may spell catastrophe for a startup.
“The query is, will the AI be extra environment friendly and low threat?,” he asks.
AI-made software program will eat the world
There’s a historical past of very small startups reaching large valuations. Instagram famously solely had 13 staff when it offered to Fb for $1 billion in 2012. In 2008, the relationship web site Loads of Fish had just one worker, founder Markus Frind, whereas producing $10 million in earnings—a rarity in and of itself for progress startups. Although even Frind, the bootstrapper par excellence, had about 75 staff by 2015 when he offered Loads of Fish to on-line relationship juggernaut Match Group for $575 million.
Along with their restricted workers, these corporations additionally share one thing else in frequent: They’re shopper software program. Startups making these sorts of merchandise are almost certainly to be the primary one-person unicorns, say Gurevich and Currier. A software program product will be constructed as soon as—presumably with the assistance of an AI copilot—after which up to date at common intervals, like in Currier’s plate spinning analogy. As soon as it’s full, many of the remaining work will probably be recruiting new customers.
Conventional corporations, particularly people who make bodily items, don’t have that luxurious. “Should you’re a Ford Motor Firm, you’ve acquired eight completely different buildings for eight completely different capabilities: procurement, manufacturing, gross sales, dealerships, advertising,” Currier says. “With these [software] merchandise, you don’t. You get rid of a variety of these divisions of your organization, so that you don’t want folks to run them. Then you’ve got AI are available in and allow you to with all of the items that you just do have to do.”
Enterprise software program merchandise, whereas comparable, would require a extra hands-on strategy, making them much less suited to the automation wanted to turn into a one-person unicorn. The businesses buying the software program would possible count on common customer support and have better cybersecurity calls for, in keeping with Gurevich.
One other robust candidate to turn into the primary one-person unicorn is a direct-to-consumer ecommerce startup, Gurevich says. Such a startup would use AI for thought era, promoting, and market analysis, he provides.
Satirically, a one-person unicorn is unlikely to be an AI firm itself. “This one-person unicorn is not going to essentially be constructing a local GenAI product themselves, however they are going to be world class at leveraging GenAI internally to turbo cost the start-up benefit,” Gurevich says.
Founders nonetheless must be visionaries
However simply because what was as soon as a pipe dream now appears potential, or at the least believable, it doesn’t imply these startups of the longer term gained’t nonetheless require distinctive founders. Most unicorns do. Currier believes the three-person unicorn will probably be led by a founder who has the identical visionary concepts that propel essentially the most profitable founders.
“Founders of the three-person unicorns will must be vulnerable to a stroke of genius, and unafraid of performing on these impulses,” he mentioned in his weblog publish. “You must be able to seeing one thing others don’t, and aggressive, courageous or unpleasant sufficient to take motion.”
The opposite two members will probably be a “numbers individual” and a “phrases individual.” They’ll additionally must be extraordinarily gifted. “To tug off a 3 individual unicorn would require very particular expertise among the many three folks,” Currier wrote. “Few groups can have the multifaceted abilities to drag it off.”
In keeping with Sutera, former vp of product at unicorn Yext, the three core components of a startup are design, gross sales and engineering. Prior to now, having cofounders who specialised in every discipline was the “holy trinity.” However now, a single founder may have a mix of all three abilities that may be “augmented by AI superpowers,” Sutera says.
The one factor that may proceed to be a sizzling commodity are comfortable abilities. An AI program can’t shut a sale with a serious shopper or have adequate style to select the suitable design for a product, Sutera says.
Currier agrees. “For the knowledge work that we’re involved with, the defensibility of arduous abilities declines over time,” Currier says.
There’s one other main motive Currier stands by the thought of a three-person unicorn with AI-supercharged productiveness as an alternative of a one-person model. It’s all the way down to human nature, he says—folks want firm. “Should you simply do it by your self, you find yourself being actually lonely,” he says. “You find yourself not having fun with what you’re doing, and you find yourself making unhealthy selections.”
