Ai is changing how Silicon Valley builds new companies

Almost every day, Grant Lee, a Silicon Valley businessman, listens to investors who try to persuade him to take his money. Some have even sent him his co -founders personalized gift baskets.

Mr. Lee, 41, would usually sit flattering. In the past, a new rapid growth company such as Gamma, the new artificial intelligence company that helped establish in 2020, would have constantly sought more funds.

But like many new young companies in Silicon Valley today, Gamma is following a different strategy. You are using artificial intelligence tools to increase the productivity of its employees in everything, from customer service and marketing to customer coding and research.

That means that Gamma, which makes the software that allows people to create presentations and websites, does not need more effective, said Lee. His company has hired only 28 people to obtain “tens of millions” in annual recurring income and almost 50 million users. Gamma is also profitable.

“If we were the generation before, we would be easily in 200 employees,” Lee said. “We have the opportunity to rethink that, basically rewrite the play book.”

The old Silicon Valley model issued that new companies should raise a large sum of money from risk capital investors and spend it by hiring an army of employees to climb quickly. The profits would come much later. Until then, the head count and the collection of funds were badges of honor among the founders, who philosophized that bigger was better.

But Gamma is among a growing cohort of new companies, most of them working on ai products, which are also using ai to maximize efficiency. They earn money and are growing fast without financing or employees that would have needed before. The greatest rights of bluffing for these new companies are to obtain more income with the least number of workers.

The success stories “Tiny Team” have become a <a target="_blank" class="css-yywogo" href="https://x.com/benln/status/1889388151770325427″ title=”” rel=”noopener noreferrer” target=”_blank”>MemeWith the technicians who share with lists enthusiast as Elevenlabs, a new voice company, did the same with around 50 workers.

The potential for ai to allow new companies to do more with less have led to wild speculation about the future. Sam Altman, Executive Director of OpenAI, has <a target="_blank" class="css-yywogo" href="https://x.com/alexisohanian/status/1752753792058294725″ title=”” rel=”noopener noreferrer” target=”_blank”>provided Someday there could be a company of a person worth $ 1 billion. His company, which is building an intensive cost of the so -called fundamental model, employs more than 4,000 people and has raised more than $ 20 billion in funds. He is also in conversations to raise more money.

With ai tools, some new companies now declare that they will stop hiring a certain size. Runway Financial, a finance software company, said it plans to exceed 100 employees because each of its workers will do the work of 1.5 people. The agency, a new company that uses ai for customer service, also plans to hire no more than 100 workers.

“It's about eliminating roles that are not necessary when you have smaller equipment,” said Elias Torres, founder of the agency.

The idea of ​​the efficiency driven by ai was reinforced last month by Depseek, the new Chinese ai company that showed that it could build ai tools for a small fraction of the typical cost. Its progress, based on open source tools that are available for free online, trigger an explosion of companies that build new products using the Deepseek economic techniques.

“Deepseek was a decisive moment,” said Gaurav Jain, an investor of the risk firm before capital, which has backed Gamma. “The cost of calculation will lower very, very fast, very fast.”

Mr. Jain compared the new new companies with the wave of companies that emerged in the late 2000s, after amazon began offering cheap cloud computing services. That reduced the cost of starting a company, which led to a burst of new new companies that could be built more economically.

Before this ai boom, the new companies generally burned $ 1 million to reach $ 1 million in income, Jain said. Now reaching $ 1 million in income costs a fifth and eventually it could fall to a tenth, according to an analysis of 200 new companies carried out by before.

“This time we are automating humans instead of just data centers,” Jain said.

But if new companies can become profitable without spending much, that could become a problem for risk capital investors, assigning tens of billions to invest in new ai companies. Last year, the companies of ai raised $ 97 billion in funds, which represents 46 percent of all risk investments in the United States, according to Pitchbook, which tracks new companies.

“The risk capital only works if you get money at the winners,” said Terrence Rohan, an investor with Fund in another way, which focuses on very young new companies. He added: “If the winner of the future needs much less money because they will have much fewer people, how does that change?”

For now, investors continue to fight to enter the most popular companies, many of which do not need more money. Scribe, a new ai productivity company, dealt last year with much more interest from investors than the $ 25 million he wanted to raise.

“It was a negotiation of which is the least amount we could assume,” said Jennifer Smith, Executive Director of Scribe. She said that investors were surprised with the size of their staff, 100 people, compared to their three million users and rapid growth.

Some investors are optimistic that the efficiency promoted by ai will stimulate entrepreneurs to create more companies, leading to more opportunities to invest. They hope that once the new companies reach a certain size, companies adopt the old model of large teams and a lot of money.

Some young companies, including Anysphere, the one behind cursor, are already doing it. Anysphere has raised $ 175 million in funds, with plans to add personnel and conduct investigations, according to the president of the company, Oskar Schulz.

Other founders have seen the dangers of the old start -up book, which kept companies in a fundraising of funds where the hiring of more people created more costs that went beyond their salaries.

The biggest teams needed more robust managers, human resources and background support. These teams need specialized software, along with a larger office with all the advantages. And so on, which led the new companies to burn in cash and forced the founders to constantly raise more money. Many new companies of the 2021 financing boom were finally reduced, closed or hurried to sell.

Obtain profits from the beginning can change that result. In Gamma, employees use approximately 10 ai tools to help them be more efficient, including intercom customer service tool to handle problems, the Midjourney image generator for Marketing, Claude Chatbot of Anthrope for data analysis and data analysis and Google's notebook to analyze customer research. Engineers also use Anysphere's cursor to write a code more efficiently.

Gamma's product, which is based on Operai and others tools, is not as expensive to do as other ai products. (The New York Times has sued Openai and his partner, Microsoft, claiming the infraction of copyright of the news content related to ai systems. The two companies have denied the claims of the lawsuit).

Other new efficient companies are taking a similar strategy. Highly, a provider of 10 people from ai telephone agents, obtained profits in 11 months, thanks to the use of ai, said his co -founder Torrey Leonard.

The payment processor strip created an ai tool that helps Mr. Leonard analyze Thinkly sales, something that would have previously hired an analyst to do. Without that and the tools of others to rationalize their operations, so I would need, so I would need at least 25 people and be far from profitable, he said.

Usually, he will eventually raise more money, Leonard said, but only when he is ready. Not worrying about running out of effective is “a great relief,” he said.

In Gamma, Mr. Lee said he planned to double the workforce this year to 60, hiring for design, engineering and sales. Plan to recruit a different type of worker before, looking for generalists who perform a variety of tasks instead of specialists who only do one thing, he said. He also wants “players coaches” instead of managers, people who can guide less experienced employees but who can also participate in daily work.

Lee said the A-Efficient model had released time that they would otherwise have administered people and recruiting. Now he focuses on talking with customers and improving the product. In 2022, he created a loose space for the comments of the main Gamma users, who are often surprised to discover that the executive director was responding to his comments.

“That is actually the dream of all the founders,” Lee said.