Almost every day, Grant Lee, a Silicon Valley entrepreneur, listens from investors trying to persuade him to get their money. Some have even sent him and his co -founders personalized gift baskets.
Mr. Lee, 41, would normally be distributed. In the past, a fast -growing start like Gamma, the beginning of artificial intelligence that he helped create in 2020, would have constantly demanded for more funding.
But like many new beginners in Silicon Valley today, Gamma is following a different strategy. It is using artificial intelligence tools to increase the productivity of its employees in everything, from customer service and marketing to client coding and research.
This means that the gamma, which makes software that allows people to make presentations and websites, does not need more money, Mr. Lee. His company has hired only 28 people to get “tens of millions” in repeated annual income and about 50 million users. Gamma is also lucrative.
“If we were from generation before, we would be easily in 200 employees,” Mr. Lee. “We have a chance to rethink it, basically rewrite the game book.”
The old model of Silicon Valley dictated that beginners had to raise a large sum of money from the capital’s capital investors and spend it by hiring an army of employees to scale quickly. The profits would come much later. Until then, the head count and fundraising were the mark of honor among the founders, who philosophized that the largest was better.
But Gamma is among an increasing starting group, most of them working on the products he is also using to maximize efficiency. They make money and are growing fast without the funds or employees they would need before. The biggest rights of boasting for these beginners are to make the most income with the least workers.
Tiny Team success stories have now become a meme, with excited techniques sharing lists showing how Anysphere, a start that makes coding software cursor, hit $ 100 million in annual revenue repeated in less than two years with only 20 employees and HOW Elevenlabs, a beginner of his voice, did the same with about 50 workers.
The potential for him to allow the beginnings to do more with less has led to wild speculation about the future. Sam Altman, Openai’s chief executive, has predicted that one day there may be a company with a person worth $ 1 billion. His company, which is building an intense cost form of it called a basic model, employs more than 4,000 people and has raised more than $ 20 billion in funding. It is also in talks to raise more money.
With the means of he, some beginners are now stating that they will stop employment at a certain size. Runway Financial, a finance software company, has said it plans to go out into 100 employees because each of its employees will do the work of 1.5 people. The agency, a start using its customer service, also plans to hire no more than 100 workers.
“It is about eliminating roles that are not needed when you have smaller teams,” said Elias Torres, the founder of the agency.
The idea of the efficiency led by him was strengthened by Deepseek last month, the Chinese beginning of the one who indicated that he could build up tools for a small part of the typical cost. Its progress, built on open source vehicles that are freely available online, set an explosion of companies that build new products using free Deepseek techniques.
“Deepseek was a catchment moment,” said Gaurav Jain, an investor in the company’s firm above Capital, which has supported Gamma. “The cost of calculation will decrease very, very quickly, very quickly.”
Mr. Jain compared the new beginnings of him to the wave of companies that rose in the late 2000s, as Amazon began providing free Cloud computing services. This reduces the cost of starting a company, leading to a new multitude of new beginners that could be built cheaper.
Prior to this boom, he generally burned $ 1 million to reach $ 1 million, Mr. Jain. Now reaching $ 1 million in income costs one fifth as much as possible and eventually can drop to one tenth, according to an analysis of 200 beginnings from above.
“This time we are automating people compared to only data centers,” Mr. Jain.
But if the beginning of the beginning can become profitable without spending too much, this can become a problem for the capital’s capital investors, who share tens of billions to invest in the beginnings. Last year, he raised $ 97 billion in funding, comprising 46 percent of all venture investments in the United States, according to Pitchbook, which tracks the beginning of the beginning.
“Venture Capital only works if you get money in the winners,” said Terrence Rohan, an investor with another fund, which focuses on the beginning of many new ones. He added, “If the winner of the future needs much less money because they will have much less people, how does this VC change?”
For now, investors continue to fight to enter the hottest companies, many of which do not need more money. Scrib, a productivity starter, Grapple last year with much more interest from investors than the 25 million dollars he wanted to collect.
“It was a negotiation of what is the smallest amount we could get,” said Jennifer Smith, chief executive of the Scrib. She said investors were shocked at the size of its staff – 100 people – when compared to its three million users and rapid growth.
Some investors are optimistic that the efficiency of him will encourage entrepreneurs to create more companies, leading to more opportunities to invest. They hope that once the beginnings reach a certain size, firms will approve the old model of large teams and big money.
Some new companies, including Anysphere, what stands behind the cursor, are already doing it. Anysphere has raised $ 175 million in funds, plans to add staff and conduct research, according to company President Oscar Schulz.
Other founders have seen the risks of the old starting book, which kept companies in a fundraising routine, where hiring more people created more costs that went beyond their salaries.
Larger teams needed managers, stronger human resources and back office support. Those teams then needed specialized software, along with a larger office with all obstacles. And so on, which made the beginnings burn through cash and forced the founders to collect more money constantly. Many beginners from the 202s funding boom eventually decreased, closed, or tried to sell themselves.
Returning an early profit can change that result. In Gamma, employees use about 10 tools of him to help them be more efficient, including InterCom’s customer service tool for problem handling, Midjourney image generator for marketing, Claude Chatbot for analysis for analysis of Data and Google notebook for analyzing client research. Engineers also use Anysphere cursor to more efficiently write the code.
The range of range, which is built on top of the tools by Openai and others, is also not as expensive to make as other products. (New York Times has sued Openai and her partner, Microsoft, claiming copyright violations of news content with respect to he. Both companies have denied the claims of the lawsuit.)
Other efficient starts are taking a similar strategy. With thought, a 10 -person telephone agents’ provider returned a profit in 11 months, thanks to his use, said his co -founder Torrey Leonard.
The Stripe Payment Processor created a tool that helps Mr. Leonard analyze the sales of thought, something he would have previously employed an analyst to do. Without her and the means of he from others to simplify her operations, it is thought that at least 25 people would need and would be far from profit, he said.
The thought will eventually raise more money, said Mr. Leonard, but only when ready. Not worrying about finishing cash is “a big relief,” he said.
In Gamma, Mr. Lee said he planned to double the work strength this year to 60, hiring design, engineering and sales. He plans to recruit another type of workshop from the earlier, looking for generalists doing a number of tasks than specialists who do only one thing, he said. He also wants “player coaches” instead of managers-people who can mentor less experienced employees but can also get into daily work.
Mr. Lee said the model he had liberated the time he would have spent to manage people and recruitment. Now he focuses on chatting with clients and improving the product. In 2022, he created a clumsy room for reactions from top Gamma users, who are often shocked to discover that the chief executive was responding to their comments.
“This is actually every founder’s dream,” said Mr. Lee.