This post mentionsthe buzzword “leverage AI” once. Please don’t let that scare you away.
In the evolving landscape of entrepreneurship, a significant shift is on the horizon, driven by artificial intelligence (AI) and a surge in pre-seed stage capital (accelerators, “first-check-in” firms, incubators). We’re entering an era where the archetype of startup teams is transforming, favoring ultra-lean operations composed of just 1 to 3 people, often all co-founders, supplemented by part-time advisors.
Lets not dismiss this as a trend, but see it as a strategic response to the burgeoning accessibility of offshore and nearshore talent, the exponential growth in AI capabilities, and recent tech layoffs (the equivalent of 3 Apple’s has been laid off since January, 2022 (~160K Apple FTE vs. 462K laid off at the time of writing). Nearly everyone in tech, from CEOs to marketers, has experienced the harsh realities of layoffs. This widespread exposure is likely to inspire a leaner hiring approach, influencing not just those directly affected but also their friends, family, and acquaintances involved in starting companies who have some of this scar tissue.
AI tools are revolutionizing the way startups operate, making tasks that were once time-consuming or resource-intensive—like content marketing, image generation, customer surveys, and market research—astonishingly efficient or virtually effort-free. This technological leap enables startups to validate their business ideas and engage with their target audience with minimal initial development, shifting the emphasis from heavy coding to flexible, design-driven approaches; pixels are easier to move than code.
Many organizations find themselves adjusting to a new reality where the traditional workforce must prove its indispensability amidst the rise of automation. This shift comes in the wake of widespread layoffs across the tech industry, where companies are realizing the consequences of overhiring and overspending plus have many positions now easily augmented by AI.
The core thesis of this transformation is the notion that startups can now remain small and agile, raising just enough capital to not only survive but thrive without the immediate pressure of becoming venture scalable. With the aid of cost-effective tools, early-stage startups can secure seed funding ($500K TO ~$4M) sufficient to support a compact, efficient team for 2+ years—time well spent on honing their product and strategy. A few million dollars can go a long way and keeps options open from:
- building a company that doesn’t need to raise more capital or
- playing the VC Alphabet soup game (Series A, B, C, D, E, etc.)
This paradigm shift predominantly applies to software-centric startups, where the primary resources are creativity and innovation, rather than physical product development. In this new era, the ability to leverage AI and global talent pools will be a cornerstone of success, allowing startups to maintain minimal overhead while maximizing their growth potential and market responsiveness.
Hopefully this 2 to few person approach not only conserves resources but also fosters a more sustainable and adaptable startup ecosystem.
unpublished alpha 