Reason 1: Because any company with one individual who leverages AI to achieve a billion dollar valuation would trivially & obviously be more valuable and be able to achieve more if they had two people leveraging AI. And, at a billion dollar valuation; why not pay that extra salary? Why not add a third? There's a huge difference in potential output by building with a founder team of 2 or 3 people versus 1; with not that much difference in cost.
Reason 2: The most capital efficient valuations in history are B2C companies (Instagram & Whatsapp are maybe the two best examples) during the VC boom era of the 2010s. B2C is naturally very capital efficient; you can do inbound marketing, no sales teams, just build. But, B2C success stories are more-and-more rare; the name of the game in the 2020s era has generally been B2B. Cursor might be the fastest company to reach $500M in revenue, and it got there on B2B, Notion isn't building its AI tools to sell to its consumer customers, etc. B2B is a lot harder; it requires outbound marketing & sales, as well as customer-led product development that usually requires interacting with people. AI will absorb some of those roles, but to suggest it can widdle down to one person per billion dollars in valuation in a year feels too accelerated to me. The world is complex, old, and crusty.
Just look at the YC batches for 2025 [1]: Of the 375 companies in the three batches, 20 are Consumer tech (~5%).
Reason 3: Weaker, but something I think about: AI is weirdly non-differentiating/egalitarian. You see some people try to differentiate it with crazy prompts or context engineering, but then next month Cursor ships an update and suddenly those aren't differentiating anymore. If you're an investor in a single-person unicorn-moonshot, you have to ask: Why can't some other company just come in and do the same thing you're doing? If that much can be automated through off-the-shelf systems. My feeling is that this concern would lead to lower revenue multiples on the valuation, which just makes it that much harder to hit unicorn status.
Reason 1: Because any company with one individual who leverages AI to achieve a billion dollar valuation would trivially & obviously be more valuable and be able to achieve more if they had two people leveraging AI. And, at a billion dollar valuation; why not pay that extra salary? Why not add a third? There's a huge difference in potential output by building with a founder team of 2 or 3 people versus 1; with not that much difference in cost.
Reason 2: The most capital efficient valuations in history are B2C companies (Instagram & Whatsapp are maybe the two best examples) during the VC boom era of the 2010s. B2C is naturally very capital efficient; you can do inbound marketing, no sales teams, just build. But, B2C success stories are more-and-more rare; the name of the game in the 2020s era has generally been B2B. Cursor might be the fastest company to reach $500M in revenue, and it got there on B2B, Notion isn't building its AI tools to sell to its consumer customers, etc. B2B is a lot harder; it requires outbound marketing & sales, as well as customer-led product development that usually requires interacting with people. AI will absorb some of those roles, but to suggest it can widdle down to one person per billion dollars in valuation in a year feels too accelerated to me. The world is complex, old, and crusty.
Just look at the YC batches for 2025 [1]: Of the 375 companies in the three batches, 20 are Consumer tech (~5%).
Reason 3: Weaker, but something I think about: AI is weirdly non-differentiating/egalitarian. You see some people try to differentiate it with crazy prompts or context engineering, but then next month Cursor ships an update and suddenly those aren't differentiating anymore. If you're an investor in a single-person unicorn-moonshot, you have to ask: Why can't some other company just come in and do the same thing you're doing? If that much can be automated through off-the-shelf systems. My feeling is that this concern would lead to lower revenue multiples on the valuation, which just makes it that much harder to hit unicorn status.
[1] https://www.ycombinator.com/companies?batch=Summer%202025&ba...