The One Person Billion Dollar Company: A Possible Future of Business

This was a concept that I’d been thinking and pondering about for a long time. But was pointed out by Anand Sanwal most recently:

Anand Sanwal on Twitter: “Bragging about headcount was 1 of the most corrosive trends in startup land over the last many years I was guilty of it too Somehow larger growing headcount became a positive signal of success for companies When in reality, it may more often than not be a negative signal” / Twitter

This absolutely made me think about all the bad ideas that happened in Silicon Valley recently and the counterpoint: what we are overlooking? Technology ultimately is about scaling and leverage. Yet we went the other direction. Adding people instead of technology and outsourcing to scale. This recession is forcing us to rethink “business as usual” here, in a very good way. Auren Hoffman was early to this.

Auren 𝐇𝐨𝐟𝐟𝐦𝐚𝐧 on Twitter: “The most important business skill in the next hundred years is the ability to select and manage vendors. This is in contrast to the most important business skill from the last 100 years: the ability to recruit, manage, retain, and grow talent.” / Twitter

Auren goes on to say correctly: “In the future, those who achieve the greatest results with the least number of employees will be admired above all others; the key statistic to look at is the go-forward net revenues per employee because it best encompasses the company’s leverage. What matters is each employee’s productivity and how the business itself can scale?

“If you start stripping out everything that is not unique to your company, you’re left with just a few people who make the unique parts of the company. And then add a few people who need to explain its unique benefits to the market. Imagine your 100 person company going to 6 people. Imagine your 1000 person company going to 20. How much faster could you move?”

The key question is why haven’t companies adopted this mindset 25 or 50 years ago and how does one start to outsource non-essential tasks? Primarily, corporations of yesteryear were full-stack — they rarely used vendors and instead opted for adding many heads into the fold, creating a hierarchy and thus a stringent bureaucracy. This is changing: today, vendor selection is becoming a rare and prized skill as it frees up time and money that businesses can invest in higher ROI activities like R&D.” Source: https://summation.net/2020/02/11/the-new-status-game-for-companies-fewer-employees/

I remember reading this book by Elaine Pofeldt, called “The Million Dollar, One Person Business” a few years ago. It was eye-opening. It almost broke my brain but it showed me what is possible.

As entrepreneurial Naval said once 10 years ago: “the actual efficient size of a company is shrinking very rapidly. So the future of the world will be almost all startups. Like I think most of the world, most businesses will adopt a startup mentality. In the sense that, there will be small companies, loosely coupled and connected to each other, all through APIs and processes for their needs. I think we will see more billion dollar businesses built by 4 or 5 people and it will stay at that.”

https://www.youtube.com/watch?v=rIXx617xVMo

But I’d go even further. So $1M is definitely possible. Why not a one person $1B business? Maybe we are far from that. But there definitely will be a very tiny team company worth a billion dollars. My friend Jeremy talks about this and it’s excellent. This is recapped here:

“PREDICTION: The next billion-dollar startup will have only 3 employees.

By Ben Parr Chris Saad and myself, Jeremiah Owyang on a recent podcast on #AI for startups.

The culture within the AI startup market is “AI First” where the first instinct is to use Autonomous AI agents as the first method to get a job done. Automate all the things. Fully remote.

Here are the key duties for each of the three roles:

CEO:

-Vision, strategy, drive growth

-Lead public-facing marketing

-Also be involved in engineering, hands on coding

Will occasionally represent the company in public, but most of the digital marketing and sales functions will be handled by AI agents, which may replicate their likeness.

Product Leader:

Will work closely with AI agents to accomplish:

-Collaborate with customers & team to construct roadmap

-Drive development and delivery or product

-Refine and iterate

Operation Leader:

-Manage marketing and sales automation, finance, supply chain, and legal functions.

-Responsible for company-wide AI agents and generate single source of reporting.

-Ensure smooth operations across all functional areas of the company.

SUMMARY

-We expect to see this 3-person team form by end now by end of year, with it hitting stride in 3–5 years.

-This is just the start of the journey, we expect to see fully-autonomous companies that may not even have humans at the helm.”

Source: https://www.linkedin.com/feed/update/urn:li:activity:7058821822867202048

It’s an interesting idea and concept whose time has finally arrived. Instagram and Whatsapp are some great examples of these kinds of companies in the last decade, albeit they were in the teens or dozens of employees (Instagram at 18 employees and Whatsapp at 55 employees). But directionally these two companies set the tone for this future.

I anticipate that with a large global pool of contractor talent & expertise plus the rise of even more distribution platforms, tools, APIs coupled with the larger trend of generative AI and “Low code and No code” tools, we are closer than ever to this becoming easier and a much more common reality.