In February 2024 OpenAI CEO Sam Altman spoke to the JP Morgan Investors conference and said, ‘We’re going to see 10 person billion dollar companies pretty soon.’
He went on to joke that he’s in a Whatsapp group with other tech CEOs who are wagering on the first year that we’ll see a one person billion dollar company.
As for the first point, it appears we’re already there. Numerous AI enabled SaaS products have seemingly smashed the ceiling.
Midjourney, an image generation tool still wedded to a Discord server (which makes its accessibility mildly harder), reached $200m in Annual Recurring Revenue with a 10 person team.
Cursor, an AI assisted development tool, saw revenues reach $100m in 21 months with fewer than 20 people.
With such explosive growth, we’d have to conclude that a billion dollar valuation for either company would not be far off.
AI unicorns
There are a host of other ‘AI unicorns’ which have seen their revenue explode with small teams over the last couple of years, and the excitement is never too far away on social media. Meme like graphics soon start doing the rounds:
Three of these relate to development (Cursor, bolt.new and lovable) and three to image generation (Midjourney, Magnific, Aragon.ai). Eleven Labs is an AI sound generation platform largely related to voice over. Mercor is a HR and recruitment platform.
Cursor has been singled out for special praise, with some touting it to be the fastest company ever to reach $100m ARR. It achieved the feat in 21 months, after an $8m seed round.
It’s difficult to determine the exact truth of this given how much engagement is generated by hype, but we can be fairly sure that Cursor has grown very fast with a small team.
Why is it so successful? There is clear demand for coding assistance. Coding is a hard to learn skill that AI can level. Anthropic’s first Economic Index showed that the most common use case for the Claude chatbot was software and coding related. Cursor has been able to be a real hit in this market.
It’s also relatively cheap vs. immediate competitors, with tiered ($0-$200 pricing). By contrast, Devin by Cognition has only a $500/month subscription requiring an org-level onboarding.
There’s also a suggestion that the market is ready for coding assistance, rather than a full ‘AI agent takeover.’
But elements of that ‘AI agent takeover’ are likely in the next few years. One observation about AI tech is that it’s moving too fast to adopt.
By the time large businesses have adopted LLMs, startups and individuals may well be in the Agentic phase, supercharging their productivity with agentic workflows.
The $1m agent
It all recalls Mustafa Suleyman’s ‘Modern Turing Test’, which amounts to a straightforward prompt: ‘Go make $1 million on a retail web platform in a few months with just a $100,000 investment.’
He refers to an agent completing this test as being a bridge between now and Artificial General Intelligence (AGI) through Artificial Capable Intelligence (ACI).
Having an agent with such a capability may well lead to the one person, billion dollar company.
