The upcoming unicorn may not employ anyone.

      A decade ago, startups typically viewed success as synonymous with swift headcount expansion. The approach was straightforward: develop a product, secure funding, and hire rapidly. Larger teams translated into larger risks. However, the landscape is evolving as a new wave of startups flourishes with smaller teams and reduced personnel. They are refraining from creating extensive customer support or sales departments, opting instead for automation of tasks that previously required entire teams. Their growth is truly impressive.

      Cursor, recognized as the fastest-growing SaaS company ever, achieved $200 million in revenue with just 30 employees. Similarly, Midjourney made $200 million with a team of 40. Ben Lang’s website, Tiny Teams, monitors these agile operators, many of whom are emerging from Europe. For instance, Sweden's Lovable boasts a team of 25 and reached a valuation of $1.8 billion just six months post-launch. Vlayer Labs in Warsaw secured $10 million in pre-seed funding with a team of 20, while Berlin's Juna AI raised $7.5 million with just seven employees.

      These cases aren't isolated; startups across various sectors, particularly consumer-facing and fintech, are streamlining their operations. In 2022, Carta, a platform that tracks startup equity and hiring trends, reported that the average seed-stage consumer startup had 6.4 employees. By 2024, that figure had dropped to 3.5. The future may significantly transform the startup environment.

      Consider the possibility of a startup generating millions in revenue without employing a single person. No growth head, no support team, just software, bots, and perhaps one or two founders overseeing operations. In 2024—the blink of an eye in AI's rapid evolution—OpenAI CEO Sam Altman has anticipated the emergence of one-person unicorns. As dystopian as it may sound, the zero-workforce startup may be nearer than expected.

      1.0 burn multiples are becoming standard.

      While AI and automation undoubtedly hasten the tech industry's “Great Slimdown”—referred to as the Ozempic era for startups—this isn’t the sole factor. Since the booming days of the 2021 market, the venture capital industry has contracted, leading companies and investors to prioritize efficiency more intently. The number of active venture capital firms in Europe dropped by 30% between 2022 and 2024, while venture funding for European startups saw a considerable decline in Q3 2024, plummeting to $10 billion—the lowest since Q3 2020, reflecting a 39% year-on-year decrease and a 36% quarter-over-quarter drop.

      Tobias Bengtsdahl, a partner at VC firm Antler in the Nordics, has observed this shift firsthand. “We invest in the very early days, when there’s only one to three founders, but already we’re sensing that they can go so much further and build so much more than in the past,” he states.

      Before joining Antler, Bengtsdahl founded Memmo, a personalized video message platform, in 2019, which reached $10 million in revenue within two years and expanded to 150 employees in 20 months. “In the zero-interest environment of 2021, the number of engineers we had mattered more than our spending discipline,” he recalls. “This reflects a real pendulum swing, wherein investors are now increasingly cautious and careful.” European startups are also facing a significantly harsher debt market: bank loans now carry interest rates of 9-13% for early-stage companies, up from nearly zero a few years back.

      This caution overlays a more profound structural transformation. Founders aren’t just decreasing expenditures; they are adopting new building methods utilizing AI and automation. For instance, engineering teams have shrunk, thanks to code generation tools like GitHub Copilot and Tabnine, which enable developers to work more efficiently with fewer resources. In 2024, GitHub’s research indicated that developers using GitHub Copilot completed tasks 55% faster than those who did not. In the US, hiring for software development roles has fallen over 15% year-on-year, according to CompTIA.

      Customer support, often one of the first areas to expand, is increasingly managed by AI. GPT-powered assistants, such as Intercom’s FinAI Agent, are reportedly able to resolve up to 80% of Tier 1 support tickets immediately, according to internal metrics. A similar trend is evident in sales and marketing, with tools like Jasper and HubSpot’s AI suite facilitating the generation of outreach, content, and campaigns in a fraction of the traditional time. For many founders, this AI framework is not merely a temporary solution—it represents a hiring philosophy, with early-stage CEOs postponing critical hires and, in some cases, opting not to fill certain positions.

      As extremely lean, AI-focused startups become more common, VCs are reevaluating what defines a 'scalable