By Jeff Becker 

Evidence suggests that there’s a new breed of founder in tech.

It’s difficult to source the origins of what we might label an AI company; AI has been around for decades. In the past 10 years, there has been an increasing creation rate of companies for which AI is at the core of their technology. Since 2017 the number of such companies in the U.S. has doubled. Concurrently with this shift, there has been the advent of a new type of entrepreneur.

Jeff Becker, general partner at Antler

Today it’s the AI-native founder who wins the race. AI-natives are technically fluent in artificial intelligence and socially adept at navigating its impact. They are born with the internet in their pockets. The ability to learn anything at any moment is an expectation, rather than a desire.

Together with AI, there’s an entirely new method of company-building emerging; instead of building an AI company, these founders are building their companies with AI.

AI buildup

These companies are not building their own models. Instead, they are standing on the shoulders of giants. They are architecting systems that are more efficient and scalable than their incumbent peers — similar to the established tech players that rode the wave of the cloud and mobile supercycles. This is true of all new generations of founders who receive the technological baton from their predecessors.

AI-nativity is such a radical departure from the old ways of constructing companies that it has the potential to completely change the way we work, hire and grow.

Why have an SDR team mapped 2:1 to their AE’s when you can use something like Valley and achieve the same efficiency with 1:1 and save 90% compared to the additional FTE? Or, if you have the cash, why not maintain 2:1 but have the efficiency of 4:1 where every seller’s calendar is filled to maximum capacity? Or, when it comes to engineering, why write code without copilot by GitHub? And of course, the list of AI tools that create leverage for founders is expanding every single day.

The why culture

These new founders are embedding this culture of “why” into their businesses. They’re hiring for it too, with AI-related job postings on the rise again. AI-nativity is becoming a prerequisite to moving quickly and capitalizing on what is always an infinitely long product roadmap for the companies with the most long-term potential.

The rise of AI-native founders is also unlocking new possibilities in venture capital.

For example, traditional hard-to-back industries will start to become fair game as their operating economics improve. Consider Harvey AI, a California legal-tech firm. Pre-AI-nativity, backing a services business such as a law firm wouldn’t make sense from a VC perspective. But with AI augmenting the work, the overhead and margins make it look more attractive and scalable, and suddenly it becomes a high-leverage business. We are already seeing that trend across the S&P 500 with fewer employees needed to generate increasing amounts of revenue.

Of course, there are bubbles and hype cycles in tech, so investors must temper their enthusiasm for AI natives by continuing to underwrite durability and customer value. Understandably, AI skepticism is already creeping into public and private markets, and critics are right to problematize aspects of this latest supercycle.

Many AI companies lack cost-durability and struggle during market volatility. This will be less prevalent as failures mount and resilience prevails. But for now, we may be overhyped in AI relative to the fundamental value being created.

There is also the perennial Big Tech problem; industry leaders will shift further toward an M&A model that constricts competition and continues to make matching the likes of Microsoft, Apple, Nvidia and Meta seem impossible. This dynamic has always been there in tech, and only time will tell who has what it takes to reauthor the S&P’s top companies.

Advances in AI capability are showing that there is a better way to do almost every element of every job, and AI-native CEOs will not only create new and interesting technology companies, but they also will rebuild many of the incumbents with a technical architecture that is built for the future instead of the past.

Jeff Becker, a general partner at Antler who leads the New York office, is a sales leader and investor. Over a nine-year run at LinkedIn, he held a series of roles launching new business units and leading sales teams to best-in-company performances as the business grew to 770 million members and $10 billion in revenue. Separately, Becker launched his own company, Earhoox, scaling it across the globe. He’s also an active angel investor focused on health, wealth and happiness. 

Illustration: Dom Guzman