And I already see this in companies I work with. They’re hesitating before hiring, asking themselves if they can automate the work or hire out contractors.
When I first started my company, people used to always ask me the question, “how many people work for you?”
I always saw this question as odd, given that the goal for entrepreneurs is not total team size, but total revenue, with the goal of having the ratio of team to revenue being as small as possible. In this way it is not exactly true that “Entrepreneurs create jobs.”
Instead it’s a byproduct of the risk that founder’s take that jobs are created and the function of demand from the other side of the economy. This demand forces founder’s to hire to meet it. However, in a world of hiring AI’s, robots, and using, automation, and robotics, it’s more possible now than ever for entrepreneurs to shift their headcount growth to machines. This massively benefits margins. There’s already talk about billion dollar single person companies.
Profit per employee increase?
Just look at Tether’s profit per employee:
Electric Capital co-founder Avichal Garg suggested that Tether is the most profitable company per employee; the figure is $85.6 million.
If You’re Worried About Your Labor Hedge by Becoming Capital
Now, I am of the opinion that AI economic growth and job loss will be much slower than most predict. But still, with this fear looming in the background, what can you do about this as a business owner, employee, or founder?
You can hedge your bets by investing in the AI trend. You become capital, instead of labor, benefitting from AI scaling and job automation. You own pieces of the companies that profitably grow margins via cost cutting.
If you can’t beat the scale and growth of AI, join it. You can do so by buying public equities linked to the AI trend that stand to benefit. You can buy equity in Amazon, Google (Waymo), Microsoft (large OpenAI investor), Coinbase (Circle, Tether Competitor). You can buy the semiconductor companies that power AI: NVIDIA (NVDA) / Super Micro Computer (SMCI) Micron / ASML. You can invest in Decentralized AI: Bittensor: (TAO)Incentivised global model-training marketplace and Render (RNDR): GPU-render + inferencing jobs on Solana
Or, if you’re truly worried about mass job losses, Bitcoin provides a nice hedge to the increase in government spending needed to support such a massive labor problem.
Again, this is a hedge tying some investments who’s growth could pose a risk to your career. I’m not saying go all in, I’m saying think about this like insurance. The AI bubble will pop, and maybe we’re close to that point.
But if you’re worried about your career over the next decade, it can help to have a cushion from the growth of an industry that can offset loss of income.
Great post!