Lean Startups

2025 Startup Climate

Remote work 🤝 AI

These two trends have led to the start of a new focus for startups to gain market share efficiently. Versus blowing all the cash they have to move as quickly as possible.

This efficiency is now being measured by a new north star metric:

⭐ Revenue/FTE (Full-time Employee) ⭐

Bloated teams and massive hiring sprees seem like a thing of the past. It’s better for employees, it’s better for companies, it’s better for investors, and it’s better for customers.

Tech companies are being asked to address their plans for building lean org designs along with determining a plan for leveraging AI.

ARR per FTE benchmarks are increasing.

We’re entering a new era in B2B Tech—the Lean Startup.

Also, some other contributors to this trend of revenue per FTE at a macro level that are worth calling out:

• Higher Interest Rates: squeezes the available funding and capital and forces VCs to make fewer and more calculated bets.
• ARR Multiple Compression: public markets are not valuing SaaS and AIaaS on ARR multiples alone, but also focusing on profitability.
• Lack of late stage funding: many early stage companies have been overvalued and now cannot access additional capital without taking a downround, unless they show profitability.
• Consumption based pricing: the market is demanding to pay for work done, not access, and this trend doesn’t seem to be slowing down.

What this means for startups

This new climate of profitability + rapid growth is causing a different approach for building a company today.

The reality is that →

1. Teams need to do more with less headcount.
2. Founders need to stretch their funding further.
3. Exit values will be smaller, and protecting equity will become more important.

If you’re just starting to grow your company, think efficiently. If you’re further along, think about your use of AI and your hiring plans for the future.

AI alone is a big topic, but hiring full time employees cost more than you would expect.

The true cost of an FTE

There is almost a 2x salary implication when hiring someone full time. There are lots of estimates above but it helps paint the picture.

Also, below are some very real, but harder to calculate costs:

• Productivity ramp time
• Recruitment
• Training and onboarding
• Ongoing development and training
• Management (1:1s, reviews, etc.)
• Need for more middle managers
• Attrition
• Poor performance and opportunity cost
• Culture dilution
• Slower decision making
• Liability for lawsuits and employment law issues

Point is – take your time to hire. Don’t rush it. Don’t let each org leader run wild w/ headcount. Pay a lot of attention to this.

How we got here

There is a lot of leg work to do to grow and scale a business.

And the way to do the leg work has changed.

We have more context on what to do, how to do it, how not to do it. This has opened up the opportunity for technology and consultants able to perfect these workloads without having to do everything internally.

Over the last few years, we’ve seen these small teams powered by AI and consultants hit massive revenue numbers without having a ton of people on your team. Cursor, Midjourney, Lovable, etc.

This has spurred a new flex for companies—small teams w/ massive revenue numbers.

There are likely many explanations to this phenomenon, but we’re really focused on the two we are directly impacting. Leveraging AI + Consulting. But first, this all starts with the proper org chart.

The Lean Org Chart

We believe that sales and product strategy should live within the organization. For now.

Supporting roles should be reviewed and optimized w/ AI and Consultants:

• GTM → demand generation, GTM operations (RevOps), support
• Product → development, DevOps, QA

Basically, you need to know what to build/how to build it, and directly talking with customers to sell it. That’s where the investment in FTEs should be.

To illustrate this, we want to talk about how an org chart could look like:

Traditional Org Chart

Below is an example traditional org with multiple functional business lines and levels of management and ICs.

This is bloated and has about 60 people that could probably bring in ~$10m in recurring revenue. Or about ~$170k revenue/FTE.

Lean Org Chart

Leveraging AI and Consulting firms will allow a similar revenue company ~$10m to bring in close to $340k/FTE with a Lean Org design:

This is 2x the profitability, more equity available for the team, less babysitting entry level roles, and overall quicker decision making.

tl;dr do NOT approach hiring in 2025 like you would in 2020. Use AI & Consulting Firms.

AI Automation

AI is replacing the work streams typically done by entry level roles, usually execution-level work. Where decisions don’t have to be made internally, and limited people management internally or externally.

Any systematic workflow (scraping company data, basic coding, etc.) should all be routed through AI.

Now, non-linear workflows are now being pushed to AI agents that can make decisions across a variety of permutations and combinations.

Some examples for Go-to-Market AI applications are below:

Consulting Firms

Consulting firms will replace Sr. and Manager-level roles and decision making—along with managing AI agents.

This allows startups to hire more experienced people to execute and manage some of the most important tasks.

Here’s why:

• Consulting firms (should) hire Senior talent and train them extensively
• These senior resources manage multiple clients
• Each client can get access to senior support, without having to hire them full time

For example, a VP RevOps doesn’t have to hire a junior candidate to report to them in Sales Ops—they can hire a VP-level person at a similar cost. Although they won’t work full-time, they will be able to do a lot more with less based on their experience.

This all brings up the idea, what will it be like to build a startup in the next two years?

Building a Startup in 2027

At LeanScale, we’re looking two years ahead of what a startup work structure will look like.

Here are some hot takes:

• $500k revenue/FTE is new standard metric (2-3x where we are at today)
• 2x equity offerings per employee because the equity pool will be split by less people
• Building teams will have a deep focus in:
  • Leverage AI in vertical solutions across all functions
  • Hiring A+ consultants for middle management of people and AI systems

Building with AI in 2027

Each function of an org under an executive (CEO/COO/CFO/CRO/CMO/CPO/CTO) will leverage AI in a few ways:

• Mission Critical tasks: Build internal tooling and solutions directly w/ LLMs, likely will not want to use a more “off the shelf” solution for these things. Especially if it’s part of their ‘secret sauce’.
• All other tasks: Leverage pre-built AI vertical solutions/tools that offload work without having to build and manage.

These will all be implemented and managed by the internal or external team. Constantly iterated on, and deep experience in AI for FTEs will be vital.

Hiring Consultants in 2027

Expectations for hiring consultants will fundamentally change over the coming years.

Startup execs are going to look for consulting firms that:

• Hires startup people, not consultants
• Enable their talent w/ deep AI competency
• Leverage AI Agents in engagements to cut down billable hours
• Make it easy to hire, manage, and track work out of a SaaS-like dashboard
• Take accountability of quality delivered (e.g. not marketplaces)
• Pay-as-you-go for what is used vs having to pay minimum commits for hours
• Get experts across all functions of the line of work (consolidation)

The McKinsey, Accenture, Bain, etc. approach will not work for Startups. It’s unrealistic—too expensive, too slow, and not the right talent.

However, those consulting firms focused on the future of consulting will be building an infrastructure that would allow teams to hire at scale and build their org in a fraction of the time.

Our hot take: We believe Startups will be able to hire to 50% of annual ops capacity in 4 weeks.

So what, now what?

Take a close look at your org design and AI implementations.

More specifically, focus on these 3 areas:

• Building the right org design—do not let teams run rogue and build it based on “what they did in their last role”. The market is changing, and leaders need to adapt.
• Leveraging AI—be practical, take a look at repetitive tasks. Get intimately familiar with what front line/entry level FTEs are doing and help enable them to leverage technology.
• Leveraging consultants—be skeptical and ask for some details on the type of people they hire, which companies they’ve worked with—and always ask for some work up front before you commit.

Did we miss anything? Would love to hear from our community. Reach out to me directly at anthony@leanscale.team!