Intrepid, to the Stars
On a mathematical function for achieving the Sam Altman Prize.
The website that tracks the progress of these intrepid entrepeneurs is https://SamAltmanPrize.com
Sam Altman Prize - a description
Breaking down the prize into its components, why do people believe a one-person Unicorn is possible? 1 Billion Valuation for the company means earnings of at least $10million per year (which really isn't that crazy) with a multiple of 100 (also not that unheard of).
Now let's focus on the meaning of the prize. A "valuation". No mention was made of the P/E ratio, the earnings post costs, or even top line revenue. Simply Valuation.
However, all valuation is based on "future earnings" potential. Even if you are making $0, but you have 1Million people signed up, paying, but your costs are huge currently, but will go down soon, then obviously you're worth 1Billion.
So then, going with this logic, we see a valuation is at a near term future having actual earnings with a decent P/E to justify 1Billion dollars. Looking at the average P/E of tech companies across the board, AAPL to GOOGLE, to TSLA/NVIDIA are around 27-100. Therefore, we will put a P/E of 50. Working backwards, that's $20million in profit a year, with a margin of around 50% (its a one person startup remember!!), we see that the company needs to earn around $50million a year. Okay that's $4million a month.
We've then defined the exact "output" of the startup in which the Prize is achieved. $4.16 Million Revenue per month with a margin of 50%. Cool!
Now let's look at the inner workings of the company. Why is it that now, more than ever, this is seen as possible? Because to have revenue of 4.16 million per month, let's say with a subscription of $10 (let's be real here, I've built enough things online to know nobody's ponying up $100/month to a random startup). So that's 400,000 seats! Now we see the difficulty in achieving such a measure. If we go B2B, and each company on average has 10 employees, that's still 40,000 seats.
This is only possible because all the employees that would normally be: marketing, responding to emails, cold outreach, lead generation, handling requests, managing responses about the product, and not to mention Coding, would be on the order of 20 - 50 employees.
With AI Agents, we can break down each of these tasks, and create automations that handle all of it for us. A single person could instead of hiring "people", prompt engineer "Agents" that can do the exact tasks needed.
Now where would such a person begin? I believe getting the first few customers, feedback iterating on what's needed, and getting the word out with marketing.
The first 2 agents needed are: Product and Marketing to bring in customers. Handling their requests, questions etc will generate the next agent. So on and so forth.
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