What "Working" Means in the Era of AI Apps

Summary

One of the most common refrains in the generative AI era is that “startups are growing faster than ever” — often with fewer resources. Some notable examples? Per company metrics, Lovable hit $50 million in revenue in just six months, Cursor reported $100 million in revenue in its first year, and Gamma reached $50 million in revenue on less than $25 million raised. But for the average AI company (not the top 0.1%), what does growth really look like? Pre-AI, a common benchmark for best-in-class enterprise startups was $1 million in ARR in its first 12 months. Consumer companies, by contrast, often delayed monetization well beyond their first year, typically waiting until they had built a base of millions (or tens of millions) of users to monetize through ads. Based on data across hundreds of companies we’ve seen over the last 18 months, we can definitively say these metrics have shifted. Here’s what we’re seeing among the companies we’ve spent significant time with: What does this mean for founders? 1. Faster revenue, faster rounds. Our data backs up the idea that we’re in a new era of startup growth. The median enterprise company in our sample set reached more than $2 million in ARR in its first year, raising a Series A just nine months post-monetization. Median consumer companies performed even better, reaching $4.2 million in ARR and raising an A round within eight months. What was once considered “best in class” — the $0 to $1 million ARR ramp — is now on the lower end of growth we’re seeing. Given the rapid growth both AI-native B2B and B2C companies are achieving between Seed and Series A, startups looking to raise venture capital need a strong velocity story. If not yet in live commercial traction, then certainly in shipping speed and product iteration. Speed is becoming a moat. 2. The gap between “good” and “exceptional” is growing. While the bar has been raised across the board, top performers are really pulling away. Many of these breakout companies continue...