AI Startups Really Do Run Leaner, Here’s The Data

AI Startups Really Do Run Leaner, Here’s The Data

https://www.forbes.com/sites/joemckendrick/2026/07/05/ai-startups-really-do-run-leaner-heres-the-data/

Publish Date: 2026-07-05 06:30:00

Source Domain: www.forbes.com

AI makes startups leaner

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Artificial intelligence-powered startups don’t rely as much on human power to get rolling – and they may be setting the example for the next wave of startups, as well as larger, more established companies.

This doesn’t relate to AI replacing jobs, but rather, an increase in the number of enterprise launches accomplished in a leaner-and-meaner fashion than ever before.

AI-native firms run 25% smaller than traditional startups, with 15% fewer entry-level workers, and 15% fewer managers, according to a recent study out of Harvard Business School and INSEAD. The researchers analyzed close to 50,000 Y Combinator and PitchBook-listed venture-backed startups and found hierarchies at AI-native companies were also flatter — all while maintaining the same value as their non-AI-centric counterparts.

Companies covered in the study were launched between 2020 and 2024. Among the Y Combinator launches, AI first-deal counts in 2024 are nearly eight times the 2020 average, according to the researchers, Hyunjin Kim of INSEAD and Rembrand Koning of Harvard Business School. They employed Y Combinator’s AI self-tagging protocols to determine a firm’s AI profile.

While the proportion of AI-driven firms is on the rise, the amount of activity they are generating may possibly lead to more labor demand overall, they speculate. The share of engineers in AI firms is 13% greater than in non-AI startups.

AI’s impact on both internal work as well as products were tracked. Embedding AI into products, beyond layering on AI tools into existing workflows, “is a primary way startups are scaling knowledge work without large teams of knowledge workers,” Kim and Koning said.

These AI firms emphasized engineers within their teams, and downplayed sales, finance, operations, and administration, they also found. “They skew senior, with the share of entry-level workers just under 15% lower and the share of senior workers about 20% higher.” These “small teams…

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