As AI agents have gained traction over the past year, there’s a buzz in the Bay Area: Someone, somewhere, sometime soon, might have the first one-person company with a $1 billion valuation: 1-person-1-billion, 1P1B, or the solo-unicorn.
AI-first companies have already had some impressive exits (Base44 sold for $80M in June 2025), but the first solo-unicorn is still elusive, hunted by avid solo-entrepreneurs (solopreneurs) hoping to strike it rich with a 100% equity stake (or close to it).
What interests me isn’t the horse race of picking the lucky winner, but the impact this signifies for the economy, on existing businesses, and on the entrepreneurial ecosystem. Also, let’s keep this in perspective: WhatsApp sold to Facebook/Meta for $19B with 55 employees, or $345MM valuation/person- so this isn’t an oder-of-magnitude shift.
Getting a $1B valuation means that someone thinks that your future revenues are worth at least $1B- that’s either a ton of customers (a consumer app with huge traction and growth, like WhatsApp and Instagram had) or a solid number of high-value enterprise service accounts, complete with agentic AI teams for sales, implementation, and support.
If I were to bet, I would expect that the first solo-unicorn will be in the consumer space because valuations can be frothier, adoption can be rapid and viral, and there is no sales cycle. Because of this frothiness in the consumer space, let’s focus on what this would mean if there were a business-to-business unicorn.
Hitting a $1B valuation with real revenues means that you’re providing real value that’s likely going to be priced in competition with a human-first company (think an RFP or listing in a Forrester Research industry summary). A single-person company will have very low HR overhead, by definition, and can compete on price. Large incumbents have some economies of scale, but also have huge overhead- as a result, their delivery/implementation costs will be much higher.
As long as there’s only one AI competitor in the space (or a small number of AI companies competing on the margin), the incumbents will set the price, and that price will be high– as high as existing installations. Let’s say there’s a software service which sees multimillion-dollar annual deals. An incumbent with low growth will see its valuation as a multiple of annual recurring revenue, e.g. 3-4x ARR. A rapidly growing startup will see its ARR multiple inflated by its growth rate- so an AI unicorn could be birthed with a few multimillion dollar deals and a great growth rate.
Now, what will that mean for the incumbents? They will need to lower their prices to compete, but depending on the industry’s economies of scales they may not be able to compete with a startup with no HR overhead. Those who aren’t able to compete will exit the market, leaving the remaining firms as an upper ceiling on the price which the AI-first startup can claim.
Imagine you’re an engineer at a big incumbent who was laid off because your firm couldn’t compete against a solo founder who’s incubating a unicorn- what do you do? Some of those engineers will look at that solo founder, think “I can do that!”, and try their own hand at growing an AI-first company. Given their expertise with the industry and its sales process, it’s likely that they can outcompete the first AI entrant– and this is where things get interesting.
With multiple serious and scalable AI competitors in the marketplace, the prices are no longer set by the big human-powered incumbents, and prices and margins will tumble to whatever price is set by AI inference/agent costs. Contract values will shrivel, and along with it valuations will shrink- as well as the unicorn status of those lucky first entrants. Any entrepreneurs who weren’t smart enough to cash out before AI-powered competition entered the race will see their personal fortunes walloped.
Because of this, I think that the era of the solo-unicorn will be short-lived: most likely just a few years as we transition to more competition between AI-first companies. If you’re in the market right now and have a low-overhead AI startup, ride that wave! 🌊🏄♀️🌊
Next post: What does this mean for the rest of the economy?