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Your Day, Hijacked by Fluff

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Transcripts • Summaries
en
2.44s
How does a company with only eight employees become worth $80 million in 6 months? That is exactly what happened with a company called B 44. Base 44 is an AI powered no code platform. In June 2025, Wix agreed to buy B 44 for around $80 million. But the main part here was that the company only had eight employees. 6 months, $80 million. The number that I find the most interesting is not $80 million. It's eight employees. Companies becoming worth millions isn't something that's unusual. Companies becoming worth millions with barely employing anyone. Now, that's a bit weird. Now, this isn't just a once- off. You can see it even more clearly with Lovable, another AI company that lets people build software by describing what they want. when it reached $und00 million in annual recurring revenue, it had about 45 full-time employees. Now, if you look at the average, according to SAS benchmark data, a company earning about $50 million in annual recurring revenue, known as ARR, it equates to roughly around $278,000 per employee. Lovable was doing around eight times that, $2.2 $2 million of annual recurring revenue per employee. So, this is where it stops becoming another boring story of an AI founder getting rich. Because if companies can suddenly create this much revenue without hiring anywhere near the number of people they used to need, what happens to all the jobs that growth would have normally created? And more importantly, who ends up capturing that money instead? So to understand how this is even possible, we need to go back to base 44 to the person who built almost all of it alone. Mayor Schlommo is the founder of base 44 and he wasn't new to technology when he started it. He had already spent years working in tech and had previously co-founded Explorium. This was a data and machine learning company. So when he started building base 44, he already understood the software, the products and what it takes to build a technology company. So what is interesting about most of base 44's 6-month existence is that Schlommo was basically running this all by himself. He actually said that his first employee joined about a month and a half before Wix acquired the company and then he explained how he managed to build so much with only a few people. He described himself as essentially managing teams of AIS writing code. At one point he said that he hadn't personally written a line of HTML or JavaScript in 3 months. And this starts to answer the question that I began with. How does a company with eight employees become worth $80 million in 6 months? For most of the time, it actually wasn't an eight person company. It was one experienced founder using AI to do far more than one person would normally be able to do. So while Schlommo was handling base 44 alone, he handled engineering, sales, and customer support himself, work that would normally be divided between many people. And before he hired his first employee, Base 44 had already received quite a high worth acquisition offer. So AI didn't give Schlommo the experience to build a successful company. He already had that and AI was just the leverage. So one experienced founder could suddenly produce software faster, automate work and operate across roles that would normally be spread across a much larger team as well. But this is where this stops being an impressive founder story. Because if one person can suddenly do the work that used to require several people, what happens to all the people a growing company would normally have hired. So let's talk about jobs. When we talk about AI taking jobs, I normally imagine layoffs. Like let's just say Microsoft has about 200,000 employees. They introduce AI and suddenly 4,800 people are laid off. They're gone. And then people complain. I create a video saying what a terrible company Microsoft is. Nobody likes them. The next month I renew my Microsoft 365 subscription. At least I'm honest about it. But B 44 shows us something that is a bit more harder to see. With Base 44, it didn't just grow to 500 employees and then automate 492 of them away. It's just that those jobs weren't created in the first place. And now we're starting to see evidence of exactly this kind of shift. Stanford researchers tracked millions of US workers and they found that employment among 22 to 25 year olds in very highly exposed AI occupations is now about 19% below where it would have been if those occupations kept with the usual pace of other occupations with little AI usage. And the really interesting part is how that gap appeared. It appeared through less hiring, not a sudden wave of people being fired. An even newer Stanford study looked across 41 countries using about 1.25 billion job postings and around 154 million employment records. And this research found a similar pattern across companies adopting generative AI. The share of junior workers declined relative to firms not using AI heavily, but senior employment actually grew, which makes sense when we think about what we just saw from base 44. AI doesn't necessarily remove the experienced person. It can make that person far more productive. The person may remove from the equation is a junior that they would have previously hired to help them. And programming gives us an awkward problem here. Junior developers become senior developers by actually being junior developers, fixing bugs, writing small pieces of code, getting things wrong, and having someone more experienced review their work. So, if companies increasingly keep the senior developer, give them AI, and hire fewer juniors, you eventually have to ask, where do the senior developers from the future come from? And AI doesn't need to replace every software engineer to fundamentally change the job market. It only needs to change how many new ones companies need to hire in the first place. And that's the problem. There's a reason the pressure may be showing up at the bottom of the career ladder first. I'm talking about the poor junior engineers. I mean, they've already survived the grumpy senior developers, infinite loops, variables called final final v2. It's rough out there. But the issue is that AI actually doesn't need to learn someone's entire job. It only needs to become good enough at most of the tasks within it. And for a junior engineer, those tasks can easily be replaced by AI. The IMF estimates about 40% of jobs globally are exposed to AI, rising to about 60% in more advanced economies. Now, exposed doesn't really mean replaced. We know in some jobs AI does complement the worker, but in others, it can definitely take over enough of the existing tasks that companies may need less labor. And a Stanford research again found an interesting pattern where this appears to be most vulnerable. So what Stanford found was that in jobs that heavily rely on what researchers called codified knowledge which is things that can be documented, taught and written down, the employment decline amongst younger workers in those kind of jobs were strong because experienced workers tend to have something AI has a much harder time to reproduce. That's known as tesset knowledge. That is the judgment you build after years of seeing things go wrong. knowing which solution looks correct but probably isn't. Understanding a client who can't properly explain what they actually need. So now the base 44 story makes a bit more sense. AI didn't replace a founder mayor Schlommo's experience. It just gave one experienced person the ability to absorb more of the work that might have previously been handed to several other people. But if this starts happening amongst thousands of companies, the company won't really lose its senior employees, it just needs fewer people on the way up. But now that brings us to the other side of the story because if companies can create more with fewer people and the value hasn't disappeared, where does it go? So in March 2025, Bloomberg identified about 29 founders whose AI related fortunes were collectively worth around $71 billion. Now across four major AI companies, 15 founders held stakes that were estimated to be around $ 38 billion. Just 15 founders. Most of that money isn't paid as salaries, it's ownership. Their companies become more valuable. So the shares that they own become more valuable with them. So now AI allows companies to grow exponentially without actually hiring a lot of people. If you think about a traditional company and how it grows from 10 employees to 100 to a thousand. As a company grows, the money it generates gets distributed through salaries to all of those additional employees. These employees then spend that money elsewhere in the economy. It feeds the economy. But what happens if a company can achieve that same level of growth without adding anywhere near as many people? Value hasn't disappeared. So the company can still make money. Its valuation can still increase. Its founders, its investors can still own really valuable shares. There's just simply fewer employees participating in that growth through normal wages. So what could that actually mean? Now there is economic research actually looking into this. In 2025, IMF researchers actually looked at how AI could effect inequality. They did find that AI could make wealth inequality worse because people who already own businesses, shares, and other assets are more likely and probably the only ones to benefit when AI makes those assets more valuable. And this effect becomes really strong when companies adopt AI because it allows them to save on that really expensive human labor. And that is just the crux of it. If a company can grow without hiring people at the same rate, fewer people may participate in that growth through employment while people who still own the company still participate in that increase of its value. Now for the founder, that's great. That's incredibly powerful. you own a large percentage of something that can suddenly grow incredibly quick without needing that enormous workforce that companies traditionally needed to support that growth. But if you think about the person who would have previously been employed as maybe employee number 56, if that position never exists, the person isn't just, you know, only missing a salary, they're also missing that potential experience that would have helped them move up into a more senior position later. And in a startup, they also may be missing something else, ownership. Because historically, if we look at Microsoft at the beginning when they were just a startup, the stock options turned so many employees into millionaires that the Microsoft millionaire became a phrase. It became a buzzword. Before its IPO, employees collectively held a significant equity in the company. So, if the next generation of companies need far fewer employees, then it isn't only salaries that fewer people get to participate in. It's also ownership. And look, this isn't personal. If I built an $80 million company with only eight employees, that is an achievement and that would be incredible. Who wouldn't feel that way? And at the level of one or two companies, there's nothing really wrong with this. The problem is when this becomes normal across thousands of companies, then we're not really talking about founders building leaner businesses, we're just talking about fewer entry jobs, maybe fewer people gaining experience, fewer people moving up that career ladder, and also far fewer people sharing in the wealth that those companies create. And this is really something that is not heavily talked about, but it is creating this new class of AI millionaires that really may affect industries going forward if this continues. And the final irony that I have to add is that the AI systems were built using enormous amounts of human knowledge, human writing, human code, human experience created by millions of people. But now the economic rewards from that same technology end up flowing to a much more smaller group of people. You know, we've taken knowledge created at an enormous scale and now we've turned it into wealth captured at a much smaller one. It's really unfair and it is a bit sad. Thanks so much for watching. If you like my content, please like, comment, and subscribe. I will see you on the next one. Bye.
  1. TL;DR — AI-powered platforms like Base 44 are generating multi-million-dollar valuations with tiny teams, signaling a major structural shift in the job market. While this hyper-productivity enriches founders and investors, it heavily reduces entry-level hiring and wealth distribution.

  2. Key Points

    • 00:00 — Base 44, an AI-powered no-code platform, was acquired by Wix for $80 million after operating for just six months with only eight employees.
    • 00:50 — Similar companies like Lovable generate massive annual recurring revenue (ARR) per employee—far exceeding traditional SaaS industry benchmarks.
    • 02:00 — Base 44 founder Mayor Schlommo ran the company mostly by himself using AI as leverage for engineering, sales, and support, proving AI supercharges experienced individuals.
    • 04:30 — Stanford studies show AI's impact on employment manifests not through massive layoffs, but through a severe lack of new hiring for junior roles, especially in AI-ex

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