SUMMARY
There are an estimated 33.2 Mn small businesses in the United States, 88.1% of which have fewer than 20 employees
Organisations are currently in the times of ‘Tiny Teams’, where there are no ‘specialised’ teams within to take care of specialised tasks. They are performed by the existing team members (mostly the founder) or are outsourced
The next generation of SaaS tools will not be built for specialised teams. They will help transfer the niche skills to the organisation and ‘assist’ them just as an ‘expert’ team member would do
There are an estimated 33.2 Mn small businesses in the United States, 88.1% of which have fewer than 20 employees. Similar is the story in many other countries across the globe. There are hundreds of millions of companies across the world that have less than 20 employees. Most of these are small businesses, both in terms of the number of employees as well as in the revenue they make.
Of late, there have been companies with less than 20 employees that have attained multi-million dollar and even billion-dollar valuations. WhatsApp had just 35 engineers when it was acquired by Facebook for $19 Bn. Instagram had just 13 employees when it was acquired by Facebook for $1 Bn. Waze had less than 100 employees when it was acquired by Google for $1.2 Bn.
In recent times (read months), NGL and GAS have managed to scale to hundreds of users and millions of daily active users with just 3-4 team members. These might be exceptions, but they are also indicators of the direction businesses are going. In the coming decade, it will not be uncommon to see unicorns with just double-digit teams.
Most of these businesses are led by the founder. A vast majority of these businesses are single-member teams. In short, most of these businesses are founder-run businesses where all the responsibility of key business decisions and systems (HR, Accounting, Recruitment, Admin etc.) supporting the core operations falls on to the founder.
The Era Of SaaS Tools
In the last two decades, most businesses including larger organisations have been moving to SaaS tools. This has forced the big players in the enterprise applications space to move from on-premise to Cloud and serve their offerings as SaaS. Given the advantages of using SaaS, the newer, sleeker and smaller firms will always opt for SaaS tools to carry out their operations.
Traditional technology tools assumed that teams skilled in the function will be using them. Thus, the tools were meant to be used by specific teams within the organisation. The accounting team used accounting systems, the graphic design team used graphic design tools and so on. While the tools moved from on-premise to SaaS, the assumption was still the same — functional teams, using tools, specific to their operations.
Fast forward to the times of ‘Tiny Teams’ — there are no ‘specialised’ teams within this team that takes care of the graphic design or accounting. These tasks are performed by the existing team members (mostly the founder) or are outsourced.
The problem with outsourcing is that not every 20-member company has the resources to hire the best or even a ‘good’ service provider. The onus thus comes to the founder. It is not judicious to expect the founder to be adept in every function to run the firm. Thus, the founder struggles to get help from resources on the internet, from friends and family and from their professional circles.
The Rise Of ‘Assistive’ Tools
The last (and even the current) generation of SaaS tools helped to digitise the skills of the teams. A skilled graphic designer may use Adobe Photoshop to digitise their skills and create amazing works of art in digital form. A skilled programmer may use various programming languages to convert their skills into a programme that executes certain tasks.
The next generation of tools will not be built for teams that are skilled experts in their functional areas. These tools will not only help transfer the skills of a person, or a team into digital form, but also ‘assist’ them in doing so just as an ‘expert’ team member would do. That explains the no-code tools becoming the tools of choice for next-generation companies. Thus, the likes of Canva were born and went on to become mega successes.
What Next?
The next generation of such tools (will) have embedded AI in them to ‘assist’ the teams convert their imagination into artefacts and tasks. With AI becoming accessible and democratised by initiatives such as Open AI, it takes the transformation of imagination into reality to the next stage.
SaaS tools with embedded AI that ‘assists’ freelancers, founders and ‘Tiny Teams’ is what small teams need. The opportunity was leveraged by startups building tools with assistive capabilities. That explains the success of startups like Copy AI, C3 AI, and XOR AI, among others. These successes are in the times when the AI is still at the initial stages and has a lot more journey to cover. Imagine what lies in store as the AI models improve with real-world usage and use cases.
Besides these great success stories, there are many other smaller startups being built on AI to support the operations of freelancers and small teams. A sub-category of these startups is aptly referred to as ‘freelancer SaaS’ that focuses on the needs and requirements of single-member teams.
Surprisingly, the majority of these startups themselves are small teams. Copy AI, with an MRR of almost $1 Mn has just 27 employees. This is the era of small teams building for small teams!
