The Cracked Economy

$20M in 2 months, layoffs, and what else keeps me up at night.

We can all feel nervous now

We’ve been talking about how “AI is going to take our jobs,” for years. Some were skeptical. Others made jokes like “soooooo…when do we lose our jobs?” The rest of us thought it was all hype, like crypto.

But if you believed AI was the real deal, you were right.

We’re losing our jobs now. It’s happening.

Here’s the quick story so far:

  • The release of ChatGPT marked the beginning of AI taking over.

  • These AI apps are now amazing and literally taking people’s jobs.

  • Companies are removing middle management altogether anyway (layoffs below).

  • All it takes is one kid to make a new AI app (in a month or two) and that’s it. That could be your job.

It’s happening now.

  • Companies with less than 50 people are worth billions (in less than two years).

  • Two kids locked themselves in a room for 90 days to build a $1M company (and they might actually do it).

  • Layoffs are getting worse.

For the first time researching what’s new in AI (I’ve been on it since day 1), even I’m nervous. Of course, I’ll share how we can stay ahead of the game.

Let’s get into it.

Overnight billionaires

Here is one tweet that tells a whole story.

$20M ARR (annual run rate), in 2 months, with 15 people is insanity. It’s also terrifying.

Do you think your boss doesn’t know he can also ask ChatGPT? That many of these apps work for him/her too? For all you know, your boss has been using ChatGPT to manage you for the last two years. Are those emails from HR, or did AI write them too?

The point is, consumer dollars are all moving into AI. It’s a secret smart employees are the only ones using anymore. That’s how they make so much money. It’s not a ‘threat,’ or just an idea. It’s real, and it’s about all our jobs and businesses.

These ‘overnight’ unicorns (private companies valued over $1B), are rare, but becoming more common because of AI. McKinsey Consultants outlined (in a great report), how the AI opportunity will be valued over at over $4.4-trillion long-term. They could be wrong (there’s so much hype), but the idea makes sense.

AI is real, growing fast, and doesn’t look like it’s slowing down.

Then what?

Sweatshop software

Two founders, locked themselves in an apartment to build a new business, and reach $1M in 90 days. They are streaming the entire thing live. You can watch it now with this link.

My favourite thing they’ve done so far? Tweet the sweatshop video that got taken down.

Let me explain.

Y Combinator, a startup accelerator (recognized as the best in the world), posted a video of a company they are funding (I think). Software to run a sweat shop with AI.

  • The camera watches the workers’ every move.

  • Records it and adds their efficiency to a dashboard.

  • Shows the factory manager who’s doing poorly, and their history.

  • They can then see everything and talk to the workers directly.

  • It’s AI to make a sweatshop the stuff of nightmares (in theory).

It was so bad the best and most prestigious accelerator in the world had to take it down.

Watch it here:

Full disclosure, the video doesn’t show much tech doing anything. Those could be screenshots for all I know. But if they actually built this, it’s insane.

So let’s recap again.

  • Some companies making $20M ARR in two months with 15 people.

  • Kids building sweatshop software to make our jobs absolute nightmares (or just becoming millionaires in 90 days).

It gets worse.

Mass layoffs anyway

I want to start by saying some people are awful at their job and deserve to be fired.

But, I also feel bad for good, hardworking people who haven’t been able to keep up with technology. Imagine having multiple children, a household, a job, elderly parents, and then having to sit at a computer like you’re back in school (if you even had computers then), to learn about this new technology straight out of science-fiction.

That’s tough.

Then, we have companies who hired too many people (probably knowing it was too many), and now having to remove them. Not just because they don’t need them, but because AI can do the job better, faster, cheaper, and without complaints.

Here’s a list of notable layoffs, just for February 2025. This doesn’t even include people who choose to leave, and are not replaced with a new hire.

  • Chevron – 8,000 employees

  • Meta – 4,000 employees (~5% of workforce)

  • Commerzbank – 3,900 employees

  • Porsche – 1,900 employees

  • Workday – 1,750 employees (8.5% of workforce)

  • Blue Origin – 1,400 employees

  • Bell Canada – 1,200 employees

  • Estée Lauder – 7,000 employees

  • Cruise – 50% of workforce

  • Salesforce – 1,000 employees

I don’t care what anyone says, or what’s official. The timing is not a coincidence.

Let’s do one last recap before I describe what we can do about it.

  • Some companies making $20M ARR in two months with 15 people.

  • Kids building sweatshop software to make our jobs absolute nightmares.

  • The biggest companies in the world, with record revenues, are laying people off anyway.

But now we’re on to the big question. How do we become winners when it looks doomed?

How to win

I listened to a podcast that gave a blueprint to make the most of AI, and I agree with a lot of it. Our CEO sent it to everyone at beehiiv and I listened to it (I think most of us have).

The thing with AI is that if it feels impossible to do something now, you might as well start building it anyway. Why? Because it’s all improving so fast that you could probably do that impossible thing in 6 months.

The world’s timelines are shrinking. $20M ARR is no longer a matter of 5 years, it’s a matter of 2 months. Whatever you think is going to take a few years, may actually take less than one.

Which leads me to the blueprint for companies (your boss, or their boss will be getting this advice from other people soon if they haven’t already).

Let’s get into it.

Cut anything that slows you down

Agility is the name of the game. Every wasted day is another day closer to when that kid’s AI takes your job and mine. A week where nothing got done is one more week at risk.

Middle managers, meetings, ‘assessments,’ and bureaucracy that slow things down will hurt so much more.

The companies that are slow to move will be the big losers. Winners move with speed and get things done quickly.

So audit your company, find what’s making things take so long, and be prepared to act on it.

This is the quiet part that most people are scared to say out loud.

That one person who is an absolute nightmare for everyone, has to go. They hurt the company before, but it’s so much worse now because of everything I just said. They could very well be the reason you go under.

Fortunes have been made, history has been written, and some of the world’s greatest achievements happened because the right person was doing the right job at the right time. Think of the opposite.

You really will have to cut the people that have a bad attitude and painfully slow.

Context matters

Ravi (the guy talking in the podcast), was the COO and CFO of Instacart for years before becoming a partner at Sequoia Capital.

He describes a story with his wife to make this example.

“If you’re at a party, and your partner gives you…even a slightly different look, you know it’s time to leave. You know each other so well, that’s all it takes. With one look, you know what the other person is feeling. But you’ve been getting to know each other for so long, that you have the context to make that possible.”

These AI models (like ChatGPT) are the same thing as having an army of geniuses at your disposal 24/7. If you hired an army of geniuses to work for you, how would you train them? You’d give them every single thing they need to do the job.

All the information, documents, history, time with staff, and more. They would be asking anything they want, anytime. You’d fight to get them what they need. Meanwhile, you go to ChatGPT saying “write this email” with a blurry screenshot and you’re mad it sucked.

Where’s the context? It better be there, because winning with AI (and people) means giving it the context it needs to actually do a great job.

Get ready to work hard

There’s an expression we use to describe smart people who work insanely hard.

They’re cracked. A cracked engineer, founder, creator, etc.

They’re cracked if they work hard, are extremely effective for every min, hour, and day, and solve difficult problems with little effort.

And no, it’s not about drugs (but I get why you might’ve thought that). It’s originally slang to describe someone great at video games. Now, it’s moving into business.

This is your competition. Talented, hard working, ‘cracked,’ people (of all ages), who can now use these AI models to make themselves even more productive. Imagine a proper genius who works 12 hours a day, against you.

In an environment that really incentivizes doing well with AI, this wave of of talent makes $20M ARR in two months while we’re still figuring out why so-and-so at the company still hasn’t sent in a one-page document they’ve been writing for three weeks (or what they’re doing all day).

Yeah, competition is heating up, and all of us have to work just a little harder.

Or, we could not. But that can’t be me, because I’d still be afraid some kid will make an AI app that takes my job. So, here I am learning how to code with AI, too. I’ll keep you posted on how it goes.

As always, thanks for reading. Feel free to reply if you have any questions.

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