Let's explore something that's been keeping me up at night recently: What if the path to a higher valuation isn't hiring more people, but replacing them with AI?
It sounds like the nightmare scenario of FAANG workers and deccelerationists, but Klarna's making moves that can't be ignored.
The numbers that got me thinking:
- 2021: $45.6B valuation (traditional "hire everyone" approach)
- 2022: $6.7B valuation (peak headcount, yikes)
- 2024: $14.6B valuation (after cutting 22% of staff)
Is this a coincidence? A market fluke? A PR stunt? Or are they onto something?
Let's break it down.
The Old Way: "Just Throw People At It"
We all know this playbook. Heck, many of us have lived it:
"We need to hire faster!" "Scale the team!" "Get that VP from Goldman!" "More people = more growth!"
The traditional recipe looks something like this:
- Set aggressive headcount targets
- Hire without really thinking it through
- Promise to figure out efficiency... someday
- Watch your metrics get... interesting
- Keep hiring anyway
Those monthly hiring reviews? Finance chasing down team requests while Tech and AI teams are nowhere to be seen. Because that's just how it's done, right?
Result: 4,500+ people, massive salaries everywhere, and efficiency metrics that make you want to hide under your desk.
The New Way? "What If AI Did This Instead?"
Here's where Klarna's taking a wild bet - and I mean WILD. They're basically asking: "Do we actually need all these people?"
What they're trying:
The Weekly "AI Opportunity" Meeting
- Engineering, Product, AI, and Ops teams get together
- Looking for automation opportunities
- Everything's on the table (apparently)
The Numbers So Far
- Cut headcount by 22%
- Built what they're calling an "AI-first" operations team
- CEO's saying their AI "can do most jobs"
- Valuation's up–way up
They're even planning an IPO from this position.
What if we've been thinking about tech companies all wrong?
The traditional way is like trying to win a race by adding more drivers. But maybe - and I'm just thinking out loud here - it's about building a better car?
Klarna seems to be betting that:
- AI might not need regional teams
- AI could scale differently than humans
- AI might be more efficient (at some things)
- AI could change the game entirely
If you're running or working in a tech company right now, maybe we should be asking:
- Which processes could AI handle? (Not should - could)
- Are we hiring out of necessity or habit?
- What would an "AI-first" strategy even look like?
The Big Unknown
We're possibly entering a world where more humans doesn't automatically equal more value. Klarna's testing this theory–hard.
Is this good for society? That's a whole other newsletter (and honestly, I'm not sure). Is this the future of business? Way too early to tell.
The math right now:
- Traditional approach = $6.7B
- AI-first approach = $14.6B
But is it sustainable? That's the trillion-dollar question.
The Bottom Line
Maybe (and this is a big maybe)–the next unicorn will be measured differently. Not by how many people it hired, but by how efficiently it operates, with or without AI.
That's the future Klarna's betting on. Will it work? The honest answer is: nobody knows. But it's fascinating to watch.
What do you all think?
Is this crazy talk or the future of business?
Are we missing something obvious?
I especially want to hear from folks building companies right now–how are you thinking about AI vs human scaling?