Tan notes that 81% of Y Combinator's current startup batch comprises AI companies, with 25% relying on large language models for 95% of their code. Despite some limitations in debugging, this technology enables small teams to tackle projects that previously required much larger teams, opening up new opportunities in niche markets for software businesses.
Key takeaways:
- Startups are achieving $1-10 million annual revenue with fewer than 10 employees due to "vibe coding," where large language models code entire apps.
- Garry Tan believes that tasks once requiring 50-100 engineers can now be accomplished by a team of 10 using cutting-edge tools like Cursor or Windsurf.
- 81% of Y Combinator's current startup batch consists of AI companies, with 25% having 95% of their code written by large language models.
- Despite limitations in debugging, the technology allows small teams to tackle work previously needing dozens of engineers and opens up niche markets for software businesses.