You shouldn’t have to cross your fingers and hope for a strong stock market to coincide with your short-term goals. And right now, you probably wouldn’t want to.Because you’re working within a short time framethink two to six yearsinvesting for shorter-term goals like buying a house or paying for a wedding should look different from the portfolio you build for retirement. But don’t stop putting away money for your long-term goals while you’re working toward your short-term ones.So, how do you balance saving for both?
How to think about funding short-term and long-term goals
Don’t forgo saving for the long term to meet your short-term goals. Thanks to the power of compounding over time, saving early can have a large impact on your long-term outcomes. The longer the time frame, the greater the potential impact. You should put retirement front and center, especially as you approach your midcareer.Earlier in your career, you might shift your savings somewhat to shorter-term goals, but retirement should still be part of the equation. At least, take advantage of any retirement match that your employer might offer. To some extent, what you’re saving for can tip the balance as well. You might direct more of your savings away from retirement if you’re saving for a house than if you’re saving for a vacation.
Account types that work for short-term investing
It’s helpful to separate your short-term portfolio from your retirement portfolio, but there are some accounts that you can use to multitask. Depending on your situation, you might use a tax-deferred account, like a Roth IRA, or a taxable brokerage account. Traditional IRAs are less appealing for short-term investing because there are tax penalties when you withdraw from the account before age 59 and a half.Unlike traditional IRAs, Roth IRA contributions can be withdrawn at any time and for any reason without taxes or penalties. That makes a Roth IRA a perfect “multitasking” account for younger investors who need to build up both an emergency fund and retirement assets. Roth IRAs also allow you to withdraw up to $10,000 of earnings (in addition to any contributions) to help pay for a down payment on a first home if the account has been open for at least five years.
Finding the right investments to meet near-term goals
Unlike a long-term portfolio, which has a timeline of 10-plus years, the main goal of a short-term portfolio should be to outpace inflation while protecting what you’ve saved. Maximizing portfolio growth is less of a priority because the added risk likely isn’t worth the reward. Being able to buy a home in three years feels very different from affording it in seven because your investments lost value in the interim.Common mistakes that investors make are either in taking on too much risk or not enough. Some investors might assume that because stocks have beaten other asset classes over long time periods, they’re also a good choice for the short termbut they aren’t.Other investors might stick with guaranteed products, like CDs or money market accounts, because they’re concerned about protecting their savings. This approach leaves them at a disadvantage because inflation will eat into the value of those savings. Holding cash-type investments is a good idea if your timeline is super shortless than two years.
Short-term investment portfolio examples
Explore model portfolios that show what reasonable short-term portfolios look like. The portfolios consist of cash and shorter-term bonds. You might include a dash of stocks for growth potential, but the bulk of your money for short-term goals should be in safer, lower-returning assets.
This article was provided to The Associated Press by Morningstar. For more personal finance content, go to https://www.morningstar.com/personal-financeMargaret Giles is a senior editor of content development at Morningstar.
Margaret Giles, Morningstar
Shares in Hims & Hers Health, Inc. (NYSE: HIMS) are skyrocketing in early-morning trading today after the telehealth company announced a new partnership with the Danish pharmaceutical giant Novo Nordisk. That partnership will see Hims & Hers offer Novo Nordisks weight-loss drug Wegovy through its platform. Heres what you need to know.
Hims & Hers will offer weight-loss drug Wegovy
Hims & Hers Health announced today that it has entered into a long-term collaboration with Danish drugmaker Novo Nordisk to offer its popular weight-loss drug Wegovy to its users through the Hims & Hers platform.
The news sent HIMS shares soaring in early-morning trading.
Novo Nordisk is the maker of the Wegovy weight-loss drug. The popular GLP-1 drug is often prescribed for those who wish to manage their obesity and lose weight. In recent years, people who have struggled to lose weight via traditional diet and exercise regimens have increasingly turned to GLP-1 medications.
The collaboration between Hims & Hers and Novo Nordisk will see the telehealth companys platform integrated with Novo Nordisks NovoCare Pharmacy, allowing Hims & Hers users to acquire all dose strengths of the Wegovy weight loss drug.
The aim of the partnership is to blend Hims & Hers’s holistic telehealth offering with proven weight-loss medication and to offer the drug to self-paying patients. Hims & Hers says that the medication, along with a required Hims & Hers membership, will be offered to users for $599 per month. It will begin offering the drug this week.
HIMS stock surges
Shortly after Hims & Hers announced the Novo Nordisk Wegovy collaboration, HIMS stock surged in premarket trading this morning. As of the time of this writing, in early-morning trading, HIMS stock is currently up over 26% to over $36 per share.
The stock surge suggests that investors see the Novo Nordisk collaboration as a potential major accelerator for Hims & Hers memberships that could lead to increased recurring monthly revenue.
However, at around $36 per share, Hims & Hers stock price is still well below its all-time high of nearly $73 per share in February. That month, the company released its Q4 results and announced that it would stop offering compounded semaglutide, the active ingredient used in Wegovy and similar GLP-1 weight loss drugs, CNBC noted.
In May 2024, Hims & Hers stock surged after it had been allowed to offer a compounded semaglutide due to a semaglutide shortage. But once the U.S. Food and Drug Administration (FDA) declared that the shortage had resolved, Hims & Hers could no longer offer the compounded drug.
HIMS stock sank 22% after that announcement in February, reported CNBC at the time.
Its understandable, then, why HIMS shares are surging so much in trading today after the company announced once again that it would be able to offer a GLP-1 weight loss drugand not just a compounded version, but the brand-name version, Wegovy.
With todays stock surge, HIMS shares are now up nearly 48% year-to-date. Over the past year, HIMS shares have now surged nearly 185%.
Major orders canceled. Containers of products left stranded overseas. No roadmap for what comes next.The Trump administration raised tariffs on goods from China to 145% in early April. Since then, small business owners who depend on imports from China to survive have become increasingly desperate as they eye dwindling inventory and skyrocketing invoices.President Donald Trump seemed to back down somewhat last week when he said he expected the tariffs to come down “substantially.” That helped set off a rally in the stock market. But for small businesses that operate on razor-thin margins, the back and forth is causing massive upheaval. Some say they could be just months from going out of business altogether.
The Massachusetts family-owned game company
Game makers are particularly susceptible to the tariffs since the majority of games and toys sold in the U.S. are made in China, according to The Toy Association.WS Game Co., based in Manchester-by-the-Sea, Massachusetts, is a family-owned business that licenses Hasbro board games like Monopoly, Candy Land and Scrabble and creates deluxe versions of them. Its most popular line of games come in boxes that look like vintage books and sell for $40.The company’s games were featured in Oprah’s Favorite Things list in 2024 and sold in 14,000 stores in North America, from big national chains to mom-and-pop stores, said owner Jonathan Silva, whose father founded the company in 2000.All of WS Game’s production is done in China. The tariffs have brought the past 25 years of healthy growth to a screeching halt.Over the past three weeks, WS Game has had three containers of finished games, worth $500,000, stranded in China. It lost orders from three of the largest U.S. retailers totaling $16 million in business. And there’s not much Silva can do about it.
“As a small business, we don’t have the runway or the capabilities to move manufacturing on a whim,” said Silva, who has 22 employees. He said the tariffs have “disrupted our business and put us on the verge of insolvency” and estimates he has about a four-month runway to stay afloat if nothing changes.“We’re really hoping that cooler heads prevail,” he said.
Artificial flowers in Kentucky
Jeremy Rice co-owns House, a home-décor shop in Lexington, Kentucky, that specializes in artificial flower arrangements for the home. About 90% of the flowers his business uses are made in China.Rice uses dozens of vendors. The largest are absorbing some of the cost of the tariffs and passing on the rest. One vendor is raising prices by 20% and another 25%. But Rice is expecting smaller vendors to increase prices by much higher percentages.House offers mid-range artificial flowers. A large hydrangea head will retail for $10 to $16, for example. China is the only place that manufacturers higher quality silk flowers. It would take a vendor years to open a factory in a different country or move production somewhere else, Rice said.Rice ordered his holiday décor early this year. But even after stocking up ahead of the tariffs, he only has enough everyday floral inventory in to last two to three months.“After that, I don’t know what we’re going to do,” he said.Rice is concerned that the trade war will wipe out a bunch of mom-and-pop stores, similar to what happened in the Great Recession and the pandemic.“There’s nowhere to turn, there’s nothing to do,” he said.
Tea in Michigan
A tea shop in a Michigan college town is also caught in the middle of the ongoing tariff fight.“It’s basically just put a big pit in my stomach,” said Lisa McDonald, owner of TeaHaus, located in Ann Arbor, home to the University of Michigan. McDonald has owned TeaHaus for nearly 18 years and sells tea to customers across the U.S.Americans drank about 86 billion servings of tea in 2024, according to the Tea Association of the U.S.A.. Almost all of that is imported since tea isn’t grown in the U.S. at scale, due to factors ranging from climate to cost.McDonald imports loose-leaf tea from China, India, Kenya, Sri Lanka, and other countries. She says her customer base is “from all over the U.S. and the world.” But she worries there is a limit to what they’ll spend. Her premium teas can cost up to $33 for a 50-gram bag.“I don’t think I can charge $75 for a 50-gram bag of tea, no matter how amazing that tea is,” she said.McDonald understands Trump’s rationale for wanting to use tariffs to spur U.S. manufacturing but says it doesn’t apply to the tea industry.“We can’t grow tea in the U.S. to the extent that we need. We can’t just flip the industry and ‘make tea great again’ in America. It just can’t happen,” she said.
Car accessories in Oklahoma
Jim Umlauf’s business, 4Knines, based in Oklahoma City, makes vehicle seat covers and cargo liners for dog owners and others. To do so, he needs raw materials such as fabric, coatings and components from China.Umlauf has explored manufacturing in countries other than China since 2018, when Trump first instituted a 25% tariff on goods from China, but has run into complications. In the meantime, 4Knines absorbs the extra cost, which Umlauf says has limited its growth and squeezed its margins.Now, the new tariffs make it nearly impossible to do business. The demand is there, but the company can’t afford to bring over more products.“We only have a limited amount of inventory left, and without some relief, we’ll run out soon,” Umlauf said.As a small business owner who has worked hard to develop a high-quality brand, create jobs and contribute to the community, Umlauf is frustrated. He has tried to contact the White House and other decision-makers to ask for small business support. But he’s gotten zero response.“It’s time for policymakers to consider the full impact of trade policies not just on stock prices or global competitiveness, but on the real people running small businesses,” he said.
AP videojournalist Mike Householder in Detroit contributed to this report.
Mae Anderson, AP Business Writer
Its been more than half a century since it became more common to ship freight in trucks than by train. But when one company decided to start selling its product in the New York City market, it built its own new rail terminal to avoid the cost and emissions of trucking.
A truck is not an efficient way to take these types of materials long distance, says Grant Quasha, CEO of Eco Material Technologies. The company makes supplementary cementitious material or SCM, a component added to concrete to make it stronger and longer-lasting. The material is made from fly ash, a type of waste produced from coal plants that the company sources from landfills at locations throughout the country. A truck can hold 20 tons of it; a train, which can move as much as 2,000 tons, cuts emissions by at least 90%, Quasha says.
The company wanted to serve the construction market in New York from one of its sites in rural Pennsylvania, as well as another site in Georgia. But since trucking would be cost-prohibitive and more polluting, they turned to the more old-fashioned solution of rail.
First, they had to find rail lines that were still in use in the right location. We had to scour the area to find existing infrastructure that could work with our needs, Quasha says. They partnered with a local short-line railroad that owned a rail yard in Queens, not far from the companys concrete customers. Then they built a terminal in the rail yard that would work for their specific needs. Extra train tracks at the terminal allow them to store their product in train cars until its needed.
[Photo: New York & Atlantic Railway Co.]
The logistics are complicated. To make a delivery from one of the companys sites, in Pennsylvania, the train cant go straight there. There isnt a bridge or tunnel to accommodate a train to Queens, although a long-planned freight tunnel is under construction. After a train reaches New Jersey, the train cars go on a specialized barge with built-in train tracks. A tugboat pushes the barge across the Hudson and East Rivers, and then another locomotive picks up the train cars in Brooklyn.
Right now, using this type of material in New York City usually means importing it from countries like Turkey and China. But it makes more sense, environmentally, for it to come from a place like Pennsylvania instead, Quasha says. (It also can avoid tariffs and crowded ports.) Over the last century, coal companies have sent billions of tons of waste to landfills, which Eco Material Technologies reprocesses for use in concrete. It also has the dual benefit of helping clean up the old dumps.
When it’s used in concrete, it reduces the need for cement, which has a large carbon footprint. It makes the final concrete stronger, and less expensive. “People say, if these materials are cheaper, more environmentally friendly, and make better concrete, why aren’t they used all the time?” Quasha says. “The answer is supply: Historically, there hasn’t been enough of the material where you need when you need it. You don’t generally have these waste dumps next to midtown Manhattan.”
At the new terminal, where deliveries have already started, the company plans to bring in around 50,000 tons of the product each year, on roughly 10 train cars each week.
The rumors are true: Anheuser-Busch confirmed on Tuesday that its viral sensation Busch Light Apple will be back in stores in May for the first time since 2022.
Thats welcome news to the legions of diehard fans who have been appealing the St. Louis-based beer maker to bring the apple-flavored lager back to stores for the past three years.
“Before Busch Light Apple was taken off shelves, our fans chased down trucks to get their hands on it,” Krystyn Stowe, head of marketing at Busch Family & Natural Family at Anheuser-Busch, said in a statement to Fast Company. “They created Facebook groups with thousands of members to mourn the loss of their favorite beer, and Reddit threads became a new home for those looking to connect with others who miss the signature sweet taste of Busch Light Apple.”
In recent weeks, people have taken to social media to share that theyve apparently found early-release cans of Busch Light Apple on shelves or videos of the beer on assembly lines. Such posts have typically sparked large numbers of comments from fans asking where the beer can be located.
Its a bit tricky to unpeel what exactly kicked off the rumor mill this spring that “Babble”as fans call itmight be revived this year. However, in mid-March, a user on the X platform shared a photo that he said was from a December 2024 Anheuser-Busch meeting indicating a return of the fan-favorite beverage. That photo was subsequently shared widely across various social media platforms.
To be fair, some fans were hoping it was a sign of good things to come as far back as October when Busch Beer celebrated National Apple Day with a photo of a bushel of the beer and apples on Instagram.
One in every three comments on Busch Lights social posts is from fans urging us to bring back Busch Light Apple, and weve read every single one, Stowe added in a statement.
But the good-news announcement comes some news that might disappoint: The company promises that Bapple will only be available while supplies last and urges fans to stock up.
That said, Busch tells Fast Company that fans can expect to see the beer in stores “all summer long.”
Busch league of fans
All of this fervor might leave some of you scratching your heads in confusion: People are this passionate about . . . a Busch beverage?
Oh, you have no idea.
Something special seemingly happened when the Busch brand dropped its first flavored beer from the family tree in July 2020. Whether its the taste, the timing of the beverage launch, or the companys announcement that lampooned an Apple keynote presentation of new tech product launches, the beverage soon amassed a loyal Busch league of fans.
How loyal? A lot of people toss around the word favorite when describing the lager thats made with real apple extract.
And while theres seemingly a market for everything on eBay, some people have recently sold Bapple merchandise for $200 and up, while empty cans or even an empty box case could fetch $10.
Apple tie-in
This year, Anheuser-Busch has once again played up that Apple tie-in, enlisting a perhaps-unlikely spokesperson for the beverages rebirth: Ronald G.Wayne, who cofounded the tech giant alongside Steve Wozniak and Steve Jobs.
Wayne, now 90, liquidated his 10% stake in Apple in 1976 for just $800 and hes parlaying a billion-dollar mistake that happened nearly 50 years ago as a selling point for fans to stock up on Busch Light Apple.
This time, Im not missing out on a great, Apple-related opportunity, Wayne says in the YouTube ad before pointing to a pallet of Bapple and calling it a real good investment.
When and where will Busch Light Apple beer be available?
For fans who cant wait to get their hands on a cold can of Bapple, the Busch website has a locator feature to search for any brew, including Busch Light Apple, by zip code.
Spicy pickle soda. Dirty protein soda. Cereal milk soda. These arent your standard mocktail offeringsbut thats exactly the point. On May 12, Olipop will launch its first-ever soda drive-thru in Los Angeles, offering an array of offbeat, internet-inspired drinks and limited-edition mocktails, with the first drink free to the public.
The pop-up event taps into the internets growing obsession with so-called beverage goblin culture, which has people cycling through multiple drinks at once for hydration, energy, and fun.
Theres just so much chatter around just these internet drinks and the whole like beverage goblin trend, where people have their hydration drink, their fun drink, and their caffeine on their desk, said Steven Vigilante, Olipops director of strategic partnerships. This is a reflection of that . . . Giving people an opportunity to actually do something, get out of the house and go try one of these for free.
The drive-thru mocktail menu leans into the experimental, including three different flavors. Theres the Cereal Milk Soda, which is an orange cream Olipop mixed with vanilla almond milk, rimmed with vanilla frosting, and topped with fruit cereal. There’s also the Dirty Protein Soda, which is an orange cream with Koias vanilla bean protein shake. And there’s the Spicy Pickle Soda, a mix of pickle and jalapeo juice with Olipops vintage cola.
While the novelty drinks are temporary, one fan favorite is making a permanent return. Olipops 12-ounce orange cream flavor, which first went viral in 2021, is officially joining the brands year-round lineup. Fans have been asking for its comeback on social media: Love this bestie but pls bring back orange cream, wrote one Instagram user. Another added, Next bring back orange cream pls . . . Ive never tasted anything better in my life. Starting April 29, its back permanently in the flavor lineup.
[Photo: Olipop]
The event also relates to the resurgence of soda culturespecifically, the dirty soda trend that blew up following the release of The Secret Lives of Mormon Wives in late 2024. The reality series highlighted the oversize soda drinks popular in Utah, where chains like Swig and Sodalicious serve highly customized soft drinks mixed with flavored syrups and cream. Olipops orange cream soda fits right in with the trend.
Creamy fruit flavors are the best for dirty sodas. They mix really well with the creamer. And we just thought this would be a fun way to do it. It’s like a kickoff this summer, Vigilante said. This is a beverage brand and a product that people need to try and touch and feel and taste.
Adding to the event, Olipop is teaming up with Crocs for a limited-edition merch drop. The collaboration includes bright orange Bae Clogs in an Orangesicle colorway and exclusive Jibbitz charms. The items wont be sold online or in stores, as only a limited number will be given away at the drive-thru while supplies last.
Attendees can also try a drink designed for the occasion: the Orange Dreamsicle Crocs-Taila mix of Olipops orange cream, half and half, vanilla syrup, whipped cream, and a branded popsicle.
For those unable to attend in person, Olipop will run a virtual version of the event from May 12 through May 19. Online participants can enter to win a drive-thru kit or a case of the returning orange cream flavor.
The event was originally planned for January, but postponed due to wildfires in Los Angeles. Now, it’s being used in association with the companys community-first approach.
We are using this drive-thru as a way to create a nice community event in L.A. and give back to some of the folks who were impacted by the fires, said Vigilante.
Enthusiasm peaks in the early days of a new job. New hires are creative, motivated, and often, a fresh dose of optimism compared to their more tenured teammates.
Yet, in a matter of weeks, that initial enthusiasm plunges by an average of 22%.
The innovation and discretionary effort that comes with new-hire enthusiasm are a strategic advantage for any organization.
But to be impactful, new-hire energy must last beyond the first few weeks. Here are four tips to preserve that early days enthusiasm:
1. Give Context, Not Just Content
Too often, new teammates find out how it works here through pushback, sideways glances, and a slap on the wrist over red tape they didnt know existed.
As a result, the motivation to drive results is quickly outweighed by the fear of reputational risk or political consequence.
Its a preventable comedown. Effective onboarding must go beyond role-specific content. Organizational context is what gives new teammates the foundation to dive in effectively.
In the onboarding process, answer questions like:
How do different teams typically work together (or not)?
Are there cultural norms around offering feedback?
Is the decision-making hierarchy fluid or more rigid?
What metrics are most important to the organization? (Beyond individual OKRs)
Who determines whats considered urgent, and how is that typically communicated?
This foundation enables new hires to make an impact fast, without fear of stepping on a cultural landmine.
2. Prove a Failure Tolerance
If your organization needs to progress, failure inevitably comes with the territory. Yet, the prospect of failing can send a shockwave through someone eager to impress.
A Move fast and break things poster does not have enough credibility to inspire risk-taking. Instead, prove an organizational failure tolerance by citing specific examples in onboarding.
Share stories about failed launches, the buggy beta version, or internal projects that didnt pan out. Talk about what was learned, how the organization adapted, and most importantly, that the people behind those efforts are still here.
3. Follow-up on the Invitation for New Ideas
The onboarding process can be overwhelming. Between setting up passwords, learning names, and attempting to decipher health insurance, there isnt much brain space left for innovation in the first few days.
If you want new hires to speak up and bring a fresh perspective, follow up on that invitation after theyve had time to settle in. Go beyond Got any ideas? Ask pointed questions that show your interest in their perspective. Try prompts like:
Im curious about your take on thisdo you think were missing anything?
If you could start this (project, process, product) from scratch, what would you change?
Were there any moments where you thought, Why do we do it this way?
Showing new hires that We want new ideas!” isnt just a perfunctory corporate welcome.
4. Share the Metrics, But Dont Start the Clock
Ambitious new hires want to know the criteria for success. Even if they dont ask, share the metrics a new hire will (eventually) be evaluated against. Whether its delivery timeline, revenue targets, or client satisfaction, be clear about what good looks like.
But dont start the clock right away. Give new hires time to build relationships and develop a meaningful understanding of how to achieve those numbers effectively.
If metrics are not shared up front and only surface during a later performance review, it can feel like the rules are being made up mid-game. On the flip side, starting assessment on the first day can feel overwhelming or even unfair.
Align early on key metrics of success, but delay starting the “clock” for 6090 days in performance-based roles. Be transparent, but not premature in applying pressure.
Will every day of work be as exciting as day one? Probably not. The adrenaline of a new job is impossible to sustain.
Yet, with intentionality, preserving new-hire enthusiasm is possible.
The Trump administration has frozen, stalled or otherwise disrupted some $430 billion in federal fundsfrom disease research to Head Start for children to disaster aidin what top Democrats say is an “unprecedented and dangerous” assault on programs used by countless Americans.Sen. Patty Murray of Washington and Rep. Rosa DeLauro of Connecticut on Tuesday released an online tracker that is compiling all the ways President Donald Trump and his adviser Elon Musk’s Department of Government Efficiency are interrupting the flow of federal funds, often going up against the law.“Instead of investing in the American people, President Trump is ignoring our laws and ripping resources away,” said Murray and DeLauro, who are the top Democrats on the Appropriations committees in Congress.“No American president has ever so flagrantly ignored our nation’s spending laws or so brazenly denied the American people investments they are owed,” they said.The tally is far from complete or exhaustive, the lawmakers said, but a snapshot in time. It comes in a rapidly changing political and legal environment as the Trump administration faces dozens of lawsuits from state and local governments, advocacy organizations, employees and others fighting to keep programs intact.At 100 days into Trump’s return to the presidency, the project showcases the extent to which the White House is blocking money that Congress has already approved, touching off a constitutional battle between the executive and legislative branches that has real world ramifications for the communities the lawmakers serve.The White House and its Republican allies in Congress have said they are working to root out waste, fraud and abuse in government. The Trump administration is in court fighting to keep many of the administration’s cuts even as Musk, whose own popularity has dropped, says he will be cycling off DOGE’s day-to-day work.And Trump’s director of the Office of Management and Budget intends to soon send Congress a $9 billion rescissions package, to claw back funds through cuts to the U.S. Agency for International Development and others.Murray and DeLauro said they want to “shine a light on President Trump’s vast, illegal funding freeze and how it is hurting people in every zip code in America.” They said it’s time for Trump and Musk “to end this unprecedented and dangerous campaign.”While Republicans have also stirred with concerns about Trump’s spending cuts, many are reluctant to do so publicly as they try to avoid Trump’s reactions. Instead, they tend to work behind the scenes to restore federal dollars to their home states or other constituencies that have been put at risk by Trump’s actions.The powerful Appropriations committees in the House and the Senate, where Republicans have majority control of both chambers, draft the annual funding bills that are ultimately approved by Congress and sent to the president’s desk for his signature to become law.
Lisa Mascaro, AP Congressional Correspondent
The startup playbook that built Uber, Airbnb, and DoorDash is becoming obsolete in real-time. As AI compresses jobs that once required hundreds of employees into algorithms, we’re witnessing the birth of a new company archetypecapital-efficient, immediately profitable, and surprisingly small. With a variety of software to use for all aspects of building a businessfrom Shopify for e-commerce to Stripe for paymentsand low operating costs, innovation just keeps making everything that much more efficient.
Advancements in AI are turbocharging this even further. Now, companies not only need less software and less capital for solutions to get off the ground, but they also simply need fewer people. From marketing to design to data management, AI can perform and accelerate many processes that take place in a growing company. Whether its automating website copy and social posts, assisting with interface and ad design, or even processing data sets to inform strategic decisions, many are already using AI to do this and more.
This means it now takes the least amount of money it ever has to grow and scale a company. As a result, revenue scale is being achieved with the fewest number of employees ever and profitability is soon to follow suit.
Acquisitions and IPOs are out of date
Starting a company the old way was coming up with an innovative idea, followed by creating a minimal viable product and getting users. Raising venture capital to fund additional growth was the traditional next step, with ownership of the company being diluted every step of the way as new and necessary capital came in in which was needed to reach true scale. An ideal outcome would then be an exit through an acquisition or an IPO, but the odds are actually often against the company in that instance.
In fact, only 11.5 percent of companies actually reach a good exit within the first five years. And when they do exit, the teams ownership has often been so diluted that their stake in a $100M sale could be less than if they raised just a few million and sold for $25M. Sometimes, consistently batting singles and doubles is better than trying to swing for home runs.
The $100M company with one employee
More and more stories like this are surfacing. Companies are reevaluating the need for venture capital and how much, if any, money to raise. Theres a lot of talk about the first $100M revenue company with just one employee because of AI, and were getting closer to that every day.
In general, companies utilizing AI to its maximum potential are proving to be extremely efficient in terms of revenue per employee, because there is less needed to achieve the same growth trajectories. The best case study for this may be Midjourney, a company which has raised no outside capital at all but was last projected to be valued at more than $10B, in 2023, if they were to go out and fundraisea number that is likely even higher now given the companys continued growth.
Because its easier than its ever been to start, grow, scale, and become profitable, the question now is, How much money companies should be raising? When theres so many more viable options, some have begun to wonder why raise money at all.
New forms of financing
All of this raises another fundamental question: What does this mean for the future of the tech ecosystem?
The new normal may become financing through debt. If companies can turn a profit sooner than ever and the ability to get there requires far fewer employees, there are a lot more financing options for EBITDA-positive companies, including raising debt from banks, which is relatively inexpensive, or securing financing using revenue as the collateral.
Because raising money from VCs requires diluting ownership and answering to shareholders, it is far and away the most expensive capital a company can find. If theres a world where capital can just come from debt, companies will get the best of both worlds: scaling the business on their terms while retaining ownership the entire way. This is likely going to be one of the most popular options in the AI-first era.
Disrupting the conventional VC model
VCs, meanwhile, will have to adapt their approach to adjust for a world in which their capital is simply less interesting to a company. Traditionally, their model is to get outsized returns from a handful of investments, which offsets the losses from the majority of the investments that dont return anything.
VCs usually do this by investing and gaining significant ownership stakes in companies over time, reinvesting in round after round of the winners in their portfolio. These companies historically have come back for more capital because that was the way it was always done. That looks a lot different now when the companies they want to invest in only need to raise very little capital and in turn they dont get the ownership stake they need to generate those outsized returns.
To keep up, VCs can look to new models and find companies outside of their normal view. It may look a bit less like software, and more like service-based companies that they previously avoided. These businesses are still ripe for disruption and have the potential to experience a dramatic lift from incorporating new technologyspecifically AIinto the mix. Investing in these types of businesses gives VCs the chance to capture the traditional types of returns over time, even if it starts to look more like private equity. The model becomes less about picking a handful of big winners, and more about ensuring that the majority of the companies they invest in are successful, even if just modestly.
An existential question
The next decade won’t just transform what startups build, but it will fundamentally reinvent how they’re built. The companies that thrive won’t necessarily be the ones with the most capital, but those that strategically deploy technology to maximize impact with minimal overhead. For companies and investors alike, adapting isn’t optionalit’s existential.
The first 27 satellites for Amazon’s Kuiper broadband internet constellation were launched into space from Florida on Monday, kicking off the long-delayed deployment of an internet-from-space network that will rival SpaceX’s Starlink.
The satellites are the first of 3,236 that Amazon plans to send into low-Earth orbit for Project Kuiper, a $10 billion effort unveiled in 2019 to beam broadband internet globally for consumers, businesses and governmentscustomers that SpaceX has courted for years with its powerful Starlink business.
Sitting atop an Atlas V rocket from the Boeing and Lockheed Martin joint-venture United Launch Alliance, the batch of 27 satellites was lofted into space at 7 p.m. EDT pm from the rocket company’s launch pad at the Cape Canaveral Space Force Station. Bad weather scrubbed an initial launch attempt on April 9.
Kuiper is arguably Amazon’s biggest bet under way, pitting it against Starlink as well as global telecommunications providers like AT&T and T-Mobile. The company has positioned the service as a boon to rural areas where connectivity is sparse or nonexistent.
The mission to deploy the first operational satellites has been delayed more than a yearAmazon once hoped it could launch the inaugural batch in early 2024. The company faces a deadline set by the U.S. Federal Communications Commission to deploy half its constellation, 1,618 satellites, by mid-2026, but its slower start means Amazon is likely to seek an extension, analysts say.
Hours or possibly days after the launch, Amazon is expected to publicly confirm initial contact with all of the satellites from its mission operations center in Redmond, Washington. If all goes as planned, the company said it expects to “begin delivering service to customers later this year.”
ULA could launch up to five more Kuiper missions this year, ULA CEO Tory Bruno told Reuters in an interview this month. Amazon said in a 2020 FCC filing that it could begin service in some northern and southern regions at 578 satellites, with coverage expanding toward Earth’s equator as the company launches more satellites.
The Web services and e-commerce giant’s Project Kuiper is an ambitious foray into space, with a late start in a market dominated by SpaceX. But Amazon executives see the company’s deep consumer product experience and established cloud computing business that Kuiper will connect with as an edge over Starlink.
Amazon launched two prototype satellites in 2023 in tests it said were successful, before de-orbiting them in 2024. It had been relatively quiet about the program’s development until announcing its first Kuiper launch plans earlier this month.
‘ROOM FOR LOTS OF WINNERS’
Elon Musk’s SpaceX, with a unique edge as both a satellite operator and launch company with its reusable Falcon 9, has put more than 8,000 Starlink satellites in orbit since 2019, marking its 250th dedicated Starlink launch on Monday. Its deployment pace has hastened to at least one Starlink mission per week, each rocket with roughly two-dozen satellites on board to expand the network’s bandwidth and replace outdated satellites.
That quick pace has helped Musk’s company amass more than 5 million internet users across 125 countries, upend the global satellite communications market and woo military and intelligence agencies that have sought to use Starlink and its manufacturing line for sensitive national security programs.
Amazon Executive Chairman Jeff Bezos has voiced confidence that Kuiper can compete with Starlink, telling Reuters in a January interview “there’s insatiable demand” for internet.
“There’s room for lots of winners there. I predict Starlink will continue to be successful, and I predict Kuiper will be successful as well,” he said.
“It will be a primarily commercial system, but there will be defense uses for these LEO constellations, no doubt,” he added, referring to low-Earth orbit.
Amazon in 2023 revealed its Kuiper consumer terminals, an LP vinyl record-sized antenna that communicates with Kuiper satellites overhead, as well as a smaller terminal whose size it compares to its e-book Kindle device. The company expects to make tens of millions of the devices for under $400 each.
Amazon in 2022 booked 83 rocket launches from ULA, France’s Arianespace and Blue Origin, Bezos’ space company, snagging the industry’s biggest-ever launch deal as it prepared to begin Kuiper deployment.
Joey Roulette, Reuters
