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A.I. Is Changing How Silicon Valley Builds Start-Ups

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Tech start-ups typically raised huge sums to hire armies of workers and grow fast. Now artificial intelligence tools are making workers more productive and spurring tales of “tiny team” success.Almost every day, Grant Lee, a Silicon Valley entrepreneur, hears from investors who try to persuade him to take their money. Some have even sent him and his co-founders personalized gift baskets.Mr. Lee, 41, would normally be flattered. In the past, a fast-growing start-up like Gamma, the artificial intelligence start-up he helped establish in 2020, would have constantly looked out for more funding.But like many young start-ups in Silicon Valley today, Gamma is pursuing a different strategy. It is using artificial intelligence tools to increase its employees’ productivity in everything from customer service and marketing to coding and customer research.That means Gamma, which makes software that lets people create presentations and websites, has no need for more cash, Mr. Lee said. His company has hired only 28 people to get “tens of millions” in annual recurring revenue and nearly 50 million users. Gamma is also profitable.“If we were from the generation before, we would easily be at 200 employees,” Mr. Lee said. “We get a chance to rethink that, basically rewrite the playbook.”The old Silicon Valley model dictated that start-ups should raise a huge sum of money from venture capital investors and spend it hiring an army of employees to scale up fast. Profits would come much later. Until then, head count and fund-raising were badges of honor among founders, who philosophized that bigger was better.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Can Harris’s Economic Plans Sway Small Business Owners to Vote Democratic?

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    Kamala Harris has leaned in with promises to aid start-ups, but proprietors are often more focused on taxes and regulations.Presidential campaigns often use the backdrop of small businesses — record stores, diners, machine shops — to emphasize their candidates’ authenticity and hometown values. But this election cycle has taken those businesses a bit more seriously.In speeches and ads, Vice President Kamala Harris has sought to infuse entrepreneurship into her brand — an avowed capitalist, but for the little guy. Her economic policy platform mentions “small business” 77 times, including a section aimed at addressing owners’ needs, such as easing licensing requirements and funneling more federal contracts their way.It’s not hard to see why a candidate might lean in on Main Street: Small businesses are collectively the most respected institution in American life, according to research from Gallup and Pew. Ms. Harris’s messaging might also help counter former President Donald J. Trump’s reputation as a successful business owner, which continues to bolster his economic credentials among voters despite his many bankruptcies and sometimes fraudulent practices.Ms. Harris’s focus on small business isn’t completely new. She also took on the issue as vice president, visiting businesses to hand out billions of dollars in loans funded by the American Rescue Plan Act. She often talks about her “second mother,” Regina Shelton — who ran a nursery school in Berkeley, Calif. — as a small-business owner and an integral part of the community.“Kamala’s economic plans are designed to help people like Mrs. Shelton, so that they have enough in the bank to start a business or pass something on to their kids,” said Felicia Wong, who runs Roosevelt Forward, a progressive advocacy group.Ms. Harris has sought to portray herself as an avowed capitalist, but for the little guy.Kenny Holston/The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    in Economy

    With $32 Billion in Aid, Native Americans Push Against History of Neglect

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    Cortez, a Colorado town of about 9,000 people tucked near the San Juan Mountains, has the trappings of a humble but healthy small-town economy: bustling businesses, congenial single-family homes, a park with grassy fields, a public pool, playgrounds, a pond and skate ramps.A couple of hours southwest is Tuba City, Ariz., the largest community on Navajo Nation tribal lands. It has roughly the same population as Cortez, and it is surrounded by the same sandstone and mesa-filled terrain. But despite the area’s rich history of trade, and its proximity to thriving cities like Flagstaff and tourist sites like the Grand Canyon, widespread poverty and a lack of public services are notably entrenched — the stark reality across many reservations throughout the country.Gas stations, dollar stores and fast-food chains fill most of the skinny commercial strips. R.V. trailers and other mobile homes make up much of the housing stock. One in three Navajo households has income below the federal poverty line. Red dust whiffling in from desert winds tends to be more common than the dust stirred up by builders.Gas stations, dollar stores and fast-food chains fill most of Tuba City’s skinny commercial strips. Sharon Chischilly for The New York TimesAt the town’s center, though, is a recent exception: the construction of a 5,500-square-foot senior center, whose $5 million cost is partly financed with about $1 million from the American Rescue Plan Act, passed in 2021.That package, primarily meant to address the economic and public health crises caused by Covid-19, included $32 billion in short- and longer-term assistance for tribes and reservations: aid for households and tribal government coffers, community development grants, health services and infrastructure; as well as access to the $10 billion State Small Business Credit Initiative program, which previously excluded tribal nations.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Led by Believers in the City’s Future, Detroit Is on the Rebound

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    Once the largest city in the U.S. to declare bankruptcy, this Midwestern metropolis is now thriving. But some obstacles still remain.On a sunny Friday morning last month, Mike Duggan, the mayor of Detroit, got behind thewheel of his black Jeep Grand Cherokee to give a tour of the city he has led for 10 years. Not far from Michigan Central Station, the former hulking ruin that was recently transformed into a gleaming office complex, he slowed to point to a construction site of vertical steel girders and yellow earth-moving machines. It will become a 600-room JW Marriott hotel, linked to the city’s convention center and scheduled to open by 2027, when college basketball’s Final Four will be played in Detroit.Farther west, more earth movers were crawling along a mile-long stretch of riverfront land, adding contours that will soon be a spacious, green recreation area, with elaborate play structures, a water park, basketball courts and outdoor workout equipment. It will be one of the final links in a 3.5-mile chain of parks, open spaces and bike paths that have replaced the warehouses and industrial yards that previously lined the Detroit River.Just beyond the park stood a vestige of Detroit’s troubled past — a crumbling, boarded-up building that was once the Southwest Detroit Hospital, which closed 18 years ago. Detroit City FC, a professional soccer club, hopes to raze it and build a new stadium.A mile or so away, Mr. Duggan, 66, pulled up at another construction site that will be the home of a University of Michigan research and innovation center focusing on software, artificial intelligence and other advanced technologies. “This is where we are going to create the jobs of the future,” he said.“I’m excited about how much pride is back among Detroiters,” said Mayor Mike Duggan.Nic Antaya for The New York TimesTwenty minutes later, Mr. Duggan stepped out of the Jeep at a small park off Rosa Parks Boulevard, north of downtown. In 1967, it was the site of an unlicensed after-hours club that was raided by the police. The action provoked a violent uprising that raged for five days, left 34 people dead, 1,200 injured, and more than 14,000 homes, buildings and stores burned or destroyed. The episode spurred the flight of thousands of residents from the city and marked the start of Detroit’s long, painful decline.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    The Pandemic Small Business Boom Is Still Helping to Fuel the Economy

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    Hector Xu was on track for a career in academia when the pandemic upended his plans.Tired of endless Zoom meetings and feeling cooped up in his Boston apartment, Mr. Xu decamped for New Hampshire, where he began taking lessons to fly helicopters. That led to a business idea, converting traditional helicopters into remotely piloted drones.Mr. Xu’s company, Rotor Technologies, now has nearly 40 employees — including his former flying instructor — and about $1 million in revenue this year, a figure it expects to increase twentyfold next year. Gov. Chris Sununu was present for the first test flight of one of its drones.“Covid hit, and it really changed my perspective,” Mr. Xu said. “You ended up spending most of your time in front of your computer rather than in the lab, rather than interacting with people, going to conferences. And I think it made me really yearn to do something that was more impactful in the real world.”Mr. Xu, 30, is part of what may be one of the pandemic’s most unexpected economic legacies: an entrepreneurial boom. Stuck at home with time — and, in many cases, cash — to burn, Americans started businesses at the fastest rate in decades.Piloting a test flight of a Rotor drone.Ian MacLellan for The New York TimesThe company now has nearly 40 employees.Ian MacLellan for The New York TimesWhat happened next might be even less expected: Those businesses thrived, overcoming supply chain disruptions, labor shortages, rapid inflation and the highest interest rates in decades.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    A.I. Is Helping to Launch New Businesses

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    Entrepreneurs say use of artificial intelligence for a variety of tasks is accelerating the path to hiring and, ideally, profitability.Sean Ammirati has been teaching a class on entrepreneurship for more than a decade.A professor at Carnegie Mellon University, Mr. Ammirati has groups of mostly graduate students start businesses from scratch over the course of the spring semester. Some of the start-ups that his 49 students created this year were classic examples of the form: a dating app for couples in long-distance relationships, a personalized fitness app.But Mr. Ammirati also noticed something unusual.“I have a pretty good sense how fast the progress that students should make in a semester should be,” he said. “In 14 years, I’ve never seen students make the kind of progress that they made this year.”And he knew exactly why that was the case. For the first time, Mr. Ammirati had encouraged his students to use generative artificial intelligence as part of their process — “think of generative A.I as your co-founder,” he recalled telling them.The students began sharing their ideas for use cases on a dedicated Slack channel. They used generative A.I. tools such ChatGPT, GitHub Copilot and FlowiseAI to help them with tasks including marketing, coding, product development and recruitment of early customers.By the end of the class in May, venture capitalists were descending on Carnegie Mellon’s campus in Pittsburgh.“It felt to me like what I felt like in the mid-2000s, when cloud and mobile happened at the same time,” said Mr. Ammirati, who is himself an entrepreneur. Generative A.I., he believed, could similarly change innovation “by an order of magnitude.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    in Economy

    Montana Has More Cows Than People. Why Are Locals Eating Beef From Brazil?

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    Cole Mannix, of Old Salt Co-op, is trying to change local appetites and upend an industry controlled by multibillion-dollar meatpackers.“Making It Work” is a series is about small-business owners striving to endure hard times.While many people can conjure up romantic visions of a Montana ranch — vast valleys, cold streams, snow-capped mountains — few understand what happens when the cattle leave those pastures. Most of them, it turns out, don’t stay in Montana.Even here, in a state with nearly twice as many cows as people, only around 1 percent of the beef purchased by Montana households is raised and processed locally, according to estimates from Highland Economics, a consulting firm. As is true in the rest of the country, many Montanans instead eat beef from as far away as Brazil. Here’s a common fate of a cow that starts out on Montana grass: It will be bought by one of the four dominant meatpackers — JBS, Tyson Foods, Cargill and Marfrig — which process 85 percent of the country’s beef; transported by a company like Sysco or US Foods, distributors with a combined value of over $50 billion; and sold at a Walmart or Costco, which together take in roughly half of America’s food dollars. Any ranchers who want to break out from this system — and, say, sell their beef locally, instead of as anonymous commodities crisscrossing the country — are Davids in a swarm of Goliaths.“The beef packers have a lot of control,” said Neva Hassanein, a University of Montana professor who studies sustainable food systems. “They tend to influence a tremendous amount throughout the supply chain.” For the nation’s ranchers, whose profits have shrunk over time, she said, “It’s kind of a trap.” Cole Mannix is trying to escape that trap.Mr. Mannix, 40, has a tendency to wax philosophical. (He once thought about becoming a Jesuit priest.) Like members of his family have since 1882, he grew up ranching: baling hay, helping to birth calves, guiding cattle into the high country on horseback. He wants to make sure the next generation, the sixth, has the same opportunity.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Start-Up Founder Sentenced to 18 Months in Prison for Fraud

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    Manish Lachwani, who founded the software start-up HeadSpin, is the latest tech entrepreneur to face time in prison in recent years.Another start-up founder is going to prison for overstating his company’s performance to investors.Manish Lachwani, who last year pleaded guilty to three counts of defrauding investors at his software start-up, HeadSpin, was sentenced to one and a half years in prison on Friday. He will also pay a fine of $1 million.Government prosecutors said Mr. Lachwani, 48, deceived investors by inflating HeadSpin’s revenue nearly fourfold, making false claims about its customers and creating fake invoices to cover it up. His misrepresentations allowed him to raise $117 million in funding from top investment firms, valuing his start-up at $1.1 billion.When HeadSpin’s board members found out about the behavior in 2020, they pushed Mr. Lachwani to resign and slashed the company’s valuation by two-thirds.Mr. Lachwani is at least the fourth start-up founder in recent years to face serious consequences after taking Silicon Valley’s culture of hype too far. Other founders currently in prison for fraud include Sam Bankman-Fried of the cryptocurrency exchange FTX and Elizabeth Holmes and Ramesh Balwani of the blood testing start-up Theranos.Trevor Milton, a founder of the electric vehicle company Nikola, was sentenced to prison in December for fraud. Michael Rothenberg, a venture capital investor who was recently convicted of 12 counts of fraud and money laundering, is set to be sentenced in June. And Changpeng Zhao, who founded the cryptocurrency exchange Binance and pleaded guilty to money laundering last year, is scheduled to be sentenced later this month.Carlos Watson, the founder of the digital media outlet Ozy Media, and Charlie Javice, founder of the financial aid start-up Frank, have pleaded not guilty to fraud charges and face trials later this year.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    As Wildfires Grow Fiercer, Some Companies Look to Rebuild the Tree Supply Chain

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    As forests succumb to ever-fiercer wildfires, the federal government and some adventurous private companies are trying to resuscitate an industry.When it came to wildfires, 2021 was an increasingly common kind of year in Montana: Flames consumed 747,000 acres, an area nearly the size of Long Island.About 2,700 of those acres were on Don Harland’s Sheep Creek Ranch, where ever-drier summers have turned lodgepole pines into matchsticks ready to ignite. After the smoke cleared, Mr. Harland found creeks running black with soot and the ground hardening more with every day that passed.A former timber industry executive, Mr. Harland knew the forest wouldn’t grow back on its own. The land is high and dry, the ground rocky and inhospitable — not like the rainy coastal Northwest, where trees grow thick and fast. Nor did he have the money to carry out a replanting operation, since growing for timber wouldn’t pay for itself; most of the nearby sawmills had shut down long ago anyway. The state government offered a few grants, but nothing on the scale needed to heal the scar.Then a local forester Mr. Harland knew suggested he get in touch with a new company out of Seattle, called Mast. After visiting to scope out the site, Mast’s staff proposed to replant the whole acreage, free, and even pay Mr. Harland a bit at the end. Mast, in turn, was to earn money from companies that wanted to offset their carbon emissions and would put millions of dollars into planting trees that otherwise wouldn’t exist.Mr. Harland said he had his doubts about the carbon-selling part of the plan, but he was impressed with Mast’s operations, so he said yes.Two years later, after seeds had been collected from similar trees on nearby lands, crews of planters came out with bags full of seedlings, rapidly plunking them into the ashen ground. As part of the deal, Mr. Harland signed an agreement to let the trees grow for at least 100 years, so they can keep sucking greenhouse gases out of the air as they mature.Can carbon credits help rebuild a forest? Tell us what you think. More