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When a Swedish startup set out to make personal care packaging more sustainable, it turned to an unexpected source of inspiration: aluminum cans. Meadow, the company behind the concept, created a refill system that seals shampoo, lotion, and other products inside aluminum cans. Unlike soda, theres no pull tabthe aluminum cartridge, called Kapsul, has a solid lid. But when you insert the can into Meadows reusable pump and twist on the top, the device pierces the lid with a clean, satisfying pop. When youve used up the product, the aluminum can be easily recycled. We knew that we would not be able to develop a totally new packaging solution, says Victor Ljungberg, Meadows CEO and cofounder. We dont have the time and we cant afford to build totally new infrastructure. We need to look at what we have. [Photo: Meadow] They knew that aluminum beverage cans had a high recycling ratein Sweden, its around 90%. In the U.S., its a much lower 43%. But thats still more than triple the recycling rate for plastic packaging. Aluminum can also be recycled repeatedly without losing any quality, unlike plastic. The aluminum beverage can, the most recycled container, already exists on the market, Ljungberg says. But the whole industry around this has been focused on one thingto use that container for food-grade content. We asked ourselves, okay, what is it that we need to do to take it into new categories such as personal care, pharma, home care, and others? [Photo: Meadow] For safety reasons, they didnt want to put soap in a can that someone might mistake for a drink. Thats why the team designed the lid to only open when its inside the reusable dispenser. The design also makes it easier to use than typical refills that have to be poured into a container, Ljungberg argues. (The company calls the packaging prefills since theyre already ready to use.) Many refills also currently come in thin plastic film that ends up in the trash. Of course, there are other ways to ditch plastic packaging. Companies like Kitsch make shampoo in bar form, for example, so it only needs a small paper box. But Ljungberg believes that many consumers arent quite ready for that much change. [Photo: Meadow] We need to admit that there is a very established single-use culture among people all over the planet, he says. With what we do, we meet consumers where they are, saying that we are not forcing them to change behavior too much. Instead, they will buy the cans on the shelf just as they buy goods today. [Photo: Meadow] The startup partnered with DRT, the Ohio-based company that invented the first pull-tab cans, as well as Ball Corporation, the worlds largest can manufacturer. Ball Corp is also one of the companys minority investors. (The startup has raised around $15 million in seed funding so far.) Because its possible to make the cans on existing equipment in factories, the packaging can easily scale up. Brands can add their own branding to the cans and dispensers, paying a licensing fee to use the system. Companies like Ikea or Muji could also potentially make universal dispensers. Nuniq, a Swiss personal care company that avoids plastic packaging, recently started using Meadow’s system for products like cleanser and body lotion. More brands will soon follow when Meadow launches in the U.K. this fall.
Category:
E-Commerce
On a crisp day in May, Josh Blackman, a third generation cotton farmer, is sitting atop his 14-foot tall John Deere planter on his family farm in Littleton, North Carolina. The planter is an engineering marvel. Its 10 arms create neat rows in the soil, then drop cotton seeds at the right depth, allowing one man to do the work of 50 laborers. By October, this field will be blanketed with fluffy white bolls of cotton that never fail to take the 34-year-old Blackmans breath away. Cotton is so pretty at harvest time, he tells me. Blackmans grandparents established Warren Farms in 1941. Until the 1960s, roughly 95% of the clothes Americans wore were made domestically, so cotton from Warren Farms would travel by truck to nearby mills and factories to become Fruit of the Loom T-shirts and Levis jeans. But over the past five decades, the U.S. apparel industry has been decimated. Today, 97% of the clothes that Americans buy is imported, largely from China, Bangladesh, and Vietnam. The majority of Blackmans crop will be shipped to Asia where it will be turned into fabric, then cut and sewn into garments at low-wage factories. Blackman often feels he is at the mercy of geopolitical forces. Hes competing with farmers in developing countries who produce more cheaply because they pay lower wages and have weaker environmental protections. China, the worlds biggest cotton importer, has an outsized influence on the commoditys price. This year, Blackman expects to lose money on his harvest because the price of cotton is less than 70 cents a pound, down about 10 cents from 2024, which was already considered a bad year. The weather determines the crop, and the market determines what we get for it, he says. But Blackman believes that if apparel manufacturing returned to the United States, there would be more demand for domestic cotton, allowing him to earn more. Bringing the factories to Americaopening them back upwill create a market for my cotton right here, he says. [Photo: courtesy American Giant] For years, the idea of breathing life back into American clothing factories, reversing half a century of off-shoring, seemed like a pipe dream. But the plate tectonics of the apparel industry are shifting. Over the past decade, dozens of American-made labels like Buck Mason, American Trench, Imogene & Willie, and Duckworth have sprung up, tapping into the skeletal remains of the domestic supply chain. This was a small-scale effort: These high-end brands make clothes for affluent customers who care about sustainability, ethical labor, and durability. But everything changed last summer, when Walmartthe largest company in the worldentered the picture. The retailer dropped a $12.98 T-shirt made end-to-end in the U.S. just in time for the Fourth of July. Walmart sells an enormous quantity of clothing. Of the $648 billion in revenue it generated last year, Coresight Research estimates that $29.5 billion came from apparel. (By comparison, Gap, Inc. and H&M only generated $15 billion and $22 billion respectively.) The vast majority of clothes Walmart sells is made overseas, predominantly in China. But this American-made T-shirt suggests theres another way forward. [Photo: courtesy American Giant] Without a domestic supply chain, Walmart collaborated with an upscale U.S.-made label, American Giant, to make its Fourth of July collection. American Giant has spent the last 12 years building a domestic supply chain and cultivating demand for its $45 t-shirts and $148 hoodies. The T-shirts that came out of this partnership were a hit, with Walmart reportedly selling hundreds of thousands of T-shirts, spurring the two companies to make a $39.98 hoodie that similarly flew off the shelves. Now Walmart is building an ongoing partnership with American Giant to produce even more garments. President Trumps pursuit of steep tariffs on China (currently 30%) and other apparel-producing countries, including Vietnam, Bangladesh, and Cambodia (at a universal baseline of 10%), have put Walmarts efforts in a new light. Walmart CEO Doug McMillon spent part of his last earnings call outlining ways the company was managing the cost pressure from tariffs, and made news whe he noted that prices would go up. Whether Trumps tariffs are intended to restart American manufacturing or simply extract more money from trading partners remains to be seen. But the jolt to the supply chain has forced large retailers and brands to consider what it would take to make their products domestically. [Photo: courtesy Warren Farms/Enfield Cotton Ginnery] Walmart, for one, is making a concerted effort to build an apparel supply chain in the United States. Today, American-made garments still only comprise a tiny fraction of Walmarts overall apparel sales. But as the company places enormous garment ordersmany times what startups like American Giant makes in a yearit offers a glimpse into what 21st century apparel manufacturing in America could look like. To produce at these volumes, factories of the future are likely to be powered by robots and AI, and managed by a relatively small group of highly skilled workers, rather than the labor-intensive operations of the past. The possibility of making clothes in America is closer than it has been for decades. But it is still unclear whether this reality will materialize. Much will depend on whether Walmart continues its commitment to American-made apparel and spurs other large retailers to do the same. And whether Trumps tariffs stay in place long enough to motivate brands to set up supply chains in the United States. At Warren Farms, Blackmans face lights up when he hears about Walmarts ambitions to make clothes in America. His cotton goes to a yarn mill that supplies American Giant, which means it could very well end up in the next batch of Walmart T-shirts and hoodies. I love growing cotton, he says. Its all Ive ever known. I want to be able to keep doing it. [Photo: courtesy American Giant] When Walmart Met American Giant It was 2022 and Bayard Winthrop should have been on top of the world. A decade prior, he had quit his job at Chrome, an outdoor apparel brand, to launch American Giant. In the face of naysayers who told him his dream of making clothes in America was impossible, Winthrop had succeeded. American Giant was profitable and generated upwards of $10 million in annual revenue. Its 50 employees were constantly working to keep up with the demand for the brands growing assortment, which now includes jeans, dresses, and collaborations with celebrities like Jason Kelce. Bayard Winthrop [Photo: courtesy American Giant] Despite American Giants success, Winthrop wasnt satisfied. He had launched his brand to create the kind of durable, high-quality clothing he remembered from his childhood in the 1970s, when brands like Wrangler and Pendleton were still produced domestically. Back then, those brands were affordable to working-class people. But American Giant, which has a cult following among Bay Area tech executives, is decidedly premium. Winthrop knew that if he could increase the size of his production runs, he would be able to create the same high-quality products for lower prices. In other words: He needed a quick growth hack. It dawned on him that the solution was for a large scale, mass market retailer to tap into his supply chain. And the most obvious one was Walmart. In 2021, Walmart had announced it was investing $350 billion in sourcing American-made products over the next 10 years. The investment would go into everything from food (which makes up 60% of Walmarts sales) to packaging to electronics. This initiative would create jobs and make Walmart more resistant to the supply chain shocks we have seen in recent years resulting from COVID and Trumps tariffs. Walmart has said that textiles are one of the hardest categories to make domestically, because the industry has been largely off-shored. Still, Walmart is slowly making inroads. In 2022, it encouraged one of its largest India-based suppliers, Classic Fashion, to open a cut-and-sew factory in Santa Ana, California, staffed by 125 workers who produce exclusively for Walmart. It partners with cutting-edge American tech startups like Unspun, which automates the cut and sew process, and Rubi Laboratories, which creates fibers using carbon dioxide. [Photo: courtesy American Giant] Look, there are many things that I disagree with Walmart about, Winthrop says. But no other retailer has done anything even close to what Walmart has done to support American manufacturing. In the summer of 2023, Winthrop went on Mike Rowes The Way I Heard It podcast to talk about American Giant. During the chat, Winthrop gave Walmart kudos for its commitment to domestic manufacturing. A few weeks after the show aired, Winthrop got a call from Walmart executives inviting him to the companys Bentonville, Arkansas, headquarters. On that podcast, we got to hear his thought process not only about U.S. manufacturing, but Walmarts role in it, says Avinash Bhaskar, VP of private brands at Walmart. We wanted to explore a possible partnership. [Photo: courtesy American Giant] After a year of close collaboration between American Giant and Walmarts sourcing teams, the two companies launched co-branded T-shirts that cost $12.98. Six months later, they launched a sweatshirt that cost $38.98. Walmart wont share exactly how many T-shirts and hoodies it has produced, but people familiar with the matter say it is in the hundreds of thousands of units, many times bigger than a typical American Giant production run. These garments have sold well, prompting Walmart to turn the pilot project into an ongoing relationship. American Giant has also begun receiving calls from other mass-market retailers interested in exploring similar collaborations. (Winthrop declined to share which specific companies, since discussions are ongoing.) The garments in the Walmart line are manufactured through the same supply chain that American Giant uses for its more expensive products. But making a large volume of a single garment immediately brings down the cost per unit by five or 10 times, Winthrop explains. Making a few thousand units of clothing is extremely expensive, because a factory takes time to train workers on how to cut and sew the product, and must use whatever equipment they have on hand, even if it is not the most efficient. When a factory makes hundreds of thousands of the same garment, workers get faster and more accurate; the factory can also invest in tools like automatic label makers and more powerful fabric cutters. Theres an initial startup cost for making a garment, Winthrop says. With a large volume, factories can amortize those costs knowing they have months of production ahead. They can accept a lower margin in exchange for predictable, reliable volume. [Photo: courtesy American Giant] To make the Walmart collection even more affordable, the team picked different materials and fabrications than a typical American Giant product. For instance, the Walmart shirts use widely available cotton yarns, versus more luxurious yarns like Supima, which can add up to $15 to the cost of a T-shirt. Walmart also uses fabric that is knit in a tube, cutting out the labor of sewing side seams, which costs about 50 cents more per T-shirt. In spite of all these efforts to reduce costs, American factories arent able to sell their products to Walmart as cheaply as Asian manufacturers, Bhaskar says. But there are other advantages to making products here. Since the factories are closer to the customer, they can make products with shorter lead times, making it easier for Walmart to manage inventory. This means Walmart is less likely to buy too many units, which could end up marked down or unsold. It was a puzzle for us to think about how to make this product financially workable, Bhaskar says. But we realized it was a completely different cost equation from manufacturing overseas. Still, its important to remember that Walmarts commitment to these American suppliers is relatively superficial. Walmart has not invested directly in these factories, or in American Giant. It just places large purchase orders, which gives these suppliers cash upfront, which they can use to make their own investments in technology or staffing. We think about the art of the possible with the purchase order, says Kyle Carlyle, Walmarts VP of supply and sourcing innovation. As I think about the supply chain, it allows Bayard and others to think about the volume of fabric they need or different points they can automate. But experts point out that Walmart could pull out of these relationships at any time, particularly if it faces other economic pressures, including tariffs. A big order from Walmart is a bonanza for these suppliers, says Rachel Slade, author of Making It In America, a history of manufacturing and labor in the United States. But will Walmart place the same order next year? [Photo: courtesy American Giant] How Walmart Drove Factories Overseas Its ironic that Walmarts team depends on a small startup to source apparel in the United States. In the first two decades after Walmart was founded in 1962, it grew into one of the biggest buyers of American-made apparel. But, as Slade writes, when Walmart set out to dominate mass market retail in the 1980s, it focused on delivering the lowest possible prices. Walmarts scale meant that it could pressure manufacturers to sell their products fo less money, Slade says. Eventually, the manufacturers had to go overseas, where labor was cheaper, if they wanted to retain these contracts with their biggest buyer. Today, Walmart makes roughly 80% of its discretionary merchandise, which includes clothing, in China, according to the Alliance for American Manufacturing. Retailers werent the only ones driving down the price of goods. Geopolitical forces were making off-shoring easier, as well. In 1978, the Chinese government opened its economy to foreign trade and subsidized its burgeoning apparel industry to make it more globally competitive. Meanwhile, the U.S. government was eager to give Americans access to cheaper products made in low-wage countries. In 1992, the U.S. signed NAFTA, which eliminated tariffs against Mexico, and in 2001, when China joined the World Trade Organization, U.S. companies had low-tariff access to Chinese goods. It didnt take long for Americas clothing factories to hollow out. Between 1990 and last year, the number of Americans working in clothing manufacturing shrank from 900,000 to 84,000. America quickly became flooded with cheap clothes. But these low-priced T-shirts and jeans came at other costs. Many American towns built around the textile industry (such as Fall River, Massachusetts, or Gastonia, South Carolina) never recovered when major employers closed, leading to blight. Mill and garment factory jobs were never high paying, but they provided livable wages and steady employment. There are now pockets of persistent poverty, says David Robinson, director of external affairs at Manufacturing Renaissance, a Chicago-based organization that helps people find work in manufacturing. No other industry has come close to manufacturing in terms of creating opportunities for people to enter the middle class. The explosion of cheap clothing has also led to environmental catastrophe. The $2.5 trillion global apparel industry produces hundreds of billions of garments annually, which generates between 4% and 8.6% of global greenhouse gas emissions. In many Asian manufacturing hubs, there are weaker environmental regulations and worker protections than in the U.S., which means both the planet and people are regularly harmed in the process of making clothes. President Trump claims that he is trying to reverse decades of off-shoring with his tariffs. Many who support American manufacturing believe that some sort of tariff regime is good because it could even the playing field. Tariffs are a really interesting tool that the U.S. has used since its founding, Slade says, pointing out that the U.S. used tariffs to protect its textile industry throughout the 18th and 19th century. The United States can realign pricing to reflect the fact that we regulate industry because we believe in living wages, safe working conditions, and not turning rivers into flammable liquids. The problem, though, is that the Trump administration has unleashed the tariffs haphazardly, making it difficult for companies to shift their supply chains to the United States. Building new factories in America is a slow, expensive process and it is unclear how long the current tariffs will stay in place. We need to create an environment that can give companies the assurance to make long-term investments, says Sheng Lu, director of graduate studies in the department of fashion and apparel studies at the University of Delaware. But right now, I only see uncertainties. I dont even know what the tariffs will look like a month from now, and building a new factory requires a five- or 10-year market outlook. Walmart, thanks to its large size and profit margins, is capable of taking a longer view on American manufacturing. In 2013, when President Obama was in office, Walmart made its first $250 billion commitment to sourcing products domestically over the following decade. In 2021, it made a second $350 billion decade-long commitment. According to Walmarts Carlyle, one reason the company is so focused on domestic manufacturing is research showing that it is important to its customers: In 2020, Walmart conducted a survey with BCG in which 85% of its clientele said that it was important for retailers to carry products made or assembled in America. Were trying to figure out how we can make this a priority because we know this is what our customers want, Carlyle says. Walmart says domestic sourcing could support the creation of an estimated 750,000 new jobs. Many of these workers would be likely to be Walmart customers, too. According to Jessica Delton, a history professor at Skidmore and author of The Industrialists: How the National Association of Manufacturers Shaped American Capitalism, Walmart has long been in the business of hiring from among its customer base. They opened up in poor, rural areas that had been neglected by other retailers, she says. They could sell things cheaper to these people, but also offer them jobs. Walmart put money in their pockets they could then turn around and spend at Walmart. Still, Walmarts entire business is built on delivering low prices. And its executives are aware that its customers have a threshold for how much more they are willing to spend on American-made goods. Our biggest challenge was to make the cost palatable to the customer, says Bhaskar. [Photo: courtesy American Giant] The Factory of the Future After Warren Farms is done harvesting each fall, its newly picked cotton makes the four-hour drive to Parkdale Mills, one of the worlds largest yarn manufacturers and the largest buyer of U.S. cotton. The majority of Parkdales yarn is exported overseas, mostly to China, where it is woven into fabric. But a tiny fraction also goes into making American Giant productsand that figure is growing, thanks to the Walmart collaboration. Founded in 1916, when the U.S. was still a major player in textile production, the Gastonia, North Carolina-based Parkdale bought raw cotton from farms throughout the South and spun it into yarn. Spinning machines already existed back then, but the process was still labor-intensive, as hundreds of workers carried heavy bales and fed them into the equipment to produce 900,000 pounds of yarn thread annually. [Photo: courtesy American Giant] Today, this facility is equipped with cutting-edge machinery from Germany and Switzerland. As a result, it produces two million pounds of yarn every week with only 23 workers. Fluffy bolls of cotton flow through pipes on the ceiling and walls, depositing them in machines that clean the fibers, comb them out, and spin them into filaments. Other machines wind the thread into spools and package them to be shipped off to fabric mills. Today, there are few people on the factory floor; instead, humanoid robots carry boxes around on trays. One abruptly stops a few feet away from me when it senses I am nearby. [Photo: courtesy American Giant] Matt Hardegree, the plant manager, began working in a yarn-making plant in 1980, right out of college. Growing up near cotton fields in Alabama, he was used to seeing two or three mills in every town. But when he started working in mills himself, the off-shoring was already underway. The smallest, the oldest, the weakest, the most out of date, got eaten up first, Hardegree says. The strongest survived. Parkdale was the strongest. For years, the company poured its profits into buying the latest yarn-making machinery. This allowed it to beat out competitors and buy out other American mills. Today, it employs 4,500 people across 19 mills in the United States, and six in South America, generating upwards of $1 billion in annual revenues. It has managed to remain relevant globally, competing with high-tech mills in China. Hardegree has watched this play out over 45 years, during which hes learned how to operate increasingly complex equipment. He takes me across the floor, pushing buttons to pause the machines so he can hand me pieces of cotton and yarn threads to touch. [Photo: courtesy American Giant] Many Americans image of apparel manufacturing is stuck in the 60s and 70s, the last time factories were still thriving here. But the industry has evolved. Much of the process is automated, from Josh Blackmans cotton planting machines to Parkdales yarn mills. These days, most of the technology in apparel manufacturing is developed overseas rather than here in the United States. The American apparel industry is perceived to be in secular decline says Steven Kurutz, author of American Flannel, about the new generation of fashion labels building U.S. supply chains. Bright young people dont want to go into an industry like this. It is engineers in China, and other places with robust garment industries, that see the value in coming up with breakthroughs. American manufacturers are also less competitive when it comes to the low-tech, labor-intensive parts of the apparel industry, namely cutting and sewing. American Giant owns a knitwear factory in Middlesex, North Carolina, but it was too small to fulfill the large orders that Walmart has brought in. Winthrop ended up finding suppliers in the Los Angeles Garment District. Cutting and sewing is where you hit a labor log-jam, he says. Our access to high-quality labor in Los Angeles was 20 times what it is in rural North Carolina. Even in Los Angeles, though, its hard to find workers who are willing to do the repetitive labor of sewing hundreds of garments a day for low wages. Most of the people staffing these factories are immigrants from Mexico and South America who learned how to sew in factories there. According to Bureau of Labor Statistics data, there are nearly half a million open manufacturing jobs right now in the U.S., whereas workers are lining up for factory jobs in Vietnam and Mexico. The U.S. is an advanced economy with abundant capital and technology, while less advanced economies, including China, Vietnam, and Bangladesh, are abundant in cheap labor, says Sheng Lu, of the University of Delaware. Well never have the comparative advantage in the labor-intensive parts of garment-making, like cut and sew. Many aspects of cutting and sewing have been automated and improved over the decades. For instance, digital pattern making reduces wasted fabric, while laser cutters precisely slice through large volumes of cloth. But there hasnt yet been a technological leap to automatically turn fabric into garments. Ken Pucker, professor of the practice at Dartmouths Tuck School of Business, says there are clear reasons for this. For one thing, given how depressed wages are in many apparel-producing countries, factories havent been motivated to pour money into replacing these workers with machines. The styles change so frequently that its hard to figure out a model that allows for robotics, says Pucker. But that doesnt mean it cant happen in the future. If America is serious about bringing apparel factories back, it will have to invest in automation. Though the Trump administration is levying tariffs in the name of American manufacturing, it hasnt yet offered any wide-scale support like tax credits or grants to spur innovation in apparel production. And establishing a new industry is expensive: When President Biden set out to develop Americas clean energy industry, he invested $1 trillion in manufacturing and infrastructure. The only way forward for the American apparel sector is for companies to make these investments. So far, few have stepped forward to do so. Walmart, for instance, does not invest in partner factories; it simply places large orders, like it has done with American Giant. [Photo: Ashley Batz/Unspun] Still, there are signs that Walmart is at least exploring new technologies that could one day replace cutting and sewing. In 2024, Walmart began placing orders with a tech startup called Unspun, which has developed technology that can weave yarn into clothes. We go from yarn directly to the garment stage, skipping the cut and sew stage entirely, says Beth Esponnette, Unspuns founder and CEO. [Photo: Unspun] The approach reduces the need for labor, but it is also better for the environment: There is no fabric discarded in this process, garments can be made on demand, and they can be made close to the customer, reducing transport emissions. Unspuns goal is to set up 3D weaving machines at microfactories around the country, with the goal of having 350 machines operational by 2030. I think its possible to automate many parts of the cut and sew process in the next few decades, but it will take big players like Walmart to achieve scale, Esponnette says. Unspuns technology is still in its infancy, but Walmart is working on a pilot project to explore how Unspuns technology could be deployed in its supply chain. The first application of this partnership is to create mens chinos that will be sold at Walmart stores. Were exploring technology that could help us leapfrog where we are today, Carlyle says. Back in American Giants factory in Middlesex, North Carolina, this kind of futuristic factory looks very far away. Winthrop stares out at the floor, where 85 workers are at their stations, manually sewing seams and tracing patterns onto fabric. Their needles bob and weave through fabric as they piece together the heavy-weight hoodies that made American Giant famous. But Winthrop has always had a gift for imagining a different reality; its what gave him the courage to start his company to begin with. A decade from now, he believes his factory will be smarter, faster, and more high-tech, churning out millions of high-quality clothes that Americans are proud to wear. We cant get there alone, Winthrop says. To level up, we need others to buy into our vision.
Category:
E-Commerce
When Mike Krieger helped launch Instagram in 2010 as a cofounder, building something as simple as a photo filter took his team weeks of engineering time and tough trade-offs. Now, as chief product officer at Anthropic, hes watching early-stage startup founders accomplish far more in far less timesometimes over a single weekend. Thanks to intuitive agentic AI models (or AI agents), founders are experimenting with product, code, and business strategies, often without needing to hire specialized team members. When I think back to Instagram’s early days, our famously small team had to make painful decisionseither explore adding video or focus on our core creativity, Krieger tells Fast Company. With AI agents, startups can now run experiments in parallel and build products faster than ever before. To him, it signals a seismic shift: the rise of agentic entrepreneurship. Enterprises can supercharge engineering teams while individuals with bold ideas but no technical background can finally bring their visions to life. At Anthropic, 90% of Claude’s code is now written by AI, and this has completely transformed how we build products. Recently, Claude helped me prototype something in 25 minutes that would have taken me six hours, Krieger says. I see founders who tried every model, couldn’t get their startup to work, then with Claude, their startup suddenly works. Krieger believes agentic AI is fundamentally redefining what it means to be a founder. You no longer need to write code or raise significant capital to start building. The bottlenecks, he says, have shifted to decision-making and operational frictionlike managing merge queues. And the numbers support this momentum. In its first week of launch, Claude 4 reportedly tripled Anthropics subscriber base and now accounts for more than 60% of the companys API traffic. Usage of Claude Code, its specialized AI coding agent, has spiked nearly 40%, drawing interest from both developers and nontechnical builders. Krieger shared that some users have even begun treating AI agents less like tools and more like capable creative collaborators. AI models can now function like an entry-level worker, and that is going to have a big impact on the workforce. We think we need to talk about this so we can prepare our economy and our society for this change, which is happening very fast, he says. Its too late to stop the trainbut we can steer it in the right direction. A few weeks ago, Anthropic CEO Dario Amodei predicted that the first one-employee billion-dollar company could emerge as soon as 2026, enabled by AI. He also suggested AI could eliminate half of all entry-level jobs within the next five yearsa claim that drew immediate pushback from some in the tech industry. Among the skeptics was Google CEO Sundar Pichai, who cautioned against overestimating the reliability of AI systems like Gemini. Even the best models still make basic mistakes, Pichai said during the recent Bloomberg Tech Summit in San Francisco. Are we currently on an absolute path to AGI? I dont think anyone can say for sure. On the prospect of AI displacing the workforce in the near future, Pichai remained measured. Weve made predictions like that for the last 20 years about technology and automation, he said. And it hasnt quite played out that way. Yet even amid skepticism, a quieter revolution is unfolding beneath the surface of agentic AIone thats reshaping how work itself is defined in the era of intelligent software collaborators. MCP: The Infrastructure That Makes AI Work The unsung hero behind Anthropic and Claudes leap in capability isnt just the model itselfits the Model Context Protocol (MCP). While Claude 4 is praised for its intelligence and natural language fluency, MCP is the system-level breakthrough that enables it to move from passive assistant to active collaborator. This open standard allows Claudes AI agents to securely interface with tools like GitHub, Stripe, Webflow, Notion, and even custom internal systems. As a result, Claude isnt limited to answering prompts. It can pull real-time analytics, trigger actions, update databases, launch web assets, and manage entire project pipelines. Just as http enabled browsers to interact with websites, MCP is creating a universal interface layer for AI agents to operate across digital tools. Previously, AI agents were largely isolatedthey could process information you gave them, but they couldn’t directly interact with your actual tools and systems, Krieger says. By solving the connection problem together, were building infrastructure that will unlock entirely new possibilities for human-AI collaboration, making AI systems dramatically more useful and relevant in real-world contexts. Major tech companies are already integrating MCP. Microsoft has built it into Windows 11, Azure, and GitHub, allowing AI agents to run workflows across OS and cloud infrastructure. Google has added it to Gemini SDKs to bridge model interactions with live apps. Companies like Novo Nordisk, GitLab, Lyft, and Intercom are also deploying Claude agents into live workflows. In this light, Amodeis one-person unicorn prediction seems less like hype and more like a reflection of a deeper platform shift. As developers build new connections between knowledge bases, development environments, and AI assistants, were seeing the early emergence of the more connected AI ecosystem we envisioned, Krieger says. As AI assistants become more agentic, MCP will evolve to support increasingly sophisticated workflows. [MCP] might be the most important thing Anthropic has ever shipped. Agentic AI Is Redefining the Modern Startup Tech Stack Krieger sees the combination of Claude 4 and MCP as a genuine platform shiftone where the AI acts like a partner rather than just a productivity tool. He describes Claude Opus 4 as Anthropics most powerful agentic model yet and the worlds best coding model. [Opus 4] can work autonomously for nearly seven hours, which transforms how teams approach work. When I can prototype something in minutes, that fundamentally changes what’s possible for a single person, Krieger says. In my experience, it mirrors how people manage their work. That level of autonomous task execution just wasnt possible before. With MCP in play, Claude becomes more than an assistant. It can push code, analyze logs, manage dcumentation, and send updateswithout the constant context switching that slows teams down. In some cases, Krieger says, it simulates workflows that once required coordination across multiple departments. When you can iterate at speed, every manual process, every unnecessary meeting becomes this jarring interruption, he noted. Still, not everyone is convinced that AI-powered unicorns are imminent. Analysts caution that while AI agents can automate many workflows, they cant yet match the experience seasoned professionals bring. The state of LLM-based AI agents is that you must give them simple decisions to make to reliable answers. We are not close to being able to throw a bunch of data at an AI agent and trust its decision, Tom Coshow, a senior director analyst at Gartner, tells Fast Company. Is there an automatic VP of sales ready to go? Not even close. Coshow emphasizes the need for realistic expectations. Its important to get real about what you can and cant build, he says. No-code design is incredibly powerful, but it also creates this illusion that anything you type into the box will just magically work. It doesnt. Building robust AI agents for real-world business use, he explains, is far from trivial, noting, Complex agents are hard to get right. LLMs are inherently probabilistic, and most business processes simply cant rely on that kind of unpredictability. A Brave New Startup Era? Anthropics core bet reflects its broader philosophy: Were moving toward a world where major chunks of work are automated. Its better to be aware of the risk and adjust to the change than to take the chance and be caught unprepared, Krieger says. Were seeing this shift begin with tech companies, but its going to move quickly into other knowledge-intensive industries. So, is the one-person unicorn just hypeor a sign of things to come? It may still be too early to know. For experts like Coshow, the future lies not in abrupt disruption, but in careful evolution. The path forward is well-designed agentic workflows with a human in the loop, he says. Whether or not a billion-dollar solo startup emerges by 2026, the tools to build one are already here. And that, as Krieger sees it, changes everything. Its going to be about finding people who can work at the intersection of customer problems and AI capabilities, he says. The most valuable early hire might not be a traditional engineerit could be someone who translates needs into iterative, AI-powered solutions. The one-person unicorn will be relentlessly curious, and fluent in working with intelligent collaborators.
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