AI Startups: A New Era of Hypergrowth

The generative AI era has redefined startup growth. Data reveals median enterprise AI companies achieving over $2M ARR in their first year, with consumer AI companies surpassing $4.2M. This surpasses previous benchmarks and reflects strong user demand. However, this rapid growth also widens the gap between 'good' and 'exceptional' companies, emphasizing the continued importance of metrics like user retention and engagement. Surprisingly, consumer AI companies, often fueled by model updates causing revenue spikes, are outpacing B2B counterparts in revenue. The conclusion? It's a prime time to build application-layer software companies.