A new working paper from Harvard Business School and INSEAD finds that AI-native startups are building smaller, more technical teams with significantly fewer entry-level roles. These firms prioritize senior talent, which the study notes skews male, in a shift that could reshape early-career pathways.
The paper defines AI-native startups as companies leveraging AI both internally—to boost employee productivity in coding, sales, or design—and externally, embedding AI into their products for customers. This dual use of AI creates leaner organizational structures compared to non-AI peers.
Researchers analyzed Y Combinator startups from 2020 to 2024 and a broader set of US venture-backed firms whose first financing closed during the same period. The study found that AI-native companies maintain flatter management hierarchies and employ fewer workers overall, concentrating technical talent at senior levels.
The trend raises questions about career access for junior talent. If AI-native startups become the dominant model, the traditional pipeline of entry-level roles into tech could narrow, potentially concentrating opportunity among experienced workers.
Critics may argue that the study's focus on early-stage VC-backed startups might not represent broader labor market trends. AI-native firms could also create new roles not captured in the current data.