If there’s one silver lining around the sorry state of business, technology, and the economy in 2025, it’s that smart and talented entrepreneurs are no longer relying on some of the traditional means of starting and building a business, which can be constricting.
One of those sidestep moves that I’m starting to see is the normalization of new businesses that assemble part-time collectives of fractional top talent.
In other words, here’s how startup formation usually works:
- I have a great business idea, but the demands of bringing that idea into reality require talent I don’t have.
- If the idea is strong and the potential is abundant, I need top talent right now.
- But all those top talented folks have top jobs with top salaries that I can’t even come close to matching.
- So, I wait for some unknown catalyst to allow me to hire that top talent before I move forward with the idea, and the value of the idea depreciates over time. Or…
- I spend a lot of money I may or may not have, paying top talent to do the things they’re most talented at, but also a lot of other low-quality things to justify the salary I’m paying them. Or…
- I hire average or new talent instead, paying them less for lackluster or even nonexistent results.
That’s a six-point recipe for failure!
How about instead, I just put together a collective of fractional top talent in a retainer-style agreement? We’re getting the band back together! Are you in?
That premise is much more fun than the traditional way of starting a company. And it often produces better results more quickly. So, more entrepreneurs are leaning into this method these days, especially older and more experienced founders.
Here’s why.
What Is a Startup Collective?
A startup collective is a part-time collection of talented professionals who want to take advantage of the widespread uncertainty wreaking havoc on the tech economy to build something in their downtime. Rather than bringing on a full suite of full-time employees, smart founders can get the skills of top talent without having to pay full-time salaries.
Nothing Is Certain Right Now
This isn’t a new concept. It’s not much different than the garage or dorm room full of young people building on an idea for equity that’s not worth the paper it’s never printed on.
But these are strange days.
When business is booming and technology is evolving and the economy is firing on all cylinders, the result is a general increase in the appetite for taking big risks in the hopes of achieving even bigger rewards. You get more startups in the good times.
The bad times — when business is fearful and technology is monolith and the economy is anyone’s guess, which is where we find ourselves today — that produces the opposite result. No one has the confidence to believe in anything that’s happening, let alone believing in anything new.
Eventually, we end up in a kind of malaise, which produces some chilling effects:
- No matter how talented you are, employers will cut you.
- No matter how much potential you have, there’s no money to fund you.
- No matter how much value you offer, customers will reject you.
These are all symptoms of uncertainty, and in 2025, most of that uncertainty is fueled by AI.
AI hype is making job security fragile, regardless of its ability to perform the job it’s replacing. Yet, the lion’s share of investment capital from venture, private equity and even corporate is being swallowed by the AI promise. None of that AI promise is hitting the customer the right way, however. Certainly it’s not yet, so those wallets are glued shut too.
And the tariffs, even just the threat of them, just exacerbated all of the above, resulting in sheer chaos.
But chaos is where the true entrepreneur thrives. When you throw away the rules, unwind expectations and rock all the boats at once, smart people with drive and alacrity can pick apart fearful, off-balance incumbents.
You just need to get those smart people together. Ironically, chaos makes this easier.
Top Talent Is Bored
I’ll take some heat for saying the quiet part out loud here, but the smartest and most talented people, if they actually have a job at this point, are bored out of their smart and talented minds.
Because no one, certainly not anyone with skills and experience, wants their job to become “AI wrangler and cleaner-upper.” So, when this type of work becomes the strategy mandated from the highest levels of many organizations, coupled with layoff announcements that lean firmly into machines dictating the future of work, the message to top talent becomes clear.
Nod your head. Look busy. Figure something out. Don’t lose your paycheck.
The talented folks won’t leave the safety of the sinking ship, not yet, because “any port in a storm,” you know?
But they’ve got a few extra hours of free time here and there. Maybe more than a few.
Slow Money Requires a Slow Roll
Even if your idea is a tech idea, or even an AI idea, if it’s actually a potentially explosive idea — a solution to a problem instead of a solution in search of a problem — it’s going to be difficult to stand out in a sea of AI hypers, coasters and charlatans chasing the same dollars right now.
You need to lay low for a while. Stay in the shadows.
Because now that we’re deep in the AI investment cycle, we’ve run out of greater fools. The winners are in, the money is spent and … humanity is slightly better off for it?
That’s probably the rosiest assessment of AI one could make at this point. But most customers downstream of the AI investment cycle, both business and consumer, aren’t even that rosy. For the vast majority of those folks, all AI has done is added friction and produced “neat” results that can’t be counted on. That’s the conventional wisdom anyway.
Well, what if I told you that this whole crazy AI hype cycle was spawned in the shadowy corners of an equally insane mobile technology hype cycle over a decade ago?
Remember the Yo app? Eventually skewered by Mike Judge’s Silicon Valley as the “Bro” app?
We’ve been here before.
Back in 2014, when people were sending Yo to each other, at Automated Insights we were figuring out how to produce 13 million automated matchup recaps for Yahoo Fantasy Football without breaking AWS. And most importantly, we were figuring out why this was something we should be doing.
You need top talent to figure out that last part, but you don’t need them for 40 hours a week.
So yeah, wait it out. If you’re working on what’s truly the next big thing, it’s time to play the long game. There’s no need to spend hundreds of thousands of dollars on salary when you should probably just lay low and get by on the spare cycles of top talent for a while.
Fractional Is the Smart Way To Build a Business
The next wave of unicorn startups is going to come from four or five people who aren’t in a garage or dorm room, haven’t incorporated in Delaware and aren’t even thinking about a pitch deck or go-to-market strategy.
Yet.
They’re thinking about what the next big, humanity-bettering solution might be and, most importantly, why. And they’re doing it a couple hours a week, in their “spare” time. And, as chaos reigns, they increasingly find themselves with more and more spare time.
If you’re interested in building a smart, sustainable business you can be proud of and not just riding the AI hype wave, this is the way to go. The sneaky secret is that it has always been the way to go. We just didn’t tell anyone what we were doing until it was already done.
