On Pandemics, AI Agents, and Solopreneurs
- Ariel Steinlauf
- Jul 1
- 6 min read
Sometimes the next blog post just writes itself for you – by you, 6 years ago – and updated by reality.
In May 2020, I published a piece arguing that the pandemic was about to generate millions of solopreneurs — individuals pushed out of traditional employment by unemployment rates nearing 15% and 30 million jobless claims who would convert latent skills into micro-businesses and never fully return to corporate life. At the time, I was writing it with regional bank executives in mind, arguing that this emerging class of customers – if they were willing to see them as a growth segment rather than a charity case – represented a generational commercial opportunity.
Fast forward six years, and on June 9, 2026, the Nasdaq Economic Institute published a data brief confirming not only the first wave of solopreneurs I predicted, but also that a second, larger wave is already underway. Since early 2025, solo business applications have risen more than 20%, while applications from businesses likely to hire employees have remained flat. In March 2026 alone, 76,657 new Professional Services business applications were filed; Finance and Insurance added another 19,309. April's total surpassed half a million.
The Institute’s brief circulated as a labor market story: ‘AI democratizing entrepreneurship, enabling the one-person company at scale, lowering the cost of starting a business to a $200-a-month AI subscription’. That reading, while accurate, is the wrong frame entirely for private equity.
In fact, this is not a labor market story at all - it is a revenue growth story hiding beneath the surface of a workforce trend most GPs are reading as noise (if they’re listening to it at all).
Act I: The Pandemic Wave
The first wave of solopreneurs was driven by necessity. The Census Bureau's data confirmed it in real time: EIN applications peaked at 1.465 million in Q3 2020, up more than 65% over early 2019 levels. Annual business applications surged from a pre-pandemic average of roughly 2.5 to 3 million to 4.3 million in 2020 and nearly 5.4 million in 2021. The sectors leading the surge — retail, food service, transportation — told the story plainly. Displaced workers. Survival income.
Some had the foresight to interpret the signal and act. Lili launched a neobank explicitly for freelancers and raised $55 million on the thesis. Joust built a banking platform for solopreneurs from scratch. Huntington Bancshares launched a small-dollar SBA lending program in October 2020 — eventually generating $133 million in loans to nearly 1,900 businesses — then folded it into a $40 billion community plan and accepted an industry award for the effort. Months later, they announced a $22 billion acquisition of TCF Financial. My take? They bought scale they could have grown organically.
I watched the same pattern from the inside. At the time, I was embedded with TD Ameritrade's venture studio, leading work that exposed gig workers as a distinct customer cohort. You see, gig workers face an acute and largely unaddressed need for financial products that could absorb the volatility inherent in self-employment income – the kind of structural need that well-designed insurance and banking products could serve. A dedicated team was formed to develop that opportunity further.
The timing, however, was unfortunate. While the team was chasing the right segment with the right ideas for new financial products, they came together after Charles Schwab had already announced its acquisition of TD Ameritrade. That meant it was working on borrowed time against priorities that were already in flux due to the business combination. The team was ultimately absorbed into a broader banking initiative, and thus, we will never know what it might have built.
A similar sequence became the defining pattern of the first wave's commercial response. By 2025, Lili had pivoted away from solopreneurs toward higher-revenue, multi-employee businesses. Joust had lost its independent identity. The first committed movers retreated precisely as the second, larger wave arrived.
Act II: The Agentic AI Wave
In stark contrast to the first wave, the second one runs on a different engine. It‘s not driven by unemployment or survival but by capability.
Agentic AI tools (i.e., software capable of executing multi-step tasks autonomously) have lowered the cost of running a business so dramatically that a single operator now produces what previously required a small team. The complete solopreneur technology stack in 2026 costs between $3,000 and $12,000 annually, versus several hundred thousand dollars in equivalent traditional headcount. A 95% reduction in operating costs. What was previously marginal is now obviously viable.
The workforce data reflects what the Census Bureau's formation numbers predict. MBO Partners' 15-year longitudinal research shows the independent workforce growing from 38.2 million in 2020 to 72.9 million today with the $100,000-plus earner cohort growing 87%, from approximately 3 million to 5.6 million. McKinsey, using a different methodology, pegs independent workers at roughly 36% of the US workforce. Last August, Gusto – a private multi-billion dollar payroll and HR company – shared an analysis of solopreneurs on its platform revealing something astonishing: average year-one revenue of $294,000, growing to $500,000 or more by year five — with 77% reporting profitability in year one.
The new solopreneur did not leave their previous employer because they had to. They left because the math stopped working.
The Plot Twist: This Time It's... Professional?
One more data point, closer to home: V1A Growth runs on the same model I’m describing. Agentic AI handles prospecting, research, content operations (read: research and factchecking for my articles), and pipeline intelligence. There is, of course, a human in the loop, handling every decision that requires judgement and ensuring the quality of the output. That gives one person company-scale output (or operational leverage, if you prefer). The solopreneur argument doesn't require a leap of faith from here, just a look in the mirror.
The first wave's solopreneur worked in retail, food service, and transportation – sectors where the barrier to entry was physical effort and existing skills. The second wave's solopreneur works in technology, finance, and professional services – sectors where the barrier was always the cost of execution, which AI has largely removed.
That sector shift is the plot twist. And it is the single detail in the Nasdaq brief that matters most to anyone running a PE portfolio.
Gusto read the same data and acted on it. In August 2025, they launched Gusto Solo: a dedicated platform for solopreneurs navigating S-corp compliance, automated payroll, and self-employment tax planning. Gusto didn't build this out of charitable impulse. They built it because 80% of all US small businesses now have no employees, because those businesses earn nearly $300,000 in year one, and because the company that owns those customers early retains them through the full arc of their growth into conventional small businesses.
No middle-market PE-backed financial services company has made a comparable move. Yet, all of them should give this distinct customer segment a serious look.
Final Act: What It Means for Your Portfolio Company
The 2025 solopreneur needs insurance, payroll, compliance, legal structure, working capital, and retirement planning. They are earning $294,000 in year one, running a profitable business, and buying essentially none of those products from your portfolio companies.
The reason is not demand. It is packaging.
The product brief inside virtually every PE-backed financial services portco is calibrated for a customer with a CFO, a benefits administrator, and a minimum revenue threshold that quietly excludes that 36% of the US workforce. The same E&O coverage a mid-market company pays $5,000 a year for can be underwritten for a solopreneur consultant at a fraction of that cost. The same compliance infrastructure serving a 50-person business can automate quarterly estimated taxes for a one-person S-corp. The product exists. The form factor and the price point do not.
The professional services analog is one step behind but moving fast. Legal templates, contract structures, IP protections, 1099 management — products a $294,000-a-year solopreneur needs and would pay a monthly subscription to access. That subscription tier does not exist in most portcos' catalogs today. It could be added without a ground-up build.
Ask your portco's commercial team one question: what is the smallest customer we currently serve — and what would it take to serve the person just below that threshold?
The first wave's institutions – regional banks, neobanks, and at least one venture team inside a major brokerage that never got the chance to find out – largely failed to answer that question before circumstances answered it for them. The second wave is not coming. It arrived in early 2025. The question is whether your portfolio companies are selling into it or reading the Nasdaq brief as someone else's story.
