The Pyramid Is Dead. Meet the Pod.
Over the past eighteen months, during technology due diligence projects, my team and I have encountered something that has changed how we think about professional services, about M&A targets, and about our own business. We have been inside what I have started calling firms of the future: small, AI-augmented teams of five to fifteen people, delivering the output of traditional firms ten times their size. Not occasionally. Consistently.
Quick explainer
$1bn revenue with 300 employees — what AI-native economics actually look like.
The numbers behind this are not theoretical. Cursor — the AI coding tool — reached $1bn in ARR in under 24 months, with roughly 300 employees. That is about $3.3m of revenue per head. Midjourney generates over $12.5m per employee. The top ten AI-native companies average $3.48m per employee, against a traditional SaaS average of $200k. These are not outliers. They are the direction of travel.
The hidden cost of hierarchy
In a traditional advisory pyramid, each layer filters, hedges, or reframes the original insight before it reaches the client. The analyst sees the data. The manager softens the language. The director removes the contentious point. The partner adds the safe summary. Organisational gravity does its work. The client receives a deliverable that has been made safe — which often means it has been made generic.
You are paying for senior thinking. You are receiving a committee version of it.
The Pod: not a smaller pyramid, a different shape
What we observed in the field — and have implemented in our own practice — is not a smaller pyramid. It is a different operating system entirely.
At its centre is the Delivery Lead: the experienced operator who structures the engagement, designs the AI-enabled workflow, interprets outputs, and translates findings into actionable recommendations. HBR describes this role as the new centre of gravity in the evolved advisory model — the operator who orchestrates AI tools rather than supervising junior teams. The intellectual standard does not change. The mechanism of execution does.
Around the Delivery Lead sits the AI Facilitator, who builds, tunes, and maintains the toolchain that delivers leverage. Specialists are pulled in for the parts that require deep human judgement — regulatory, commercial, behavioural. The Pod is small, opinionated, and accountable in a way the pyramid is structurally incapable of being.
How to tell if your advisor is Pyramid or Pod
If you are a Corp Dev or PE buyer, the operating model of your advisory firm matters more than most buyers realise. Six questions to ask yourself before your next engagement:
- When you ask a sharp question, do you get a sharp answer — or a deck circulated for review?
- Who is actually doing the work? Name them. Have you met them?
- Is the deliverable specific — names, numbers, anecdotes — or generic frameworks, benchmarks, and hedges?
- How quickly can the firm change direction inside an engagement?
- Does your advisor ever disagree with you directly, or do they reflect your position back to you?
- Is the pricing model time-and-materials, or outcome-based?
If most answers point to the pyramid, the thinking you are paying for is not the thinking you are receiving.
What this means for the next 12 months
The advisor question is the easiest of the three to act on, because the cost of switching is low and the upside is immediate. The harder questions — whether the firms you are evaluating are AI-native or AI-washed, and whether your own Corp Dev team is built for this world — come next.
This is the first of a three-part series. Part 2 — AI-Native or AI-Washed? What You're Actually Buying →
The full paper, The Team and Operating Model in the Light of AI, is available as a free download on our Resources page.