⚡️ 10x AI Engineers with $1m Salaries — Alex Lieberman & Arman Hezarkhani, Tenex
Alex Lieberman and Arman Hezarkani, co-founders of Tenex, reveal how they’re revolutionizing software consulting by compensating AI engineers for output rather than hours—enabling some engineers to earn over $1 million annually while delivering 10x productivity gains. Their company represents a fundamental rethinking of knowledge work compensation in the age of AI agents, where traditional hourly billing models perversely incentivize slower work even as AI tools enable unprecedented speed.
The Genesis: From 90% Downsizing to 10x Output The story behind 10X begins with Arman’s previous company, Parthian, where he was forced to downsize his engineering team by 90%. Rather than collapse, Arman re-architected the entire product and engineering process to be AI-first—and discovered that production-ready software output increased 10x despite the massive headcount reduction. This counterintuitive result exposed a fundamental misalignment: engineers compensated by the hour are disincentivized from leveraging AI to work faster, even when the technology enables dramatic productivity gains. Alex, who had invested in Parthian, initially didn’t believe the numbers until Arman walked him through why LLMs have made such a profound impact specifically on engineering as knowledge work.
The Economic Model: Story Points Over Hours 10X’s core innovation is compensating engineers based on story points—units of completed, quality output—rather than hours worked. This creates direct economic incentives for engineers to adopt every new AI tool, optimize their workflows, and maximize throughput. The company expects multiple engineers to earn over $1 million in cash compensation next year purely from story point earnings. To prevent gaming the system, they hire for two profiles: engineers who are “long-term selfish” (understanding that inflating story points will destroy client relationships) and those who genuinely love writing code and working with smart people. They also employ technical strategists incentivized on client retention (NRR) who serve as the final quality gate before any engineering plan reaches a client.
Impressive Builds: From Retail AI to App Store Hits The results speak for themselves. In one project, 10X built a computer vision system for retail cameras that provides heat maps, queue detection, shelf stocking analysis, and theft detection—creating early prototypes in just two weeks for work that previously took quarters. They built Snapback Sports’ mobile trivia app in one month, which hit 20th globally on the App Store. In a sales context, an engineer spent four hours building a working prototype of a fitness influencer’s AI health coach app after the prospect initially said no—immediately moving 10X to the top of their vendor list. These examples demonstrate how AI-enabled speed fundamentally changes sales motions and product development timelines.
The Interview Process: Unreasonably Difficult Take-Homes Despite concerns that AI would make take-home assessments obsolete, 10X still uses them—but makes them “unreasonably difficult.” About 50% of candidates don’t even respond, but those who complete the challenge demonstrate the caliber needed. The interview process is remarkably short: two calls before the take-home, review, then one or two final meetings—completable in as little as a week. A signature question: “If you had infinite resources to build an AI that could replace either of us on this call, what would be the first major bottleneck?” The sophisticated answer isn’t just “model intelligence” or “context length”—it’s controlling entropy, the accumulating error rate that derails autonomous agents over time.
The Limiting Factor: Human Capital, Not Technology Despite being an AI-first company, 10X’s primary constraint is human capital—finding and hiring enough exceptional engineers fast enough, then matching them with the right processes to maintain delivery quality as they scale. The company has ambitions beyond consulting to build their own technology, but for the foreseeable future, recruiting remains the bottleneck. This reveals an important insight about the AI era: even as technology enables unprecedented leverage, the constraint shifts to finding people who can harness that leverage effectively.
Full Video Episode
Timestamps
00:00:00 Introduction and Meeting the 10X Co-founders00:01:29 The 10X Moment: From Hourly Billing to Output-Based Compensation00:04:44 The Economic Model Behind 10X00:05:42 Story Points and Measuring Engineering Output00:08:41 Impressive Client Projects and Rapid Prototyping00:12:22 The 10X Tech Stack: TypeScript and High Structure00:13:21 AI Coding Tools: The Daily Evolution00:15:05 Human Capital as the Limiting Factor00:16:02 The Unreasonably Difficult Interview Process00:17:14 Entropy and Context Engineering: The Future of AI Agents00:23:28 The MCP Debate and AI Industry Sociology00:26:01 Consulting, Digital Transformation, and Conference Insights
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The Step-by-Step Playbook We Used to Build a $100M+ Newsletter Business
[free]
Episode 693: Sam Parr ( https://x.com/theSamParr ) talks to Alex Lieberman ( https://x.com/businessbarista ) and Austin Rief ( https://x.com/austin_rief ) about how to build a profitable newsletter.
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Show Notes:
(0:00) Intro
(3:12) 0 to 100K subscribers
(9:18) Nontraditional hires
(15:26) 100K to 1M subscribers
(35:00) Entrepreneurs Operating System
(43:27) 8-figure Exits
(55:28) How to start a newsletter in 2025
(1:02:57) Newsletter ideas
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Links:
• The Hustle - https://thehustle.co/
• Morning Brew - https://www.morningbrew.com/
• Traction - https://tinyurl.com/5dfh3nx9
• Arena Magazine - https://arenamag.com/
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Check Out Shaan's Stuff:
• Shaan's weekly email - https://www.shaanpuri.com
• Visit https://www.somewhere.com/mfm to hire worldwide talent like Shaan and get $500 off for being an MFM listener. Hire developers, assistants, marketing pros, sales teams and more for 80% less than US equivalents.
• Mercury - Need a bank for your company? Go check out Mercury (mercury.com). Shaan uses it for all of his companies!
Mercury is a financial technology company, not an FDIC-insured bank. Banking services provided by Choice Financial Group, Column, N.A., and Evolve Bank & Trust, Members FDIC
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Check Out Sam's Stuff:
• Hampton - https://www.joinhampton.com/
• Ideation Bootcamp - https://www.ideationbootcamp.co/
• Copy That - https://copythat.com
• Hampton Wealth Survey - https://joinhampton.com/wealth
• Sam’s List - http://samslist.co/
My First Million is a HubSpot Original Podcast // Brought to you by HubSpot Media // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano
The New York Times: The Empire Strikes Back - [Business Breakdowns, EP. 48]
This is Jesse Pujji and today we’re breaking down The New York Times. Since its founding in 1851, The New York Times has become known as the national “newspaper of record” through its focus on truth seeking and quality journalism. To underline that status, it has won 132 Pulitzer Prizes, almost double its nearest competitor. However, the business behind the Times hasn’t always been easy and it has faced several existential threats over its history, most recent of which has come from the internet and digital mediums.
To break down The New York Times, I’m joined by Morning Brew co-founder and host of Founder’s Journal and Imposters podcasts, Alex Lieberman. It’s particularly interesting to hear a new media operator dissect the heritage and evolution of one of the most storied brands in his industry. Please enjoy this breakdown of The New York Times.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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Show Notes
[00:02:55] - [First question] - What The New York Times is as a business
[00:04:35] - Snapshot of the scale of The New York Times and it’s readership
[00:08:06] - The origin story of The New York Times and becoming a national news source
[00:11:40] - How the business is distinctive being family-run for five generations
[00:15:00] - Unpacking the shift from physical to digital and how it impacted their numbers
[00:20:00] - Course correcting after the first few years of their digital strategy not succeeding as anticipated
[00:23:43] - The cost of sales and the margins of the business and growth levers
[00:27:47] - Revenue differences between advertising and subscriptions
[00:29:37] - What does their non-digital advertising business look like
[00:31:43] - The biggest levers for growing the topline and bottomline of the business
[00:35:18] - Acquiring Wirecutter & historical M&A performance
[00:37:57] - Other categories and businesses that help build a bigger audience
[00:42:00] - Differences between the Netflix and New York Times subscription models
[00:44:37] - Leaning into world events and politics
[00:48:22] - Macro factors and specific things that would lead to reaching their subscriber goal in the future
[00:51:10] - Mistakes and threats that could negatively impact their goals
[00:55:43] - Biggest lessons for builders, entrepreneurs, executives and investors
[00:58:30] - Learn more about the New York Times; Peter Kafka, Rich Greenfield, Lightshed Partners
Nextdoor SPAC breakdown, Pelosi trading options + Morning Brew’s Alex Lieberman | E1242
First, Jason breaks down the highlights from Nextdoor's SPAC announcement (1:48) and covers the profits made by politicians trading tech company options (16:26). Then, Alex Lieberman, Co-Founder & Executive Chairman of Morning Brew, joins to talk about growing a newsletter business (45:34), expanding as a media company (49:51), angel investing (57:19) & more!
Rapid Response: The trampoline effect, w/ Morning Brew CEO Alex Lieberman
Revenue for Morning Brew's booming email newsletter operation dried up when the pandemic hit, but its audience remained devoted. Morning Brew CEO Alex Lieberman, who started the business with co-founder Austin Rief as undergraduates at the University of Michigan, leaned into the brand's distinctive personality, fueling a sharp rebound. By last fall, they sold a majority interest to Business Insider for a reported $75 million. Lieberman explains the roots of this "trampoline effect," the potential of the creator economy for entrepreneurs, and why an authentic voice is a shortcut to business success.
Read a transcript of this episode at https://mastersofscale.com
Subscribe to the Masters of Scale weekly newsletter at https://mastersofscale.com/subscribe
See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
How I Built Resilience: Alex Lieberman and Austin Rief of Morning Brew
Six years ago, Morning Brew started out as a fun business newsletter Alex Lieberman and Austin Rief wrote for their classmates out of their University of Michigan dorm room. The company now has over 2.5 million subscribers with multiple newsletters and a podcast, and last year Business Insider paid about 75 million dollars for a majority stake in Morning Brew. Alex and Austin talk to Guy about the organic unpaid marketing they relied on in college to build up their readership, and they predict shifts in how we will consume news in the next five years. These conversations are excerpts from our How I Built Resilience series, where Guy talks online with founders and entrepreneurs about how they're navigating turbulent times.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.