From Digital Natives to AI-Natives: The Rise of the Frontier Firm

In the early 2000s, we saw the rise of “Digital Native” companies - organizations born in the Internet era, free from legacy systems and paper-based processes. Fast forward to 2025, and a new generation is emerging: AI-native companies, or what Microsoft calls "Frontier Firms". In this blog post, we’ll explore what defines a Frontier Firm, why startups are leading the charge, and what traditional organizations can do to stay competitive.

Digital Natives: Born in the Information Age

The term “Digital Native” was coined by  Marc Prensky to describe individuals born from 1980 onwards - those who grew up with technology as a natural part of their lives. Over time, the term expanded to also include companies like Netflix, Spotify, and Airbnb - organizations that weren’t held back by analog thinking or outdated infrastructure. These companies redefined industries by embracing digital-first strategies. But today, digital fluency alone isn’t enough.

The birth of the ”Frontier Firm”

According to Microsoft’s 2025 Work Trend Index Report, Frontier Firms are organizations built around AI - not just using it. These firms operate with hybrid human-AI teams, where AI agents act as digital colleagues, not just assistants. They scale faster, adapt quicker, and deliver value at unprecedented speed.

• 82% of leaders say this is a pivotal year to rethink strategy and operations.
• 81% expect AI agents to be deeply integrated into workflows within the next 12–18 months.

Why startups have the edge

Startups are uniquely positioned to lead the AI transformation. Without legacy systems or entrenched processes, they can embed AI into their workflows from day one. As Jeff Becker, General Partner at the early-stage venture capital firm Antler, puts it, AI-native founders are “technically fluent in artificial intelligence and socially adept at navigating its impact.” They’re born with the internet in their pockets - and now, AI in their workflows.

We’re already seeing this in action with companies like Engine, which uses AI to streamline business travel, and Wealth.com, which is reimagining estate planning through intelligent automation. Closer to Storyals, Swedish company Lovable is embracing AI-native principles in both its operations and culture. With over 2.3 million active users and a valuation of $1.8 billion just eight months after launch, Lovable is redefining software creation as a joyful, collaborative experience powered by autonomous AI agents.

Traditional organizations: Adapt or be outrun

While startups have the advantage of a clean slate, traditional organizations must evolve.

Yet, many companies are still in pilot mode. As stated in the Work Trend Index 2025 report, Microsoft’s research reveals that only 24% of leaders say their companies have deployed AI organization-wide. The rest are still experimenting. Many organizations still haven’t come to a decision in regards to AI and don’t have an AI-policy in place.

The case for training: Empowering the workforce

One of the most encouraging trends is the growing recognition of the need for AI training. According to Microsoft, 90% of leaders say they want employees to learn new AI skills - but only a fraction have formal programs in place. Organizations that invest in upskilling their workforce now will be better positioned to harness AI’s full potential. Training isn’t just a checkbox - it’s a strategic advantage. Here, Storyals is uniquely positioned to support organizations that are looking for professional, sustainable and cost-effective upskilling for their employees.

What business leaders should do

To stay competitive, decision-makers need to act now:

• Don’t wait: AI is already here. Employees are using it - even if leadership isn’t ready.
• Invest in training: Build internal capability and confidence with AI tools.
• Build hybrid teams: Empower your workforce with AI agents that complement human judgment.
• Redesign workflows: Move beyond automation. Rethink how work gets done with agents - managed by humans. 

Final thoughts

Just as digital-native companies reshaped industries, AI-native Frontier Firms are redefining the future of work. Whether you're a startup or a traditional enterprise, the journey to becoming a Frontier Firm starts now. At Storyals, we help organizations navigate this transformation - empowering teams to work smarter, not harder. Through our hands-on programs and coaching, we support leaders in building the skills and mindset needed to thrive in the AI era. We welcome digital leaders to join as we discuss these and other topics at the annual conference, WorkScape Circle.