Startup productivity in the age of AI: automate, deprecate, delegate (A.D.D.)

Over the past decade, I invested in over 350 startups and watched up close as founders figured out how to do more with less.

Startups, by their nature, are resource-constrained organizations when compared to the legacy businesses they are trying to displace.

There is, of course, the rare exception of a market frenzy when startups are overfunded. I've experienced two in my lifetime: the dot-com bubble (~1998-2000) and the ZIRP bubble (~2019-2021).

Those approximate five years were fantastic times to sell overpriced equities and raise money, but they are so rare that founders should put them in the back of their minds (except as a time to consider selling some shares).

Since startups are most often resource-constrained, it's critical to look at what's taking up your time and ask the following three questions:

1. Can we automate this (with software)?
2. Can we deprecate this (because it's having little to no impact)?
3. Can we delegate this (to someone at a lower salary)?

While this A.D.D. framework might seem obvious as you read it, it's easy to forget (like many simple things).

How to avoid panicking your team

Now, it’s hard to implement this inside your startup because as you deploy it, folks will naturally be nervous.?

They’ll immediately ask valid questions like:?

1. “You’re going to automate my job?!”
2. “You’re going to outsource my job to a remote worker getting paid half as much as me!??!”?
3. “You’re going to have me stop doing the busy work that takes up half my day!??!”
4. “Am I getting laid off?!?!”?

The answer is “yes!” to the first three, and “your choice” for number four.

The brutal truth is that most jobs will be automated, delegated, and deprecated in the coming years thanks to AI and remote work (more on this below).?

We must embrace this moment and “move up the stack” to higher-impact work as the easy work fades away.?

The highest-level contributors in the 21st century are those who can implement this A.D.D. framework, confidently, and understanding there will ALWAYS be higher-level work.?

If you run a hotel and magically, tomorrow, a robot could deliver room service and your bags perfectly at 10% of the price, you would immediately take that win. In fact, these robots exist and are currently being deployed, by many , many , many companies.?

So, you take the win and redeploy the bellhop and room service staff (if willing to level up) to higher-level work that improves the guest experience.?

If the guest experience gets perfected and you need fewer people to run the hotel, you should…. wait for it…. open another hotel. Or lower the prices at your current hotel. Or increase your profitability and raise the remaining employees' salaries.?

That’s where society is headed, fewer people accomplishing more and doing more meaningful work.

This evolution has been happening for some time now, but with AI it’s going into hyperdrive.?

Here's how you implement the A.D.D. framework:

a. Every week, ask your team to do an S.O.W. and E.O.W .: a start-of-the-week report and an end-of-the-week report.

b. After three months, review the significant items folks accomplished each week and ask them which items they think have the highest and lowest impact on the business. People will be candid with you.

c. Automate: sit with whoever the most tech-savvy folks in your company are and figure out how to automate the most critical tasks where possible. At my investment firm, LAUNCH, we have a half dozen folks who know how to use Notion, CODA, Zapier, Airtable, and Slack to build “mini-apps” that automate everything we do. Hands down, these are our most valuable team members.?

d. Deprecate: When faced with a list of tasks that can’t quickly and easily be automated, ask yourself, as the founder, if this task is essential or optional. As a founder, you probably asked folks to do things last year that are no longer essential this yearl, but your loyal team members are doing them as if they are.?

Your bad. Be ruthless in deprecating these items. If you're wrong, you can always add the items back.

e. Delegate: After you automate and deprecate, you'll be left with a bunch of important tasks that can't be automated and that you need to do. At this point, look at the hourly salary of the person doing them. Times that salary by 1.2x (for benefits and equipment) and then divide that number by 2,000 (the number of hours the average person works a year).?

If a $100,000 employee updates a database with contact information and processes invoices for 10 hours a week, that is costing you $60 an hour ($120,000 / 2,000). A work-from-home executive in the USA would cost ~$25. In Canada, it would cost ~$15 USD. In Manila, it would be $5 an hour (and you would have a line out the door of folks who want that job).??

The average $100,000 employee in America who implements the A.D.D. system will automate 20% of their job, deprecate 20%, and delegate 20%, in my experience.?

This means every year, a high-functioning team should be able to free up ~50% of their cost/work on average (depending on how much you save when you delegate that 20%).

Why is this important now? ?

While these steps seem apparent, three things have made this framework critical:?

1. Startup funding has collapsed by 75%.?
2. Remote work has made all of us exceptional at managing and delegating work. Managing an American, Canadian, Argentinian, or Phillipino team member is the exact same on SLACK and Zoom.
3. Most importantly, ChatGPT, Bard, Claud, and countless emerging AI tools are making the automation of work accelerate at an absurd pace.?

The great irony, I’ve learned, is that the remote workers from emerging markets are the ones embracing ChatGPT the most. It’s obvious why when you think about it.?

These remote workers are typically working freelance for a dozen customers who only care about output. They’re very hungry, and they are absurdly customer-focused. They know that the faster and happier they make a customer, the more money they can make.?

In conclusion

I’ve been working with our portfolio companies and our teams on this process for over a year, and it’s having dramatic results. This is a 1.0 framework, so please take it, remix it, and report your results to me.?

We all want to do more meaningful work and we will always find new ways to be helpful to society.?

Embrace the pace!?

Speed wins.

My email is [email protected] for life.

DMs open.?

Best, JCal?

PS - I’m going to start doing weekly posts here on Substack, to my x.com/jason account, and Linkedin. I am also planning on doing a paid subscription of some type to hire a full-time editor to work with me on these posts.?

Will include some sort of subscriber Q&A and benefits as well (hit reply and tell me what you want). If you want to pre-pledge, you can do so at calacanis.substack.com . Which will give me some signal as to people’s interest.