AI is not the threat. Our bloated Product Market Fit is.

AI isn’t the real threat. It’s just increasing the pressure & surfacing the cracks that already exist.

Because the biggest threat to an early stage SaaS company is that it is PMF swollen.

We might have started out with a stirring team mission with a deep customer focus but somewhere on the path to a 7-figure ARR, we got a little boozy on our success & started opening our doors to everyone who came knocking.

Before we know it, we’re now hosting a variety of ICP dinner guests that all seem like they want the same meal, but are distinctively different enough that each requires a slightly different recipe.

Now if we’re making money hand over fist & trending up, no one’s really bothered about this over-stretch. It’s seen as a growing pain.

The real leading indicator here is the loss of joy in the team.

Because burnout doesn’t happen from long hours & hard meetings.

Burnout happens when we lose control. The most engaged employees get disheartened when their work lacks clarity & predictability.

If doing X, doesn’t deliver Y or we don’t even know what Y is to begin with, then doubt starts to creep in. And that’s how a bloated punch drunk business presents itself first - through our culture. We start feeling more overwhelmed & more tired.

The solution here to go back to our fundamentals & build from our core out.

Here’s the 3 steps to build an AI ready team:

AI is just a tool. If wielded right, it can amplify the core customer-value hypothesis at the heart of our business.

The secret is to have 100% clarity on our superstar core.

Meaning identify the work we’re truly passionate about & the secret sauce that makes us unique. This includes identifying the cult customers who love us the most & knowing their most painful problem.

The key here is to brainstorm & focus on a dream outcome that only we can serve our customers with. And it’s critical that this outcome be 2-3x better than the current solution we’re offering.

Because outcomes are clear binary real-world results that every team member can see, touch & feel. It gives people a very real finish line to work towards, thus lowering the case for burnout.

Also it has to be a dream outcome.

The only way to combat the overwhelming fear of AI & competition is to give people an ambitious & exciting goal to focus their energy on.

It’s this combination of doable, fun & slightly impossible that rallies people.

We can’t tell people not to be afraid. That's not how our nervous systems change.

We have to give them a reason to feel courageous.

Reverse engineer a game-plan to deliver this dream outcome from the top-down while using this key principle: Protect our magic, AI our bottlenecks

First, at a leadership level, have the team draw out our zones of genius in this plan & make sure its untouched. Meaning anytime our judgement is needed in the workflow, that should be protected. We should build processes & playbooks to secure our secret sauce.

For everything else, identify the biggest most time-consuming & repetitive bottlenecks. Then brainstorm ways to use a combination of AI, systems & shared best practices to resolve it.

Each leader should have a role in this plan. Because if it’s truly a reality altering result, it’s going to require everyone pulling their weight.

Once each team leader takes their sub-goal back to their own team, have them rinse & repeat the same principle. Have their team work backwards from this big sub-goal to build a plan, identify the zones of genius in it to protect & find creative AI-hybrid ways to resolve our bottlenecks.

This pattern keeps repeating all the way down - until every last employee knows their targets, their genius core & their AI contributions, and how it cascades all the way up to the big company goal.

When the robotics & automation wave blindsided the car industry in the 80s, every car maker was up in arms trying to figure out how to respond to it. Toyota & GM joined the fray & responded swiftly, but their executions differed deeply.

1. Superstar Core - When Toyota asked themselves what their core was, they realized it wasn’t “making cars”. It was their philosophy of how work gets done.

They realized their secret sauce was in their skilled workers using their judgment on the shop floor & stopping the line when they spotted a problem. That was the true genius core of their brand.

Robotics didn’t change the core, it was slotted in to support it.

2. Dream Outcome - Toyota's dream outcome was concrete: the world's most reliable, highest-quality cars. Every internal process was reverse-engineered from this outcome of a car never breaking down.

3. Automate the Bottlenecks, Protect the Magic - Armed with their identity & goal, they went about infusing robots & automation into their facilities.

They simplified job classifications, grouped workers into teams and put robots in areas that were more unsafe & physically very taxing. But employees were also given authority to stop the robot line if they sensed anything wrong.

The new tech didn’t replace the humans, it amplified their magic & the customers felt it in every mile driven.

GM on the other hand built a “lights-out factory”. It was part of their CEO’s massive automation program where robots would replace the humans. The strategy was to let robots handle everything & watch productivity increase tenfold.

The end result was chaos: factory robots broke down constantly, they painted each other & welded the car doors shut. The customer felt it too, as market share collapsed from 46% to 35%.

The best example of how all this affected morale was the NUMMI factory.

In 1984, Toyota partnered with GM to help them produce cars at an old GM plant in California.

The only catch was that this was deemed as a problem plant.

With 1 in 5 employees not showing up to work, 700 employee complaints & multiple union strikes, this factory had the reputation of producing the worst cars in the entire company. In the end, GM shut down the plant & laid off over 5,000 workers.

But when Toyota took over, they re-hired the same group but this time they instituted their system. Immediately, absenteeism dropped to 2% & quality jumped from producing the worst cars to building the best in the company.

The same exact workers, the same exact robotics wave - the only thing that changed was the system that connected both of them.

And this system brought the joy back.