Over the past few weeks, I’ve been working with some truly creative founders. One was a three-star general at one point. Another is in the United States because his research is so advanced in the field of artificial intelligence that the U.S. State Department granted him an O-1 visa for extraordinary ability. Another has a PhD and a pile of patents in his name.
Exceptional Founders
If you work in a venture capital firm, it’s not unusual to meet exceptional people like these. You’ll see a constant flow of individuals coming in with pitches, prototypes, and resumes. Venture capital firms are continuously seeking to discover and invest in exceptional startups, those rare gems that have the potential to disrupt market sizes and innovate industries and shake things up significantly. And if you’re an ambitious aspiring founder, you might wonder if you have what it takes to attract such investment and thrive in the fierce competitive environment of startups.
Difficulty Raising Capital
Unfortunately, what I’m seeing now in the funding rounds is that if there isn’t a perfect alignment between the founder and the market, raising capital becomes a difficult task.
My Experience as a Founder
Of course, this made me reflect on my own startups. If I compare myself to the current funding standards, none of my startups would stand a chance at raising funds.
General AI Skills Gap
The skills gap in artificial intelligence is real. A recent study from Randstad, a recruitment company, found that the number of jobs referencing generative AI skills has increased by 2000% since March. It is the third most in-demand skill set and the shortest in supply.
Chief AI Officer
The logical next step for large companies is to hire a Chief AI Officer (CAIO) to kick-start their efforts. Earlier this year, Dylan Fox wrote an article arguing that every company on the Fortune 500 list needs a CAIO.
“Companies that do not integrate AI into their products, operations, and business strategy will struggle to remain competitive – and will fall behind companies that do,” Fox wrote.
It’s a compelling argument that touches enterprise-level companies. But what about everyone else? Startups and emerging companies need to heavily integrate AI – especially if they are trying to raise funding in this current environment. However, they often lack the resources or organizational structure to support a senior executive dedicated solely to AI.
Fractional Chief AI Officer
This is where the fractional Chief AI Officer comes in. Fractional leadership is a recent trend in the labor market: experienced executives in a certain field work across two or more companies simultaneously, offering their talents to fast-growing companies that need their specific skill set but can’t afford them full-time.
And here’s the astonishing thing: having a fractional Chief AI Officer outweighs hiring a full-time executive in one critical aspect. AI – especially generative AI – is such a new technology that the broad experience across multiple companies for fractional executives gives them an advantage over their full-time counterparts.
Three Stages of AI Adoption
While the promise of generative AI is great, it’s challenging for companies to create a reliable ROI metric in the early stages of the adoption curve, especially in an environment where companies are expected to be more conservative with spending.
Stage One: Workflow Efficiency and Productivity
Given the market challenges, companies are looking for ways to free up cash and reduce spending to keep budgets stable in 2024. For this reason, productivity gains and workflow efficiency are likely to be the number one driver of generative AI adoption. A recent study from BCG found that generative AI could drive significant improvements in workflow, operations, and internal work tools – participants using GPT-4 completed 12% more tasks on average and at a 25% faster rate than the control group without GPT-4. Here we’ll see ROI first. Let’s call this the first range.
Stage
Second: Customer Experience
This is a great step towards the next phase of adopting generative artificial intelligence: enhancing customer experience. These days, customers expect drastic improvements – and more personalized digital experiences. They will turn to your competitor if you do not remember who they are and anticipate their needs. Generative AI can bring personalization to your digital experiences.
Source: https://techcrunch.com/2023/11/23/yo-ho-a-founders-life-for-me/
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