Start Smart: Why DOFI Works for Growing Startups

“Digital-Only and AI-First” An operating model for Startups to launch faster and reduce cash burn

Startups struggle with running out of cash before they reach profitability or attain a critical milestone needed to attract more funding. Hiring talent, leasing physical space and buying capital goods are three horsemen that burn cash very rapidly. One approach to launch faster and reduce burn is to operate as a “Digital-Only and First-AI” entity. I call this a DOFI operating model for short. Digital-Only means the company exists exclusively online. No physical offices. “‘First AI’ means that once you've developed a list of essential business tasks, you first explore which ones AI can handle before hiring talent.” "Deliberately use AI to run business tasks wherever AI tools can reliably and cost-effectively". Emphasis is on Reliable and Cost-effective. Since the launch of Chat-GPT AI is being used in new and expanding ways. From the humble virtual assistant to Robotic process automation. You might as well check out what is possible especially if you can get access to AI tools via a subscription model. Then thoughtfully hire people into roles where they create optimal value for your business.

Here are some examples of business tasks AI tools can be used for

Customer Support

AI chatbots and virtual assistants can handle routine customer inquiries and provide 24/7 support without hiring a large customer service team

Content Creation AI natural language generation tools can automatically create blog posts, product descriptions, and other written content

Finance AI tools can automate financial reporting, expense tracking, and forecasting, reducing the workload on finance teams. Marketing AI tools can analyze customer data to create personalized marketing campaigns, improving engagement and conversion rates without extensive manual effort. Process Automation AI tools can automate repetitive back-office tasks like invoicing, scheduling, and data entry using robotic process automation (RPA) Product Development AI tools can help design and test product prototypes quickly, reducing the time and cost associated with traditional development cycles.

 Note, the list is not exhaustive

Being a Digital Only - First AI company can help a Startup in various ways: 1. Buy time to grow or fail fast and fail cheaply 2. Leapfrog and catch up with incumbents without heavy investment in infrastructure and high overhead 3. Extend the runway of seed funding

BUT it may NOT be a sustainable model for the long term for all. How long your Startup can stay a DOFI depends on multiple factors such as your type of business, your growth rate, the need for consumers to have a real-life immersive experience of your brand, the need for human interaction, regulation or how much cash you have. Eventually you may need to have an office and/or hire more people.

Have questions or comments or want to suggest a topic for the series? Send Juliet Anammah a short email at info@cgandrstrategy.com

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