30) Organizational Structure

Behind-the-scenes building Vambrace AI, a company on a mission to figure out its mission. Please pardon the stream-of-consciousness style. Subscribe to follow along or visit the site here:

(typos are to make sure you’re paying attention)

Introductory Remarks

Dear Vambracers —

In last week’s post, Measurable Impact, we identified the importance of an explicitly calculated economic impact metric for any engagement. We then explored the multi-applicability of such a measurement in business development, pricing, customer acquisition, brand-building, etc. It’s one of those obvious things that’s almost so obvious that it’s easy to overlook. But I shall overlook no more! Except now the challenge is finding organizations that will let me create an #economicimpact. Moving on!

Organizational Structure

[But not like in the traditional sense]

In today’s post, I intend to commit to some more structure and rigor as it relates to the internal operations of the business. In case you can’t tell, I’ve been mostly vibes-ing things since getting started in mid-September—and I think I’ve made it pretty far on a mostly vibes-based business plan. But I recently started working with a new mentor that has challenged to me to be more analytical and rigorous in my evaluation of myself and the opportunities that I see in the market, and the categories I am to address.

Background

Not that you care, but I really do love business. In college I would watch a lot of youtube videos from prominent businesspeople and I read any businessbook that I could get my hands on—and it was an awesome self-directed crash course in some major business happenings of the last several decades. In particular, I remember going really deep on the Bill Ackman / Herbalife feud and I thought that was super fun. And then Bad Blood pulled me into the world of startups and venture capital and compelled me to pursue a career with early-stage companies. In any case, I’m a business fan.

I spent my formative professional years in early- to mid-market investment banking and consulting which equipped me with some foundational tools in business evaluation and economic modeling and all that good stuff. I enjoyed the work a ton. I then spent some time working for a startup in Miami, and then eventually “broke into” VC. Venture was an awesome experience because it opened my eyes up to a ton of stuff going on in the broader innovation economy. It also allowed me to: (1) grapple with the viability and market appetite for thousands of businesses, and (2) observe behaviors and dynamics associated with successes and failures.

Present Day

But, after about 7ish years deeply immersed in the business world, I sort of got “business’d-out.” This coincided with the initial AI boom and so I shifted my effort and energies a bit towards emerging tech and trying my hand at actually building things. That culminated in the initial MVP I built for user interview analysis over the summer—which ultimately I realized wasn’t very viable. But that gave me my first little taste of life in the founder’s seat, and I enjoyed it very much.

So then really after that exercise I realized I had to take a step back and chill for a second. I had been go-go-go for 7ish years (longer, really) and I just needed to take some to breathe. I also felt that, since I could now feasibly (if not effectively) build virtually anything using AI-assisted coding tools, that I had to put a restriction on actually building anything unless and until somebody would pay me for it.

So then that naturally pushed me towards sort of a hybrid of my role in banking and venture, against the backdrop of my academic background in statistics, where I try to pair deep business and economic analysis with technical development to assist with organizational optimizations for hard services businesses. I decided to target early- to mid-market hard services businesses for a few reasons:

• Impact. I thought that these smaller companies might have more opportunities for technological optimization and that there could be greater impact—on a relative basis—there than in mid- to later-market companies. (And, realistically, sub-$50M revenue companies is more within my realm of competence).

• Sliding down the cost curve. As software development and leading-edge technologies become cheaper, it’s actually profitable to work with smaller companies where the main input is time and intellect that, when mixed with modern AI tools, could supercharge my personal productivity.

• Accessibility. Thus, I thought I could offer “top-level” (or, in any case, rigorous) business consulting services to companies that historically might not be able to afford or want to work with major consultancies. But by offering relatively affordable services to a select group of clients I felt like I could carve out a profitable niche for myself.

• Hard services. And then finally I want to target hard services businesses because, at least in the near-term future, it’s unlikely that AI will completely obviate these physical services being delivered. Right now it’s difficult for AI to fix a sink or mow a lawn or lay bricks, but AI can automate and improve a lot of the non-value-additive workflows (e.g., customer support, estimates, etc.) in support of those of core profit-drivers.

Need for Structure

So, I’m now at a sort of crossroads in my personal development and the company’s organizational development. I’ve been working with one client for several months—and have seen success there—but really I need a second customer for it all to feel real. Up until this point, I’ve been continuing with a vibes approach for acquiring my second client and candidly have struggled.

So I’m realizing, with the help of a mentor, that it’s time for me to put on a suit and get serious about what I’m doing here. I have a pretty strong intuition for the opportunity and the direction I’m going, but I haven’t formalized it in any way analytical, quantitative or rigorous manner—and it’s time for me to rectify that.

Focus Areas

I’m going to specifically exert intellectual energy on the following tasks:

• Category research. I have a general sense of the types of companies I’m interested in: hard services businesses, ideally family-owned, doing roughly $5-$50M in revenue. Ideally the family is still in charge and responsible for key strategic decisions. They’re AI-curious but aren’t really sure what it means or how to leverage it for their business. That’s where I (hopefully) step in.

  What I really need to do now is codify the top ~3-4 categories that I really want to focus on. This could be lawn care, since I already have a case study there, or construction, or paving, or masonry, or roofing—or whatever. But the point here is that I need to do some proactive research on each category that might be interesting to help me assess if they are interesting, what challenges they face, how many of them are there, what are typical economic profiles, etc. And then once I have a better understanding of the categories that excite me (relative to impact potential) then I can craft a more targeted solicitation strategy (or something).

• Business plan. I am absolutely not somebody that believes in an old-school business plan that goes through the typical 10 sections or whatever. I understand its utility and its place in the business deliverable universe, but I just think it’s a stuffy and outdated medium. With that said, I do need to spend time reflecting more on what makes me unique and what I observe in the market in order to refine my narrative—to myself and to clients. More specifically this means I have to quantify broader economic and technological trends, size of the market opportunity, number of firms I realistically could target, what my core-core sweet spot, my core competencies, economic model, growth plans, etc. A lot of this stuff has been percolating in my mind for the past few months, but it’s time for me to professionalize a bit and take the next step in the business’ journey. But it will NOT be a stuffy document.

[Last quick carveout here, this post’s caption is in reference to a statement made by Jenny Lawton, COO and then CEO of Makerbot from the wonderful documentary Print the Legend available on Netflix—which I highly recommend that you watch—it’s my favorite documentary. But she says at one point that the growth stage of a startup is like putting a skeleton in a jellyfish—and that always stuck with me. And so the main point here is that I’m trying to skeleton-ify my company’s jellyfish in the coming months.]

Looking Forward

I think somewhere above I was supposed to say that I actually really enjoy the type of business analysis that I’m going to engage in—which is true. And I’m thankful to have just recently met a new mentor-type person who wants to help keep me accountable and has pushed me to start on this professionalization journey.

But, as I tend to my business with a more rigorous approach, I don’t want to lose the fun and whimsy and positive vibes that effectively underpin the ethos of what I’m trying to do here—which is sort of follow my curiosity and allow myself to wander and do random things just to see what happens. It’s more about just striking some balance of serious and silly. I’m excited for it.

That’s all from me. Have a wonderful week! I can’t believe the year is almost over.

Sincerely,

Luke