You've seen it in the news: Board of directors makes the bold call to cut xyz budget, citing expected efficiency gains from AI and automation.

... and oftentimes, they have to walk it back. 

My growing concern is stories like these scare midsize companies away from making investments in data and AI.

So today, let's talk about appropriate levels of investment:

1.  "You are here" 📍

2. Finding the goldilocks zone 💪

3. How to spot speculation ⚠️

4. Finding your golden zone 🎯

Goldilocks investment vs return zones

Low Hanging Fruit

When your investment is markedly less than your return: Spending $1 on AI, and immediately achieving $2 in efficiency gains.

Low hanging fruits often look like (real life, paid off examples)

• Drafting legal documents with Claude affords fewer hours of retainer

• Swapping classic email search with LLM-powered search (execs' favorite)

• Low-code/no-code tools enabling citizen developers to move data between systems

• News summaries, AI-powered research, basic content generation

• Thought partnership

Pragmatic

When your investment equals your near-term return: Spending $1 on AI, and immediately achieving $1 in efficiency gains.

You enter the Pragmatic Zone after scooping up enough low-hanging fruit that you've satisfied your appetite, so you stop. This reminds me of satisficing: reducing your efforts once you hit "good enough."

If you're on this blog, this should resonate with you:

Why "good enough" isn't good enough

Stopping at "good enough," is giving yourself permission to step out of the ring. Things that were not possible last year, last month, or last week, are becoming technologically feasible at a dizzying pace.

What's more, automation tools and embedding AI into Saas apps natively mean that the barriers to entry are dropping for those that aren't as technically adept.

As technical savviness drops, skill is overtaken by "will," and we see those who simply try, find success with historically sophisticated workflows.

Thus, those who stop at "good enough," risk falling behind those who continue pushing.

Golden Zone

When your investment is slightly less than your near-term return: Spending $1 on AI, and immediately achieving $0.75 in efficiency gains.

In the golden zone, you've already achieved the low-hanging fruit, you've leveled-up your sophistication with pragmatic-level applications, and now you're ready to really reach for something more ambiguous (usually, something more strategic).

This is where I want you to be. 

When the pace is this fast, being slightly out over your skis means that you're actually working on meaningful, strategic problems. You're identifying the ideal processes, data flows, and quality outputs while you wait for the technology to catch up. 

You're likely in the golden zone when the value of the deliverable is within view, but the technical implementation isn't rock solid yet.

Finally, Speculative Behavior

When your investment is significantly less than your near-term return, and the future returns are difficult to forecast: Spending $1 on AI, and immediately achieving < $0.05 in efficiency gains.

Almost all speculative approaches have these hallmarks: 

• Overzealous executives/leaders/boards

• Under-planning (buying licenses without thinking about use cases)

• Disconnected from a foundational data strategy (e.g. no way to get proprietary data into or out of your chosen chat interface)

Tech companies, with armies of engineers, can quickly slip into the red zone because they've achieved the preceding milestones.

In classic saturation curve fashion, incremental investment has to get larger and larger to get returns that are increasingly smaller and smaller. 

🎯 Finding Your Golden Zone 

There are numerous headwinds facing companies attempting to find their golden zones. Vendor-locked data, a lack of technical talent, little time, allocated budgets, and misconceptions how to properly leverage ML/AI ... to name a few. 

As a result, an assessment phase has become a regular part of our scoping. Once we've prioritized and solidified use cases, we have multiple battle-tested AI entry points to walk through with you.

The fastest way to catch up is to start. Reach out at hello@buildaidaho.com to begin today.

Best,

Paige, Founder