How Overrelying on Algorithms Can Stall Your Business, Just Like Hollywood.

If you haven’t noticed, artificial intelligence (AI) has become an indispensable tool for decision-making, customer engagement, and even sales forecasting.

From predicting consumer behavior to automating ad targeting, AI-driven solutions promise efficiency and cost savings. Yet, overreliance on algorithms can have unintended consequences on your growth.

Take Hollywood as an example. One of my favourite types of movies is the slow, character driven indie films like The Fundamentals of Caring and Little Miss Sunshine, but films like this are slowly disappearing.

The industry saw a massive boom fueled by streaming platforms like Netflix, Disney+, and Amazon Prime. Studios and content creators increasingly leaned on algorithms to determine what content to produce, what actors to cast, and where to distribute their films.

Cinelytic and ScriptBook

AI platforms such as Cinelytic and ScriptBook became prominent players, offering data-backed predictions on film success based on past trends.

However, the industry is now facing a steep decline, with a 40% drop in U.S. film production and mass layoffs.

This is largely attributed to an over-reliance on data-driven decisions that couldn’t account for cultural shifts, human creativity, and unforeseen market changes. Algorithms, while powerful, have limitations in predicting the developing tastes of audiences or the nuanced demands of real-world scenarios. More big movies. Less Indie Films. Everything is reliant on data, when movies are about passion.

Lessons for Business.

Similarly, overreliance on AI can lead companies to miss out on essential human elements that drive long-term sales growth. While AI can efficiently predict which products might sell better or which demographics to target, it lacks the ability to foresee changes in customer sentiment, societal trends, or the importance of brand authenticity.

When businesses neglect the “human touch” in favor of algorithmic precision, they risk alienating customers who crave emotional connection, authenticity, and flexibility. This imbalance often results in declining sales and a weakened market position.

As shown by the struggles in Hollywood, relying solely on algorithms can be risky.

Businesses must strike a balance between leveraging AI for its efficiency and incorporating human insight to adapt to ever-changing market dynamics. Embracing both data and intuition is essential for sustainable growth.