Answering the Biggest Questions on AI

Artificial intelligence (AI) has dominated the news in recent months. The release of ChatGPT-4 opened up what felt like a whole new world of exploring information. Companies responded in kind. 

Data on what’s happened lately is sketchy, but more than $36 billion flew into AI-oriented companies in 2020. That number likely looks like chump change now.

These AI releases have met mixed results in terms of both utility and perception. Concerns about how it will impact broader employment and our understanding of the world abound with complicated relativity. 

But AI isn’t going anywhere. As a society, we have dreamed of this technology for centuries. Today’s biggest concerns revolve around whether the technology can or should deliver in certain arenas. The answers to such questions are as complicated as they are unstable.

First Things First: What is AI (really)?

Generally speaking, the public understands AI as they see it on the silver screen: human-like technology with superhuman abilities.

In reality, AI isn’t that sexy right now. Though there are plenty of conversations to be had about the uncanny valley, AI in any investing or entrepreneurial framework today hinges on efficiency and cost reduction. 

It’s also not new. The systems behind AI branding are already in use to varying extents. 

There are entire publicly available trading systems using computers to direct trades. Investment advisors use data and equations to guide their advice. Employers use computer systems to sift through applications while applicants try to game the system with their resume design. Entrepreneurs seek financing using the same data institutions use to approve their loans.

AI as it exists today does not improve any of this. It makes it more efficient. To this end, AI solutions offer a cost savings in terms of time value more than anything. 

We may one day see a world where AI resembles the fantasies depicted in movies. Today is not that day. This doesn’t mean AI cannot benefit investors or entrepreneurs. It just means putting that value in context. That means answering specific questions.

Can AI Improve My Investing?

Most investors know that investing on emotion means losing money. Most smart investors work with an advisor for this very reason. Could even smarter technology deliver greater results?

Bloomberg thinks so. They recently released a product called “BloombergGPT” to provide AI guidance to investors. It’s a cute idea – eminently marketable, fantastic SEO, positions their brand well.

It’s also nonsense.

We can (relatively easily) build a trading system based on rules developed from assumptions tied to past performance of the market. Many, many people before this have done just that relying on what the market DID.

Bloomberg attempts to differentiate itself by saying it has access to information others do not. This makes up (arguably – if you believe them) half of their guidance. It still gets right just only half of the time.

BUT past performance is NOT indicative of future results under the BEST of circumstances. That is literally all AI has to bank on if things are somewhat predictable. 

This tech makes choices based on what has happened in the past, literally because its’ programming requires it. This reality literally creates the foundation for regulations requiring professionals to insert disclaimers about past performance while guaranteeing subpar returns.

AI in investing today is just an easier way to parse numerical investment inputs than a basic Excel or Google sheet offers. It’s the fancy version of previous trading systems. 

Those selling better results because of AI are just marketing technology as an amplifier of ROI based on perception. If they needed AI to give you recommendations, you probably hired the wrong person in the first place.

Can AI Improve My Marketing?

A huge part of the AI conversation today revolves around marketing. After all, why pay a designer to do what an equation can give you?

Let’s start by explaining what we mean when we say marketing. This isn’t a world with hard numbers. It’s about who you are as a company, how your value is perceived, and how potential and current customers perceive their interactions with you. 

Think: what you say, where, how, and the imagery involved.

There are meaningful reasons why using AI to this end ethically awful, but it also fails to pay. Beyond a computer-generated ripoff of a designer’s career being gross, AI delivers subpar content. More than 60% of brands report AI marketing losing them money. They feel as though automation caused them to lose sight of their customers.

We’re not just talking about graphic design, though. We tried it. We asked AI to write a post about financial literacy. The result was embarrassing enough to not publish, at best. Nothing original, no data, no linking strategy, no nothing. 

Truly – there was a chance publishing a screenshot could have caused legal issues. That’s the only reason we’re not posting anything to show you. It’s how bad computers are at trying to write like humans with a single creative thought.

The point? You can probably get a computer to write or design about you and why you matter in general terms. The odds of that generating a positive brand experience are low.

Can AI Fix My HR Struggles?

Believe it or not, AI is probably already baked into your HR policies. The vast majority of job posting sites and services already use AI. Their technology parses the contents of applicant resumes to identify language aligning with your requirements and desires.

That does not always equate to better hires. It means you only see applicants who played nice with the job posting company’s algorithms. That may or may not mean they were a good applicant. 

Algorithm-driven hiring processes are problematic for many reasons. These systems easily become accidentally sexist and racist. They also fall very, very short in terms of qualitative candidate evaluation. 

All companies should pay attention to how the job boards they utilize screen applicants. ROI for such services often falls short of expectations. We don’t only mean that in terms of your applicants. Advances in AI make how we even write about jobs more relevant.

An AI tool could easily tell you that the copy for a job posting is excellent. That does not make it accurate or compelling. It means, based on available data across XYZ range, the copy provided by AI aligns with best practices as we understand them now.

At every stage of the hiring process, AI fails consideration of humanity. It lacks context. 

Can AI Deliver Better Advertising Returns?

If marketing is how you are understood, advertising is how that promise is received in cold, hard cash. 

We broadly understand the return on advertising to be one of brand. If people know who we are, what we provide, and why that matters, we’re set up for success.  But beyond top-level calculations about company profit, measuring advertising success today is both easier and more complicated. 

You can ballpark how many people will see you on a digital billboard based on traffic projections. You can boil it down to how many people see your name in a day on any given social channel.

Those numbers used to amount to fairytales in terms of realized dollars. Arguably, they still do. But AI seeks to fix this. The right tools, in theory, can automatically craft the language and images most likely to deliver positive results.

The numbers available to us already get used in advertising and marketing strategies. When Facebook asks you to target a demographic with your ad, numbers are behind it. When Yoast asks you to improve your SEO or readability metrics before publishing on WordPress, data drives the instruction.

But AI in advertising underdelivers for the same reason it falls short in HR or investing – it works off of available information. Think about it this way: 

• Would a computer have told you to “just do it”? 
• Would an algorithm have told you Michael Jordan could turn your brand into an international juggernaut?
• Would an equation have created the Mac v. PC ads?

In case you wanted to argue with a keyboard, the answer is no. The choices behind those advertising campaigns were inherently human. That made them successful. Numbers might make great ideas more likely to succeed, but they cannot guarantee a thing.

Can AI deliver me more sales?

Money is the bottom line. If a computer can make you more money, odds are you’ll bank on it. You should.

Except delivery on promise remains sketchy. You can’t argue that technology hasn’t changed how we do business. If you’re talking about product sales, the web has been revolutionary. Even service providers see significant benefits from a broader audience reach.

But the reach you get from your audience is only as valuable as your conversion rate and the lifetime value of your customer. AI cannot (and should not) touch these figures.

Let’s say you sell a million of your products. We’ll pretend they make it easier to watch silly stuff on your phone while cooking dinner. Sounds great, right?

That “great” cannot be captured by AI. The “great” gets defined by customers’ discussions about their experiences with your product. That might be a review on your website or Google. Perhaps it looks like a post on Facebook or Instagram. 

The “great” might get communicated later through AI, but the customers defined the product as great before AI got involved. Their voice always mattered most, but AI can’t capture it until they’ve spoken.

To this end, AI might be able to inform sales strategy, but it cannot amplify it. The right people using the right information in the right way will.

The Cleanup Cost

AI will, in all likelihood, fail you right now. We’re just not there yet.

That means the cost of an AI investment clocks in at a much higher number than you think. How much are you willing to spend on something shiny and attractive without proven results? 

Proven means a lot more than numbers. It took five seconds for universities to realize this. Following the latest school shooting in Michigan, a Tennessee university sent out an AI-generated email offering condolences. The email literally said so.

The reaction? Well, reasonable. Students, alumni, and beyond were furious when they saw the email had been generated by AI. 

This highlights the problem with leaning on AI in a public space. You could be a public entity, company, or person. When you decide the ease of AI matters more than who you are, you put who you want to be and what you stand for at risk.

AI as a Tool, Not a Solution

We don’t want to naysay AI for entrepreneurs or investors. You cannot argue it has no use. 

We instead argue that how we use it matters much more and better informs ROI calculations. If you’re looking for a silver bullet, you’re looking in the wrong direction. If you’re looking to improve what you’re already doing, you might see a benefit.

But that’s the whole point. You will find a million articles out there arguing AI will solve everything and a million more saying it will kill us.  one of them hit the mark. AI has become a reality. The question is how we make that work for us in ways that matter.

Artificial intelligence is one tool in the entirety of an entrepreneur’s technology toolkit. But there’s a lot to fear from what you can’t control. That’s why cybersecurity matters so much. Our on-demand webinar series will help you build the knowledge gap. Click here to learn more.

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