AI Is Cool But I Prefer Profit

If you’re a marketing firm in the black hole ($1mm–$7.5mm), the biggest determiner of financial success is your people. Are you getting enough from them to produce profit? Aren’t we supposed to be talking about AI? Why concentrate on people skills when AI is going to liberate me from that hell? If you could make your labor efficient you wouldn’t need to read this. But they’re not and you do.

AI marketing — "AI and robots will replace all jobs" — describes a future built on models capable of replacing human involvement, and when humans typically cost at least 50% of your revenue, AI becomes irresistible. Think about that. For every dollar a principal receives, it costs half of that figure to deliver the work they exchange for the product, leaving them just 35 cents to pay for every other expense in order for the business to retain 15 cents of profit. In such an inhospitable scenario, why wouldn’t they consider any alternative that reduces labor costs and removes the chore of managing people?

As in all complex systems, it’s never that simple. And when shocks disrupt the market, the realistic change is not a single outsized conclusion — ‘AI is going to kill the design profession’ — but a vector — ‘big business will get bigger; small firms who get serious about profit will thrive.’

Depending on whether you enjoy working with people or machines, betting on an artificial intelligence that mitigates your need for people is not only suicidal (if one existed you’d be out of business), it’s also neglectful. Technology that can replace all people in a system is too dark to consider, but a world where the laborious tasks that used to fall to interns, that’s already here. That offers some relief from the frustrations of human error in expensive tactical work, but the big winners are financial juggernauts dwarfing the small firms that seem dominated by the possibilities of what’s around the corner, if only we could make better use of AI.

The AI defenders — you know who you are, friend of The Terminator — swallow this change whole, rarely having the imagination or taste they need to gauge their appetite or their risk. As someone raised on VHS tapes, I’m no stranger to change. I encourage my clients to play with the possibilities of AI. But baking it into your business plan, mentioning it on your website, and founding your vision on it are all worrying commonalities I’ve seen ripen this year. It’s a trap to dwell on what could be, a mirage that distracts from the discipline of keeping your focus on small incremental wins.

The way to enrich yourself is the same way to make your people’s lives better: concentrate on the fundamentals of your business. Grow a culture of learning, that defines a standard from the principal down, where coaching is expected and no question is too basic.

Forget about broad growth and obsess over the ways in which you can simplify everything your people do, to deepen your understanding of the few core offerings you do well.

Concentrate on profit margin, not revenue. All small businesses need to be constantly aware of the weight of labor they can carry without capsizing. While it’s still profitable to make processors there will be constant market demand to replace every human possible for every role imaginable. Your job as the principal is to work out how to make the best of automations that make sense of your work, but never at the expense of improving your ability to communicate effectively with your people.

Tough calls are ahead with while people you keep. Not everyone will survive this ever-increasingly short-sighted future we’re racing towards. Choose wisely because you will need from tomorrow’s survivors a higher standard of communication than you had yesterday. The goal of your business is to build wealth for the owner. And the only way to do that successfully is to make your biggest cost as efficient as possible.