Recommendation systems have some limitations. Understanding these limitations is important in order to build a successful recommendation system:
The cold-start problem: Collaborative filtering systems are based on the action of available data from similar users. If you are building a brand new recommendation system, you would have no user data to start with. You can use content-based filtering first and then move on to the collaborative filtering approach.
Scalability: As the number of users grow, the algorithms suffer scalability issues. If you have 10 million customers and 100,000 movies, you would have to create a sparse matrix with one trillion elements.
The lack of right data: Input data may not always be accurate because humans are not perfect at providing ratings. User behavior is more important than ratings. Item-based recommendations provide a better answer in this case.