Bots and AI will drive a second wave of fragmentation and disruption
Chat applications are becoming a mainstream trend and our preferred way of interacting with colleagues, friends and family. From the early days of SMS to the favorite snaps of our children, real-time online conversations are everywhere and here to stay. The acquisition of WhatAapp by Facebook in 2014 for a hefty $22 Billion price tag made it clear and promising as TechCrunch noticed it one year later.
But although TechCrunch saw messaging apps as the future of mobile portal, they remained more or less next to the Internet, without a direct impact, except their increasing audience.
The recent surge of interest in Bots and AI is changing the game and we’ll be witnessing the second major fragmentation of the Internet.
Apps drove the first fragmentation
The rise of mobile apps and the growing usage of smartphones generated a completely new user experience: instead of searching and browsing content from one page to the other using hyperlinks, we were siloed in different apps, each brand driving its own experience, sometimes sharing basic data between each other like pictures.
This was the first fragmentation of the Internet and we accepted it, mainly because we gained at the same time mobility and ubiquity thanks to smartphones.
Fragmentation is always generating a symmetrical need for order and the App Stores of the two mobile OS giants became our gateway to the prolific apps world and the kings of this new world.
Bots will drive a second fragmentation
Bots are a very different kind of animal than Apps for several reasons:
- Bots are more granular and closer to microservices, whereas Mobile Apps are usually a one-size-fits-all customer-facing view of your complete (and often bloated) set of offerings. Bots will potentially disassemble the different services and offers of Companies, leading to increased benchmarking and competition.
- Bots are adaptative by design, both on front-end & back-end : as Machine Learning is making progress at lightspeed (see AlphaGo), expect to see the level of service offered by Bots increasing day after day, in a Test & Learn approach. You’ll be teaching them through interactions and they’ll learn continuously from you, generating an unprecedented level of stickiness. And as Ted Livingston explains it in his article, you don’t need to start with tons of Machine Learning algorithms: an efficient and honest conversation for daily tasks will start building strong ties between Bots and your customers (the beer-in-a-stadium use case used by Ted in his post is a simple yet great example).
- Bots go well along with voice and they will together become our preferred way of interacting with services. With their increased definition (2K, then 4K) and graphical power, our numerous screens will remain a great way to display the result of our requests to Bots and sometimes a great second level interaction too.
- Bots will induce new kinds of business integration and cooperation, based on dynamic connections between Bots and relying on collaboration and continuous learning: the first Internet was based on hyperlinks between static pieces of content and the second / mobile Internet was based on sharing (little) content between Apps. Bots will collaborate on our behalf and will benefit from each others and their increased level of service. Metcalfe’s Law will also be valid for the Bots space, so expect the total value of this ecosystem to grow as the square of the number of Bots nodes.
All these characteristics will lead to a more profound fragmentation of the Internet, impacting both the User Experience on the Front End and the Business Models in the Back End: all the ingredients of a new disruption are there.
A fierce competition to own the Bot space
Apps fragmentation generated a need for order, trusted third parties and and distribution channels. Bots will not be an exception and the competition is already heating up.
Amazon shot first with its Echo device and its Alexa architecture and set of services and the feedback from early adopters are very positive: the Echo device is finding its place at home and within the family at an unexpected speed.
Slack is successfully leading the charge on Bots for Business and Telegram offers some innovative Bots features.
Facebook announced on April 12th during the F8 Conference its long rumored ChatBots API for Messenger.
Microsoft already unveiled last month a complete ChatBot Building Framework.
New ventures like Kik.com from Ted Livingston are also entering that space and several other startups have raised significant rounds of money in the last months like Magic, GoButler or Operator. There will be a strong demand for tools to build and raise Bots but also to develop branded messaging applications, as strong brands will want to resist to the hegemony of the Internet behemoths.
Last but not least, although the audience is mainly in China so far, WeChat is by far the more advanced player in this new space.
Despite the fact that their Bots strategy looks still fuzzy, Apple and Google own key assets, like voice recognition with Siri and Google Now, Machine Learning skills, a trusted payment system and foremost the two largest Apps stores.
A new wave of disruption
Let’s wrap up the new field of forces that any brand will soon face online:
- your services may be disassembled fragmented into small Bots
- the great UIs built and maintained year after year and requiring significant investment, are being deprecated by cheap and fast messaging Apps, where your brand may reduced to your logo and the inherent quality of your customer relationship (yet to be mutated into a mix of automated Bots and human reps)
- New or existing messaging Apps players (WeChat, WhatsApp, Messenger, Hangouts, iMessage and all SMS operators) with massive audience are highly compatible with the Bots culture and architecture
- These players will try to reassemble a brand new and great Customer Experience, taking a cut of the transactions done through their Bots ecosystem, most probably charging the same 30% that has become the de facto standard on all App stores
- Start thinking proactively how you could deeply integrate Bots and Voice Recognition into the heart of your products and services: this may be your best line of defense
There are always opportunities coming along with risks: using Bots and a Lean Startup approach, you’ll be able to test new markets and offers in an always cheaper way.
So will your competitors, incumbents like new entrants, so you better start now this great journey.
(*) The picture has been taken from torbakhopper and is available on Flickr, under the Creative Commons CC BY-ND 2.0 license.