Bots: What I Learned at Botcamp Day

tl;dr: bots are deeplinks, watch out for iMessage, Facebook is being deliberate and careful with its platform

Our partner Betaworks recently hosted its botcamp day. CEO John Borthwick, my fellow Kellogg alumnus Matt Hartman, and the rest of the team put on an excellent day with great speakers and demos by eight highly promising bot startups.

Here are my 10 key takeaways from the day’s presentations and discussions:

Current State of Affairs

  1. Early days: Bot functionality is still limited. App developers are laying early groundwork on user experience, bot personality, getting access to data, developing algorithms, improving NLP, and many more challenges. The bot world today is undeniably developing apps that are more useful than Clippy, yet we know that we are still in the industry’s infancy and that bots don’t do everything that users want them to do. For a fun example: even though you can order a Domino’s Pizza directly from Facebook Messenger, the bot’s functionality is fairly limited and does not replace a human. You can’t ask it if pineapple will taste good on your anchovy pizza.
  2. Naysayers: Many people used to argue that they would never purchase products online. Now many of those people loathe going to stores and prefer the convenience of purchasing online. A similar transformation of people’s preferences will likely happen with bots, especially as bots continue to improve with access to more data, better algorithms and the evolution of best practices.

Product Strategy

  1. Asia: a lot of people point to China’s use of bots in WeChat and expect that the same bot products will work in the Western world. This is not necessarily a fair comparison. Beyond the cultural and societal differences, here is a very specific technological/political example: many Chinese developers rely on existing app platforms as a way to bypass the requirement by the government to approve apps (SAPPRFT: State Administration of Press, Publications, Radio, Film, and Television). Such limitations do not exist in the Western world. And so bot developers are not as reliant on messenger platforms as they are in China. Secondly, Chinese users entered the social web via an all-encompassing messaging platform, QQ then WeChat. Western users have been educated to think about “atomized” apps and generally use a wider mix of messaging platforms.
  2. The 2 rules of marketing: Many moons ago, one of my business school professors hammered home the point that businesses exist only to either a) address a pain point, or b) delight their customers. The same advice holds true for today’s bot developers, except that at botcamp they often state it as: a) “help people get shit done” (x.ai’s Amy, Olabot’s enriched profiles) or b) “make it fun” (Hugging Face’s virtual best friend, 2001’s Subservient Chicken).

Thoughts on Functionality

  1. The New Deeplink: Bots are great for jumping into the deeplink of a decision tree. Compare a bot to a telephone IVR (interactive voice response system). In an IVR, you listen to several options then hit 5, more options then 7, more options then 2. A bot can you get you there directly by you saying just one word (cancel, support, stolen, reschedule, etc).
  2. ♩ ♪ Lean back, lean back ♫ ♬: as bots continue to improve, we should expect to see that users will spend less time leaning in trying to figure out how to get the computer to do what they want. Instead, the bots will become so good that people will lean back and simply say what they want in their own natural words. We are in the Age of Context. An example of a recent improvement: ask Siri to tell you a joke about Donald Trump and she will give you Google search results. Ask Alexa and she’ll make you laugh.
  3. Apple iMessage: the once-simple messaging app released in 2011 that 250m people use has recently had a massive change. iMessage now supports 3rd party apps. While the press has discussed this to a certain degree, the impact of iMessage is still underestimated. Expect iMessage to continue evolving and to be an important platform for bot developers, especially in the US where iMessage has its largest foothold of users. iMessage will transform to start having elements of fun for younger audience. More fun and more play.
  4. Dream bot (one of many): imagine being able to chat with the author of a self-help book. It is powered by a bot, but users can’t even tell the difference. To feel like Stephen Covey, Dale Carnegie, Malcolm Gladwell, Jim Collins and The Dalai Lama are all ready and eager to train you.

Some Challenges

  1. Discovery: we do not have a good model for bot discovery. It is hard to find the best, most useful, most fun bots. At the same time, there are many potential privacy issues to resolve, especially in open environments (unlike Slack’s closed environment). For example, if I can invite a bot into a group discussion, the bot’s functionality might erode some people’s privacy expectations. This is one of the reasons why Facebook is moving slowly with bots: they represent a big opportunity, so they don’t want to do it wrong and alienate people forever. Even with recent progress — Facebook is rolling out an ads unit that takes users from their News Feed to a conversation inside Messenger and adding support for payments inside of bots — Facebook is being deliberate and careful.
  2. ♩ ♪ It ain’t easy ♫ ♬: being a bot developer is not easy. In addition to the challenges of discovery, user experience, algorithms, getting access to the right data for AI & NLP models, etc, the platforms also impose some limitations. A few examples: one cannot pass parameters to Facebook Messenger that would allow the bot to jump into the right location in its algorithm. Another example: some data, including the types of KPIs that VCs often ask for, is not always made available.

Conclusion

While we are in the early days, bot developers have created many useful bots. Some favourites discussed at the event and with friends: YourMD’s health insights, Xiaoice’s best friend with its 20 million registered users, Digg’s freshest news (White Star is an investor), Swelly’s surveys, Poncho’s weather, Digit’s money saver, Purple’s political news, Talkspace’s therapist, Toronto’s Zoom.ai’s workday assistant, and many others. These are exciting times for bot developers and for their users. Yet even with all these entertaining and productive bots, the best is yet to come!

My ask

Bots consume and generate data that we at White Star believe can be a competitive advantage. Not only in the obvious cases of social and of business productivity, but also in FinTech, in disrupting commerce, and interfacing with IoT-enabled devices. If you’ve developed such a bot and are getting significant traction, we’d love to hear from you.

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Lylan Masterman is a Kauffman Fellow and a Venture Capital Investor at White Star Capital, an early-stage Venture Capital fund backing exceptional entrepreneurs with global ambitions. www.whitestarvc.com

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