How does a chat bot company transform a technology advantage into a distribution advantage? This is the key question facing startups in this part of the ecosystem.
Deep learning is advancing at an incredible rate. Google has released TensorFlow and Parsey McParseface. These advances will improve natural language understanding, enabling chat interfaces to amaze and delight users.
So let’s assume that the technology works. Let’s take for granted that despite the myriad ways a human can ask a question, the computer will understand the query. And let’s also assume that on top of the messaging platforms, these chat services flourish. Distribution resembles that of the early days of the iTunes Store, when users were rapt to try out new products and startups aggregated massive user basis overnight. Then what?
In the SaaS world, to generate meaningful revenue per user/account and to create an enduring business, startups often become a system of record – the canonical store of a particular kind of data. Salesforce is the system of record for client information. Zendesk is the system of record for customer support; Marketo for marketing; Github for code and so on.
Can a startup transform user acquisition momentum and innovative technology to become a system of record? Is a change in user interface compelling enough to engender a user groundswell in the company that clamors for change? This has happened in the past with B2C2B businesses with companies like Expensify and Dropbox.
This go to market is David and Goliath reincarnated. Objections like why not buy IBM/the gold standard? are bound to arise. After all, the custom And the best counterargument to that objection is broad internal adoption and usage, because the failing of most systems of record is their data is inaccurate or out of date.
Chat bots can be a disruptive go to market strategy, and a handful of them will break out, amass collections of ardent supporters who champion the products internally, and ultimately subvert existing systems of record. But it won’t be easy.
Published 2016-06-08 in Trends