Today’s chatbots are new & fun. Someday, they’ll actually be useful.
Right now, the tech news is flooded with announcements for new bots or IoT products that are “revolutionizing” some part of our daily lives. It’s easy to label any exciting new technology as “disruptive,” but in the case of bots and AI, we’re still in the first inning. As the underlying tech improves, bots will penetrate new verticals to solve the problems that mobile apps were unable to fix. In five years, 2016 will look like the chatbot stone-age, otherwise known as the bottom of the S-curve.
There’s an App for That?
Think back to the app store in 2008. While apps were touted as the next big thing in tech, the top apps were mostly single-use widgets. They weren’t revolutionary, because they mostly allowed us to continue doing what we were already doing, this time with an app. But they were new, and that was enough to get us excited to download a flashlight app, a calculator app, and an app that made fart noises.
The way we use apps in 2016 would have been beyond comprehension to our 2008 selves, because apps have created completely new behaviors. In today’s ecosystem, the word “app” is almost meaningless; a good app’s value is the new behavior it enables: usually something that was previously impossible, or at least prohibitively difficult. Unfortunately, as the app economy seems to be reaching its peak, monetizing an app has become an uphill battle. The new opportunity is the chatbot.
Enter the bot
Earlier this spring, Facebook released the bot store, which allows us to chat with robots in the same space we chat with our friends: the Messenger app. Think ordering a cab from a bot or contacting customer service from a bot. Most of these chatbots are either app replacements or novelties, and the experience still feels like talking to a robot.
If Microsoft’s “Tay” taught us anything, it was that the underlying technologies have a ways to go before chatbots can pass as real people. As GenCat’s Phil Libin has noted, most 2016 chatbots are “fart bots” similar to apps in 2008: cool and new, but not yet revolutionary.
This is all about to change. As the underlying technologies produce bots that are leaner, faster, and smarter than today’s apps, the trillion dollar opportunities will be the bots that solve the problems that apps cannot fix in entirely new ways. Innovation is not incremental improvement, it’s original creation. As Peter Thiel has said, creating value is moving from zero to one, not one to two.
We’re so excited to see bots and AI climb the steep slope of the innovation S-curve. Starting this summer, we’ll be posting monthly on the most exciting technologies and use cases driving the bot extravaganza in consumer finance and investment management. Over and out.