Article No :1670 | September 23, 2016 | by Elias Parker
In July of 2013 Toby Shapshak, the South African speaker, strategist and editor of Stuff Magazine, did a TED talk called You Don’t Need An App For That. Business leaders, innovators and experience designers would soon realize how profound this TED talk was to the rest of the world. Shapshak’s astute observations and message to the rest of the world was years ahead of a revolution that Forbes would call “the new way we’ll be interacting with computers.”
Toby’s 2013 Ted talk touted that “while the rest of the world is updating statuses and playing games on smartphones, Africa is developing useful SMS-based solutions to everyday needs”. Since 2013 his TED talk has been viewed 1,438,046 times as of July 19, 2016.
Fast forward a couple of years and we see more apps than anyone knows what to do with, as well as a notable decrease in usage and app-downloads. This has businesses confused and frustrated. Meanwhile, around the world, messaging (SMS and the ever-encroaching uptake of IP messaging - Facebook Messenger, Spark, Slack, Kik, SnapChat, etc) is by far the most used function or app on mobile phones - smart phone or not.
2016 brought a wave of new businesses and products that fall into the category of bots; chat bots, messaging-bots, conversational-bots, “invisible apps” or "conversational commerce”. Messaging-bots are popping up for everything, increasingly displacing mobile-apps. New bots are being brought to life daily by startups and household brands alike. Whether the experiences are where they need to be or not, bots existing today which allow you to order a pizza, make a payment, read the news, be reminded of an appointment or even make an appointment. Even city and county municipalities are seeing the value, for example, Washington DC uses a bot for their 311-public services hotline.
Silicon Valley and other capital ventures hubs around the world have already backed several startups that leverage, if not rely entirely on, bots. Benedict Evans, Partner at the Venture Capital Firm, Andreessen Horowitz ('a16z') tweeted "I genuinely can't remember the last time a concept blew up as quickly as bots".
For years, I’ve been part of a business that, like Toby Shapshak, was ahead of the “bot” curve that’s now consuming the business and customer experience worlds. Expedia, Bosch, DHL, Unilever, Stella Artois, HomeAdvisor, The National Domestic Violence Hotline, Red Cross and many others use OneReach to create (and manage) self-service messaging bots and live communications with their customers. The most popular use-cases include live and automated customer support, proactive order status notifications or order updates, payments/purchasing and text or chat-enabled IVRs (now called chat-bots). Who’d have thought that a bot could reduce 40% of a major brand’s customer support costs, increase revenue by 30% or boost NPS scores?
Toby Shapshak seems to have been the oracle that foretold one of the most prolific changes in how consumers and businesses communicate and do commerce. He suggested that bots are “effectively an intersection of the most basic and sophisticated communication. It's remarkable that the very rich (in the developed world) and poor (in the developing world) have effectively ended up in the same place (both using bots)”
Years have past since his Ted Talk and we thought it would be valuable to see what Toby thinks of today’s climate and where things go from here.
Our interview with Toby Shapshak
Elias: Messenger Bots are impacting the everyday life and habits of consumers - in commerce, purchasing, managing one’s time, getting news and so on. You’ve been watching the impact of messenger bots in Africa for sometime. With this in mind, what perspective would you offer to business leaders and experience-designers on the impact that messenger bots have on consumer habits - in commerce and purchasing or donations, customer support, managing one’s time, getting news and so on?
Toby: Business leaders and UX designers should be aware of how chatbots can have an impact on consumer habits; both positively and negatively.
For the youth of the world, who have grown up using chat, it's a logical extension to communicate through this channel, ask questions, even make purchases. Pew Research found that American teenagers were only using email to communicate with "authority figures" - adults, parents and teachers. Now chatting is so dominant that WhatsApp has over a 1 billion users and Facebook Messenger has some 800 million users and 50 million businesses. WeChat has some 800 million users, mostly in China, and has been using bots in a very sophisticated way for a lot longer. Wechat is the future of chatting mingled with commerce.
The great thing about SMS - which is arguably the greatest communication medium the world has ever seen; and the most expensive - is that it works on every single cellphone, no matter how sophisticated. The other key thing is SMS has a 100% read rate - even the spam.
In this context, doing new things like search or shopping via messaging/chat seems obvious to a generation of youngsters that prefer chat to email or anything else. Chat is cheaper and it's a paradigm that people understand. It also doesn't have a learning curve, the way that conventional apps do.
Elias: In 2013 you commented that "while the rest of the world is updating statuses and playing games on smartphones, Africa is developing useful SMS-based solutions to everyday needs”. Is the current wave of messenger bots solving real problems or this just the new version of "updating statuses and playing games on smartphones”?
Toby: Right now, a lot of chatbots seem like a nice-to-have. Give them some maturity and we'll see if they are a flash-in-the-pan hype or something that will be ongoingly useful.
Elias: Is the rest of the world catching up or is Africa still ahead and in what ways? What has the rest of the world yet to learn still from African innovation?
Toby: Africa is forced to innovate the way it does because there are no other alternatives. it's the purest form of innovation out of necessity. More people in Africa have access to a cellphone than to electricity. Because of this there are brilliant power solutions, including solar-power systems like M-Kopa. If you have a pressing problem, it's the best incentive in the world to solve it. If you have electricity, what are you likely to do? Watch TV or YouTube. it's sadly that simple.
Elias: What are your predictions for where messaging and bots go next, in Africa and elsewhere?
Toby: The sky really is the limit, isn't it. Text-based services are revolutionary in Africa, offering everything from Google search via SMS to important health information via South Africa's mHealth initiatives.
Kevin Kelly, the founding executive editor of Wired magazine, said some very interesting things at SXSW this year about how artificial intelligence will become part of our lives. Right now, he says, “it's like the early days of cloud computing, but it will ultimately be as sophisticated a service as cloud-based offerings are now”. He called it "intelligence as a services". “Like electricity, which you now buy in what we now call an on-demand model”, Kelly says "you won’t have to make your AI, you will just purchase it. It will flow like electricity from the grid to wherever you want it. " He says: "Artificial intelligence will soon be a commodity". AI services at low cost will spur the chatbot industry and make offerings increasingly sophisticated.
There is also the network effect to consider. Part of the reason Google's search algorithms are so fast - and can predict or suggest answers so quickly - is because of the volume of search queries it has already performed. This inventory of queries and searches mean there is a greater volume of info to reference. As the volume of chatbot data increases, they will also become more effective.
Reflection & Looking Forward
In reflecting on Toby Shapshak’s 2013 Ted Talk it’s evident that he saw something revolutionary emerging amidst the noise in the world of experience design, business and technology.
Similar to the concept of hindsight being 20/20, until 2016 the business world largely ignored the opportunity to leverage the most ubiquitous communication channels in the world (text messaging and IP messaging) for customer support.
The first text message was sent in 1992 and by 2007 74% of all mobile phone users worldwide used text messaging. It took the western business world roughly another 10 years to accept the notion that just maybe they should consider communicating with their customers over the single most prefered communication channel in the world - SMS.
For the last 6 years at OneReach>, I’ve been lucky enough to see startups and huge international brands alike use our tools to easily create and iterate on fully reportable and integrated bots. It’s been 3 years since Toby Shapshak’s TED talk and it’s great to finally see so many companies designing for the channels consumers actually prefer (messaging).
Now that we’re here, let’s not be foolish enough to think that leveraging chat bots to drive business impact is any easier because the interface is an ‘old’ technology. The businesses world learned that building any old mobile app really isn’t all that hard. Similar to mobile apps, the success of a today’s chat bots will not be defined by whether or not your company offers chatbots. Success will rest on whether or not your chatbot experiences achieve desired outcomes for your business while being meaningful to your customer.