What’s It Like To Build & Run A Chatbot Business?
We Asked Bot Publishers Themselves
People use messaging apps more than social networks these days. Messaging is also the preferred method of contacting a business, compared to e-mail & phone. All such factors have helped fuel the recent chatbot boom. But what are the chatbot publishers saying?
There are enough bot reports to show the volume & behavior of consumers using bots. We decided to speak to the other side — the bot publishers themselves — and get their take on the current climate. Here’s what we observed:
Chatbots Are Making Money
A whooping 60% of chatbot publishers are already monetizing their bots. Premium subscriptions are the most popular revenue model, where users pay the bots for specific services (like managing your calendar). This is followed by platform revenue. Here, bots exist on platforms such as Slack & make money by providing services (like increasing productivity & collaboration). Another way bots make money is through conversational commerce. Brands build bots & interact with users via Messenger or WeChat to inform them of offers or conduct a purchase. Interestingly, these bots have not made as much money as expected.
Bot User Base Is Increasing Every Month
85% of the bot publishers say that their user base is increasing every month. In addition to this, half of them say that more than 50% of their users are retained every month. Most of them retain around 30–50% of their users each month.
Scratch beneath the hype, you see that roughly one-third of bot users engage with the bots after 30 days. The churn is faster than it was for apps!. One big advantage, perhaps, is that bots can be built on platforms where users already exist, so a separate app is not required. Platforms like Facebook, Slack & Skype have millions of daily users, so they’re the ones most bots are built for. However, retention is a challenge, partly because bots are hyped and there isn’t, perhaps, a killer bot in each category to sustain engagement!
The Challenge
Early bot builders have made the most of these big platforms to acquire users. The challenge would be to retain them even after the initial euphoria has died down. This would mean constantly improving their intelligence and conversational skills — easier said than done.
For one, AI itself is some way off full sophistication. This results in conversations that don’t sound natural. And even with advancements in AI, good engineers, ethnographers and even psychologists are needed to keep enhancing the conversational experiences of bots. For the time being, though, this would be a problem:
82% of bot publishers feel that there is a dearth of available resources required for NLP & Machine Learning skills. Moreover, 30% of them feel that these skills are hard to train. The dev community is aware of this though, and a lot of them have started retraining in these areas. So if you’re aspiring to be an expert in this field, now’s as good a time as any to start honing your skills.
What Can We Expect In 5 Years?
The bot industry is expected to mature in 5 years. At that point, there are expected to be several players in each category, but today’s big tech giants are expected to dominate. This is down to the head start they already have over the others in terms of the platform moats they have built. We can expect a lot of AI related acquisitions from them, continuing with the trend we already experience.
WIth this in mind, it is perhaps surprising that, bot publishers don’t think voice-based assistants will be popular in the future. This in spite of Amazon, Google & Apple investing heavily on voice. The popular vote points towards bots based on natural language, with 48%. Voice had only 1.5% of the votes. Will be interesting to see how this pans out.
Bots have certainly enjoyed a great start, boosted mainly by platforms with a large user base. A lot of them are already making money, but there is a lot of demand for good resources. This is the best time for aspirants to put their hands up & participate. For if bots are to truly replace humans, there is some way to go.
We also received insights on other aspects of bots, like the jobs bots would first replace, opportunities bots would create, and so on. Grab your copy of the report here.
