Chat company Kik ‘excited’ by Facebook’s move into bots
WATERLOO, ONTARIO Ted Livingston was surprised — pleasantly surprised — when Facebook CEO Mark Zuckerburg outlined his company’s plans for chat bots at the f8 developer conference in April.
Livingston, the founder and CEO of Canadian-based chat company Kik Interactive, had expected the launch of a full range of bots — interactive software powered by artificial intelligence that simulate human conversation on chat systems. Kik is in a race with two Facebook units, Facebook Messenger and WhatsApp, to develop a portfolio of bots that can help businesses communicate with customers.
However, rather than unveiling a range of bots, Zuckerberg instead handed developers the tools they need to develop these bots.
“We were excited that they’d be delivering the platform with great bots, because that would signal that bots are here,” Livingston said in an interview at his Waterloo office. “But that didn’t happen. I said to someone, ‘We’re further ahead than I thought.’ ”
Livingston, 29, likes Kik’s position in the burgeoning chat bot market. The company unveiled its own Bot Shop — the bot equivalent of Apple’s App Store — in early April. With 275 million registered users, it has a dominant position in the U.S. youth market and is used by 40% of American teens. And it received a $50 million strategic investment last year from China’s tech giant Tencent, the creator of WeChat, the dominant chat app in China. That’s im- portant because the Chinese chat market is far more advanced than those in America and Europe.
Livingston believes his company is now leading the race in that the Bot Shop has the best display of what bots are available and showing a potential for developers to build apps. It’s a view shared by at least one industry analyst.
“Facebook Messenger could have the greatest potential, and WhatsApp,” said Cathy Boyle, the principal mobile analyst at eMarketer in New York, alluding to the massive Facebook user base. “But if you look at what’s out there now, I think Kik has a greater selection of bots, or maybe they’re the most organized. … Their presentation of bots is more familiar because we’re all used to the App Store.”
One thing that Boyle, Livingston and others agree on is that the bot market is in its infancy, and the current products only hint at what bots could achieve in the coming years. Livingston compares the current bots to websites that came out in the early days of the Internet — rudimentary products that hinted at what was to come.
“The thing that we are excited about is that the first bots make it obvious just how powerful bots will be,” he said.
Livingston believes that bots will soon occupy the position in the mobile tech market that apps now hold — or at least held until recently. Consumers are now downloading fewer apps, and the time spent on mobile phones is dominated by a few apps. Consumers prefer not to download apps, and chat bots allow consumers to view, test and fiddle with apps without any download.
In fact, he said the experience in China has shown that consumers that have never used the Internet are using chat to undertake a range of transactions — from ordering food to shopping to banking. Critics point out that chat took off in China because it is an emerging market in which people lacked Internet a few years ago. But Livingston says there is a segment of the American market that has never carried out these transactions on the Internet: youth.
The generation that is now entering the years in which they use money use chat more than the Internet and will therefore feel at home moving money through chat. And Kik, argues Livingston, is perfectly positioned to connect them with businesses because it has the Bot Shop and is working with Tencent, which already has expertise in the area. “We have a pretty unique audience with all the teenagers,” he said.
The launch of the Bot Shop has been a bright spot in a troubling year for Kik, during which it was criticized for the product’s role in the slaying of a Virginia teen. Nicole Lovell, 13, was killed after an 18-year-old man and a female accomplice allegedly initiated contact with her using Kik and then kidnapped her, police say. Livingston said the episode was “tough.” The company has added functions designed to prevent young children from using it.
“If you look at what’s out there now, I think Kik has a greater selection of bots, or maybe they’re the most organized.” Cathy Boyle, principal mobile analyst, eMarketer