“We plan a bot in Hinglish“
In a face to face interaction Aakrit Vaish, Co-Founder & CEO, Haptik Inc, explains about the overall business model of Haptik in Indian market perspective
How old is Haptik as an organization and what has been the domain you have been playing in?
Haptik is now about a little more than four year old company and we have been trying to be at the forefront of the chatbot space. The company is externally funded. We started Haptik by bootstrapping and we raised capital about two years back.
The space itself is so new; it is evolving and we are all trying to understand and learn as to what is happening. Haptik started out with the vision that we want to be the leaders in chatbots, the messaging as we used to call it and let’s see how it works. Currently, we broadly have products and solutions for three different types of customers. Having said that, these three customers could be the same customer, but we have three different ways of working with them.
Can you elaborate on the profiles of these three types of customers?
One is, let’s say you have a large app and you want to implement a bunch of services inside your app for more user engagement. For example, if I have a news app and I want to implement jokes, quizzes, flight ticketing, cab services, local services inside my app. I want to implement a bunch of these services for my user. So, we have built about 45 bots which are readily available for people to use. There is no customization. There is only color and all which are customised but outside of that, it’s completely generalised.
The second module is we working with CMOs and advertising agencies to run chatbots for their advertising purposes across these users. As I said, there is user based and I make money by giving this option for advertisers to come and run chat based ads which can be LeadGen, pure branding or it can be transactional as well.
The last business is the pure play enterprise software business where we build a chatbot for you that can then be deployed on any of your channels for customer’s service or lead chat. This can essentially be on your mobile web, mobile app, apps, facebook messenger. We can build something for you on Alexa, on Google home, across the board anywhere, one
bot can go everywhere. Our team does the solution as well as the integration with the enterprise’s CRA. Furthermore, there is a SAAS model where we charge one time plus.
What sort of actual deployments have happened in each of these areas?
About 10 apps are using the bots. There are two business models for this. One is you go after thousands of apps to get users. Second is, you go after limited but largest apps. So that’s what we have done. We work with 10, but these are the largest apps in the country. The Times of India, The Economic Times, and then Samsung has an app called Samsung My Galaxy which is on every single Samsung device, besides the in-built apps on Intex phones and Karbonn phones. Therefore, we have a total user volume of more 25 million users.
On the second front, we measure LeadGen on leads. And on the brand side, we have a unique model where we measure on engagements. So the number of chats people have with the brand is the measure and then we build on the chats. That’s our big advertising for CMO bots. This month we will have about 25 ad campaigns running. This quarter we have focused on BFSI. For example DSP Black Rock, Edelweiss Tokyo Life Insurance, HDFC Home Loans, Cadbury--we had Valentine’s Day campaign for them.
Again as I said, on the third category with very large companies we try and do long term partnerships. I think on an average we have about 35 campaigns running in the next few months. The live ones are Coke, Dr.Lal Path Labs, Housejoy, Ziacome, Tata Docomo WiFi. For instance, if you go to Delhi Airport and connect to the WiFi, you will see our chatbot. And the remaining are in development and will be going live in the next few weeks.
Would the third business model be the biggest in terms of overall contribution?
It is the fastest growing right now, but overall contribution per se advertising is the biggest because we have so many users. But to your point, the third will become the biggest eventually; it is the fastest growing and there is no ceiling to it. In ad business ceiling is upto the users, half of the people don’t spend on advertising in India. In the enterprise business, there is no ceiling, you can start making outside India, in any market and in any country.
With respect to services offered by the bot, would it require localisation since India is a vast and diverse country?
Absolutely, that is an area we are very actively looking at right now. It’s not an easy technological problem to solve as to how will you implement a language if the person talks in Hinglish. We have started research on that about two months back. We are hoping to have our prototype next quarter. We are currently looking at Hindi and then after that, maybe to Hinglish. Because people don’t usually talk how they write.
By market share the biggest language in India is Bengali, Tamil is second and Hindi is third which is purely based on number of educated speakers. Right now we looking at Hindi and English and depending upon how successful we are, we will see which language to take up next.
How big is the overall bot market in India?
It’s like asking how big the overall app market is. There is no number because bots can be everywhere. Someone quoted that the bot market is $30 billion which is not an exact number.
What we do is that we focus on our business areas. At Haptik, we think, how big is the ad market, if that’s one area, how big is the enterprise software customer support market. Like the customer support is a trillion dollar market. Right now if bots can automate about 5 per cent, that’s 50 billion. Second is the digital ad market in India is about a billion dollars where Google and facebook dominate most of it, rest of it is 100 or 200 million.
So these are the numbers we focus on. Larger bot market is difficult to understand.
Most of the apps are coming from the developers, so availability is normally free like on PlayStore. Now on, all those apps which are trying to device mechanisms of monetisation. So how does it work? How does the challenge of monetisation work?
Very few people understand the bot business, and that is the big challenge. Like if I go to The Times of India and integrate the app, people will start using it but how do you make money? It’s not easy but we are trying to figure out different ways to deal with it. I don’t think we have the answer because right now we are doing the ads and Lead Generation, that’s a big area for us by giving leads to the BFSI and travel companies. We are doing pure brand ads, but we need to find a better way to scale and currently, its work-in-progress. I don’t have a firm answer except that everyday there is an experimentation going and some theories come up that should you show an ad while a person is chatting or should you show it after
the person finishes the chat, or before a person starts the chat. So we are at the stage where video was about 7 years back.
While as you said that you are figuring that out, do a see a transition more towards the enterprise customer business, because obviously there will be a requirement and there the demand is already in market. Is that why you are seeing a gradual transition towards that model?
I think when you do a business, you have to think about the ultimate areas of doing business that I am going to succeed in. My take right now is that the entire apps monetisation ads business in the short term, that will be our biggest driver of growth. But in the long term, it will be the enterprise. I think in the next 12-18 months, most of our revenue will come from the ad side because there we already have the user base and now its just about selling properly and finding out the best ways.
Having said that, enterprise sales takes time, around 6 to 12 months, during that time we will build the enterprise business, we might get into international markets and towards the end of 2019, this will definitely overtake and will be bigger driver of growth.
But for us what works is, we need to have both, obviously because both are very interesting businesses even though one is larger than the other. But also because we are the only company in the world of chatbot which can actually go out and say, we have distribution. The reason why I can build my enterprise business so well is because I can get into the door of CMO from my ad business versus most other enterprise companies because they don’t have that. They only have a platform and building bots, we are the only company that can provide sort of both. So we leverage that against each other.
So who will be some of your competitor?
At a horizontal level, there is a company in Bangalore Nikki.ai. They do the publisher work, or they do the partner integration. But they don’t do ads or enterprise, so there they are a competitor. On the ad side, I don’t think there is a company which is a competitor, our competitor is a format which video ads. Everybody wants to spend on video and the remaining budget are put on chat. So for us the bigger challenge is how do you compete against video.
Does that mean both from the ad agency perspective and media planners, typically the bot is still a good to have not a must have. How do you evangelise to increase the awareness?
40% of my time is spent on evangelism. Not necessarily for ads, for bots. I am here talking to you, I did a session upstairs, I will go talk to someone else, my job is only evangelism, to get people the idea why bots will work and depending on the each person’s requirement and mindset, there is a different reason why bot may work for them. If you are a brand, a bot is 4 times as engaging as a video because you are actually chatting back and forth. But the moment, a Youtube ad comes, in five seconds you skip, you don’t even look at it because videos you have become so used skipping that you play the video until the ad is playing, you will be looking everywhere else. However, in chat you are actually engaging, so for a brand that’s my evangelism to you or for an agency. On the enterprise side, the evangelism is you are spending so much money to counter some support, they are not even available all the time. It is terrible customer support and they are not even real time. Therefore, a bot comes in.
Overall, when you are an industry which is early and when you are trying to establish it, most of time is spent on evangelism.
What are going to be your areas of focus in the coming year?
The main focus area will be around language expansion.Our second area of focus is going to be, particularly to the advertisers and enterprise side amongst all the areas, how do we scale efficiently. Right now we build a bot, solution it out, how can you a platform and building up the product that each time the effort is lower and the ROI is high. We think ourselves in the bot space, a little like SAP, the large software which has so many modules built into that if a company has to implement SAP or an ERP solution, they have to bring in a consultant to customise and implement. That is the direction we want to claim, that we build out enough modules in our product to plug inside an enterprise.
Then, we will also look into international market. We also launched a product 4 months back that we dint even announce which is still there and people use it. It’s a direct to consumer app which called Rembo, which a ninja for reminders that sets reminder for you every day. So we roll out the experiments to see how it works, because again, the space is so new that we have to continue doing it. And also, the last focus on product side is going to be voice.