In a line, chatbots are more profitable than self service and that's why businesses will adopt them. Last year and the beginning of this year we have seen a lot of companies embrace machine learning and use chatbots as a new interface for users.

Source: https://www.pexels.com/photo/bot-cellphone-chat-bot-chatbot-190362/

What is a chatbot

If you haven't yet heard of or used a chatbot (try Slack for a few of them) it is basically a service (or program) that will take an input from a user like a chat, tweet or message and render a service. Some examples of bots are the ones in Slack, IFTTT, Skype and so on. A lot of messaging platforms have introduced them as a way to enhance the value of the platform because now with a simple line of text you can get things done in addition to just chatting with people.

What's in it for users

Well the obvious benefit to users is, convenience. They don't have to spend time navigating websites and reading all the options before they find the cheapest airline ticket, or best hotel room and so on. With a simple chat you're able to now order for those services.

Mobile and wearable enable faster access

Add to this the small mobile screens with high speed internet, wearable that you can use, you now have a bigger need and ability to trigger workflows and services quickly. You don't  have to wait to be in front of a computer (or rather a keyboard :P)

Isn't this bad for business

Websites relied on pageviews for ad revenue and on user searches for revenue. There was a lot of opportunity to cross-sell and up-sell if users came to a page. Now, if users are just typing what they want in a single line with no option to show them new services or ads, why will businesses embrace the chatbots? Well, the reason is because chatbots can be more profitable than self service.

So .. why will it succeed for business

Users like to have a simple way to do things because it isn't their profession to use your product or their passion to use your product (well most users anyway). They use your product as a means to get something done. So the less they have to do, the better they like that. When wesbites came up and became popular, they gave something to the customer that they never had .. the ability to self serve at anytime from anywhere. The customer didn't have to drive to an agent or office or make a phone call during business hours or only on weekdays. It opened up a lot of flexibility to get the same service at any time. 

Businesses will start to adopt chatbots as helpful agents to optimize their service for you

But with that came the burden of reading and choosing on the customer. More and more, websites and services have complex options and conditions on their website so a customer really has to invest a lot of time before they can make a decision. So now a chatbot can take away that from a customer by automatically picking the best option. This makes the chatbot a sort of an agent. The chatbot can suggest more profitable plans to users or charge a premium and I would bet that users will prefer that instead of having to do all the research and selection themselves on a website.

Make it easy to stay with the service

Also, it makes it easy for the user to stay on a particular service if they just need to chat a line or two to make some changes or to enable or disable some services since the big configuration is already done as a one time setup. Most users will just stick with the simple service instead of having to switch and research the best alternative.

The customer will also win .. eventually

Over time, I think as third party chat bots become popular there will be a case for a win-win for businesses and customers. Chatbots can truly act as agents that work on behalf of the customer picking the service provider that is the best option for the customer and not generating more profits, or cross-selling new services. Imagine a third-party chatbot telling you to stop subscription because you just don't use it enough to justify the cost :)

Anyway, I think that is still some time away. For now, I think businesses that embrace chatbots will be able to offer a new easy way to use their services and customers will be fine with paying a premium for that. They'll likely see better retention rates too. This would be something they'll want to do.

I was reading an article on TechCrunch the other day titled Do Startups Stand A Chance Against Valley Incumbents?. That got me thinking on what is Google's biggest threat. Google has slowly grown from a small search engine that was powering Yahoo and Microsoft web search back in the early days to one of today's biggest companies.



Its success can be attributed to three powerful strategies Google followed (and still follows).

1. Simple design to encourage users: From its single line web search to email and to every other product Google makes, they are really focused on simplicity. They go to extraordinary lengths to maintain the simplicity and consistency of their sites.
2. Really powerful search and ad matching: The keyword matching and bidding systems used by Google's AdWords and AdSense platforms are outstanding. Since they have captured the search market as well, Google is able to generate volume which drives optimization which again drives better ROI for advertisers. If advertisers see better ROI, they are more likely to go back to Google to advertise.
3. Free: Google offers almost all its services for free. You can't compete with that! Most users don't know where Google really makes money, but they trust Google because the search and almost everything else is really really good and free.

Ok, so now you're wondering why I am still talking about Google's strengths when the blog post is supposed to be about Google's threat. I just wanted to lay some ground work. Google's revenue comes from its ad network. The table below shows that more around 96% of Google's revenues are from advertising revenues. This has been true for many years now.

	Full Year			2013
			(unaudited)	(unaudited)
Revenues	2011	2012	2013	Q1	Q2	Q3	Q4
As % of Google Segment Revenues
Google Websites	69%	68%	67%	67%	68%	68%	67%
Google Network Members’ Websites	27%	27%	24%	25%	24%	23%	23%
Other Revenues	4%	5%	9%	8%	8%	9%	10%

Source: http://investor.google.com/financial/tables.html (see 2013 information). More information here.

The key strengths of Google is also its biggest weakness. Google is one of the biggest proponents of the Internet and has believed that if more people use the Internet then Google will have more content to search and therefore can make more money. But as more people came to the Internet, two things happened,

1. Google made more money: Yes that part was true to a certain extent
2. The organic search results started interfering with the ads

The second point is key. As more people (advertisers) also come on the internet with their websites, blogs, pages (facebook, linkedin, pinterest, etc.), then Google organic search (the main search results) will have more (if not all) the advertisers in it. So there will come a point when Google will have to pick what to show in the search in order for users to click on the ads. If Google stays true to its search philosophy, it will have to show the advertiser's site in the search result and the advertiser's ad on the right. Users will naturally click on the search results and Google search will start cannibalizing on its ad revenue. At some point, the advertisers will see that if they are relevant, users will find them anyway on Google and if not, users will not click on their ads because they found better "results".

So, as I read the article on TechCrunch I was thinking to myself, who could stand up to Google? The simple answer is .. no one has to. Google search and advertising paradigm is heading towards a point of collision. Well, you might argue how come this hasn't been happening so far. If all of Google's ads are links to others sites, then why has Google been able to generate revenue so far. The reason for that is that advertisers didn't have enough presence on the Internet to link them to people. So keywords were the answer. Advertisers could use keywords as hooks to draw people to their sites. Now, with so much data and information about each advertiser on the Internet (continuing to grow), advertisers do not need the keyword hooks anymore. Google can already find the right match and show that in the search results.

I am yet to dig into whether we can spot signs of this theory from Google's revenues and rankings. But you can see anecdotal evidence in the way Google has started showing paid ads more prominently, in the form of widgets, giving it larger screen real estate, etc. in the recent years. Here's a great post on recent changes to Google's ad spots on its search results page.

http://www.rimmkaufman.com/blog/a-more-organic-experience-part-iii/19022014/

Google has tried numerous attempts to generate revenue from hardware (Motorola purchase), services (like Google Shopping Express) and others to diversify its reliance on the ad revenue but with ad revenues making up 96% of total revenues, there is a lot of work to do. Google is the king in search but I think it is getting closer to being forced to make difficult decisions on whether it has to stay true to its search philosophy or try to play the consumer to continue its dominating ad revenue.

Please leave your comments.

Today I went to StartupRoots organized by The NextBigWhat team, in partnership with 10,000 startups. I was in two minds when I heard about the event, but when I saw Ravi Gururaj was going to speak at that event, I decided that I have to go. Here's what I saw and my views. Apart from all the great things that took place there, the highlight was the shark tank event where four early stage companies were given an opportunity to pitch to the sharks who had promised to make a funding offer to the company right there on stage if they liked the idea.

Very informal and honest:
Very few events I can say make you feel they're authentic and honest and at the same time they give you a closeness of sitting in a coffee shop with the speakers. This event was exactly that. Hats off to Mukund Mohan for making the environment so lively with his witty humour and liveliness.

Honesty and open-ness of the sharks:
When it comes to asking questions and giving feedback, it was a really open and honest interaction. I felt that Mukund played a really important role in asking right questions on behalf of the audience and the founders and the sharks were very honest about their feedback.

All four startups were funded:
All startups were supposed to come and make an offer for giving a stake in their company for a certain sum of money. I was really happy that the sharks made counter offers where companies weren't able to convince them and the founders accepted the counter offers. The counter offers did seem fair. Ravi Gururaj explained the nature of why the counter offers were made. They looked reasonable and fair.

Is the format right:
There was so little time given to the startups and I felt some of them weren't getting to the point quick enough or talking about what the sharks were looking at. Get to the point people and be really clear on why you're doing this and what you need the money for. The questions asked by the sharks were on similar lines. I think it would have helped if the startups were given a basic format to stick to so at least the basics will be covered.

Are there really buzz words:
I do think that there are buzz words. I mean if something is hot, business that ride the wave will find it easier to make money. So there's nothing wrong with buzz words. However startups forcing buzz words into what they're doing when it really isn't riding the wave, to me, looks like the wrong way to try to make a pitch. These sharks seemed pretty experienced to differentiate the two and asked the right questions.

Effective elevator pitch of hunches:
I wonder how so much of funding was done so quickly (7 mins per startup). Do the sharks have a strategy to evaluate against, or have they done some homework before coming .. I think they have their secrets. In some cases they didn't promise the whole funding in a single round so they offered it as a two stage investment if the company met the milestones after the first round. Also, Ravi said he had heard one of the startups pitch at a different place. So I guess its a bit of hunch and a secret evaluation criteria. If the money is a lot they might go into a lengthy evaluation, otherwise they might stage the investment.

Overall, I was excited to see so many companies trying to create something new. The sharks were very encouraging and fair. I caught up with Ravi after the event. As always, it was great talking with him .. some useful insights to learn. Here are some pictures from the event.

After the event I saw so many startups talking and mixing with the sharks. I think it made for a good informal way to discuss ideas, learn from sharks and meet new people. I learned a lot and am happy that such great events are taking place in India. Looking forward to some great companies.

Update 1: Here's a link to who got funded by how much. Thanks for the detailed information NextBigWhat team :),
http://www.nextbigwhat.com/live-funding-india-startuproots-details-297/
Nice pictures as well.

Karthik

When Windows 8 was showcased by Steve Balmer, I must admit that I was impressed and quite honestly feared that Apple might have met a worthy competitor. The tiled look definitely was pretty to look at. The idea that you can have a single OS on multiple devices was impressive - buy an app once, and use it everywhere. I also saw Xbox beginning to use the new Windows 8.

Fast forward to today and my views are less optimistic about this operating system after I have been using it for a few months now. I upgraded from Windows 7 and decided to give it a try thinking that it will be a really great experience.

Here are some things I don't like:

The full screen metro apps:
Yes, I know you designed it that way, but why do i want to see only a single app on my 22" monitor! The only flexibility Microsoft has given is the ability to have side by side apps occupying 80% and 20% of the screen. The problem with that is that most apps don't do anything useful in that 20% so there's no point even doing that. Yes, i know we shouldn't call it Metro apps but they haven't given it a better name yet. Wasn't Metro the biggest thing in Windows 8 .. hmmm.

Web browsers really suck in Metro mode:
I don't know if they were told to be designed that way through developer guidelines or if everyone just designed for the tablet in mind, but the web experience on Metro is really bad if you're on a computer. You have to move the mouse all over the place to do simple things. The tabbed browsing is really bad. For an advanced a heavy user of browsers, I don't want to see animation too much. Yeah its cute to look at the first few times, but after that, it slows you down and gets irritating.

Pictures don't make the app better .. just beautiful:
For a while now, Microsoft has resorted to using beautiful images as backgrounds to apps. Is that a way to make us like the app or get distracted? I'm not sure what the intent is for that, but if I wanted to see beautiful images, there are better sites to do that. We see the same thing in Windows 8 apps - Weather for example. The pictures dominate the design more than what the app is supposed to be doing. Keep it simple guys .. :P

Save as .. what were you thinking!:
When you try to save a file from a Metro app, you get this really bad looking save as dialog box. Its almost easier to save to Desktop and go to Desktop and use the older style Explorer to move it on your own. The navigation is really difficult and you can only see a part of the file name even though the rest of the 22" screen is empty. I wonder if anyone saw that and still decided to go ahead with it.

Searching is weird if you have to go to the right every time:
To perform a search (or find) in any app, you have to move the mouse to the right edge of the screen, wait for the animation to show the search option and then use that. It makes it look like you're searching the computer instead of the app. How is search a OS level function? Isn't it something each app implements specific to what they're trying to do? Anyway, its confusing and I hope Windows finds a way to fix it.

Here's what I like:

Boot speed is awesome:
Windows 8 boots up really fast, much faster than Windows 7. Was it designed keeping the tablet in mind? Well it works awesome on the computer.

Desktop is close by:
If you didn't like the Metro, don't worry. The desktop is always close by. Just click it and you can get back to work.

Automatic updates:
Windows automatically keeps your operating system up to date. I think that's something apps like Dropbox, Evernote, etc. have been doing for a while now. As consumers, we don't want to control which app is updated when. Just make sure it works when I need to use it. Microsoft has done a great job at getting this in for Windows 8.

Live id for login:
At some point, the web will merge with the desktop. Windows 8 has taken this first step towards that. I like the fact that you can go to a website and see that you're computer is there. I'm sure it also reduced piracy a lot given that every machine is trying to register on the web.

Refreshed UI:
Ok the flat panes, tiles, look plain but its nice. Good refresh from tons of gradients and colors before. I think keeping it simple in the UI makes it easier to focus on what you want to do.

So how is this related to strategy

• I think the tablets, phones and desktops can have a single OS but more like what Ubuntu has done and not what Windows 8 is doing
• I'm not at all surprised that Windows 8 has not seen a lot of adoption. There is just too much change in one version
• The OS should take care of making the apps render and useable in different form factors. Let the developers focus on the apps and make it work seamlessly
• The most used apps - office apps are not present on Metro only windows tablets. That is probably a big drawback to why Windows 8 tablets are not selling
• I like the multi-tasking ability in Desktop mode and like the Metro for tablets .. great start but more work needed

In the end, I appreciate the fact that Microsoft has taken such a big leap. A company so big is making such a big change, that is impressive. I think they have enough stickiness right now to experiment with the next or next two releases before they start losing serious market share. So its great to see them being bold now and trying out different things. That's all for now :)

Karthik

I just stumbled upon this link and happened to see a video by Lee Doren. He speaks very enthusiastically and in my opinion, has his fundaes quite right on the macro economy front. He is a strong believer in capitalism and I liked his argument on how capitalist nations create wealth. Just finished (well almost finished) Wealth Of Nations by Adam Smith and its a great book.

So if you want to listen to some good debate and discussion on macro economic topics, do check out this channel on YouTube.

Cheers,
Kar.

Its been a while since I blogged. Today I think I will continue blogging because:
a. Its always great to read them again
b. Rediff launched its renewed blog service - http://blogs.rediff.com/. I am moving to Rediff blogs, but I doubt they're Google indexed so I'll blog here and import. Or maybe XML connect the two. Not decided yet.
c. I'm gonna finally start blogging about my passion - robotics (in a separate blog of course). Trying to "connect" with the experts through the world wide web. There isn't a good blog on robotics .. yet :)
d. With the iPhone in hand, I can now mo-blog a lot more .. and with great pictures!
So what's happened in the last 6 months! I quit Rediff. yep .. that was a big decision. I wonder if it was the right decision though. But too much had been said and too much had been kept unsaid. And we're not getting any younger .. so why wait for something. Time to fly I say .. India needs people to shake it from its flaky present, full of corporate disownment, commoditized degrees, lackluster work cycles and a sad habit of only following the West.
It isn't too much about following them that pisses me off. We were once passionate about the arts, music, science, technology, war even! What happened .. how can a nation be taught how to fall in line .. and for how long. What happened to the rising middle class? Gen X? Baby boomers of India? Silicon valley of India? What happened to the money the VCs were going to bring? There are fundamental shifts that need to happen, but one thing I have realized over the last 3 years is that the effort of following one's passion is surprisingly under-valued and over-estimated. So is it too much to wonder .. where have all the people gone.

Cheers,
Kar. (somehow the KP sign-off brings bad memories)