They're Faster Than Apps and Resemble a Real Conversation: Get Ready for Chatbots

These computer-based programs, made possible by artificial intelligence technology, are already saving time and money for users worldwide.

The staff of Meekan, a company that offers a chatbot for setting up meetings involving a number of people, August 1, 2016.
Courtesy Meekan staff

At the end of June, a 19-year-old Stanford University student by the name of Joshua Browder, or more precisely software that he developed, made headlines. Browder developed software called DoNotPay, which acts as a virtual lawyer when it comes to challenging parking tickets. DoNotPay is a chatbot — a computer-based program that provides a service and simulates conversations with its users.

Browder’s bot asks users simple questions about the tickets that they received and, if it finds sufficient grounds, files an appeal with the local authorities. At this stage, the bot only deals with parking tickets issued in London and New York, but it has been a resounding success so far. Over the past two years, DoNotPay has filed 250,000 appeals and had gotten 160,000 tickets rescinded, saving users about $4 million in fines.

This could be the beginning of something big, similar in scope to the effect of smartphone apps on our lives. Through instant messaging chat, users can talk to chatbots and request a range of services, from ordering a pizza or flowers to checking a bank balance or finding the perfect place to go out on a date.

“Bot” is short for robot; the technology earned the moniker because there is no human being on the other side of the conversation. Although the first chatbots may have been a bit unsophisticated at times, they are being used and developed at breakneck speed.

“It’s reminiscent of cellphone apps when they first began,” says Rona Segev, who is a partner at the TLV Partners venture capital fund, a young fund that has not yet invested in the chatbot sector but is looking at it as a major tech trend. “Facebook announced that it was opening its Messenger platform to bots just three months ago, and it already has more than 10,000,” she remarks, adding that in another six months, the numbers could climb to 150,000 or 200,000. The messaging app Telegram also has its own abundance of bots, which may actually exceed Facebook’s in size.

This was all ushered in by the Slack app, notes Segev, which enabled external developers to integrate business-related bots with apps and made it easier to feed them data or to request information.

“We believe that bots are the next paradigm after apps, and expect that there will be millions of bots in the coming years," says Eran Yariv, group engineering manager at Microsoft’s Israeli research and development center. If banks have a website and an app today, tomorrow they will also have a bot, he predicts, turning communication with a machine into a conversation, all made possible by artificial intelligence technology.

A major study by the Business Insider website found that bots could be collectively worth billions of dollars to businesses by boosting revenues and saving on expenses. The same revenue streams generated from apps, such as advertising and subscription fees, can also apply to bots, even though the authors of the study say it has been hard to quantify this in an exact manner. As with apps, it can be expected that most services would be provided without charge. Business Insider found that in the financial and insurance sector, for instance, companies could realize savings by replacing human sales and service personnel with chatbots.

A date with a robot

The main reason to use a bot is to save time. While it takes a few minutes to order food for home delivery, a bot might take care of it in 20 seconds.

“I created TicTuk in the middle of 2015 with the thought of creating a food ordering network on WhatsApp,” says Tomer Ben Erza, referring to the popular text, voice and video messaging service. He is the CEO and one of TicTuk's two employees. “Over time, we saw that WhatsApp was creating problems and was not opening up to bots, but after Facebook released a developers’ toolkit for bots on [Facebook] Messenger, we went online with a first bot for ordering food from the Agadir [Israeli burger] chain,” he says.

Ben Ezra claims his bot was the first in the world to allow users to order food without being redirected to a restaurant’s website or completing the order by phone. He says he’s now working with Pizza Hut and that several other clients are in the pipeline, as is the possibility of customers in Cyprus, Western Europe and Singapore.

The Telegram messaging service, Ben Ezra notes, offers a great environment for bot developers and predates Facebook’s bot platform by a year and a half. Ben Ezra provides users the option of either Facebook Messenger or Telegram and although he says most people opt for Facebook, Telegram is becoming increasingly popular in Israel.

Ishay Tentser, the CEO of Initech Software Services, has been trying his hand at developing bots in several fields over the past year. Dating websites in particular, he says, can make use of bots for actions like building a user profile, getting users together and figuring out where to meet. The bot can narrow down the choice of meeting places by asking about location, the type of establishment and how much the couple intends to spend, for instance. And Tentser notes that at the end of the process, the bot can ask: “These are your five options. Do you need help making a reservation?”

Among other examples he cites are utilities, which could use bots to allow customers to report service outages; or hotels, where bots could not only make it easier for potential guests to reserve rooms but also enable existing guests to order additional services.

The illusion that it’s a real conversation

Meekan, which offers a platform for setting up meetings involving a number of people, was the first technology firm in the Israeli tech scene to make an exit. The company was purchased by Doodle, a Swiss company. Although the sales price for Meekan was not disclosed, it was apparently several million dollars.

Meekan co-founder Matty Mariansky says that when the product was originally developed, it was built as a smartphone app, but users didn’t understand how it worked, so the company shifted to a bot. “The company’s situation changed overnight," he says. "The bot can look at the users’ calendars and find a time slot that’s convenient for everyone. It learns the users’ routines and knows if someone prefers morning meetings, for example.”

“The robot is a blank slate,” Mariansky declares. “Naturally people also swear at it and even ask it to make a sandwich. At the beginning, we would generate an error message for the user when he wrote nonsense,” he says, but after understanding the phenomenon, the company developed a database of responses that created the illusion of a real conversation. ”If a user told the bot: ‘Schedule me a meeting on the moon,’ then it would reply that you need more than one robot to do that.”

Chatbots provide an ideal platform for checking your bank balance or performing basic banking transactions. They could be used to order a cab, pay for metered parking and a whole host of other uses. At this point, many chatbots are connected to content and media. There are chatbots for news and magazine websites, including Time magazine, National Geographic and CNN.

The advantage that these bots offer over apps is that the user not only receives notifications about breaking news but can also request news on a particular topic. Bots are also a great way to disseminate music and podcasts, something that more traditional technology has not properly addressed.

Another potential use was noted in tech news website VentureBeat's technology blog: Bots can be especially attractive in countries such as India, where users’ smartphones are generally inexpensive and only have basic apps. Even if the users’ internet connection is slow or if websites are not adapted for mobile devices, bots can be an excellent way of accessing the internet, the blog notes.

Business models

Since the chatbot is still a relatively new form of technology, there is a difference of opinion regarding how it should ideally be used and what business model is the best fit for it.

Referring to Apple's voice-activated personal assistant feature on the iPhone, which goes by the name Siri, Ben Ezra said: “I believe less in bots like Siri, which is based on natural language and which has heart-to-heart talks with you. I believe in bots that simplify life, and that's difficult with natural language technology. There are a lot of applications around the world like that involving millions of dollars of investment, and it really is cool technology, but for the time being, it is not sufficiently developed. If a bot is designed to order food, it needs to know how to do it and do it quickly.”

But Segev, from TLV Partners, has the opposite opinion, saying the voice recognition technology doesn’t have to be 100 percent accurate. “Instead of one click after another, just say what you want: ‘Give me a large Greek salad with sesame seeds,’ for example.”

Chatbot as sales staff

Chatbots are also a good technology for people with privacy concerns. Unlike applications, which frequently require that users provide access to a large amount of information from their smartphones, including their locations and contact list, the use of bots requires minimal access to data. The Facebook bot doesn’t involve the user’s Facebook profile, says Initech CEO Tentser. “It’s the profile of the business whose services you use.”

The business model for bots remains unresolved and how many of them will generate revenue is still unclear. Tentser notes that he hasn’t paid a penny for accessing many of the ones that he uses.

However, Meekan, the Israeli firm recently sold to the Swiss company for an apparently respectable sum, reached a sizeable audience of users without charging a fee. “That’s what they also asked at the beginning in the app world, but gradually they discovered that people are prepared to pay for them,” says Segev. “If a bot gives you major value, and it suddenly threatens to disappear, maybe you would in fact be prepared to pay $10 a month for it.”