[Part 3] The “bot age” dawns, setting the stage for new competition

Category: Column

Parts 1 and 2 of this series examined the ongoing shift from the “app age” to the “bot age” and addressed some of the factors behind the change, drawing on contextual clues from the history of the IT world.

For our final installment, we’ll be concentrating on the “now” of the bot age: the new services that the era is currently ushering in, the latest messenger-bot mashups, the various service offerings that have come along with the advent of messenger-bot integration, and the initial salvos of competition in the bot-age arena.


The latest in messenger-bot services

For starters, let’s look at the shopping app bot that a startup called Spring demonstrated at the F8 conference.

When you tell the bot you want to “Go Shopping,” the bot responds with a cheerful “Hey [your name]! What are you looking for today?” and brings up a list of clothing category options. The conversation continues through product categories, budget restrictions, and other conditions until the bot eventually comes up with a list of products (with pictures) that match your requirements—and it’s all automatic.



Clicking “Buy this item” takes you to the Spring mobile site, where you can make your purchase. At this point, though, “Go Shopping” is the only message that the bot fully supports. Improvements are sure to be coming, of course.


Now that we’ve taken a peek at a B2C bot (Spring), let’s look at an example from the B2B category: Kit CRM, a service that lets businesses chat with a bot to manage their online advertising on Facebook and other sites.


There’s an in-depth video (https://vimeo.com/116780056) on how Kit CRM works, but here are the basics: working with an external advertisement delivery system, the bot asks the user questions. By simply responding to the bot’s various prompts, users can do everything from controlling the advertisements they want to deliver to managing their advertising budgets. There’s no need for the user to sit in front of a management screen at a computer workstation or open up any specific management apps on a mobile device—it all happens on a messenger interface.

Kit CRM has shown itself to be such a compelling business that Shopify, one of the world’s largest EC platforms and the solution of choice for major brands like Tesla Motors and Red Bull, acquired the company on April 13. Shopify also announced a bot for Facebook Messenger on April 12, signifying another step in the ongoing shift toward interactive, messenger-bot service provision.


What I’m trying to draw attention to here is the fact that both of these examples started out as traditional app- or web-based services but eventually evolved into messenger-based offerings. Bots might not have optimal levels of functionality yet, but the signs are pointing to a future where messenger-based bots will give users access to any service they used to need an app for.


As bots continue to permeate the market, modes of communication are starting to move from conventional text-based patterns to information-rich “card” formats.

Standard text is fine if you’re having a simple conversation, but bots are beginning to provide increasingly complex details on travel, events, and other things that involve more information than what a simple back-and-forth can handle. That’s where “cards,” which Google and Facebook now use to provide richer information, come in.




The image on the left shows what you might see when you search Google for “flights from SF to LA,” while the image on the right is how Google Now displays an actual flight ticket right on your device. Both the Google search engine and the Google Now platform go above and beyond the conventional text-based style for a smarter, more useful “card” format. Remember the Spring bot for Facebook Messenger? That one uses cards, too, arranging them in a carousel format to make content easier for the user to engage with.


Still, Google and Facebook cards aren’t completely optimized for rich information yet.

One of the global leaders in card-based communication is Wrap Media, a Silicon Valley startup. Founded by eminent serial entrepreneur Eric Greenberg, a veteran of two IPOs (both valued at around 1 billion USD), Wrap Media has secured funding from top investors like Salesforce and the Peter Thiel-led Founders Fund. People in the tech world are buzzing about where Wrap Media could go.

Wrap Media

Wrap provides card-based content creation services for use on the mobile web platform (not apps). In addition to letting merchandisers put product information, videos, and “Buy now” buttons on their cards, Wrap also makes it possible for users to take care of the entire purchase process on a single card.


The best way to see what makes Wrap so innovative is to try the service out for yourself, but let me give you a quick rundown here. Wrap might operate in a browser environment, but the interface feels like an app—users can swipe and scroll cards, which creates an environment that makes it easier for merchandisers to generate views and clicks in their information-rich content spaces. It’s the perfect format for a bot-based content provision tool. With the Wrap API, sellers can even customize content for individual recipients.


The growing presence of messengers and bots means that players in the market are soon going to be incorporating new modes of communication, which could wipe the whole app format off the face of the tech landscape.


■Catch and release, catch and release

The messenger-bot wave, currently threatening to wash over the entire app arena and reshape the C2C and B2C landscape, is surging straight ahead toward the world of B2B services. Kit CRM is just an early example of what that transformation will look like.


As the tides of messengers and bots start to erode the current app user population, Apple’s long-standing base of supremacy doesn’t seem as rock-solid as it might appear to be. Apple is actually struggling to keep pace with the shift toward bots, giving Facebook, LINE, and other leaders in the messenger app field a leg up on usurping its position.


That doesn’t mean that the big players in the messenger app arena are going to be in complete control of everything, though. Microsoft is focusing on bots, not messengers, in hopes of securing the upper hand in the bot market.

This March, Microsoft launched the “Bot Framework” under an open-source license. Using the Framework, people can now develop bots that work with Skype, LINE, Slack, and the other main messenger platforms. It’s not too hard to see what Microsoft is trying to do: by facilitating bot development and “catching” as many bots as possible, Microsoft could lay the foundation for a “Bot Store” to replace the existing Apple Store.

Bot Store


As a “bot marketplace,” the Bot Store would give users quicker access to the bots they need. A user could add a clothes-shopping bot to her messenger contacts and message the bot whenever she wanted to shop.


Some messenger providers have already opened their own bot stores. Kick, a popular message among American teenagers, and Slack, the workplace communication tool, have launched their own bot depositories, for example.

Messengers are duking it out, yes, but the competition in the bot market is also clearly heating up as the players jostle for position.


There’s also a company trying to shake up the platform-wide monopoly that the leading messenger apps have established: Layer, which offers SDKs for embedding chat UIs in iOS, Android, and web apps.


Layer is sounding the alarm about what could happen if users get over-dependent on big-time platforms like Facebook Messenger and LINE. Relying too heavily on the major players not only pigeonholes developers’ data into specific frameworks but also means that developers have to tweak settings whenever the platform implements a system modification, creating conditions that could easily lead to drops in overall service quality. That said, it’s still had to develop and operate your very own chat system in-house.


The challenges haven’t stopped Layer, however. With just a few lines of code, Layer users can quickly build Facebook Messenger-caliber chat systems into their company’s services—and instead of limiting the options to a single UI, a la Facebook Messenger, Layer gives users free reign over the interface design.



Chatting in Layer
(Compatible with B2B & B2C commerce, marketplaces, games, and a wide variety of other web/mobile apps in different industries)

Layer is already the chat system for Trunk Club, which connects users shopping for clothes with expert stylists, and Hinge, a dating app.


All these examples point to the same reality: with apps gradually giving way to bots, the competition among players in the market is intensifying on a daily basis.


Wherever you look, companies are fighting tooth and nail to gather enough dedicated users to build legitimate strongholds.


The strategy of “catching” and retaining users has paid off for numerous services, beginning with Windows and continuing on to i-mode, Mobage, and iOS. The problem is that catches don’t stay captive forever—there’s always a new competitor ready to come in, break through the enclosure, and “release” the users to a sea of new options.

Now that Apple’s walls are starting to crumble, we’re on the verge of another “release” stage. All the companies I’ve talked about so far are doing everything they can to make sure that this opportunity doesn’t slip through their fingers.


Can Japanese companies make it through all this tumult intact, though? Sticking to their conventional app approaches would obviously set them up for failure, considering that bots are poised to supplant apps altogether.


From incorporating Layer-type services into messenger platforms to developing their own bot-based service provision solutions, Japanese companies will have to step out of their comfort zone and innovate if they want to stay afloat in the churning waves of change.



Hiroshi Nakano, Business Producer

ビジネスプロデューサー 中野 裕士

Joined DI after working in ZIGExN company. In ZIGExN, Hiroshi launched a Vietnamese subsidiary and worked as CEO. In the company, he is engaged in an offshore development of 50 people and pursuing a wide range of business activities such as the expansion of a web services business aimed locally, business strategy decisions, marketing, recruitment and training.

At DI, as a central member of Asia development in investment destinations such as Wrap Media, he is engaged in planning growth strategy as well as business development strategy, implementation support, etc. It also pursues consultancy activities in Japan, such as developing new business strategies for the manufacturing industry and brand strategies for makers of consumer products.

BA from the Department of Electrical and Electric Engineering, and a MA from the Graduate School of Electrical Physics at Tokyo Institute of Technology.

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