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How to develop truly conversational bots

Have you ever had a pleasant conversation with a bot? Chances are high that you have, as chatbots are getting smarter and better at helping us deal with the products we’re dealing with everyday.

Barcelona startup Caravelo is at the moment developing six chatbots for some of the biggest airlines in the world. The chatbots they build help millions of travelers to book and reschedule flights, provide customer service, act as personal concierges and much more.

Even though all their bots use NLU (natural language understanding), they’re not building their own solution, but are using existing NLU solutions to cope with all the different languages airlines need to speak with their customer, according to co-founder JoseLuis Vilar:

“If we would try to build an NLU solution for all the languages our client’s needs, we would be dead.”

Not replacing apps

Caravelo says beyond the hype, that the bots they’re building are not replacing apps, they just doing the same things very differently in terms of UX and UI, but also in terms of use cases.

“We won’t build bots for everything, only where it’s natural to have one.”

After being live with several chatbots for nearly 3 months, collecting thousands of interactions, they’ve already learned a lot of valuable lessons, the biggest being not ask the same questions over and over again.

According to the startup the distance between success and failure is quite short, so you need to get things right the first time around. And according to Vilar, even though the risk for failure is high, the reward for the customer when things go right is much higher.

Repeating answers is the worst a bot can do to a customer according to Caravelo.

Work on building a solid knowledge base

After tracking their bots conversations the latest months, Caravelo has found that 20 percent of the inventory of intents (Q&A’s) makes up around 80 percent of the total value. So you need to focus on that part first, building a really strong inventory to start all conversations, the right username and contact, pictures, etc.

The next 15 percent of value is based on the inventory of questions and answer (intents) where you need to build a solid knowledge base for your specific industry. In Caravelo’s case, they’ve built a database of 1000 FAQ’s related to the airline and travel industry, and this is based on interactions the airlines have had with their customers over the years.

The last five percent of value are from the questions a bot cannot answer, and the idea is this is the place where we get the human take-over, and a customer service agent will serve any remaining problem.

The three different categories of value provided to the customer, either by a bot or a human.

Key learnings

The most important learning Caravelo has done the last months is to avoid user loops, like shown in the pictures above. There are few things as annoying for a user to go through the same questions over and over again.

So far Caravelo’s solution to bugs like this one has been to build a small fix where the bot only can ask the same question a certain amount of times.

Caravelo co-founder and CIO JoseLuis Vilar.

Another key learning is to use, but not abuse the NLU (natural language understanding). So for example, today they have some answers that go through the back-end from their database, and some answers that go through the NLU, but they classify the easy answers, like affirmations, to not go through the NLU.

Just as with any product, the on-boarding of the user is crucial to keep people talking to the bots. In the case of chatbots, you need to tell them what you’ll be doing for them, and give the user clear options.

The last take-away the Caravelo team has learned over the course of using bots in real life, is to not take too much advantage of bot trainers (external services), as they’re not building a natural language understanding themselves, and it’s easy to get too dependent on them.

To get the full value of Caravelo’s learnings, take a look at the video at the top.

If you want to learn more, take a look at our latest podcast about the European VC industry:

https://blog.itnig.net/first-rule-of-talking-to-vcs-show-metrics-that-support-the-story-you-re-telling-3d31160db889

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2017 — The year eSports really goes mainstream

In stadiums meant for physical sports are thousands of fans gathered to see their idols play more virtual kinds of games. Foto: Bago Games

In 2016 reports showed that over one billion people are aware of eSports the industry brought in around one billion dollars the same year. Both analysts and experts see 2017 as a year this growth continues, and that in a fast pace, as this will be the year eSports goes mainstream.

Pol Ruiz is the co-founder and CEO of Playfulbet, one of the biggest social betting platforms in Europe with over seven million users. They were one of the first startups that saw the eSports wave coming:

I have to say that eSports have evolved a lot since we started Playfulbet four years ago. At the time we were the only ones offering betting on eSports (though not with real money). Today all the betting sites lets you bet on eSports and it’s growing rapidly month over month.

Pol Ruiz, CEO and co-founder of Playfulbet.

Talking about sports, the only thing growing faster than eSports itself, is betting on eSports. According to the market analyst SuperData the eSports market will be worth 1.8 billion by the end of 2018. The sum is small compared to the betting market says Pol:

What many analysts doesn’t take account for is the betting industry around eSports which is also growing exponentially, and is anticipated to generate around $20 billion in turnover by 2020.

https://upscri.be/285782-2

Gamers are more loyal than football supporters

Stadiums used for traditional sports, are filling up with energetic audiences hungry for eSports live tournaments. It’s important to note that there are several key differences between the normal sports fan and the eSports enthusiasts.

The things that are special with eSports fans is that they support, interact and are much active than normal sports fans. They identify themselves with the game in a bigger degree than with other sports fans, and this makes the eSports sector both so interesting and valuable.

Pol and his team at Playfulbet are monitoring both sports sectors, and see trends emerging.

The industry is exploding, and especially after many traditional football and basketball teams got associated with the online sports games, and even formed professional eSports teams.

Mainstream means money

Until now eSports has been associated with one particular kind of demography, but that is changing rapidly, according to Pol:

As traditional TV and mass media companies are entering, this is becoming a mainstream thing. In Spain there’s TV channels dedicated to eSports and Mediapro is covering the LVP (the national eSports league in Spain).

He continues:

As most experts predict, the eSports sector will continue to grow fast the next couple of years, particularly with the entry of mainstream brands and additional famous profiles from the traditional sports world.

Also read:

https://blog.itnig.net/how-playfulbet-grew-to-400k-followers-on-facebook-and-300k-on-twitter-c207cb286559

Focused on eSports because no one else did

To strengthen their focus on eSports, Pol and Playfulbet is adding more gaming streams to the platform:

we’re integrating streaming of eSport matches so you can follow the games you’ve been betting on without leaving the platform, and you can also chat with your community watching the same games. But there’s still much more to be done for the eSports community using the platform.

Playfulbet moved over the offering bets on eSports fairly early because of one main reason:

We added eSports mostly because no one else did it, so for us it was a competitive advantage. We’re still not more focused on eSports with respect to other sports, but we’re working on offering even more content and functionality in this niche.

This post was written by media manager itnig Sindre Hopland.

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What you need to know before building an API for your product

First of all, this is a non-technical approach to API’s, so if you want in-depth tech insights, I recommend you get in touch with Hitch — the API experts.

However, if you’re looking to get insight in why you should use API’s to strengthen and grow your business, and what metrics you should be aware of when taking advantage of an application programming interface (API), you’ve come to the right place.

A whole or core product?

To really understand how your company can utilize API’s we need to understand the concept of the core product and what many call the whole product.

Famous marketer Regis Mckenna that helped launch the first microprocessor for Intel and the first computer for Apple said it like this:

(…) A whole product is a generic product augmented by everything that is needed for the customer to have a compelling reason to buy.

So for example a computer is a core product, and the mouse, the software, the screen and any other necessity being part of the whole product.

It’s very important to understand these definitions, because having insight here will help you know how to approach your customers, potential partners and competitors.

Hacking partnership agreements

As your startup grow, you’ll probably be looking to form partnership agreements with other complementary products and companies.

This can be super valuable, but often takes a lot of time and effort, in other words, it’s often very expensive.

So to hack this time-demanding and expensive process of partnering up with other companies, and API can provide this kind of partnership without all the hassle, often at a fraction of the cost.

Bruno Pedro is the CTO of Barcelona-based API startup Hitch. He explain that many underestimates the cost connected with taking use of an API, especially the cost of support.

The thing with building or using an API is that it doesn’t matter if you consider yourself as a part of a whole or a core product. If you’re able to see through your customers (or potential customers) eyes, you’ll probably discover how your product can transmit value both as an integration into a bigger product, or as an integration to enrich smaller products.

The cost of integration

Integrating your product with other businesses through an API offers many possibilities, but also new costs related to integration.

Development costs start out high, but turns to zero as the product finishes. The maintenance costs remains low but stable with a few peaks around new releases with bugs attached. The big cost related to support which will be higher as your API becomes more popular.

Development costs: very high at first, but becomes zero when the API is launched.

Maintenance costs: high after the launch because of bugs, and for every iteration you do you’ll have peaks with your maintenance costs, as well as routinely maintaining the API itself.

Support costs: This will depend on how well your API is performing, but the more users you have, the bigger the support cost will be, so this is the really expensive one.

And remember, these costs need comes with each separate integration.

So, is your API worth the effort?

In other words, we need to understand the life time value (LTV) of our integration.

First you need to measure where your customers come from, then you need to identify the new customers that are using one of your integrations within a specific timeframe and estimate the lifetime value (LTV) of those customers.

Then, when you know the LTV of each particular integration, you can easily know which is giving you growth, and which that are only causing costs to rise.

The last thing you need to figure out to see if your integration is worth doing is the payback period (PBP), i.e if your integration or your API is earning you more money than what you’re spending on it.

To find this number you have to take all of your costs (as mentioned above) and divide it by your monthly recurring revenue (MRR), and again, you have to do this for each integration.

https://upscri.be/285782-2

Getting to the good stuff — growth!

Your product can be the core product which is the big one in the middle, or part of the whole product which is one of the smaller ones on the side. No matter where you are in the ecosystem, you’ll have costs related to the integration.

To be clear, with growth we don’t mean a profitable company, but a business that is multiplying their growth month over month, or year over year. It can even be unprofitable.

So what is growth for an integration?

  • In most companies it’s considered growth if the lifetime value of the integration is three times higher than the cost of integration. If not you’re loosing money. Some experts say that 4 times higher LTV than costs is the number to aim at.
  • And not enough with with a high LTV, it also considered necessary to have a payback period of less than 12 months. If not, you’re also loosing money.

So remember, if you think about how your company is used in a broader context, and not only how its used as intended, there may be many possibilities with using API’s.

This post was written by media manager itnig, Sindre Hopland based on the presentation of Hitch CTO Bruno Pedro.

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Improve your communication with humor

In case you wonder, this is a hypnotoad.

Humor is a universal language, it has no limits, no boundaries. It is the channel to communicate with your customers and collaborators in a direct way and the most efficient transport for your ideas to go around the world.

In the ever-growing ocean of ​​content that is shared every day in social networks, those that add irony, sarcasm or sympathy or usually the ones being shared the most. All colors and tones of humor are welcome on Twitter, YouTube, Facebook, Instagram, WhatsApp, blogs and newsletters.

So, if you want to know how you can use the right sense of humor to spread your brand in all the corners of the world wide web, here are some clues:

Connect with your audience. Write, edit, program or design in a way that you talk to your customers in a natural way, inteligent people with whom you would go for a beer with. You will understand their needs, this process is called empathy.

Be funny without making a face. This is important, a good sense of humor does not consist of easy jokes. You could be sympathetic the same time smart and professional. The tone should fit with your company’s values.

Original content. This is the key to everything and to have more value adds some customization and adapt your messages to each format. Creating content is easy, being original not so much, start enjoying your own products and services. Enjoy doing your job. Feel it and try it. Write down your sensations and you will have perfect script.

The spark. This point is as easy as it is difficult. There is no manual to know for sure what’s funny, the best way to know may be to use the scientific method. Make a hypothesis, try it, and then take a distance and decide: Does it make you smile? Then it’s working.

Choose your channel. The continent is as important as the content, it simply chooses the networks and channels, it does not have to be omnipresent. Always think about who you want to read your content and who your target audience is and that will give you the answer.


This post was written & illustrated by creative copywriter at Camaloon, Dolors Boatella — you’ll find her jokes here.

https://upscri.be/285782-2

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Demystifying the product manager, and how to become one

As product focus is more important than ever in building startups in a very competitive market, the product manager role is increasingly getting more common and is highly valued.

But to many it’s a job description that’s a bit vague, and often means different things from company to company.

We invited three product people from the startup ecosystem in Barcelona to discuss the topic: Former PM at Google and currently product consultant Itamar Gilad, CEO and co-founder of Factorial Jordi Romero, and CEO and co-founder of Quipu Roger Dobaño.

Long time product expert Gilad says it’s hard to explain the PM role in one sentence:

The position has changed so much over time, and it’s still changing. I like to define the PM as the person who’s the expert on the users, the customers, the market and the competition, and manages to deliver this context to the product team in a good way — it’s a super man basically!

From product to customer first

From the left: Sindre Hopland, media manager at itnig, Jordi Romero, CEO and co- founder of Factorial.

The last 10–20 years, tech companies have shifted their focus from trusting their engineers more than market, to lifting the customer and the users as the number one priority in making the product, says Gilad that for the last six years has managed products such as Gmail and Youtube:

The first time I heard the term product manager was back in the 90’s, and back then it was very new. The thought was that engineers always knew best, but that has changed a lot.

Also Romero, CEO of Factorial, recognizes the attitude from earlier times when he worked in other SaaS companies in the US and in Barcelona:

I remember we first defined ourselves as a product-first company, then a sales-driven startup and later a customer focused company. It think these terms are hard for startups that alter and change the way they do business often.

Dobaño is both CEO and head of product at accounting SaaS Quipu, he defined the product role like this:

You’re the CEO of the product, but it’s not just about making a great product, it’s about continuously solving problems for the customers and making an impact in your customers life.

All the responsibility, but no authority

The product manager is found somewhere between tech, business and the UX/UI team of the startup. © 2011 Martin Eriksson.

Even though the PM has the word manager in the title, all three guests agrees that the only thing the PM actually manage is the product itself.

Romero points to several challenges connected with this kind of responsibility:

An issue I’ve seen in many product teams, is that the PM is managing the team itself, and not only the product and process. I think this is a real problem that is hindering the communication in the organization.

Itamar explains that the PM is there to fill all the holes of work that aren’t being worked on, which means that the person needs to be diverse:

The PM is working closely with both customer service, the business side, designers and engineering, it’s more about creating a pattern for collaborations and a good flow of progress. It’s needless to say that soft skills are in high demand.

He continues to say that a startup needs a designated PM when the startup is at a scale where the business people and the engineering team start arguing what to build next, and you don’t have time as a CEO to deal with all the discussions.

How to become one

From the left: Itamar Gilad and Roger Dobaño.

Romero says he believes a lot in promoting PM’s within the company that share the original values and vision of the founders.

Itamar explains that it’s not necessary to know how to code, but many big companies require it:

In companies like Microsoft, Apple and Google they alway prefer someone with a coding background. However, the personal also needs to be interested in the business side of the startup and have strong soft skills for team management.

Dobaño thinks many companies are setting too high requirements for their PM’s:

What you’re describing here is a unicorn. I do agree that PM’s should have a computer science background, but my job is to empower one person within each product team, and I’ll then make sure the communication flow is good between the company.

Romero repeats how vital soft skills are to this profession:

To have all the technical skills is one thing, but to be able to both do a sales pitch and to convince the developer team that what they’re building is the right thing to focus on, that’s tricky.

This post was written by Sindre Hopland, media manager at itnig and produced together with Masumi Mutsuda.

https://upscri.be/285782-2