Silicon Valley loves wickedly smart artificial intelligence teams and new developer platforms from behemoths (Facebook and Microsoft), and darlings (Slack) alike.
Welcome to the bot hype cycle.
Bots hit the mark on every pattern Silicon Valley loves. But for investors and entrepreneurs – and executives outside of San Francisco trying to figure out what this bot business is all about – it’s worth taking a step back and looking at this frenzy with fresh eyes and a bigger picture.
Beware of other people’s networks Simple interactions between people – making a connection, following and messaging – when captured in a digital network of people who know each other already personally, professionally or by reputation, have created a handful of extremely valuable networks where three billion people today spend the majority of their time.
On the other end of the spectrum, single person – or “player” – apps (those that don’t require a network of other people to function) offer travel booking, financial budgeting, guided meditation, ecommerce, schedules, parking information and games. 75% of the 1.5 million apps offered in the app store – many single player apps – are not used a second time.
Conventional thinking says that this mobile engagement “crisis" is because these apps aren’t very good, and, to be useful, they must become bots within a dominant network. In many cases, that’s true.
But looking more deeply, relying on a dominant network for both growth and engagement has its own well-documented risks. For example, the original promise of Facebook pages was that you invested your time, energy and – for brands, money – to collect a “fan” and bring them to your Facebook page to meet other fans, as well as build organic relationships with you.
Brands and startups not only paid Facebook directly to acquire new fans, but they also started using their own airtime, websites and paid advertising to send people to Facebook so they could increase their fan count. Companies popped up to offer widgets and features to add to Facebook pages to give fans more things to do. With Facebook pages, you were told your website was obsolete. You had everything you needed to take advantage of people’s desire to connect to their family, friends and colleagues...and your brand...at the same time.
Today, this promise seems quaint. Facebook pages are like the once-vibrant amusement park that got knocked down for condos. Your fans never met each other, let alone had meaningful conversations made possible by you. Fast forward to 2016, and if you want to reach more than a fraction of your Facebook fans with a post, you’ll pay for it. Every time.
Brands and startups who chose to focus on Facebook fans – at the expense of a compelling alternative they owned – don’t have a choice. They have to pay. A comments section filled with strangers on a website (or Facebook page) is no match for a personalized newsfeed powered by a relevance algorithm that surfaces compelling updates and breaking news from friends, family and people they know.
While there is no doubt that single player apps don’t engage as well as those with network dynamics, jumping straight to building bots on other people’s platforms should come with a clearly marked warning label and a conversation about other equally or more attractive opportunities.
While the battle for dominance on mobile has been won and lost in messaging, on-demand transportation, photos and videos, there are other corners where new markets are just now coming into focus.
People aren’t generic, so why should their networks be?
If the window to create a formidable competitor to Facebook, WhatsApp, Instagram, Snapchat, Messenger or LinkedIn is closed, and single player apps and Facebook Pages show the road ahead for bots, we still know two things.
First, if you have the choice to build a network or a bot, build a network. It is much easier to trigger engagement in a network and bring people back. Plus, real value continues to accrue to the people and companies building, joining and participating in networks.
Second, if you are going to build a network, build a network that meets a need other than connecting people who already know each other personally, professionally or by reputation alone. That game is over.
So, what’s left? This is where things start to get interesting.
The majority of breakout startups launched in the last few years have been networks that promise an opportunity to meet new people around a strong identity or interest. Let’s call them identity networks.
For example, Houzz is an identity network for people designing, decorating or remodeling their homes and the professionals who serve them. Product Hunt is an identity network for passionate product enthusiasts who together want to anoint the next big thing. Nextdoor is an identity network for neighbors who share an interest in making their corner of the world as safe and comfortable as possible.
A good test of whether something is an identity network is when it’s brought up in the right circles, at least one person in three knows about it and tells you how much they love it.
Beyond these well-known (and well-funded) examples, there is a large and rapidly growing pool of identity and interest networks on mobile for small business owners, the self-employed, foreign language teachers, craft hairdressers, futurists, couples navigating infertility, documentary filmmakers and tens of thousands more.
People want their identity networks on mobile to stand on their own. They won’t have 20, but they’ll proudly download and use at least one or two of these apps on their phone. They don’t replace someone’s relationships on a dominant network. Rather, these new networks tap into an individual’s most important identity, interest or condition to meet needs not easily handled by a Google search, asking one’s friends or emailing a colleague.
Identity networks start with the assumption that people are there to build new relationships. By introducing members based on a relevancy algorithm designed for people who don’t know each other, members are motivated to answer questions, contribute to polls and participate in public conversation threads – with the ultimate goal of bringing members back to privately message or meetup.
By focusing on breaking the ice, 50% or more of members in identity networks contribute, triggering the variety and frequency of push notifications to make the app a regular habit for enough new members that network effects take hold. They also require a fraction of the work to achieve the same goal in a product made for small groups who already know each other.
Identity networks don’t replace a presence on the dominant networks. Just look at Houzz with 1.7 million likes, Product Hunt with 27,000 and Hairbrained with 100,000. They extend your presence with your own owned network dynamics and engagement. When it works, the network effects accrue to you – not the dominant networks – for that identity or interest.
The opportunity for identity networks is wide open...but likely not for long. Not everyone has the opportunity to build an identity network. You can’t fake it, and they don’t work if you are more focused on selling a product or getting free customer support.
But if you belong to or serve a market that wants to meet each other, you have a window right now to create a new mobile network that brings people back and avoids the single player app (and soon, bot) engagement graveyard. The opportunity won’t last long.
