Silicon Valley has Chatbots all Wrong. Here’s How They Really Make Money.

A few years ago, shiny new startups were using their marketing dollars to tell the world that chatbots were going to change everything.

Those marketing dollars have now been spent and most of those startups are no more. But for the past few years, one company has been quietly making chatbots useful, and they are now starting to make some noise.

Today we sit down with Akemi Tsunagawa, founder of Bespoke and creator of the Bebot chatbot.

In several important ways, Bespoke is one of the most successful chatbot companies in the world, and you'll be hearing a lot about them in the years to come.

Today, however, Akemi explains how she and the team managed to succeed where so many better-funded companies failed, and she gives some great advice about how to get consumers to try out new technologies. We also talk about why you should absolutely never build your business around Facebook or WeChat.

It's a great conversation, and I think you'll enjoy it.

Show Notes

Why most travel websites are doomed to failure Founding a technical startup without technical co-founders How to get people to tell chatbot what they really think Where chatbots excel and where they should not try Things you should never use a chatbot for Why you should not build a chatbot on Facebook or WeChat Why Japanese don't want to use chatbots Bespoke's plans to go global How to speed up decision making inside Japanese companies

Links from the Founder

Everything you wanted to know about Bespoke Friend Akemi on Facebook Connect with her on LinkedIn

Leave a comment Transcript Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.

I’m Tim Romero and thanks for joining me.

I think the peak of the chat bot hype cycle came in 2017. If we cast our minds back into the midst of that distant age, perhaps we can recall that chatbots were going to change the way we work, the way we shop, the way we bank, the way we talk to our customers, and even the way we find love and raise our children. Yeah, that didn’t happen, and startup founders, start of investors, and start of media all moved on to focus on some newer, shinier object – blockchain, probably.

But, you know something, sometimes, all that media type and investor attention can actually make it really hard to build something worthwhile. A lot of times, the best ideas and the best use of technology come from trying to solve a simple problem without investors telling you you need to be a unicorn or a journalist demanding to know exactly how you plan on changing the world by the end of the year, and so it is with chat bots.

Today, we’re going to sit down with Akemi Tsunagawa, the founder and CEO of Bespoke, the creator of the Bebot chatbot. Now, Akemi will tell you exactly how Bebot works in just a second, but to really appreciate what that important story Bespoke is, you need to understand that outside of marketing and some trivial customer support apps, you’ve got to realize, there is almost no chatbot success stories. Bebot is one of the very few chatbots in the entire world that provides enough genuine utility that people not only willingly interact with it but start to rely on it.

Bespoke’s business model does not rely on novelty or cost-cutting, no. Bespoke is solving an actual problem. This is a great example of how the needs of one industry can push technology forward for other sectors, and Akemi and I also talk about why she didn’t even realize they were running a chatbot company at first.

She gives some great advice on how to get consumers to try out, not just chatbots but any new technology, and we chat about why you should never – and I mean never -- build your business around Facebook or WeChat.

But you know, Akemi tells that story much better than I can, so let’s get right into the interview.

[pro_ad_display_adzone id="1411" info_text="Sponsored by" font_color="grey" ] Interview Tim: So, I’m sitting here with Akemi Tsunagawa, the founder of Bespoke, and we’re going to be chatting about chatbots today, so thanks for sitting down with me.

Akemi: Well, thanks for inviting me here.

Tim: You know, there are so many chatbot startups out there right now, but this is really an interesting application for it, so you can you just briefly explain about the service, about what Bebot is?

Akemi: Sure. We make chatbots for enterprise client in the hospitality space like hotels, airports, train stations to help them automate interaction with their visitors and guests, to provide better experiences.

Tim: Oh, so you are focused on tourism and travel, and I’ve noticed you managed to get some major deals – Bebot is being used not only at the airport, in the New Otani Hotel, Tokyo Station. Before we dive into Bebot and the business in general, I want to back up a little bit and talk about you.

Akemi: Sure.

Tim: So, you started this in 2015, so why chatbots?

Akemi: Okay, so to be honest, we never started this company as a chatbot company. We were doing something completely different three and half years ago. What I always wanted to do was to provide authentic experiences to people. The type of experiences you get through a local friend is very different; it’s very unique. You get to eat something special, something unique to the country, or you get to visit places that you can’t visit elsewhere. That’s the kind of experience that I was looking for, but I could not find any sort of services out there.

Tim: Oh, I can understand it because pretty much 100% of the travel-oriented startups has that same pitch, right? That it is like having a local friend, but it is something that is really hard to do at scale. I’m curious, you mentioned at first you are not doing chatbots. What were you doing at first?

Akemi: So, it was a website to connect to other people, like you’ve seen that many ways at many places, but in addition to just connecting locals to travelers, you are also providing like, a little bit similar to like a trip advisor, but like a local version, like little local bars that you would not find in guidebooks types of places, so we launched the service first. We did lots of user interviews, and as we met more users, like tourists, they kept telling us like, the same kind of problem which is like in Japan, it’s always about the language, it’s always about communications, like I call the restaurant, they don’t take my reservations because I’m not Japanese or they don’t understand me, or the website is all in Japanese and I can’t understand. So, we decided to add a concert featured on top of the existing website, then as we did more user interviews, people kept telling us, concierge is great, but I don’t need your help like, next week, I need your help like, right now because I’m lost at a train station or I’m having a problem at the restaurant, so it needed to be instant. So, we decided to turn our concert service into chat.

Tim: You know, that’s interesting because I think that the vast majority of tourism startups, and even tourism technology companies approach it as a problem of lack of information that these travelers just don’t know about the local spots where the interesting things to do, but it sounds like you discovered it was really more a lack of communication ability.

Akemi: I think so, especially in Japan. I mean, there is not enough information out there. I actually agree 100%, right? But even if you can find information, there is not enough support afterwards. Especially now, the number of tourists coming to Japan literally tripled over the last five years and not enough bilingual staff to support those foreign tourists, so we decided to turn our service into chat, but the next thing we realized was there’s too many messages coming through that we can’t really reply back on time, and I don’t speak Chinese – I can’t chat in Chinese, right? So, we decided to automate it and that is how we became a chatbot company, so it was never like, we started a chatbot company.

Tim: I mean, sometimes, you have the pivot based on the information you are getting. So, right now, you support English, Chinese, and Japanese?

Akemi: So, we don’t do Japanese.

Tim: You don’t do Japanese?

Akemi: We don’t do Japanese.

Tim: Oh, okay, why is that?

Akemi: Because we built this product so that we can use it when we travel. When we travel, those places are not like Japanese-speaking countries, right?

Tim: Okay. Right, right.

Akemi: Yeah, and then also, I think in Japan, not many hotels are having problems dealing with the Japanese guests.

Tim: Right, right. Okay, you don’t have a technical background, right?

Akemi: No, I don’t.

Tim: So, did you have a technical co-founder? How do you build the original team to kind of pursue that vision?

Akemi: I don’t have any cofounders. It’s just me. When I first started, we were doing a website, so we didn’t need anyone for this, like PhD in computer science. We just needed like a very simple solid engineer-software engineer. The first person I found was a referral through a friend, so basically, what I did was I messaged literally everyone on my Facebook asking, do you have any developers? Like, do you know anyone who might be looking for a project? It doesn’t even need to be a full-time person, just a project, then I found a few and I picked the best one, so he was the first person to join, then I found a few more designers for the exact same thing, then I recruited a couple students entirely through craigslist.

Tim: Oh, really? Okay.

Akemi: Yes, so that’s how we started, so I didn’t have any cofounder, but then is our business kind of evolved, requirements also changed, right? In the beginning, we only needed like, a very simple developer, but halfway through, we decided to switch our business to make a chatbot, artificial intelligence.

Tim: Right,