Why Chat May Be King Of The New Mobile Landscape

Like tens of millions of teens across the world, 15-year-old Emma rarely surfs the web or tries out new apps. Instead, she conducts her digital life through a collection of social apps, from Facebook to iMessage to Instagram to Snapchat. On all of them, she’s messaging. “There are always messages for me to check,” she says. And though she picks up her phone every 15 minutes or so, her friends still complain that she’s slow to respond. We are all becoming like Emma that way: Recent studies show that Americans use their phones to message far more than anything else. Increasingly, companies eager for our attention online have to be part of these conversations. And increasingly, they’re doing it through chatbots.

Computer programs that talk with (and like) humans, chatbots appear as voice-controlled assistants (such as Siri or Cortana) and pop up online as customer service “representatives” for major retailers. If you’re in Messenger or a number of other messaging platforms, you can connect with bots much as you would with other users. Except the bots aren’t people; they’re brands like H&M or Whole Foods, and they’re there to serve up things like outfit recommendations and recipe ideas, depending on the keywords that you type. They also, crucially, allow retailers, services, and a host of other companies to engage mobile users, like Emma, on the platforms where they’re already spending so much time—especially since users’ appetites for new apps has dwindled. According to a recent comScore report, half of U.S. smartphone owners download zero apps a month.

The potential for bots to serve as app replacements has inspired companies like Apple, Facebook, Google, and others to bet on messaging as an altogether new way of interacting with the web. New interfaces, after all, tend to have an outsize effect on the tech industry. It was Apple’s unveiling of the graphical user interface and the mouse that set IBM on its long retreat from PC dominance. Steve Jobs set things in motion once again with the touch-screen interface. A move toward conversational interface through chatbots could catalyze another profound shift.

Perhaps no one knows this better than Ted Livingston, the founder of the chat app Kik, which has an estimated 300 million users around the world—among them, 40% of American teens, according to the company. Boyish and bro-ish, the 28-year-old Livingston was early to spot the potential of messaging, but has yet to cash in on it. He originally launched Kik in 2009 as a way to let BlackBerry users connect with people on iOS and Android devices. The app took off—until BlackBerry abruptly booted it off its phones (then sued Livingston for infringing on its own closed-messaging service). Rivals such as the now-billion-user WhatsApp gained traction while Livingston retrenched and relaunched. During that nervous, uncertain time, he came up with a plan to distinguish Kik from competitors: He’d turn it into a platform, where users could play games or buy clothes, without ever leaving the app. The idea was foresighted, but requiring people to download mini apps inside of Kik proved clunky. Finally, Living­ston and cofounder Christopher Best decided to let those apps simply talk to users from within Kik. Today, Kik is pinning its future on chatbots. “It seems like chat is going to be at the base of everything we do in a way that even the internet isn’t,” says Livingston. “What if chat powers the world?”

The rise of chat extends across the globe. In China, a phone’s operating system isn’t nearly as important as its chat apps. Through WeChat, which has 700 million monthly users, people are able not only to talk to friends about going to a concert, they can also purchase tickets, reserve a dinner table, split the check, and hail a cab—all using automated helpers. Today in China, there are 10 million business accounts on WeChat and millions of apps as well. Businesses often launch with a bot on WeChat—and skip the web page entirely.

Part of the reason chat evolved as it did in China is that the vast majority of Chinese didn’t grow up using desktop computers—and didn’t grow accustomed to interacting online through browsers and drop-down menus. “The barrier in the U.S. is that people are used to using their phones in certain ways,” says Derrick Connell, the corporate vice president for search at Microsoft, whose Chinese-language search bot, Xiaoice, has amassed more than 20 million users across a half dozen social media platforms and chat apps.

The equivalent North American demographic is teenagers. Mobile dominates the lives of Gen-Zers like Emma. That may explain why WeChat’s parent company, Tencent, invested $50 million in Kik last year as part of a strategic partnership: Livingston’s app is well positioned to mature with teens as they begin interacting with more lucrative services such as banking and shopping. “Tencent said it’s either you or Facebook that’s going to figure this out, and we think it’s going to be you,” says Livingston.

Those ambitions bring Livingston into direct competition with Facebook. Though it acquired WhatsApp in 2014 for $14 billion, Facebook has been steadily making Messenger into a billion-user behemoth, starting with its decision in 2014 to turn the service into a standalone app. It’s now letting developers create their own bots on Messenger—the clothing company Everlane, for example, lets you track your order via bot. (WhatsApp, for its part, has remained a messaging service, with no business bots.) Facebook has introduced a button for third-party web pages that can bounce users to a bot in Messenger, allowing them to chat with customer service or complete purchases. “We want this to be totally ubiquitous,” says Jeremy Goldberg, a product designer at Facebook who works on messaging. “Hopefully, we’ll be able to say this is the new ‘Like’ button.” Or a new way to buy things. It’s no accident that Facebook’s head of messaging is David Marcus, who was previously PayPal’s president. Chat may represent the best way for Facebook to become something like a digital wallet.

Apple, Google, and Microsoft are also horning in on the time you spend chatting. Apple has started to make iMessages accessible to third-party apps, such as OpenTable and Airbnb, and also more expressive, letting users share hand-drawn notes and custom stickers. Siri, meanwhile, has steadily gained more real estate across its products. This fall saw the release of Google Allo, a chat app with a built-in AI assistant. Leveraging Google’s insights into users’ search history and preferences, Allo can, for example, automatically suggest restaurant reservations if you’re messaging someone about dinner. (Facebook, not to be outdone, is training its digital assistant, M, by painstakingly cataloging millions of real-world conversations.) But the most intriguing play may be from Microsoft, which has been an also-ran in the mobile wars. It is creating a “cognitive services” division that will allow developers who want to create bots for Facebook, Google, or Kik to plug into the company’s machine-learning algorithms for help deciphering text and images. In other words, Microsoft is positioning itself to be the plumbing behind chatbots.

The challenge for Kik’s Living­ston isn’t just the deep pockets and AI capabilities of his competitors: It’s the limitations of bots themselves. Developers are still trying to figure out what kinds of bots spark the most engagement. There hasn’t yet been a clear hit. (See Building a Better Bot, for the best examples.) For now, the chatbots you find on Facebook and Kik function like choose-your-own-adventure novels, without the adventure. Livingston predicts the breakthrough chatbots may actually feel less human (or AI-heavy) in their interactions and will instead be more lightweight and purposeful. And they’ll need to be inherently social: Perhaps Kik’s greatest innovation is that it allows users to summon bots directly into conversations they’re already having with friends and to share the bots they like through invites. That natural social spreading of bots may solve the discovery problem that has stalled the app economy.

Livingston, for his part, is hoping that this time around, he’s not just spotting the next big wave for mobile, but finally catching it. “The future is inevitable,” he says. “It’s just about who gets there first.” The surf is getting crowded.

The Kings Of Chat

A look at the dominant messaging apps around the world.

WeChat: Though more than 90% of its users are Chinese, WeChat has been pushing into India and Southeast Asia.

Line: Japan’s popular messaging app just launched its own smartphone plan with unlimited data for Line services.

KakaoTalk: A full 93% of South Korean smartphone users have signed up for this chat app.

WhatsApp: Facebook’s new plan to collect data from WhatsApp users has privacy experts concerned.

Kik: Teens love its anonymity, but Kik has come under fire for that same reason.

iMessage: Apple is just starting to build upon iMessage’s tremendous user base as the default iOS chat app.

Messenger: Facebook is integrating payments into Messenger so that it might become a mobile commerce engine.

Google Allo: By leveraging Google’s unparalleled data, this assistant could become a significant new portal.

Slack: The smash-hit workplace chat app now has integrations with hundreds of services.

A version of this article appeared in the November 2016 issue of Fast Company magazine.