Our digital future will be shaped by increasingly mobile technologies coming from China

Since the dawn of the internet, the titans of this industry have fought to win the “starting point” – the place that users start their online experiences.  In other words, the place where they begin “browsing”. The advent of the dial up era had America Online mailing a CD to every home in America, which passed the baton to Yahoo’s categorical listings, which was swallowed by Google’s indexing of the world’s information – winning the “starting point” was everything.

As the mobile revolution continues to explode across the world – the battle for the starting point has intensified.  For a period of time, people believed it would be the hardware, then it became clear that the software mattered most.  Then conversation shifted to a debate between operating systems (Android or iOS) and moved on to social properties and messaging apps where people were spending most of their time. Today – my belief is we’re hovering somewhere in between apps and operating systems.  That being said, the interface layer will always be evolving.

The starting point, just like a rocket’s launchpad, is only important because of what comes after.  The battle to win that coveted position, although often disguised as many other things, is really a battle to become the starting point of commerce.  

Google’s philosophy includes a commitment to get users “off their page” as quickly as possible…to get that user to form a habit and come back to their starting point.  The real (yet somewhat veiled) goal, in my opinion, is to get users to search and find the things they want to buy.

Of course, Google “does no evil” while aggregating the world’s information, but they pay their bills by sending purchases to Priceline, Expedia, Amazon, and the rest of the digital economy.  

Facebook, on the other hand, has become a starting point through it’s monopolization of users’ time, attention, and data.  Through this effort – it’s developed an advertising business that shatters records quarter after quarter.

Google and Facebook, this famed duopoly, represent 89% of new advertising spending in 2017.  Their dominance is unrivaled…for now.

Change is urgently being demanded by market forces – shifts in consumer habits, intolerable rising costs to advertisers, and through a nearly universal dissatisfaction with the advertising models that have dominated (plagued) the US digital economy.  All of which is being accelerated by mobile. Terrible experiences for users still persist in our online experiences, deliver low efficacy for advertisers, and fraud is rampant.  The march away from the glut of advertising excess may be most symbolically seen in the explosion of ad blockers.  Further evidence of the “need for a correction of this broken industry” is Oracle’s willingness to pay $850M for a company that polices ads (probably the best entrepreneurs I know ran this company, so no surprise).

As an entrepreneur, my job is to predict the future.  When reflecting on what I’ve learned thus far in my journey – it’s become clear that two truths can guide us in making smarter decisions about our digital future:

Every day, retailers, advertisers, brands, and marketers get smarter.  This means that every day – they will push the platforms, their partners, and the places they rely on for users to be more “performance driven”.  More transactional.

Paying for views, bots (Russian or otherwise), or anything other than “dollars” will become less and less popular over time. It’s no secret that Amazon, the world’s most powerful company (imho), relies so heavily on its Associates Program (it’s home built partnership and affiliate platform).  This channel is the highest performing form of paid acquisition that retailers have, and in fact, it’s rumored that the success of Amazon’s affiliate program led to the development of AWS due to large spikes in partner traffic.

Chinese flag overlooking The Bund, Shanghai, China (Photo: Rolf Bruderer/Getty Images)

When thinking about our digital future, look down and look east.  Look down and admire your phone – this will serve as your portal to the digital world for the next decade and our dependence will only continue to grow.  The explosive adoption of this form factor is continuing to outpace any technological trend in history.

Now, look east and recognize that what happens in China will happen here, in the West, eventually.  The Chinese market skipped the PC driven digital revolution – and adopted the digital era via the smartphone. Some really smart investors have built strategies around this thesis and have quietly been reaping rewards due to their clairvoyance.  

China has historically been categorized as a market full of knock-offs and copycats – but times have changed.  Some of the world’s largest and most innovative companies have come out of China over the past decade.  The entrepreneurial work ethic in China (as praised recently by arguably the world’s greatest investor Michael Moritz), the speed of innovation, and the ability to quickly scale and reach meaningful populations have caused Chinese companies to leapfrog the market cap of many of their US counterparts.  

The most interesting component of the Chinese digital economy’s growth is that it is fundamentally more “pure” than the US market’s.  I say this because the Chinese market is inherently “transactional”. As Andreessen Horowitz writes – WeChat, China’s  most valuable company, has become the “starting point” and hub for all user actions.  Their revenue diversity – is much more “Amazon” than “Google” or “Facebook” – it’s much more pure.  They make money off the transactions driven from their platform – and advertising is far less important in their strategy.

The obsession with replicating WeChat took the tech industry by storm two years ago — and for some misplaced reason — everyone thought we needed to build messaging bots to compete.  

What shouldn’t be lost is our obsession with the purity and power of the business models being created in China.  The fabric that binds the Chinese digital economy together and has fostered its seemingly boundless growth is the magic combination of commerce and mobile.  Singles Day, the Chinese version of Black Friday, drove $25B in sales on Alibaba – 90% of which were on mobile.

The lesson we’ve learned thus far in both the US and in China are that “consumers spending money” creates the most durable consumer businesses.  Google, putting aside all its moonshots and heroic mission statements, is a “starting point” powered by a shopping engine.  If you disagree, look at where their revenue comes from…

Google’s announcement last week of Shopping Actions and their movement to a “pay per transaction model” signals a turning point that could forever change the landscape of the digital economy.  

Google’s multi-front battle against Apple, Facebook, and Amazon is weighted.  Amazon is the most threatening. It’s the most durable business of the 4 – and it’s model is unbounded on two fronts that almost everyone I know would bet their future on – 1) people buying more online, where Amazon makes a disproportionate amount of every dollar spent and 2) companies needing more cloud computing power (more servers), where Amazon makes a disproportionate amount of every dollar spent.  

To add insult to injury, Amazon is threatening Google by becoming a starting point itself – 55% of product searches now originate at Amazon up from 30% just a year ago.

Google, recognizing consumer behavior was changing in mobile (less searching) and the inferiority of their model when compared to the durability and growth prospects of Amazon, needed to respond.  Google needed a model that supported boundless growth and one that created a “win-win” for its advertising partners – one that resembled Amazon’s relationship with its merchants – not one that continued to increase costs to retailers while capitalizing on their monopolization of search traffic.

Google knows that with its position as the starting point – with Google.com, Google Apps, and Android – it has to become a part of the transaction to prevail in the long term.  With users in mobile demanding less ads, and more utility (demanding experiences that look and feel a lot more like what has prevailed in China) – Google has every reason in the world to look down and to look east – to become a part of the transaction – to take its piece.  

A collision course for Google and the retailers it relies upon for revenue was on the horizon.  Search activity per user was declining in mobile and user acquisition costs were growing quarter over quarter.  Businesses are repeatedly failing to compete with Amazon and unless Google could create an economically viable growth model for retailers – no one would stand a chance against the commerce juggernaut – not the retailers nor Google itself. 

As I’ve believed for a long time, becoming a part of the transaction is the most favorable business model for all parties – sources of traffic make money when retailers sell things – and most importantly – this only happens when users find the things they want.  

Shopping Actions is Google’s first ambitious step to satisfy all three parties – businesses and business models all over the world will feel this impact.  

Good work, Sundar.

Pioneer Square Labs’ Greg Gottesman on the studio model for high growth startups

Photo courtesy of Flickr/Randy Stewart. You were a Managing Director at Madrona Venture Group for many years but recently left to found Pioneer Square Labs. You employ a different model for building startups i.e. it is neither a venture capital firm nor an accelerator. How is this new model different or better? The traditional way of starting a company will remain the most common, which is you have an idea and bootstrap it or… Read More

Nexus Ventures’ Naren Gupta bemoans "short-termism" among current Indian startup founders

Naren Gupta, the highly respected Silicon Valley based founding partner of Indo-US cross-border VC firm Nexus Ventures, has published an article in Forbes India highlighting some areas in which the current crop of Indian startup founders could do better. Extract: Over the last few years, I have failed to see this focus or commitment in many of the new-age company founders or management teams

Fewer deals and smaller checks: Startups suffered in Q1 as first-time financing fell 31%

martech-2015-funding-exits-money

While it’s never easy for entrepreneurs to convince venture capitalists to invest in their new companies, it was especially difficult during the first quarter of this year. Fewer startups received first-time funding, and those that were fortunate to do so saw smaller checks.

For the first three months of 2016, initial funding deals declined 16 percent to 297, and the total dollars invested fell 31 percent to $1.7 billion, according to the latest MoneyTree report by PricewaterhouseCoopers and the National Venture Capital Association (based on data from Thomson Reuters).

Moreover, the average amount for first-time financing dropped 17 percent from $6.9 million in the fourth quarter of 2015 to $5.7 million in this quarter.

Source: MoneyTree Report

Source: The MoneyTree Report

Of the $1.7 billion of initial investments, software startups garnered $666 million (39 percent) across 121 deals. The next closest industries were media and entertainment, biotechnology, consumer products and services, and IT services, in descending order.

 

Funding by industry 2016 Q1

Source: The MoneyTree Report

The difficulties faced by companies seeking their initial fundings stood out in a quarter that was largely soft, reflecting the continued overall chill in the venture capital ecosystem. Total venture dollars invested in startups was flat at $12.1 billion, with a total deal count down 5 percent at 969, according to the MoneyTree Report.


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Fewer deals and smaller checks: Startups suffered in Q1 as first-time financing fell 31%

martech-2015-funding-exits-money

While it’s never easy for entrepreneurs to convince venture capitalists to invest in their new companies, it was especially difficult during the first quarter of this year. Fewer startups received first-time funding, and those that were fortunate to do so saw smaller checks.

For the first three months of 2016, initial funding deals declined 16 percent to 297, and the total dollars invested fell 31 percent to $1.7 billion, according to the latest MoneyTree report by PricewaterhouseCoopers and the National Venture Capital Association (based on data from Thomson Reuters).

Moreover, the average amount for first-time financing dropped 17 percent from $6.9 million in the fourth quarter of 2015 to $5.7 million in this quarter.

Source: MoneyTree Report

Source: The MoneyTree Report

Of the $1.7 billion of initial investments, software startups garnered $666 million (39 percent) across 121 deals. The next closest industries were media and entertainment, biotechnology, consumer products and services, and IT services, in descending order.

 

Funding by industry 2016 Q1

Source: The MoneyTree Report

The difficulties faced by companies seeking their initial fundings stood out in a quarter that was largely soft, reflecting the continued overall chill in the venture capital ecosystem. Total venture dollars invested in startups was flat at $12.1 billion, with a total deal count down 5 percent at 969, according to the MoneyTree Report.


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ASO master class: How to get 40K app downloads for free and other growth hacks (webinar)

app store.shutterstock_302135009

You could spend $10K to drive paid traffic and get some users — or you can growth-hack and land 40,000 downloads in just a few days. What’s the secret? Join top ASO gurus for this free half-hour master class in getting your app ranked, fast.

Register here for free.


“There’s this notion that you build a great app, and people will find it. Unfortunately that’s just not true anymore,” says Steve P. Young, ASO wizard and founder of App Masters.

Young, the host of the top mobile app podcast, has been picking the brains of hundreds of mobile developers since 2013. He’s successfully launched hundreds of new apps with his PR firm, Runway.bz. And he knows what mistakes make an app sink — and more importantly, how to make it rise.

App store and app marketing optimization (ASO and AMO), Young emphasizes, is not optional any more. “With the cost per installs continually going up,” he says, “you’re just going to have to spend a lot more money to get that visibility if you’re not doing ASO.”

App store optimization, he explains, is essentially SEO for the app store, juiced to drive organic growth by finding users with intent: those who are organically searching for your app, or your type of app. And those users are out there looking for you. Approximately 60 percent of app store users are there to search for particular apps.

The users who are pleased to find your app turn up at the top of their search results are going to have a better user experience, which is going to make them a better, and more profitable, long-term user.

Getting ranked requires surprisingly easy tweaks that can be made and updated instantly: ensuring your icon is eye-catching, and optimizing your description. Young has seen downloads double when developers get just these key elements right.

And there are short-term boosts you can leverage right away. “You can get downloads and not have to pay a cent,” Young says. He’s seen his favorite growth hack used successfully over and over: running a paid-to-free campaign where you where you make a paid app available for free for a couple of days. His first experiment with the technique netted him over 40,000 downloads in just a few days.

The key is getting press in the sites that track paid-to-free campaigns. “Coverage in one of these media outlets drives huge amounts of downloads,” Young says. And that’s the kind of action that drives you to the top of the app store charts, netting you more organic users. Not many traditional app marketing strategies are as elegant, easy — and free.

To learn more about the innovative tips, tricks and hacks that get your app onto the phones of the users you want, join our free webinar, “Growthhacking your app store downloads via AMO.”


Don’t miss out!

Register here for free.


In this half hour ASO masterclass, you’ll learn:

  • The tools, tips, and techniques to get your app in front of your audience and top of mind with app stores
  • How to identify the small changes in components, such as your in-app purchase descriptions, that will have big impact on downloads
  • The differences between Google Play and Apple’s App Store, and map how you should adapt your ASO/AMO strategy for both

Speakers:

  • Peggy Anne Salz, analyst, VentureBeat
  • Steve P. Young, ASO ‘wizard’ and founder of App Masters

Moderator:

  • Wendy Schuchart, analyst, VentureBeat









ASO master class: How to get 40K app downloads for free and other growth hacks (webinar)

app store.shutterstock_302135009

You could spend $10K to drive paid traffic and get some users — or you can growth-hack and land 40,000 downloads in just a few days. What’s the secret? Join top ASO gurus for this free half-hour master class in getting your app ranked, fast.

Register here for free.


“There’s this notion that you build a great app, and people will find it. Unfortunately that’s just not true anymore,” says Steve P. Young, ASO wizard and founder of App Masters.

Young, the host of the top mobile app podcast, has been picking the brains of hundreds of mobile developers since 2013. He’s successfully launched hundreds of new apps with his PR firm, Runway.bz. And he knows what mistakes make an app sink — and more importantly, how to make it rise.

App store and app marketing optimization (ASO and AMO), Young emphasizes, is not optional any more. “With the cost per installs continually going up,” he says, “you’re just going to have to spend a lot more money to get that visibility if you’re not doing ASO.”

App store optimization, he explains, is essentially SEO for the app store, juiced to drive organic growth by finding users with intent: those who are organically searching for your app, or your type of app. And those users are out there looking for you. Approximately 60 percent of app store users are there to search for particular apps.

The users who are pleased to find your app turn up at the top of their search results are going to have a better user experience, which is going to make them a better, and more profitable, long-term user.

Getting ranked requires surprisingly easy tweaks that can be made and updated instantly: ensuring your icon is eye-catching, and optimizing your description. Young has seen downloads double when developers get just these key elements right.

And there are short-term boosts you can leverage right away. “You can get downloads and not have to pay a cent,” Young says. He’s seen his favorite growth hack used successfully over and over: running a paid-to-free campaign where you where you make a paid app available for free for a couple of days. His first experiment with the technique netted him over 40,000 downloads in just a few days.

The key is getting press in the sites that track paid-to-free campaigns. “Coverage in one of these media outlets drives huge amounts of downloads,” Young says. And that’s the kind of action that drives you to the top of the app store charts, netting you more organic users. Not many traditional app marketing strategies are as elegant, easy — and free.

To learn more about the innovative tips, tricks and hacks that get your app onto the phones of the users you want, join our free webinar, “Growthhacking your app store downloads via AMO.”


Don’t miss out!

Register here for free.


In this half hour ASO masterclass, you’ll learn:

  • The tools, tips, and techniques to get your app in front of your audience and top of mind with app stores
  • How to identify the small changes in components, such as your in-app purchase descriptions, that will have big impact on downloads
  • The differences between Google Play and Apple’s App Store, and map how you should adapt your ASO/AMO strategy for both

Speakers:

  • Peggy Anne Salz, analyst, VentureBeat
  • Steve P. Young, ASO ‘wizard’ and founder of App Masters

Moderator:

  • Wendy Schuchart, analyst, VentureBeat









ASO master class: How to get 40K app downloads for free and other growth hacks (webinar)

app store.shutterstock_302135009

You could spend $10K to drive paid traffic and get some users — or you can growth-hack and land 40,000 downloads in just a few days. What’s the secret? Join top ASO gurus for this free half-hour master class in getting your app ranked, fast.

Register here for free.


“There’s this notion that you build a great app, and people will find it. Unfortunately that’s just not true anymore,” says Steve P. Young, ASO wizard and founder of App Masters.

Young, the host of the top mobile app podcast, has been picking the brains of hundreds of mobile developers since 2013. He’s successfully launched hundreds of new apps with his PR firm, Runway.bz. And he knows what mistakes make an app sink — and more importantly, how to make it rise.

App store and app marketing optimization (ASO and AMO), Young emphasizes, is not optional any more. “With the cost per installs continually going up,” he says, “you’re just going to have to spend a lot more money to get that visibility if you’re not doing ASO.”

App store optimization, he explains, is essentially SEO for the app store, juiced to drive organic growth by finding users with intent: those who are organically searching for your app, or your type of app. And those users are out there looking for you. Approximately 60 percent of app store users are there to search for particular apps.

The users who are pleased to find your app turn up at the top of their search results are going to have a better user experience, which is going to make them a better, and more profitable, long-term user.

Getting ranked requires surprisingly easy tweaks that can be made and updated instantly: ensuring your icon is eye-catching, and optimizing your description. Young has seen downloads double when developers get just these key elements right.

And there are short-term boosts you can leverage right away. “You can get downloads and not have to pay a cent,” Young says. He’s seen his favorite growth hack used successfully over and over: running a paid-to-free campaign where you where you make a paid app available for free for a couple of days. His first experiment with the technique netted him over 40,000 downloads in just a few days.

The key is getting press in the sites that track paid-to-free campaigns. “Coverage in one of these media outlets drives huge amounts of downloads,” Young says. And that’s the kind of action that drives you to the top of the app store charts, netting you more organic users. Not many traditional app marketing strategies are as elegant, easy — and free.

To learn more about the innovative tips, tricks and hacks that get your app onto the phones of the users you want, join our free webinar, “Growthhacking your app store downloads via AMO.”


Don’t miss out!

Register here for free.


In this half hour ASO masterclass, you’ll learn:

  • The tools, tips, and techniques to get your app in front of your audience and top of mind with app stores
  • How to identify the small changes in components, such as your in-app purchase descriptions, that will have big impact on downloads
  • The differences between Google Play and Apple’s App Store, and map how you should adapt your ASO/AMO strategy for both

Speakers:

  • Peggy Anne Salz, analyst, VentureBeat
  • Steve P. Young, ASO ‘wizard’ and founder of App Masters

Moderator:

  • Wendy Schuchart, analyst, VentureBeat









‘Allumette’ proves that virtual reality cinema is no joke

Allumette

Allumette, a lovely animated feature by Penrose Studios, illustrates why virtual reality film should be taken just as seriously as traditional film.

The folks at Sundance and the Tribeca Film Festival have already figured this out — both festivals showcased virtual reality this year. But in such early days, the quality of each VR experience varies wildly from project to project.

That’s why Penrose Studios — founded by Oculus’ first cinematic hire, Eugene Chung — surprised me yesterday. Here’s a behind-the-scenes teaser of Allumette:

 

Allumette is 20 minutes long — lengthy by VR standards, but it never feels drawn-out. The world Penrose creates for the viewer leaves you wishing it lasted a bit longer. The experience is like a good song in that way; you want to repeat it again right when it ends.

The film premiered today at the Tribeca Film Festival, and Penrose tells us a teaser of Allumette is coming “in the next few days” to Oculus Rift and HTC Vive owners. The full film will become available to anyone with a VR rig “later this year,” on the Rift, Vive, and PlayStation VR, says Penrose.

We sat down with Chung yesterday to learn more about the evolution and future of VR cinema, as well as the challenges the art form faces. Here’s an excerpt of our interview.

Eugene Chung: Most of my career’s been guided by, when I think back, to my parents. … So my mother was an accountant and my father was an opera singer. I’ve always had this duality of left brain-right brain throughout most of my career. They’re very much on each side of the spectrum.

VentureBeat: As far as they could possibly be…

Chung: It’s always sort of guided my career. On the creative side, I’ve been a filmmaker. I’ve made films the normal way, part of stage, part of theater, and then on technical side I’ve been coding and hacking since I was very young. I played a lot of video games as well. … I get a lot of motion sickness very easily, so I can’t play first-person shooters, actually.

VB: I get that!

Chung: You can imagine what it was like working at a VR company.

So I’ve always had this creative and analytical side. But because my dad’s an opera singer, I’ve recognized that art forms change over time. … When we think about the opera, 150 years ago Richard Wagner … called dramatic opera a “total work of art.” … 50 years later, we had this group of guys with cameras come around, and they started making the first films. … And this change was so dramatic that if I were to ask you to name a major movie company you’d say “OK, sure, Disney, Fox, Warner Bros,” but then if I were to turn around and ask you, could you name a major stage play or opera company of the 1800s, you’d have no idea. … It’s because they were completely disrupted. And some people say, “Well, 100 years ago is a long time,” but then I remind them Paramount Pictures is over 100 years old.

So art forms do in fact change. And I was wondering … “When will I see the day that an art form will change? … I probably won’t live to see it.” But then a few years ago I saw virtual reality come back around.

Penrose_Allumette (9)

VB: Were you the first film hire [at Oculus]?

Chung: I was the first film and cinematic hire at Oculus, and I basically had a blank slate, because no one else was doing this.

So I remember thinking: VR and AR are the next major computing platform, in the same way that in the last 50 or 60 years we’ve had five major computing platforms. We had the mainframe in the 60s, then the minicomputer, followed by the personal computer, followed by desktop Internet, followed by mobile Internet, which is the era we live in today, and I think that augmented and virtual reality will be that next phase of computing platforms.

So then I said, let’s go back to the last time we’ve seen a major computing platform. … If you thought about the summer of 2007 when Steve Jobs launched the iPhone, if you asked someone to build an iPhone app, they wouldn’t know how.

VB: You’d get fart apps.

Chung: Well, you’d definitely get that, but if you asked a serious person to build a real mobile app, they’d be like, “I don’t know how to build a mobile app,” and then they’d take Microsoft Word for the desktop and jerry-rig it onto the phone, and that would make for a bad mobile app. So what did Apple have to do? They had to create several example apps. … So I realized we had to do the same, and I hired some of my former colleagues from Pixar, and we created this thing called Oculus Story Studio, and created some of the first VR films, like Lost was our first one. …

But then along the way we got acquired by a little company called Facebook, and that changed the nature of the entire industry. So what I thought would take something like ten years got condensed into something like one year — and that was just an incredible moment. And I stayed on for a while building out the team after the acquisition, but what I wanted to do before even joining Oculus was create my own company, and so I created Penrose Studios.

VB: When did you leave Oculus?

Chung: I guess last year? We’re one of the few companies that has a publishing deal with Oculus — one of the few companies paid by Oculus for content.

VB: Do you feel weird demoing the film on a [HTC] Vive?

Chung: Well, right next to you was CV1, so our premier will have Oculus Rifts and HTC Vives. What’s great about this industry in general now is there’s so much excitement that there’s just a lot of collaboration in virtual reality today, even with different headset makers.

VB: It’s so transparent, compared to mobile platforms which have been locked up.

Chung: So, anyways, we’re a few months in, but we did The Rose and I, which was our first piece, which premiered at Sundance. Our second piece, which is Allumette, is premiering at Tribeca Film Festival.

Penrose_Allumette (13)

VB: What does it mean, Allumette?

Chung: It means matchstick in French. It was kind of a working title … and then, by the time it came to name the film, we were like, “Let’s just call it Allumette.”

VB: So for the movie: One thing that’s funny is it’s absolutely a film, but it’s not like most films, and it’s only 20 minutes long.

Chung: Well, only? The longest VR film of its kind …

VB: “Only” and “impressively”? For people who aren’t in the film world, they’re used to 60 to 90 minute films with a long arc. Everyone in the audience sees the same thing. They watch it at the same time. You can almost see stages [in Allumette], harking back to your childhood, growing up with your father in opera. There are scene changes in a way that’s similar to stage.

Chung: It’s really more like the stage. … We have this team of really talented people who come from CG film land, and there is lots and lots of really good talent there. In the last great art transition, the major stage play directors tried to become film directors, and a lot of them didn’t succeed because they did things like put the camera in front of the stage. And they were like “Oh, this is cinema.” And it wasn’t actually cinema.

It took completely new creators, like D.W. Griffith, who invented the closeup — the new, talented people who crafted the language of cinema.

VB: Do you feel pressured — trying to be that for this?

Chung: I don’t really feel pressured. I think we’re excited to be making this new medium.

Because that was the case with film. With VR, it’s almost like, we have all this talent on the team, and it’s about trying to be humble enough to understand that we don’t know everything that we need to know about this medium. That’s a very difficult thing. The biggest problem with the stage play directors in cinema is that they knew too much.

Penrose_Allumette (10)


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Shopify acquires Kit, the artificially intelligent marketing bot

shopify-logo-white

We’re standing on the edge of the chatbot revolution, and I’m reminded of how I felt when those first apps hit the store in 2007. Only this time, the apps talk back.

And following its announcement at Facebook’s F8 developer conference yesterday — where it became the first commerce platform to announce an integration with Facebook Messenger — Shopify has today announced that it has agreed to acquire privately held Kit CRM Inc. Details of the deal were not disclosed.

Kit is the virtual marketing assistant I’ve covered at length before. It leverages SMS and other messaging platforms to help companies market their online stores by asking salient questions at the right time.

Kit can email your customers, build Facebook ads, sponsor Instagram photos, and send you timely reports to let you know if you sold those last ten pairs of designer jeans. And last month we announced it had launched an API, allowing partners to expand on its artificial intelligence. It can now help you set discounts, retarget website visitors, engage with the customer after an abandoned cart, and handle 404 errors — all through a simple chat interface, and in 20 countries.

“The Kit team has been focusing on the intersection of commerce and messaging since their inception,” Craig Miller, chief marketing officer at Shopify told me. “Their vision of the future is squarely aligned with ours. This acquisition accelerates our product roadmap and also brings top talent to Shopify.”

With Shopify’s announcement yesterday that it is building commerce bots for Facebook Messenger Platform, I wondered how this acquisition dovetails with that intent.

“We believe messaging apps are the gateway to the Internet on mobile, and conversational commerce represents a huge opportunity for Shopify,” Miller said. “The acquisition of Kit, along with Shopify’s integration with the new Facebook Messenger Platform announced yesterday, further supports our focus on helping merchants embrace conversational commerce.”

kit-crm-api-ai-assistant

With so many bot fingers in the messaging and chat app pie, Shopify must be tempted to roll Kit into its Messenger project. For now, though, it appears nothing will change.

“In the near term Kit will remain as a Shopify app in our App Store,” Miller said.

For Michael Perry, founder and CEO at Kit, today’s acquisition is a milestone in a journey that started in 2013.

“Shopify is the ideal company to acquire Kit,” Perry said. “Their commitment to business owners and their view of the future is directly aligned with our own mission and goals. We both want small business owners and entrepreneurs to be successful.”

The original mission remains the same too.

“Kit will continue to work as a team that is laser-focused on building the future of virtual workforce and conversational commerce for business owners,” Perry said. “I feel very fortunate that we have Shopify’s full support to build the future of commerce together.”

More information:

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