What is the idea?The startup idea is to establish an automated customer support system which shall be a ‘Software as a Service’ offered by the startup to various businesses across the globe. The chatbot will use artificial intelligence to learn and answer customer queries continuously. This chatbot will reduce the dependence on humans as well as increase consistency and quality of response.
Market Definition With the rise in customer service standards and customer expectations, the customer service market is growing fast around the world. According to Radiant Insights report, the Global Outsourced Customer Care Services market was valued USD 62.5 billion in 2014, with estimation of USD 84.7 billion by 2020, growing at 5.2% from 2014 to 2020. Out of this, the Customer Interaction Service market was USD 51.6 billion in 2014 and expected to reach USD 68.6 billion by 2020, growing at a CAGR of 12.1%. These interactions include communication across different channels, like email, instant message, social media, telephone, and SMS.
Currently, North America leads in the segment with the industry share of 55.1% in 2014. Asia Pacific has been gaining pace and is expected to grow at a CAGR of 7.4% until 2020 owing to the accessibility of cost-effective labor, and fluency in English.
Competitor Analysis There are various startups across the globe which are providing outsourcing customer support services. Some of the examples of these startups are Talla, Twyla, Tara, Eternime, and Cyra. Agentbot is one of the few that also uses artificial intelligence in its chatbot.
Pain Point & Target Audience The targeted customers would be the “businesses looking to outsource customer support.”The biggest challenge for companies and especially startups is that they are not able to focus on the business because time and energy get sucked in managing customer complaints. Outsourcing of Customer support not only helps in concentrating on business but also provide high-quality customer services by using experts.
Value Proposition The customers of this AI enabled chatbot will have the following benefits:Cost effective, due to less human intervention;24x7 365 days a year support to customers; andA smarter system with minor errorsAbility to scale up and down depending upon call volume and customer demand
Business Model The business model for this startup will be subscription based where the customers will pay a monthly or an annual fee. The company could add more features and charge an extra fee for such features.
Way to market The first step will be to create software that would use artificial intelligence for answering common customer service queries. The company should offer the product for free to initial customers as a beta offering so that the initial bugs can be recorded and rectified.
Milestones The company has to build capability in different industry segments, as a first milestone it should identify up to three industry sectors where it’s solution can be implemented. The second milestone will be to build a repository of customer complaints and their plausible responses, so as to feed the chat bot with initial data.Please remember, creating a repository is the first step in creating the chatbot for a particular industry segment. Your chat bot’s efficacy will depend on how you feed it with data. As a third milestone, the company would need to reach out to various customers and would need to devise an exhaustive marketing strategy for this.
Investment Needed For PrototypeFor testing & building the prototype, pitch for raising 200K USD from angel investors or incubators like Nasscom 10,000 startups or 500 Startups or any other incubator in your home country. There should be no office rentals or salary payout; the entire budget should be apportioned for customer acquisition and technology.
Team Capability It would be ideal to have a UI/UX expert and an AI expert as co-founders. In addition to this, you need to have a strong performance optimization team that can optimize the chat latency so that consumers don’t experience lag. In addition to this, the first few employees should be from customer service background so that you can train the chatbot on industry specific questions.
Investors / Expert Take There are a large number of B2C businesses which are being opened across the globe every day, all of them fall into the potential customer's category. This large market size will make this business attractive to potential investors in future. Similar business models have attracted investment from Inspirit Angels and Entrepreneur First in the past.
We spoke to Paolo Schellino from Biella, Italy, the founder & CEO of ThemeChat , a leading messaging platform that is replacing emails as a mode of communication. According to Paolo, the Chatbots are the future as the old system of emails or calling up customer service agents is slowly getting outdated and many of his existing ThemeChat customers, have approached him to build a chatbot for them. He further added that the generation Z is more comfortable with chats rather than writing emails. In case you need any help in refining this business idea or structuring a business plan, we at YoStartups.com will be more than happy to assist you in starting a startup venture on this concept.
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