It was while walking home in late 2014 that Kit’s Michael Perry had his “holy shit” moment.
That’s when he became convinced that he should to move his startup deeper into SMS as a way to offer a marketing service to merchants and small business owners who had neither the time nor the interest to pursue other options. Now you can buy Facebook ads with four messages.
Perry compares that moment to a band recording an amazing song.
“Do you think that they were just sitting back and listening to that song and thinking ‘This is going to be a fucking hit’? You know what I’m saying? Like no one else has heard it, and they’re sitting there going, ‘This is going to go platinum, this is going to be a hit’,” he said.
In April, a day after Facebook opened the Messenger API for bots and Shopify became the first commerce platform to integrate with Messenger, Kit was acquired by Shopify.
Kit elected to work exclusively with Shopify customers and currently works with 5,000 businesses in 76 countries around the world.
Perry expects that Kit will someday be the biggest employer in the world, that Shopify will become the first place people go to create a business, and that bots and A.I. will be “much more transformational than desktop to mobile.”
In the future, Perry wants Kit to automate more tasks for the more than 300,000 Shopify customers around the world.
Though his company fully automates tasks, his biggest fear is that automated bots working on behalf of small businesses can eat away at the authenticity that makes these companies unique and distinguishes them from big box stores or giants in the market, like Amazon.
This interview was edited for brevity and clarity.
VentureBeat: My rabbit hole, so to speak, is a bit different from yours, and I think you’ve got a real deep vision on the conversational commerce side of things. So where are we going? Where do you think we’re heading?
Perry: The level of sophistication this stuff is going to get to is going to allow us to be the people we want to be. It will allow us to do the things we want to do. It will bring us to a new level of efficiency that we’ve never experienced before in our lives. We’re moving into a very liberating era where knowledge will always be accessible, information will always be accessible, but right now, we live in a world where a lot of bots are really bad. They’re very unsophisticated; they can’t actually take action.
VentureBeat: What are the bridges you think we can cross within the next year or so? Because I think we’re getting to the point where… you’ve seen it. You start out and everyone’s really excited, and we can all see the potential very well, then the malaise sets in. I’ve heard this being called the “figuring-it-out phase.”
Perry: I think we’re going to see a fairly big dead pool in the next four months. Lots of things are undeservedly getting funded, like I read things and am like, Holy shit, they just raised $2 million? I think we’re in an era similar to when iOS came out with their SDK, and everyone was like, “I’m going to go build.” I was one of those guys. I was like, “Fuck the web. I’m going to go build a mobile app,” because at that time in my life I was trying to get rich. After you fail enough businesses as an entrepreneur, you stop actually caring about getting rich. You hit this point, this line in the sand where you’re like…I actually have to find out if I’m capable of doing this.
I think what’s happening right now is we’re seeing this period where everyone is super excited about the bot era; everyone’s super excited about the A.I. era, even though none of their bots have A.I. And then they’re like, “I’m going to go build a bot,” and so they force a square into a round hole, and it’s a very bad experience. It doesn’t actually work out.
I hate to keep running the railroad tracks over Poncho, but that is a very bad experience that doesn’t actually speed the process up. For us, as a company, that is the measurement we’ve always strived for. If I can still do [something] faster than Kit, then it’s wrong. If Kit is not more capable and efficient then I am, then it’s failing the store owner, because they’re going to get frustrated, and they might as well go do it themselves.
VentureBeat: Any bots you’re excited about other than your own?
Perry: I really think Digit is great; I use Digit all the time. It takes action.
VentureBeat: How would you characterize a lot of bots being made right now?
Perry: The problem is that people aren’t building because it’s the right solution to the problem; people are building [bots] because it’s the hot thing to build. And I think that there are still some applications; there are some experiences that are still better on web than they are on mobile, and there are going to be some experiences that are still going to be better on mobile than they are on a conversational interface with a bot. So I think it’s worth understanding what the problem is you’re trying to solve and how it relates to a time experience. I really use time as the greatest measurement here, and I think that a lot of people haven’t woken up to that yet, because they’re not really looking at it as the solution. They’re looking at it as, “This is the craze, someone will buy me fast, this is cool.”
VentureBeat: What do you think are some of the challenges ecommerce faces in the chat interface?
Perry: One piece is how is conversational commerce going to help them drive more sales? It’s very clear to me that it will allow businesses for the very first time on ecommerce to maintain the special intimacy that small businesses have. I grew up working in small family businesses, starting at like seven, eight, nine years old. And I loved when people would come in, and I’d watch my uncle or my dad. Their interactions with customers is what actually made the sale happen.
I can talk to a small merchant in New Zealand about his beef jerky and have a conversation with him about it the same way as if I physically walked into a store. So anytime you can take this physical experience that’s really magical [and maintain it in a digital setting], that makes it worth continually paying a premium. Because, obviously, it’s a premium if you want to buy from a small business owner and you take that into the digital world. That is a very special moment; that’s a privileged conversation to have with your customers at scale. That, to me, is everything.
Then there’s the flip side, where it’s just the actual messaging component for a small business owner to work in a virtual world with virtual employees. All that will actually allow for mass production, mass scale to levels that we’ve never seen before. You can have one guy in New Zealand, one guy from San Francisco, and Kit, and the three of these people can be working together from their apartments and in the virtual world and building a multimillion dollar business. In the history of mankind, we’ve never seen anything like this before.
VentureBeat: I agree with that, and I think that’s something Jeff Lawson from Twilio was saying, as well, that this ability to build things and make change has never happened before in human history. I’m not sure everyone understands.
Perry: No, no they don’t get it yet. It will take some years to catch on, but that’s what my excitement is like. It’s the dirty secret we all know, but very few people recognize, that we are on the cusp of some massive shit. So you’re just sitting back, and we’re working hard to position ourselves, because we haven’t won yet.
VentureBeat: Let’s go back: We know the positive sides of the ecommerce chat interface. What are the challenges?
Perry: There’s no data that supports this, but the challenges are that people will overuse it and lose their authenticity. Right now, it’s brilliant, because it’s still so small that I can talk to Rachel who’s selling jackets and say, “Hey I’m interested in buying this for my wife. Can you help me?” and she’ll respond.
I think that one thing we’re very much trying to navigate away from is having a bot respond to that question, losing the authenticity, and then it feels like you’re calling Amazon’s customer support that puts you through Press 1 for orders, Press 2 for refunds… that is my biggest fear.
Being at Shopify now, and being a guy that really is passionate about this space and is incredibly passionate about entrepreneurs and small business, people have asked me 100 times over, “When will you build Kit’s ability to do customer support and customer service?” And I said not until natural language processing is at such a point that it can carry on the conversation and feel very authentic.
Because the last thing you want to do for small business owners is rob them of authenticity. People put up with that with Amazon because they’re buying stuff for pennies on the dollar, and they’re getting it the next day, and [Amazon has] all these other superpowers that sort of compensate for the lack of authenticity. [But there’s a] lack of support in the way that you’d want a small business owner to care about you and care about the purchase and care about the conversation. So I don’t know if [automation is] why we’ll fail, but that is my biggest fear, like I talk to my wife about this. I lose sleep over this, and I actually am very vocal within Shopify, because I’m like, we can’t fuck these people over like this.
We can’t just say [automation] will help with efficiency. Some things can’t be efficient. Where we can help is saying, Hey, here is the entrepreneur, and they’re responsible for marketing, and logistics, and product management, and customer reviews, and loyalty, taxes, bookkeeping — these people are by themselves trying to do 20 roles. My goal, my vision, is that I’m going to eat all these roles, so that this guy can just spend his time focused on two things: his product and his customers. Because at the end of the day, for a founder those are really the two most important things.
VentureBeat: So do you think companies like Kit and Shopify are the other side of the argument that automation is going to take all of our jobs?
Perry: No. You know, the thing is I’ve had a lot of backlash about this, a lot of angry people at conferences and things like that, saying I’m the guy ruining you know… whatever. The reality of it is I go to sleep at night actually helping with job creation, because these are people who are making $3,000 a month, $4,000 a month, to support their family. They have no resources to hire a person. I’m not taking any job away, because they couldn’t afford to hire anyone in the first place.
And you look at the demographics of people we’re trying to help, and if anything, I’d love to, over time, help put their businesses in such a position where maybe they stop using Kit and say, “Hey, Kit’s helping me with these three things. I really want to hire an accountant.” I really hope that the legacy of Kit is built around the fact that we actually put more people to work than anyone ever gave us credit for, and I really do believe that will be the outcome at the end of the day.