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We’ve been hearing about this notion customer experience Forever, the idea that we can improve customer interactions with brands digitally. So far, the results have been good at best.
range of mountainsThe new startup from Brett Taylor and Clay Bever thinks AI agents could be the next technological frontier, not unlike the websites or mobile apps that came before them: essential digital assets for every company, and which may ultimately deliver on the promise. Can improve digital customer experience.
Whether this is true or not, both founders fundamentally AI Agent As a new technology category, it offers customers an entirely new way to interact with brands to improve their overall experience.
“Our thesis is really simple. “We think conversational AI will become the dominant form factor that people use to interact with brands, not just for current trends like customer service, but really for all aspects of the customer experience,” Taylor told TechCrunch. told.
This means that customers can enter free-form questions and requests into a search-style box, and the AI agent should be able to understand that request and take action by connecting to whatever transaction system is needed. These could be tasks like viewing orders in the order management system or rescheduling deliveries in the scheduling system, as some examples.
Taylor and Bever acknowledge that it is not always easy to connect to these systems, especially if they are older. But most of the CIOs they’ve talked to indicated that they’ve created APIs that connect to these legacy systems, making it much easier for Sierra to communicate with them.
Regardless, Taylor and Bever admit that there are some serious challenges and risks when it comes to humans interacting with these AI agents. “When you put AI in front of customers, the value is obviously very high, but the risks are also very high with brand misrepresentation and hallucinations – all technical problems that are clearly the hardest problems in AI ,” Taylor said.
Notably, these are not trivial issues hallucination problem, where large language models sometimes make things up when they don’t know how to respond to a prompt. Depending on the nature of the response this could be potentially devastating to a brand’s reputation.
Although neither company has yet addressed hallucinations – and likely never will – Sierra is working to mitigate the problem (but then again, doesn’t everyone do that?). The company’s software is based on the idea of autonomous agents. “In practice this means that there is not a single model that generates a response from a Sierra agent.” In fact, Taylor says, it sometimes involves seven models, one of which he has dubbed an “observer” that monitors the quality of the answer, and if it finds the answer questionable, it asks it to reevaluate. Sends it back for. Taylor acknowledges that dealing with hallucinations is an ongoing research problem for the industry.
Although this wasn’t enough to worry about, when it comes to handling customer data in an automated manner, there are a whole range of regulatory and data privacy issues to deal with. But Taylor and Bever say their agents are designed to handle this, too.
Taylor believes AI is fundamentally different from software as we have known it for the past 30 years, and it needs an educational component to help customers understand the strengths and pitfalls. “So part of our drive to market is to mitigate these risks [and] Teaching our customers how this new type of software works,” he said.
But the flip side of that risk is that it represents a huge opportunity for the company. “Whenever there’s a big change in technology, it opens up a window of opportunity for smaller companies to explore that open space and really take some risks and try some new things,” Bever said.
This new wave of AI will generate at least five to 10 meaningful new independent enterprise software companies, not dissimilar to what happened when cloud and mobile arrived, Taylor said. “There is an opportunity for a new technology model. There is no market leader in conversational AI right now because it is new. It’s a year old, if that’s the case, so everyone is figuring it out in real time,” he said.
Taylor, who is also OpenAI’s board chair, does not think the two companies are competing or that there is any conflict between the two, although one could certainly argue that they do. “We do not view OpenAI as a competitor, and if there were ever a potential conflict I would clearly recuse myself from it,” he said.
The founders also think that a new platform should have a new approach to pricing, and they have designed an entirely new pricing model based on the results. Instead of tiered subscription fees or usage-based pricing that we’ve seen with other software companies, they want customers to only pay for results, when a problem is solved.
“We believe outcome-based pricing is the future of software. I think with AI we finally have technology that is not only making us more productive but is actually working. It’s really killing things,” Taylor said. And this is the point where they intend to charge the customer. However, the mechanics are still being worked out with early customers.
Despite all this, and even taking into account the experience of the two founders, CRM Essentials founder and principal analyst Brent Leary believes it will be difficult to compete with incumbents like Taylor’s former company, Salesforce. .
“I mean [Taylor] He’s incredibly intelligent and capable, there’s no doubt about that,” Leary said. “But Salesforce has a lot of institutional experience and skills and other resources that a startup doesn’t have, even if it’s led by someone like Brett. And these big companies are throwing away all their R&D investments and restructuring their entire operations around the opportunities they see with AI.
To be clear, Sierra is well capitalized, though certainly not at the level of a company like Salesforce. Taylor and Bavor’s pedigree and the potential market they’re going into are attracting big investment, with the company already scoring $25 million from Benchmark and an additional $85 million from Sequoia, scoring $110 million. That’s an extraordinary amount for an early-stage company – but these aren’t your typical founders.
Sequoia Capital partner Ravi Gupta, who is leading his firm’s investment in Sierra, says that beyond the backgrounds of the two founders, the firm was impressed by the technology and its potential. “I think it was a remarkable thing to see it in action and I think it really captured our imagination of what customer interaction could be in the future,” he said. He said writing the check was not a difficult decision for him.
Sierra clearly sees a huge opportunity to transform the customer experience with AI, but there are many obstacles standing in the way of success. If the founders can find a way to adequately address the disadvantages of free-form, AI-powered, automated customer service agents while avoiding established enterprise competitors, it could be a successful startup, but everything related to AI Like, it still has to prove it can do it — and do it consistently and at scale.
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