Microsoft just made a rare investment into a Chinese startup. Even the entrepreneur behind it, Wang Guanchun, sounds a bit surprised by who led the series A funding for his app.
“We connect people to local commerce – that’s our goal,” says Guanchun of the mobile butler service, Laiye. The app looks a bit like a messaging app, one where people make specific requests – get me a coffee, book me a flight – which are fulfilled either by a human assistant or an automated AI.
“Laiye is about efficiency and getting things done for you – just like a real assistant,” adds Beijing-based Guanchun. It’s a similar proposition to Silicon Valley’s Magic.
With all the work being plowed in to its AI, the Chinese startup has parallels to Microsoft’s Cortana, a rival to Apple’s Siri assistant – so the Microsoft largesse makes a lot of sense when you think about it. Under Satya Nadella, the Redmond giant has been making mobile and apps a priority – and it has even set up an fund dedicated to investing in global startups working on AI.
While Guanchun and Microsoft haven’t nailed down exactly how they’ll work together, he sees the two parties benefiting from each other in terms of AI. His startup could make good use of Bing’s knowledge graphs, containing valuable data about what people want, as well as be promoted to Microsoft’s many corporate clients across China.
“Microsoft is looking for local partners,” adds the founder.
Laiye now has 60 staffers, some of whom coordinate the requests that are too complex for the AI.
The startup doesn’t do any of the legwork itself. Instead, it sends service requests – like an order for a hamburger or a ride to the airport tomorrow morning – to relevant providers, like meal delivery startups or ride-hailing apps. If the task can be automated, no human intervention is needed on the startup’s side.
The AI can automagically command another startup to get a coffee from Starbucks and send it to your office, but it cannot book you a flight because the process involves a lot of back and forth and other pernickety details.
For 2017, “more AI is definitely a focus” for the team, Guanchun tells Tech in Asia.
“Surprisingly, AI handles more transactions now than humans,” he explains.
He reckons that flight requests will be automated “soon” – another victory for AI over us meatbags.
Back in 2015, when Laiye got US$4 million seed funding shortly after launch, the entire thing was free to users – apart from the cost of the coffee or whatever you ordered, obviously – even though every order was passed through an employee.
The crew will concentrate on even more AI in 2017.
But now the app – for iPhone, Android, or inside WeChat – is split between free and paid, or “VIP” as it’s called. “It was an inevitable decision,” says the boss.
Anything that can be processed by the AI is free, while human involvement on Laiye’s part means you’ll have to pay the butler.
The startup still makes money from some of its free requests since a number of services offer commission. That’s thanks to China’s on-demand boom, which sees hundreds of locally-focused startups fighting for users with discounts and other enticements.
All that manna from heaven, however, has turned into a drizzle this year as all those services figure out profitability instead of desperately trying to rope in users with unsustainably low prices.
“They’re lower now,” admits Guanchun of the subsidies. Some have been eradicated entirely. Didi Chuxing, China’s ride-hailing warrior, used to give his startup 2 percent commission on each ride – but no longer.
Nonetheless, the entrepreneur feels his startup business is “healthier” now than it was before, with more people than ever proving to be returning users. The Microsoft money is a nice vote of confidence too.
Laiye’s series A is of an undisclosed amount. Lightspeed China and Sequoia China – earlier seed funders – also contributed.
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