How Sierra is rethinking customer experience in the age of AI


We have heard of the notion of client experience forever, the idea that we could improve customer interactions with brands through digital. So far, the results have been mixed, to say the least.

Sierrathe new startup from Bret Taylor and Clay Bavor, believes that AI agents could be the next technological frontier, much like the websites or mobile applications that preceded them: essential digital assets for every business, and which could ultimately deliver on the promise of digital customer experience.

Whether this is true or not, the two founders fundamentally see AI Agents as a new technology category, offering customers a whole new way to interact with brands to improve their overall experience.

“Our thesis is really simple. We believe 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 every aspect of the customer experience,” said Taylor at TechCrunch.

This means that customers can enter free-form questions and requests into a search-style box, and the AI ​​agent must be able to understand that request and take action by connecting to the required transactional systems. These could be tasks such as finding an order in an order management system or rescheduling a delivery in a scheduling system, to name just a few examples.

Taylor and Bavor acknowledge that it’s not always easy to connect to these systems, especially if they’re older. But most of the CIOs they spoke with said they’ve created APIs that connect to these legacy systems, making it much easier for Sierra to communicate with them.

Regardless, Taylor and Bavor recognize that there are serious challenges and risks when it comes to human interactions with these AI agents. “When you present AI to customers, the value is obviously much higher, but the risks are also much higher, with the brand misrepresentations and hallucinations – all the technical issues that are frankly the hardest problems in AI,” Taylor said.

These are not minor issues, especially the problem of hallucinations, where great language models sometimes make things up when they don’t know how to respond to a prompt. This could be potentially devastating to a brand’s reputation, depending on the nature of the response.

Although no company has yet solved hallucinations – and probably never will – Sierra is working to alleviate the problem (but then, isn’t everyone?). The company’s software is based on the idea of ​​autonomous agents. “What this means in practice is that there is no single model that produces a response from a Sierra agent.” In fact, Taylor says, it sometimes involves as many as seven models, including one they’ve dubbed “the supervisor” who monitors the quality of the answers, and if he deems the answer questionable, he sends it back for re-evaluation. Taylor acknowledges that managing hallucinations is an ongoing research problem for the industry.

As if that wasn’t enough, when it comes to processing customer data in an automated manner, there are a whole host of regulatory and data privacy issues to address. But Taylor and Bavor say their agents are designed to handle that, too.

Taylor believes that AI is fundamentally different from software as we have known it over the past 30 years, and requires an educational element to help customers understand its power and pitfalls. “So part of our go-to-market approach is to mitigate these risks [and] teaching our customers how this new type of software works,” he said.

But the flip side of this risk is that it represents a huge opportunity for the company. “Anytime there’s a step change in technology, it opens a window of opportunity for small businesses to explore that open space and really take risks and try new things,” Bavor said.

This new wave of AI will generate at least five to 10 new independent enterprise software companies, Taylor said, much like the arrival of cloud and mobile. “There is an opportunity for a new technology model. There is currently no leader in the conversational AI market because it is new. It’s been a year already, and so, everyone is finding out in real time,” he said.

Taylor, who is also chairman of the board of directors of OpenAI, doesn’t see the two companies in competition or any conflict between the two, although one could certainly argue that is the case. “We do not view OpenAI as competitive, and I will obviously recuse myself in the event of a potential conflict,” he said.

The founders also believe that a new platform should have a new approach to pricing, and they designed an entirely new results-based pricing model. Instead of tiered subscription fees or usage-based pricing that we’ve seen from other software companies, they want customers to pay only for results, when a problem is fixed.

“We believe outcome-based pricing is the future of software. I think with AI we finally have technology that not only makes us more productive, but actually gets the job done. We’re actually finishing the job,” Taylor said. And that’s when they intend to bill the customer. However, the mechanics are still being worked out with the first customers.

Still, even taking into account the experience of both founders, Brent Leary, founder and principal analyst at CRM Essentials, thinks it will be difficult to compete with traditional incumbents like Taylor’s former company, Salesforce.

“I mean [Taylor] is incredibly intelligent and capable, there’s no doubt about that,” Leary said. “But with Salesforce, there’s a lot of institutional experience, skills and other resources that a startup doesn’t have, even if it’s led by someone like Bret. And these huge companies are abandoning all their R&D investments and are already restructuring their entire operations based on the opportunities they see with AI.

To be clear, Sierra is well capitalized, but certainly not to the level of a company like Salesforce. Taylor and Bavor’s pedigree, combined with the addressable market they are pursuing, is attracting big investments, with the company already earning $110 million, including $25 million from Benchmark and another $85 million from Sequoia. This is an extraordinary amount of money for a startup company, but these are not typical founders.

Sequoia Capital partner Ravi Gupta, who is leading his firm’s investments in Sierra, says that beyond the experience of the two founders, the firm was impressed by the technology and its potential. “I think seeing it in action is what’s been remarkable, and I think it’s really captured our imagination about what future customer interactions can be,” he said, adding that it doesn’t It wasn’t a difficult decision for him to write a check.

Sierra clearly sees a big opportunity to transform the customer experience with AI, but there are many obstacles standing in the way of its success. If the founders can find a way to adequately address the pitfalls of automated, free-form, AI-driven customer service agents while avoiding established competitors, the startup could succeed, but like anything that involves AI is still successful. to prove it can do it – and do it consistently and at scale.


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