LIVE FROM RISE 2016, HONG KONG: Mobile messaging apps continue to evolve as technology improves, addressing users’ needs in innovative ways, but overcoming the network effects of mass-market apps only becomes more difficult as they scale to hundreds of millions of users.

These were the key messages during a panel discussion yesterday at the event.

“We try to build messaging as a platform, because in a market like India, which faces constraints of low smartphone penetration and data usage, messaging will be the gateway to the internet,” said Hike Messenger founder and CEO Kavin Mittal (pictured below).
Given that the average user already has a couple of message apps on his or her phone, the upside for new apps would seem to be limited. But Mittal noted that as new technology changes, it allows new companies to solve needs in much better ways.

“We’ve seen that happen in the dial-up world on the desktop with broadband, and now with mobile we’re seeing the same transition happen. And we still have a few billion people to connect to the internet,” said Mittal, who is the son of Bharti Airtel CEO Sunil Mittal.

He noted that there is still a large audience who doesn’t understand the need for the internet and thinks it’s expensive.

Open Garden founder and chairman Micha Benoliel (pictured below) agreed, saying it’s a question of how you bring more people onto the mobile internet. “We’re going to see a new generation of services and new ways to access the network in a free way.”
RISE Open-garden
He gave the example of a company that allows users to win free data credits by taking a survey.

Operator initiatives
Asked about telecoms operators’ efforts to create their own messaging services, Benoliel said “good luck to carriers to win in that space” as they have been working on new standards for many years. “While the features they offer are promising, platforms like FireChat and Hike are already doing it today so why would users switch? I don’t know,” he said.

Mittal said that it’s interesting to see them trying, but noted that it takes a lot to build a network that is interoperable at the scale Hike has. “We’ve seen with the scale that Hike has in India how hard it is to breakthrough network effects. If you have an app that has hundreds of millions of users, or if there are two apps in the market with hundreds of millions of users, it gets even harder.”

Interoperability – little sense
With a lot of the value created by having control of the user experience in the mobile space, Mittal said offering interoperability between messaging apps makes little sense. “Twitter had this problem early on when it gave APIs out, so a lot of people built Twitter clients; and they ended up cutting it off and brought users back to the application because when it comes time to build a business and monetise, you want to have control over the user. So it [interoperability] is unlikely, at least in the short term.”

Benoliel pointed out that messaging of course is not only about sending text, with users addicted to an experience of finding people on a specific platform for a specific purpose. “You’re going to be using SnapChat to send videos and you’ll use specific apps for specific groups of friends or family or business, because they each provide a slightly different experience.”

Chat bots
Regarding the recent rise of chat bots, Mittal argued that they won’t be successful – with millions of users — until you can build a chat bot that actually has personality. “When you’re chatting to something, it has to feel like a human being. Humans have this capability to handle a lot of exchanges that bots right now don’t have. Over time they will – the question is when not if.”

As the technology improves he sees them playing a big role in messaging.