If you want to see the future of what Ted Livingston and his Waterloo, Ont., company, Kik, are building, you have to go to China. There, WeChat—operated by communications conglomerate Tencent—is a ubiquitous platform for commerce, allowing users to do everything from calling cabs to paying for purchases to receiving online tutoring, all without leaving the app.
It’s a chat-as-technology platform, and Livingston says it’s the logical next step in the evolution of computing interfaces. “There was the PC in the ’80s, the web in the ’90s and mobile in the ’00s,” he explains. “Now everybody believes chat is going to be the next once-a-decade platform.” If chat apps are the new web browsers, then bots, (automated programs that serve as interface between users and businesses) are the new websites. Livingston says 20,000 have been created on Kik since it opened up the functionality in April, with brands like H&M and Sephora, and content providers like CNN and Funny or Die among them.
Kik’s fiercest competitor in the battle to dominate this new era of interfaces is Facebook, which has been encouraging developers to build bots for its Messenger platform and whose WhatsApp subsidiary is finally opening up to business uses. The apps all dominate different demographics, with Kik having a lock on U.S. teens. Last August, Livingston got himself a powerful ally in the battle to build a WeChat-like ecosystem on this side of the world: Tencent, which made a US$50-million strategic investment in Kik. (The deal gave Kik a $1 billion valuation, putting it in rare company as a Canadian “unicorn.”) Livingston says access to Tencent’s expertise has been just as valuable as the capital. When a part of its platform build-out proves challenging, the Kik team can send their questions to people who have already faced and solved the same problems with WeChat. “They’re not pushing it on us—it’s all pull-based,” says Livingston.
Kik’s chat ecosystem is growing, albeit slower than the flood of articles hailing the bot revolution might lead you to believe. Livingston likens it to the early days of the App Store, after its 2007 launch. “A bunch of the apps were more like hobbies,” he says. “But as Apple built a richer feature set where you could build, grow and monetize your app, that’s when a bunch of money and serious development talent started to pour in.” Still, he says developers and brands tell him and the Kik team they’re leading the pack.
A nine-figure valuation and toe-to-toe battle with Facebook have inevitably made Kik the subject of Canadian boosterism, and both the firm and its founder are now fixtures in lists of up-and-comers and politicians’ success speeches. Kik recently hired a prominent New York PR firm, but Livingston insists unicorn status hasn’t meant much change. More consequential, he says, has been the rapid expansion in head count. Kik now has 150 employees spread across its Waterloo headquarters and engineering base, and outposts in Toronto, Los Angeles and New York. “That process of scaling a company has been really difficult,” says Livingston. “What works to get to 50 or 100 people just completely breaks down [at 150].”