Is This Thing Working? The Promise and Limitations of Chatbots

This case explores the potential benefits of chatbots and the challenges that have prevented them from fulfilling some of the bolder hopes and visions they have inspired. It briefly describes their AI origins and their "breakout" moment in the mid-2010s, when firms like Microsoft and Facebook invested heavily in strategies that prioritized the technology. Although chatbots proliferated throughout the later 2010s, as the case describes, their effectiveness was hindered by ongoing challenges. Most importantly, they were very limited in their ability to perform tasks and sustain productive interactions beyond narrowly defined functions involving precise language. The case also explains and explores the two different categories of chatbots--those that are products in themselves, versus those that are designed to be sales, marketing and customer-service tools. And it describes three examples of businesses that have made chatbots key elements of their corporate strategies: Lemonade Insurance, Sutter Health/Ada Health, and Domino's Pizza. It concludes by noting some common threads among firms that have successfully adapted the technology.