Cathal McGloin effected a big score with FeedHenry. Now he’s looking to repeat the trick is the competitive chatbot space

Cathal McGloin (54) is a Donegal entrepreneur with a Midas touch for tech startups. He has been involved in three tech ventures that found buyers and he’s in the startup space again with ServisBot, though the impressive track record doesn’t make raising equity investment any easier.

The McGloin CV includes Performix Technologies, Aran Technologies and FeedHenry. The latter venture was acquired in 2014 by Red Hat for €63m, with McGloin’s share amounting to €5.3m. The entrepreneur stayed with Red Hat for two years, learning about open source software, and then co-founded ServisBot in 2016.

ServisBot, launched in January 2017, develops chatbots that automate conversations between companies and their customers. As the company explains: “Conversational AI represents one of the most significant shifts towards using natural chat as a means of engagement where customers can book things, buy things, get service and interact with brands across multiple touchpoints, without the need for a human agent.”

The venture’s other founders are his brother, Ray McGloin, Chris Doyle and Cian Clarke. Doyle worked with Ray McGloin in nPower in the UK, while Cian Clarke worked with Cathal McGloin in n FeedHenry.

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As of March 2018, Servisbot Ltd had €2.4m equity investment. The business has offices in Dublin and Waterford, where the engineering and development teams work on the product. ServisBot also has an office in Boston, where the CEO, CTO, and product management, sales and marketing teams are based.

What are ServisBot’s primary target markets?

We are focused on industry sectors where we see significant opportunities for chatbots in transforming customer engagement. These are financial services, energy and utilities, insurance, travel and healthcare. Within these sectors we target the business departments that manage customer-facing processes and interactions.

Contact centres constitute a huge market for chatbot solutions that are geared towards more convenience and automation. It is also a target for us, but our platform is not limited to the use cases that are characteristic of the contact centre.

What processes do ServisBot solutions suit?

We are seeing some of the most interesting traction in areas like insurance claims processing; customer acquisition and on-boarding, such as approving a bank loan, credit card application, membership etc.; customer retention for utilities; and debt collection through proactive outreach via messaging to collect delinquent payments. There are also some fascinating use cases for chatbots in loyalty and marketing departments.

Is the chatbots technology back-end complicated?

One of the common misconceptions is that you have to have a team of data scientists to implement and maintain Artificial Intelligence and chatbot projects. We have built a platform that does the heavy lifting on messaging, automation, and AI, so that even a business person can create a chatbot using the platform.

Another thing we come across is people using chatbots to automate their existing customer service processes, rather than rethinking how a chatbot can be used to totally transform how they engage with their customer.

When you think of chatbots as task-oriented bots, you can see the potential for them to do much more than answer a standard customer question. They can take a customer through a more complex journey, like applying for a loan, submitting all the proof documents, and gaining approval – all in a seamless chat session on a messaging channel.

Will chatbots will make more and more human roles redundant?

There’s a fear factor around AI, which is often hyped in the media, that bots are replacing the human workforce. This is especially palpable within the contact centre space. However, like other disruptive technologies, AI and chatbots will not eliminate the need for human interaction.

On the contrary, the role of the human will assist chatbots in providing the emotion and instincts that chatbots are not yet capable of, or may never be capable of. The skillset of human agents will shift to handling more complex interactions and tasks and less of the routine queries. So the role of humans with chatbots is going to be as important as ever, though they will have to adapt their skills.

How have you found the process of fundraising for ServisBot?

We are funded by private investors and have just completed a round that will allow us to grow and implement our strategy. There’s a lot of noise in the market for chatbots, and we really had to make ourselves different to the multitude of other players.

I believe our technology is the key to that, but how we go to market is also important, as our investors want to see revenue streams. People think that raising money is easy — but it’s not. Investors are very savvy and want to understand why we’ll succeed over others.

How did you manage startup costs for ServisBot?

I’ve done a few startups so I have learned a lot along the way. My time in Red Hat taught me a lot about open source software. You actually don’t have to build AI infrastructure from scratch – the real value is in the models that use the proven AI techniques.

The likes of Google, Amazon and IBM have all invested heavily in this area, and they have either open-sourced some of their technology or provide it as an API to be deployed by third parties. We have developed our own AI models that act as the brain to orchestrate all the components that make up our system, from natural language understanding and image recognition, to conversation management and bot orchestration.

I spend a lot of time looking for the right talent that can do this, so to me it’s about building a great team rather than spending lots of money on complex AI.

Is it difficult to find and retain good software developers?

This is my fourth startup and I have always drawn heavily on the pool of great talent we have in Ireland, especially the young computer scientists and engineers that graduate from our universities and technical institutions.

It’s definitely a competitive labour market and it can be hard to compete with the big guys who can offer all kinds of benefits that a startup can’t. However, there are many great, passionate young software engineers and data scientists who want an exciting career and opportunity to develop in many different ways. That’s what you find in a technology startup.

When recruiting for a venture like ours, you’ve got to convey the passion that we have as a company and how every single person plays a pivotal role in shaping our success. I’m always open, communicating what we are doing, where we’re succeeding and where we need to improve.

What’s your view on the ecosystem for software startups in Ireland?

Ireland has great supports through the likes of Enterprise Ireland, Dublin Business Innovation Centre and a number of regional organisations. The Seed Capital Fund also makes it relatively easy, compared with other EU countries, to get an idea off the ground.

It becomes more challenging when you need your first venture round to start scaling, as the Irish venture capital market is quite small. At that point companies should be looking to London, Berlin, Paris or even the US for finance.

On the infrastructure side, it’s also not a consistent story across the country. Some areas just don’t have access to the bandwidth required for modern startups and work-from-home developers. Broadband will be key to leveraging the talent outside of the urban centres.

What keeps you motivated as an entrepreneur?

I just love the startup environment. It energises me and gives me purpose. It’s not easy and maybe I’m a sucker for punishment.

The one piece of advice I would give is that this game is about your team. You can’t do everything yourself and shouldn’t even try. Hire a great team of skilled people and be their guide, rather than micro-manage. Just like a conductor is to the symphony orchestra, so too should a CEO be to their teams.

What’s in the pipeline for ServisBot in 2019?

We’re ramping up the ServisBot workforce in both engineering and sales in Europe and the US. We are working on deals on five continents at the moment and have partnered with a global financial company to bring this technology around the world. There will be more to come on this in 2019.