Transforming the Customer Experience: Sierra’s Innovative Approach Amidst the AI Era

We’ve been hearing about the idea of enhancing the customer experience through digital means for quite some time now – but the results have been far from stellar. Enter Sierra, a new venture by Bret Taylor and Clay Bavor, that believes AI agents could be the next big thing in technology, following in the footsteps of websites and mobile apps. For these founders, AI agents represent a whole new category of technology with the potential to revolutionize the way customers interact with brands, ultimately delivering on the promise of digital customer experience.

“Our thesis is simple. We believe that conversational AI will become the dominant form of communication between people and brands – not just for customer service, but for all aspects of the customer experience,” says Taylor in an interview with TechCrunch.

This means that customers can ask questions and make requests in a natural, free-flowing manner – simply by entering their query into a search-style box. The AI agent should then be able to understand and take action by connecting to different systems such as order management or scheduling software.

Taylor and Bavor recognize that connecting to older systems can be challenging, but many companies have built APIs to facilitate this process. And while there are significant risks associated with introducing AI agents in customer interactions, the potential rewards are equally enticing.

“When you put an AI in front of customers, the value is a lot higher obviously, but the risks are a lot higher, too, with brand misrepresentation and hallucination – all the technical problems that are candidly the hardest problems in AI,” Taylor explains.

One of those technical problems is hallucination – where large language models sometimes generate fake information when they are unable to answer a query. This could have disastrous consequences for a brand’s reputation, so Sierra is taking steps to mitigate this issue. Their software is based on the concept of autonomous agents, with multiple models working together to provide accurate responses. They also have a “supervisor” model that monitors the quality of answers and sends them back for further evaluation if needed.

In addition to technical challenges, there are also regulatory and data privacy concerns to address when using AI agents to handle customer data. Taylor and Bavor assure that their agents are equipped to handle these issues as well.

But beyond the risks, the founders also see a huge opportunity in this new technology. “Anytime there is a sea change in technology, it opens a window of opportunity for smaller companies to explore that open space and really take some risks and try some new things,” says Bavor.

Taylor, who is also the board chair at OpenAI, doesn’t see their company competing with the research organization. “We don’t see OpenAI as competitive, and I will obviously recuse myself if there is ever a potential conflict,” he states.

“We think outcome-based pricing is the future of software. I think with AI we finally have technology that isn’t just making us more productive but actually doing the job. It’s actually finishing the job,” Taylor remarks.

Sierra’s pricing model is based on outcomes rather than traditional subscription or usage-based models. Customers only pay when a problem is resolved, and the company is still working out the details with early adopters.

Despite the experience and expertise of the founders, Brent Leary, founder and principal analyst at CRM Essentials, believes it will be challenging for Sierra to compete with established players like Salesforce – Taylor’s former company.

“But with Salesforce there’s a lot of institutional experience and skills and other resources that a startup doesn’t have, even if it’s headed by someone like Bret. And these huge companies are throwing all of their R&D investments and restructuring their whole operations already around the opportunities they’re seeing with AI,” Leary explains.

While Sierra may not have the same resources as Salesforce, they have still managed to secure significant funding with $110 million raised, including investments from Benchmark and Sequoia. The company’s pedigree combined with their target market has attracted attention and investment, but it will take more than that to succeed in the highly competitive world of AI.

Despite the challenges, Sequoia Capital partner Ravi Gupta believes in Sierra’s potential. “I think seeing it in action is the thing that was remarkable, and I think it really captured our imagination of what future customer interactions can be,” he says of his firm’s decision to invest in Sierra.

One thing is for sure, AI represents a new era in technology and has the potential to spawn numerous successful startups. “This new wave of AI will generate at least five to 10 meaningfully new independent enterprise software companies,” says Taylor. And with the amount of investment and talent behind Sierra, they may just be one of them.