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Chatbot – the Beginner guide for Startups

A Chatbot is a pure magic. AI-powered virtual assistants are the future of the tech industry that opened the door for all companies to interact with their users. The Chatbot is not a new concept. Although they have been technically using since the 1950s, virtual bots are hottest in the technology and digital marketing world. Many popular brands such as Uber, Pizza Hut implemented them to reach more customers efficiently. As a survey of 2018, 38% of Americans would use Chatbots to interact with a company or brand. Indeed, AI-powered bots gave a new dimension to startups and companies to grow their business.

 But, exactly what are Chatbots? How do they work? Why have they become such a big opportunity? How can we build the Chatbots?

These are the questions we are going to answer!! HERE, THE COMPLETE BEGINNERS GUIDE FOR STARTUPS OR INDIVIDUALS. 

What is a Chatbot?

 A Chatbot is Artificial Intelligence (AI) software that simulates conversation when a human user interacts with an interface. It automates chat in natural language by websites, apps, and mostly used interface messaging apps like Facebook messenger. 

Chatbots = Artificial Intelligence (AI) + Natural Language Processing (NLP)

With the help of NLP, these bots can communicate with the human user in common language rather than in command lines. 

Let’s look at the most popular brand in the World using Chatbot-

MasterCard Kai Chatbot for Banks and Merchants. It makes commerce more conversational and allows consumers to manage finance, transactions, and other personalized services.

What can a Chatbot do?

 A Chatbot can provide useful responses whenever a human user interacts with the intent of finding a restaurant, getting a refund, or buying a product. 

However, it is possible only if the system has enough data to train and tweak Chatbots. The key reason behind developing Chatbot is to understand the intent of a visitor, customer, or lead. The combination of Natural Language Processing (NLP) and Artificial Intelligence (AI) can find a resolution from the true intent of the customers and extract entities from that intent.

For example,  

You may ask, “Where can I buy a pair of leather shoes?” The Chatbot would first have to discover that you have the intent to buy a pair of shoes and also a place to buy them.

Applications like Google Home, Alexa, Siri, or Cortana are the network of thousands of hundred of Chatbot models.

See also: Top IT Company for Chatbot development in India 

How does it work?

Generally, a Chatbot work on three classification methods. 

1) Pattern Matching

Chatbots utilize pattern matching method to first group the text and produce a relevant response from the clients.

AIML or Artificial Intelligence Markup Language is a standard structured model to create human interfaces for the implementation of patterns which can easily understand and get back with an appropriate response from the clients.

Here’s an example of pattern matching:

<aiml version=”1.0” encoding =”UTF.8”?>


<pattern>HI HOW ARE YOU</pattern>


<srai>HI<srai><srai>HOW</srai><srai>ARE YOU</srai>





For every question, a remarkable pattern must be accessible in the database to give a reasonable response. 

 2) Natural Language Understanding

A natural Language understanding algorithm examines a sentence.  It is a branch of Artificial Intelligence that uses software agents to examine the group of texts or speech.NLU is a subset of Natural Language Processing (NLP) that goes beyond understanding every input and interprets the meaning specified.

NLU implements algorithms to decrease human speech into a structured hierarchy .  For example, a query for an island camping trip on Bali island on the 20th of July.NLU algorithm breaks down the query something like this : Ferry tickets [intent] / need: camping lot reservation [intent] / Bali Island [location] / July 20th [date].

Check Here: How a company is earning with  AI Bots?

 3) Natural Language Processing

Natural Language Processing (NLP) utilize algorithms to analyze the text, allow machines to understand how humans speak. It is commonly used for text mining, machine translation, and automated question answering. 

NLP can rely on machine learning algorithms. This usually works in the following steps:

Tokenization: NLP separates a series of words into tokens or pieces that are linguistically representative, with a different value in the application.

Sentiment Analysis: It will study and learn the user’s experience, and transfer the inquiry to a human when necessary

Normalization: This program model processes the text to find out the typographical errors and common spelling mistakes that might alter the intended meaning of the user’s request.

Named Entity Recognition: The program model of Chatbot looks for different categories of words, similar to the name of the particular product, the user’s address or name, whichever information is required.

Dependency Parsing: Syntactic parsing or Dependency-based parsing is the process of extracting verbs, words, grammatical structure and defines the relations between each word in the sentence.

Why does a business need Chatbots?

Chatbots have already become a sensation in the global market. It’s rendering anytime support or augmenting human support retains its popularity to get added as part of customer management. Hence, the global Chatbot market is expected to increase exponentially between 2018 -2025.

As per the statistics, 85% of customer interactions will be managed without the involvement of  human resources by 2022. Executives of top leading companies say voice recognition is the widely used AI technology for their business growth.

See also: What are the Best Platforms to Develop Chatbots.

What are the types of Chatbot?

Chatbot made easy for the customers with the potential benefits of answering quickly and easily. As per the survey, 61% of customers feel good about the company when they handle the issues without involving a live person. Also, Chatbots are luring small businesses to make an investment in developing them.  As a matter of fact, by 2021, 50% of businesses will adopt Chatbot as a customer support platform. 

Further, we will discuss the types of Chatbot that can develop to simplify the process of customer support and for better user interaction.

 1. Scripted Chatbot  

A Scripted Chatbot usually develops with a predefined set of questions. This type of Chatbots builds on the rule-based concept where the action is determined by rules. Hence, a rule-based/scripted Bot takes less time to anticipate what a customer wants to ask.

2. AI Chatbot

   Intelligent Chatbots utilize AI technology to map user input to intent. These bots allow NLP to classify the text or video questions and parse them to get variables for an answer. However, AI Chatbot works with limited knowledge or understands the context or to have a memory which influences the conversations.

In Conclusion, Chatbots are the future of the business industry. Now, every startup should think to develop a bot for their exponential growth in the market. Integrate the chatbot with the system/application for better user interaction. Also, it has already become extremely easy to build a bot. Further, click on this link to know  how to develop a Chatbot for your business.

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