5 big questions on innovation

We have created an online platform for online dispute resolution (ODR) that can resolve disputes of all kinds from eCommerce to relational disputes, and we are available to companies, government agencies, and ADR organizations, to deliver fast and fair resolutions across these categories. We have done a couple of things that I think are unique. One is that we built a configurable platform that has all the modules of dispute resolution that can be snapped together in different ways to solve particular needs. No one else has built a platform like this. We think of online dispute resolution as a business process or a civil justice process, and it is kind of like how salesforce.com created the CRM category—we have not seen anyone else do that for DR; it is like this underserved business process. Secondly, we built a team with a unique composition of experts, mediators, arbitrators, and technologists. Some are experts in building technologies in start-up environments, some have done international Mediation and Arbitration work, and some are just experts in ODR. No one else has assembled a combination of talents like this. We design the resolution journey, and in that way, we bring people together.

The platform is a click away on websites where you are transacting your business: an online marketplace, or a merchant’s website, and in some jurisdictions on an ombudsman site. We are increasingly working with ombuds organizations, especially in European jurisdictions. Europe has started to pass laws that require online businesses to provide online dispute resolution. In addition, we have innovated a SaaS-based business model focused on the value of making our customers’ customers happy. We deliver our platform as a service subscription, and the price depends on the number of disputes the customer runs through the platform. The more disputes you have, and the less you pay per dispute. We deliver value by making it more efficient for you to resolve a dispute—including resolving it through automate software—and making your customer happier.

ODR is changing the traditional customer service role: Modria is reducing the number of customer contacts in the call center for a problem transaction, and freeing the agents up to do more account management, up-selling and outreach into the customer base. In customer service, for a typical US company, if I pick the phone up and call, and they answer my call and try get me a basic outcome, it is going to cost the company about 12 dollars for labor, technology, telecommunications, and overhead. That is before they pay me any compensation. Our system brings that cost down from 12 dollars to four dollars and eighty cents. We do that through the reduced contacts because we are resolving issues in software; for marketplaces, we resolve issues between buyers and sellers without CS having to get in the middle. We typically serve the space that you might classically think of as Small Claims. Our disputes usually involve 25,000 dollars or less, but resolutions are tailored and often involve solutions beyond dollars that might satisfy the customer. With an eCommerce site, the value is often 25 dollars to 150 dollars, but we also, for example, resolve insurance disputes. We have a large caseload in the state of New York, and with New York No Fault insurance those claims are higher because they are related to medical bills, but they are still not millions of dollars.

We have spent a lot of time innovating the user experience, and trying to package up what we call resolution flows. What we see is that there are patterns of commerce and the disputes that arise from them. A typical problem we see from customers is that they didn’t get their item. Or they did get their item, but it was not the way it was described on the website. We innovate by pre-building the resolution process, so we give our customers a jump-start when it comes to deploying online dispute resolution. They do not have to start from a blank piece of paper. We synthesize decades of experience in this. We are working with major airline companies on delayed flight compensation, and so far it is working well. If your flight was six hours late, and you missed a meeting, how do you build that resolution flow and make it available to multiple jurisdictions?

Most disputes are resolved in the diagnosis and negotiation phases, and then there is also a neutral party in the mediation module. Beyond that, there is the arbitration pathway that also sees resolution in a short time, relative to the courts. We are now in a regulated process; decisions are typically given by retired judges who are arbitrators. All their decisions are published online, and are searchable. In a lot of ways, it looks like an online court, and is legally binding—a process the injured party opts into.

I think there are two things that hold back innovation. One is that people look at disputes as just customer service—to answer the phone and quickly dispatch an answer—as opposed to realizing that when a transaction goes wrong, companies or government agencies need to provide a resolution process that’s not just giving them a return. We have a bit of resistance, and you need a change in people’s thinking to realize that what customers want are resolutions, not talking to customer service agents. When our customers shift our thinking in that simple way, we can suddenly use technology to deliver resolutions with benefits for both parties.

Also, customer service is usually seen as a cost center. When we try to bring innovation here, customer service teams see how this can transform the customer journey, and they can see how the economics are aligned. Our service often reduces the number of contacts into the customer service center, because people just work it out, or our software provides a resolution for the customer without a customer agent having to interact. Part of the enterprise challenge is to get companies to realize this is a sales and marketing benefit. This goes directly to your brand, to your customer retention, and it goes to Net Promoter Score (NPS) or customer referral. You must think broadly, and that can be a challenge to adoption.

We always have a bit of R&D running, even though we are a young company. Innovation is encouraged within a framework we call “Listen, Learn and Innovate.” We drive innovation based on what our customers are telling us, and we use that to enhance the technology and the product. We aggregate data across the disputes platforms, in an anonymized fashion, for the benefit of all customers to improve the platform. What I have learned at Modria is that every time I turn to anther industry, I discover a category of disputes that have probably impacted my own life in the past, and that I wish I had had a mechanism to resolve.

Technology innovations you will see from us is the use of machine learning and AI to learn from our customer dispute volumes, and to tune policies to auto-resolve issues when we can. Based on the pattern and behavior our customer’s customer has shown via the platform, if we know what the answer is going to be, then why are we sending them to a customer service agent? Let’s say we are serving an online marketplace: when a customer clicks “I have a problem,” we ask them some questions. We take them through this diagnosis process. If in answering these questions, we realize 99 percent of the time the answer is going to be X, we can offer that solution right then and there. It might be as simple as telling them: “A replacement is on the way; it’ll be there overnight.”

I think this use of data and AI is changing our lives in ways we don’t even expect. I watch my granddaughter interact with technology, and people talking to their phones, and I watch Uber self-driving cars in San Francisco. The most interesting innovation to me is the way that software is going to become intelligent, and essentially become our companion as we travel through life. And it is sneaking up on us from a social perspective in ways people are not anticipating.