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1、Fresh ConsultingWhy Robotics Companies Fail Table of ContentsWhy Robotics Companies FailLacking Business FundamentalsPoor Market Fit&TimingBad User Experience&IntegrationMisaligned Investors&PartnersFocusing on the Wrong ProblemConclusion3610172227363Why Robotics Companies FailBoth ARC Advisory Grou

2、p and Forbes report that robotics is one of the fastest-growing industries either has ever researched.Much like the early years of personal computing,were seeing more and more robotics businesses spring to life every year.Companies are building on each others successes and failures in order to offer

3、 new and innovative platforms with varying degrees of autonomy,intelli-gence,and personality.Yet,for a wide variety of reasons,the robotics industry is still plagued with an incredibly high failure rate.Many in the industry have offered thoughts and opinions on the topic,but no single answer seems t

4、o provide a complete picture.Likely because theres rarely ever just one clear reason for why robotics companies fail.For this reason,the robotics team at Fresh Consulting decided to go a bit deeper hoping to uncover the patterns of failure and success through some of the more well-known stories and

5、names from the last decade.Our team analyzed some of the most significant case studies,from Rethink to iRobot,looking for patterns of failure or success,and what factors may be behind those patterns.On the surface,several factors emerged that seemed to offer clear explana-tions for why its challengi

6、ng for robotics companies to succeed:High cost of engineering and talent leading to shorter capital runways Expensive components,materials,and manufacturing leading to expensive product iterations Lack of mature business models and pricing models Lack of common reference development platforms for ne

7、w entrants to leverage,creating inordinate expense to“reinvent the wheel”Long sales cycles with expensive customer acquisition4 Costly support and maintenance after hardware delivery Immature distribution and partner channels to launch with High cost of ownership,making scaled deployments challengin

8、g to achieve Pressure from investors and stakeholders to achieve unrealistic growth objectives and development milestones Overall misalignment of expectations or agreement on whats achievable Fear and resistance of change for workflow integration requirements New markets that require time to develop

9、 and matureWhile these factors make running a robotics company hard,they arent the reasons why so many robotics companies fail.In looking closer at these challenging factors,and exploring how each are in-terconnected,we identified five central themes that are consistent among failed robotics compani

10、es:1.Lacking business fundamentals 2.Poor market fit and timing3.Bad user experience and integration4.Misaligned investors and partners5.Focusing on the wrong problem Image source:Evan Ackerman/IEEE Spectrum5Throughout this paper,we will expand on these themes and challenging factors outlined above,

11、and connect them with examples of companies who met those challenges head-on and succeeded,as well as the many others who couldnt rise above.As a disclaimer,this paper is not intended to be an exhaustive list of all robotics companies and every reason for their success or failure.We have also specif

12、ically decided to exclude a number of established industrial robotics giants(like Mitsub-ishi,ABB,FANUC,KUKA,Yasakawa,Omron,and others)from the analysis of this paper.While its clear these companies are shining examples of in-ternational success in the robotics and automation arena,we are choosing t

13、o focus our analysis on the many other robotics companies trying to make their mark outside of the established walls of industrial robotics/automation.By looking deeper into these patterns of success and failures,we hope to provide some helpful strat-egies and tools that new robotics companies can i

14、mplement to improve their odds of success.61.Lacking Business FundamentalsIts rarely ever the case that one bad business decision causes a company to fail.New and old busi-nesses alike typically go under because of a com-bination of several bad decisions,and sometimes a mix of unfortunate circumstan

15、ces as well.For robotics companies,this equation can be a little trickier.Since most are blazing a new trail in some fashion or another,there are very few established business models,pricing strategies,and other best practices available for new entrants to emulate and learn from.The resulting effect

16、 seems to be a gen-eration of robot companies marching to market in similar ways,making similar business mistakes along the way.From the case studies we examined,this lack of business fundamentals emerged early as a central theme among the majority that failed.Strong Business AcumenIf were being hon

17、est,technical founders of robotics companies are not all great business leaders.Some are,but many are not.Managing funds,board members,supply chains,logistics,demand fore-casting,sales and marketing efforts.in addition to a host of other challenges unique to building a product it takes a lot to buil

18、d a company,even for the most seasoned business leaders.Having the impressive technical knowledge and talent required to bring a successful robot concept to reality is one thing,but it doesnt nec-essarily mean youll be an equally capable or savvy business executive.Eric Klein,Partner and Founder of

19、Lemnos Labs,has seen this firsthand.Even though a companys founders may be“the greatest mechatronic engineers of our generation,”if unit economics,scale potential and ability to get to the customer dont work,Klein reasons,“it doesnt matter how good the robot is.”Making sure to complement the technic

20、al expertise of your team with others that have equally strong business expertise or industry knowledge is a great 7way to help avoid making costly business decisions down the road.Building a working,reliable,us-er-friendly robot is hard enough,so getting help with building a company can position yo

21、u for greater chances of success.Managing Funds StrategicallyBuilding a robotics company is an expensive endeavor,and among the case studies we reviewed,funding challenges were a root cause of failure for many of them.Simply generating enough funding to bring your robot vision to life can be challen

22、ging enough.Once you get funding,managing it wisely can be even harder.A lack of clear product and market strategy will force a robotics company to burn through capital quickly as they pivot and pro-gressively re-engineer toward a solution with a better market fit.Similarly,overspending on expensive

23、 en-gineering talent and large office space early on is another quick way to create cash flow challenges.Treating a small company like a big company early on can kill it.Saving Enough for the FutureAssuming youre fortunate enough to generate the funding youre looking for,running a lean operation and

24、 spending that precious capital wisely is the next challenge robotics companies face.Designing and developing robotics hardware and software is costly:theres no way around it.Robotics ventures require specialized talent and expensive materials and equipment and generally take much longer to producti

25、ze and sell.Often creating a truly mar-ket-ready robotics product can take several years.Even when youve successfully launched a product,youre still not out of the woods.The next challenge is sales and marketing,customer adoption,inte-gration,and support.surviving until you turn a profit.Assuming yo

26、uve made it through the long,expensive product development process,this is the next most common point when robotics companies run out of cash and are forced to shut their doors.Not because of any shortage of great products,great ideas,or excited customers,but because the company never got beyond pro

27、duct creation and its overhead wasnt sustainable long term.8Case Study of Failure:Laundroids Lack of Product Strategy Led to Insurmountable DebtIn 2015,Seven Dreamers debuted its robot-pow-ered laundry machine Laundroid.While the robots exterior looked like a simple cabinet,its complex internals mad

28、e it a unique offering in the home robot industry.Specifically,Laundroid was designed to fold your clothes for you after you tossed them into the machine.You could place them inside the machine in any orientation,even wadded up,and receive a folded garment within minutes.At least thats how it was in

29、tended to work.The Verges Dami Lee found Laundroid took 5-10 minutes to fold a single t-shirt,and even then it didnt always work.The robot also cost$16,000,though Seven Dreamers was working to lower the price point.Unknown to the public,Seven Dreamers had racked up over$20 million in debt to more th

30、an 200 creditors.The company shut down its operations in 2019 before they had the chance to improve Laun-droids price or functionality.Case Study of Failure:Airware Overestimated Their Value Airware is an example of a startup that overextend-ed itself after early excitement.Founded in 2011 by Jonath

31、an Downey,Airware produced software and hardware for the drone industry.The goal was to create autonomous drones that gathered data,such as monitoring work at mines,looking for damage to buildings,and creating maps of construction sites.Airware was one of the first companies to envision drones as so

32、mething other than a war device,which led to massive support from consumers and busi-nesses alike.Everything seemed like it was going great for the startup;in fact,there was little warning upon the companys closure.Things were fine one day,and the very next morning,employees were told not to come to

33、 work.Despite interest from companies like Caterpillar and Mitsubishi,no deals ever came to fruition.Airware hadnt prepared for this outcome.Instead,theyd spent heavily on new office locations and expensive talent from groups like Google and NASA.When Airware failed to secure deals for addi-tional f

34、unding,they were left with a swift and unex-pected end.9Case Study of Failure:Reach Robotics Innovative Technology Killed by a Poor Business ModelFounded in 2013,Reach Robotics was a company working to bring a four-legged robot to the education and entertainment market.MekaMon,the companys robot,was

35、 released in 2017.It featured unique,lively movements,the ability for users to modify the robot via an app,and an interactive augmented reality game that users could play with their MekaMon.In terms of technology,the progress that Reach Robotics made was huge.By starting with a simple foundation and

36、 mission,the team was able to create a robot more lifelike and responsive than nearly anything else on the market.Similarly,the combination of robotics,artificial intelligence,and augmented reality made for a highly innovative product that showed the potential for each of these technologies when bro

37、ught together.Unfortunately,it was the overly ambitious nature of the product that contributed to the companys shutdown in 2019.MekaMon was in high demand,especially during the holidays.However,the lack of business experience and the newness of the tech-nology made it difficult for Reach Robotics to

38、 fulfill orders.This led to products arriving with technical issues,an overworked customer support team,and immense sales pressure that disrupted the flow of the companys innovative efforts.The consumer market is a challenging space for robotics,as many of the stories in this paper have shown.Reach

39、Robotics tried its best to overcome these challenges,but in the end,it didnt have the business expertise to navigate the marketplace.Its business model was unsustainable,and after facing pressure from a creditor,Reach Robotics closed when it couldnt find additional funding or sales.Image source:Reac

40、hEDUImage source:ReachEDU102.Poor Market Fit&TimingWhile poor market fit and timing may sound like obvious causes of failure for any new company,theyre particularly relevant for robotics startups.Arriving too soon,too late,or with the wrong solution all together can be detrimental to your success.Ov

41、er the past decade and more,there have been quite a few robotics ventures whose ideas and concepts could be considered about 5-10 years ahead of what current technology,market demand,or even industry infrastructure could truly support.On the market fit side,weve seen a similar number of companies en

42、ter the market with grossly over-priced,over-engineered,and otherwise under-de-livered solutions that are misaligned from what the market truly needs or is asking for.Said another way,sometimes the feature set is too ambitious and the cost of the robot solution is more expensive than the problem it

43、solves.The Right Market TimingGenerally speaking,bad market timing can cause any new company to fail.For robotics companies specifically,market timing is an especially difficult thing to get right,and it seems to boil down to a factor of technology readiness level and the asso-ciated usability,menti

44、oned below.Either the cost of the technology being developed is too expensive to solve the problem in a cost-effective way,or the problem a robot is setting out to solve simply cannot be achieved efficiently with todays technology.If your new robotics concept is on either side of those two paths,the

45、n you may fail because youre either too early to market,or your concept may be too expensive to bring to market in a reasonable amount of time.For the most part,there are still many limita-tions to modern-day motors,actuators,sensors,and 11other critical robotics hardware that make it chal-lenging t

46、o develop certain robotics concepts effi-ciently enough,functionally enough,and at a rea-sonable cost to the customer.The Right Market FitOn the other side of market timing is an even more subjective perspective of market fit.Are you de-livering something the market genuinely wants,can afford,and ca

47、n easily/intuitively use?There are many interconnected variables that impact a products overall market fit,but the underlying prin-ciples behind market fit are all about finding the right balance and proportionality for the product youre bringing to market.What does your market absolutely need from

48、your robot,and what can your team promise to deliver with the resources you have at this time?As evidenced by some of the case studies in this section,finding this“balance”is still a big challenge for some robotics companies.From our research on market fit,one of the biggest challenges for robotics

49、companies seems to be pricing.In many instances,weve seen robotics companies create fantastic tech that truly delivers on what its market is looking for,but the price of the solution ends up being more expensive than the problem it solves.That said,one positive direction is that the cost of robot pa

50、rts has been dropping dramatically over the past decade,which will help reduce the inputs that make prices higher.Anecdotally,through many of our personal expe-riences,most large enterprises have said that the often high CAPEX required to deploy and maintain most robot systems has continued to be a

51、primary obstacle in adoption.A lack of successful business models and pricing strategies across the industry is certainly a driving factor for this.Convincing busi-nesses to buy large quantities of expensive robotics hardware is a difficult task,especially if its new and relatively unproven tech.For

52、 this and other reasons,were starting to see several robotics companies explore various robot as a service(RaaS)models as a way to alleviate expensive upfront hardware costs for customers.As Aaron Prather,Head of R&D at FedEx,recently told us,“Investors are pushing the RaaS model.This may work fine

53、with some players.However,for large corporations that can capitalize these purchases,RaaS is not really a feasible option sometimes.”While RaaS certainly seems like the right direction for some new and future robot companies to follow,its proving to be sector-dependent and doesnt yet work for everyo

54、ne,at least today.12Case Study of Failure:Jibo Failed to Capture Market InterestIn 2012,an MIT roboticist named Cynthia Breazeal founded Jibo,a robotics company centered around a social robot of the same name.Jibo was a robot for the home that performed a broad range of functions,almost like a hybri

55、d between Google Home and Roomba.The goal of Jibo was to become a fully-fledged robotics platform,something the startups founder believed was missing in the robotics industry.Jibo went on to raise$3.5 million in funding by the end of 2014 and was featured in Time Magazine in 2017 as one of the years

56、 best innovations.Despite early momentum,Jibo is believed to have gone out of business sometime between 2018 and 2020 after failing to receive additional funding.There are many causes for Jibos failure,all centering around its lack of focus.Though Jibo was capable of performing many tasks,the majori

57、ty of these tasks were not things on the consumer priority list.Additionally,all of the features Jibo offered made it an expensive product to manufacture and purchase,resulting in fewer orders,delays in deliveries,and customers who felt the end product didnt provide enough value for the price.Extern

58、ally,Jibo faced fierce competition from more established businesses like Google and Amazon,who produced competing products like Google Home and Amazon Echo.Jibos inability to provide a quality,focused,niche product left an initially well-received device with no clear practical uses or justifications

59、 for its higher price.Image source:13Case Study of Failure:Aria Insights Outpriced Its MarketAria Insights,originally CyPhy Works,was a robotics startup that had all of the components to be a huge success.It was founded by one of the cofounders of iRobot,Helen Greiner,who led iRobot to great success

60、 during her time with the company.Aria Insights created innovative drone solutions that were used in agriculture,law enforcement,and the military.Law enforcement and military contracts made up the bulk of Arias income for most of the companys lifespan,though this changed when Aria shifted focus in e

61、arly 2019.Greiner had left the company in 2018 to focus on work she was pursuing with the military,which marked the beginning of the companys end.In January of 2019,Aria Insights announced that it would now focus on collecting and storing massive amounts of data through its drones.The idea was to mo

62、netize this data and provide deeper insights into its customers operations.While an innova-tive concept,no company had the resources on hand to interpret the data being gathered by Arias drones.The task of sorting through massive amounts of data generally falls onto artificial intel-ligence and mach

63、ine learning,technologies that many companies dont easily have access to.Ad-ditionally,each of Aria Insights drones cost$5,000,which made it a steep investment even from a B2B perspective.The end result was a product that no company could afford to purchase or understand how to use,and Aria Insights

64、 shut down just a few months later.Image source:Aria Insights14“We failed because we had a price point that was too high for a consumer product.Our price was coming out at around$5,000,which is a lot of money.Additionally,the Internet technology wasnt ready yet,and it wasnt consumer-friendly.”Helen

65、Greiner,co-founder of iRobot and Aria Insights,in Robotics Business ReviewImage source:Aria Insights15Case Study of Failure:Keeckers Popularity Wasnt Profitable EnoughKeecker was a robot for the home in the shape of a small,egg-like pod.It would roam around the house,using sensors to follow its user

66、s,providing useful information,projecting video content onto walls and ceilings,and hosting video calls.Keecker was founded in 2012 and raised$8 million,with lots of hype as one of the first home robots to demonstrate practical,clear use cases primarily itsprojection features.In 2019,however,despite

67、 over a thousand robots in customers homes being used an average of 3.5 hours each day,Keecker couldnt bring in enough revenue to remain profitable.It never generated the same levels of attention as robots like Jibo and Kuri.The passionate founders fought hard not to fall to the same challenges as t

68、heir competitors,but their efforts proved to be ineffective.In the end,Keecker was simply too expensive to produce and purchase to get traction with mainstream consumers.Image source:Keecker16Case Study of Failure:Rethink Robotics Bleeding Edge Tech Missed the MarketRethink Robotics launched in 2008

69、 and quickly became one of the most exciting robotics startups of its time.The goal of its founders(Rodney Brooks and Ann Whittaker)was to create a robot that could assist workers in skilled labor,making manufac-turing easier,cheaper,and safer.Rethinks robots would reduce the level of education requ

70、ired to work in these jobs,decreasing the amount of manufac-turing jobs being outsourced to countries outside of the U.S.The startup won several awards and was an Edison Awards finalist in the early 2010s.Despite so much early momentum,Rethinks history was plagued with problems that the founders str

71、uggled and ultimately failed to overcome.Its two robots,Baxter and Sawyer,were robotic arms with friendly faces and equally friendly hardware,as it was a big part of Rethinks mission to create safe robots for human workers.Series elastic actuators(SEAs)in the device joints increased flexibility so t

72、hat in the event the robots made contact with an employee,the joints would have enough give to avoid harming their human counterparts.The SEA advancements did make the devices safer for employees to work around,but they also made the robots much less accurate.The added flexibili-ty reduced the repea

73、tability of Baxter and Sawyer,making them too inefficient for industrial work.Rethink Robotics tried to overcome this by modifying the software,though in hindsight,it seems more likely that this was a hardware problem.This didnt stop Rethink from marketing its devices to manu-facturers,who in turn b

74、ecame less and less inter-ested.Despite how bleeding-edge Rethink Robotics had been when they initially launched,by 2018,the ten-year-old company was battling technology problems that newer startups had surpassed.In 2018,after$149 million in funding over its lifespan,Rethink Robotics sold off its as

75、sets to the HAHN Group,a German automation specialist,and shut down its operations.Many robotics experts believe that had Rethink managed to bring a more complete product to market when Baxter initially launched,they could have succeeded,while others believe the safety features made Rethinks robots

76、better suited for demonstration purposes in universities than re-al-world jobs.Whatever the case,Rethinks inability to bring the right technology to the right market out-weighed its innovative concepts.Image source:Rethink Robotics17“The reason Intuitive Surgical succeeded is because they made a UI

77、that was so easy to use.It allowed others to go play with it,which led to the discovery of the real uses of that robot.Intuitive Surgical didnt discover prostate cancer remediation for their product;their users did.They figured out how to make an intuitive user interface,and they were so good at it,

78、that it became the name of their company.”Howie Choset,Carnegie University Robootics Professor3.Bad User Experience&IntegrationIt may not surprise you to learn that many robotics companies still miss the mark on user experience.Modern-day customers(B2B,consumer,industrial,or other)have become tech-s

79、avvy enough to know when a product is going to create more problems than it solves.When building a robotics solution,having impressive hardware and software is often only 50%of the battle.The other half is heavily weighted on having an equally well-thought-out UI/UX design.At Fresh,we like to call t

80、his the“soft”side of robotics.For most customers,purchasing a robot not only requires a large financial investment(in many in-stances),but also a commitment to learning how to operate and maintain this new piece of cool technol-ogy.For industrial and commercial users of robotics,theres a big conside

81、ration to be made for how this new robot tool(or fleet of tools)will integrate with any existing workflows and infrastructure.These im-portant,often emotional factors tied to user experi-ence are a large part of any purchase decision,and can ultimately determine market success or failure.In a recent

82、 conversation we had with Carnegie Mellon University Robotics Professor Howie Choset on this topic,he brought up Intuitive Surgical as a great example of the power of a well established user interface:18In the same conversation,HEBI Robotics Co-Found-er Dave Rollinson brought up drones as an example

83、 of the importance UX plays in the adoption of robot-ics.While there have been incremental advance-ments in the motors and electronics of drones,their fast rise to success happened when non-experts could confidently pick up the controls,fly,and avoid crashing.Rollinson explained,“Theres enough intel

84、-ligence baked in now,that theres no longer a steep learning curve for people to use that tool.”The truth is that,at this time,robots are still asking a lot of their operators even under the best of circum-stances.The more costly and frustrating a robotics solution is to set up,operate,service,and m

85、aintain,the harder it will be to learn,integrate,and scale.Aaron Prather,FedExs Head of R&D,can attest to this.In a recent conversation with us,he explained,“Too many times we have had companies overprom-ise and under deliver.Sometimes this can be due to a salesperson who is really good at sales but

86、 does not understand the technology and its limitations.This leads to frustration and finally just walking away.”From our research,one of the more prevalent user experience failure points for robotics companies is simply reliability.This is by no means the primary reason so many robot companies fail

87、,but its cer-tainly near the top.Sadly,many robots today still fail while carrying out the core tasks they were built for,requiring human intervention to solve the issue,and resulting in a potentially costly outcome.Robots need to consistently create less work,not more work,to be adopted.Lets use th

88、e example of a remote-operated robot inspection tool.These inspection robots help save lives by eliminating the need for humans to venture into confined and other hazardous spaces to collect high-value inspection data.While this is a fantastic user experience value proposition,consider what happens

89、if the same robot loses connection from its operator,and gets stuck inside,or damages the mul-timillion-dollar critical asset its inspecting?In many instances,the total cost of retrieving that robot is likely three to five times what the robot is even worth.Worse yet,leaving a robot inside an asset

90、for mul-tiple days could result in millions of dollars of lost production and operational downtime for each day that critical asset is shut down.For the many who look to robots for help with NDT and other visual inspection,the reliability of the solution is the most important factor.Below we highlig

91、ht a few companies who saw the importance and value of great user experience and made it work to their successful advantage.19Case Study of Success:Northrop Grummans Attention to Customer ExperienceNorthrop Grumman Remotec is often referred to as the gold standard when it comes to reliable,tactical

92、robot platforms(not unlike Endeavor Robotics).Remotec develops and sells semi-autonomous,remote-operated platforms to bomb squads and other tactical units to help remove humans from dangerous tasks and environments.Their robots are used for intelligence and surveillance,as well as detecting,removing

93、,and disrupting bombs and other hazardous materials.Remotec understands that their users rely on their technology when lives are on the line and that having a tool that always works when you need it is mission-critical.Remotecs focus and commitment to building high-quality,reliable robots that are a

94、lso easy to use has made them a preferred solution among bomb squads and other tactical organizations globally.Remotecs robots feature swappable parts for easy maintenance,and customers rarely have to replace a robot unless it is completely destroyed(which is a rare occurrence,as the materials used

95、in these products are extremely durable).Alongside crafting products that work reliably when you need them,Remotec also provides excellent customer service.This commitment to customer service ensures that even when a customer does encounter an issue,Remotec staff are available to resolve the error a

96、s quickly as possible.The result is satisfied customers and an enduring reputation among their core users.Image source:Northrop Grumman20Case Study of Success:iRobot Sustains Long-Term Consumer Interest iRobot is the company behind the popular Roomba home vacuum,a robot for the home that automatical

97、ly vacuums your floors without needing human intervention.It will periodically notify you when it needs its bin emptied,but otherwise,its completely self-sufficient.iRobot was founded in 1990,making it one of the oldest and most successful robotics companies in the last three decades.iRobot has sold

98、 more robots than any other company to date.It invests heavily in its sales and R&D,steadily releasing new and innovative products to keep consumers interested.Despite only operating a few product lines,iRobot continues to grow year over year.In 2019,the Roomba line of products accounted for$715 mil

99、lion of iRobots$787 million revenue during the first nine months of the year.It could be argued that the reason iRobot has such a stronghold on its market,being the dominant leader in the home robot industry by a wide margin,is because of its streamlined,highly focused,easy-to-use products.Rather th

100、an coming out with consistently new and exciting products,iRobot has created a family of related products(a self-operating vacuum,mop,and lawnmower)that work well and directly address consumer needs.Its a great example of a robotics company having a tight focus,and then building on that success with

101、 a family of related products.Image source:iRobot Corporation21Case Study of Success:SoftBank Robotics User-Centered Robot Designs SoftBank Robotics(formerly Aldebaran Robotics)has succeeded in creating two of the most iconic humanoid robot platforms,NAO and Pepper.While SoftBank Robotics is still n

102、ot a profitable company,what has made them a success among their peers in the humanoid robot space is the unrivaled appealing design of the NAO and Pepper robots.Despite their lack of profitability,the Pepper and NAO robots are still some of the best-selling and most widely recognizable humanoid rob

103、ots around the world.Contrary to some of the points made so far in this paper,the founding team from Aldebaran designed the original NAO robot with no real customer,problem,or solution in mind.It was more of an artistic experiment in human-centric robot design,wrapped around some impressive mechatro

104、nics.There was also a decent amount of faith that if you create an appealing-looking two-foot-tall robot with an above-average set of capabilities,it will sell.Thankfully it did,and the global academic community was among the first to see a lot of value in what the$9k platform could offer to STEM Ed

105、ucation,and other advanced HRI research.Aldebaran and SoftBanks focus on appealing design as the foundation for their robot has resulted in elegant,unintimidating,lovable humanoid robots with a friendly disposition and fun personality.As evidenced by the plethora of robotics companies trying to imit

106、ate NAO and Peppers design,it is clear the products have found an ideal position within the uncanny valley.Image source:Softbank Robotics224.Misaligned Investors&PartnersRobotics companies often make one of their biggest business decisions before they even begin building a product.Were talking about

107、 the important step of selecting the founding team,investors,and other early business partners.For many robotics compa-nies,this first big decision can either set them on a path toward success,or spark an early indication that trouble is on the horizon.Investor-Founder AlignmentA few months ago,our

108、team sat down with Andra Keay,managing director of Silicon Valley Robotics,to get her insight on the topic.According to Andra,robotics startups often fail because of a lack of a shared vision between investors and founders.The goal of venture capitalists is to see their investment grow by 100 x or e

109、ven 10,000 x,which is impossible for most robotics companies to achieve.Keay goes on to explain that because robotics start-ups are creating new markets,they usually need twice the amount of time to take off than a typical startup.Since most venture capitalists primary goal is to make a return on th

110、eir investment,they often pull funding as soon as they see favorable returns,leaving the startup to fail shortly after.You can see this pattern reflected most commonly in Lux Capital,who routinely pulls funding from robotics startups after three to five years.“Robotics startups need to interview inv

111、estors carefully and make sure that visions are aligned.Some investors,those with a deep tech background.will be focused on growing a new robotics industry and be looking at the long-term returns.Robot startups need to be more selective about funding,and the marketplace needs to step into the gap le

112、ft by imploding venture capital.Ultimately,we need to increase productivity and support an aging population without sending work overseas or destroying natural resources further.I believe robotics is the only way forward for the planet.”Andra Keay,Managing Director of Silicon Valley Robotics23Eric K

113、lein,Partner and Founder of Lemnos Labs,has a different perspective:that VCs and founders are equally accountable for ensuring the mutual success of their relationship.In a conversation with us,he pointed out that the 2-4 year primary invest-ment window and 10-year payoff have been an es-tablished V

114、C model since the 1950s.Founders and VCs are equally at fault if they enter into a relation-ship that cannot support that timeline.And“a lot of robotics companies have not reached the window where they are a venture back-able business,”Klein argued.He added,“Im going to get on the phone here in a fe

115、w minutes and Im going to screen a new robotics company.but the thing Im going to spend the most amount of time on in the next hour has nothing to do with the technology.”For Klein and Lemnos,the math,the unit economics,and the scalability is most important.As we commented earlier,ensuring alignment

116、 also means maintaining open communications and setting clear expectations with your investors,early and often.As we will see in the example of Acutronic Robotics(below),impatient,poorly informed,and otherwise misaligned investors will pull their money fast.Overconfident FoundersFrom our research,it

117、 seems common for founding teams of robotics companies to fall into a trap of believing themselves to be too capable.They may underestimate the work required and overestimate their personal ability to handle it all.These proud founders often try to take on more of the work than they can manage inste

118、ad of hiring strategically or outsourcing certain portions of development to more experienced companies and partners.While there are near-term cost benefits of keeping full-time headcount low,the net long-term outcomes are delays in development milestones and larger amounts of engineering rework lat

119、er down the road,all extending the timeline to market which is criti-cal to success or failure.Investing in Strategic Investors&PartnershipsIdentifying strategic partnerships early on can play a big role in the success or failure of the company.For robotics startups,the most beneficial early partner

120、ships are the ones that provide“friendly”en-vironments for prototype testing.Even better when that partner is a potential marquee customer whos giving you invaluable insight and feedback on how your solution performs in relation to their needs and expectations.Too many robot companies fail because t

121、hey miss out on key opportunities to test their bots early and often in real-life environments,and with understand-ing users who share a mutual interest in seeing the robot succeed.For anyone whos ever built a robot thats meant to navigate in our world,you know that you can only go so far and achiev

122、e so much through simulation.The biggest value in having multiple testing partners is that you validate or disprove your assumptions quickly.In most cases,youll likely find that every customer environment is unique,and every one will challenge your robot in an equally unique way.The sooner you can i

123、dentify partners that have a mutual interest in seeing your robot succeed,the better your chances.24Case Study of Failure:Acutronic Robotics Lost Capital when Investors Lost Interest Acutronic Robotics was founded in 2016 after Acutronic Link Robotics AG acquired Erle Robotics,a company working on c

124、ommunications technologies centered around the Robot Operating System(ROS).Before its closure,Acutronic was working on the Hardware-Robot Operating System(H-ROS),which would make it simpler for different robotic hardware to integrate with one another.The technology would facilitate modular robot des

125、igns,like Acutronics MARA robot,which could have revolutionized the robotics industry.Unfortunately,just three years after its founding,Acutronic Robotics was shut down.The company faced two primary challenges,the first being a market too young for Acutronics technology.Although the concepts were so

126、lid,there wasnt enough interest in modular robotics at the time.The second issue was funding,which was made worse by the first issue.The cost of developing MARA and H-ROS required more capital than the company had on hand.Acutronics investors didnt believe that the company was viable anymore and pul

127、ledtheir funding.Acutronic looked for funding elsewhere,but it was too little too late.Robotics Business Review reported Acutronic confirmed that while“several parties”showed acquisition interest,no agreement wasever made.Image source:Acutronix Robotics25Case Study of Success:GreyOranges Outside-of-

128、the-Box Partnerships GreyOrange,considered to be one of the top ten robotics companies in the world today,is an excellent example of a robotics startup whose success can be partly attributed to strategic partnerships.Rather than looking for traditional venture capital investors,GreyOranges investors

129、 are also the companies helping it sell,deploy,and service its products.This makes for much stronger alliances,as all of the involved parties have more at stake than money alone.They all understand each of the others visions,goals,and needs.This reduces the chances of one party letting the other dow

130、n and creates a compounding synergy that is necessary for robotics startups to succeed.GreyOrange raised$140 million in 2018 and is continuing to grow in 2020.Image source:GreyOrange26Case Study of Failure:Mayfield Robotics Lost Critical Alignment Mayfield Robotics was a robotics startup founded in

131、2015.It partnered with Boschs Startup Platform,which allows select startups to grow with Boschs support.Mayfield Robotics produced a single product,the Kuri Robot,a robot for the home that performed similar functions to smart speakers like Google Home and Amazon Echo.The device was nominated for the

132、 Best of CES award in 2017,and was the only robot to receive the nomination.Even though Mayfield fostered a promising relationship with Bosch early on,the two companies were faced with incompatible goals and visions.Bosch wanted to use Mayfield Robotics to test the robotics market and see if it was

133、worth investing in,while Mayfield was looking to use Bosch for its manufacturing expertise.As discussed in this paper,the robotics industry is volatile,and Bosch quickly determined that Mayfield was not worth the risk.Unable to find additional funding or compete with products like Google Home,Mayfie

134、ld Robotics closed later in 2018 and halted production of the Kuri Robot for good in July of 2019.Image source:Mayfield Robotics275.Focusing on the Wrong ProblemAs most of the aforementioned examples illustrated,its critical to choose the right problem and scope to solve with your robotics concept.A

135、ccomplish this early,and youre off to a fantastic start toward be-coming a success.Arrive at this a bit late,and its likely youve eaten up a lot of time,burned through a small mountain of cash,and may only have some fun prototypes to show for it.As Steve Blank puts it,“a minimum viable product(MVP)i

136、s not always a smaller,cheaper version of your final product.Defining the goal for an MVP can save you tons of time,money,and grief.”In his book The Four Steps to the Epiphany,Steve also discusses the importance of not developing your solution inside of a vacuum.Forgetting to comple-ment product dev

137、elopment with a parallel customer discovery process is a nearly statistical guarantee that your venture will fail.Far too often,new robotics companies fail to successfully define the goal for their MVP,or the minimum viable problem their robot will solve.If the problem that a robot is intending to s

138、olve is just as niche or as complicated as the robot itself,the odds of market success are much slimmer.Simple as that.As Simon Sinek recommends in The Golden Circle,“start with why your product exists rather than what your product is.”Rather than trying to sell all of your robots capabilities,sell

139、the reason you decided to create a robot in the first place.The more compelling the reason,the more your robots value proposition will resonate with your custom-ers.From our experience,if you need an inordinate training,marketing,and sales budget to educate your customers on why the problem your rob

140、ot is Rather than trying to sell all of your robots capabilities,sell the reason you decided to create a robot in the first place.28solving is important,then youve likely chosen the wrong problem to solve in the first place.That said,its worth acknowledging that the often-high cost of educating new

141、customers is something most robot-ics companies deal with when beginning to market and sell their solution.Given everything we know about the high costs of robotics development,attempting to build too many features and capabilities into your solution from day one can deplete precious capital and res

142、ources in record time.Its easy for teams of engineers that like to solve problems to focus on more features that land the product with feature bloat,making core solutions weaker and product focus scattered in the end.Weve learned from product develop-ment in general that too many features can also 1

143、)increase cognitive load,2)increase usability risk,3)increase technical debt,4)increase cost prior to testing and launch where critical pivots are needed,5)increase time,and 6)increase training effort.Ro-botics companies are no exception.In our related white paper“The Strategy of Starting with Less,

144、”we offer recommendations for how to focus on a true Minimum Viable product(MVP)to test with,and a true Minimum Lovable Product(MLP)to launch with.Its understandable why companies might feel com-pelled to design their robot to be the Swiss Army knife for solving all the problems when,in reality,you

145、should only be focusing on finding the quickest and most cost-effective way to automate the solving of“X”problem,and nothing more.Assuming,of course,that youve done your customer discovery and know that there are a lot of people or companies who want to automate X and see measurable value in spendin

146、g Y to do so.Our recommendation:focus on creating a robot that can perform one or two tasks exceptionally well.Highly focused objectives like these demon-strate clarity of vision to investors and customers and are more manageable for a startup to under-take.A team can spend two to three years creati

147、ng a robot that can do a lot of things poorly.In that same timeframe,another team with better focus can create a near-perfect,market-ready robot that does one thing really well.The latter is much more in line with what most investors and customers are looking for today.29Case Study of Failure:Anki R

148、obotics Lost Identity Anki Robotics is an excellent(and unfortunate)example of a robotics startup that failed for a multitude of reasons and could likely fit into any one of the categories weve covered throughout this paper.The companys first product was an AI-enabled set of race car toys,similar to

149、 the popular Hot Wheels brand,which launched in 2013.Unlike Hot Wheels,however,these toy cars were equipped with sensors and artificial intelligence and could be controlled via a smartphone app.Then in 2016,Anki released its first huge success,the Cozmo robot.Cozmo was a palm-sized robot vaguely in

150、the shape of a bulldozer.A screen on the front gave the robot the appearance of having a face,enabling it to communicate and interact with children.The robot also used AI and sensors and was able to navigate and interact with the users home without any interference from the owner.It was essentially

151、a pet robot for kids and became the best-selling toy on Amazon in 2017.In 2018,Anki launched Vector,a product that marked the beginning of the end for the once-promising robotics startup.As you more than likely noticed,the initial two products from Anki were,by design,toys.They may have been using s

152、ophisticated technology,but at their core,they were created for children to play with.Vector,on the other hand,had a much less clear intent.It featured a nearly identical physical design to Cozmo and was even the same size,but was instead marketed to serious tech enthusiasts as a smart pet and virtu

153、al assistant.It could do everything that Cozmo could,as well as things like answering questions,setting reminders,and checking the weather.The problem was that by the time Vector came out,Anki Robotics had been making childrens toys for eight years and was known as a toy manufacturer for five of tho

154、se years.It may have been the companys intention to use these toys as a way to test the waters and see what they were capable of creating,but it unintentionally pigeonholed them in the eyes of the public.Image source:Anki30During an episode of Recode Decode,Anki CEO Boris Sofman stated,“For us,it wa

155、s never meant to be a toy company,or even an entertainment company.Its a robotics and AI company.”The discrepancy between Ankis version of its identity and the publics version was too vast,and the company closed down just months after Vectors product launch.As reported by the F,Ankis problems werent

156、 just tied to a poor market adoption of their Vector product.To receive a much-needed loan in 2018,Anki had to offer up a rather large security interest in its copyrights,patents,and trademarks.If Anki failed to repay,the Silicon Valley Bank had the right to claim all of that intellectual property t

157、o make up for the money lost in the loan.The Robot Report also uncovered that Fisher&Richardson(a Global IP Law Firm)filed a lien against Anki in mid-2019,stating that Anki had failed to compensate them for patent and trademark prosecution services.When all was said and done,Anki CEO Boris Sofman st

158、ated that ultimately a failed round of financing was to blame for Ankis closing,having told employees that a deal had failed to materialize“at the last minute”even though there was acquisition interest from companies such as Microsoft,Amazon,and even Comcast.Image source:Anki 31Case Study of Failure

159、:Startups Caf X&Zume Pizza Struggle to Find TractionEarly in 2020,two once-promising robotics companies faced significant challenges and hard decisions.Caf X,an automated coffee shop in San Francisco,closed three of its stores and laid off members of its staff in order to mitigate falling profits.Me

160、anwhile,Zume Pizza,originally meant to be an on-demand,robot-operated pizza shop,closed its doors and laid off over 200 employees.Zume is now becoming a sustainable packaging manufacturer,leaving the world of robots and pizza behind.Without trying to lump these two companies too closely together,gen

161、erally speaking it appears both suffered a similar fate of bad market fit and perhaps a larger issue of lack of customer understanding.To dig into Caf Xs case study a bit,its not terribly surprising to find them on this side of the list.Customers today(particularly those in San Francisco)have a seem

162、ingly endless supply of coffee shops available to them.With a Starbucks,Petes,Philz,and many other small coffee chains on every corner in cities like SF,why is having coffee prepared by a robot suddenly going to disrupt the industry?The differentiator cant be speed:plenty of people are already order

163、ing coffee on their mobile devices before they arrive at their local shop to cut down on wait time.It cant be a better quality of service:Caf X was a fully automated solution;other than reliable repetition,theres no real heightened degree of service available to offer.It cant be the“low cost”busines

164、s model,since Caf X required a physical commercial space for each installation and thats not a cheap way to scale a business.Image source:Caf X32All of that said,and to be fair to their achievements,their tech was good.It was entertaining,and it worked well.Despite this,Caf X seemed to have misjudge

165、d the importance of the human element that is steeped within coffee culture.When the novelty of a robot making coffee wears off,customers will go back to getting their tall blonde latte from Starbucks,and youre left with an expensive chunk of hardware,inside of an expensive piece of real estate,with

166、 little cash coming in,and no clear way to pivot the company in order to keep things going.None of this is to say that all automated food startups are doomed to fail in the future simply for entering the space,but the food and restaurant business is a fickle sea to navigate,with or without fancy rob

167、ots automating portions of the process.Image source:Zume Inc.via Facebook33Case Study of Success:Kiva Systems Solution Acquisition Kiva Systems was a robotics company founded by Mick Mountz in 2003.Mountz decided to launch the company after his former employer closed its doors.Realizing that high co

168、sts and inefficient processes led to that closure,Mountz decided to launch Kiva Systems,a robotics company dedicated to streamlining the traditional warehouse infrastructure.Tools like conveyor belts and forklifts were replaced by robots in constant motion,moving packages between one another in the

169、most efficient manner possible.Kiva quickly found success,selling its robots to various companies.One such company was Amazon,which was quickly growing in size.Realizing just how valuable Kiva Systems could be and having the cash on hand,Amazon made its second-largest acquisition(at the time)and pur

170、chased KIVA for$777 million.Today,Kiva Systems has been restructured into Amazon Robotics and the robots that KIVA developed have remained a foundation for Amazons use of robotics.Although this is one of the more prominent stories of a customer acquiring its supplier,its not a lone incident in the r

171、obotics industry.Shopify recently bought 6 River Systems,FLIR Systems purchased Endeavor Robotics last year,and Eddyfi Technologies purchased Inuktun Robotics.Image source:Kiva Systems34Case Study of Success:Inuktun&Eddyfi Technologies Solutions Help Save Lives Inuktuns success in the field resulted

172、 in them being acquired by Eddyfi Technologies in 2019,a provider of non-destructive testing and inspection tools.Through this acquisition,Eddyfi has been able to provide more sophisticated machinery to more customers in more industries,expanding its vision of creating a safer workplace.The success

173、of Inuktun and Eddyfis mission shows that focusing on a singular goal and creating clear,simple,reliable robots leads to the greatest success.Eddyfi offers a really unique suite of remote operated robot inspection tools for visual inspection and other non-destructive testing.Eddyfis suite of confine

174、d space crawlers come with modular track/drive configurations optimized for certain environments,a suite of sensors,cameras and lighting to explore dark,dirty,and dangerous environments,and a reputation for reliability.These machines can navigate tight,dangerous spaces and provide highly valuable vi

175、sual and other NDT inspection data back to operators in real-time.With leaders from the oil&gas,energy,and chemical sectors promising to eliminate confined space entry for humans by the mid-2020s,Eddify is in a great position to capitalize on the lifesaving value their robots deliver.To this day,hum

176、an inspectors risk their lives entering hazardous and confined spaces to gather high-value inspection data that helps companies maintain critical infrastructure and assets.Image source:Eddyfi Technologies35Case Study of Success:Blue River Technology Innovated an Industry Established in 2011,Blue Riv

177、er Technology was founded by two Stanford graduates looking to achieve more sustainable agriculture practices.The duo combined robotics with computer vision,a field of artificial intelligence involving image recognition.Blue River accomplished this goal by creating the Lettuce Bot,a robot capable of

178、 determining which lettuce plants to remove from a crop in order to yield the best crop results.Automating this time-consuming process saved Blue Rivers customers significant amounts of money and earned them recognition on a wide scale for proving that robotics and AI have a place in agriculture.Sho

179、rtly after the success of its Lettuce Bot,Blue River moved on to create the See&Spray,a solution similar to the Lettuce Bot that uses deep learning to apply its technology to other types of plants,namely soybeans and cotton.See&Spray is able to accurately separate these plants from weeds,greatly red

180、ucing the percentage of weeds in any given crop.The improved accuracy and speed of the See&Spray over the Lettuce Bot was enough to win the robotics company several awards in 2017 and led to Blue River being acquired as a subsidiary by agriculture giant John Deere.Blue River remains an independent s

181、ubsidiary,benefitting from the vast resources and experience of John Deere.Image source:Blue River Technology36ConclusionIts clear the past decade has shown incredible innovation and advancement across the robotics spectrum,but it has also left a considerable wake of failed products,bad investments,

182、and likely some bruised egos along the way,as weve detailed in this paper.Despite this,our team at Fresh believes there are still many reasons to be excited about the future of ro-botics.Were seeing a lot of evidence the industry is growing stronger and more focused.Some of these positive indicators

183、 include:VCs are regrouping after some big losses and are actively recalibrating on new investment models to better support the needs of new robotics companies and help reduce future investment risks.Were seeing more and more successful robotics exits take place each quarter(some examples below).New

184、 business models and pricing strategies are emerging,allowing robotics companies to get more creative in how they deliver solutions to market and meet customer demands,needs,and expectations.New robotics companies are showing signs theyve learned from industry mistakes,and are becoming savvier in ho

185、w they approach building and scaling concepts.Were seeing a rise of more enabling technol-ogy companies with platforms,tools,services,and other critical components that robotics companies can leverage to streamline and reduce the cost of robotics development.Robotics hardware,sensors,and other criti

186、cal components continue to get cheaper,better,faster,stronger,and smaller.Global markets are continuing to change rapidly,with new sectors becoming aware of the need for robotics and other smart systems to help meet pressures for increased produc-tivity,throughput,and a declining workforce in key jo

187、b categories.37Throughout this paper,weve been critical about many of the reasons why robotics companies fail,but its worth noting there are many robotics com-panies currently succeeding in the market,or at least showing all of the right signs pointing to that.Judging by the number of robotics compa

188、nies ac-quired in 2018 and 2019,it seems like we may be approaching a“second wave”or perhaps a“golden age”of robotics in the coming years.Pulling from an article in the Robot Report,these are some of the more notable acquisitions from 2019 alone.6 River Systems-Acquired by Shopify Endeavor Robotics-

189、Acquired by FLIR Systems Renesas-Acquired by Integrated Device Technology Corindus Vascular Robotics-Acquired by Siemens CANVAS Technology-Acquired by Amazon Drive.ai-Acquired by Apple Blackmore Sensors-Acquired by Aurora Innovations Kinema Systems-Acquired by Boston Dynam-ics Auris Health-Acquired

190、by J&J JR Automation-Acquired by Hitachi Root Robotics-Acquired by iRobot OrthoSpace-Acquired by Stryker Mobius Imaging&Cardan Robotics-ALSO acquired by Stryker In a recent conversation we had with Andra Keay,Managing Director of Silicon Valley Robotics,she predicts:“Overall,robotics startups are po

191、ised to have a major impact on every industry over the next decade.Various market sectors,including agriculture,health,logistics,and retail,are crying out for smart automations that can improve their productivity.The most robust startups Ive seen in the last decade have sourced their investment in p

192、art from the market that needs them.”Andra Keay,Managing Director of Silicon Valley Robotics38While these positive indicators should make you hopeful about the future of robotics,companies looking to increase their odds of market success,or perhaps secure an exit like those shown above,should rememb

193、er to pay close attention to the themes weve outlined in this paper:1.Business Fundamentals:Physically engineering a robot is one difficult challenge turning it into a business and running a successful company is an entirely different type of challenge.Make sure to have someone on your team that kno

194、ws how to also run a business,with all of its chal-lenges.2.Market Fit&Timing:Be strategic about your market fit and timing.Arriving too early,too late,or with the wrong offering all together can be detrimental to your future success.Test early to evaluate fit and interest without betting your produ

195、ct and company on your first take.3.User Experience&Integration:Whatever you do,dont forget to focus on the customer ex-perience.It plays a much bigger role in deter-mining the success or failure of your robotics company than you might think,especially given that industry maturity and workflow integ

196、ration with something new might already be challeng-ing to begin with.4.Choosing the Right Investors&Partners:Ensure alignment(and expectations)between founders and investors,and look for strategic partners who share a mutual interest in your success.A misaligned vision can cost you vital funding an

197、d resources when you need them most.5.Focusing on the Right Problem:Streamline your initial scope by finding the quickest and most cost-effective way to automate a solution for your markets problem,and nothing more.At-tempting to deliver too many features and ca-pabilities from day one can deplete c

198、apital and resources in record time.The truth is,that even when robotics companies fail in this volatile market,they dont fail in their mission to push the industry forward.Every robotics startup failure or success plays an important role in im-proving public perception and trust in robotics,and cre

199、ating new concepts that future robo-preneurs can be inspired by.From our robotics team at Fresh to all the companies we discussed in this paper,we thank you for your passion,creativity,ingenuity,and for having the guts to try and build something innovative.Robotics is hard,and if it were meant to be

200、 easy,everyone would be doing it.While the road weve been traveling has been bumpy and dark at times,the road ahead is looking smoother and more promising every day.Lets keep pushing forward together.39Authors&CollaboratorsROBOTICS SOLUTIONS DIRECTOR CEOJames DietrichJeff DanceThought LeaderOver the

201、 past six years,James has helped launch pilot programs,innovation projects,and other scaled deployments with human-oid and industrial robot platforms.Jeff brings years of experience to the technology space,overseeing hundreds of creative projects.40Authors&CollaboratorsROBOTICS DIRECTORMitch TolsonMitch has over a decade of engi-neering experience and a proven ability to advance industry pro-cesses and automation.