Most venture capitalists are quite scared of robots — at least when it comes to betting their firms’ money on them. That perhaps partly explains why, when iRobot, founder Rod Brooks took the stage to open up the technology track this morning at the National Venture Capital Association’s annual member conference, the room was littered with far more empty chairs than occupied ones.
Brooks also probably didn’t win over many VCs when he joked: “Having a robot in your home is no longer a novelty–except for VCs. None of you have them. You all have Brazilian house cleaners.”
But that’s not to say Brooks’ speech wasn’t compelling — he colorfully explained why he believes robotics will make up the third wave of the Industrial Revolution, while at the same time warning about the dangers of investing in this field.
Brooks, a longtime professor of robotics at Massachusetts Institute of Technology until last year, has twice done what many entrepreneurs have found difficult — convince VCs to invest tens of millions of venture capital dollars in a robotic company. In 1990 he and two others co-founded iRobot, known for the Roomba home vacuum, picking up capital from firms like Acer Technology Ventures, FA Technology Ventures and Fenway Partners on the way to an initial public offering in 2005.
Last year, he retired from MIT and started another robotics company, Heartland Robotics, which has raised $32 million from several VC firms including Charles River Ventures, Highland Capital Partners and Sigma Partners.
So not surprisingly, Brooks’ outlook on robotics is bright, due to the exponential growth in technological innovations, he says — things like cameras, speech recognition, vision sensoring and wireless networking, for example — that drastically bring the economics down. “All these freebies are coming out of the IT space to make robotics better,” Brooks said.
To illustrate his point, he showed a humorous video from 1979 of the Stanford Cart, a robotic vehicle constructed at Stanford University that Brooks said took six hours to move 20 meters across a room. “Do you see the camera on top that is moving back and forth?” he asked the audience. “They could only afford one camera because it cost $50,000.
“I recently bought a Web camera for $2.99,” he said. “It’s a sh—y camera, but it’s way better than this $50,000 camera.”
Fast forward to 2005, when Stanford won $2 million in a robotic competition when its robotic vehicle navigated a 132-mile desert course in 6 hours and 54 minutes, averaging more than 19 miles per hour. Then there’s Google Inc., which these days is testing robotic vehicles on the highways of Silicon Valley.
But it’s not just the technology that’s improving. “The world needs robots,” Brooks said, explaining how the growing number of elderly people in Japan and Europe, for example, are far outpacing younger people. “The physical stuff that needs to be done for people is going to get prohibitively expensive, so we’ll see more robotics” — a lift to help put grocoeries in a car, or a robotic wheelchair that moves people up and down stairs, for example.
There are now more than 6 million robots in people’s homes, Brooks said, compared to virtually none in 2002.
It all sounds great, right? As Brooks turned to a slide that simply read, “Let’s Invest In Robots!” he cautioned that it’s extremely difficult for venture capitalists to identify what’s an easy solution and what’s difficult. For instance, while robotic machines can help airplanes fly across the country, they have an extremely hard time with simple tasks like picking keys out of a pocket. That’s because the “boundary conditions” are relatively stable in the sky, while the boundary conditions in a pocket are constantly moving when a robotic hand is placed inside. “Intuition and perception are hard to figure out,” Brooks said.
On top of that, it can be hard to figure out whether the market will be responsive to a radically new solution.
IRobot had 14 failed business models — such as selling land-mine clearance robots, earning royalties on robotic toys, and selling nuclear power-plant inspection robots (“We couldn’t get anyone to buy! Now they’re in demand in Japan”) — before it found ones that worked. (Brooks’ latest company, Bedford, Mass.-based Heartland Robotics, recently sent four robots to Fukushima, Japan, to help out with the nuclear-plant efforts.)
“There are still tremendous opportunities,” Brooks said. “There are more than 80 companies in Massachusetts alone, some will fail and some will succeed, but the complexity of developing robotics is so difficult that it will take years for anyone else to catch up.”
COMMENTARY: If you visit Heartland Robotics' website his mission statement reflects my own vision of the future for robotics:
"Robots will change the way we work.
They will have intelligence and awareness. They will be teachable, safe and affordable. They will make us productive in ways we never imagined.
Robots will reinvigorate industry and inject new life into the economy. Making businesses more competitive. Keeping jobs from moving overseas. Demonstrating the power of American ingenuity.
Robots will change how we think about manufacturing. And Heartland will change how we think about robots."
ZDTV filmed a very interresting three-part video about IT's Rodney Brooks.
Having researched the robotics industry, it is my opinion that robotics is poised to become the next technological frontier since the invention of the first personal computer. The technologies necessary to develop truly functional and problem-solving robotic innovation is now available, namely computer processing speed, software and the electronics.
The new new era of robotics allows more miniturization and less costly robotic devices that are smaller, more nimble, more intelligent and can even think and act autonomously. Artificial intelligence is now much more advanced, allowing the development of robots that can sense, think learn and understand language. A great example is IBM's Deep Blue 2 robot, or "Watson", as he became to be known. Watson is the closest thing I have seen to 2001: A Space Odyssey's HAL 9000 computer. Watson competed against Ken Jennings and Brad Rutter, two top winners for the long running TV game show "Jeopardy", and came out on top by a wide margin.
Here's a brief summary of the robotics industry. The robotics industry is divided into two segments:
- Industrial Robots - Robots used for industrial and manufacturing purposes and includes articulated robots, cylindrical robots, linear robots (including cartesian and gantry robots), parallel robots and SCARA robots. Industrial robots are heavily used in manufacturing assembly lines like those in the automotive and electronics industries, consumer packaged goods industries, and in the shipping and transportation industry.
- Service Robots - Robots used for personal private use, includes domestic household robots, entertainment and leisure (toys, hobby systems and education and training) robots, and bionic robots for assisting the handicapped.
According to the International Federation of Robotics (IFR), the industrial robots sold in 2009 decreased by 39% or $3.8 billion due to a worldwide decline in manufacturing due to the recession. It should be noted that the figures cited above generally do not include the cost of software, peripherals and systems engineering. This may result in the actual robotic systems market value to be about two or three times as large. The world market for robot systems in 2009 is therefore estimated to be $12 billion. Industrial robots are expected to recover in 2010 as the world economies recover from the recession.
In terms of units, it is estimated that the worldwide stock of operational industrial robots will increase from about 1,020,700 units at the end of 2009 to 1,119,800 at the end of 2013, representing an average annual growth rate of less than 1% between 2011 and 2013. In 2010, the stock will increase by 7%. In the traditional markets: North America, Japan, and Western Europe, the stock is stagnating or decreasing while it is surging in the emerging markets
According to the IFR, the total value of professional service robots sold up to the end of 2009 was $13.2 billion. Service robots for personal and private use: about 5.6 million units for domestic use and about 3.1 million units for entertainment and leisure sold up to end of 2009.
So far, service robots for personal and domestic use are mainly in the areas of domestic (household) robots, which include vacuum cleaning and lawn-mowing robots, andentertainment and leisure robots, including robotic toys, hobby systems and education and training robots.
The market for robots for handicap assistance is still small, but is expected to increase substantially in the next 10 years. Robots for personal transportation and home security and surveillance robots will also increase in importance in the future.
Here a few links for some of my prior blog posts about robotics innovation:
- 12/5/10 - "Giant Robotic Plastic Extrusion Machine Creates Green Chairs From Recycled Plastics"
- 3/8/11 - "Modular Robotics Unique 'Cublets' Robotic Toy Blocks can Move, Sense And Think Automatically, And Are Sizzling Hot"
- 3/16/11 - "No Longer Science Fiction: Robotics Suits That Can Transform Humans Into Super Cyborgts"
- 3/21/11 - "Sifteo Cubes Reinvents Table Top Game Playing With Cubes That Can Plan An Endless Array Of Games"
Courtesy of an article dated April 6, 2011 appearing in The Wall Street Journal's Venture Capital Dispatch