Which Robotics Companies Are Going To Become Unicorns?
CEO and Founder of RIOS, where he leads a team focused on solving the last mile automation in the factory with dexterous, AI-powered robots  getty  There has been an explosion of robotics startup companies during the last two years. Every couple of months, Im seeing new VC-backed startups coming out of stealth mode with millions of dollars in funding. Every AI-powered robotics startup touts their unique technology spin and claims that theyve found the silver bullet or the holy grail of robotics. All the nascent startups appear slightly more sophisticated both on the technical and business fronts. In parallel, some of the robotics companies that have been around longer are raising increasingly more capital, flaunting their oversized rounds and beating their chests to show that theyre still the alpha. There is an arms race to raise more capital, and interestingly, there is an abundance of it in Silicon Valley. Robotics and AI are at the peak of the hype cycle, and VCs are dying to invest in robotics companies. Im even seeing billion-dollar VC firms investing in early-stage companies and departing from their usual modus operandi  this creates even more FOMO in the VC world as most investors are herds of independent thinkers. In the grand scheme of things, there are good rationales to invest in robotics: Labor shortage and labor turnover are spearheading the dire need for automation, the pandemic has accelerated automation and the advent of AI, GPUs and cloud infrastructures are enabling us to build more intelligent and more capable machines than ever before. An almost counterintuitive statement in the VC world is, Capital is abundant, but the opportunity is scarce. What this means is that even though there are many companies out there to fund, there will only be one or two that truly matter  i.e., only a few robotics companies will become the dominant players, and the rest will fold or be non-existent. Thus, the billion-dollar question is, Which robotics companies are going to become unicorns? Its very hard to answer this exact question, but I can articulate the three critical elements that will become the pillars of the most important robotics companies in the world  and I wont delve into the clich statements that a startup needs a great team, robust product and a very large market to be wildly successful. 1. Being More Customer-Centric Than Technology-Focused  Ill often be asked questions like: Is reinforcement learning better than imitation learning? How does haptics technology compare with switching grippers dynamically? Is a lidar-based AI-powered vision approach better than a 3D depth sensing camera? Some investors want to understand which technologies they should be betting on, and theyd like a basis for comparison. The reality is that we cant really do an apples-to-apples comparison of technology solutions, and an accurate benchmark would be heavily dependent on the use case and specific context. What most people dont realize is that there is a confluence of technologies in the world  i.e., the same problem can be solved by different approaches (given enough money and time). This is what were seeing today in robotics; with access to the information superhighway, engineers are acquiring knowledge rapidly, coming up with innovative solutions and rendering obsolete others superior technological advantages. The winning horse will not necessarily be the one with superior technology, but the one that is customer-centric. Customers do not care about fancy reinforcement learning algorithms, but care more about whether a company can solve their pain points in the first place. Importantly, customers care about whether the company can rapidly deploy robots and deploy at scale. 2. Remembering Speed is the essence of war From Sun Tzus The Art of War  The companies that will take over the robotics market are those that can deploy the fastest. All things being equal, it will boil down to speed. Customers with real pain points wanted solutions yesterday. In my experience, it takes systems integrators about nine months to deploy automation on the factory floor; this is a non-starter for mass deployment. Companies that can bring these deployment time lines to a few days will be unstoppable. Scale is also an important factor that goes synergistically with speed. Most robotics startup companies today can build and roll out one or two robotic workcells, but most havent completely figured out how to build a hundred per quarter, let alone a handful per quarter. Architecting an integrated and robust logistics and supply-chain infrastructure will be another decisive factor that will make or break companies. 3. Offering Amazon-Like Frictionless Customer Service  The most important robotics companies on the planet are going to be full-stack robotics companies (i.e., those that deliver end-to-end systems). These one-stop-shop integrators that can deliver a frictionless all-inclusive service will win. This entails providing installation, programming, support and maintenance of robotics workcells, while remaining the sole point of contact for customers. Part of this white-glove service is the robots-as-a-service model (RaaS) that is becoming prevalent. Its a pay-as-you-go model with zero upfront costs, which allows every business to offload risks and finance their automation needs. The most successful robotics companies are those that have a solid financial vehicle built-in to be able to fund millions of dollars upfront in hardware costs for customers  with the caveat of not taking that money from their own investors. Forbes Business Council is the foremost growth and networking organization for business owners and leaders.