As part of Robohub’s Big Deals series, startup expert Andra Keay asks Valery Komissarova, Grishin Robotics’ Director of Business Development, about what all the recent robotics acquisitions mean to the startup community.
[AK] With investments in two accelerators now (Bolt in US and Navigator Campus in Russia), as in well as a range of robotics companies, Grishin Robotics has a bird’s eye view of robot startups. What do you think about the recent high profile announcements about robotics investments … how will this impact the start-up scene?
[VK] It’s definitely great news. Amazon, for example, announced in a very significant way their interest in robotics a few years ago when they bought Kiva for $775 million. So this isn’t the first time that big corporations not traditionally involved in robotics are starting to pay attention to the field. It really begun at least in 2012, when Grishin started to invest into robotics startups as well.
However, this time it’s even more about perception. These high profile media announcements are getting picked up by the general public, investors, and entrepreneurs – they attract attention to the industry. No doubts, it is important from an entrepreneurial perspective – there should be more success stories for them, more ‘benchmarks’.
These days many talented mechanical and electrical engineering students and professionals (particularly in the Bay Area) are attracted by the large salaries being offered by big internet companies like Facebook and therefore decide to switch into software and postpone their startup, hardware and robotics dreams indefinitely.
But when they hear these big announcements about new products or M&As, they realize the market is actually happening and they begin to believe that they can start their own company … they don’t have to go work for a big corporation. They can continue to work in a profession that they like and have expertise in. So from that perspective, these announcements are very important.
From the investors’ perspective, it’s largely the same. They need inspiration, they need proof, they need exits, and they need public companies. Of course there are already public companies like iRobot , but still we don’t hear about robotics acquisitions or IPOs every day – not yet. The announcements of the Amazon drones and the Google acquisitions of Nest and other companies really attracted the attention of the venture and finance communities and reminded them that something big is happening. It forced them to pay attention … it forced them to think that maybe another one or two years is too long to wait to make their bet on this space. And that’s really great news.
Google have invested in quite an assortment of robot startups, particularly if you include their investments and resources in AI and NLP. What do you think their plans are?
Interesting question to speculate on. Google itself said that their primary interest at this point lies in the area of manufacturing. But the acquisition of Nest is definitely a consumer play. Frankly, at this point, I think, it may be not so much about any coherent behind-the-scenes grand strategy as much as that they are starting to feel like something big is going to happen to follow the revolutions that came with the personal computer, the internet and the smart phone. Many people are seeing signs that the next big revolution may be robotics.
For Google, Amazon etc. this may be more about announcing some kind of interest in this space and to jump into the game as early as possible. I think there’s a lot of R&D going on internally to figure out where and how exactly to go and approach it.
So while it’s definitely exciting times and more and more startups are launching with interesting ideas, there are still some unknown variables. It’s important for big corporations like Google to figure out the unknowns in this multi-billion dollar market as early as possible, and to do this before the competition does.
Do you see any down side to large companies getting involved in robotics?
Despite all these announcements the market is still at an early stage of development, so the really fierce competition is ahead. It’s not that the market is divided between big companies, after all these news – far from that. Just as a comparison … it’s difficult to launch another smart phone in the market today because the market is fairly mature and is divided between the big companies. But in the robotics market, and in the consumer robotics market specifically, it’s the opposite.
The barrier of entry for robotics startups has been getting lower and lower the last few years. And all these announcements lead to increased investor interest, which means more money for robotics and hardware startups … more investors ready to consider these kinds of companies in addition to the traditional Internet and mobile companies. I just can’t think of any significant downside – at least not at this point and not for the next two or three years.
Possible problems could include losing top talent, or losing access to components or research, or support for community and open source projects, which all have impact on research and startups …
All good points and let’s consider them one by one.
Regarding top talent, all these companies that were bought are fairly small. I deeply respect all these people and I know many of them, but I hope these acquisitions will inspire more robot students or engineers to go out there and start their robotics companies, or it will inspire younger students to select robotics when they pick their majors at universities. I think that the cumulative positive impact will be so much greater than the loss of these people to big corporations.
I also agree that it’s startups that are primarily innovating in new markets rather than the big companies … but it’s not like these people won’t continue to do research. And Google has a lot of money and resources and these people will continue their work with other talents they meet there. It’s very possible that these talented people will be able to accomplish more given the vast resources they’ll have access to inside these big companies. So I urge you consider not just the negative side of this, but the positive sides as well – word ‘loss’ has too much of a negative connotation, in my opinion.
The second concern you mention is lack of access to components …
Yes, to components, ROS, research findings…
Not necessarily. When big company is buying component technology, of course, it often ceases to be open-source. Discussion of open-source ideals are wholly different topic, but my point is that it is not necessarily means decreased access – may be quite the opposite. Often there is an interest of a big company to make certain technology a dominant platform, therefore, great investments are made to attract more developers to it, improve it, explain benefits etc. And if it will turn out not to be the best platform – competitors or same open-source community will be quick to offer alternatives, especially, again, at this stage of market development, when barriers to entry are quite low.
If you could ask Andy Rubin any question what would it be?
One of the main challenges for consumer robotics market – whether we are talking about connected devices and the Internet of Things or more traditional consumer robotics like Roomba – it pretty much comes down to applications and business models. We can imagine some of the interesting applications or verticals where robotics could make a significant impact, but we can’t always imagine all the possible areas and ways where robotics can be applied to make our lives better – there are just so many of them, and many are far from being obvious. So I would be interested to know how he thinks robotics can make our lives better in a significant fashion, beyond the usual suspects we already know about, like agriculture, drones etc.
And the same question about business models can be asked from a different perspective: at the moment hardware companies are selling hardware, but it’s getting commoditized … and you have to think about software and data and the cloud connectivity of the hardware components you are making. So, how can business models that are familiar to Google (like advertising, subscriptions, internet) be applied to robotics and consumer hardware companies? And of course, what kinds of new business models will emerge as a result?
We’ve talked about Google and Amazon. Who are the other big new players in the robotics space that are known for things other than robotics but are starting to have an impact in the field …
There may be many more than we are aware of. Like Tesla – of course it’s an automobile company but more and more its top management is starting to say that they are essentially an IT company, considering how connected the car is and how advanced the driving functions and so on. And the same goes with the other automobile companies that are working on self-driving cars.
And the problems they are solving, whether they are BMW or someone else, are very related to the problems the robotics industry in general is facing right now. The advancement of computer vision is basically what the whole robotics industry is reliant on in terms of future growth and potential. Also autonomous capabilities … We’re not talking about the holy grail of full autonomy any time in the foreseeable future, but the algorithms and the decision-making processes needed for these new (semi) autonomous cars may spill over into the startup world tomorrow. Eventually it will impact the whole market in a very significant and positive way.
Many of the big corporations today may essentially be involved in robotics already. For example Foxconn and other manufacturing companies are starting to use robots. And more and more companies in agriculture and mining are beginning to use unmanned vehicles. They are starting to understand that adopting these technologies earlier than their competitors is a necessity if they are going to survive. Robotic capabilities are becoming the basis of their long-term competitive advantage.
To make a comparison, almost everyone involved in physical commerce today is finding that their internet capabilities are getting closer and closer to the heart of their business. I think we will find the same thing happening with robotics. It’s not so much about the specific companies’ names we can come up with today … because in the future it will be almost everybody, just like how almost everybody these days is involved in the internet or is using software or computers.
What do you think are the most interesting recent robotics acquisitions?
It depends on how you define robotics. Is Nest as a robotics company? I for one define it as a consumer robotics company but I can imagine that many people will not agree with me. I believe everybody will eventually agree with this definition but not maybe today. I think the Deep Mind announcement is also very interesting. AI and related software is a very important enablers of robotics.
What do you think about Dyson’s announcement of the $8million (5 million pound) UK research facility specifically into home robots?
It’s an awesome announcement. Dyson himself is an iconic figure, as well as his company. They have been making products that we are used to seeing both in the home and the office, and they’ve been able to make them differently, both in terms of design and in terms of capability. And it’s great when such a company pays significant attention to robotics.
The thing is – it’s not enough to make a good-looking coffee maker or washing machine anymore because people are getting more and more used to smart devices in their homes and cars. Increasingly they are expecting smart capabilities for the same amount of money. And it is possible now to deliver a much smarter device – with Internet connectivity – for almost the same price as a so-called ‘dumb device’.
All this attention is just another confirmation that very soon the fact that you are making smart devices with robotic capabilities will stop to be the competitive advantage and will start becoming the threshold capability. I think Dyson is foreseeing this (probably somewhat ahead of their competitors) – but eventually everyone will follow.
Grishin Robotics is investing in consumer robotics… Do the recent announcements change any of your plans?
No. There are a lot of very interesting application areas and verticals in the robotics market, whether it’s health care, agriculture, or manufacturing, but Grishin focuses on consumer robotics simply because we see huge potential, both from the market perspective and from the perspective of having a positive impact on people’s lives. This potential is much greater when we’re talking about robotic products that the average person can buy for $100-$200, and when there are so many prospective customers out there. It’s really all about impact. Big corporations and governments have been benefiting from robotics for so long, but average people have yet to benefit. We think it’s time to change that.
You could say, then, that the recent announcements have validated Grishin Robotics’ interests …
Exactly. In June 2012, when Dmitry Grishin launched the firm, a fair number of people told us that we were absolutely crazy. When so many smart people are telling you that you’re crazy, you have to think that you may not necessarily be right, but at least you’re probably doing something interesting. But when in the end it turns out that you are even may be right … it does feel good.
[Edited by Hallie Siegel]
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