A positive indicator for robotics startups is the improving financial climate. There are signs that the US housing market is stabilizing. Fannie Mae, the government backed mortgage company, has posted a profit for the first time since 2007 without needing a government bailout. The decline in home prices is slowing, as are mortgage delinquency rates and the rate of American home purchasing is on the rise again.
“We expect our financial results for 2012 to be significantly better than 2011,” Susan R. McFarland, Fannie Mae’s chief financial officer, said in a statement. “As our serious delinquency rate declines and home prices stabilize, we expect to reduce our reserves, which combined with revenue from our high-quality new book of business will drive our future results.” 
While not everyone is getting rich yet, the overall financial indicators show that the U.S. economy has rebounded faster than predicted. The stock market has doubled since 2009, corporate profits are surging and the U.S. economy is growing at 3% pa. As financial journalist Daniel Gross puts it:
“Like the world’s first bionic man, the U.S. economy has come back—better, stronger, and faster than most analysts expected, and than most of its peers.” 
While this is a U.S. centric view and some of Europe is still in financial crisis, nonetheless China and S.E.Asia are surging and many African economies are showing very promising proportional growth rates. There are other sources that describe the current world economic status but it’s no longer a bad time for a capital intensive industry like robotics to grow. Particularly if business models lower the risk by utilizing lease models or the rapid cheap trial and error methods of startups.
Where Defense budgets are tightening on traditional robotics, like unmanned systems, the Whitehouse is committing spending towards other newer robotics growth areas. All this indicates that robotics is ready to support itself as an industry, rather than be supported as a research project. Legislation is being passed allowing the introduction of driverless cars and by 2015 we may see changes permitting the commercial use of small drones in U.S. airspace.
3. Maturity of Robotics Technology
Rodney Brooks, founder of iRobot and current CEO of Heartland Robotics, is one of many expressing the view that robotics has progressed beyond a cool new research area and into the world of robot products. While making new discoveries is exciting, there isn’t enough effort going in to using those same exciting new technologies in everyday applications.
”Users just want to get a task done. They don’t care if it’s a cool robot. You may, but they may not care if it’s a robot at all,” 
So, the question now isn’t what robots can we build, it’s what can we do with the ones we’ve built already. The robots that are successful products seem simple and boring, eg. industrial arms, vacuum cleaners, cars. But when applied to the right problem, even simple robots are transformative. The first successful consumer robot was of course iRobot’s Roomba vacuum cleaner with more than 7 million sold worldwide. But the biggest acquisition of a robotics company was Amazon buying Kiva in March 2012 for $775 million.
Kiva’s system relies on small orange turtle like robots that move shelves around in warehouses. The brains are largely on servers. The robots aren’t ‘cool or exciting’. They are barely even robots. But they solve the problem that sank WebVan, one of the most spectacular e-commerce failures. You can only do half your e-commerce in the cloud. Somewhere real products have to be shipped to real places.
Kiva founder Mick Mountz is an MIT engineer who worked at WebVan. “We decided products that could walk and talk on their own would be the best way to solve the problem,” he laughs. 
Think of Kiva bots as the hands and feet of the Cloud. They are not autonomous Star-Trek-like agents, but are wirelessly connected to and controlled by the Cloud in real-time. 
Amazon, like WebVan, has to ship product. Reportedly, phsyical order fulfilment cost nearly 9 percent of Amazon’s $40 billion global revenues. This is a big enough pain point for some companies to be willing to trial the Kiva System in a few locations, especially smaller retailers, like Staples in 2004, who faced increasing competition in cloud commerce.
Kiva’s robots today are processing millions of orders a year in retailers’ warehouses across the United States, the UK, and Europe, quietly driving Kiva’s startling 80 percent annual growth. On the distant horizon is a plan to bring Kiva’s approach to the manufacturing sector. 
Jeff Bezos from Amazon is also investing heavily in Heartland Robotics. Brooks has a vision of transforming the workplace by making robots that can be safely worked with, shifting robots out of sterile, safe factory environments and bringing them alongside people. His analogy is with mainframe computer systems in the 1960s to the personal computer of the 1980s.
“Originally ordinary people couldn’t touch computers. Now they can. What if ordinary people could touch robots?” 
The future of robotics is exciting, but we’ve barely begun to fully explore the potential of the simple robots we already have.
next post: Increasing modularity & commonality plus decreasing component costs
MEGA Startup Weekend proved that you can mix startups and robots together and build new robot businesses. Now we need to work out how to repeat the success. It’s clear now that having real robot platforms is very inspiring. So is providing soldering irons, arduinos, and other materials like moldable plastics. But most of the teams who hacked on a robot platform or built their own robot still had to make trips to the shops.
The real story of our success was the roboticists, our robot mentors or demo coaches. These amazing people came early and stayed till midnight, even when their robot platform wasn’t being used [Elad Inbar of The Robot App Store and Ted Larson of Oddwerx]. Then they went home and built more robots to bring in [Tully Foote – Willow Garage]. They pulled apart their own personal robots [Melonee Wise – Willow Garage] to provide parts for teams. They flew in from far away [Ross Ingram and Adam Wilson – Sphero, Harsha Kikkeri and Jay Beavers – Microsoft Robotics] bringing boxes of robots and giving them away as prizes to the winning teams. But mainly they gave away their time, smiling. We were all inspired by the robot track, but it was the roboticists that really did it.
Harsha Kikkeri, robot mentor from Microsoft Robotics at MEGA Startup Weekend, April 13-15, 2012. Photo/image credit: Erica Kawamoto Hsu
Rodney Brooks, from iRobot, recently said that the real question for robotics now isn’t “what CAN a robot do?”, it’s “what SHOULD a robot do?” Startup Weekend is a wonderful opportunity to test assumptions about what a robot should do, to do it rapidly, to iterate and to validate. While we had some very good robot businesses, the winning team, “Eyes on Demand” had an incredibly strong value proposition, achievable cheaply with available technology.
The team had a strong connection to a section of the community, people with impaired vision, and the team understood the real pain points, eg. reading mail or food labels. They started with a clear problem and then looked to available affordable technology and put things together in a new way. This democratization of robotics technology, as seen in the DIY drone community, is something we’ve all been waiting for.
Although world domination through robots and startups is definitely on our agenda, Robot Launch Pad is a small group in the Silicon Valley area just starting to grow. We were both touched and surprised to be contacted recently by Paul Doyle, Head of ACCESS, Research and Development at Hereward College, UK. Paul wanted us to hurry up and get people making real affordable robots for people with disabilities. He foresaw the possibilities of rapid prototyping and the startup movement.
“Hereward College in the UK supports many students with physical sensory and cognitive impairments. For years we have been awaiting the arrival of the practical assistive robot as many of our students could and should benefit from their availability.
What we have currently is a number of high cost ubiquitous machines, with little or no practical application in the real world.”
Paul wanted to know if there were any DIY robots coming in the future and to inspire us to build robot solutions based on affordable technology, easy for consumers and staff to work with and replace. Of course we still need sophisticated robots, but MEGA Startup Weekend proves that we can iterate around existing technologies, putting people centered design at the heart of robots. I was delighted to tell Paul about “Eyes on Demand”. He was thrilled too, and his whole college wants to be first customers. I think there’ll be quite a queue!
MEGA Startup Weekend was a MEGA success for robotics. And created a new hybrid event, a mashup of startup weekend and hackathon, with arguably the best of both worlds. I think I got Shacked Up this weekend.