Is 2017 a good year to launch a robotics startup? The market has improved over the last few years, but there are some important traps which new startups need to avoid. Robotics is a tricky industry. Here are some tips for success.
It seems that 2016 was a great year for robotics startups. Funding for new startups has almost tripled in the last four years — according to CB Insights (a research company which monitors the startup industry). Startup World at Automatica 2016 was a huge success. The year's notable startups range from the NUA Robotics smart suitcase, which follows you around, to SynTouch's biometric tactile sensing.
Will 2017 be a good year to launch a robotics startup? Or is it already too late to capitalize on the trend? What essentials do new startups need to know this year?
The basic answer is that, yes, it looks like a good time to launch a startup. However, you need to be smart about it. A whopping 90% of all startups fail and you don't want to be one of them. Here are six tips for launching a robotics startup in 2017.
Tip 1. Be Realistic About What You Can Achieve
"There are too many dreamers [in the robotics industry]. We need more practical people developing actual products." Dmitry Grishin, Russian investor who launched a $100 million fund this year for consumer robotics.
The history of robotics is full of examples where people thought "we just need to solve X and then the technology will be ready," only to find that X was much harder to solve than anyone could have imagined. Don't forget, there was a huge buzz around expert systems back in the 1960's. Everyone thought machine learning would put doctors out of a job, until apparently simple challenges turned out to be unsolvable.
When you are launching a startup, don't let your inner dreamer take over. Be practical and realistic.
If a particular challenge has never been solved before by anyone, do not assume you will be able to solve it in a month. Many successful robotics startups are based around mature technologies. For example, the winner of Startup Pitchfire at RoboBusiness 2016 was an autonomous lawn mower, which have been around for years. There's good reason for this, mature technologies work.
I'm not saying not to develop brand new technology, just be realistic about what you can achieve.
Tip 2. Spend Your Time Wisely
"Money is time, not the other way around."
Matt Joseph, CEO of Locent
We all have limited time and it is easy to fall into the trap of thinking that action means progress — it doesn't. There are many time-sucks for startups, including trying to focus on too much at once, trying to get everything perfect before launch and aiming too high too quickly.
Nobody can tell you exactly what steps you need to take to become a successful robotics startup. At least make sure that those steps lead you somewhere.
Tip 3. Learn What Doesn't Work and Avoid It
"I'd say most startups fail because the founders and teams don't learn and pivot fast enough from what doesn't work." - Andrew Hyde, Startup Weekend.
It can be tempting to look at successful robotics companies and ask "How did they do it?" However, this is upside down. Success stories are a good source of motivation and mindset, but your situation is different from theirs. What worked for them won't work exactly the same way for you.
Don't look for "what works" and try to copy it exactly. Learn what doesn't work and avoid it.
CB Insights did a "post-mortem" of 178 failed startups. The top reason that startups fail is developing a product which is "a solution looking for a problem" — i.e. the market does not need their product.
This is a real danger for robotics startups, especially if the founders started as researchers. For years, we have had to "get creative" when looking for applications for our research outputs; because there were very few markets for robotics. As a result, many roboticists have developed a bad habit: we build technologies first then try to retrofit them to real-world problems. This approach does not work in the world of business — with a few rare exceptions.
Do not blindly assume you will succeed where others have failed. Learn why they failed and take steps to avoid making the same mistakes.
Tip 4. Connect With Your Customers Now!
“Wonder what your customer really wants? Ask. Don’t tell.” – Lisa Stone, CEO of BlogHer
How do you avoid developing a "solution looking for a problem?" By connecting with potential customers as soon as possible!
Find out who your customers are and where they are. This can be challenging for robotics businesses because the markets aren't as mature as they are in other industries. However, your startup will not be on steady footing until you connect with customers and ask them what they need from your product.
Tip 5. Don't Get Blinded by Tech or Money
“Money is like gasoline during a road trip. You don’t want to run out of gas on your trip, but you’re not doing a tour of gas stations.” - Tim O’Reilly, founder of O'Reilly Media
Much of the early work of launching a startup is involved in running a business, not developing technology. As roboticists, most of us feel comfortable when we are writing code or building hardware, which means we can easily get blinded by the tech. Venture capitalist Shanin Farshchi urges robotic startups not to rush to build hardware. It can lead to wasting lots of money without a viable product at the end.
Don't get blinded by the technology. Focus on the business.
Similarly, don't get blinded by money. A lot of investors are interested in robotics right now, which is great for finding potential funding. This follows on from a trend which I explained just over a year ago in the post Why is Everyone Investing in Robotics? A History. However, this is also a danger for new startups — not all investment is equal. The best sources of funding provide more than just money. They understand your market and can provide business advice, connections and strategy.
Make sure that investors are a good fit for you and your business. Don't get blinded by the money.
Tip 6. Stay Friends With Your Co-Founders
“It’s like getting married. You’re going to spend a lot of time with them so think about it that way." Steven Renwick, co-founder of Satago.
According to Sam Altman (CEO of seed accelerator Y Combinator) 99% of startups "die from suicide, not murder." Although startups list a whole load of reasons that it didn't work, in reality they usually ended because the founders quit.
Stay friends with your co-founders and team. Startups are fragile and one bad argument can end a potentially successful business.
And Finally, Believe in Your Vision
Yes, it's challenging to launch a startup. There is no easy way to do it and the initial stages are really hard. In some ways this is a good thing because it weeds out thousands of non-starters.
If you are realistic and believe in your vision, 2017 looks like a great year to launch a robotics startup.
What challenges do you see for robotics startups in 2017? Which startups have caught your eye over the past year? How can you find your potential customers? Tell us in the comments below or join the discussion on LinkedIn, Twitter, Facebook or the DoF professional robotics community.