The iRobot Q&A: Colin Angle on the Next Robotics Inflection Point
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revenue in 2003, and then to $92 million. That was an inflection point.
The magic moment of that whole experience was a phone call with Brookstone. There was a buyer at Brookstone—she called me up and said, “Just want to check in with you, Colin.” Oh, how are we doing? Are we doing OK? “Yeah, Colin, we’re doing OK.” Is the sell-through good, do you have enough inventory? “Actually, that’s why I’m calling.” OK, well how many more Roombas do you need? And she said, “How many can you build?” That was the moment when we knew that we had something. We had set off to sell 15,000 Roombas. And in the third quarter of 2002, we sold 70,000. It forever changed the business.
X: Now, with your business diversifying, could you be headed for another inflection point? What will that take?
CA: The mainstreaming of Roomba is very exciting. That is something that hasn’t been seen before. You get market data back for the small domestic appliance industry. The industry has grown 3 percent this year—this is toothbrushes, coffee makers, irons, and so forth, upright vacuum cleaners. Why? Because of espresso machines, robot vacuuming, and single serve coffee makers. The first and third are a pre-existing large industry. Robot vacuuming is still relatively small, but it’s growing so rapidly that it’s moving and growing the whole industry. So that’s big.
On the defense side, we’re being negatively impacted by the uncertainty around sequestration, the election, and budgets. It’s not an inflection point for the defense [business]. In the remote presence industry, I think that this [healthcare] robot is important. Is it the beginning of a revenue hockey stick? It’s going to take a little while. We’ll do between $465 and $485 million this year. It’s going to take a little bit in order to materially move that number with a new-to-the-world product. But we think it will be material next year and we think it will be very, very important over the next few years. So from a financial materiality perspective, a little more patience before you see that curve, but from a first practical navigating remote presence system, I think we’re going to trace back to this system right here as being incredibly important in all of the new economic opportunities that navigating, mapping robots are going to create for the world.
Roomba is “clean the floor completely, you’re good.” This is “go to the room swiftly and safely, and perform value.” It’s a different class of economic opportunity. You could spend five minutes and list out more applications for this technology than any one company could develop in its lifetime. So that’s cool. We need to focus systematically, and grow from one to the next.
X: Let’s talk about the competitive landscape, whether it’s Google or other Silicon Valley companies. Who’s going to own the operating system for robots?
CA: Right now, iRobot has the “Aware 2” system, architected from the ground up to be reliable, safe, secure, very efficient, and we’re an open interface as opposed to open source. That has allowed us to create the navigation demo—it’s very fast. Our overall strategy is one where we’re going to embrace mobile from the neck up, and create a safe system from the neck down that can handle the mobility and areas where crashes in unsafe fashions can lead to very bad things happening. We have a commercial-viable strategy.
I think the Willow [Garage] folks, it’s more of an academic-friendly, open-source environment, which plays well to the needs of the academic community and has a long-term role in the ecosystem. Can it ever be sufficiently reliable and capable for commercial systems? Maybe. Certainly there are some startups using Willow. My firm belief is that more companies is good for the industry. My concern around an open software system like Willow is that we need to make sure that the [intellectual property] that enables robots to perform whatever value-creating business that the companies are out to create, that that IP is ownable by the company that is developing it.
Because if you think about the software industry, there was enough IP ownable to allow application development on standards to create value for the founders. In the robot space, the more value that ends up in the physical hardware, the less of a defendable competitive position you have. Because ultimately, unless you’ve done something really wonderfully creative with your physical system, the hardware is more vulnerable to being commodity than the software. So my anxiety over Willow is that we commoditize the value of the software, forcing robot companies to compete on hardware, which gives the advantage to big giant [consumer electronics] firms over in Asia, which facilitates the exporting of the robot industry overseas. That is a macro anxiety that I have. But the positive side of Willow is that it’s a … Next Page »