10 strategies that build successful automation and robotics companies
It's a great time to be an automation solutions provider. The prevalence of lower-cost components, open-source code, accessible options for contract manufacturing, an influx of interest in investment capital, and a growing social acceptance of robots empowers many engineers to design innovative robotics for a variety of collaborative tasks. It can be challenging to make the shift from an emerging company to a growth company without keeping a few key components in mind.
As a service provider to different types of automation and robotics companies, we've found several differentiators that make companies attractive to private equity or growth capital investors and build success and scale long-term.
Successful companies build a robot that solves a problem.
Some robotics startups are quick to design their robots without fully understanding how or why customers will use them. In the rush to create, many robotics engineers don’t focus closely enough on the "critical business" aspect and attempt to build a “be-all-do-it-all” robot that may be an engineering marvel, but has little practical use in the marketplace. Successful companies focus on purpose-built robots that solve specific problems and have market applicability.
Successful companies build a robot people want to use (and buy).
So, your robot is the ideal solution. But will people use it? Much rigor goes into the introduction of new products in the consumer market. Despite focus groups, testing, analysis, and multiple iterations of product design, many still fail. Robotics companies need to ascertain early on not only what features customers want, but what they are willing to pay for. Successful companies engage early and often with their prospective customers to determine the potential for adoption, especially with collaborative robots, and how large of a market this translates to. They also make sure their collaborative robot is ready to handle the challenges of working in the real world alongside humans. Pro Tip: Don't forget to account for end-user training. Training is the key to adoption and proper use.
Successful companies leverage existing technologies.
Why reinvent the wheel? If your navigation system can’t tell the difference between the sidewalk and the street, or your optical resolution isn’t up to the highest standards, don’t be afraid to borrow technology from those who have gone before you. Successful companies forge strategic alignments and partnerships with companies that have already developed the necessary components or software.
Successful companies plan with scalability in mind.
Investors are not only looking for a great idea, they're looking for a great idea that is scalable and can get to market quickly. Can your robot be used and deployed on a global scale? After you get funding, will your company be able to meet the demand to supply the number of robots necessary to meet your forecast? The best startup robotics companies have figured out how to leverage their funding to scale rapidly and own the market. Pro Tip: Don’t wait until you are ready to scale to begin planning for scale. Plan ahead.
Successful companies are authentic, demonstrate integrity and are highly motivated.
Who doesn't love a big, bold idea — especially when delivered with charm from a charismatic visionary founder who can sell that big, bold idea? And while the desire to make money (and change the world!) is great, it doesn't mean much if it's not backed by a depth and breadth of experience and relevant backgrounds. Think carefully about the founding members of your company and what each member will bring to the team. Be the experts! Who will drive the business strategy of the company and who will be the technologist that leads the engineering team? Skillsets and experience aside, the company's leaders should share a common ethos and vision — something that you'll always be able to agree on no matter what the obstacles are. Hopefully, you'll all be working together for a very long time. It pays to be thoughtful when adding foundational members to the team.
Successful companies align with the right investors.
Automation hardware startups require an extra level of risk and capital, along with a shared and compelling vision to become successful. Successful robotics companies align with investors who understand the demands of a multidisciplinary field and multiple product iterations, especially in the initial funding stages. Automation is difficult and expensive. The right alignment in funding at both the early startup stage and the mature growth equity stage enforces market orientation. It helps to successfully foster the transition from research and technology to integration and growth.
Successful companies are adaptive and objective.
Don't be afraid to fail early and fail often. Successful automation companies focus on both the technology AND the prospect of running a business. Part of this is being realistic about what can be achieved and how much of the market actually exists for your robot. Engaging with customers about what they want early in the process helps create obtainable goals, so you don't run the risk of becoming "a solution looking for a problem." Learn early on what doesn't work and avoid it. Successful robotics companies learn to pivot when necessary.
Successful companies keep up with the technological pace of the competitors.
There is a lot of interest and investment in automation and robotics right now, both in the industrial robotics markets and in the collaborative robot space. The entrance of large players like Google and Apple into the automation race is a good thing because they have the power to disrupt traditional industries and change regulations. The actions of big players can ease the way for smaller companies who seek to enter new sectors. Taking advantage of these newly worn paths requires staying in the race. Successful companies focus on agility, spend their time wisely on the most meaningful activities, and have a technology roadmap for the next 5, 10, and 20 years.
Successful companies focus on the core.
As startup companies secure funding and journey to becoming established companies, there can be a strong temptation to take on the trappings of large companies, sometimes leading to unnecessary expenditures. Scaling an emerging business is challenging. As your devices deploy, you'll need to support them. You need people, parts, a distribution network, warehouses, and office space. Use your funding wisely to invest in what matters: engineers, R&D, and technology. Successful automation and robotics companies partner with companies with expertise in providing the field support, logistics, and back-office functions needed for the daily running of the business. Pro Tip: Focus on the core and partner with a service and support leader for the rest.
Successful companies do what they say they are going to do.
Many startup businesses fail not because of a lack of funding, but due to a simple failure to understand and meet the company's key performance indicators (KPIs). Investors are looking for a return on their investment, usually through sustained revenue growth, combined with reasonable cost and efficiency management. They don't like surprises. Yet, creating and adhering to a set of fundamental KPIs is often a challenge for entrepreneurial, engineering-minded robotics founders that are more interested in the technology than the business operations. Successful, growth-focused automation companies create a set of specific KPIs around their business objectives in sales, customer, and financial metrics that grow with them, not against them. Pro Tip: Uptime is critical to delivering on the promised efficiencies and, ultimately, to adoption and growth. Preventative maintenance is vital.
Congratulations. You've nailed the innovation, have a great founding team, and see a bright and profitable market for your product. It's a great time to be a robotics company. But it's better to become an established automation solutions provider with a proven business model and positive cash flow that can build on long-term experience and success.