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Four Reasons Most Service Robotics Companies Fail

Wouldn’t it be nice if we had robots to clean the office, greet our clients or put away the groceries at our house?  In this day and age of advanced technology we have come to expect – and embrace – the advances that can make our lives simpler. Yet why hasn’t the vision of robotics as dutiful helper come to fruition happened?  

The use of robotics is relevant in the manufacturing industry – namely automated factories – but they have failed to make it into our homes and businesses in a meaningful way.

It turns out the challenges facing their adoption outside of the factory are plentiful.  Chief among them is the difficulty in aligning the ability to deliver on a consumer or business need without creating operational issues or inadvertently setting unrealistic expectations of what the robot can do.  To do that, and at a price point that a business or consumer can actually pay, is a sweet spot few are able to find. And, unless all are aligned, the likelihood of success for a service robot is minimal.

While there are numerous problems robotics companies face in order to succeed in the market, the four main ones continue to be: product market fit, lack of product features or attributes primarily due to software, operational hurdles in market and the inability to set realistic expectations to those that interact with the robot.

1) No Product Market Fit

We’ve all seen those YouTube videos where robots, can do amazing things like climb walls or do back flips.  These are robotic accomplishments for sure, but not particularly useful in everyday life.  Said another way, sometimes product engineers aren’t being guided by a market need so much as the desire to solve a mechanical problem.  The result is an amazing machine that no one wants to pay for.  By the time they realize this product development sequence is exactly backward, it’s too late.

Theodore Levitt, economist and former editor of the Harvard Business Review, was famous for telling companies to focus on their customer’s needs and not their own capabilities: “Too many companies focus on how to produce more goods and services—or how to do it better—to sustain the business. But what every company needs is customers, and to get them, you must meet their needs. That’s why marketing or understanding the customer should come first, and the product should follow—not the other way around.”

What would you pay to not have to vacuum your house?  This is the fundamental question iRobot answered with its Roomba.  It isn’t perfect, but its value to you the consumer is clear.  For as little as $200, a tedious chore is effectively perpetually done for you.  The value is clear; the product solves a consumer desire to never have to vacuum again.

This is an example of a company understanding a need in the marketplace that they can then solve with robotics.  But currently there are not a lot of products – or companies – that seem to understand market needs. Unlike the industrial robotics space, service and consumer robot companies still struggle to either identify or deliver on a value proposition in order to be successful.  Think of a welding arm in auto manufacturing.  Making a car is an incredibly scripted, repetitive process where the name of the game is manufactured throughput, so robotic welding arms that can meet a car frame at exactly the same three dimensional point in space every time are uniquely suited to adding value to this environment.  They can work longer and harder on endless shifts in ways workers cannot to maximize throughput.  Thus their cost is compared to the labor savings and low defect rate they deliver to determine an ROI.

Service robots, however, still have a long way to go in showing economic value for the tasks they can actually do.  Too often young robotics companies set about solving a robotics problem as opposed to a meeting a customer need and the result is a lackluster performance in market, if they can sell a unit in the first place.

2) Utility Issues - Lack of Product Features or Attributes

Related to market fit is the next robotics issue: the robot lacks sufficient product features or attributes to function effectively in the market.  And often the issue is not one of hardware but of software.  We have robots that can go anywhere and do just about anything.  Where they still have a lot of room for improvement is in the software. 

A robot that can’t distinguish between an object and its background won’t be very good at picking objects up.  Similarly, a delivery robot that gets lost, or a hotel lobby robot that can’t understand you, won’t perform well either.  Now, these are examples of very dynamic machines moving around and performing tasks as opposed to having a programmable coffee maker prepare your coffee each morning (yes, by some definitions your programmable coffee maker is a robot), but this is where we see companies trying to launch solutions and coming up woefully short.

Lets take the case of a robot designed to greet you in a hotel.  To be practical in that setting, it needs to be able to see, hear and understand you and then deliver on your needs in that exact moment in time. Probably something to the effect of checking you in or out, telling you about the surrounding area or offering you restaurant options and directions. The benefit to the business would be in freeing up the staff to handle more complex interactions with guests. But to be able to delight the guest and replace a front desk worker, a concierge, a bellman or any combination of the three, requires massive computing power and data sets to work from.  Speech and facial recognition software, noise cancelling software, cloud computing, device security software and API access to reservations and other company systems all need to be packaged in a form factor with which you want to interact. This is just part of the software stack that needs to be incorporated for this usage scenario to even operate.  That is an incredible amount of work for an engineering team to do even with third party software.

So what is the robot company to do?

Likely, they will try to minimize development time by focusing on just one of the use cases, say, check in, to narrow the product scope, add speed to market and maximize performance.  This, in turn, reduces the economic value the robot can provide to the business because it now only performs one task.  In doing so, the cost-benefit analysis (the cost of the robotic system vs. the cost of a front desk worker) comes perilously close to zero or even negative ROI rather quickly.  Further, if the machine fails more than two or three percent of the time, it won’t make sense for it to be in the lobby of the hotel.  So by not having enough product features, the economic value added decision to invest in the service robot becomes insurmountable.  Why buy a robot to do what the staff can do better and with less friction?

3) Real World Operational Hurdles

Further complicating matters of adoption rates, at least for business focused service robotics, are the operational hurdles these machines face out in the world.  Think about a typical business setting, a retailer perhaps, or a warehouse.  Each of these settings has already been optimized for efficiency and effectiveness, sometimes many times over.  Adding new robotics technologies that somehow add cost or inefficiency to adopted processes is usually a nonstarter for the businesses. 

If you are retailer operating on single digit profit margins, you likely won’t risk adding operational complexity.  If a robot can’t deliver a package or move around the business without someone having to follow it, then its use creates operational hurdles.  Further, someone has to be responsible for the robot, maintain it, keep it in good working order and make sure it is charged.  If that requires an extra headcount, then the value equation is likely thrown off and a business will choose not to adopt the technology.  Burger flipping robots work best when the kitchen is built around them, not by bringing them into an existing kitchen and trying to retrofit.   This is one of the most difficult things for robotics companies to overcome in the sales cycle, the operational disruption their solution creates.

4) Expectations

Finally, though software is advancing rapidly, it is still not yet able to deliver on expectations formed by pop culture.  Rosie the robot from the Jetsons, C-3PO and the machines in ExMachina are the benchmark set in people’s minds for what robots should be able to do.  But the reality is just to have a robot understand you in a public setting is an incredible challenge.  In the hotel lobby scenario above, the guest wants the robot to be able to check her in, tell her about the property, recommend food and shopping options around the hotel and potentially book appointments.  That is what she would expect a robot to be able to do, especially if it is autonomous and built to look like a member of staff (i.e humanoid).

But to get a robot to do all the things we want it to do based off what we’ve seen in the movies is not technologically possible, at least not at a market affordable price. And this is the final dagger in most service and consumer robotics company’s hearts – performance rarely lives up to the expectations.  This is one of the main reasons the home robots – like Anki’s Vector, Kuri and Jibo – ultimately failed. You can’t just have a conversation with them, but that’s what we wanted.  Cute robots like these don’t ultimately work well in home or business settings because they don’t deliver on the need.  They either need to do chores for you or they need to be a companion, in which case they need to be able to interact with you and converse with you.  If they don’t, well then Amazon’s Echo is all you need. As Matt Simon wrote in Wired “Vector, Jibo, and Kuri show that you can’t sell a home robot on adorableness alone.”

This is not to say robotics companies won’t continue to chip away at the problem, but the likelihood your job is at risk from a robot is not high. 

Bottom Line for Success

It is incredibly difficult to get this all right; however it has been done.  iRobot is arguably a good example.  A more recent one would be Simbe Robotics’ Tally. Tally is a shy robot designed to blend into its surroundings moving slowly and methodically.  It is designed to tackle the massive problem of out of stock items in retail stores.  Tally checks the store three times a day and relays the information back to the staff to help them make sure the items we are looking for are all out and priced correctly.  This frees up the staff to focus on stocking and helping shoppers.  The important point is they identified a massive industry problem, keeping on top of the inventory position in store, and delivered a robotic solution that works flawlessly.

So what can other companies learn from Simbe?  What do they need to do to be successful? 

First, they need to do a better job finding customer problems they can solve well with the technology available now, like industrial robots do.  Second, robotics companies need to narrow the scope of their offering to something both the hardware and the software can deliver on 100 percent of the time with little or no intervention.  Finally, these companies need to do a better job of level setting the expectation that the form factor they choose (e.g. humanoid) sets.  A robot that can move around autonomously, has a much bigger expectation put on it then your coffee maker does.

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Top 6 Ways People Discover Your Mobile Game

Virality and buzz continue to be the best way to inexpensively acquire high-quality users. Social sources (e.g. word of mouth and seeing someone play) are still among the most highly endorsed discovery sources. In addition to these social sources, users also tend to gravitate toward games that have high levels of visibility, for example being featured or near the top of the charts. Video services like YouTube have seen the most dramatic jump in utility, as an increasing number of users are looking to see gameplay firsthand before committing.  Sight, sound and motion continue to be of importance to the overall marketing of a game.

The following are the top six sources mobile gamers use to find new games:

§  BEING NEAR THE TOP OF THE DOWNLOAD CHARTS (43%) Overtaking social sources as the top method of finding new games, a high level of visibility on the app stores’ front pages is now more crucial than ever to draw in new players.

§  WORD OF MOUTH (36%) There have been many academic studies on the profound influence word of mouth has on purchasing behaviors and gaming is no exception.

§  BEING A FEATURED APP (35%) We as consumers have been conditioned to look for things that are being promoted.  There is a reason a typical end cap display in Walmart increases sales 25-50%+ for a product.

§  WATCH PERSON PLAYING GAME (33%)

§  FRIEND’S FACEBOOK POST (21%) Facebook continues to play a key role in user acquisition in 2014 as both a social network and advertising platform. Users remain more responsive to more personalized and indirect forms of advertising - but Connect Invitations (18%) and Facebook Advertisements (18%) remain strong sources for discovery too.

§  VIDEO SERVICES (19%) Year over year, the most dramatic shift has centered on the role that video plays in facilitating user sharing and drumming up buzz. In 2013, Video Services ranked 12th most utilized among 17 potential discovery sources. As of Q3 2014, the use of services such as Everyplay and YouTube to find out about new games has jumped dramatically, now ranking as the 6th most utilized discovery channel. Moving forward, the integration of easy video sharing options will be crucial to driving organic virality and promoting community engagement.

Traditional and Mobile Gaming Websites, although less endorsed as a source by mobile gamers overall (18% and 14%), over-index for Payers and should not be ignored as a discovery source for heavily engaged mobile gamers.

These are the “top of the funnel” numbers around discovering an app or game.  By far the #1 reason a gamer downloads a game is its cost (66% said it is the #1 reason for downloading).  That doesn’t necessarily mean its free but the cost/value equation to the gamer is the most important determinant in whether the game is downloaded.

The bulk of these numbers came from EEDAR’s “Deconstructing Mobile Gamers 2014” report. I encourage you to find it on their website as it has considerably more information of value to the mobile app and gaming community.

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Blurred Lines - B2B vs B2C Marketing

When I worked in the beauty care business, we talked about the differences in marketing “needs” vs. “wants” (Cosmetics in particular is a very aspirational category) to our customers. The key to marketing the category then was to understand the motivations of the shopper (i.e., to look beautiful, feel good, etc. ).

While historically the marketing world has delineated between business-to-consumer marketing (B2C) and business-to-business (B2B) marketing, to me the two are not dissimilar – in either case you have to start with the motivation of the target. In fact, one trend that seems to be clear now is that in B2B marketing, business leaders, as people, expect to be marketed to as people and the key is to understand that person’s motivation.

B2B – The Rational

A manager seeking a good or service for his or her company is likely to be an expert, or at least, very savvy, and so has different motivations than a normal consumer. She is likely far more interested in the product’s features, its price/value to the firm, and, not to be underestimated, how purchasing that product will make her look inside the firm. After all, she may well have to defend her decision. This last piece is an important emotional trigger. So, while at first glance it seems like the marketing should focus only on the logical, practical attributes of the product, that approach likely won't deliver the full potential of a B2B campaign. To be clear, marketing focused on this person needs to give him or her a business reason to change from the status quo but that same B2B campaign can’t be devoid of emotional benefits either because people (even business managers) need that connection.

B2C - The Emotional

In most instances, the opposite is true for the B2C marketing efforts. Why are we loyal to Coke over Pepsi? Morton’s Salt vs. store brand? Pampers vs. Huggies? In these instances the motivations of the purchaser are not fully logical or rational but are heavily influenced by the emotional connection to the brand. Indeed, that is the entire point of creating a brand. As such, the key to B2C marketing is to focus significantly on establishing an emotional connection and then deliver the product’s attributes.

The once distinct lines of traditional B2B and B2C marketing strategies are clearly blurring, but the basic constructs of marketing are still in play in either setting – get the attention of potential customers with a message that is relevant to them logically and emotionally (or vice versa).

#marketing #B2B #B2C

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User Acquisition is the digital age’s First Moment of Truth

I was fortunate to be with Procter & Gamble in 2001-02 when we were developing the concept of the “First Moment of Truth” (FMOT).

Simply put, we identified the first 3 to 7 seconds that a shopper came into contact with our product as a crucial moment in time for the sale of that item. The presentation and packaging of the product and its value proposition all had to be communicated in “five seconds from five feet.” Knowing that as much as 70% of purchase decisions are made in-store at the shelf, this became a central core marketing principle, not only to us, but also to the entire consumer products industry.

Fast forward to today: The explosion of mobile applications is an all-new digital industry.  Likely, you can’t browse your smartphone or tablet nor scroll through your news feed without being bombarded by applications to download. This is particularly true in the free-to-play (F2P) gaming world. Makers and marketers of these apps call the process of their downloading “user acquisition.”  

Which means the moment a consumer happens upon an app for download — while scanning, surfing or scrolling — is really not much different from the moment he or she comes across a product on an end cap at Walmart. In both instances, the brand has mere seconds to engage and prompt a decision – buy/download or move on.

The world of digital performance marketing is so focused on cost per click, cost per acquisition and other data metrics that it often overlooks this simple premise: The first moment of truth for your app is the moment a consumer sees it and makes a decision to download it – or not.  

What marketers present in that digital FMOT can be conceived through four questions:

·       How does my creative seize attention and stop a thumb from scrolling or someone paging and clicking through a website?

·       How easily is my app’s brand value proposition understood in a couple of seconds?

·       How well does my digital ad perform in the setting where I place it (e.g., news feed) — and can I leverage sight, sound and motion given the platform?

·       Which elements in the ad do I need to make certain are present to maximize the chance the ad is clicked on (e.g., a clear and relevant brand message)?

Billions of dollars are spent every year by the world’s top marketers to draw attention to their products and brands when consumers are in a position to buy that product (i.e., in-store). Why should an app marketer think any differently at the moment someone is most likely to download an app?  

The app industry must embrace such thinking more centrally and recognize that the tactics of user acquisition are just that — tactics. It’s the underlying strategies of marketing that are in many ways universal, albeit influenced by time, location and context.

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Mary Meeker Internet Trends

If you want to understand tech, Mary Meeker’s Internet Trends reports are the closest you’ll get to gospel. Yesterday the Kleiner Perkins partner released her hotly anticipated 2015 edition. But at 197 slides, her presentation can be overwhelming. So Techcrunch has broken down Meeker’s knowledge dump to highlight the most critical data points, and added our analysis so you know what you’re looking at.  http://techcrunch.com/gallery/best-of-meeker/

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Why Messaging Platforms Need Games

One of the biggest learnings for Facebook was why games were so critical to the time spent on the platform.  Social platforms and gaming go hand in hand.  In Asia, Line, WeChat, KakaoTalk have all leveraged their platform to drive revenues from game downloads and in app purchases.  Re/Code recently wrote “Games are a big deal for Line, which recently filed for a $10 billion IPO and attributes 60 percent of its revenue to in-game purchases.“  Tango, a US based messaging platform recently hired Gree‘s head of game pushing partnerships to lead its gaming business.  Facebook and its Messanger are not too far behind it would seem.  https://www.theinformation.com/With-Messenger-Apps-Sluggish-Facebook-Eyeing-Games

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Steve Carlin of Facebook Talks Games

From an appearance on TechRadio in December 2014

http://wsradio.com/122014-guest-nasa-news-world-games-facebook-automate-life-ifttt/

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Black Widow Removed?!?

Uncool Hasbro/Mattel

http://www.dailydot.com/geek/black-widow-toy-ultron-motorcycle-replaced-captain-america/

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Rule of Three - Verizon/AOL

Dr. Jagdish Sheth was a professor of mine at Emory.  He spoke of the “Rule of 3″ meaning in any industry three dominate players emerged with the largest market share.  There can be many players, but likely #4 and down won’t be able to get more than 10% market share.  I think we may have just seen a shift in the online advertising scene.  Verizon’s purchase of AOL allows them to effectively jump in the game with Facebook and Google.  AOL provides the technology to target individuals instead of content, and Verizon the ability to track those individuals at arguably a deeper level than anyone else in digital advertising.  Now the question is can they overtake Yahoo for #3?

https://stratechery.com/2015/verizon-aol-facebook-instant-articles-and-the-future-of-digital-advertising/?utm_medium=email&utm_source=cb_daily&utm_campaign=email

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Bud Light Marketing Blunder

Another reason why the marketing team should have others proof read their copy, especially if it is going on the packaging (i.e. the bottle itself)

http://www.nytimes.com/2015/04/29/business/bud-light-withdraws-slogan-after-it-draws-ire-online.html

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Future of brand marketing

There has clearly been a lot of discussion over the last several years about the future of brand marketing.  This WSJ article discusses again how brands can include themselves in the daily “conversation” with their core consumers.  Some have dubbed this a piece of the “Omni-Channel” marketing concept, but regardless of its label, I think it touches on an important part of what marketing will need to evolve to given the trends in mobile, social, connected and wearable technology.  In short, when a brand can glean an insight about a consumer need/want and communicate the value of that brand as a solution to that need or want and the right moment in time it will stand the greatest chance for success (read engagement).

http://www.wsj.com/articles/the-future-of-advertising-farewell-mass-marketing-1430105034?tesla=y

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thenita:

on Stewart. Stephen Colbert. And now John Oliver.

Bite sized pieces of information you REALLY should know, presented in an entertaining format with the occasional piece of music thrown in.

And the target demographic for those three men? Adults who grew up on Sesame Street.

Fuck. Of Course

Right. I get it now

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Great article about finding CPG Talent

http://www.foodnavigator-usa.com/Manufacturers/CPG-industry-facing-a-serious-talent-shortage-recruiter?utm_source=RSS_text_news&utm_medium=RSS%2Bfeed&utm_campaign=RSS%2BText%2BNews

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Best Golf in NorCal?

What are the best Northern California Courses?

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JORDAN SPIETH: You’d be smiling too if you just won The Masters and earned $1.8 Million in prize money…but how much will Spieth earn off the course now that he’s a Masters Champion? Our Ron Sirak dives into what this could mean for the 21-year-old Texan: http://golfdig.st/1HiUhLZ

Photographs by Dom Furore

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In Nigeria, NPR reports nearly 200 girls are still missing all these months later, after being abducted from their school. ‪#‎BringBackOurGirls‬ ‪#‎NeverForget‬ ‪#‎OneYear‬

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Powerade Rose from Concrete