July 26, 2011 11:47 pm
The rise of the machines
By Jeremy Lemer
Man on a mission: Colin Angle with the Roomba. iRobot creates products not just for the home but also for bomb disposal, such as the Warrior
Not many entrepreneurs can claim their businesses were saved by a risqué comedian appearing in his underpants on national television. But that is pretty much what happened to Colin Angle, co-founder and chief executive of iRobot.
In 2003, iRobot had brought out its signature product, Roomba, a cute autonomous vacuum cleaner, about the size and shape of a dinner plate and the thickness of a novel, that zips around homes, picking up dust as if it has a mind of its own.
On this story
After a strong start in its first year, sales stumbled and iRobot was in trouble. Until, that is, the company caught a break when PepsiCo ran a television advertisement showing a famous stand-up comic battling a Roomba-like machine.
“Pepsi put millions of dollars into a TV commercial with Dave Chappelle losing his trousers to a Roomba and it was remarkable,” says Mr Angle. “Sales tripled, we blew through our inventory and learnt an important lesson about marketing.”
The company, whose name is reminiscent of Isaac Asimov’s short stories collection I, Robot, has now shipped more than 6m units. These include robots to clean swimming pools and wash floors, while Roomba has spawned a host of commercial imitators and earned a place in popular culture – including a racy skit on Saturday Night Live involving Tina Fey, a pink “Woomba” and some unexpected cleaning chores.
That success has brought iRobot annual sales of $400m and a market value of about $962m, while Mr Angle has become the leading evangelist for a burgeoning industry populated by appliance makers LG and Electrolux and military robot makers such as Qinetiq.
Like most foundation myths, the Pepsi story obscures as much as it reveals, glossing over years of hard grind. Mr Angle founded iRobot in the 1990s, after graduating from MIT and then working in its Artificial Intelligence Laboratory, roping in his professor Rodney Brooks and fellow student Helen Greiner to work on applications for his thesis project, a six-legged crawling robot called Genghis.
At the core of the group’s mission was a determination that robots should be useful. Mr Angle is fond of saying that his favourite robot from Star Wars is not the glamorous C-3PO or R2-D2 but the little black boxes that guide storm troopers around the Death Star.
The trio set themselves up in Mr Angle’s apartment, using his living room as a makeshift laboratory and sneaking back on to the MIT campus when they needed more advanced equipment.
Two decades on and sitting in the company’s glass and steel headquarters in Bedford, Massachusetts, Mr Angle, 44, talks with a fluency polished by hundreds of corporate presentations. Though in his black jeans and ill-fitting jacket, the gawky, cheeky engineer is still very much in evidence. During conference speeches he occasionally wheels out a life-size cut-out of his mother to help him demonstrate new products for helping seniors to stay in their homes longer – an area in which iRobot hopes to grow in the future.
“We actually went six and a half years never starting a month with enough money in the bank to make payroll,” Mr Angle says, recalling one particularly disastrous week when a robot blew up during final testing.
Colin Angle’s tips
● Strategic Partnering “[Partnering larger companies] allowed us to explore a great many things and mature as a company without piling up debt that would be difficult to repay or burning through years of venture capital investment patience, so that when we finally did take VC money in 1998, we had a much clearer view of what we would do with it and where we were going.”
● Fun is key “You best have an enjoyable job because there are going to be bad days. And if you have bad days compounded by ‘I hate my job’, it is not a good recipe for success.”
● Nothing is certain “We could have built Roomba 10 years earlier. The technology to do a robot may have cost $50 more, but we could have done it ... Why did it take so long for us to get where we got? I was new on the job with less experience. So I was looking for justification. I wanted iron clad ‘if thens’, which you are never going to get.”
● Lay the groundwork “Good things happen sometimes. We had enough bad things happen to us – contracts cancelled at the 11th hour for things that weren’t our fault. And I think that luck plays into it but ... over the years we had been very open and willing to work with the media and ... [when Roomba came out] they loved it and wrote about it, and that created the interest so we got enough attention that the Roomba was sufficiently known for other people to run with it.”
● Take calculated risks “As an entrepreneur, having a good answer to ‘if this doesn’t work out, then what?’ is a good idea. Is there a way I can have a couple of irons in the fire to better my odds of success?”
As a result the fledgling company took whatever work it could get, including building robotic dinosaurs and baby dolls for Hasbro, floor cleaners for SC Johnson, mine-clearing robots for the military and gadgets to gather data from deep wells for the oil industry.
In the process, the group stumbled on key ingredients of their later success. SC Johnson opened iRobot to opportunities in cleaning, while working for the military created a focus on rigorous financial controls.
“One of the more powerful tools that an entrepreneur has is the naivety to go start down a path which someone who knows more might find too daunting to attempt,” says Mr Angle.
Moreover, through its contracts with larger partners, iRobot was able to develop skills and test markets without giving the company away to investors or burning through venture capital funding early on. It only received its first funding in 1998.
“The idea that an entrepreneur is the great risk-taker is nonsense. Successful entrepreneurs look like they are taking immense risks, but kind of like a rock climber scaling a 1000ft cliff, they also have a rope,” he says.
For iRobot part of that safety net was building a military business. The company first deployed PackBot, a remote-controlled robot used mainly for bomb disposal, in 2002 and has gone on to sell more than 4,000 units to the Pentagon. When the company floated in 2005, Mr Angle became a multimillionaire. Last year he bought a mansion, which he is packing with robots. He retains a 3.4 per cent stake in the company worth about $30m. Nonetheless, he has mixed feelings about going public, describing it as both “invigorating and frustrating”.
. . .
Success has also brought him prominence in the robotic community and made iRobot something of a hub for start-ups. Co-founders Mr Brooks and Ms Greiner have both moved on to form new robot businesses, as have other iRobot alumni. “I am proud of all of that,” he says. “[We have created an] ecosystem of entrepreneurship that you usually read about in Silicon Valley. But here near Boston we are seeing it with robots.”
Those changes and the growth of the company have forced Mr Angle to constantly re-evaluate his role. Last year he appointed a former Navy research and engineering expert as chief operating officer, allowing him to focus on long-term strategy. That has proved useful given the bumpy time iRobot has had during the recession. Sales of Roomba slipped as consumers cut back and the military restructured pipeline projects.
He is currently focused on Ava, which he describes as the next generation of robots. With an extendable lamp-post-like platform, it has a tablet computer for a head and can follow people around, avoid objects and relay video and audio data. That could allow it work as a mobile kiosk, a video conferencing tool or as a security guard.
Whatever Ava turns out to be, it is clear Mr Angle’s enthusiasm is as high as it was when he started out in the industry: “This stuff is cool.”
Copyright The Financial Times Limited 2011