How to Build and Invest in Robotics Startups

Here are my 5 key takeaways from Robotics Invest 2024 , an invite-only masterclass on how to build and invest in robotics startups. The curation and delivery of speakers, panel topics, roundtables, and participants was masterful. Congrats again to the organizers! I’ve already shared the most important insights from the Climate Robotics panel at Robotics Invest, so here’s what piqued my interest in the other sessions.

??? “Robotics is a unique investment class,” which needs its own framework and metrics. Robotics Invest served as a call to action to VCs: co-create the investment mechanics for this unique class. Based on my experience in the climate robotics space, founders of robotics startups are more likely to trust and build higher-quality partnerships with investors who understand why robotics presents a different investment class.

?? “Robotics will usher in the next industrial revolution.” Various versions of this statement were made at Robotics Invest (and other tech events I’ve spoken at over the past 10 years). But I’ve yet to hear anyone raise the point that our past industrial revolutions were responsible for creating extreme concentrations of wealth rather than shared prosperity, thus exacerbating power asymmetries and inequalities globally. While the environmental impacts of past revolutions are more openly discussed today, questions around the carbon footprint of the robotics industrial revolution are rarely raised, even when there’s talk of building one billion humanoid robots. More on humanoids in a bit.

“Investing is an act of faith in the future.” I love this. Does it follow, therefore, that tech investments that drive industrial revolutions ought to consider the seismic and unintended consequences of such revolutions? Can we be more forward-thinking, proactive, inclusive, and multi-disciplinary in our thinking than we've been in the past to better manage these structural consequences? Also, whose future are we referring to?

?? “Robotics is now a general-purpose technology.” This was an open debate at Robotics Invest. Some roboticists cautioned that we’re nowhere close to general-purpose robotics, and most VCs in the room still seem to prefer investing in startups that focus on more specific problems. It’s also worth noting that we’ve made little to no progress with consumer robotics, the only exception being iRobot (thanks to the Roomba). On the other hand, recent advances in AI mean that we’re getting closer to (rather than further away from) making robots work in highly unstructured environments, which may help unlock the consumer market, bringing us back to the topic of humanoids.

Side note: If we’re going to adopt the term “Physical AI,” can we also adopt the term “Robot-Deficient AI” for non-physical AI?

?? “When is a humanoid no longer a humanoid?” If you add a third arm to a humanoid or replace its legs with wheels, is it still a humanoid? No consensus was reached on these questions. Some prefer to focus on the tasks that robots need to accomplish and let these tasks drive the form factor of the robot. “With further advances in AI, we can expect to see more form-factors of robotics in the future.” In any event, as soon as robots become successful, they’re simply known as “appliances” or “smart machines” (cue the usual dishwasher example).

One panelist welcomed the staggering investments going into humanoids because the resulting breakthroughs will spill over to other areas of robotics, which can only be a plus. Another panelist ruled out a future with humanoid robots. Some speakers likened the quest for humanoids to the one for self-driving cars, which began some 10+ years ago and burned through tens of billions of dollars without producing a fully self-driving car.

?? Finally, the roundtable sessions on day 2 were stellar. They reminded me of similar sessions I participated in as an MIT Solve Fellow and UBS Global Visionary. Having such seasoned investors and high-caliber founders around the table for an hour to discuss key strategies on how to build and scale your robotics startup was brilliant. There were 6 different roundtables to choose from. I joined the discussions on “New Financing and Revenue Approaches for Robotics Startups” and “Fundraising and Due Diligence Preparedness: Developing Your Moat.” I gained some new insights on business models, pricing strategies, contracting, IP, patenting, data rooms, cap tables, and more, which I’m excited to share with the early-stage climate robotics startups I’m advising.