Robots are expensive so companies are subscribing instead

Making robots is hard. But building robotics companies might be even harder.

Few people doubt that robotics will be part of our future, but even some of the most promising robotics startups have folded, failed or generally disappointed investors.[1] Boston Dynamics, one of the most accomplished and longest-standing robotics labs out there, has been sold on three times. CyPhy Works, Anki and Jibo were also sold on or ran out of road.[2] ?OpenAI, too, disbanded its robotics research team in 2021.[3]

Of course, without challenges we wouldn’t have innovation. And what I find most exciting right now is the new business models emerging to make robotics work better for companies, investors and customers alike.

Robot-as-a-Service (RaaS) — which turns robots into a subscription-based service rather than a one-off purchase — is already growing the market by lowering barriers to entry. We’re even seeing web3 business models being explored as a way to completely decentralize and democratize the funding, access and ownership of robot systems.

I think these innovative business models change the robotics calculation for business leaders and investors. It’s worth watching them closely to see how the sums could add up for your business.

RaaS is making robotics accessible for all kinds of business

If you run a smaller business, you may well assume that robots are too expensive to be viable. RaaS is turning this assumption on its head in industries as varied as warehousing, commercial landscaping and hospitality.

For example, InVia Robotics is a startup that’s pioneering the RaaS model in warehouse automation. Its pay-as-you-go model is helping logistics SMEs benefit from autonomous mobile robots that could otherwise be far out of reach.[4] For these companies wrestling with macroeconomic uncertainties, chronic labor shortages and an increasingly competitive ecommerce environment, being able to scale costs to demand is enormously helpful.[5] ?

Outside warehousing, RaaS is finding a foothold in commercial landscaping too. It’s another sector facing labor shortages. Startups Scythe and Graze offer autonomous lawnmowers to landscape businesses on a RaaS basis to help plug the gaps at an affordable cost.

Interestingly, while Scythe’s model aims to attract customers by charging by acre mowed with zero upfront cost,[6] Graze’s pricing model is different. They believe an upfront fee plus annual maintenance cost is still more cost-effective than a non-autonomous machine and human operator.[7] These variations suggest the flexibility of RaaS models will make it a competitive differentiator for robotics companies in the future.

And I can’t talk about RaaS without mentioning one of my favorite examples — the Flippy 2 burger bot. This back-of-house robotic chef from Miso Robotics is making waves in the US fast-food industry: it’ll be working in a third of White Castle kitchens by the end of 2023.[8] It’s available on a RaaS basis too, so look out for Flippy 2 coming to a burger joint near you.[9]

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Web3 could democratize future access even further

Beyond RaaS, ideas about web3 business models for robotics are creating fascinating ripples in the industry. You may wonder how web3 and the turbulent world of crypto could be a good business model for robotics. I did too, but recent research got me thinking.

A team of US and Russian academics have published research that applies the principles behind web3 and blockchain-enabled finance to machines and the Internet of Things (IoT).[10] The idea is to use these technologies to democratize and decentralize ownership and access to machines. One startup, IoTeX, is already getting onboard.[11]

It’s a complex area, but it has potential. MIT, for instance, is already trying out a combination of blockchain and IoT to help control multi-robot systems called robotic “swarms”. The technologies enable the robots to share the data they capture.[12]

In terms of web3, decentralized apps and storage technologies could work together as a computational layer for new decentralized robotics systems.[13] And companies like IoTeX believe web3 can incentivize users to invest in infrastructure to earn rewards in the form of tokens.[14]

There are still many questions to be explored — including who will pay for the upfront capital costs of the robots. But I’m excited for what this push toward decentralization could mean for future access to robotics.

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Delivering on the promise

While web3 robotics innovation is one for the future, RaaS business models are changing robotics now. As we see more RaaS providers come to market and show they can deliver, I think adoption of subscription robotics will accelerate in all sorts of sectors. Robotics innovation is only just getting started — I’m strapping in for the ride.

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The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.

[1] The Demise Of Robotics Companies: Learning From Past Mistakes (forbes.com) (Jul,2021)

[2] Hyundai completes deal for controlling interest in Boston Dynamics | TechCrunch (Jun, 2021)

[3] OpenAI disbands its robotics research team | VentureBeat (Jul, 2021)

[4] Customers - inVia Robotics (Accessed Jan, 2023)

[5] Signs its Time to Automate Logistics Workflows - Vecna Robotics (Aug, 2021)

[6] Reserve Your Scythe M.52 Fleet Today | Scythe - Robots for a Greener World (scytherobotics.com) (Accessed Jan, 2023)

[7] Graze announces new autonomous robot for commercial lawn mowing (therobotreport.com) (Sep, 2020)

[8] Inside the restaurant: How a fry cook robot holds the line for White Castle | Restaurant Dive (Jun, 2022)

[9] FAQ | Miso Robotics (Accessed Jan, 2023)

[10] Frontiers | Robot-as-a-Service: From Cloud to Peering Technologies (frontiersin.org) (May, 2021)

[11] IoTeX launches MachineFi, a combination of machine and DeFi that unlocks trillion-dollar opportunities in the Metaverse (prnewswire.com) (Nov, 2021)

[12] Overview Blockchain: A new framework for robotic swarm systems — MIT Media Lab (Accessed Jan, 2023)

[13] Frontiers | Robot-as-a-Service: From Cloud to Peering Technologies (frontiersin.org ) (May, 2021)

[14] IoT For All Podcast: MachineFi, Web3, Blockchain, and the Future of IoT | IoTeX Network's Raullen Chai on Apple Podcasts (Mar, 2022)