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5 Lessons Robotics Founders Can Learn From the AV Industry
- Robotics has seen investments worth $60bn over the course of five years, with the AV industry leading the way, offering drew excitement even from seasoned investors like Sequoia and Andreessen Horowitz.
- Commercial success is measured differently from a successful pilot. Robotics founders must demonstrate production deployments and measurable ROI to investors.
- Instead of going after the largest, most complicated problem like autonomous passenger cars, robotics founders today should focus on use cases with real value.
- Incumbents can accelerate momentum in investment and help overcome investor reluctance on a still-unproven use case. Startups able to disrupt legacy business models will attract investment dollars.
- Robotics is becoming more competitive, only startups with the strongest case can survive early investment rounds and attract later stage dollars from customers and acquirers.
- AV unicorns like Aurora are disrupting the trucking industry, while Locus and RightHand Robotics are transforming how fulfillment operations are done.
- Startups must have attractive unit economics associated with their offerings with more than 70% gross margin after subtracting BOM and support costs from lifetime revenues.
- Identifying use cases where TAM is still significant is the sweet spot for a VC-backed robotics business.
- Many companies are now pursuing use cases in constrained operating environments with greater fault tolerance, often with a human-in-the-loop element, which creates more technical feasibility.
- Technological acceleration, labour shortages, stagnant productivity gains and investors' interests in the category are amongst the factors that work in favour of today's robotics founders.
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