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Rethink Robotics: Unpacked!
How Baxter will revolutionize manufacturing and what it means for workers and business owners alike
By Dan Kara


 

Atypical Business Model
Rethink’s funding chain followed a formula much in keeping with other high tech ventures… Series A funding is followed by Series B, and then a final go-to-market round.  With the Baxter product release, however, Rethink colors outside the lines.  First, while the Baxter hardware begins sales on October 1st, the product will ship with beta software.  The release date for the final Baxter code is January 1st, 2013 (happy holidays Rethink software engineers!).

Rethink’s software approach approximates the Lean Startup Methodology that has been embraced by developers of Web centric software and apps for mobile devices.  Lean Startup advocates releasing a “minimum viable product” to early adopters that can be quickly validated.  The product is adjusted as necessary based on customer feedback, rapidly released again, and this process is iterated so as to achieve optimal “product market fit”.  This approach offers the added advantage of releasing product sooner and generating revenue immediately.

Rethink representatives describes their software model in terms of the PC and workstation market.  Accordingly, software will be released on a regular basis, with each new release providing for new tasks and offering better performance.  The difference between the Lean and PC models is the maturity of the initial software runs and regularity of releases.

Platform Play
Regardless of how the approach is framed, it is clear the Baxter is really a platform play.  Hardware advances will be incorporated into the Baxter platform, of course, and more ancillary products made available, including through 3rd party hardware partners (grippers and other types of end effectors, for example). However, competitive differentiation based on low cost sensing technology and commodity hardware (motors etc.) is difficult to achieve.  Baxter the software platform, or possibly the software stack (or even ecosystem if outside partners are involved), is another matter.  Here competitive advantage and differentiation can be had more readily, and IP protection more easily enforced.  In conversations with Rethink representatives, it was made abundantly clear that the company plans to aggressively protect its intellectual property.

Horizontal and Vertical Markets

As noted above, Rethink is initially focusing on small-to-medium manufacturers as their target market.  No specific vertical markets have been targeted, as Baxter has wide applicability. According to Rethink representatives, the initial system release is well suited for light material handling processes such as loading, unloading, placing, or manipulating material for manufacturing operations such as part transfer and machine tending.  The company expects that additional classes of operations can be performed in the future as new software and grippers become available (from both Rethink and 3rd party developers).  Example Baxter manufacturing operations include:

  • Pick and Place – Baxter is well suited for the repetitive part transfer operation of loading and unloading items on a moving assembly line (ex. picking items off a conveyer and placing them in a pile, array or container and vice versa).
  • Machine Operation/Tending – Baxter can be trained to load and unload raw materials into machinery for processing, or start and stop a process.
  • Part Testing and Sorting – Baxter can be programmed to test or sort random objects on an assembly line as part of quality control or other need.
  • Packing – The Rethink system can pick and place components into containers for shipping or storage.
  • Light Assembly – Using both arms in coordination, and likely with a human counterpart, Baxter can be programmed to perform some types of light assembly work.
  • Finishing Operations – Baxter can be used for light finishing work such as removing excess plastic or metal from parts.

Market Sizing, New Markets
According to Rethink representatives, there are approximately 12M manual labor manufacturing jobs in North America.  A back of the envelope elimination analysis, say by removing jobs in specialized vertical markets such as food production, work involving heavy loads, or assembly tasks requiring high levels of skill and fine manipulation, reduces the 12M figure substantially.  Still, there are approximately 800,000 manual labor jobs in general manufacturing where light payloads are held with one hand and are involved in simple and repetitive non-skilled tasks. 

Rethink pegs the size of the North American market for automating these classes of processes with Baxter-like automation technology at $16B.  The worldwide market, obviously, is much larger.  For comparison (albeit imperfect), the International Federation of Robotics (IFR) calculates the size of industrial robotics sector worldwide in 2011 to be approximately $8.5B (not including systems engineering, software etc.).

While market sizing, especially where no existing market exists, is an inexact science, the perils of prognostication can be reduced by market understanding and using correct assumptions.  Rethink appears to have done this.  But at some level, the actual figures do not mean all that much.

What does matter is the knowledge that much of the manufacturing sector has not been automated at all.  Even more importantly, low cost, very powerful, commodity sensing technology is now available and at one time it did not exist (at least at a reasonable price point).  These sensors, combined with increasing powerful (and low cost) processors, can be harnessed by smart software to create new classes of affordable robotics systems, including manufacturing systems.  New products, as well as new markets will be created by those who understand the robotics technology power/cost dynamic and apply it in novel ways.  This is what Rethink has done.


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