June 25, 2012      

Fittingly situated among the pioneer businesses in Boston’s burgeoning Innovation District, Rethink Robotics (formerly Heartland) has undergone a highly publicized re-branding while remaining tight-lipped about its revolutionary product. Our expert analyst Dan Kara sheds light on the remarkable company’s intentions as he re-examines Rethink Robotics at this pivotal point in its development.

On June 19th, 2012, Boston based Heartland Robotics simultaneously released two noteworthy press releases. Both communications were very straight forward. The first press release announced that Heartland Robotics had changed its name to Rethink Robotics. The second reported that the company had secured and additional $30M in series C funding.

Answering the ?so what? question?

The announcements received a great deal of coverage in the robotics, business and manufacturing press, as well as in the local Boston-area media. Unfortunately, all were a reiteration of the press releases (here, here and here for examples). More to the point, no one answered the ?so what? question citing a lack of details. That?s unfortunate, and will be rectified here.

While Rethink has been less than forthcoming regarding their business and product plans, it is possible to construct a description of those plans from a variety of confluent inputs including company announcements and new hires, investment and industry news, as well as political and social trends. This exercise will also provide insights into unfolding trends in the industrial robotics market, as well as opportunities in that market sector. The characterization will be broken down as follows:

  • What is Rethink developing?
  • How did the company get to this point?
  • What does the name change and additional funding mean?
  • What is the competitive landscape?

At first blush

In 2009, following a $7M Series A1 equity funding round, I postulated as to Heartland/Rethink?s product plans in a Robotics Business Review analysis piece entitled ?Heartland Robotics: Hiding in Plain Sight?($). As the title suggests, I believed that despite Heartland?s reticency, quite a bit of information regarding the company could be gleaned through a careful examination of public information. I concluded:

?The company is developing human-scale, highly dexterous and versatile industrial robots targeted to small to midsize manufacturers, which can work in close association with people safely and efficiently. The robots will exploit the increasing power of hardware and system software to deliver new levels of performance and human interactivity, greatly expanding the number and types of manufacturing processes that can be automated. This class of robots has the potential to revolutionize manufacturing.?

In the piece I went further to provide details as to what I believed was truly transformative technology, a new class of industrial robots specifically designed to perform materials handling, manipulation and assembly-related duties that formally required two hands operating in a highly coordinated fashion. Historically, these tasks have been restricted to humans. The system(s) I described were:

  • Primarily targeted to small to midsize manufacturers
  • Designed to automate complex, often highly detailed manual manufacturing processes
  • Available at a low purchase price and requiring only minimal lifecycle costs
  • Easy to set up and program
  • Capable of being used by workers with a wide range of qualification levels
  • Able to support multiple types of automation
  • Offers a small footprint and is human-scale in size
  • Works collaboratively and in close proximity to human workers
  • Provide fine motor control and supporting dexterous manipulation
  • Employ machine vision, along with force, touch, position, and tactile sensors
  • Boast of multiple arms and possibly a humanoid form factor
  • Quick to reconfigure, so as to support quickly changing, low production volumes
  • Reimagining manufacturing

    Since 2009, Rethink has remained steadfastly tightlipped regarding their plans. As before, however, much can be discerned from announcements, press releases, recent hires and general industry ?noise?. The noise typically comes in two flavors ? formal presentations and industry scuttlebutt.

    As Professor of Robotics Emeritus at MIT, as well as founder of iRobot and now Rethink Robotics (he is also the company?s CTO), Rodney Brooks speaks often at robotics, business and investment events. Example speaking venues include the most recent International Conference on Human Robot Interaction Conference (HRI2012), the 2011 RoboBusiness Leadership Summit (Editor?s note Robotics Trends, the producer of Robotics Business Review also produces the RoboBusiness series of events), and 2012 Robotdalen event. The presentations at these events were somewhat generic in their focus, but other session spoke directly to Rethink?s vision and productization plans (while avoiding specifics). Examples include:

  • Rodney Brooks – “Technology Trends and a Revolution in As Yet Un-automated Manufacturing”
    January 20, 2012 session at the 17th Annual Robotics Industry Forum produced by the Robotics Industry Forum
  • Rodney Brooks – “Will Our Consumer Goods Always Be Manufactured By Hand?”
    May 2012 keynote at the MIT Leaders for Global Operations (LGO) conference on “The Future of Manufacturing in the U.S.”
  • Little information was offered during these two sessions that would dramatically alter what I ventured in 2009. However, it is now clear that Rethink?s new generation of industrial robotics systems is targeted to consumer product manufacturers (mostly). Evidently the answer to ?Will Our Consumer Goods Always Be Manufactured By Hand?” is a resounding ?no?.

    It is rare that technological capability, business needs, and sociopolitical impetus harmonize to such a degree.

    A second thread interwoven throughout these sessions concerns the re-shoring of manufacturing, the act of returning outsourced manufacturing to the country of origin. Recently, the business press has been is chock-full of stories of companies reevaluating their earlier outsourcing decisions. It appears that many companies are bringing operations back to the home country citing a range of benefits including reduced lead-time and inventory requirements, and lower shipping and transportation costs.

    Rethink?s offerings dovetail nicely with recent re-shoring initiatives in the manufacturing sector, especially the production of goods for the consumer market. They are also synergistic with social and political drivers tied to increasing national competitiveness and creating jobs. It is rare that technological capability, business needs, and sociopolitical impetus harmonize to such a degree.

    Earlier this year a number of sources noted that Rethink (Heartland at that time) had purchased booth space at the Automate event to be held in Chicago in January 2013. This has since been confirmed by Rethink. Products might be launched earlier, but it appears that January 2013 is a hard stop. What has not been confirmed is the $5,000 product price point cited in a 2010 article.

    Getting this far

    In the four years since the founding of Rethink (Heartland), the company has attracted approximately $62M in funding coming in four separate rounds ? 2008, 2009, 2010 and 2012 (see Table 1). The number, timing and the increasing amounts of investments funneling into Rethink indicate that the company is progressing (presumably on schedule). From the initial seed round in 2008 to the latest investment influx, there does not appear to be any hint of delay.

    One indicator that speaks to the strength of Rethink?s value proposition is the number and quality of the company?s investors. Since 2008, the company has added three investment groups to the original two, with a new investor coming on board with each additional round (Table 1). The investors in the latest round – Charles River Ventures, Sigma Partners, Bezos Expeditions, Highland Capital Partners and Draper Fisher Jurvetson ? are well known, well respected and well established. Bezos Ventures, the investment wing of Amazon founder Jeff Bezos, is also major funder of Kiva Systems, a Boston area developer of robotic warehouse automation technology.

    The latest $30M Series C financing is clearly the go-to-market round. The company itself notes, ?The funds will be used to launch the company?s new robot product, begin development of new product lines, and expand sales, marketing, and services operations.? Sales and marketing are of little use without a product, and, in fact, the company has brought on Mitch Rosenberg, former VP Marketing & Product Management at Kiva Systems, to head up Rethink?s marketing. The company has listed other openings for marketing and product support positions, a very different situation compared to when my 2009 article was written (only technical jobs then).

    Heartland Rethink Robotics

    The change of names from Heartland Robotics to Rethink Robotics would seem to provide little insight into the company?s future direction. But the rename was a deliberate step, and one which required some thought and, probably, the advice of consultants. Maybe it was only that the alliterative double Rs in Rethink Robotics rolls off the tongue smoothly. Possibly, but I doubt it.

    Historically, the word ?heartland? refers to the central region of a country, an area that is self sufficient and whose population are the holders of national or traditional values. The word can also be linked to the US industrial manufacturing base which is located in the central region of the country. In a robotics context, then, heartland connotes a return to international competitiveness for US industrial manufacturing (a powerful political and social driver). Of course, the US is the world?s largest manufacturer, a fact that tends to get conveniently mislaid in difficult political and economic times, but that is another story.

    It is possible to detect a strain of the nationalistic in the term ?heartland?, which makes it inelegant for a US company selling products internationally. The word heartland is also limiting in a way that rethink is not. Political, social, business and economic trends come and go. Will ?heartland? have the same power and psychosocial currency it has today? Probably not. Rethink believes that they are developing transformative technology, systems that demand that you rethink what is possible for manufacturing automation. It is quite clear? ?rethink? is a much stronger choice.

    The competition

    Many other robotics companies share Rethink?s compelling vision and see the same opportunities. Some are developing competing solutions. These companies range from existing industrial robotics players to robotics startups. The former, exemplified by companies such as Kuka Robotics, Fanuc Robotics, Staubli and others are seeking to expand robotics usage beyond manufacturing and assembly within large enterprises in the automotive, electronics and semiconductor industries. All offer benchtop systems targeted to small-to-medium manufacturers that are characterized by their low cost, small form factor, easy set up and simplified programming environments. The benchtop bots are dramatically different from what Rethink is presumed to have in the offing, but many companies have dual armed systems that work safely with humans under development (see here, for example).

    Some established robotics companies are further along in their development of such systems. ABB, working under the auspices of the ROSETTA project, which is funded through the European Community?s Seventh Framework Programme, has developed its dual armed Frida concept robot. Frida is specifically designed to work cooperatively and safely with humans in industrial manufacturing applications. To date, however, ABB has indicated that they have no immediate plans to commercialize the Frida platform.

    In 2007 Motoman Robotics, a division of Yaskawa America, Inc., released its SDA series of dual armed robotic torsos. The SDA systems are designed for complex assembly and materials handling tasks, including multi-process applications, which formally could only be accomplished by human workers (see here and here for examples).

    Kawada and Redwood

    Motoman?s SDA series systems are not safe for working directly with humans. Nor are they inherently vision based. That is not the case with Kawada Industries? Nextage system (HIRO is the research version). The vision equipped, wheeled Nextage shuts down with the approach of humans and has arms that are backdrivable. At a reported $87,000 per unit, the Nextage would be price prohibitive for smaller companies. However, larger firms are already employing Nextage systems. The Wall Street Journal reports that Nextage is currently at work in Japan for Hitachi Ltd. assembling hard drives and at Glory Inc. fabricating money handling equipment.

    In May 2012, it was announced that Meka Robotics, Willow Garage and SRI were partnering on a new startup, Redwood Robotics, that will, according to the company website, ?enable the personal and service robot markets through a new generation of robot arms that are simple to program, inexpensive, and safe to operate alongside people? (sound familiar?). While explicit mention of industrial manufacturing is not on the Redwood site, the Meka, Willow and SRI triad would be a formidable Rethink competitor if the company turns their attention in that direction. SRI has a long history of commercializing groundbreaking technology (for example, robotic surgical system provider Intuitive Surgical is an SRI spinoff), while the Google backed Willow Garage is a robotics research powerhouse, developing open source hardware and software for personal robots, most notably Robot Operating System (ROS), a collection of libraries and tools for mobile robots.

    The inclusion of Meta Robotics as a Redwood partner is especially interesting given their offerings ? arms, grippers, hands, torso, sensors, etc. ? as well as the company?s pedigree. Both Meka co-founders – Aaron Edsinger and Jeff Weber ? have ties to MIT?s Computer Science and Artificial Intelligence Laboratory (CSAIL). Edsinger received his PhD at MIT CSAIL with Brooks as his thesis advisor (The thesis title?… Robot Manipulation in Human Environments).

    Possibly first, possible monopoly

    “Rethink Robotics is very well positioned, in terms of executive leadership, financing and first-to-market advantage to monopolize the market for this class of manufacturing robots for the foreseeable future.”

    Rethink Robotics appears well positioned to be first to market with low cost robotic systems capable of working directly with humans during the manufacture of consumer products. As such, the Rethink systems would be truly revolutionary. However, other robotics suppliers share the company?s vision, understand the compelling value proposition, and are attracted to the business opportunity. They are also quite aware of the political and social drivers associated with re-sourcing, and the economic tailwinds that can support companies providing re-sourcing enablers. Moreover, these same companies are capable of developing technology with abilities similar the postulated Rethink system I described above, some, such as Redwood Robotics and Kawada Industries, are uniquely suited to do so. Still, Rethink Robotics is very well positioned, in terms of executive leadership, financing and first-to-market advantage to monopolize the market for this class of manufacturing robots for the foreseeable future.

    Dan Kara is analyst-at-large for Robotics Business Review. He can be reached at [email protected].