Shahin Farshchi (speaker) explains how technology-driven projects must be ‘impedance matched’ to market needs to become successful businesses. He contrasts academic-driven pursuit of pushing the state of the art with the practical need to integrate existing technologies to solve specific, revenue-bearing problems (examples: iRobot, Tesla/SpaceX as exceptions). He advises finding white-space with customers who can pay, building the minimal viable integration (cheap/fast proof-of-concept), engaging customers (e.g., Flextronics use-case), and then scaling; he cautions that most robotics applications (manufacturing, healthcare, automotive) are slow-growth and often a poor fit for venture capital, which suits only businesses that can scale extremely quickly.
Chapters
So having been an academic myself, you know, I was, for me, it was all about pushing the technology envelope, right? Building something that nobody has built before. The reality is that if you look at the successful ventures, if you look at, if you look at companies like Tesla, like SpaceX, like iRobot, their success wasn't the product of a capability that nobody had done before. Sure. The whole notion of obstacle avoiding whatever robots that kind of find their way and pick up dust, that's not a new concept. But IROBOT was able to market it and productize it and monetize it, right? So, you know, I like to use the term impedance matching, right? So to be a great technologist, you have to push the envelope from a technology standpoint. But pushing the technology envelope doesn't necessarily translate to impedance matching, that incremental or even quantum leap in kind of technology to an interesting business, a large business. So in order to do that, you have to impedance match the need with the tool set that's available to you. Now, sometimes you're like Elon Musk and you create a new rocket engine or you create a new battery management system to be able to disrupt and create an attractive business that would leverage that innovation. But it's usually less about kind of that, you know, the hardcore technology innovation, which is what roboticists do, right? So roboticists are focused on. I mean, what we're told when we're getting our PhDs is what you're doing is so important that you're going to change the world by, you know, by pushing the state of the art. Right? And that's what kind of compels us to sit down in like, you know, labs underground for five years, spend five years of our lives under there not getting paid or getting paid $20,000 a year to do that. You know, that's the motivation. But that's, you know, it's not quite true, right? At the end of the day, you create something, but it's not really useful to anybody unless you, you know, unless either the government, for example, develops it further or somebody turns it into a company so somebody can do that impedance matching function. Now there are academics who've been able to do both. You know, invent something and turn it into a great company. But that's rare and very difficult. I guess the secret is to answer your question. The secret is to identify a need, identify a white space that has dollars attached to it, that has people that have deep pockets that want to pay. And see what I mean, it doesn't necessarily have to be a bleeding edge technology, see what's out there that you can integrate and solve their problem without having to spend a ton of money to get you to the point where you can have that kind of initial, I guess, proof of concept for them to be able to play with and use and then slowly engage further with you. So for example, if you want to remove certain aspects of human labor from Flextronics manufacturing line. So right now there's people standing in stations like phone booths flipping circuit boards, right. And putting them into different trays, for example. If you want a robot that does that, come up with a way to use the best available technology and minimize what you need to invent. Just find the cheapest, fastest way to get something into their hands that they can play with and find a way for them to engage with you. Okay? And then from there you can work with them and get a better sense as to what the larger opportunity really is. And then you can use that as proof behind your hypothesis as to why this can be a great large company. And then you can take that to investors should you choose to take their money. By the way, in my opinion, only a small fraction of successful businesses really make sense for venture capital. Because with venture capital, you're putting 10, 15, 20, 30, $40 million to work to really accelerate a company quickly. And that only applies to companies like Pinterest and Uber and Twilio are these companies that achieve massive growth. The reality is that most areas that robotics is getting into, you know, manufacturing, let's say, you know, health care, these are slow industries. And so, you know, automotive manufacturing, I mean, these are, these are industries that don't, that, you know, if you, if you pump venture, I used to call, I used to call venture capital money like steroids. If you pump steroids into it, it's really not going to take it very, it's not going to go very fast. So it may not be the best kind of fit for venture. So but then if there's an area that you've identified that can grow very quickly with the help of venture money, then absolutely, we'd love to talk to you.
