Archive for the ‘Commentary’ Category
My long awaited article in Proceedings just came out! You might not have been waiting for it, but I have! I started the article over a year ago. It was a slog. I can’t quite believe that I’m now signing up to publish an academic paper on the capital structure of robotics companies.
Image Credit: DTIC
In summary, the U.S. Navy is making a terrible mistake in it unmanned maritime vehicle policy. The Navy is basically designing all their programs for robots that swim in the water to fail. The technology exists today to make really cool, useful maritime robots. However, the technology does not exist today to build the Navy’s dream robots. (Especially since the Navy’s secret dream is to need more manned ships of the type we have today.) Essentially, the Navy is pulling the equivalent of refusing to look at Roomba because it is not Rosie.
I’ll try and expand upon some of the key ideas from the paper over the next couple of weeks. Readers of this blog will be familiar with the core ideas which have been translated from business to military jargon. The Navy has to figure out what it needs its robots to do and the ecosystem around them at the same time that it is working on building the systems. That’s what we in business call market risk! The Navy needs to take some steps to reduce that risk. Although the defense acquisition process stacks the deck against the Navy and it has some truly heroic individuals working on the problem, as an institution, the Navy really isn’t putting forth an adequate showing considering we’re talking about the institution’s future.
As a patriotic citizen of the United States–and as someone who understands that the U.S. Navy as much any institution on the planet has guaranteed an era of global trade, peace, and freedom–I really want our Navy to have a bright future. Everyone who studies the naval budget–horses and bayonets snark aside–knows that the Navy isn’t on a sustainable path. Robotics offer the Navy a future even brighter than the past. To have this future, the Navy will have to learn how to manage and implement this technology. It won’t be easy, but there are solid principles for doing this.
Also, readers, I want to thank you. Thank you for being patient with a terrible layout, a casual tone, mixed quantitative/qualitative arguments, poor citation, and irregular tables. I do want you to know that you are reading a blog whose underlying ideas are good enough to go through peer review. I, for one, commend you for that. I hope that the ideas have a practical impact in advancing robotics that improve the world. Now, stop indulging my self-congratulation and get back to putting more robots into the world!
If you do, please make an introduction for me.
I’ve been thinking a lot about the future of aviation lately. I’m trying to write a major piece for Patrick Egan at sUAS News and also thinking about this for reasons related to my business. I’m not sure that we in the unmanned aviation community have done enough to think about what the future of the aviation industry is like. Clayton Christensen’s Seeing What’s Next has a great discussion of disruption in aviation, but even though it was written in 2004, it makes nary a mention of unmanned aircraft. Steve Morris at MLB Company also was kind enough to have lunch with me last week and talk about what he sees coming.
Photo Credit: DARPA / DTIC.mil
Hypothesized Developments in Aviation from Unmanned Aircraft:
-Aircraft building, particularly on the low end will approach a commodity industry more analogous to PCs or cellphones than current aircraft building paradigms.
-Unmanned aircraft companies (both builders and operators) are going to look more like software or networking companies than they are going to look like industrial companies, this has implications for both human resource practices and the capital structure of the companies.
-Scheduling, routing, and planning will be done according to the new paradigm. Currently in aviation, everything is optimized around getting the most out of any particular flight hour or unit of plane time. Unmanned flips this on its head and allows for the aircraft to be treated like other tools that wait on the main job. Don’t know when you’ll need the plane up? That’s okay, we’ll park it in the sky (maybe doing a lower value mission) until you need it. Want to go from point A to B? Great we’ll take you there, directly, when you want to go. We will not worry about crew duty cycles, hubs, or returning the plane to its home base.
-Large airports will loose their centrality to the system–this is not to say they will experience a decline in traffic, but rather, they will not be the key limits on a network-like system of small airfields and ad hoc landing or operating sites (think more like a heliport than an airport).
Predicted Market Effects:
-Differentiation and customization will likely become the norm in unmanned aircraft operations. Most airlines are pretty undifferentiated, but when the business customer is going to tie their ERP system to their aerial service provider’s dispatch system and automatically task aerial missions based on orders, sustained relationships and differentiated services are going to be much more meaningful.
-Data gathering / reconnaissance is likely to switch almost entirely to unmanned systems after the FAA changes the rules.
-Air Cargo is going to be significantly changed, mostly at the interface between trucking and air, with more work being done by air and less by trucking.
-In the long run personalized aviation, whether that is passenger aviation or other types of aviation consumption is going to be the big development. Aircraft of today are like mainframes of the 70′s. Only anointed experts who get to go into the restricted area can operate these machines. Unmanned aircraft are going to be like PC’s, so cheap and easy to use that anyone can have one. The possibilities here are quite remarkable. Data collection, aerial work, cargo, and passenger transport are likely to feel the effects of this shift.
-Long haul, passenger, mass transportation will be the last segment to be effected. The first segments to be effected will be small, light-weight, short duration applications.
So what else?
I don’t really have a clear idea of how this effects incumbents. It will definitely be change. On the one hand, I think that the big guys at the top of the market will be fine. I don’t expect Boeing or the airlines to disappear. On the other hand, I don’t think that axis will have the control over aviation that they do today. They will be more like bus companies and builders in the large automotive industry.
The cult of the pilot will be diminished (as it already is in military aviation) and air travel will continue to be democratized. I believe that we are witnessing something akin to the introduction of the automobile. Prior to the automobile, mechanized transportation had been too expensive and hard to use for anyone that was not an expert. Prior to aerial automation, aircraft were too expensive and hard to use for anyone but an expert. That’s changing, if we can hurry up the FAA, we have an amazing industrial explosion ahead of us.
Despite the tremendous potential for robotics to transform people’s lives, robotics is not nearly as widespread as information technology. Traditionally this has been ascribed to the high capital costs of starting a robotics company, but this explanation does not bear scrutiny[i]. More realistic explanations for the lack of proliferation of robotics are that management in most robotics companies cannot effectively match customer development and product development cycles, and robotic solutions are not easily ported from one industry to another.
The lack of synchronization between product and customer development leads to a much slower and more expensive development cycle than in software based businesses. This is not an inherent problem of robotics, but a product of the management practices employed in robotics versus software businesses. Better management is already leading to falling iteration cycle times. Many of the leading robotics firms on the West Coast have cycle times that are within a factor of 2 or 3 of software best practice.
The more fundamental problem in robotics is that robotic solutions are not easily ported from one industry to another. Solutions tend not to be universal but rather quite tailored to specific industries. As a result, successful robotics firms tend to think of themselves as serving specific industries and being participants in that industry rather than having a core technological competence.
Take the example of Automated Healthcare, one of the first substantial out-of-factory robotics acquisitions. In the 1990s, it developed a solution for automating pharmacy operations at hospitals to reduce labor and more importantly theft and errors in the pharmacy. Although, their solutions was loosely based on handling of computer tape media, they did not view themselves as a material handling and storage provider, they came to view themselves as providers of drug distribution solutions—while this is certainly a valid business direction—the acquisition by McKesson ensured that their great success in drug distribution would likely stay in that industry. I’m not suggesting that McKesson took a technology that was ready to jump industries and didn’t take it across industries. However, once a technology finds a home in a giant healthcare company it is going to developed to serve the interests of the parent company, not the interests of the robotics community at large.
Contrast this with solution providers for information technology. Ten years prior to the start of Automated Healthcare, Oracle was being started as a relational database company. Oracle did not stay fixed on any particular industrial niche, but rather became a database solutions provider to practically every industry that uses databases. This portability allowed Oracle to grow to a thousand times the size of Automated Healthcare, even though material handling probably generates as much revenue as do relational databases. The sad part is that the acquisition of Kiva Systems by Amazon indicates that this trend robotics material handling solutions being aligned to particular industries is likely to continue.
ReThink’s Baxter may point at a broadening of robotics to serve several sub-segments of manufacturing. I hope that Baxter can also become the mail clerk in an office and serve lunch in the cafeteria. Once we get to that point, our industry will really start to take off. My suspicion is that there are enabling technologies and infrastructure that we haven’t developed yet to do this. A truly universal dispatching system and some other key enabling technologies are likely to have to fall in place before this happens. I hope to devote a future post to what those key enabling technologies and infrastructure pieces are.
So I wonder how the EADS shareholders feel about taking a hit for a merger that never happened. Oddly enough, it seems like the German government is actually looking out for shareholders in blocking the deal. Most analysts couldn’t figure out why they were trying to do this. EADS / Airbus does well enough on its own when not making blunders like the A380. BAE does well on its own because it has access to the U.S. defense market in a way that a partially government owned continental firm would never have (see: tanker competition; see also: special alliance). I’m still puzzled by the logic of this.
There are great mergers out there in our field. Pittsburgh robotics firm RedZone has gone on acquisition kick and bought up companies that provide software and solutions for larger diameter pipes to build a complete sewer solution. iRobot has bought Evolution Robotics when it seems like someone else’s mousetrap had some cool features. Both of these create value for the company and have clear economic rationales underlying them.
Let’s hope that robotics can keep our business combinations on the path to having economic rationale.
The lack of women in robotics is quite palpable. I’m not going to quote statistics about the lack of women in robotics because the readers of this blog have been in robotics engineering shops and have eyes—it is that bad. This is a loss for all of us. Not only do the women in robotics often have a disproportionate impact, but also the missing women are indicative of a deeper cultural problem that hurts both male and female participants in our industry.
Beyond the issues of opportunity, fairness, and attracting the best and brightest in our field, a lack of women is an indicator of a deep seated cultural problem that is impairing our efforts to make the world a better place. This insular culture, which robotics shares with many other engineering-centric industries, harms and alienates many men too. The lack of women in robotics should be viewed as a flashing red warning light of a much deeper problem that affects everyone, rather than just a women’s problem.
Another Knowledge Industry Grapples With A Similar Challenge
While I was at Deloitte, the firm was endlessly bragging about its Women’s Initiate, they called WIN. Before the turn of the millennium, the partners realized that they had a problem. At all the ‘working’ ranks of the firm, Deloitte was doing a great job hiring and retaining talented people of both genders. However, when it came to senior managers and partner level positions, the women all disappeared.
What Deloitte discovered when they looked into this problem was not discrimination. The problem was that all the top women that the firm wanted to promote were leaving, even though they were being offered the same deal as the men. Becoming a partner or principal at Deloitte today is arduous, but before WIN it was grueling and brutal. Basically, becoming principal at Deloitte requires a huge commitment to have consulting be one’s life, but before WIN there was pretty much one way this commitment could look. Women knew what was required and were more than capable, but they were saying, ‘Screw this, I don’t want to put up with your abuse just to sit at the top of the pyramid and perpetuate it, I want a family (or an impact in the world, or a life).’ So they were leaving the firm.
Deloitte took a hard look at the firm and decided that the path to becoming partner was counterproductively rigid. They launched WIN and made the workplace much more humane for everyone. The firm started retaining more talented women and they have thousands of women principals today. But more interestingly, they also started retaining more of the talented men who had been leaving too, but ‘just weren’t cut out for consulting.’ Deloitte fervently believes—and their impressive growth in the last decade testifies—that they created a much more effective organization.
What had showed up as a women’s problem was actually a firm-wide culture problem. It turned out that many more men were willing to compromise their performance and risk losing their marriages, families, and personal lives over the firm’s culture problem. There was nothing ‘wrong’ with the women, nothing they needed to be taught or given to help them get ahead. They were just not willing to put up with such an unnecessarily inhumane system, while many men were willing to live with it. As a result, the firm got sub-optimal performance.
The question that Deloitte should have been asking was not, ‘What’s wrong with our women that they’re not making partner?’ Or even, ‘What’s wrong with our men that they don’t help the women make partner,’ it was really, ‘What’s wrong with our men that they’re willing to make partner under sweatshop working conditions?’ I fear that we’re at a similar impasse with respect to the engineering fields.
The Deeper Cultural Problem In Robotics Engineering
Isn’t it odd that we don’t need to make a special effort to interest women in law, accounting, medicine, or the like? These fields have similar intellectual requirements and levels of drudgery to engineering. Yet despite comparatively massive efforts to interest women in engineering, they are not entering the field in anything like the numbers we would expect. And why are American students—including men—not enrolling in engineering fields at the rate that foreign students do?
There is strong social signaling in undergraduate schools that discourages most women and many men from even attempting the study of engineering. Perhaps they realize that getting an engineering degree can be a long, unrewarding slog when compared to the experience that most undergraduates have. Perhaps, they have a sense this narrow technical view is carried on beyond undergraduate. I do not believe that being willing put up with this kind of experience is necessary, and is perhaps counterproductive, to being a great robotics engineer.
Engineering courses are used to screen out anyone who is not willing to devote long hours studying tough courses that do not reward students just for their interest in the subject. Those who are considering law, business, or medicine as an alternative career may not want to risk their GPAs even trying engineering courses. No one would bother becoming a robotics engineer unless she had an innate sense that she had a special calling in robotics. This sense of calling is common among the engineering superstars, both male and female. Though the current method of engineering education may be adequate for the superstars, this method of education likely alienates many people who could make great contributions to engineering.
We now realize that training medical residents more than 80 hours a week is not productive—engineering isn’t different. Silicon Valley is starting to see sunlight, humane schedules, leadership opportunities, and pleasant workplaces that promote social interaction as the minimum conditions for engineering productivity. Colleges such as Olin which have experimented with new (read more people centered) ways of teaching engineering have seen many women enroll. These are all signs that there is another way to do engineering. We are starting to see that engineering can be altered to treat engineers and students like social beings, without sacrificing technical rigor.
By attracting people to engineering who are sensitive to the way that others treat them, we will also attract people who are sensitive to their colleagues, customers, and business partners. Without these engineers who understand their impact on others, engineering will forever be solving the wrong problem. Engineering education and culture are far too important to all our futures to be left only to left-brained males. If we let engineering be a secret club that no woman without an extreme commitment would want to join, we will fail to harness engineering’s full potential to improve our society.
Avenues for further investigation:
How can robotics companies accelerate the production of an inclusive engineer culture?
What benefits and employee flexibilities have measureable results on engineering output?
How concentrated among the ‘usual suspects’ schools is robotics engineering hiring?
Does hiring outside of the engineering department’s immediate network improve or degrade performance of the engineering organization?
Do robotics engineering organizations with more women tend to do better? (Hypothesis: There is positive correlation, but not to be confused with causation.)
Image: Fairchild Semiconductor Successor Companies
Source: Steve Blank’s Testimony to House Science Committee
I was harassing my asset management friends to get them to help me develop the synthetic short instrument I want to put into the robotic stock tracker and we started discussing capital use in robotics. Their question, was, “Okay, if robotics are not inherently capital intensive, why does it take more money to get a robotics company up and running? Isn’t that initial expense an inherent characteristic of the robotics industry?”
In a word, no. The fundamental problem with robotics companies is that management doesn’t have a well developed process for synchronizing customer and product development to use Steve Blank’s terminology. Or put another way, a lot of robotics companies spend a fortune on unnecessary engineering when they frankly suck at discovering what customers want. iRobot has a whole museum dedicated to their market failures. I contend that much of this engineering effort is not necessary to development of viable robotic businesses–this same learning could be done with vastly less expense.
Much of this problem comes from the difficulty of porting over rapid-cycle software development best practices for discovery of true customer needs. Most of our hardware development methodology comes from environments where customer needs are relatively well understood and engineering improvements require a lot of time. Robotics companies still have engineering cycle times (the amount of time to go through the engineering build, test, analyze, decide cycle) that are much longer than pure software companies at least 3 times longer and often much more as best as I can estimate from anecdotal evidence. Companies are very reluctant to reveal this information, so my estimate may be off by several factors, but it is clearly much longer for robotics companies.
I believe that we in the robotics industry need to tailor the customer and product development methodologies to the peculiar challenges of robotics. We will need to reduce cycle times of engineering teams down closer to software levels. 3D printing and continuing improvements in supply chain should make this feasible. Management should make it a priority and a reality, and be willing to incur some expenses to do so. Even more, management needs to do a lot of work to reduce market risk much earlier in the product development cycle.
iRobot’s museum show that it is proceeding to engineering while far too much of what is required to make a viable commercial product remains unknown. This isn’t to pick on iRobot, they may be among the best in the industry, but it is just to show that even the most advanced practitioners in our industry are not very good at understanding customers compared to other industries. Yes, for some customers, such as the government, just doing research can be a viable business model, but this won’t grow the industry. We need to develop ways to reduce market risk and we need to get good enough that we’re showing the software industry how they could learn about customers more and code less.
I don’t propose to give a complete answer on how to do this here, but it is clear that there is more than one path to reduce market risk in a product. Both Intuitive Surgical and Liquid Robotics seem to have taken the approach of building a robot that is so awesome and widely applicable that it will find a use even if it isn’t in the application that management originally intended. Other robotics companies, like Kiva Systems and RedZone (since Eric Close took over), seem to have taken a more traditional minimally viable product approach and iterated upon the original product. Both strategies appear to win in certain circumstances and companies that took the opposite approach in the same markets failed. How do we distinguish which set of market and technical circumstances we find ourselves in?
This interplay between technical and market risk and how it applies to robotics management is only beginning to be understood. Few people have proposed measurable distinctions that would allow management to make decisions about what risks to accept and what risks to mitigate before committing capital to a project. This area of research more than any other will unlock the potential for robotics to become the next tech boom.
I got to spend two days at the Association for Unmanned Vehicle Systems International (AUVSI) North America 2012 trade show last week. As a first pass, the industry continues to grow even as defense cuts start to put a damper on things. Other domains besides air are also starting to look like real possibilities though their manufacturers don’t always see fit to join AUVSI. There is still tremendous excitement about the FAA’s recent moves that seem to indicate real progress in the last year. Privacy concerns are being taken seriously, hopefully early enough to nip the issue in the bud, because the safety issues seem to be close to resolved.
- The show is bigger than ever with more and more companies in attendance. Based on my entirely unscientific method of walking around the show and looking at the booths at random, it seems to me that there are more companies offering services and software, about the same number offering components and hardware, and many fewer trying a hawk new platforms. I think this reflects the reality of customer budgets and also the maturity of the industry. The show didn’t have quite the same clubby feel that I used to remember, but maybe that’s good as well.
- There was real concern and real awareness of the image problems that our industry has. AUVSI is still definitely focused on the air side of things, but ground and maritime are definitely on their radar. There is real determination on the part of the association leadership, both professional and volunteer, to counteract the negative press that the industry has been getting.
- The Brookings Institution and the American Civil Liberties Association (ACLU) were both in attendance to participate in a privacy forum. The Brookings and ACLU seem to have a great deal of common ground with the AUVSI membership at large on at least the law enforcement uses of unmanned aircraft. That is the fourth amendment is still in effect and the same sorts of procedures that govern manned aircraft data collection ought to govern unmanned aircraft data collection. Further, most people here on both sides of the panel were far more personally concerned about being tracked by cellphone data than unmanned aircraft.
- The show is still definitely defense centered. However, there is a feeling in the air that the FAA will actually do something and get unmanned aircraft out in the airspace soon. Lots more booths are starting to have material that touts civilian use and more thinking is going into what will happen after the FAA starts allowing unmanned aircraft in the airspace. Personally, I’m still skeptical that FAA is going to meet its deadlines, but I am certainly hoping that they will.
- Robotics is starting to be used more in the same breath with unmanned systems. Most of the AUVSI education outreach efforts don’t talk about unmanned systems at all (except maybe in an acronym) but do talk about robotics education. I think this is a really positive development. I would like to see AUVSI, the RIA, SAE robotics, and the robotic medical device companies operate under some kind of shared banner. We all have the same workforce concerns, similar regulatory concerns, and face the same kind of backlash whenever we try to introduce new applications. I believe that there is strength in numbers and it is always great to get the back-up that the fallacious counter arguments being trotted out against your robotic application are the same ones trotted out against other robotic applications that have gone on to be successful. Particularly when we go to Capitol Hill to try and get rules changed so that we can compete on level playing field with legacy systems I think that there is value in having the Boeings (NYSE:BA), Intuitives (NASDAQ:ISRG), and Schillings (acquired by FMC NYSE:FTI) of the world support each other.
I must be an Aristotelian active soul, because I have no patience for those who hold themselves up as philosophers but suggest no way to actually live in the world. I have a new post up on Hizook taking the leading intellectual on drones to task for sloppy reasoning–then I suggest a realistic path forward.
Really where are they? Given how many companies are building some form of robot it seems like there should be some proportionally greater number of companies out there forming to implement, service, and operate these robots. Where are they?
Frank Tobe isn’t finding a lot of them forming in his start-up list. Even the RIA seems to have fewer integrators than suppliers. AUVSI has many more Lockheeds and Insitus than VT Services. One could make a case that this is characteristic of the peculiar industries that we’re looking at. The robotic counter example is perhaps the ROV industry which routinely provides the ROV as a packaged service to the off-shore oil and gas industry. But most consumer robotics are still selling to early adopters. Our consumer customers are all people who want tech for tech’s sake, not to mainstream customers that are just looking to solve a problem.
Think about other complex goods in our economy. Computers have a vast cottage industry associated with servicing and maintaining them which is probably as big or bigger than the software industry proper. All vehicle industries whether air, ground, or sea have vastly more businesses in the business of selling the services than engaged in construction of the vehicles–even if constructors do manage to capture a large share of the total revenues of the industry.
I think our industry has a problem. I’ve talked to people at the oil and gas majors and heard straight out that robotics companies are producing robots which have a business case to be used several applications, but they will never be used until a credible organization to is there to provide the robot as a service. It is a bit of chicken and egg, but I think this applies as you go down the chain, not just in large capital projects.
When doing sampling or reconnaissance, customers want actionable data not a fleet of robots or new employees. I know from experience that infantry brigade commanders love having drone imagery of the battlefield, but don’t want to worry about having to support the drone unit, they just want to see the battle. This is equally true in forestry, agriculture, infrastructure, and minerals.
Do I really want to own a cleaning robot? No, I would much rather have a business that comes to my house every week and keeps the place clean whether that business uses humans, robots, or both.
Even in medicine, if I were a hospital operator I’d love to be able to push the risk of owning the robot back onto someone else. If I can pay per procedure and not worry about utilization, maintenance, or obsolescence–I’m much more game to adopt something new.
To date, our industry has done a relatively poor job of making robotics accessible to people and organizations who aren’t willing to organize around robotics and develop organizational competence in robotics. Providing robotics as a service could greatly expand the number of potential customers. I think when we see these businesses start cropping up, we will know that our industry is no longer in its infancy.
There is an interesting post on hiring ads over at Global Robotics Innovation Park. The post sources its data from Wanted Analytics’s post on hiring advertising for robotics. The post headline is that robotics related hiring ads are up 29%. This is good news, but I’m not sure that it is that significant a statement on the health of our industry. It is more a statement on the health of our industry’s customers and the macro-economy at large.
If you look at the trend and the details that they report, it seems that most of these jobs are at users of robotics in manufacturing or medical hubs–not places with lots of robotics builders. The need for a physician/urologist with robotics experience sounds a lot like hospitals are trying to keep those sweet new DaVinci Sis fully utilized. A lot of the other jobs sound like manufacturing is finally finding its feet again. Don’t get me wrong, this is all good for robotics, but it doesn’t mean that our industry is growing relative to the economy at large. Take a look at the job posting numbers for robotics qualifications.
Job Postings for Robotics:
Wanted Analytics also has a similar post on the state of hiring for lean six sigma engineers with a headline about 28% growth. The trend of the two graphs is almost identical. This suggests to me that both the headlines should really be about the macro-economy and what that means for hiring.
Job Postings for Lean Six Sigma:
I think the takeaway from this jobs post is that as our industry continues to insert robotics into more areas of people’s lives, that the changes will not be in tech hubs where robots are designed and built. Rather, the changes will be where the users live. Our impact, for good or ill will be where our systems get used. Adoption and sales are going to be driven by the challenges that our customers face. As an industry we need to start addressing the challenges of the robotics workforce to remove that impediment to adoption. ReThink Robotics is on the right track trying to reduce the hurdles to operating a robot. Still, our society will probably require a lot of system operators and maintainers if more work is to be done by robotic systems. The education system is unlikely to meet this challenge with out partners, I hope that our industry can be such a partner.