6 River Systems

Overview

6 River Systems is a robotics startup that creates warehouse fulfillment robots and AI systems.  The team builds both the AI software that manages the robots as well as the physical robots themselves.  In most fulfillment warehouses today workers pick items for shipping off the shelves by following a piece of paper and manually picking their route.  In contrast, 6 River systems has the worker or "picker" as they are called in the industry follow the robot as it optimizes for the route while picking items off the shelf and giving them to the robot to carry.  The system dramatically increases the key metric in fulfillment centers of items picked/ hour.  Their system is quick to deploy, easy to use, and generates value from the first day of deployment.  Customers include 3rd party logistics companies, industrial suppliers, traditional retailers, and young eCommerce companies.

6 River Systems differs from Amazon's famous Kiva robots by having the pickers go to the item whereas in Amazon's fulfillment centers the robots actually bring the shelves to the picker.  6 River Systems will never have the throughput of Amazon style systems, as they don’t eliminate walking, but they are able to sell their product with much less equipment and for far less than an Amazon style system.  The company likes to describe this as having 80%  of the benefit of warehouse robotics at 20% of the cost.  

In terms of business model the company sells the systems and software as well as offers a Robotics as a Service option where they lease the robots out.  The Robotics as a Service offering is popular as many companies in this space have thin operating margins and don't like to make expensive capital expenditures.  6 River Systems robots will be used at 30 sites by the end of this year.

The company is based in Boston and has 60 people.

Why I like Them

eCommerce continues to boom and will grow over the coming years globally as physical retail continues to shrink.  Automating fulfillment centers will only become more important as companies try to stay competitive.  6 River Systems has the perfect product offering to replace what today is mostly a manual process.  Collaboration robotics, where both a human and robot work together simultaneously, is the big trend to watch over the next decade in the field.

Like a number of people who follow the technology industry I am very excited for the future of robotics and automation.  The team was kind enough to explain their view that the reasons robotics is starting to see widespread adoption today include the intersection of: 

• The miniaturaization and drop in costs of hardware including sensors, mainly due to the growth of the smartphone industry
• The rise of Open Source software allowing for accelerated software development especially by small startups
• Cloud based computing allowing infinite computing capacity for a low cost 

Disclosure:  I have spoken to members of the team.

Measure

Overview

Measure is a startup that offers drones as a service to corporate customers in the Energy, Telecommunications, AEC (Architecture, Engineering and Construction) and Media industries.  They focus on developing full drone solutions to improve processes at these companies and then sending their own pilots out to the field to perform these services for their clients.  Some examples include capturing live shots for media companies or doing infrastructure inspection. 

Measure does not build it own drones but instead buys them off the shelf and incorporates them with their backend systems and processes.  They are technology agnostic and will use the most optimal products on the market for client's use cases.  Especially unique from a startup perspective is that Measure has a franchise business model to help it quickly cover wide swathes of the country.  

The company is headquartered in Washington D.C and currently has under 100 full time employees.

Why I like Them

I have never quite run across a business model like theirs and I really like the innovation here.  Measure is taking a well established business model of the franchise and combining it with a rapidly advancing technology in drones.  Most startups achieve scalability via software but in this case to scale they need more pilots in the field covering more territory.  The company recognized this and realized in the green field that is drones as a service the fastest way to expand would be to franchise since it requires minimal capital investment.  The drone industry as a whole and demand for its services will continue to grow rapidly (currently globally drones are a $100B+ industry) especially as more autonomy in units is developed and regulations broadened.  Especially huge is what the industry calls BVLOS (beyond visual line of sight) which will allow much faster scaling when regulations allows it commercially.  Measure is at the forefront of these trends and posed to benefit as they take off.

I further like that the company knows who its customers are - it is focused on 4 industries and targets small and medium sized businesses for its services.

Disclosure:  I have spoken to members of the team.

Intuition Robotics

Overview

Intuition Robotics is a startup that does machine learning and robotics focused on interacting with humans and their emotions. They are developing what they call cognitive computing to emotionally connect people and devices.  

Their first product, ElliQ, is a social companion robot for the elderly that also makes use of an included tablet to help communicate with its owner.  There have been over a decade of studies showing loneliness has extremely negative influences on health and leads to premature death in the elderly.  The ElliQ simplifies the elderly's interaction with technology as well as proactively engages with them, acting as a companion.

The team is based in Tel Aviv, Israel with 23 employees.

Why I like Them

I like that they are serving the needs of the growing elderly demographic.  I have long thought that this is a drastically underserved market with low competition and a large customer base whose needs are being unmet.  As the world's demographics grow older, there is a ton of opportunity to automate all aspects of care.

Intuition Robotics is in their earliest stages as a company and have yet to ship even their beta product or find product/market fit.  If the ElliQ itself doesn't work out, the software, patents, data, and learnings the team has developed around natural, emotive robotic communications will be invaluable as every digital device becomes smarter in the coming years.

However, they are headed in the right direction with a lot of work to be done in making humans interaction with our devices natural and intuitive.  Hardware startups statistically have even steeper odds than most startups, but I look forward to following Intuition Robotics progress in the coming years.

Disclosure:  I have spoken to members of the executive team.

INTUITION ROBOTICS FIRST PRODUCT, THE ELLIQ

Drone Racing League

Overview

Drone Racing League (DRL) is a sports and media company that creates and markets drone racing competitions.  The company seeks to leverage fans of traditional high speed sports such as Nascar and eSport viewers.  It designs its own drones that the racers then use to race along elaborate 3D courses.  They successfully utilized social media to grow their fanbase quickly and have secured spots on sports entertainment networks including ESPN.  In its first season DRL claims to have reached 30 million viewers.

DRL is a New York startup founded in early 2015 by a Tough Mudder executive named Nick Horbaczew­ski.  The company's first formal event took place at the end of 2015.

Why I like Them

Along with eSports this is the most innovative new type of entertainment to be created in the last two decade.  It is very fast and visually spectacular with the ability to carry the audience into the action through cameras on the drones or even virtual reality.    

It is hard to launch a new type of sport with an extremely high failure rate but DRL seems to have taken an informal hobby of drone racing and created a sports like franchise around it in a year.  Although fledgling I certainly expect it to become more popular and mainstream globally, especially as viewers of traditional sports such as baseball continue to decline

Disclosure:  All information is from publicly available sources, I have not had any contact with a member of the company or its investors.

Emerging Trends: Automated Food

In the last couple of years a number of startups have appeared in the restaurant industry that seek to automate completely the process of preparing and serving everything from casual meals to beverages.  Several of these startups include:

• Eatsa - A new restaurant concept that is mostly automated and defined by customers having zero interaction with the employees.  Food is ordered online or via in store ipads and when completed appears in electronic cubbies that show the customer's name on them when ready.
• Cafe X - A startup that has built and opened in San Francisco a fully robotic coffee shop.  The actual coffee itself has been reported to be higher quality and half the cost of nearby coffee shops.
• Momentum Machines - A team of roboticists building robotics for restaurants including a high end fully autonomous hamburger machine that can replace 3 workers per machine.  Their mission is explicitly not to build machines to help restaurant workers but to completely replace them.  The startup has plans to launch a burger chain in the next several years.  

As cool as these technologies are, it is critical to keep in mind that they will dramatically replace low skilled human labor.  The US government estimates there are currently half a million people employed at fast food and fast casual eateries.  It is looking like over the next 5-10 years almost all of these jobs will be automated away.  Critics say that consumers prefer human interaction but in my experience a number of people actually prefer not having to interact with another human to purchase a product, especially if an automated system is faster.  In fact, to a number of people (myself included) having no human social interaction when getting food is a feature, not a bug, and something some might even pay an additional amount for.  Larger chains that have kiosks in stores report younger customers will actually wait in line to order from the automated kiosk rather than order from the completely available human cashier next to it.

It is obviously impossible to know without seeing their financials but my guess would be the unit economics for a Cafe X like store are great per order served with faster service, more accurate orders, and less management once the store is setup. Automated produced food has already proven to be faster at dealing with lunch rush hours, sanitation, and food quality consistency.  Simultaneously, some of the labor savings costs can be reinvested into the food itself with higher quality ingredient meals available at lower prices.

Large chains such as Chipotle, McDonalds, etc are certainly watching these startups with keen interest to see consumer reactions and salivating at the chance to cut their rising labor costs.  My prediction is within the next 4-8 years lower end eateries will be 80%+ automated for more efficiency at lower cost.  Human service and interaction will be one of the selling points of mid and high end more formal restaurant dining and even that part of the industry will likely become heavily automated.