Death to Cool
For years, iRobot designed stuff cool enough for the Sci-Fi Channel, but its new product sells on the Home Shopping Network. Here's how a boutique high-tech firm broke out by reinventing itself as an appliance company.
Published July 2003
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COMMENT ON THIS ARTICLEUnlike nature, the media adores a vacuum.
Specifically, the media adores Colin Angle's vacuum, Roomba, a sleek silver saucer that last autumn whirred its way onto the year's best-products lists of Time, Business Week, and USA Today, among others. With the publicity helping to drive sales of tens of thousands of units over the holidays, Roomba, from iRobot Inc., had the kind of product launch most entrepreneurs would sell their grandmother up the river for. "We were No. 6 on Entertainment Weekly's ranking of hot topics, right under Angelina Jolie and Prince Harry," says CEO Angle, awe vying with amusement in his voice. "Now that is powerful."
It's also an awful lot of heavy breathing for a category that traditionally has delivered all the sex appeal of baggy support hose. Roomba's va-voom quotient derives from the fact that it's a robot: It uses artificial intelligence and infrared sensors to sweep rooms on its own, without requiring some weary soul to slog along behind it. The potential market includes seniors, the disabled, and anyone who lives someplace that has floors. "When the fertility drugs kicked in and my wife gave birth to quadruplets I knew we'd have our hands full keeping the house clean," confides one reviewer on Amazon.com. "This little marvel tools around the house providing an unceasing blanket-sweep of our floors."
The vacuum is helping its makers clean up as well. Roomba is the first offering from the nascent consumer products division of iRobot, which expects to top $50 million in sales this year, compared with $15 million in 2002. The company, based in Burlington, Mass., has also raised $27.5 million in five rounds of venture funding, most of it after the technology market fizzled. "They've got sales, they've got momentum, which in this economy is staggering," says one private equity investor who is not involved with the company but is familiar with its plans. "They've had a huge hit with Roomba, and that attracts a lot of people."
Until recently, however, iRobot looked nothing like a mass-marketing sensation waiting to happen. For 13 years it built its reputation as a boutique engineering contractor, designing products that were too cool for schools of them ever to be produced. There was part of a teeny-tiny robot -- less than a centimeter long -- developed for the Japanese Ministry of Trade. A crab-walking minesweeper for the Department of Defense. A rugged oil-well-repair bot for Baker Hughes (now Halliburton). The company was an idyllic environment for engineers eager to grow and learn and not get rich. "We were getting contracts from people who wanted us to do something they found interesting but only wanted one of," says Rodney Brooks, iRobot's chairman and cofounder. "It was like being an artist working on commission."
But iRobot's founders had this dream: to place in every home robots that are cheap and task-specific and labor together with the unfussy coordination of Snow White's dwarves to clean your carpets, and perhaps in the future, wash your windows, mow your lawn, or mop your floors. It sounded like a job for a consumer-products giant like Sony, not a 100-person firm with no manufacturing experience, marketing exper-tise, channel contacts, or understanding of consumers. Perhaps the most daunting obstacle was iRobot's techno-elitist culture. "When Hasbro asked us to make a robotic velociraptor to tie in with Jurassic Park III, the engineers came to me and said, 'We can't possibly work on that. It's too dull,'" recalls Angle.
If the shift to mass marketing is not done well, it can mean death to the company that bungles it.
Many innovative tech companies have stumbled lately on the way from conception to market. Others, like digital-video-recorder pioneer Tivo, struggle to transform their ideas into a marketing message everyone "gets." Meanwhile, small R&D shops that supply brand-name manufacturers rarely break out on their own -- and for a reason. The shift iRobot had to make, from high-cost prototype design to every-penny-counts mass production, "is a hugely daunting transition," says Robert Bruner, executive director of the Batten Institute at University of Virginia's Darden Graduate School of Business. "If it's not done well, it can lead to setbacks or even the demise of the company that bungles it."
Angle, 37, embodies the argument for nurture over nature.
The boyish, lank-haired CEO was raised by his mother and engineer stepfather: three stepbrothers also became engineers. His biological parents, brother, and two half brothers, by contrast, don't count a gearhead among them. Growing up in Schenectady, N.Y., Angle displayed early signs of what he would become, building pinball machines and crossbows and erecting elaborate pulley systems in the trees of his backyard. "When I was two years old you could put me near a stream and I'd dam it," says Angle. "I invented thousands of things, none of them useful."
