As iRobot pitched ideas for toy concepts, Angle got religion on cost control. The catalyst was rejection.
Today, Angle waxes evangelical on the subject. "When people say to me, 'I'm thinking of making a consumer product,' I say, 'Have you had a knock-down drag-out fight over a nickel yet?'" says the CEO. "They either give me a mystified look or they say, 'No, Colin, it's actually a penny.' And if they say it's a penny, I know they understand the consumer-products business."
It was Angle's own grasp of the consumer-products business that led, in 2000, to the idea for Roomba. At first the founders assumed they'd find a partner, like Hoover, to manufacture and sell the device. But looking back at all they had learned from their customers -- how to source materials and ensure safety and manufacture cheaply and design for the mass market and work with companies in the Far East -- "we decided to do it ourselves," says Angle. "Because we could."
Barbara Bund, a senior lecturer at the MIT Sloan School of Management, tells the story of a group of engineers at Quaker State who were invited to observe consumer focus groups discussing the company's motor oil. "This one engineer was sitting in the backroom watching a group in which not one single person understood the difference between synthetic oil and nonsynthetic oil," Bund says. "He walked out of there and said, 'We've got to get smarter focus groups.'"
It's an attitude Angle knows well. As the CEO began carving out the consumer division in 2001, he considered that his crew of tech huggers might run into problems. The company's engineers (60 out of a staff of 100) are a preternaturally brainy bunch: A third hail from MIT, where they worked on everything from ocean engineering to carbon fiber solar cars. Although such people have their own Uncle Morts and Auntie Mabels, they do not ordinarily build stuff for them. But the vacuum-buying public, Angle knew, wouldn't tolerate a learning curve steeper than a flat line.
To prevent a mass case of the cultural bends, Angle seeded the consumer robotics group with five engineers from the toy division, and then had the team observe focus groups of ordinary people who clean things. As engineers worked their way through 20 versions of the product, they brought each iteration home for testing by spouses, friends, and neighbors. The marketing staff also auditioned Roomba in their houses and filled out surveys reflecting the average-joe perspective.
The iRobot engineers responded to the feedback with enthusiasm. "We used to talk about training users to operate the robot, and now that's something that we never want to do," says Jim Lynch, one of the chief designers of Roomba. "We have a picture of this big button that says clean. There were many times someone would grab that piece of paper and put it on the table and say, 'That's the user interface we want. That's how simple we want this thing to be.'"
The focus groups also reinforced the lesson that consumers don't like products that tax their wallets any more than ones that tax their brains. Roomba's $200 price tag is a key defense against competitors. Because only a few of Roomba's manager-engineers learned cost control at Hasbro's knee, the company's new chief financial officer, Geoffrey Clear, spends hours helping them anatomize bills of materials and pointing out where, say, an 8¢ resistor got preferential treatment over a 3¢ alternative.
Clear's hiring -- he's the company's first CFO with a portfolio broader than government contracts -- was another marker along iRobot's road to mass-market-dom. Formerly an executive at Micro-Touch and 3M, he's helping iRobot forecast demand, plan production, and perform all the other financial chores that contract engineers don't worry their pretty little heads about. The CFO also has experience preparing companies to go public -- an outcome becoming legible in iRobot's tea leaves.
In manufacturing, too, the emphasis has been on building iRobot's mass-market chops: The company hired a former Hasbro employee to help establish its Far East operations and a veteran of action-figure producer Toy Biz to run them. And in March, executive vice president Greg White, who hails from appliance maker the Holmes Group, came on board to assume the consumer-products reins and develop iRobot's brand.
Not that iRobot is smarting from its earlier expertise deficit. In fact, the company's first sallies into distribution and marketing were shrewdly executed. It launched Roomba in September 2002 -- in time for the Christmas season -- through Sharper Image, Hammacher Schlemmer, and Brookstone, relying on their appeal to gift buyers and willingness to demonstrate products. In February Roomba expanded into Bed Bath & Beyond and Linens 'n Things and, in April, Target. Those venues appealed, Angle says, because of their willingness to run tapes of the product in action, offer demonstrations, and provide other support more typical of specialty shops.
Meanwhile, a publicity blitz helped build consumer demand. Media Strategies, a Boston PR firm, pitched Roomba's story aggressively to one outlet in each print category: a newsweekly (Time), a national daily (The Wall Street Journal), a technology book (PC Magazine), and so on, sending demo versions to a few chosen reporters. On launch day Angle did 22 TV interviews via satellite from his office. Once Time and shows like Live With Regis and Kelly established that Roomba was news, iRobot swept onto the women's and bridal magazines, the favored distractions of its ultimate audience. "We even got the Good Housekeeping Seal of Approval," says Angle. "How retro is that?"
