Death to Cool

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The company's diversity made it flexible; its intellectual capital made it strong. But to bring its robots to a wider audience, iRobot needed to be one more thing: cheap. For a contractor used to spending tens -- sometimes hundreds -- of thousands of dollars on envelope-shoving prototypes, that wasn't easy. "This is my monument to not understanding the realities of the world," says Angle, taking down from a shelf a plastic-molded tableau in which a half dozen cartoonishly costumed figures surround what looks like a child's book. "It's a storytelling machine. We developed a scripting language so that you could write something -- 'King Croft turned to Jenny and said, "I'll get you"' -- and the characters would actually turn and make the right gestures and the lights would come up and there would be dialogue. It was unbelievably cool."

The management at Hasbro -- to whom Angle presented the prototype in 1996 -- agreed. But then Angle opened it up and showed off the innards. "The unit price on the microprocessors was $60 each," says the CEO. "This flash card was something like $400. Just the parts were $3,000. We thought there was some magical thing where you could give this to the toy industry, and they would say, 'Here's your royalty,' and it would turn up on the shelves at Toys "R" Us for $19.95.

"We were profoundly shot down," he adds unnecessarily.

Still, in 1998 Hasbro agreed to fund an R&D team at iRobot and became its exclusive partner in the toy industry. For two years, as his engineers pitched ideas for toy concepts and technologies, Angle got religion on cost control. The catalyst was rejection: dozens of thumbs-downs on technically elegant -- but way too expensive -- projects such as board games that interacted with players and balls and bats that understood how they were being used. "The first time it happened it was unbearably painful," says Angle. "By the fifth time, the engineers learned to maintain some emotional distance, which allowed them to broaden their attention as to what makes the project rewarding."

What makes the project rewarding, the toy group decided, was seeing it on a store shelf. One product -- the emotionally responsive doll My Real Baby -- finally made it to market in 2000; iRobot technologies turned up in a variety of the toymaker's offerings as well. Those all came about because the engineers promoted cost to priority one. They sourced materials aggressively. They learned to make robotics with plastics rather than with expensive machined aluminum. Detailed bills of material began showing up in every product pitch. To keep itself focused, the group adopted a mantra: "We have no money."

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.

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Leigh Buchanan

Leigh Buchanan is an editor at large for Inc. Magazine. A former editor at Harvard Business Review and founding editor of WebMaster magazine, she writes regular columns on leadership and workplace culture, and she contributes Inc.'s capsule book reviews, "A Skimmer's Guide to the Latest Business Books."

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