Rethinking the Approach to Starting a Next-Generation Robot Business

Rethinking the Approach to Starting a Next-Generation Robot Business

Shu Ishiguro

1. Introduction

In this paper, I would like to present some viewpoints and keys important to starting a next-generation robot business. Although expressions may differ from the content I have talked about previously, the essence is the same. I hope that people involved in the robot business, as well as those with an interest in it, will take the time to read this paper with the aim of changing the way they think about this subject.
Nobody knows the true feasibility and steps to take with a concept or business plan until putting it on the market. The chance of success, however, will increase if a company starts with plans based on clear assumptions, then uses initial market response to a product or service to understand what to do and how to adjust its direction. This paper was written with the goal of assisting in drawing up business concepts and plans for a successful next-generation robot business by reorganizing and presenting the approach to starting up such a business.
Because this paper touches only on the main points, I hope I will have the opportunity in future to expand on individual ideas.


2. Major Approaches

This section will touch on the main points of the discussion.
First, I will define what is meant by next-generation robot and a next-generation robot business. This is important because without a common definition, our ability to get started will be hindered by disagreement and failure to break out of preconceptions of a next-generation robot business.
Normally, people hoping to start a new business don?ft have to make it a robot business. Before thinking about robots, one should already have a concept or plan for a business; robot technology (RT) should be part of the way to implement the concept or plan or to boost competitiveness. For details on how to create a business concept or plan, I recommend reading books on the subject. What I have done is take up the most fundamental of the points to keep in mind and the basic approach to starting a new business.
Some people probably think that they cannot start a new business?even if they try?without an idea to begin with. As to how to come up with such ideas, I recommend books on business idea brainstorming. This discussion presents the useful viewpoints when coming up with ideas and gives the themes for creating product and service concepts for next-generation robots. I would like you to keep these viewpoints and themes in mind as you come up with combinations of ideas for realizing these products and services.
This discussion does not touch on any real case studies. The companies and researchers, and their businesses and research findings, which have been introduced at the monthly discussion meetings at the Robot Laboratory, represent case studies corresponding to the content of this discussion.


3. Rethinking the Next-Generation Robot Business

It's hard to define next-generation robots: there are almost as many definitions as there are people involved in the field. My definition, for example, for next-generation robots has always been as follows: A system that provides benefits by having robots replace people or work together with people.
So, what does next-generation robot business refer to?
There are generally two types. One is a business that develops and provides new service processes and social systems that incorporate next-generation robots (note that next-generation robot refers to the narrow definition; in other words, the image that most people have of robots). This includes, for example, the development and provision of next-generation robots to take the place of humans in doing demeaning, dirty, and dangerous work. It also includes the development of information appliances and equipment and systems that act as the interface between ubiquitous infrastructure and humans.
Another is a business that develops and provides reengineered and integrated systems that offer customer benefits in the form of the elemental technology (RT) that makes up next-generation robots. This includes, for example, spaces in towns and buildings incorporating RT, system developments incorporating RT and the related spaces, and customer-oriented services that incorporate robot systems.
The next question is, what is the next-generation robot industry? I think that the next-generation robot industry should not be perceived as a manufacturing industry. Neither is it simply a service industry. To put it boldly, I believe it is a new form of industry that fuses the system solutions of the manufacturing industry with the service industry. Although Japan?fs strengths of manufacturing and device development are important, at least as vital are areas like systematization and the provision of solutions; areas in which Japan has not traditionally been strong. If Japan can build a business in systematization and solution provision, this will stand out as a key to making the country more competitive in its strong area of manufacturing.


4. Main Points for Creating New Business

As already mentioned, whether it?fs next-generation robot business or some other business, business is business. The next section will talk about things to keep in mind that are specific to next-generation robots, along with viewpoints to ponder. This section lists the points that are absolutely essential when creating a new business. These are things you can find in any book on business, so feel free to skip ahead if you wish.
The first point is to know who the most important customer is and to clarify just exactly what benefits aiming to offer this customer. This is essential to any business and should hardly require mentioning. Note, however, that when asked who the customer is, people may mistakenly think that the target can be easily segmented into, for example, general users or women. (In fact, ?ggeneral users" is not a proper category of market segment).
The second point is whether the business can gain a competitive advantage. In the case of next-generation robot business, because competition can come from many directions?from upstream and downstream within its own industry as well as from outside of the industry?it becomes important point to think not only about competition, but also about cooperation and alliances with other companies.
The third point is how a company builds mechanisms for providing total value. It?fs not what a company can provide; it?fs how a company can provide the total benefits needed in order to satisfy customers. To this end, a company must perfect its value chain by making up for its shortcomings in areas like resources and function.
The fourth point is to have a business concept or plan that will give a company competitive advantages by using resources and strengths to the maximum, and a company must secure the position within a partnership.
The fifth point is to starting up a business at the right time. That is to know if a company is keeping up with trends and correctly detecting changes in the market.
Another point to think about in addition to the above five is how to minimize the risks that are unique to starting a new business. To this end, it is necessary to reduce two kinds of uncertainties.
The first is uncertainty in technological means. When using leading-edge research and technology, it is important to ask questions like whether the fruits of research or the technological means are the best option for achieving the necessary functions, and whether they will become common practice in the industry. For technologies that are key to providing the desired products and services, there is the risk of uncertainty in choosing a technology at too early a stage, as well as the risk of choosing it so late that a company fall behind its rivals.
The second type of uncertainty is in the market. There is uncertainty in whether and when the target market is ready for a new product or service.
The standard way to reduce these uncertainties is not to rush in and immediately try to develop the technology to realize the products and services that meet the needs of the target market or customers, but to work gradually towards the goal by adopting existing technologies to the new market, or by adopting new technologies to an existing market. As well, to increase the chance of success, it is effective to have a continuous cycle of tentative proposals for products and services, and verification of these, with lead users in the eventual target market. Furthermore, as a way to hedge against risk in hardware development, it may be effective to start from a service business in which initial investment is minimal, and then keep an eye on market and technology trends and incorporate new technologies into the service process accordingly (this is called the service substitution process).


5. Viewpoints to Keep in Mind in a Next-Generation Robot Business

The first thing to keep in mind is that the start-up process will still require careful thought and planning, even if the eventual form that this provision of solutions takes involves a high degree of dependency on hardware because the next-generation robot business can be thought of as the provision of system solutions.
As I mentioned in the previous section, the development and provision of hardware requires large amounts of resources, and this means large risk. Particularly in the case of next-generation robots, there is an extensive amount of technology incorporated, much of it advanced technology, and this adds up to increased risk of uncertainty. To reduce this risk and increase the chance of success, as mentioned previously, it is necessary to clearly map out the route to providing the target market and customers with the product and service, as well as meticulously plan the way to enter the business. One way would be to use existing technology in a new market. For example, use industrial robots in the service industry, which is in fact a new market for industrial robots. Furthermore, as a way to enter a business, starting by offering services that will lead to benefits for the target customers eventually should be considered although this may seem like a rather roundabout way to people currently working in manufacturing-related industries. Another effective way is to seek out lead users and make them the springboard to business.
The second point to keep in mind is that, by definition, next-generation robots constitute a system that provides benefits to customers, and people are a part of this system. Here, ?gpeople?h may mean the employees of the companies that provide the benefits, in the form of services, to customers, or it may mean the customers themselves. In either case, it is important to plan and proceed so that what is eventually developed is a system that is an optimal fusion of people and robot technology.
The proportion of a system made up by next-generation robots (or robot technology) will depend on what stage of development and market entry the system is at. The eventual percentage of the system accounted for by robot technology will depend on the degree to which the system planners want the system to be able to do either the work that people shouldn?ft do or cannot do. Apart from a small number of exceptional cases, generally the eventual form of the system will be one in which people make up a certain portion. Currently, there are many actual cases of next-generation robot development in which trials are underway to completely replace people with a certain role in the service process with hardware. Based on the above viewpoint, it may be necessary to rethink a system design, as well as think about to what degree, and at what point in time, the system should be automated.
Next-generation robots are by definition?as well as by their characteristics and the needs of the times?increasingly being incorporated into the service industry. I will now talk about the introduction of next-generation robots and RT into the service industry.
The third point to keep in mind is that it is important to analyze the succession of services in the service industry and rethink the entire process accordingly; in other words, reengineer the service process. What often happens, however, is that people look at the many sub-processes that make up the service provided to customers and then focus only on those areas in which next-generation robots can be incorporated. They then calculate how much it will cost to incorporate robots into only these areas, as well as compare the efficiency and performance of these areas with and without robots. Here is a better idea. For instance, if a company does a detailed analysis of the succession of service processes currently being used and finds that they are made up of 10 sub-processes, the company should try to incorporate next-generation robots (or robot technology) in order to dramatically reduce the number of steps and thus create a service process that is far superior to the previous one.
The last point to keep in mind is to divide the relevant service industry into the backstage, in which most of the work is done by manual labor, and the front stage, in which the work is mainly interaction with customers, and to systematize using next-generation robots (or robot technology) with the aim of making the front stage the final target. However, the front stage, particularly the area of customer interaction, requires advanced capabilities; even if the job is done by people, how much value is added to the product or service will vary greatly depending on the capabilities of the people. Therefore, it will be a long time before we see next-generation robots doing high-level front stage work. However, as mentioned earlier, if we believe that the prerequisite is a system combining people and next-generation robots?a system in which we examine all the service processes and have people do the jobs they are good at and robots those they are good at?then it is possible that in the not-too-distant future we will see next-generation robots incorporated in the front stage.


6. Themes for a Next-Generation Robot Concept

I would like to talk about the key themes for creating product and service concepts that make use of the features of next-generation robots.
(Remote / Active / Smart) x (Sensing / Communication) x Interface device
The above formula means that a next-generation robot is an interface device possessing any or all of the characteristics of "remote,?h ?gactive,?h and ?gsmart,?h plus either or both of the functions of ?gsensing?h and ?gcommunication.?h A concrete concept is made by combining the characteristics and functions of this formula with consideration for the key points and viewpoints expressed in the two previous sections of this paper. One approach to creating new business is the robot business startup intensive course held every year at the Robot Laboratory, where we go into detail about ways to come up with business concepts and ideas.
I have a name for the next-generation robot that meets the requirements of the above themes: ?ginterdependence agent.?h Among the products that can be envisioned from the themes we have discussed here, many are one that most people would not perceive as next-generation robots. An example is the Nintendo Wii, which went on sale in Japan on December 2, 2006. Those people who plan on entering the next-generation robot business should not think of this as merely a remote controller for video games. This product comes very near to what a next-generation robot should be.