Creating a Concept for Next-Generation Robot Business

Creating a Concept for Next-Generation Robot Business

1. Concepts for Next-Generation Robot Business

The most important element to expanding and advancing the next-generation robot industry is the people and companies capable of creating and implementing innovative business concepts that will captivate customers. But just how do you come up with an innovative concept for a next-generation robot business? I would like to talk about the viewpoints to keep in mind in coming up with such concepts.

(1) Create Customer Values

In ?gMarketing Myopia,?h Theodore Levitt?fs famous marketing paper written more than 45 years ago, the author had these immortal words to say about the demise of railroad companies:
?gThey (railroad companies) let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry wrong was because they were railroad-oriented instead of transportation oriented; they were product-oriented instead of customer-oriented.?h
The concept for all new businesses, not just the robot business, must offer unconventional customer values. There must be a focus on what kind of value is being offered to what kind of target market. In many examples of robot businesses, rather than thinking of the needs of their target customers, companies create a concept based on what they want to build or based on what their current technology will allow.

(2) Collaboration Between the Service Industry, Spatial Exploitation Companies, and Robot Technology-related Companies

One important way for a next-generation robot business to create customer values is to have robot technology companies tie up with service companies and spatial exploitation (for example, companies that design and build homes and offices and urban developers) in order to redesign the value that is offered to customers who use the services and spaces. Within industries like the service industry or the spatial exploitation industry, companies are most likely in constant debate about exactly what balance of cost and utility will allow them to come out ahead in their industry. There are many cases of companies losing important potential customers because they are more concerned about competing with other companies than with providing value to the market. There are also many companies that miss important business opportunities because of tacit customs that exist in the industry. By teaming up with companies outside their industry, it is possible to create totally new value packages by thinking outside of the confines of their own industry. An effective way of doing this is demonstrated in the ?gBlue Ocean Strategy?h, in which companies come up with values that are important to both current customers and potential customers. Companies create an untapped market?a blue ocean?by introducing innovations in products or services that create value for the market while at the same time reducing or eliminating features that are less valued by the current or future market.
Compared to the service industry in Europe and the US, Japan has an extremely low labor productivity overall, with some sectors only about 60% of their US counterparts. In future, as the service industry globalizes and as various restrictions are removed, Japanese companies are likely to be overwhelmed by highly competitive foreign service companies that enter the Japanese market. Many Japanese service companies will probably prepare for this by dramatically raising their labor productivity and re-evaluating the value they provide to their customers. This presents the ideal opportunity for robot technology-related companies to tie up with service companies. In the past, pioneering service companies such as SECOM, a provider of home security services, introduced cutting-edge technology on their own rather than relying on the manufacturing industry, and even developed robots in house. With this lesson in mind, the robot technology-related companies must not miss this opportunity to collaborate with service industry companies.

(3) Features of Next-Generation Robots

The features of next-generation robots make them better positioned than any technology in the past to offer value to customers. However companies must extract the particular characteristics of these robots that allow them to create an inimitable, competitive advantage. Because development itself takes considerable time, companies must draw a roadmap showing when they are going to introduce certain technologies and at what level these technologies will be. Below, I will talk about only the main items of the characteristics of next-generation robots.
First, next-generation robots represent a system that integrates a broad range of elemental technologies, the main technologies being sensing, information processing, and mechanical control. If a company is going to make research and technology its competitive advantage, it must avoid the conventional competition of choosing what kind of trade-off it is going to make between utility/efficiency and cost (the competition to choose whether the company competes with other companies by offering high utility at a high price, or by offering an inexpensive product with lower utility and efficiency). Rather, a company must aim to create a new value system by cooperating with another company in a synergistic, win-win relationship.
As for characteristics of next-generation robots beyond the technological ones, these vary depending on the viewpoint. From the viewpoint of functional and emotional characteristics, the following represent some examples. Emotional characteristics represent an aspect of next-generation robots that did not exist in conventional industrial products. Some key ideas here are anatomy and expressions, automation, hyper-human, personality, agent, and interface. If companies are going to offer products and services with anatomy and expression as the functional features, they can stress movements suitable for work done using arms and fingers, or make robots whose movements match those of feet. If they are thinking of emotional features, they can even create robots that use non-verbal communication. Automation and hyper-human represent only functional characteristics. With the idea automation, you can build robots that handle menial labor much more efficiently and reliably than humans. The idea hyper-human represents functions that go beyond what humans are capable of. For example, an ultra-high-speed vision sensor that goes beyond a human?fs dynamic vision can be used for highly efficient inspections and advanced medical diagnosis. Personality represents only emotional characteristics. Such characteristics could be suitable for businesses such as robot pets and toys, as well as for Internet content. The idea of agent and interface characteristics means the functional or emotional roles of the product or service are positioned in next-generation robots as the agent or interface. Of these key ideas, I believe that it is extremely important to position next-generation robots as the interface. For example, having the robots function as an emotional interface can lead to revolutionary new methods in the management of customer relations. As well, by envisaging various interface applications, it will be possible to apply next-generation robots to content businesses such as game and music, the creation of customer network communities, and the provision of Internet services.

2. Case Studies

Apart from some fledgling examples, we still have not witnessed any cases of eye-opening next-generation robot businesses in line with the ideas mentioned above. There are still, however, some case studies we can learn from. I will briefly outline two of these. For further details on these products, please refer to the respective web sites.

(1) Wii

Wii is a video game controller that has become such a hit that stores are constantly running out of stock. Although only a video game controller, it incorporates elemental technologies that qualify it as a next-generation robot. Wii is a next-generation interface that brings together the user and the virtual world. Of particular note is the fact that Wii successfully offers a whole new form of video game that allows entire families and the elderly?a previously untapped market segment?to enjoy it. With Wii, Nintendo has broken away from the conventional competition among game makers, as exemplified by the Sony PlayStation, of competing based on ever-improved performance. As a result, the company has achieved a completely new value package. Wii can also connect to the Internet and Nintendo is constantly adding services like valuable lifestyle information and the sale of products that the company believes these new customers want. Wii detects the body movements of people operating the controller and synchronizes these with the game software. In future, this interface will likely become more personalized and context aware in relation to the individual users. This will lead to robots that are just like partners for their human owners.

(2) Nike+iPod

There are a number of ways to look at the iPod as a successful case study. Here, I will talk about the Nike+iPod campaign held jointly by Nike, Inc. and Apple Inc. The Nike+ line of sportswear and shoes and the Apple iPod are major consumer favorites. Besides their obvious performance factors (Nike?fs light, superbly breathable material or the air soles of its shoes; and the iPod?fs ultra-compact size), they both boast a highly polished product design. Although this is a facet of both these manufacturers, the Nike+iPod campaign developed jointly by the companies is not merely a value package that represents the sum of the two products added together. Rather, the campaign represents both the provision of new value, and the birth of a whole new way to offer such value to customers. The key to Nike+iPod is a miniature sensor that is installed inside the sole of the Nike+ shoes (which probably incorporates an acceleration sensor and personal area network transmission technology) and a miniature receiver attached to the iPod, which work together to not only allow users to listen to music but also know their time, distance, pace, and amount of calories consumed while running. After the run is finished, the runners can upload that day?fs time to their personal web site on the nikeplus.com site using iTunes, where they can keep track of past records and set goals for future target times. What is even more amazing is the Nike+iPod user community on the nikeplus.com web site (numbering a staggering 13.4 million as of March 2007). Here, users can compete with fellow runners who they have never met but who share the same enthusiasm for running, and feel like they are taking part in the world marathon championship every time they go jogging. (For your information, my best time for 5 kilometers was not even in the top 100,000 as of March, so if it were not for this web site I would never think of entering a race.) I have been completely taken in by the Nike+iPod strategy. Even though I know that buying the product will not make me run any faster, from time to time I feel compelled to look at the iTunes Store and buy new Nike+ products or download songs that I think will be good to listen to while running.

3. Conclusion

This year again, the Robot Laboratory intends to hold a robot business startup intensive course, the third such session. We chose 12 people from the first two sessions who expressed the desire to start a robot business. Over an eight-month period, they made a business plan that included a business concept and the means for executing it, and together created a network community of business hopefuls. Participants all have a strong desire to put everything on the line and start a business. From the first session, six participants have gone as far as starting a total of four business ventures. It looks like there will be several companies formed in the not-too-distant future as a result of the second session as well. In the third session, we will have the people chosen create a business concept attractive to the target customers and come up with a business plan that uses next-generation robot technology as their competitive advantage. We are hoping for applications from people currently working at companies but who want their dream of starting businesses to come true, and from people who have already started their own business ventures but who want to get into other business areas as well.