6 Common Mistakes Robotics Startups Make and How to Prevent Them

Posted on 28/01/2022 by EmilyNewton

Each year brings a wave of new robotics startups developing cutting-edge innovations. Unfortunately, not all these ventures last. What causes these companies to fail? The case is different for each place, but some mistakes crop up more often than others. The first step toward success is preparing for the industry’s most common obstacles. 

1. Lack of a Proper Business Model

One of the top reasons robotics startups fail is the lack of a proper business model. It is all too easy to get wrapped up in the engineering when developing new technologies. Companies have to remember that their business model makes research and development possible. 

Robotics startups will struggle to get past the concept and testing phase without a proper business model. Investors want to see a long-term plan, not just a prototype. People may find it difficult to trust a company that lacks a well-thought-out course of action.

After all, they are putting their money into a company that has yet to prove itself. The business model proves that investing in the startup’s idea will pay off. The plan and the technology are two sides of the same coin. A successful startup needs both to survive. 

A good business model will include details about how the startup will manufacture and market its robot. What are the real-world applications? What is the niche it is catering to? How will the startup find clients and streamline production? These questions and many more need to be answered in a robotics startup’s business plan. 

2. Lack of a Clear Purpose

Closely connected to the lack of a business model is having no clear purpose. This common mistake often occurs in robotics startups that focus on developing technology rather than solving a problem. While innovation is exciting for its own sake, it needs a clear direction to support a business venture.

Successful robotics startups develop new technologies with clear, tangible applications. The new robot should advance current technology or fill a specific need. 

For example, robotics are the future of the manufacturing industry. A wise startup might identify this as an opportunity for business and innovation. A robotics startup may create a new kind of pick-and-place robot that is highly efficient or feature-packed. It could identify a certain niche that needs specialized equipment. 

Failed robotics startups often develop a concept first and search for a market afterward. One of the primary rules of marketing is that customers define a business’s success. A company that fails to identify who its innovation is for will be aimless when it is time to find early clients. 

Successful entrepreneurs — including those leading robotics startups — start by identifying a need or problem they know how to resolve. That purpose will direct every aspect of their design and development. Build the robot around the customer, not the other way around.

3. Lingering in the Pilot Phase

The pilot phase is the stage of a startup’s growth where it puts its plan to the test. At this stage, the business model and purpose of the technology become crucial. A pilot program is all about seeing how these work in practice. This is either done with a mock client or with a real early adopter. Both allow the startup to study and refine its product and plan before launching. 

Unfortunately, one of the top mistakes robotics startups make is lingering in the pilot phase. This is not always the fault of the startup’s leadership. Sometimes, pilot clients are not forthcoming about their interests or intentions when connecting with startups. This is referred to as “industrial tourism,” where customers are exploring rather than genuinely looking to invest in new solutions. 

Startups can also spend excessive time trying to perfect things in the pilot phase. They end up never scaling up to a true launch. While testing aims to streamline the business model, it is a part of the journey, not the destination. 

One of the top tips for a successful pilot program is establishing clear exit criteria. These are the goals or conditions at which the startup firmly ends the pilot. Committing to this ensures a commercial launch cannot be indefinitely delayed by either the startup or its stakeholders.

4. Waiting to Connect With Manufacturers

Robotics startups tend to focus on getting a prototype operational in the early stages of development. This is important for getting off the ground and attracting investors. However, some companies make the mistake of approaching a prototype like a one-time project. They source parts and materials from miscellaneous suppliers, which is often not feasible on a realistic scale. 

Therefore, when the time comes to create a manufacturing plan, the prototype is not replicable. This is stressful for the startup’s leadership and frustrating for investors and stakeholders. They’ve invested in the prototype and are likely to be disappointed if they hear it cannot be manufactured as they have seen it. 

Waiting too long to connect with manufacturers can leave robotics startups ill-prepared and struggling to retain investors. At the least, creating the prototype should be an opportunity to identify potential manufacturers and suppliers. This allows for a more informed business model, production plan and pricing scale. 

5. Poor Capital Management

Successful robotics startups know how to maximize the value of every dollar. Capital management is crucial to survival when progress is reliant on investors. All too often, robotics startups burn through funding too quickly on the wrong things. Sooner or later, they run out of money and have to shut down. 

For example, a startup might spend too much money hiring unnecessary people or paying for a lavish office. Focus on the most important roles and objectives first. Startups should focus on building up, not out. Expansion comes when it is time to grow, not when the seeds are just being planted. 

Poor capital management can also include behavior like rushing through the R&D process. If something about the robotics startup’s product is not working, that design flaw needs to be addressed. Trying to patch things together for the sake of continuing to progress through the development process will not pay off. Letting issues persist through the R&D stages will waste valuable funding on a system that will inevitably need to be reworked. 

6. Weak Team Culture

Even the best innovations will fail without a dedicated team to develop them. Sadly, this is often the case for robotics startups. Working for a new company can be exciting and energizing, but it can also be highly stressful. There are no guarantees of success and no corporate structure to fall back on. Strong team morale is critical for staying on the right track. 

What many tech startups encounter is burnout, among individuals as well as the larger team. This occurs when people are under pressure for an extended period, often resulting from rushed deadlines and long work hours. Robotics startup leaders need to be aware of the signs of burnout and develop ways of addressing it. 

A positive team culture can go a long way toward preventing burnout. Leadership members should be united and encouraging, and employees should have a clear idea of the startup’s goals and values. Successful teams know when to buckle down and push for success and when to take a break and blow off steam together. 

From Startup to Industry Leader

Making mistakes is part of learning and growing as an entrepreneur. All robotics startups have their highs and lows. The important part is being aware of potential pitfalls and creating strategies for recovering from mistakes when they do occur. Companies that are prepared to face these common challenges will be better equipped to make it to their commercial launch and beyond.

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