jiROBOT: ROBOTS FOR THE HOME Robots have been around for a long time. Detroit has used robots for four decades to build cars, and manu- facturers of all kinds of goods use some form of robot- ics to achieve efficiencies and productivity. But until iRobot brought its battery-powered vacuum cleaner to the market, no one had successfully used robots in the home as an appliance. The issue was not whether it Jas possible to use robots in the home, but could they be produced at a price customers would pay. Until the introduction of Roomba, iRobot's intelligent vacuum cleaner, robots for the home cost tens of thousands of dollars. At Roomba's price point of $199, it was now possible for the average consumer to afford to have a robot clean the house. That in itself is an interesting story, but even more interesting is the entrepreneurial journey of Colin Angle and his company, iRobot. Background Colin Angle grew up in Schenectady, New York, ,here he was raised by his mother and stepfather. He and his three stepbrothers all became engineers, but Angle was the inventorjbuilder of the group. Begin- ning in his earliest years, he built pinball machines and constructed complex pulley systems in the trees of his back yard. While attending MIT in the 1980s, he was drawn to the innovative work of Rodney Brooks, di- rector of the university's artificial intelligence lab. Brooks was a controversial figure in the robotics field, but he served as the inspiration for what would be- cpme some of Angle's most practical inventions. As a student, Angle was part of the group that succeeded in building insect-like robots that could perform sim- ple tasks on reflex. In fact, Angle's creation, Genghis, appeared on the cover of Popular Science. It w by then that his future lay in inventions. The Opportunity I clear In 1990, Brooks and Angle, who by then ha corne dose working partners with their MI col- league Helen Greiner, borrowed from their I redit cards and used bank debt to found iRobot in tiny apartment in Somerville, Massachusetts. The g al of the company was to build robots that would I feet how people lived their lives. At that time, none could conceive of a way to bring robots into dl mes- tic life in an affordable way, and iRobot was still years away from discovering the one application that' ould launch it into the consumer market. To stay ali I ,the company sought government and corporate con- tracts for new product development. Over th next decade, iRobot designed and built a vast I ay of products, from nuclear waste detectors to toy r bots. Angle and his team believed that diversifYin~ their product development skills would insulate I them from the risk of any one customer killing a p ject, something that happened frequently in their i dus- try. Angle also had no idea which of the many I rod- ucts they developed would be the one that ould propel the company into rapid growth, so he d not want to focus the company too narrowly too s: Diversification i ...

1. jiROBOT: ROBOTS FOR THE HOME
Robots have been around for a long time. Detroit has
used robots for four decades to build cars, and manu-
facturers of all kinds of goods use some form of robot-
ics to achieve efficiencies and productivity. But until
iRobot brought its battery-powered vacuum cleaner
to the market, no one had successfully used robots in
the home as an appliance. The issue was not whether it
Jas possible to use robots in the home, but could they
be produced at a price customers would pay. Until the
introduction of Roomba, iRobot's intelligent vacuum
cleaner, robots for the home cost tens of thousands of
dollars. At Roomba's price point of $199, it was now
possible for the average consumer to afford to have a
robot clean the house. That in itself is an interesting
story, but even more interesting is the entrepreneurial
journey of Colin Angle and his company, iRobot.
Background
Colin Angle grew up in Schenectady, New York,
,here he was raised by his mother and stepfather. He
and his three stepbrothers all became engineers, but
Angle was the inventorjbuilder of the group. Begin-
ning in his earliest years, he built pinball machines and
constructed complex pulley systems in the trees of his
back yard. While attending MIT in the 1980s, he was
drawn to the innovative work of Rodney Brooks, di-
rector of the university's artificial intelligence lab.
Brooks was a controversial figure in the robotics field,
but he served as the inspiration for what would be-
cpme some of Angle's most practical inventions. As a

2. student, Angle was part of the group that succeeded
in building insect-like robots that could perform sim-
ple tasks on reflex. In fact, Angle's creation, Genghis,
appeared on the cover of Popular Science. It w
by then that his future lay in inventions.
The Opportunity
I clear
In 1990, Brooks and Angle, who by then ha
corne dose working partners with their MI col-
league Helen Greiner, borrowed from their I redit
cards and used bank debt to found iRobot in tiny
apartment in Somerville, Massachusetts. The g al of
the company was to build robots that would I feet
how people lived their lives. At that time, none
could conceive of a way to bring robots into dl mes-
tic life in an affordable way, and iRobot was still years
away from discovering the one application that' ould
launch it into the consumer market. To stay ali I ,the
company sought government and corporate con-
tracts for new product development. Over th next
decade, iRobot designed and built a vast I ay of
products, from nuclear waste detectors to toy r bots.
Angle and his team believed that diversifYin~ their
product development skills would insulate I them
from the risk of any one customer killing a p ject,
something that happened frequently in their i dus-
try. Angle also had no idea which of the many I rod-
ucts they developed would be the one that ould
propel the company into rapid growth, so he d not
want to focus the company too narrowly too s:
Diversification in those first years enable

3. company to stockpile a range of patents that
become the basis for the product for whic they
became most famous. Angle reasoned that he had to
make certain that customers did not end up 0 . g
technology that his company might need in I ture
463
464 CaseStudies
.,
Ii
!! product development. For example, in 1992, he sold
the rights to the underlying technology on a robot
called Grendel to separate it from technology that
would be used to take the company in new directions.
Prior to this, iRobot did not control the patents for
products it developed for large customers, as is typical
with smaller businesses. However, after selling the
Grendel rights, Angle decided that henceforth the
company would retain all rights to the technologies it
developed. As it turned out, a cleaning technology
that iRobot had developed for Johnson Wax Profes-
sional and tiny processors developed for Hasbro, the
toy company, were critical components ofRoomba.
Shall We Dance?
iRobot had secured two parts of the three components
of its growth strategy. It had become a flexible com-
pany that could develop products in a broad area, and
it had built a strong base of intellectual capital. Now,
the only thing missing was a way to bring robots to the
domestic market economically, and that was no easy
task. Angle had already experienced the agony of de-

4. feat on a proposal for Hasbro. In 1996, iRobot had
developed a storytelling machine with characters that
moved and gestured while they talked. It seemed like
this could be the next big toy until they showed Hasbro
management what it looked like inside. It was a mas-
terpiece of engineering, but the microprocessors cost
$60 each, the flash card cost $400, and the parts all to-
taled ran about $3,000. Hardly a likely candidate for
the next Christmas season! But Angle had learned a lot
about the consumer products industry from this e:Al'e-
rience and what it would take to develop successful
products for the toy industry. It was all about cost-
saving pennies so that the toy company could meet its
competitive price point in the market. iRobot became
an exclusive partner to Hasbro, and over the next two
years, it proposed dozens of new toy projects, most of
which were turned down because they were too expen-
sive to make. Finally, in 2000, iRobot saw one if its
creations, My Real Baby, hit the store shelves.
It was, in fact, this new understanding of the con-
sumer products business that inspired the idea for
Roomba. Originally, they had considered partnering
with a large vacuum cleaner company like Hoover,
but one of the reasons a smaller company partners
with a large established company is to take advantage
of their access to suppliers. The iRobot team had
become experts in sourcing product components
efficiently, so they chose to do it on their own.
Developing Roomba
The engineers at iRobot were unaccustomed to build-
ing mundane products for domestic use, so to avoid
wasting the talents ofhis most brilliant engineers, Angle
created a new division in the company that would de-

5. sign and launch these domestic products. Technologies
developed from contract work now found a home in
Roomba. For example, the crop circle algorithm it uses
came from a technology used to sweep minefields. The
company worked its way through 20 iterations of
Roomba, bringing each version home to spouses and
relatives to test. One thing was clear: this device had to
be easy to use. In general, consumers won't tolerate a
steep learning curve, so iRobot's engineers pictured
something as simple as a large button labeled "clean."
In fact, they ended up with a button that provided a
choice of "S," "M," or "L," for small, medium, or
large (denoting the room size). The customer puts
Roomba on the floor, turns it on, and presses the size
button. Then the robot plays a tune and starts sweep-
ing the floor in ever-widening circles. When it runs into
something, it heads offin a different direction. The cir-
cle algorithm alternates with a wall-and-furniture-hug-
ging algorithm and straight lines. Sometimes at random
it will simply go in one direction until it runs into
something. It runs on a nickel-metal-hydride battery
that gets recharged on an overnight charger. It also
comes with an invisible wall that projects an infrared
beam if you need to keep the robot confined to a par-
ticular area. It even has three different backup systems
to keep it from fulling down stairs.
From its experience with Hasbro, iRobot had
learned to be extremely stingy on costs, down to the
penny; they knew that a price tag of $199 would
keep competitors at bay for awhile.
Market Entry
iRobot's shrewd entry strategy saw Roomba hitting
the market just in time for the Christmas season
through such gift outlets as Sharper Image and

6. Brookstone. These stores are willing to demonstrate
products, something that is critical with a new prod-
uct. Although Roomba was the first product from
iRobot, sales were $15 million in 2002 and soared to
$50 million in 2003. This was accomplished on five
rounds of venture funding totaling $27.5 million.
iRobot also hired a Boston public relations firm
to conduct a media blitz to create customer aware-
ness. Stories appeared in the Wall StreetJournal and
Time and on 1V shows like Live with Regis and
Kelly. Women's magazines were another popular
media venue. But all advertising is not good adver-
tising. Angle had to be careful that Roomba would
not be perceived as a novelty-a toy-but rather as
an everyday appliance. Therefore, the company
chose not to refer to Roomba as a robot in any of its
advertising or promotional materials. Instead it was
described as an "intelligent floorvac system." These
high-tech engineers left their techie egos at the door
and resorted to consumer terms, but the market dic-
tates what companies should do. Once iRobot found
out that 60 percent of its customers were naming
their Roombas, the company began using the term
robot on its packaging. Angle realized that once
competition entered the market and was able to
achieve a lower price point, it would be important
to customers to know that their robot vacuum came
from a robot company and not a vacuum cleaner
company.
The Future
iRobot continues to do contract research. The fed-

7. eral Defense Advanced Research Projects Agency
(DARPA) has funded its Robot's Swarm project,
where it is working on getting robots to coordinate
with each other. Called "PackBots," they are used
by bomb squads for unmanned reconnaissance and
bomb disposal. By 2006, iRobot had over 900 of
these rugged bomb-busters spotting landmines
and searching caves in Iraq and Afghanistan. Al-
though weighing only 68 pounds, the robot has an
arm that can stretch more than six feet, and it can
lift 30-pound objects in its "hand." Angle can see a
future for this technology in the horne as welL Pic-
ture a scenario where robot appliances decide
among themselves what should be cleaned first.
Case5 iROBOT: ROBOTS FOR THE HOME 465
But are consumers willing to go that far with do-
mestic robots? Are they willing to give them deci-
sion power in the home? That remains to be seen.
In November 2005, iRobot's PackBot robots
opened trading on the NASDAQ exchange, mark-
ing the first ever opening by a robot and the first
profits (in 2004) for a company in business for
15 years.
iRobot is now facing an emerging challenge from
conventional vacuum manufacturers, who have
started teaming with robotics researchers to develop
competing machines. The company is rapidly turn-
ing out new products based on its core technology
to stay ahead of what will surely be fierce competi-
tion. In 2005, the year the company went public, it
released Scooba, a floor-washing robot. In 2006, a
workshop robot designed to pick up small objects
such as nuts and bolts was released. And in 2007 the

8. company offered iRobot Create, a hobby robot;
Verro, a pool-cleaning robot; and a new line of
vacuum robots. But is this enough to grow the com-
pany to a level where it can withstand the onslaught
of intense competition that is just at hand? With
consumer robots accounting for at least half the
company's revenues, this is a serious concern for the
founders. In 2006 with 371 employees, the company
saw revenues of about $189 million and net income
of $3.56 million. But competitors like Electrolux
and Samsung Electronics are weighing in with re-
sources that total $16 billion and $79 billion, respec-
tively. Is iRobot doing what it needs to do to grow
its markets and prevent being comrnoditized by the
competition?
Sources: Ulanoff, L. (May 16, 2007). "Robots Embed-
ded in Warfareand Our Lives." PC Magazine, http://
www.pcmag.com; Storrs, F. (May 2007). "Heavy
Mettle." Boston Magazine, http://www.bostonmagazine
.com; Jewell, M. (November 10, 2005). "Investors
Buy into Consumer Robotics as iRobot SharesDebut."
Associated Press; Buchanan, L. (July 2003). "Death
to Cool." Inc. Magazine, http://www.inc.com;
"Mechanically Inclined: These Entrepreneurial Robo-
philes Take Their BusinessWhere No Man Has Gone
Before," Entrepreneur Media) Inc., http://www
.findarticles.com; Garfinkel, S. (October 9, 2002),
"iRobot Roomba," MIT Technology Review, http://
www.technologyreview.com
466 CaseStudies
Discussion Questions

9. 1. What are the unique challenges facing a new
product development company?
2. What role did patents play in iRobot's strategic
plan?
3. Evaluate iRobot's approach to the consumer
market. Was it effective? Would you have done
anything differently?
4. How will iRobot maintain its lead in the
consumer market?