It’s not a robot; it’s a tool!
Charlie Grinnell is a practical guy. That’s why he is the co-founder and CEO of Harvest Automation, which is a robotics company in the non-food agricultural space. Wait…practicality and robotics? How do those go together? Because, Charlie exclaims, “there is real work that has to get done every day by people.” And that’s the heart of what drives Charlie and his team.
Harvest does not call itself a robotics company. Very few companies use the word in their description. Saying “robotics” when you are talking about a startup is almost the kiss of death; it’s certainly a path to get a firm “No!” from funders. But today, robotics doesn’t mean C-3POs that pretend to be people, or large boxes bolted to the floor that assist manufacturing; no, today robots are tools, utilitarian tools that help people perform functions.
Finding the problem. The story of Harvest is apt learning for any entrepreneur. Start with a problem, THEN build the solution. Charlie and his team knew that if they found a business opportunity they could build a (robotic) product that fit the market need.
So, that’s what they did: they incorporated, funded their early explorations themselves, and talked with potential customers that had problems that could be solved with automation. “Until we had both the technology and market concepts validated, we wouldn’t ask for other people’s money.” Once they achieved validation they raised just over $5M and, in November 2011, they raised an additional $7.8M led by Entrée Capital of London and Tel Aviv.
Charlie co-founded Harvest with three senior robotics folk from iRobot. One of them, Joe Jones, Harvest’s CTO, was a co-inventor of the Roomba®, the vacuum-cleaning robot, and the Scooba®, the floor-washing robot. Joe was convinced that the next big thing was not going to be in the home space. Charlie tells the story: “Joe was the one who said that we should look for industrial applications. And he should know! Joe is one of the grey beards of the industry who has written a couple of books and gives talks at the key industry conferences.”
Joe set the ‘discovery’ strategy from the beginning: “What we did from the start was go out into a bunch of different industries; we asked where is there a lot of manual labor going on? It’s a misnomer that you have to replace high-value labor. We focused on industries where labor garners slightly higher than minimum wage, like ship building and meat packing. And we asked them if they were having any manual labor problems.” The Harvest team found plenty of problems that needed solving, and after a few months ended up with 15 ideas for robotic products to solve them.
After a lot of prototyping and market research, they ended up in agriculture, in the production of non-food crops in the US. “Labor rates are pretty low in that space, at or just above minimum wage. Your product has to be extremely efficient. It can’t cost a lot or be an exotic technology. As an example, we couldn’t afford to put GPS in our product. We have to save our customers money, increase production, enhance productivity, or solve other problems.”
A big market. Harvest focuses on plants – the types that consumers buy. Such plants are 10% of all agricultural crops. It’s a giant number –$150B annually, and the nursery and greenhouse plants in Harvest’s sector comprise $17B. 50% of production costs in the industry is labor – field workers. These are the types of jobs that domestic workers don’t want to do with immigrant workers in short supply in many places around the country, and getting worse. Much of this early market research was led by Greg Timbol, Harvest’s VP of Sales and Business Development.
The common misconception about this market is that it is slow to adopt new technology but Charlie and his team found exactly the opposite: “These farmers are aggressive business people; they are ruthless efficiency fanatics. While they are initially conservative, once a technology is proven, they are very quick to use it.” Harvest’s early partnerships with customers really helped. Three of the people working with them got so excited that they invested.
Value proposition. Harvest claims that up to 40% of the industry’s manual labor can be performed by its robots. For customers, Harvest’s value proposition is strong. It’s outlined more clearly on their website than any company I have ever seen (see http://www.harvestai.com/horticulture-robots-nursery-greenhouse.php). Harvest provides customers with a smarter way for them to produce their products. They provide a predictable and reliable work force that is sustainable long-term.
Funding. Once they solidified the market and the solution, Charlie raised funds. It was a brutal time to do that in 2008. It took more than a year to close. By early 2010, the company was humming: they had money, employees, and had gone through multiple iterations of robotic solutions with customer input. By summer 2011, Harvest had 11 customers that wrote them checks. That enabled them to close on their Series B.
Charlie’s parting thoughts. “I think that we [the US] need robotics, that it is important and critical for our tech future. Look at how other countries have focused on robotics. The Japanese and Koreans have poured money into the field for years. But in this country, we still suffer from lack of investment. However, maybe now, we have advantages based on everyone else’s experiences. The US needs to adopt a more practical approach to robotics – to extend from the Roomba by one little step. We need to make robotics that do real work and that work with people. And that’s what Harvest is all about.”
Learnings. Charlie summarizes some lessons learned along the way:
- Hook up with a great team. Company DNA is important. Your team helps you in so many ways: customer contact, funding, credibility, network of valuable contacts, etc. You build startups with a team. Start with building a great team!
- Connect with customers early. Do the research to make sure that there is a real problem out there that you (and hopefully only you) can solve. While it’s painful to iterate over and over with customers, it’s essential.
- Don’t lead with technology. Lead with solutions. Use technology as the basis for a product. Lead with the solution to a market problem.
This post is sponsored by Innovation Accelerator, the private side of a public-private partnership with the National Science Foundation to make America more competitive through innovation. This post is part of a series on robotics and entrepreneurship being published in New Venturist Summer, 2012.