Neato to upgrade software via USB for vacuuming robot

  Last summer, Neato Robotics came out with it's robotic vacuum cleaner XV-11, which is equipped with a low-cost laser rangefinder that enables the robot to map the room and go around cleaning without hitting the furniture. As the company ramps up manufacturing and addresses the initial quality issues, it is also preparing to release software upgrades utilizing the robot's USB port. GetRobo visited the company and talked with CEO Max Safai to learn about the latest.  (This interview was conducted originally for a column on the Wall Street Journal Japan. The following is an edited transcription of the conversation.) 

 

(Photo: Neato Robotics CEO Max Safai) 

Q. What is the initial feedback you are getting from your customers?

A. Overall, the feedback has been overwhelmingly positive. I’m very happy about that. Our product is a first of its kind. The customers cannot believe the fact that it’s a smart robot. It doesn’t just bounce around and they are very surprised by the cleaning power it has.

 If you look at the demographics of people who are really happy with the product right now, pet owners is the major section. They can’t believe how much hair it picks up and therefore love our product. They are also very impressed that hair does not wrap itself around our brush. All the other vacuuming robots - and also the upright vacuum cleaner - they need a lot of maintenance. People love that our robot requires little maintenance. 

Q. I’ve read the reviews on Amazon.com and you seem to have many very happy customers but also a few very unhappy ones. How are you addressing the feedback from the unhappy customers?

A. The only difference between a happy customer and an unhappy one is that the unhappy customer got a product that was not manufactured to our quality standards.

 To introduce our new product, we had to design all the manufacturing fixtures to produce the product. When one is making a product that is rather unique, you go to the manufacturing floor and they don’t know how to build it. How do you assemble it, test it and make sure of the quality? We have designed a lot of the test fixtures and assembly fixtures and actually wrote a lot of the test software. And we had to go to China and train the factory on how to use them. So they’re learning. It’s not that the product is not ready to be produced, but that the manufacturing floor has a learning curve to digest as well. So we are addressing it.

 And of course, what contributes to the disappointment (of the customers) is that these are early customers and they are all very enthusiastic about the product and they have high expectations. They placed their order and sometimes they waited up to 4-8 weeks to get it. Finally the robot comes, and it doesn’t work. It’s a normal human reaction to become upset.

 But if they call the company, we basically replace the robot - no questions asked. We ask them to send the robot back and then we send them a replacement. I’ve asked everybody here (at Neato) to test the replacements before they send them out so that we are 100% sure of the quality of the second product that the unhappy customer is getting. 

Q. Can you share any sales numbers? 

A. No, but thanks for asking. 

Q. The Roomba is selling well in Japan. Any plans for Neato to enter the Japanese market? 

 

A. Actually, I’m very excited about Japan. I would love to enter the Japanese market but I want to make sure my product is just right. We need to do a lot of testing for the Japanese market. For example, we don’t know yet how our product will work on the tatami floors. Our product has a soft elastomer brush. On one hand this has to be strong enough to lift the debris into the cleaning subsystem. But on the other hand, we want to make sure that it doesn’t damage the tatami.

 Also I think the Japanese consumers are very sophisticated. They are a lot more demanding than an average customer (in the U.S.).  A Japanese customer is quite used to electronics and gadgets and they have a high expectation of performance, so if you are not ready you shouldn’t go to Japan because if you ruin the name and ruin the brand, then you cannot recover. So we’re waiting a little bit right now. I want to see how the product performs in the U.S. market and get a lot of feedback from customers and address them first.

 I don’t want to go to Japan too early but we’ll get to the Japanese market by the end of 2011. I’m sure of it. 

Q. As CEO of Neato, what is your biggest challenge in 2011.

A. For us, the biggest challenge is to control quality. It’s a difficult product to assemble and to put together.

 We have provided a USB port in the back of the product. In February we are going to make a release of software, and people can connect the robot to the computer via USB and go onto their browser, go to our website and click on a special tab that will allow a re-flashing of the mother board. The motherboard will be upgraded to new software, new intelligence and some improvement on the user interface, etc.

 Our plan is to do 2 releases every year on software. So the customers can actually upgrade their own robots as we learn from feedback and we address (the issue).

 In February when one upgrades one’s robot, the robot will tremendously improve in terms of its behavior, recognition of base, not getting lost, etc. And we’ll keep improving. And it will be free. We want to be a very good company and make sure that people are very happy with their purchase and our company. 

Q. That makes me think of a future business model. Once your software is stable, you can start adding new features which can be purchase by your customers. 

A. Correct. That’s the thinking over here. As we develop more features, we could have options that customers could purchase. Some of the options can be fun options – like music, sounds, etc. Some of the options would be more of a systematic approach to cleaning or preferences. Maybe one of educational step where you can teach a robot certain things and the robot will remember - higher intelligence. But always, the base platform upgrade will be for free.

 Q.  How many people are in your company now? 

A. We now have 25. We’re hiring a few people right now. We are starting a small local office in China so that we have a better control of quality. We want to be right near the factory so that if something happens we can immediately respond. Quality is very important to me. By the end of 2011, we may be in 30-35 people.

 Q. Are you seeking any additional funding? 

A. I’m not looking for more funds right now. I cannot tell you whether we will in the future or when. 

Q. Any update on licensing the laser distance sensor? 

A. A lot of people have asked us about this, including some of our competitors. But the answer right now is no. We need to focus on our own company’s goals. Once we are solid then I can license things out. Even from a business standpoint, when you are only 25 people, focus is key. You have to have absolute focus on your objective. 

Q. How do you view iRobot as a competitor? 

A. They deserve a lot of credit for being a pioneer in the market. They started the market to great extent. They educated everybody about the robotic vacuum. People know what it is. So we owe them a big thank you. They’ve done a really good job.

 Where they fail in my opinion is that they never evolved the product. There is no fundamental evolution of the product. That’s where they stumble a bit. Any company that doesn’t evolve will eventually get themselves in trouble. 

Q. What about the markets outside of Japan, such as Europe and Korea? 

A. We’re planning to enter Europe in 2011. And we plan to enter the Asian market in 2011 also. So next year is going to be an expansion year for us.  But right now we are trying to get our manufacturing quality under control and listen to the customers. We want to make sure we understand everything they are saying, take that feedback and put it into our product before we expand even more.