ViaBot co-founder and CEO Gregg Ratanaphanyarat develops robots that tackle what he calls “the three Ds”: jobs that are dirty, dangerous and dull.
The company started with parking lot sweeping and is expanding the utility of its main machine, called RUNO (“robot one”), to include other services like license plate scanning. That flexibility is key to Viabot’s ability to scale, and the robots as a service business model (RaaS) is helping the company to iterate quickly, he said.
Ratanaphanyarat, who is from the Bay Area, came up with the concept for the robot while attending Penn State. He’s been refining it ever since with co-founder Andre Ding and support from advisors.
In this interview, he discusses:
- The genesis of ViaBot.
- What it’s like working with VCs.
- The RaaS business model.
- Who’s winning the global robotic race.
Russ: Have you always taken an interest in technology?
Gregg: As a young kid I was always really interested in machinery, especially airplanes. An airplane is a metal capsule with engines and computers that flies 400 people 40,000 feet in the air at 600 miles per hour. That’s art. That’s how I always saw it.
My mom and dad are engineers and would give me kits with motors and wires that I could put together to make small speakers or add lights and sound to my toy box.
Russ: How did you get into robotics?
Gregg: My family moved to the Bay Area from New York when I was really young, so I lived the majority of my life here. I did some tech challenges in middle school and then went to Henry M. Gunn High School, where I was one of four sophomores accepted on a 50-person team.
There was a seasonal competition that changed every year. You build a robot in six weeks and then you play some game, like shooting a basketball or balancing on seesaws. One year we created a mini-robot that could climb a pole.
I was learning all the different aspects of robotics: modularity concepts, vision tracking concepts, autonomy, teleoperation, different types of drivetrain methods.
It was around this time that I started realizing, “Oh man, this is the future. This is like the next iteration of a washing machine, where essentially it’s a much smarter machine and a much smarter tool.”
Russ: Did you always want to start a company?
Gregg: I never really thought about starting a company. Going away to Penn State for college opened my eyes to a problem that I hadn’t seen before.
I watched as people spent the entire year taking care of their yards: mowing in the summer and spring, raking leaves in the fall, and clearing snow and spreading salt in the winter. I decided to try to make a robot that did those tasks.
I met my co-founder, Andre Ding, at Penn State and we started hashing it out. We took prototypes to maker fairs and a couple conventions out of state.
At the time, the robot was essentially a rectangular piece of metal with a bunch of tools in it; nothing like what it is today. It had wheels and was modular, so you could plug different attachments in.
That summer we decided we weren’t going to do any internships and would just work on the robot. I came back to the Bay Area for two weeks and pitched my friends on what we were doing.
Russ: How did your first pitch go?
Gregg: Looking back, it was a little cringy. I made 30 to 40 people sit through a 30 minute rambling about why robotics is cool.
Everything I talked about was about tech. I wasn’t focused at all on the other aspects of the business that in some ways were even more important: the business model, the market strategy, why people would rely on this idea.
Nobody gave us money from that pitch, but it was the first step towards trying to do a business. And I ended up pulling in some future colleagues through that initial meeting.
Russ: How did you get your first customers?
Gregg: When we first got started, we got accepted in a hardware accelerator called HAX and got to spend 90 days in Shenzhen, China. We’re actually still there today because we set up a subsidiary.
Right before that program started, we had reached out to potential customers, including golf courses and management companies for shopping malls. A property management company told us, “We have accountability problems and cost problems. If you can make this robot larger, we’re in. We want the service.”
Up until that point, we had been targeting the consumer market. We ended up pivoting to a B2B model that also reflects some of the new RaaS models.
Russ: Tell me about the robot.
Gregg: We offer facility maintenance and management services.
The robot is built to be multifunctional. We started out with sweeping parking lots and cleaning outdoor spaces, going after the three Ds: dirty, dull and dangerous jobs.
We’re now adding additional services and working very closely with our enterprise clients to help them maintain their facilities in other ways.
Security is one realm we’re in the midst of getting into. Our robots will scan license plates and report suspicious activity — for example, if a car’s been parked in the same place for several days.
Russ: Are you following a RaaS model?
Gregg: Yes. One of the things RaaS is good for is lowering the barrier to entry. You can keep the costs very low, which then makes the robot more adoptable — versus taking a big risk, spending millions of dollars at a time to purchase robots that may not have been perfected yet.
Other companies might spend years developing a robot just to scan license plates. Then the market says, “You can only charge $1,000 a month for the service” — but you need to charge double or quadruple that to make the math work.
In our case, we’re doing a service that they’re already paying for daily, weekly or monthly. We’re sweeping, and then we have the ability to go ahead and also scan license plates because the sensor is built in. As a result, we can charge a lot less for that service and the numbers make a lot more sense for the customer.
At the same time, we brainstorm different business models because we believe that, like robots, the models surrounding them can continue to evolve to better help propel robotics.
A lot of the wildly successful robotics companies we see today have struggled with cash flow problems. In the traditional sense of charging monthly where a user can commit monthly to using a service, many robotic companies, including us, have found that we have to charge an upfront payment of one, two or even five years. It’s still RaaS, but with a little less flexibility.
Russ: Where did Morado Ventures come into the picture?
Gregg: After HAX we raised a seed round and got introduced to Morado Ventures in that process.
Morado Ventures helped us in a big way. We worked with Ash [Patel] and also with Henry [Sohn], who’s experience and network in operations has come in incredibly handy. Henry’s also an advisor and was one of the early employees at Yahoo! He has so much experience negotiating contracts.
We enjoyed a great partnership with Grit Ventures and Morado. They helped us get in the game and figure out how to turn our product pilots into clients. They presented things like using metric-based contracts to help us work through negotiations.
Morado’s experience with different business models in robotics helped us come up with the right approach for our company.
We still do that today. We’re constantly going to Morado to brainstorm different models, because with robotics it’s not one-size-fits-all and the models are still changing.
Russ: What type of experience paid off in the early stages to get your first customers?
Gregg: Henry’s experience as an operator and advising companies was tremendously helpful.
We were talking with massive global real estate companies that brought their own procurement teams, and I didn’t even know what “procurement” meant.
Henry was at my side during negotiations. I don’t think I would have ever expected that from a VC, but it was tremendously helpful.
He knew at every step what was going to happen. He’d say, “OK, you’re going to negotiate a certain number and then think you’re done. But then they’re going to toss you to the procurement team to push the price down even more.” And that’s exactly what would happen.
Russ: What is the impact of that VC support?
Gregg: I think the main thing it does is it gives me a lot more options.
Robotics is in a place where it’s either going to be everywhere or it’ll be turned into a gimmick for the next few years until another wave of roboticists jumps in.
It would be really hard for me to navigate without the options that they bring to the table.
I think we’re really lucky with our VC group that they’re so helpful, to the point that they would actually come negotiate with us at the table.
Russ: What’s a challenge robotics companies face today?
Gregg: We’ve seen a lot of robotics startups get stuck in a pilot phase. It’s crazy: Companies raise massive $20 million rounds and then end up stuck on a pilot for years. We wanted to avoid that.
With our investor partners, we learned about metric-based MOUs, or memorandums of understanding. Starting out when we just had a prototype to offer, we’d offer to do a pilot for free. We’d constantly show them what the robot could do and iterate with them.
We’d also figure out who the decision makers were in this company and what type of metrics they needed to make the decision. Then we’d build that into the MOU.
For example, an MOU for sweeping parking lots might say, “If we can hold this much more debris and we can pick up these types of water bottles, then we’ll move on to a final contract.” It essentially listed all the qualms they took with the prototype. Once those qualms were resolved and the metrics were hit, they’d start paying us.
Russ: What should roboticists keep in mind when forming a business in today’s climate?
Gregg: When we think about the robots, they’re cool and definitely geek out on them. But at the end of the day, we need to look at them more as a tool, like the next iteration of a dishwasher. These tools provide a service.
If we geek out on a robot, it’s the same as geeking out on the lawn mower — when the job of a lawnmower is to help the landscaper take care of a yard. So the bigger picture is the service of that yard, which includes a bunch of stuff — and some of them may not necessarily have to be robotics but can be greatly improved using different technologies, like tracking technologies, soil technologies.
I encourage people to open up their ideas of what it means to be a robotics company. It’s really about automating a service. That’s important to look at, because otherwise we just fall into the rat hole of building and iterating on a robot forever and expecting that this robot is going to carry you into becoming a unicorn, when all your robot is doing is offering a part of a service.
Russ: How do you see the robotics race playing out between the U.S. and China?
Gregg: No matter how you look at it, the two countries in this robotics race are the U.S. and China, and it’s absolutely fierce.
In some ways I worry about the perks that companies in China get from the government that we don’t have as much over here. We have an abundance of venture capital, though they’re doing well on that front, too.
We have talented people coming out of these research universities. But at the end of the day, robots are a service, and the ultimate winner will be the one that can provide the best services using these robots.
Some of China’s robotics companies and technologies have now surpassed what we have here. In some ways we’re behind.
When we were building our prototype, we were making new custom parts every week to see what worked. In the U.S. if you want good economics, you need to order parts in large quantities.
We do our software development, R&D and some assembly manufacturing here in the U.S. But when it comes to prototyping and some forms of R&D, it’s way faster and a lot cheaper to do it there.