Here's a novel way to pitch potential investors: "Do you realize how young we are? Do you realize that we're going to f**k up big time?!"
And yet, that's exactly how Keller Rinaudo, the 24-year-old co-founder and CEO of robot maker Romotive, began his meetings with investors last fall. The upshot: Success way beyond what he had ever imagined.
Rinaudo recently closed a $1.5 million first round of funding, three times what the company set out to raise when it began looking for backers. Among the investors are Zappos founder Tony Hsieh, the Stanford University endowment, Lerer Ventures, David Cohen of TechStars, and a number of prominent angel investors. Some investors were turned away.
That's a lot of excitement for a smartphone toy robot. But, hey, this is a toy with big ambitions, and Rinaudo and his crew--though admittedly unsure about where this all might lead--are convinced they're onto something.
"We think that as people let their imaginations loose with Romo, they will discover unbelievably cool applications for him," said Rinaudo, a 2009 Harvard graduate whose resume includes stints as a consultant and a professional rock climber.
First off, Romo--who apparently is male--really is fun. He's a docking station of sorts that turns your iPhone or iPod Touch--actually, any smartphone at this point--into a robot that you control from another smartphone through a Romo app. You drive him around. You control his facial expressions. Turn on the camera and he's a spybot. I played with him at CES in January, where Romotive was trying to drum up interest; you can watch a video with Rinaudo and Romo here.
The birth of Romo
Romo was born out of frustration. Phu Nguyen and Peter Seid, childhood friends from Arizona, loved robots, at least as portrayed in movies and on TV. But most of the robots on the market, such as Pleo or WowWee, struck them as "sucky," as Rinaudo puts it, or not particularly useful (no offense to Roomba, the vacuum robot).
They wanted to build a robot that, like any software-based product, could be tweaked and changed over time. Their robot needed to evolve.
The problem was cost. Nguyen, who is 25, came up with the idea of tying it all to a smartphone in order to take advantage of the powerful processor already built into the phone. This way, the most expensive part of building a robot from scratch would, in effect, be taken care of by Apple or other smartphone makers.
The two teamed up with Rinaudo, also a friend from childhood, and the duo (Rinaudo stayed in Las Vegas, where he was living) ended up at the incubator TechStars in Seattle.
Nguyen and Seid, who built the original Romo, toiled away at their robot while most of the mentors at TechStars--people with lots of experience--kept telling them the same thing: This idea isn't going to work. Where's the market? Who's going to put their phone onto a robot? You need to--jargon alert--pivot.
"Everyone was telling us we were out of our minds," said Rinaudo, who, understandably, started to doubt the whole idea after so many people told him it was off base. "It's pretty hard not to listen," he said.
Kickstarter to the rescue
So the Romotive folks did what so many startup people do these days to validate their wacky ideas: They put Romo on Kickstarter, the crowd-funding site. They listed it for 45 days, asking for a pledges of $78 for a single Romo. Their goal was to get $35,000 in pledges.
They hit their goal on day three. In the end, they closed the Kickstarter campaign with pledges totaling $114,796 and orders for about 1,300 robots.
"We were getting mentor whiplash," recalled Rinaudo, talking about all the advice at TechStars. "Kickstarter was invaluable in showing traction and shutting those people up."
That success, which helped Romotive make a big splash at the TechStars demo day, led to investor interest. The first call was from Bharat Shyam, a former Microsoft executive. When he visited the Romotive team in Seattle in November, it wasn't Rinaudo's business plan or ideas for expansion--the gang had none, after all--that led Shyam to write a check.
It was his 7-year-old son, Sam.
While the Romotive team was talking with Shyam in a conference room, Sam was outside--visible through a glass window--having a blast with Romo and, unknowingly, sealing the deal.
"Dad, look at this," Sam kept interrupting. Shyam cut a check for $50,000.
"Romo was just a delight, and the founding team is so passionate," said Shyam.
That investment led to a ton of other interest, and Rinaudo quickly realized his best answer to the standard questions--Where can the product go next? How will you make it mainstream? How will your supply chain work?--was to be completely honest.
"I tell people I have no idea," he said.
Well, that's not entirely true. But Rinaudo and his team--now six in all, and working hard to recruit more--certainly have plenty to figure out.
In search of robot geeks
The appeal is not so much Romo in its current state, but the fact that it's open for third-party developers. The dream of the Romotive founders is that other robot geeks like themselves will come up with all sorts of apps that make Romo do things they haven't yet thought of.
Already, tinkerers are expanding its capabilities. A guy in the Netherlands just made his Romo work on Windows phones, and then shared the code with the Romotive team.
And the team is always discussing ideas. Romo could work for home surveillance, since you can control it from anywhere via Wi-Fi. Another thought is for Romo to become a telepresence robot for mainstream use, since current telepresence robots cost several thousands of dollars.
Since Romo makes for a pretty cool roaming photographer, it's easy to imagine an app that lets Romo cruise a party, taking occasional photos of people ("Say Cheese," Romo could say) that it then syncs to your library for you to check out the next morning. (First concern: skirt shots.)
The team is also talking about ways to create games that use augmented reality--you see obstacles on your your phone/Romo controller but not in the real world. Or useful ways that people in different areas might be able to play together, so a grandparent in New York might be able to play along or watch what a grandchild in San Francisco is doing.
This is the idea--create a flexible robotic platform and see what happens.
The Romotive team is based in Las Vegas, holed up in an apartment where the members do everything, including assembly. They have 2,000 Romos on back order that they're working to get out the door this month, and more orders keep coming in. The price is now $99.
The parts come from all over--some from China, some from the U.S.--and Rinaudo knows that working out of what he half-jokingly calls a "startup sweatshop" can't last for Romo to make it big time. He even has big retailers interested in selling Romo, he says, but for now he's keeping them at bay.
"We need to find a better way to build Romo first," he said.
In other words, Rinaudo needs to start figuring out answers to the questions those pesky investors like to ask.