More than 2.6 million manufacturing workers are aiming for retirement within the next decade. And that’s just one challenge American manufacturing faces.
Other obstacles include the availability of cheaper labor overseas, the conundrum that even well-paying manufacturing jobs aren’t attractive to American workers, and the fact that urban centers across the U.S. – which are attractive to potential workers – don’t make great places to locate manufacturing facilities.
Enter manufacturing robots. On the face of it, they seem like the perfect solution: they can work around the clock; never need to retire; have no personal opinions about their tasks or compensation; and don’t care where they live.
Indeed, corporate giants like Ford and Adidas have already adopted robots. But the barriers to entry have been high; robotics programs are complex to operate, often requiring extensive technical resources and deep pockets.
Rapid Robotics is finding ways to address all of these concerns and bring robotics to the masses with a robotic arm pre-programmed with AI-powered tasks that simplifies common functions. And it doesn’t cost an arm and a leg.
Rapid’s solution only costs about $25K a year (most system-integrator providers run in the $150K to $1M+ range to automate a single task). Furthermore, its implementation doesn’t require custom programming, specialized hardware, additional integration efforts to reprogram or redeploy a robot, or robotics skills.
But one last critical question remains: is there a human cost to robots absorbing human tasks?
We wrote Rapid its first check in 2019 and since then the company has demonstrated that it’s possible for American manufacturers to build more products on American shores, without displacing American workers. Led by our colleagues at NEA, Rapid closed a $12M Series A funding round in April of this year, and in August closed a $36.7M Series B, co-led by Tiger Global and Kleiner Perkins.
Jordan Kretchmer, Rapid’s CEO, along with CTO Ruddick Lawrence, a two-time Bee Partners’ founder, updated us on the company’s recent progress and shared their insights on how robots can help everyone involved in making things in America.
What use cases are you going after?
We focus very intensely on simple, repeatable tasks like parts picking and machine tending, where the machine is doing the work and the human is loading the machine. These tasks are secondary operations and they’re very low-value, but they represent 80 percent of manufacturing work. The opportunity for us is in these really simple, very repetitive, very structured tasks that happen at scale.
We come in at a price point of about $2,100 a month, or about a third of the human cost. With one Rapid Machine Operator, you’re not just replacing one operator – you’re replacing three shifts of human operators. And there aren’t enough humans to do these jobs. We’re looking for opportunities where there aren’t enough humans, and where the human who was conducting that task gets upgraded to a higher position.
So, are Americans losing jobs to machines?
In the last year, the Rapid Machine Operator has been involved in the production of more than 50 million manufactured parts. There’s not a single customer of ours that has let go a single employee as a result of adopting our robotics solution. The manufacturers’ labor problem is that they can’t grow their business because they can’t hire enough people. The labor shortage in manufacturing is getting worse, not better. The average age of a machine operator is 44 years old, and there’s nobody younger coming in to fill the gap. With Rapid, they can shut down their entire open headcount, which they’ve been trying to fill for years, and upskill their current workforce into better-paying positions.
What have you learned after being in-market a year?
The key learning is that most manufacturers have self-determined that automation is not possible for them. That has been very surprising for us. It tells us we are playing catch-up to a decade of pent-up demand. That demand is because manufacturers are losing business to international low-cost labor. More recently, COVID backed up production lines for months and there aren’t enough workers. COVID also validated that it is vitally important to be defensive against global economic shifts, which means doing more production on-shore.
What realities are now possible that otherwise weren’t, pre-Rapid?Until Rapid, manufacturers could not afford to deploy robots against the tasks that were costing them the most. The new reality we’ve created for manufacturers is that, over the course of time, they can offset the costs of human labor with robot labor. At that rate, the entire manufacturing cost becomes less expensive than shipping everything back and forth to China, even with China’s lower labor costs. A manufacturer of any size now can automate away the most costly aspect of their business: labor.
You’re using tasklets. What are they and why do they matter?
Tasklets are pre-coded chunks of AI that know how to execute specific tasks, without having to be programmed. Tasklets use computer vision along with the AI and you can mix and match them like puzzle pieces. Historically, programming a robotic arm has been a step-by-step process involving thousands of lines of code. It’s very complex – you have to be an engineer. That code tells the robot how to make every sub-millimeter shift in a movement, with thousands of variables that go into one movement. We came up with a simplified approach: show the robot a picture of a part, tell the robot it needs to go pick it up, and to keep going until it picks it up. You’re not telling it how to do the task, just to do it. That’s a tasklet. And the user can tell the robot to do that with one touch of a screen.
Who are your real competitors?
We’re not competing with robotics companies that say, “We can automate your whole facility.” That becomes a prohibitively expensive proposition that leads to automation disillusionment. The sector we compete against isn’t another robot maker, it’s the systems integrators that charge hundreds of thousands of dollars to get a single machine up and running.
What has changed for you in light of your recent growth?
Our first year was about building a strong base of operations to prepare to scale, including putting into place all our tooling for our go-to-market and pipeline management processes and building our leadership team in each category. Our pipeline has grown 10x in the last three months. Now, our focus is on strategically identifying what region we are targeting next, understanding who the customers are in that region, what they need, and why. We’re aligning the bottom of the pyramid, no longer blocking and tackling but taking the base we created to execute at scale. What has changed for me now is that I’m no longer asking, “What am I doing today?” Now I’m asking, “What am I doing this month?”
About Bee Partners
Founded in 2009, Bee Partners is a pre-Seed venture capital firm that partners with revolutionary Founders working at the forefront of human-machine convergence across technologies that include robotics, AI, voice, i4.0, and synthetic biology. The firm leverages a singular approach to detecting new and emerging patterns of business as well as inside access to fertile but often overlooked entrepreneurial ecosystems to identify early opportunity in large, untapped markets. Bee’s portfolio companies consistently realize growth at levels that outstrip industry averages and secure follow-on capital from the world's top VCs.