The Robo-Marketplace-Race is on!
Ecosystem Offence and Defense become really important!
First sorry, for the issue #LinkedIn create already a second time with the Espresso#50. What a bummer!
I have changed my production methodology. It is obvious the platform cannot handle uploads reliably yet. So, now I write in WORD locally, save it and copy it for upload at the end. This is not nice, but what is even less nice is, after 2,5-3h of effort are gone!
1/ Thank you for 971 subscribers! - Please keep sharing - commenting - liking - subscribing. All the good things that help more people to find inspiration in #brandled #platformecosystems.
2/ The Robo-Marketplace Race is on! Addressing the big challenges
What a title?! However, after spending 4 days at the Hannover Fair #HM24 – the worlds biggest fair in B2B Industrial. Robots are everywhere. This is less of a surprise given the forecasts and trend reports. We will cover some of them here. The focus will be Marketplaces to address fundamental challenges players have on one hand and the race in marketplaces on the other hand.
"Never trust a computer you can’t throw out a window.”
Steve Wozniak
Let´s take a big sip of #EcosystemEspresso:
When doing first research it was not obvious to me that there could be so many. I want to shine a light here on 3 challenges in this context and why we are excited to dive right in!
The Challenges of today and tomorrow are the new Opportunities:
Massive Global Market Expansion – $€ Trillions Baby!
We know the huge destinational TAM calculations of at ARK Invest Europe . I like them as this cannot be mistaken for a quarterly or 3-year financial planning exercise many falsely call "strategy". While it might sound "crazy" at the moment, just remember how smart phones started. Now 2+ Bn units are sold every year.
B2B Manufacturing market exploding
With a real long-term time horizon the opportunity is gigantic: #ARKInvest estimates lay out an USD 12 Tn market driven by a global manufacturing GDP of USD 28 Trillions by 2030. Productivity gains of +50 to +200% and take rates of 20-50% would result in this insane amount.
B2C Home Robot Market + B2B Service Market - Robotaxis
Also the calculation below on Home Robots is leading to $ 12 T! You can read the assumptions for yourself. It is totally ok at this stage to make bold assumptions and be transparent about the those.
Robotaxis are a separate domain!
What is great to see here, that vehicles start being framed as robots on wheels as well in a mid-prize range.
However, I am deliberately skipping Robotaxis. The market and the valuations will be gigantic there as well. I will save this for another #EcosystemEspresso.
However there will not be a race anymore to that degree as #Tesla has an unassailable lead as number 1- We do see however second level operators competing with the Ride Hailers (#Uber and others). Tesla will further leverage PaaS for vision-based AI, again not part of this #EcosystemEspresso.
Manufacturing Robotics strongly growing and so will be the marketplaces
The estimate will for sure be wrong. The point is nevertheless, the market is massive. So, winning marketplaces will be powerful and transact a lot. Consequently it is not surprising that there is a race in #RobotMarketplaces.
The global industrial robotics market is projected to expand significantly, with a compound annual growth rate (CAGR) of about 15% expected.
By 2032, the market size is anticipated to reach approximately $169.8 billion, driven by rapid technological advancements and increased automation across various industries.
According to BCG estimates, the global robotics market is projected to grow from the current approximately $25 billion to a range between $160 billion and $260 billion by 2030. In this scenario, professional service robots could capture a market share of around $170 billion.
Asia Pacific: Leading in Adoption and Innovation
The Asia Pacific region dominates the robotics market due to extensive adoption in manufacturing, especially in automotive and electronics sectors. The presence of major robotics developers and manufacturers in countries like China, Japan, and South Korea fuels this growth.
North America and Europe: Technological Advancements and Diverse Applications
The continents are also key players in the robotics market, characterized by high technological adoption rates and significant investments in research and development (R&D). These regions see wide applications of robotics in manufacturing, healthcare, and logistics, promoting market growth.
Business Models need to adjust accordingly.
While market expansion is there, a robot is not a robot. As the overview outlines above the market and its use cases are vastly spread and fragmented. This leads to very different requirements and thus price points.
While a new bread of robots due to the advancements in AI will operate in unstructured environments, just like a human can (Humanoid Robots), others do need a structured environment or the use cases do not requre more.
Other facilitators are visual and sensor data-collection to feed AI LLMs and others. Information gathered from vehicle fleets, bots, and sensors, can provide valuable insights for improved decision-making and product development.
Consequently the scope ranges go from couple K USD to Million+.
Expanding in use-cases over the next 10-15 years!
That means in this period some winners will have taken most.
The use cases will advance from "close to factory" to "broad use cases across the ecosystem spaces of life". E.g. Grid management and energy storage or health care and construction.
Robotics Terms - a quick intro
We are learning quickly through available materials "out there".
New Applications for Robotics-as-a-Service. Not a marketplace!
As businesses explore ways to enhance their workforce or even automate their operations, it may not always be beneficial for them to personally own their own fleet of robots.
These services start popping up. Especially in the context of service robots in B2C or elderly care or health care.
Those models are more Robotics as a Service and not a marketplace. A marketplace has cross-side or same-side network effects. A model as a Service typically needs to put sales efforts in to keep the model working.
Why is there a marketplace race on?
CHALLENGE 1: PRICE EVASION – PERFORMANCE INCREASE DRIVE USED MARKET
Used Robot Market is and will be loaded
Two main factors play a critical role here:
1. Lowered prices will stimulate demand and penetration drastically.
2. The tremendous performance increase and subsequent price decay of older models will fill up the used market.
See in the graphic below that robots were already "more productive" than humans a little bit more than 1 year ago.
We can probably still remember the early days of smart phones, where each new generation led to a significant pump in volumes, while today the steps are more incremental.
Collaborative Robots adopting fast
New robot types will put more pressure on “traditional stupid” ones over time. These units go up and will enhance uses cases were traditional robots were not able to perform before.
Geo-Differentiation to protect new model sales
In order to protect prices Robot-OEMs will try to sell off the old gear outside the new generation markets. Hence, they also ge engaged in this market. The lower prices of previous generations can be offloaded in markets with lower productivity levels and lower wages as well as more people in the workforce.
Marketplaces are great in facilitating used transactions
Marketplaces in general help discover supply and facilitate matching. Not all robots are the same. See the different typologies. A used robot marketplace is great at helping discover with multiple filters (brand, type, age, price, usage profile etc.)
A grading system is a critical accerlator of transactions and determining the right price. KUKA ( owned by Chinese #midea)….has developed a simple 3-step scale that supports navigation and segments buyers alike.
"Superior":
KUKA ex-display robots are in excellent condition and have been used solely as trade fair exhibits or demonstration robots. They are one to three years old and almost as good as new. That is why these machines are supplied with a full warranty.
"Premium":
Used Industrial robots, completely overhauled in factory.
"Certified":
Used industrial robots, generally overhauled
An e-Commerce Solution and a vertical marketplace with some quality signals will definitely be more trust building and accelerating transactions than the more general horizontal marketplace approach (see eBay).
Is Tech progress and thus price decline faster than used market can transact?
In general this effect can be observed in earlier stages of a technology with a huge mass TAM. While this indeed might create stress in the system, marketplaces are more efficient in transactions and will take out transactions cost over time.
Legal frameworks like ESPR (Ecodesign for Sustainable Product Regulation) that is not allowing consumer electronics and fashion that can no longer be sold moved to landfill, might provide the requirements and conditions to further initiate marketplaces.
The framework will allow for the setting of a wide range of requirements, including on (source: #EuropeanCommission)
Circular Marketplaces for Robots
So next to “second life” use cases we will also see circular marketplaces or at least services within more general marketplaces alike. Robots might have parts (motors, magnets, actors, hydraulics etc.) that have value and in line with regulations will lead to welcome profits.
Access to automation solutions for all
The marketplace will provide access to more players alike.
A great example of this is RBTX by Igus.
They are a robot manufacturer and integrate the ecosystem.
The marketplace is very transparent on pricing which facilitates penetration and share of wallet expansion.
CHALLENGE 2: THE FRICTION OF DISCOVERYING AND MATCHING ALL PARTIES
Ecosystem Play: Components and Modules make up the application and solution!
When we were at Hannover Fair #HM24, we learned that actually a single business application might actually require 4 different module players to be integrated. This does not include system integration (software linkage to the enterprise software with a respective architecture) itself.
In this example there was a need to combine 4 main robotic "ingredients":
#UniversalRobots – the powerful and beautiful arm
#MIR – the moving "plate"
#EnabledRobotics - Automating the logistic workflow
#dfki AI - the start up application charging parked cars with mobile battery racks
The use case is for locations when the car does not move for some time. E.g. airports. While this is a innovation project which is in POC and early stage for the penetration of EVs, the principle holds for more standard applications.
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Marketplace matching and solutions
The marketplace lets actually all relevant players to be discovered more easily. While not all solutions might be transact able in early days at least connection and lead generation is already helping a lot.
A good example of powerful filtering and navigation could be RBTX below:
The navigation allows to find the application. It signals the scope and allows liquidity to happen more broadly over time.
This marketplace is providing on top free services that facilitate transactions and enable partners as well as customers.
Robotics (Machine) Planner
RBTX is in beta for a planner – which we could call "Configurator".
Unlike in classic CPQ this also offers the service of validation prior to order.
A great example of a function of a platform facilitating transactions through installing trust and removing friction.
Services embedded to drive share of wallet and expand use cases.
The online solutions provided should enable smoother transactions.
We can only see a short distance ahead, but we can see plenty there that needs to be done.
Alan Turing
CHALLENGE 3: SECONDMOVER DISADVANTAGE IN THE ROBOT MARKETPLACE SPACE AND CIRCULARITY
Different Operator types of eCom and Marketplaces
The list of B2B eCom and marketplaces is long. They could be almost generic. We have however found some differences. A really important factor for scaling is the ecosystem brand strategy.
We advise to develop this a future backwards proposition to avoid "expensive" mistakes to attract partners and customers as well as create the space to be aiming at "winner takes most".
--> YOUR INPUT PLEASE: The name list is already very ling. We did not aim at showing and knowing all. If you do, please feel free to post them!
Value Propositions vs. Value Creation unit (Supply Unit)
Value propositions are hard to find. Despite the big variety, most marketplaces appear generic. A new entrant must get the Value Proposition, Brand and UX right. In the right sequence!
Filtering is a critical success component of marketplaces as this ensures the matching quality goes up while the friction does not get inflated.
Her an example across:
Services can include Education, but also parts. Circular might include 3D printing marketplaces down the road as well.
Staged Expansion please
Seeing for example the accessories, the complexity becomes obvious. The staged expansion strategy must be smart and focused - scaling and expanding prior to liquidity in key proposition offerings does not make sense:
The most common cases are there to provide calibration of the filters.
While we already found a lot of data on general market (numbers, type, geographies), we did not yet find size of marketplaces:
Claiming to be the "World´s Largest Robot Marketplace" #Robotplace
Beam me back on UX
The best product will always win
This is "wisdom" backed by VC evidence. Hence, the brand strategy (see above), but also the #UX are essential. It should not be an afterthought.
Some marketplaces are more "basic":
Some of the solutions are still basic in design, simplicity. But this is ok, speed is essential. However, I am also sure that certain brands will not survive.
Consolidation is already happening
Consolidation has started already – so some marketplaces have been acquired by industry players. With new funding a better product can be developed.
Monetisation mainly transaction take rates?
Monetization ranges from GMV take rates to Subscription "Robot as a Service" - The latter mainly in service robots (see #TEMI). How the different offerings might be layered or co-exist we still need to find out.
Late Arrivals?
We do see that late starters will be slower to reach liquidity – a meaningful interaction between supply and demand. Older marketplaces will be focused on incentivising and stimulating demand and are not just busy onboarding.
They will be advanced in achieving network effects and also expanding in categories and/or geographies. They might already have layered services as the examples above.
Success breeds success
Organizationally and politically speaking this progress and lead does not only open up more resources and attention but also provide more focus on leveraging the data generated for innovating and optimizing in parallel.
While late arrivals will find it hard to identify and onboard sellers. A happy seller that already might sell on more Robot Marketplaces (Multihoming). Hence, who needs the 15th marketplace?!
My quick Outlook
This is not the end – Future scenarios
#QuantumSyncRobotics has emerged as a trailblazer in the field, redefining the traditional boundaries in both business and manufacturing landscapes. It’s enabled a world where robots not only perform tasks efficiently but also possess the capability to diagnose and fix issues autonomously, leading to a new era of self-healing machines. By applying the Robotics-as-a-Service (RaaS) business model, QuantumSync can offer customers a full suite of robotics applications from the ground up, or supple- mental robotics that just perform the diagnostic and repair functions for a preexisting robotics system. (source Amy Webb)
So marketplace success will also depend on the robot business model. The hook, upon which a platform and marketplace might be built.
The journey is far from over. And Humanoid Robots will increase in speed, intelligence and capabilities drastically (e.g. weight).
Machine Economy
In a world where Robots and Machines will do business themselves, marketplaces and interoperability provide the foundation for transactions as well:
Ecosystem Offense and Defense
Ron Adner was already writing about this concept. It is pretty obvious. While competition of the past took place on a company by company level, in large industries sometimes supplier ecosystem level.
This is the next level: Ecosystem Competition.
While I believe that the “endgame” is a world of ecosystems of ecosystems, it does not mean that those solutions here are might be all be negotiation chips for docking onto other ecosystems. Some are.
Therefore, it is time to act with a good brand, purpose, ambition, great product, staged expansion and robust work on metrics. But most importantly the people involved as long as we still have a say!
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Have a great start into the week!
Come back next week please.
Alex
Customer Services Specialist | Professional Skills, Statistical Analysis
7moThanks for sharing
Customer Services Specialist | Professional Skills, Statistical Analysis
7moUseful tips ..Thanks for sharing this info on this topic and I appreciate it very much.