Interview with Dmitry Grishin,
By James Silver
There’s something of the Victorian freak show about the World Maker Faire — a three-day annual makers’ jamboree held at the New York Hall of Science in Queens, New York. Pasty-faced inventors and weekend drone-builders peer out from stalls. Billboards advertise “Ultimate Fighting Wearable Body Combat Puppetry”. A giant spider called Scarpia, tack-welded from galvanised sheet metal and baling wire, glints in the light. There’s a singing robot made from an ancient X-ray machine; and a “nerdy derby” marquee, where miniature cars race on twisting, undulating tracks. Yet somehow the young Russian woman who flits through the crowds seems oblivious to them.
Valery Komissarova, 21, is a robotics talent-scout, searching the stalls for standout new companies and inventors among the maker movement. Her employer is Grishin Robotics, a recently launched worldwide investment company set up by Dmitry Grishin, better known as the wealthy cofounder and chairman of the Mail.Ru Group.
According to Bloomberg, Mail.Ru Group, which floated on the London Stock Exchange in 2010 and has a 0.52 percent stake in Facebook, has a market value of almost $7 billion (£4.5bn). It reaches 84 percent of Russian internet users each month, making it not only the country’s largest internet business by traffic, but also one of Europe’s biggest. Grishin, 34, a self-confessed robot obsessive, has put an initial $25 million (£16.4 million) of his own cash into his fund with the objective of investing up to $250,000 (£164,000) in ten to 20 robotics projects and companies.
Personal robotics is a field that has traditionally struggled to secure funding: R&D periods can be protracted, the hardware is expensive and large-scale manufacturing costs are prohibitive. Nevertheless, Grishin believes personal robotics is about to take off. Industrial and military robotics has been well-funded by governments and multinationals, prompting high levels of innovation: there are around 20,000 robots in war zones, Grishin says. But there has been less investment in service robotics, which includes personal and consumer products. Yet this is a market which, according to industry analyst ABI Research, will be worth in excess of $19 billion (£12.5 billion) by 2017.
Robots largely exist to do things that we consider dirty, dangerous or dull. Grishin will concentrate chiefly on a fourth “D” — domestic. He intends to spark a global personal-robotics revolution by funding research and products geared for mass consumer adoption in applications ranging from personal security to entertainment, home healthcare to household chores.
“I see, right now, a lot of similarities between the robotics market and the PC industry at the end of the 70s and beginning of the 80s,” says Grishin, a stocky and intense man who, despite fleeting moments of warmth, has little interest in small talk. He speaks with a heavy Russian accent and, at times, his English vocabulary struggles to keep pace with his ideas. “[Back then] you had the big mainframe companies, like now you have industrial robotics – but the general public don’t see them. It’s only when people started to see computers in their homes and workplaces that investors started to invest a lot of money. If you want a technology to skyrocket, you need to find a way to bring it into people’s daily lives.”
Grishin bases this on his certainty that a number of disruptive trends are converging. “I’m trying to bring a little more internet culture to the hardware world,” he says. “I really worry that the average robotics company takes five years to research [a robot] and another five years to try to bring it to market. This is because they do very complex stuff. Before now it was not possible to get to market quicker, because one of the main issues was that robotics was always expensive. To build an average robot 20 years ago, you needed to invest $1 million (£660,000) — and if you wanted to manufacture that robot, that would take significant investment in factories, resources and hardware.
“But over the last few years, several important things have happened – the cost of hardware components has significantly reduced. You can now buy an accelerometer device for $1 (66p) in China and 3D sensors for $150 (£100). So, first you have a significant reduction in cost for hardware applicable to robotics. Second, and very important, you have 3D printers, because before them, [roboticists] spent a lot of time building prototypes. And third, ten years ago it wasn’t nearly as easy to outsource manufacturing to China or Taiwan.
Now, if you want to produce thousands of units, you create a 3D model in AutoCad and you have companies that can just produce it for you and send it back. Now, you can start a robotics company with just five or ten engineers and, depending on the product, do something serious with $1 million.”
But what shape will this robotics revolution take? According to Grishin, the products won’t be humanoid — for now. Although he thinks humanoids may well help us to run our lives one day, he argues that neither the technology nor the public are ready. “If you look at androids, they are too complicated [to build] and scary,” he says. “One of the interesting theories about robots — and people have done a lot of research about this — is the smaller a robot is, the less seriously people take it. And if it’s too big, more than two metres, people start to get scared of them. The ideal size is about the size of a 12-year-old child.”
Instead of designing humanoids, hardware startups should focus first on solving problems, he explains. “People are ready to pay for simple solutions. [Robot-makers] need to focus on the problem, because the technology is already there. Take the Roomba [iRobot’s popular autonomous vacuum cleaner]. The technology is simple, but the designers found the area where it can be applicable.”
How does he define “robot”, then? He doesn’t hesitate: “Hardware plus software plus IP plus sensors.”
Grishin conjures up a vision of sensor-activated camera-mounted quadcopters keeping watch over our homes and offices — while other robots care for elderly people. “With ageing populations, governments have only two strategies: allow massive, cheap immigration from China and India — and my feeling is they won’t do that for political reasons. Or use robots to do simple tasks in the home, such as checking on an older person, monitoring their vital signs and whether they take their medicines. There will also be a lot of automisation for cooking and cleaning. [Robotics] will start with the tasks where there are fewest dangers and work from there.”
There’s an emerging consensus among roboticists that personal robotics is about to break into the mainstream. “Yes, a lot of key ingredients are there that weren’t there before — computational power, battery life and sensors,” says Hod Lipson, director of Cornell University’s Creative Machines lab. “But something deeper is happening: fundamentally newer algorithms and techniques for machine learning, which are key. I expect those to accelerate in the next few years, allowing robots to be more adaptive and responsive. I also see more receptiveness to the idea of machines doing things in people’s personal lives. This isn’t sci-fi any more. Here and now, people are beginning to accept robots because we already have so much of this kind of electronic assistance in our lives. And that’s a key factor in the willingness of companies to invest.”
A dedicated personal robotics fund could also bring some much-needed glamour, says Limor Fried, founder of New York-based Adafruit Industries. Hardware suffers from a wow-factor deficit, she argues. The web has its superstars; its Zuckerbergs and Eks. Robotics needs them too. “[US inventor] Dean Kamen said, ‘We are what we celebrate’ — but we don’t celebrate people doing personal robotics quite yet,” Fried says. “For a brief time, Sony’s QRIO was the closest thing out there to a personal robot that could have been living with us now, but Sony lost its way. How many people doing robotics are celebrated in our society?”
Grishin plans to solve another problem too: the scarcity of venture-capital investment in robotics. Research by industry news site Hizook estimates that just $160 million (£105 million) was invested in the sector by VCs in 2011 — and $90 million (£59 million) of that went to just three companies: Restoration Robotics, which employs robots for hair restoration; RedZone Robotics, which focuses on waste water and sewer inspections; and ocean data-services provider Liquid Robotics. Compare that with the estimated $6.9 billion ( of investment that went into 997 VC deals in internet-specific companies in 2011, according to PwC. “There is virtually no VC activity in robotics at the moment,” says Raffaello D’Andrea, a professor at ETH Zurich, and cofounder and chief technical adviser at Kiva Systems. “[Grishin] is going to create some positive momentum. And now that someone has made a real commitment to this area, others will follow.”
According to Mikell Taylor, a systems engineer at Bluefin Robotics, in her personal view, starting a hardware company presents significant challenges compared with web-based startups. “Robotics is multidisciplinary – you can’t really have one guy hacking around on a couch,” she says. “You need electrical engineers making [circuit] boards. You’ve got to have a mechanical engineer, who can machine parts and do CAD. You’ve got to have someone who can put some autonomous behaviour into [the robot]. If you are trying to make something that has a real application, and to show a VC or angel investor that you have a clue what’s involved, that you know you’re going to have to have this manufactured somewhere in high volume and that you understand supply chains, then you need to have people who know what they’re doing on board early on. You also need access to a lot more infrastructure. I once lived with two guys who did [startup accelerator] Y Combinator and they sat on the couch all day and wrote code. That doesn’t work for hardware.”
It also takes cash to research then build physical products – a time-consuming model with little short-term returns, which can baffle investors more used to web startups, rapid growth and quick exits. Bill Morris, founder of I Heart Engineering, says his company has used self-funding. “A lot of web-based startups don’t have a product,” he says. “In robotics, it’s the other way around: we make robots then sell them. This confuses investors. We do interesting cutting-edge research, but we try to focus on manufacturing then shipping to customers. This is necessary because hardware companies tend to burn capital fast. We could spend a million dollars in a matter of a week. When you fund your own research, you tend to spend wisely.”
In September 2012, Grishin Robotics announced its first investment: $250,000 in Double Robotics, a Mountain View, California-based startup that came out of Y Combinator (one of a handful of hardware companies to have gone through the programme). Double Robotics manufactures telepresence robots (essentially roving iPads on sleek, adjustable poles), which retail at $2,499 ($1,999 for pre-orders). A month after launch, it reported sales of 600 units, worth $1.2 million (£790,000), to customers in 44 countries including 24 universities. Three months later, a second investment followed — $250,000 in Robotappstore, an online marketplace for robotics applications.
Grishin claims that, since he announced his first investments, other investors have been sniffing around robotics companies, with one or two even offering to invest in his fund themselves. “Already some people want to join my fund,” he says, “but I want to be careful. If it’s my money I can be very unlimited in terms of the risks I take.” He says he wants to slowly change investors’ attitudes towards hardware. “The issue with a lot of VC guys is they always want a working example of a business model. But for robotics, that’s like saying to Apple in 1979: ‘Show us your business model’. The second problem with them is that VC funds have time limits, i.e. ‘After three years, we exit’. But in robotics you definitely should not, as a VC, after one or two years, push the entrepreneur to exit, because robotics takes time. You need more flexible — and more committed — money in this field.”
Grishin’s vast wealth (there is no public record of his net worth and he won’t discuss it, but it is likely to be in the hundreds of millions at the very least) has prompted accusations that he is simply a guy who’s sitting on a pile of cash and just wants to have some fun playing with robots. As this question is put to him, over lunch in a deserted hotel restaurant close to London’s Tower Bridge, he bristles for the only time. “There’s nothing wrong with having fun,” he replies. “People can say I’m just having fun — I know some people say that. But my feeling is that I’ve been looking at robotics for a long period, but only now do I see something big has happened, several dynamics have come together.” He pauses. “The deeper I go, the more certain I am that I am right.”
Still, he has influential supporters — such as Kiel Davis, the president of Honeybee Robotics, the Manhattan-based creator of robotics for applications in extreme environments including mining, exploration and even for use on the Moon and Mars. “You don’t necessarily have to have a background in this field,” says Davis. “Robotics is all about ideas and problem-solving. [Grishin] will do just fine. Coming from the outside can let you make waves.”
Grishin was born in 1978 in Kasputin Yar, a “closed” military-base city populated only by military families, in south-eastern Russia, close to the border with Kazakhstan. His grandfather was a lieutenant colonel — and scientist — in the Soviet air force, who worked on the development of rocket-control systems. Two or three weeks after he was born, Grishin’s parents left the city with him and never returned. He graduated with distinction from the Faculty of Robotics and Complex Automation at Moscow State Technical University, displaying a huge appetite for work, for instance, by taking on freelance projects for four companies as a software programmer simultaneously.
Moscow at that time was undergoing enormous upheaval, he says, and life was hard; its residents faced unemployment and uncertainty. Yet his talent and fast-rising profile led to an invitation from Yuri Milner, now a prominent Silicon Valley VC, to join a US-backed company called NetBridge, which replicated successful internet businesses such as eBay and Yahoo for the Russian market. However, NetBridge was unprofitable and in 2001 it was merged with internet portal, Port.Ru. The new company became Mail.Ru. By 2003, Grishin had become CEO and two years later he had cofounded, with Milner, the Mail.Ru Group, where he rose to his current position as CEO and chairman. Grishin says two key factors lay behind the success of the company: the high quality of tech education in Russia, and the depth of its engineering talent pool.
Grishin’s reputation is of someone devoted to his work to the exclusion of nearly everything else. Although married (he lives with his wife in Moscow), he spends much of his life — in his own words — in airport departure lounges. “My only hobby is work,” he says. “I work every day — and pretty much all of my time is dedicated to IT.” Well, that, and robots. “My vision is simple. Anywhere where there are simple, structured activities — entertainment, cooking, security, logistics, home care, even unlocking doors — will be disrupted by robotics. And once we become used to it, we won’t even call them robots any more.”
James Silver wrote about the tech incubator bubble in 06.12. He is a contributing editor to informilo.com