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The Humanoid Race | Part I
A deep dive on Beyond Imagination, the future of robotics, and why you should care
This is a sponsored deep dive into one of the more fascinating frontiers in technology: humanoid robotics; the ultimate marriage of AI and spatial computing (aka: any computation that fuses the digital world with the physical, accounting for 3D space, location, and time).
The sponsor is Beyond Imagination, one of the earlier yet lesser-known players in this race.
Part I of this series answers ‘the why’ for humanoids. Part II covers the ‘what & how’ by diving deeper into Beyond Imagination’s product and overall strategy to punch well above its weight.
Excited for you to read this one… the implications are mind-boggling.
(And as always, if you do indeed enjoy this essay, please take a second to share with a friend or three! ;-)
Imagine you're on a playground.
Endless fun is being had all around you, and your friends are seizing the day; scurrying up all the ladders; jumping off all the ledges; diving down all the slides.
But all you can do is watch.
You were born crippled, with your legs twisted backward by 210 degrees at the hips. A desperate longing burns within, and you wonder…
What if? What if I had a different body? One that could run, jump, and play?
Thanks to a healthy diet of comic books and sci-fi novels, your imagination runs wild, imagining all kinds of ways to overcome your affliction. Your favorite? A mechanical body that you can control. Perhaps with superpowers and all kinds of abilities; ones the other kids now long for themselves.
Your inner Issac Asimov kicks in and you start imagining the ability to control not just one of these bodies but hundreds.
You could send some of them into space, the oceans, or the depths of any place or task that the average human loathes.
Heck, maybe even bed-ridden grandma could use this body to play basketball with you or explore the forest with you in the backyard, frolicking about as a mechanized avatar.
And maybe grandma could also use a companion…
It certainly seems so... Grandpa passed away last year and she spends most of her time alone, occasionally tended to by a surprisingly careless caretaker.
A shriek of nearby laughter jolts you out of the daydream. You sigh and lean back as reality sucks out these seeds of excitement and hope.
But the vision evades reality’s vacuum. It burrows, nestles, and becomes lodged somewhere deep within your soul; a required affliction for any entrepreneur dead-set on changing the world and building a company as ambitious as Beyond Imagination…
The Holy Grail
Robots that look, move, and behave like humans have been the holy grail of science fiction since... well, seemingly since the inception of imagination.
Hunter-gatherers drew robot-like figures on cave walls, Greek’s told myths such as Talos, and modern sci-fi has captured our imaginations with robots of all shapes & sizes: R2-D2, Wall-E, Hal 9000, and Optimus Prime to name a few.
Today, human-like robots are rapidly moving from science-fiction to science-fact, propelled by recent breakthroughs in AI, computer vision, chips, motors, batteries, and compute power; all inducing fertile ground for bringing machines to life.
Technically, 'robots' are already here and now. They assemble our cars, clean our floors, and sort our packages.
But these aren't the robots of your childhood imagination. These are just mechanical thingys, operating as a point solution for moving, sorting, screwing, and occasionally flipping your burger or making a coffee.
These are all terrific breakthroughs, and plenty of innovation remains to be had in application-specific form factors. But their impact is limited and the market size for each is relatively small. Relative, that is, to the total addressable market of say... human physical labor, which makes up about half the world's GDP, estimated at around $45 Trillion.
So, what if we could cast a wider net at that entire TAM (total addressable market)?
Many believe the answer lies in a more general-purpose robot. One designed to interface with a world that is already designed for human interaction. A world with a built-in 'human operating system' of sorts: the doors we open, the buttons we press, the tools we wield. What if we could build an API, if you will, to this existing OS?
That is the true holy grail of robotics: one built to move, behave, and even look like us. Not a robot, per se. A humanoid.
This is the product that transforms society and the world. And that's exactly what that once-crippled boy from the playground intends to do.
They say the best entrepreneurs, the ones who achieve the biggest, craziest, and most unlikely outcomes all have one thing in common: they all have a chip on their shoulders. They were forged in a fire of sorts and they're no strangers to pain, be it physical or emotional, e.g. Steve Jobs as an abandoned orphan, Elon Musk with an abusive father. They have something to prove and they view life through a more… complicated lens.
And boy, does Dr. Harry Kloor fit the bill.
Harry's been planning, tinkering, and waiting for this moment for decades. And yes, indeed, dating all the way back to that very moment on the playground; stranded on the sidelines, legs trapped in braces.
Doctors told Harry and his mom that he'd always be this way. Immobility was his reality.
Fortunately for Harry, his mom, Mary Conway Kloor, was rather adept at imagining and creating alternate realities. She was a science fiction author, and one of her favorite mantras was "experts are people who stop learning."
So, to hell with those doctors forecast… She spent her spare time researching alternative therapy techniques, and after three painful years of battling reality, Harry's braces came off. In due time, he was walking, playing, and eventually racing with the best of em'.
Harry experienced first-hand the magic of reality distortion fields. He bent reality to his will, and in the process, embedded into his DNA the will to do the impossible.
That will has driven Harry to accomplish all kinds of unlikely and unusual feats. Despite being told it was impossible– or just simply not allowed– Harry became the first person to earn two PhDs simultaneously, in two distinct disciplines: one in Physics and the other in Chemistry while at Purdue.
His science career is littered with a wide range of contributions and projects, from working with NASA to re-imagine space travel, consulting the US Senate on automation/AI, to helping found/run the X-Prize Foundation and Singularity University.
In parallel, Harry’s right brain took on a life/mind of its own and established a career in Hollywood, where he brought his left-brained ideas to life as a writer for sci-fi shows such as Star Trek, Godzilla, and Earth: Final Conflict.
But all along the way, his current company, Beyond Imagination, was Harry’s real end-game and life mission: to build humanoids and AI for real-world work.
If successful, the outcome and impact would be tremendous. In ways that are difficult to grasp and nearly impossible to predict. But a couple of things are certain.
First, the commercial opportunity is massive and the winner(s) will find themselves amidst the largest companies in the world. Second, the societal impact will be transformational and in a fundamental way.
BI’s work/product will forever change what humans do, how they do it, and how they derive meaning/a sense of purpose, all while addressing some of the world’s grandest challenges, ranging from labor shortages, to healthcare, to a looming global debt crisis/spiral.
Such grandiose claims, ones that blend economic incentive with altruism, are the very reason humanoids are attracting some of the top talent in the world, along with arguably the greatest entrepreneur of our generation: Elon Musk (via Tesla).
So, how big is the impact? And how can a relatively small, obscure startup capitalize and compete?
That’s what we’re here to find out.
Harry had the idea for a human-controlled robot in the late 80s. He imagined VR headsets as the primary interface and an AI engine that would learn the jobs along the way.
Eventually, the robots would learn from their human pilots and become fully autonomous, operating as experts for all kinds of tasks; from fixing your bike to making sushi from the comfort of your own home (my personal favorite use case and the obvious killer app).
Needless to say, it was too early. So, as one does, he passed the time getting those two PhDs. Along the way, the universe graced him with another stroke of luck. An opportunity to meet and learn from one of the greatest innovators of our time: Steve Jobs.
Purdue’s Physics Department was one of the first organizations to buy Job's NEXT Computers: the company he founded after being ousted from Apple. As a result, Jobs spent time on campus, engaging with the students & faculty.
Jobs gave Harry a high-end NEXT Cube, and through these interactions, Harry soaked up as much as he could. He learned about Jobs' approach to building/running small teams. He learned why aesthetics matter. He saw first-hand the power of being driven by a vision and a burning desire to impact the world in a meaningful way; to not just innovate but create novel solutions that would improve the lives of billions.
These principles stewed and marinated alongside Harry's AI Robotic vision. And then, in 2000, came yet another kismet nudge: Harry met Ray Kurzweil after attending one of his lectures in 2000.
If you've heard the terms 'exponential technology' or 'the singularity,' that's Kurzweil. He's one of the world's most renowned thinkers, inventors, and teachers in computing and AI.
Harry and Ray bonded over their passion for AI and robotics, which led to a more formal collaboration. They both knew AI-powered humanoids were the future. They also knew we had a long way to go. So many things had yet to exist. So many things still needed to be invented.
So, they started inventing and filing all kinds of patents. Most notably, an approach to using VR to train AI, the creation of synthetic minds modeled off of the human brain, various applications of avatar technology, sensor technologies, security technologies, etc.
They then worked on the initial designs and settled in for the long haul.
Each piece of the tech stack had its hype cycle. VR was almost here, and then it wasn't. AI almost changed everything, and then it didn't.
Harry and Ray revved their engines numerous times along the way, passing their time with other amazing and ambitious projects like the X-Prize with Peter Diamandis, Hollywood storytelling, consulting, and all kinds of efforts to push humanity forward where they could.
They dusted off their robot plans numerous times along the way, but the ground was never quite fertile enough.
If Generative AI is blowing your mind, you ain't seen nothing yet…
No doubt, large language models (LLMs) are amazing. Their use cases are ripe with so much promise. But many AI experts believe language and text can only get us so far. It’s too constrained to the digital world of bits.
Most of humanity’s greatest problems, and its richest data sets for training AI, exist within the chaotic physical world of atoms.
These are problems that require contact with the real world and, more often than not, a human's touch (or brute strength).
The macro problem, however, is that the right human touch is becoming increasingly rare, increasingly expensive, and increasingly hard to train and retain.
Simply stated: the world is facing a major labor shortage. Already today, there's a shortage in the physical labor market of around 10 million jobs in the US. This is expected to grow to 85 million skilled jobs worldwide by 2030. By which time, manufacturing alone is estimated to have 2.1 million unfilled jobs.
The prospects of filling these roles are bleak. On one hand, we have a workforce that is aging out, taking with them critical domain knowledge. The mastery of all kinds of unsexy, yet mission-critical skills, is evaporating before our very eyes.
As for the next generation of workers? They want nothing to do with these jobs. In tandem, we have a declining rate of population growth. So even if Gen Z wanted to take out the trash or fix a power line (newsflash, they don't), we’ll eventually run out of bodies able & willing to do so.
This dynamic is most acute with jobs commonly referred to as 'dangerous, dirty, or boring'.
As for the people doing these jobs today? Sure, it puts food on their table (barely in many cases). But you'll be hard pressed to find many people who would call this work fulfilling, much less, safe.
According to the WHO, millions of people die each year from occupational hazards: exposure to chemicals, dangerous environments, etc.
Let’s call a spade a spade. Given the choice, these are not jobs people want to do. At least not in their current form.
Quick sidebar/rant: I can hear the skeptics now… ‘But these people don’t have a choice! This is the only way for them to put food on the table!’
My response is threefold. First, this isn’t about replacing humans. It’s about augmenting them and creating the ultimate collaborators. What if each person had a resilient side-kick to reduce the risk and make these roles easier & safer? Or, what if the front-line role can evolve to one of gamified supervision, controlling & commanding fleets of robots?
In which case, the company can do more, better, faster, cheaper. This creates more work, not less. Let’s not get trapped by the ‘lump of labor’ fallacy, which naively believes there’s only a fixed amount of work to be done. Ergo, if we give it to robots, there’s nothing left for humans to do.
It’s just not true. More productivity and more output creates more business opportunities and more things to do; a broader surface area to apply human ingenuity and ambition.
Automation, combined with human ingenuity, will create an upward spiral that drives human flourishing up, not down…
Second, regarding people ‘having no choice’….
Shouldn’t we give them one?
Shouldn’t we give them the choice to do these jobs from the comfort of their home with a VR headset, some controllers, and a robot with the same physical ability? Or the choice to contribute data to a training set for a humanoid skill, earning an income for doing so? Or perhaps, earning perpetual royalties off the future revenue stream from the ‘apps’ they contributed training data to? If so, people who were slaves to an hourly wage under physically taxing conditions can now make money in their sleep; a luxury reserved for the fortunate few, now democratized.
Lastly, while a bit blunt, these people didn’t have a choice because they didn’t have the necessary skills; the skills to write a product roadmap, to write a movie script, to create a pitch deck. But with AI, now they do. A lack of education or a lack of opportunity are no longer an excuse.
All the tools exist and the playing field is being leveled.
In this future, a teenager in Africa can have the creative prowess and business acumen of a Harvard MBA.
In this future, people shouldn’t fear being replaced by AI. They should fear being replaced by other humans using AI.
Okay rant over, back to our original programming: ‘the problem’.
The labor problem extends into an even more important area: food. While the rate of population growth is slowing, population totals will continue growing for decades to come. Despite more mouths to feed, there just aren’t enough people tending the fields, picking the produce, and manning the proverbial plows of modern-day farming.
This labor shortage leads to all kinds of problems, including food rot + waste (from a lack of human hands to harvest) and a decline in nutritional value (taking shortcuts to make up for a lack of labor).
Similar problems extend into industries like mining & natural resources. Say what you will about the environmental impact, these materials are critical for the products that control our lives (the copper in your iPhone), and the technologies that will power the eventual green energy transition (e.g. lithium for batteries).
Another major labor challenge is in healthcare. The most prominent is the nursing shortage, which amounts to around 6 million unfilled roles today, and an estimated 18 million unfilled by 2030.
This surprised me. From a distance, you’d think nursing is a highly sought-after job. It pays well and speaks to many people's care giving natures. But in reality, nursing is struggling to attract and retain talent. Even when they do, burn out is rampant and/or people phase out due to the regional nature of the roles (i.e. many of the openings are in places that people just don't want to live).
Unfortunately, this nursing shortage couldn't come at a more inconvenient time. Baby boomers are aging, fast and in droves. In this wake brews an elderly care crisis that is too close to home for most.
In a perfect world, families can hire in-home help, or send mom/dad too a glitzy, 5-star resort level ‘community’. But this is a luxury that only the most fortunate can afford.
Everyone else is left with two options: stay home to take care of them yourself, or send them to a second-rate nursing facility, mired with problems and suffering, ranging from loneliness to sub-par attention & care.
Either way, the toll is more than taxing; financially, physically, and mentally. Research shows that there are 53 million people in the US providing care to a loved one or friend. This group is losing $533B in potential wages… annually.
That’s just the opportunity cost. According to the National Alliance for Caregiving, “Ten million caregivers aged 50 and older will lose a total of $3 trillion in wages, pensions, retirement funds and other benefits due to their caregiving duties. These figures are more staggering when you consider that nearly two-thirds of family caregivers are employed, meaning they are juggling caregiving responsibilities with their job.”
Pretty staggering numbers…
What if there was a way to keep mom & dad in their home, but with affordable & reliable care? And for those in the nursing homes, what if we had caretakers that were more consistent, more attentive, more empathetic, and more capable of companionship?
So, in face of these problems, the fears of job displacement should start to dissolve.
Our problem isn't displacing jobs. It's filling them and/or making them easier, less stressful, and higher paying.
When you listen to the various entrepreneurs pursuing humanoids, you quickly realize money is not their ‘why.’ This technology is just too hard, the journey too long, and the outcome too speculative. There are much easier and quicker ways to make money.
That said, this is a wildly expensive mission, requiring the engines of capitalism at full throttle. Fortunately, unlike some R&D moonshots, the use cases are clear and the potential business impact is astounding.
It doesn’t take much math to quickly realize that if this works, the winners could become amongst the largest companies in the world. Just look at the pie: a TAM of around $45 Trillion (aka half the world's GDP).
Even if you only captured the most minute sliver of this market, the revenue potential is massive. But what happens when you layer in the TAM for domestic humanoids? Or how about social humanoids that will play & entertain... or perhaps ones that will love?
Dr. Kloor believes that over the fullness of time every household will own a robot, and eventually, most individuals. Skeptics might scoff.
They also scoffed at computers, dishwashers, and cars.
If Dr. Kloor’s prediction is right, let’s assume an addressable market of 1.5 billion units (approximately how many cars are owned today worldwide). At a price of around $20k (at maturity), that’s a baseline TAM of $30T. Considering the additional utility over cars, and the lower price point, it feels reasonable to assume the ‘personal robot’ TAM could be at least 2x ($60T).
And we haven’t even gotten to the software side of the story: think of an app store for robotic skills, and all the additional economic activity within…
Not sure this is the best analogy… but in considering the ratio of HW/SW revenue from the iPhone (the business model Beyond is trying to replicate), this would add at least another $6T-$9T.
Needless to say, the business opportunity is massive, for both the humanoid OEMs (original equipment manufacturers) and the wider ecosystem of app developers, vendors, and service providers.
But what about the impact on individual businesses who use humanoids? This is where things get really compelling.
With some basic back-of-the-napkin calculations, employing humanoids quickly becomes a no-brainer. It starts with analyzing potential savings compared to the traditional hourly wage.
Let's say you own a factory and you're paying someone $25 per hour. At forty hours per week, and 52 weeks, that comes out to around $70k a year. This is about the minimum wage in most factories (includes some overhead costs).
That's just one worker for one shift per week. But most factories have multiple shifts to maximize yield in a 24-hour period. It's usually three shifts, so now you're looking at a cost of over $200k for just one operation/task. And this is often the low-skill stuff. Total costs for high-skilled tasks can push well into the $400k range. When you start to consider the hundreds of tasks and operations running in parallel? The operational costs get eye-popping, fast.
Now, consider the unit economics with a humanoid robot. At launch, Beyond plans to lease their robots at a price point of $50k, and around $15k at maturity. Tesla claims they can get manufacturing costs down to $10k, and sell for around $30k. This one robot will work 24/7, so no need for multiple workers on multiple shifts.
This robot will also be a one-time, upfront expense. Or, if you're a smaller/new business managing cash flow, you could incur a smaller variable cost by leasing the robot–like you would a car–with monthly payments.
Not to mention, the upside in avoiding all the other headaches and unknowns unique to human personnel: sick days, quitting on a whim, upfront training/on-boarding, HR problems, union strikes, failed drug tests, the list goes on.
Needless to say, the business case is a slam dunk. The opportunity for savings alone is huge, not to mention the operational efficiency & predictability. For larger factories, those savings push into the hundreds of millions, if not billions as the robots’ skills increase.
As you apply this scenario to all the possible use cases, and all the verticals, you have to wonder... What does this mean for the economy? What's the macro impact?
Well, I'm no economist (it was actually one of my worst subjects in school). But here are some vectors that get the wheels spinning:
Prices down: The marginal cost of production plummets, followed by prices. Suddenly, luxury cars are affordable, five-bedroom homes are affordable, elderly care is affordable, etc. Over the fullness of time, costs rapidly approach $0. So, there's a future where earnings just don't have to be terribly high to buy all the stuff and live a really great life. Aka: we just won't have to work as hard to live the life we want to live.
More stuff & experiences (abundance): The cost of entry for entrepreneurs’ plummets, bringing more innovation, more products & experiences, and more competition (further driving down prices, while boosting quality).
Economic pie explodes: Think about all the time you spend doing things that no one pays you to do. Things like driving to work, going to run errands, doing your laundry, walking your dog, etc. This is ‘dead time’, with no economic impact and no revenue accruing. But with humanoids, all of a sudden this ‘dead time’ is being captured as a ‘paid service’. Hundreds of millions of hours that were not captured by GDP now convert into an economic tailwind. This one is harder to imagine, and probably needs some deeper thinking/analysis, but feels notionally correct.
Why does this matter? Because without such a boost in GDP, we could very well be screwed.
If you haven’t been paying attention… Global Debt to GDP is bonkers (to use the more technical term). It’s even more bonkers in the US, where we’re in the midst of a mind-numbing debt spiral.
This is not a new problem, but it’s a rapidly escalating one. To stay afloat, (and to analogize to personal finance) we’re taking out more credit cards to pay off the last credit card, and the one before that, and the one before that.
Now, our interest payments are exceeding our income and these additional ‘credit cards’ + interest payments are piling up to a point of no return. If you’ve been wondering where all this Roman Empire obsession has been coming from? This is one of the reasons, aka empire collapse.
That’s a wrap
Okay, that’s the backdrop and why you should care about humanoids.
Bringing Part I of this series home… It feels safe to say that there are many reasons why this level of automation is a good thing, if not existential given the pickle human modernity has gotten us into.
So how the heck do we make humanoids real? And who is going to pull it off?
Considering the nature of this business, it's likely to have ‘winner-takes-most’ dynamics, with a few other players rounding out the arena and satisfying various niches.
For those winners, the commercial outcomes could be the largest we’ve seen since the portals to the internet: Google, FB, Amazon, etc.
So how can an underdog like Beyond Imagination find itself amidst such giants?
Well, eyes peeled for Part II, where we’ll analyze the competitive landscape and Beyond’s strategy to win, from both a technology, business model, and GTM perspective.