Robots need humans, too
Oakland business accelerator gives robotics startups help that goes beyond offering money
Pittsburgh Post-Gazette
You always want more data, especially in a startup.
That’s according to Austin Webb, the founder and CEO of South Side-based robotic indoor vertical farming company RoBotany.
Despite his company leveraging analytics to increase labor efficiency and crop output, he’s not talking about data points fed to a machine-learning algorithm. He’s talking about advice.
“I try to get multiple opinions on difficult decisions,” he said. “I then let myself make the final decision.”
Christopher Moehle, managing director of Oakland-based investment manager Coal Hill Ventures, provided guidance to the fledgling startup. It’s part of his firm’s business model and what he calls a solution to Pittsburgh’s “valley of death” problem, wherein startups sputter out after early-stage seed funding, unable to raise capital in larger venture rounds.
At The Robotics Hub — an independent venture firm and business accelerator originally established under Coal Hill Ventures — Mr. Moehle combines monetary support, through funding, and human capital to not only invest in companies, but nurture them.
The accelerator — which also had help at its 2015 launch from the National Robotics Engineering Center and a monetary gift of an undisclosed amount from GE Ventures, the investment arm of Fairfield, Conn.-based General Electric — was created with the idea of attracting robotics startups to the region and anchoring existing ones.
At the accelerator, a team of six full-time paid employees — which can grow when including one-time ad hoc work — typically spends three to six months working in advisory roles before investing in a business. That’s the secret sauce behind The Robotics Hub and Coal Hill, which function as one joint “specialist fund,” as Mr. Moehle calls it.
Other specialized funds in Pittsburgh include the Pittsburgh Life Sciences Greenhouse in Oakland, which focuses on life science startups, and Shadyside’s Next Act Fund, which invests in women-led companies.
The Robotics Hub eyes startups in artificial intelligence, robotics and medical devices, using employees’ specialized knowledge from working in the industry to help guide startups before making a seed-level or early venture round investment.
“They’re harder to understand and often more expensive than your typical VC investment,” Mr. Moehle said.
If a venture capital firm can add to a startup’s resources, he said, it makes that investment more valuable. With respect to robotics, even fully funded companies can be thin on diversity of skill — meaning startups with a great product might not always make the best business decisions.
So The Robotics Hub staff sits in on sales calls, helps decide when another person should be hired and so on — exactly the type of business assistance the firm provided to RoBotany, which now has 12 employees.
Mr. Webb founded RoBotany in January 2016 while studying for his MBA at Carnegie Mellon University. He worked closely with Dave Mawhinney, executive director at the Swartz Center for Entrepreneurship, who, in turn, introduced him to Mr. Moehle.
Mr. Moehle served as a sort of adviser for several months, guiding Mr. Webb and his team through critical questions about the life cycle of developing and building a product as well as marketing and finding customers.
“We said, ‘Hey, here’s our plan and here’s how we want to move quickly,’” Mr. Webb said, adding that resources were tight, with all funding coming from grants through CMU, the National Science Foundation and the Project Olympus incubator on campus.
“You want to be able to do as much as you can with that,” he continued. “It was a matter of being able to bounce ideas off of him and get feedback.”
While the accelerator has a focus on Pittsburgh, due to its connection with Carnegie Mellon, it’s technically location-agnostic. “We chose The Robotics Hub name for a reason,” Mr. Moehle said. “Certainly, this is the home of advanced robotics … but there’s a lot we can
be doing for other places and there’s a lot that other places can be doing for us.”
Some of its employees work in New York and in Silicon Valley, widening the relationships the accelerator may leverage in the future for its portfolio companies.
To date, The Robotics Hub’s portfolio includes eight companies, though only five are listed on Crunchbase, a portal for self-reporting funding rounds.
That’s strategic, Mr. Moehle said. It may make more sense for some companies not to disclose who their current investors are, wait to announce them or just withhold the numeric amount, depending on the circumstances.
While he did not give specifics on any investments, Mr. Moehle noted that after working with companies for a while, the accelerator may invest in $300,000$500,000 seed-level rounds. In a Series A round, the first level for much larger venture capital funding, it might contribute to a round three to five times its original commitment.
In September 2016, The Robotics Hub made its first investment in Agility Robotics, an Albany, Ore.based firm creating legged robots for mobility applications.
Around the same time, RoBotany and Oaklandbased TravelWits were the next investments, Mr. Moehle said. Oaklandbased biotechnology firm Ariel Precision Medicine and San Francsico-based augmented reality platform Lumenora are more recent investments.
There’s a point where a startup’s training wheels come off.
“It’s like being a good parent almost. At some point in the reasonable future, the companies won’t need you anymore,” Mr. Moehle said.
“You gotta realize you’re not the star, they are. You succeed when they get the trophy, not because you’re on stage with them.”