Robotics Investments Summary

SOURCE: The Robot Report

In October 2019, The Robot Report tracked about $1.3 billion in robotics transactions. About half of the investments, or $532 million, this past month were around autonomous vehicles, followed by healthcare, logistics, and agricultural robotics.

Investors, the major automakers, and technology companies large and small are continuing to race toward self-driving cars, trucks, taxicabs, and buses. Zoox Inc.’s $200 million funding toward a Series C round for its robotic taxis was the largest transportation transaction reported last month.

At the same time, the trend toward fewer small transactions has also continued. Exit value will likely exceed $200 billion this year, according to PitchBook. However, global venture capital funding has declined in much of the world (including the U.S.) while remaining steady in Asia, reported Deal Street Asia and Crunchbase.

The total from October’s 43 reported robotics fundings is down from 39 deals worth approximately $2.4 billion in September 2019. In comparison, there were 23 deals worth $1.2 billion in October 2018, so the seasonal totals are close. See also our roundup of the 20 largest investments in the first half of this year.

The table below lists investments in millions of U.S. dollars, where amounts were publicly available:

Robotics investments, October 2019

CompanyAmt. (M$)TypeLead investors, partnersDateTechnology
Activ Surgical Inc.11Series ADNS CapitalOct. 29surgical robotics
Aerodyne Group30Series BDrone Fund, Gobi PartnersOct. 16drone services
AiM Medical Robotics Inc.0.2equity saleOct. 3surgical robotics
AnotherBrain20.7Series AGroupe SEBOct. 1AI chips
Augmenta SA2.5seedHardware Club, Marathon Venture CapitalOct. 8precision agriculture
Bominwell Robotics7Series BNorthern Light Venture CapitalOct. 30inspection, security
Cerence Inc.IPO/spinoutNuance Communications Inc.Oct. 1connected cars
CODE42 Inc.25pre-Series AKia MotorsOct. 30autononmous shuttles
Cognicept Systems Pte. Ltd.seedSurge AheadOct. 9robot support LLC50pre-Series AFosun RZ CapitalOct. 7autonomous vehicles
Diligent Robotics Inc.3seedTrue Ventures, Ubiquity VenturesOct. 1hospital robot
Disperse15Series ANorthzoneOct. 22AI construction monitoring
EHang Holdings Ltd.100IPOOct. 31passenger drones
Fabric110Series BCorner VenturesOct. 23micro-fulfillment centers
Einride AB24Series AEQT Ventures, NordicNinja VCOct. 10self-driving trucks
Ghost Locomotion Inc.32.7Series COct. 28autonomous vehicles
Gideon Brothers d.o.o.2.95seedPentland VenturesOct. 28autonomous mobile robots
Hummingbird Technologies Ltd.10Series BBASF Venture Capital, TELUS VenturesOct. 15precision agriculture
Kane Robotics Inc.0.175equity saleOct. 10robotic grinding
KuanDeng Technology14.2Series A+Yihang FundsOct. 14autonomous vehicles
Labrador Systems Inc.2pre-seedHAXOct. 15household assistive robot
Myomo Inc.3term loanChicOct. 23wearable robotics
NetraDyne Inc.Series BHyundai CRADLEOct. 4machine vision
Osaro Inc.16Series BKing River CapitalOct. 3industrial automation software
PATS Indoor Drone Solutions0.278seedUNIIQOct. 4greenhouse drones
Prophesee SA28Series CEuropean Investment BankOct. 28vision sensors
Realtime Robotics Inc.11.7Series ASPARX Asset ManagementOct. 16AI for robots, self-driving cars
Robobloq Co.1.4seedZhonghe Venture CapitalOct. 28STEM
Scallog SASseedColruyt GroupOct. 22warehouse robots
Shenzhen Youdi TechnologySeries BOct. 9delivery robots
SkyDrive Inc.13.9seedSTRIVE III Limited Liability Partnership, ITOCHU Technology VenturesOct. 4drone taxis
Smart Radar System Inc.4Series AKakao VenturesOct. 28sensors
SpeedBotinvestmentTongwei CapitalOct. 83D visual perception
Tactile Mobility9investmentPorsche, Union Tech VenturesOct. 29vehicle sensors
TIBOT Technologies3.3Series ASeventure Partners, DemeterOct. 11poultry robotics
Titan Medical Inc.25stock saleOct. 25surgical robotics
Toggle Industries Inc.3seedPoint72 Ventures AI GroupOct. 15construction
Velodyne LiDAR Inc.50investmentHyundai MobisOct. 22autonomous vehicles
Verdant Robotics Inc.11.5Series AOct. 18agricultural robotics, AI
Virtual Incision Corp.10securities saleOct. 29surgical robotics
Wide Stool Technology14.1Series AEasy FundOct. 14HD 3D maps for autonomous vehicles
Wolkus Technology Solutions Pvt. Ltd. (Fasal)1.6seedOmnivore Ventures, Wavemaker PartnersOct. 30precision agriculture
Zoox Inc.200Series COct. 22autonomous vehicles

Seven robotics mergers and acquisitions were reported this past month, in comparison with six last month and four a year ago. The Robot Report has also compiled a list of 10 notable mergers and acquisitions in the first half of 2019.

Here are the mergers and acquisitions of the past month:

Robotics mergers & acquisitions, October 2019

CompanyAmt. (M$)Acquirer, partnerDateTechnology
Altius Space MachinesVoyager Space HoldingsOct. 23satellite servicing
Aria Insights Inc.FLIR Systems Inc.Oct. 2tethered drones
AutoGuide Mobile Robots58Teradyne Inc.Oct. 21mobile robots
DeepScale Inc.Tesla Inc.Oct. 1computer vision
Keihin Corp., Showa Corp., Nissin Kogyo Co.Hitachi Automotive SystemsOct. 30autonomous vehicles
Onshape470PTC Inc.Oct. 23CAD software
SUALABCognex Corp.Oct. 16machine vision

Transportation hauls in more money

After Zoox’s Series C, drone maker EHang Holdings’ initial public offering, worth $100 million, was the next largest deal in autonomous vehicles. China-based EHang is working on autonomous air taxis, as is Japan-based SkyDrive, which raised $14 million.

More down to earth, Hyundai Mobis invested $50 million in partner and sensor maker Velodyne LiDAR, while raised $50 million in pre-Series A funding for its robotic taxis (see also our table of automotive funding for September).

Ghost Locomotion raised $32.7 million in Series C funding as it develops its suite of cameras and computing to make existing cars self-driving. Meanwhile, CODE42 plans to use its $25 million in pre-Series A funding to continue developing its Urban Mobility Operating system and create a “global autonomous transportation-as-a-service ecosystem.”

Einride, which is working on self-driving trucks or delivery “pods” raised $25 million led by Kia Motors to expand in the U.S.

Investors and engineers are recognizing high-definition mapping as a significant challenge for autonomous vehicles. KuangDeng Technology raised $14.2 million, and Wide Stool Technology raised $14.1 million. Both are in China.

Self-driving cars also need to perceive the world around them and then compare that with various maps. Tactile Mobility, also known as MobiWize, raised $9 million from Porsche and others for its tactile sensing and data analytics systems. Tesla, which itself borrowed $700 million from China Merchants Bank in October 2019, acquired computer vision company DeepScale for an unspecified amount.

Japanese automakers Honda and Hitach last month said they are merging Hitachi Automotive Systems with Honda affiliates Kehin, Showa, and Nissin Kogyo. Hitachi Automotive Systems has been testing autonomous and connected vehicles in North America and Japan.

Hyundai CRADLE invested an unspecified amount in NetraDyne, which uses AI, vision-based dashcams, and fleet management software for safety. Hyundai said it expects to use the technology to improve Level 3 advanced driver-assistance systems (ADAS).

Conversational artificial intelligence company Nuance Communications spun out Cerence Inc., which is working on speech recognition, natural language processing, and acoustic modeling for the automotive industry.

Healthcare robots reach for funding in October 2019

Robot-assisted surgery and other healthcare companies raised $52.2 million last month. Titan Medical bounced back from the news that it had to delay its submission of the Sport device to the U.S. Food and Drug Administration (FDA) partly because of a lack of funding by offering $25 million in stock.

MassRobotics resident Activ Surgical closed $11 million in Series A funding for its ActivSight system. Virtual Incision, which is working on a miniaturized robotic surgical assistant, raised $10 million (see also our list of surgical robotics transactions to date).

AiM Medical Robotics raised $200,000 in an equity sale, according to an SEC filing. It is working on a robot for neurosurgery that can be used while a patient is in an MRI scanner.

Beyond surgical robots, wearable robotics company Myomo obtained a $3 million term loan, and Diligent Robotics raised $3 million in seed funding as it launched the Moxi hospital robot.

The Robot Report is launching the Healthcare Robotics Engineering Forum, which will be on Dec. 9-10 in Santa Clara, Calif. The conference and expo will focus on improving the design, development, and manufacture of next-generation healthcare robots. Learn more about the Healthcare Robotics Engineering Forum, and registration is now open.

Logistics robotics gears up

With the holiday shopping season approaching — and some retailers putting out Christmas displays before Halloween — the need for robots in the supply chain is clear. Fabric, previously known as CommonSense Robotics, raised $110 million as it builds micro-fulfillment centers across the U.S.

North Reading, Mass.-based Teradyne, which already owns collaborative robot leader Universal Robots, logistics robot maker Mobile Industrial Robots, and integrator Energid, just acquired AutoGuide Mobile Robots for $58 million.

Osaro raised $16 million in October 2019 for its picking and vision systems, while Gideon Brothers raised $2.95 million and partnered with European logistics leader DB Schenker to deploy its vision-driven autonomous mobile robots.

Scallog raised an unspecified amount in seed funds to build more warehouse robots, and Shenzhen Youdi Technology raised Series B funding for its delivery robots.

Agbots reap new funds in October 2019

Agriculture has long been mechanized, and the trend will only intensify with agbots, say analysts. The global market for agricultural robots or agbots will grow from $16.8 billion in 2020 to $75 billion by 2025, predicts Market Research EngineAccording to Markets and Markets, it will experience a compound annual growth rate (CAGR) of 25.34%, from $4.1 billion in 2017 to $25.2 billion in 2025.

Verdant Robotics reaped $11.5 million in Series A funding, according to a filing with the U.S. Securities and Exchange Commission (SEC). The Hayward, Calif.-based company’s agbots use computer vision and AI for fruit cultivation.

Hummingbird Technologies raised $10 million for its on-demand combination of remote sensing, AI, and data analytics for precision farming. France-based TIBOT Technologies raised $3.3 million for robots to improve poultry operations.

In precision agriculture, Augmenta raised $2.5 million in seed funding, and Wolkus Technology Solutions, also known as Fasal, raised $1.6 million in seed funding.

Greenhouse Drone provider PATS Indoor Drone Solutions raised $278,000 as it develops aerial drones for insect control.

Small drones fight insects in a Dutch greenhouse. Source: PATS Indoor Drone Solutions

Infrastructure inspection on the rise

The individual transactions around construction and inspection robots and drones in October 2019 may be relatively small. However, like agbots, they represent a growing set of commercial applications, thanks to improving sensors and communications.

Aerodyne Group raised $30 million in Series B funding for its drone services. Disperse garnered $15 million for its system, which uses AI to monitor construction sites.

Speaking of aerial drones, security robotics provider FLIR Systems acquired the intellectual property and operating assets of tethered drone maker Aria Insights, formerly known as CyPhy Works.

Shenzhen, China-based Bominwell Robotics raised $7 million for inspection and security robots, and Brooklyn, N.Y.-based Toggle Industries raised $3 million in seed funding for its rebar robots.

Manufacturing and perception in October 2019

Industrial automation investments in October 2019 combined robotics and machine vision. For instance, SpeedBot raised an unspecified amount for its industrial robots, which use 3D machine vision.

Prophesee raised $28 million to commercialize its “event-based” vision sensors, and Smart Radar System closed a $4 million Series A round for its 4D image radar used in industrial and automotive applications. Cognex acquired SUALAB to improve its visual inspection capabilities.

In other robotics for manufacturing, robotic grinding provider Kane Robotics raised $175,000 in an equity sale, according to an SEC filing. Sequoia Capital participated in seed funding for Cognicept Systems, which provides “human in the loop” telerobotic troubleshooting.

Funding for robots in schools, homes, and outer space

The remaining robotics transactions for October 2019 were in a variety of areas. In the biggest single deal of the month, PTC paid $470 million for Onshape, whose software-as-a-service (SaaS) offering can aid in the design of products including robots.

Also in software, Realtime Robotics raised $11.7 million in Series A funding for its collision-avoidance technology. On the hardware side, AnotherBrain raised $20.7 million for chips that it said are energy-efficient and can lead to “organic AI.”

Labrador Systems raised $2 million in pre-seed funding for its household assistant robot, and China-based Robobloq raised $1.4 million in seed funding for its educational robots. Crowdfunding campaigns are outside the scope of this roundup, but Knightscope’s StartEngine listing is worth noting as the security robot provider prepares for an IPO.

Finally, for now, Voyager Space Holdings said it plans to acquire Altius Space Machines, which is designing a robot to service satellites.

Concept art of the Bulldog robot for servicing satellites. Source: Altius Space Machines

SOURCE: The Robot Report – > Editors’ note: What defines robotics investments? The answer to this simple question is central in any attempt to quantify them with some degree of rigor. To make investment analyses consistent, repeatable, and valuable, it is critical to wring out as much subjectivity as possible during the evaluation process. This begins with a definition of terms and a description of assumptions.

Investors and investing
Investment should come from venture capital firms, corporate investment groups, angel investors, and other sources. Friends-and-family investments, government/non-governmental agency grants, and crowd-sourced funding are excluded.

Robotics and intelligent systems companies
Robotics companies must generate or expect to generate revenue from the production of robotics products (that sense, analyze, and act in the physical world), hardware or software subsystems and enabling technologies for robots, or services supporting robotics devices. For this analysis, autonomous vehicles (including technologies that support autonomous driving) and drones are considered robots, while 3D printers, CNC systems, and various types of “hard” automation are not.

Companies that are “robotic” in name only, or use the term “robot” to describe products and services that that do not enable or support devices acting in the physical world, are excluded. For example, this includes “software robots” and robotic process automation. Many firms have multiple locations in different countries. Company locations given in the analysis are based on the publicly listed headquarters in legal documents, press releases, etc.

Funding information is collected from a number of public and private sources. These include press releases from corporations and investment groups, corporate briefings, industry analysts such as Tracxn, and association and industry publications. In addition, information comes from sessions at conferences and seminars, as well as during private interviews with industry representatives, investors, and others. Unverifiable investments are excluded.

SOURCE: The Robot Report

Robotics Market Map: 80+ Robot Startups Working In Factories, Homes, And Hospitals



Robotics Market Map: 80+ Robot Startups Working In Factories, Homes, And Hospitals
Robotics Market Map: 80+ Robot Startups Working In Factories, Homes, And Hospitals



How Fast is the Robotics Industry Growing?



Perhaps the most interesting way to peek into the future of industrial robot installations is to look at potential sales in China.

Currently, the world’s most populous nation has a density of robots that is about half of the world average, equal to just 36 robots for every 10,000 manufacturing workers in China.

However, this is changing fast. It’s been the largest market for robots since 2013, and in 2014 the country bought 57,100 robots – the highest quantity ever recorded in a year. By 2018, one in every three robots in operation around the world will be in China.

What will happen if China’s density approaches that of other robot industrial centers?

Highly automated countries such as Germany, Japan, and South Korea all have robot densities that are multiples higher. South Korea, for example, has 478 industrial robots for every 10,000 workers – a ratio that is 13x higher than China’s.

With this kind of potential for growth, it’s clear that this is only the start of the robot story.

Purpose Driven Companies: How leading organizations are using purpose to discover new needs, build new business models.


What’s the purpose of purpose?

In HBR’s 2015 report, “The Business Case for Purpose,” 80 percent of CEOs declared that purpose is important for their organizations but fewer than 50 percent of those organizations leverage purpose in an impactful way. The problem is that few leaders know how to think about purpose in a clear and focused way or how to help their companies act on it effectively. Some see purpose as an individual concern and talk about in terms of directing people toward a meaningful life or meaningful work. Others view it as an organizational challenge, and link it to  an altruistic or philanthropic agenda (the new Corporate Social Responsibility) or as a way to connect to employees and customers.

A select few organizations, however, are using purpose in a very distinct but deliberate way.

First, they define purpose as their company’s unique ability to have an impact on meaningful challenges faced by customers in their market or within society or even globally. Second, they are using that purpose as a core driver of their business rather than as a merely altruistic exercise.

The articulation of purpose shifts their orientation from current internal concerns and problems to urgent, emerging or future challenges and needs of customers, society, or the world. The pursuit of that purpose helps them drive innovations that improve or disrupt products, services and strategies and either change the game in existing markets or create entirely new markets. As a result, these companies engage more directly and meaningfully with customers, achieve growth that is directed toward filling more significant or meaningful needs, and distinguish themselves from competitors in a way that is difficult to emulate.


A Different Approach to Doing Business


A number of contemporary high-growth tech companies have been very clear and upfront about their organizational purpose. Some, such as Google, Groupon, and Facebook, famously included founder’s letters in their IPO prospectuses to declare their focus on long-term purpose over short-term profit.

Purpose-driven innovation is not just for high-growth startups in glamorous industries like tech, however, but also for incumbents in all industries. For example, the Food & Beverage sector may not initially strike observers as innovative or purpose-driven in any meaningful way. Yet, the five largest global companies in the industry, DanonePepsiCoNestleUnilever, and Mondelez, have pointedly shifted the way they do business to align their purpose more closely with their growth algorithm and strategy.


Paris-based Danone is at the forefront of this change. It has linked itself to health and nutrition from its founding in 1919 with its mission to achieve “health through food” by encouraging healthier eating habits and sourcing practices. Since 1972, Danone has been deliberately applying that ideal to shape its approach to doing business. Specifically, Danone develops, markets and sells products in collaboration with local stakeholders and in consideration of local needs, cultures, and economic circumstances. This helps Danone advance its purpose to reduce world hunger and improve nutrition and sourcing while also achieving growth and market share.


The approach still plays out decades later. In 2006, Grameen Bank founder, Muhammed Yunus, partnered with Danone to develop a Bangladesh-based enterprise, Grameen Danone, launched to develop nutritious yogurt that local populations could afford. The company leveraged local saleswomen to sell an inexpensive product on commission and build interest before developing local production facilities to meet demand. That strategy aligned purpose (reduce malnutrition and poverty) with practice (a workable business model that helped Danone enter and establish growth in a new market). As a result, Grameen Danone has developed new products and approaches that are hard for other companies to compete with or copy. The pursuit of purpose, in other words, has helped the company develop and scale an appealing product that not only meets the market need for taste and affordability and improves health and nutrition but also boxes out competitors.

Danone isn’t alone on this. Unilever, a company that shuns short-term profitability over long-term growth objectives especially in emerging markets, tries to develop brands linked to distinct social causes. It’s found that those brands grow at twice the speed of brands without a clear purpose. Nestle has organized its business around 39 commitments with social value, in areas such as nutrition (e.g., reduce salt and sugar in products), rural development (e.g., implement responsible sourcing), water (e.g., increase efficient use and sustainability), the environment (e.g., improve packaging), and human rights (e.g., eliminate child labor). Rather than limit themselves to one purpose, this approach aligns them to many different purposes that impact the world. PepsiCo has shaped its growth strategy around its “Performance with Purpose” outlook, and is investing in sustainable agriculture and environmental practices that serve their purpose and profitability goals. Mondelez, reliant on innovation and talent to win market share in a highly competitive environment, has essentially outsourced its innovation function to a network of startups and retailers to develop new consumer offerings, linking those products more closely to customer needs.


Corporations in the Food & Beverage industry may be predisposed to “purpose” because they are vulnerable to consumer and environmental criticism, and closely linked to health, nutrition, and sourcing issues. Yet, their purpose-led innovations and strategies are not being implemented merely to tick the box on a public-relations oriented CSR effort. They are about achieving growth, profitability, and competitive advantage in pursuit of purpose.

To start, they must define the role purpose currently plays in their organization’s strategy and approach to doing business.

Aligning Purpose to Your Strategic Compass


As the examples from the Food & Beverage industry also show, the level of idealism and impact inherent in a particular purpose varies. Some are more global and altruistic (make the world a better place) while others are more concerned with immediate customers and market pressures (delight customers with better products). This does not indicate a defect or flaw in one premise and a virtue or strength in another. Rather, the difference is an indication of where that company is strategically focused.


When my team began researching and reflecting on the relationship between purposestrategy and innovation as a way of clarifying the purpose of our own unit, we decided to look at a wide range of companies over the past 15 years and how they have operationalized or directed themselves according to their declared or understood purpose.


First, we looked at 8 robust sectors ranging from Food & Beverage to Motor Vehicles and Telecoms, and selected the top three to five representatives of those sectors according to the Fortune Global 500. We analyzed their mission statements and their focus on problems or needs that were linked with their purpose, and we assessed how clearly their business model was aligned with having a sector, societal or global impact.


Then, for comparison, we also looked at a number of small or emergent startups with particularly clear or compelling purpose-orientation.


We quickly discovered a number of nuances.


  1. Some purpose-driven companies are operationally focused (better products, diverse talent) while others are focused on broader needs that are more societal (economic inequality or injustice) or global (world hunger or environmental sustainability). We called this span our x-axis.


  1. Some purposedriven companies are focused on current sectors and markets (existing spaces) and others are focused on new or emerging sectors and markets (white spaces). We called this orientation our y-axis.


  1. Incumbents and startups are equally capable of capitalizing on purpose, though they may be playing in different quadrants.

Next, we ranked each company’s “purpose-business model” on a scale from 1 to 10, depending on whether a particular company has a purpose that is largely operationally focused (1) or largely globally focused (10). We similarly scored these companies against their innovation focus to compare their level of attention to existing spaces over white spaces.

Finally, we plotted the results onto a matrix.

While this analysis was largely subjective and interpretative, it did allow us to see these companies in interesting and insightful ways with some surprises.

  1. Compete = Operational Focus + Existing Space

These companies are in intense traditional competition in crowded markets. Most of the organizations we found in this quadrant were large and established with high market capitalization. A sense of purpose gave them some but not a lot of clarity and distinction between competitors and in the eyes of customers, but mostly led to innovations tied to internal performance levels and incremental improvements in products. For example, PepsiCo focuses on procuring talent that is diverse and ethical and using sourcing practices that are sustainable and efficient, and it leverages that to improve its competitiveness.


  1. Hyper-Growth = Operational Focus + White Space

These companies are trying to outpace competitors by expanding the narrow definition of a traditional market to satisfy unmet needs or pain points often through new technology. They grow explosively by bringing those innovations to scale for an established market of consumers. Netflix famously came to dominate the home video market by introducing DVD delivery by mail and later through streaming services in line with its purpose to provide entertainment anytime and anywhere. We found that most but not all these companies were startups or recent ventures.


  1. Redefine = Global Focus + Existing Space

These companies broaden their purpose beyond traditional operational concerns to more global concerns, yet they compete in traditional markets. They try to make a difference in that area of global concern by leveraging their business model. So, for example, Tom’s Shoes tries to alleviate the problem of shoelessness in the developing world through a business model in which each pair of shoes that is purchased means another pair of shoes is gifted. In a crowded market, this gives Tom’s Shoes distinct appeal for consumers who want to do more to help the world with their money. In a sense, those customers engage with Tom’s Shoes to help solve a global problem. The success of Tom’s Shoes as a traditional company fuels that capability, redefines market expectations, and distinguishes them from competitors. This group included a mix of new and established businesses.


  1. Disrupt = Global Focus + White Space

These companies are focused on global needs in areas that are not being served by businesses or with technologies and approaches that are not being applied to those problems. They are disruptive in the sense that they are driving innovations that haven’t been seen before while also bringing benefits beyond the boundaries of their sectors or markets. We found a mix of startups and established companies, though the established companies had internal startup engines driving innovations. Success for these companies means disruptive growth that also creates improvements in global problems.


Older or newer companies, irrespective of size or sector, can be found in any quadrant, though there are some tendencies and clusters. Traditional established companies, for example tend to innovate on operationally focused purposes within their existing markets to beat competitors; while it’s easier for startups to be idealistic while trying to win in new markets.


Our initial conclusion was that it is easier and better for a company in one quadrant to define and align its business model with a purpose that suits that quadrant. So, for example, GM or AT&T are beholden to shareholders and customers with established expectations, and it would create misalignment and confusion to suddenly adopt a purpose that was focused on alleviating global problems either in existing or new markets. Similarly, a startup with an operationally-focused purpose would face strong headwinds in an established market but have more potential for competitive advantage in a new market or by aligning itself with a more societally or globally appealing purpose.


However, as we reflected on the potential for purpose-driven innovations to either drive growth or improve competitiveness, we quickly saw an advantage for established companies to move up and to the right on the matrix.


We also soon saw examples of companies that were innovating in exactly this way. IBM distinguishes itself as a technological solutions provider by leveraging a focus on global problems – smarter planet, smarter cities, smarter healthcare. Nestle and Unilever have done the same.


In the past year, the big auto manufacturers, ToyotaVolkswagen, and General Motors have partnered with UberGett and Lyft respectively, as a way of moving into white space markets while also improving their capacity to develop self-driving technology that reduces accidents and improves efficiency.


Where does your company currently exist, and how can you move further up or right by focusing on purpose-driven innovation?


Reverse-Engineering Purpose


Purpose can seem so intangible or idealistic in nature that many may find it difficult to imagine how they can leverage purpose to actually innovate and solve business challenges. However, we’ve seen models for doing so that provide a clear path to follow.

(business, technological, market) that stand in the way, while leveraging innovative solutions and business approaches to overcome them. In this way, purpose and innovation becomes tightly woven with strategy and business model.


Muhammed Yunus, mentioned in the Grameen Danone example, was a banker who wanted to alleviate poverty in Bangladesh (a purpose with global need). Yunus observed the impact that small loans could have on helping launch and support small businesses. By offering micro-loans to female entrepreneurs specifically, Yunus’ Grameen Bank hit multiple objectives: it funded new business growth, alleviated family poverty, and saw a return on its investment.


Elon Musk is widely seen as a visionary, but he’s also a great example of an innovator who is purpose-driven. Consider how deliberately he focused both Tesla and SpaceX on a clear purpose and how systematically he has worked backward to overcome barriers and challenges with business solutions and innovations. Tesla, for example, is the outcome not the initiator for solving an overwhelming global problem – climate change. Musk recognized that climate change was driven primarily by CO2 levels in the atmosphere. The dominant culprit was fossil fuels. The answer is to switch to solar power. But how do you affect that sort of massive change in global power consumption?


The most significant user of fossil fuels is petroleum-powered vehicles. Musk’s approach was to apply business thinking and solutions to break the problem down into manageable challenges and solve each one in turn.


  • Purpose (global) – to reduce CO2 emission levels and help save the planet
  • How – by (replacing) transitioning energy use from fossil fuels to solar power
  • Through – increasing use of electric vehicles and making it easier to use solar power in homes


  • Obstacle – widespread reliance on fossil-fuel powered automobiles
  • Solution – build high-performance electric vehicle


  • Obstacle – current battery performance levels poor
  • Solution – bring in the best engineers to substantially build a better battery


  • Obstacle – customers don’t see electric vehicles as appealing
  • Solution – focus on speed, style, and brand to increase high-end demand


  • Obstacle – to scale and achieve mass consumption, lower cost models are required
  • Solution – build successively cheaper versions and cut out middle man (dealers) to reduce costs


  • Obstacle – need competition to spur demand for electric vehicles and associated services. Need open platform to scale
  • Solution – release all patents for electric-vehicle technology


  • Obstacle – need to stimulate broad demand for solar power
  • Solution – build battery pack for home use to allow solar power customers to store and efficiently use that energy


Musk pressed on through many obstacles and maintained focus on the fundamental problem because of the importance of the purpose in his sights. If he succeeds, he will have changed the world and achieved a level of significance comparable to Thomas Edison, Henry Ford and John D. Rockefeller combined.


Purpose is the New Leadership


Deciding on a purpose and striving through barriers and business challenges to achieve it is not enough. It takes a special kind of leader and an aligned organization to develop that vision, organize effectively, create innovative solutions, and attract the necessary backing and talent. It requires a new leadership.


Throughout the past 100 years, leadership has evolved to meet the business needs of the time. In the early manufacturing period, there was a need for massive efficiencies (think Kaizen or Lean). In the Mad Men era, there was a war for differentiation through mass marketing (remember Coca Cola or Campbell’s Soup). From the ‘70s through ‘80s the frequency of crisis and confusion led to the paradigm of the competent and confident persona (Jack Welch). This ideal changed again in the mid-1990s with the emergence of flattened hierarchies, entrepreneurial innovation, and the focus on scale over profit. Our very ideals of leadership, in other words, have evolved considerably over time.


Today, when trust in big corporations, the establishment, and institutions is limited, employees and customers are looking for meaning and purpose from leaders. In the Internet century, as Eric Schmidt calls it, we no longer require leaders to have more competence or experience than anyone else

 Young or inexperienced leaders with passion and vision can gain followers (as well as talent and capital) even more easily than those who come from the constrained status quo.


Since skills and knowledge can be outsourced cheaply, what’s left for leaders to provide? Excitement and enthusiasm, the spark of the new and the impactful, and a sense of meaning and direction… i.e., purpose.


Leaders today must be driven by their own purpose and the purpose of their organizations to truly motivate and align their people and customers around the needs of the world.

Since skills and knowledge can be outsourced cheaply, what’s left for leaders to provide? Excitement and enthusiasm, the spark of the new and the impactful, and a sense of meaning and direction… i.e., purpose.


Leaders today must be driven by their own purpose and the purpose of their organizations to truly motivate and align their people and customers around the needs of the world.

They are in business for a bigger reason than business

, and this excites and motivates others. In an economic climate under constant siege from competitors, new technology and changing customer expectations, there is no better way to steer straight to a destination and arrive first.


This trend is not going away. Millennial employees are more motivated by work within organizations that are purpose-driven and innovative, rather than hierarchical, status-quo and purely profit driven. Similarly, millennial customers are more interested in buying products and services from companies that have values aligned to their own, or do some good in the world.


Finally, some may argue that there are not that many purposes of magnitude to pursue for all companies to adopt one. Not true. As the companies discussed in this article indicate, there are a wide range and limitless number of purposes that can be leveraged.


Fortunately (or unfortunately) there are countless societal or world-saving problems out there for companies to drive their innovation and growth to solve.