iRobot CEO’s Inadvertent Glimpse Of A Frightening Future Sent Their Stock Soaring

by Tom Koulopoulos

Our behaviors are becoming part of a vast digital ecosystem in which the most valuable product is YOU!

iRobot CEO's Inadvertent Glimpse Of A Frightening Future Sent Their Stock Soaring

Dog Against Machine

iRobot was one of the earliest plays in the connected home market. Having developed robots for defense and space applications for 13 years prior to its introduction of the Roomba robotic home vacuum in 2002, iRobot was a pioneer and a visionary in small autonomous devices.

I have a dog that sheds enough hair to weave broad-loom carpets. I hate vacuuming. I love my Roomba. My dog, however, thinks it’s a demon device hell bent on taking over our home and replacing her as my favorite pet.

“While your robotic vacuum is sucking up all of the day to day dirt that accumulates on your floors it’s also vacuuming up a different kind of dirt, the myriad details about the layout of your home and your day-to-day habits.”

When I wrote about iRobot nearly a decade ago, in my 2008 book The Innovation Zone, I mentioned how none of the big brands in the vacuum industry were following suit with their own robotic vacuums. Fast forward 9 years and while there are a number of robotic vacuums the big brands (with the notable exception of Dyson) still hold onto their manual devices. It’s amazing how the familiar patterns of incumbents make it so difficult to innovate! There’s a lesson just in that which I’ll get into for a future article.

But the big story now is not the vacuum itself but something that nobody could have imagined in 2002; the data it’s collecting about you, your family, and your home.

iSee You (and your little dog too)

iRobot, which has been using Amazon’s cloud, also recently introduced a partnership and integration with Amazon’s Alexa which allows the two to work together. Not that big of deal, right? Wrong.

In an interview with Reuters last week iRobot’s CEO, Colin Angle, made an announcement that iRobot would sell data about its customer homes. Reuters subsequently admitted to a misunderstanding and updated the interview with a caveat that iRobot would only give this information away for free with customer consent.

iRobot stressed the same and elaborated in a NYT story about the news, In the Times iRobot said that it is, “committed to the absolute privacy of our customer-related data.” Consumers can use a Roomba without connecting it to the internet, or “opt out of sending map data to the cloud through a switch in the mobile app. No data is sold to third parties,” the statement added. “No data will be shared with third parties without the informed consent of our customers.”

That’s comforting since, as I’m sure you do, I thoroughly read every word in the terms and conditions of every app, internet connected appliance, and piece of software I buy or use. Which is why I barely have any time left over to write these Inc articles.

In fact a Norwegian study published in the Washington Post figured that it would be easier to read the New Testament than to go through all of the verbiage for all of the apps on a low-end smartphone with about 33 apps on average. Given that many of those terms and conditions change on a regular basis I’d likely have to give up sleep as well to stand a chance of keeping up.

“Ultimately economics drives every innovation. Follow the money and you’ll find the future.”

We claim to love our privacy but a large part, perhaps the largest part, of the value of nearly every product we purchase, going forward, is not in the device itself but in how it integrates the data it captures about its use, its environment, and its performance with the vast ecosystem of other devices doing the same. Which is why the Alexa integration is so critical to understand.

Turning Dirt Into Gold

While your robotic vacuum is sucking up all of the day to day dirt that accumulates on your floors it’s also vacuuming up a different kind of dirt–the kind that turns into gold–the myriad details about the layout of your home and your day-to-day habits. It’s onboard sensors and camera are developing an intelligence about you that has enormous value to other retailers and service providers.

Now wonder Angle calls their home robots the “connective tissue for the smart home.”

Big pet stain on your carpet? Surprise, suddenly ads start to appear in your browser for carpet cleaning and pet deodorizer. Better yet, Amazon will just take it upon itself to send you everything you need to take care of that nasty stain without your even asking for it. It’s the next step in predictive marketing. Don’t like it, just send it back, although Amazon is betting you won’t.

But here’s the piece of the story that’s not being talked about as often and which to me signals just how inevitable the trend towards making our homes, cars, and our every behavior utterly naked to our connected device overlords is becoming; a future in which the most valuable product is you and me.

Ultimately economics drives every innovation. Follow the money and you’ll find the future. The money today is gravitating towards companies that can show how they will feed and be fed by the digital ecosystem they inhabit. If your company isn’t doing that you really need to ask why!

After the announcement iRobot’s stock jumped about 17% from 87.90 on July 24th to 106.49 on July 25th. That’s the second largest single day gain over the last decade. It’s also nearly three times the stocks price a year ago. The point being that investors are putting a huge premium on a company’s ability to not only capture but to be able to share, integrate, and monetize data about you as part of the new digital ecosystem that we inhabit.

Is it frightening to consider how much privacy we are all giving up, one device at a time? Absolutely! Is there value in the trade off, not only for iRobot but for me as well? Absolutely!

My dog would disagree. Maybe she knows more than she’s telling me.

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This article was originally published on Inc.

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Thomas KoulopoulosTom Koulopoulos is the author of 10 books and founder of the Delphi Group, a 25-year-old Boston-based think tank and a past Inc. 500 company that focuses on innovation and the future of business. He tweets from @tkspeaks.