Robotics: Redesigning Industries, Transforming Tomorrow
A Deep Dive Into Key Challenges, Systemic Opportunities, and Founder Fit
Like The Wild Robot learning to thrive in an unfamiliar world, today’s robotics are not just about solving problems—they’re about adapting, evolving, and finding their place in our lives. What if these machines could go beyond automation to fundamentally transform the way we live, work, and coexist with our planet?
In recent years, we’ve seen the emergence of general-purpose humanoid robots like Figure 02 and Tesla’s Optimus. I had the privilege of seeing Optimus in action during Tesla’s recent Robotaxi event, and the potential is immense. According to Goldman Sachs, the global market for humanoid robotics could exceed $150 billion by 2035, driven by opportunities to solve labor shortages and support aging populations with smarter, adaptive solutions.
Building on the momentum of our previous post on In-Space Manufacturing, I’m excited to explore another core investment theme for PaperJet: Robotics. This deep dive is shaped by insights from industry leaders like Daniel Theobald, founder of Vecna Robotics and MassRobotics, conversations with founders, and perspectives from fellow investors.
Introduction
Robotics is one of the most exciting frontiers of innovation, where science, engineering, and technology converge to create machines capable of operating autonomously or alongside humans. Robots are already transforming our world:
Industrial robots handle complex assembly tasks on factory floors.
Service robots assist in healthcare, hospitality, and logistics.
Mobile robots navigate dynamic environments with precision.
Collaborative robots (cobots) work seamlessly with humans to increase efficiency.
But the real opportunity lies beyond automation. Robotics today isn’t just about building machines—it’s about redefining systems, solving meaningful problems, and enabling solutions at scale.
Why Now?
According to robotics expert, Daniel Theobald, robotics today is where self-driving technology was a decade ago—poised for exponential growth.
Key Drivers of Robotics Innovation
Breakthroughs in AI & ML: Robots are now smarter, and capable of real-time learning and decision-making. These advancements enable robots not just to perform tasks but to serve as the foundation for reimagining workflows, systems, and entire industries.
The Industry 4.0 Revolution: Automation, interconnectivity, and real-time process optimization are creating opportunities for robotics to solve critical challenges in under-innovated industries like agriculture, logistics, and construction.
Goldman Sachs forecasts the humanoid robotics market could exceed $150 billion by 2035, rivaling today’s EV market. This explosive growth could address critical labor shortages while supporting aging populations—provided hurdles like affordability, product design, and public acceptance are overcome.
Key Hurdles Toward Robotics’ iPhone/ChatGPT Moment
What’s holding robotics back from its “iPhone” moment? According to Freda Duan from Altimeter Capital, two critical challenges are data scarcity and hardware costs:
“Data: We have 15T text tokens, but robotics data is still limited. A diverse and large-scale dataset is crucial. Progress has been made in teleoperation, AR data, simulation, and video learning, but real-world data remains invaluable yet scarce. Google, for example, spends $300/hour to collect it.
Hardware: Creating dexterous robotic hands requires advanced planning algorithms and the challenge of replicating human-like flexibility and strength. Low-level control and physical interaction are delicate processes.”
Data Challenges
While simulated environments and AR provide useful training grounds, they cannot replicate real-world complexity and variability. High-quality, real-world data—essential for improving decision-making and adaptability—remains costly and logistically challenging to acquire.
Startups can tackle this by partnering with forward-thinking companies in high-risk industries like mining or oil & gas, where collaboration unlocks data and validates solutions.
Hardware Challenges
Hardware remains a formidable bottleneck. Achieving dexterity, human-like strength, and cost-effectiveness requires planning algorithms, low-level control, and scalable production breakthroughs. A glimpse of Tesla’s Optimus hand from the Robotaxi event (see GIF below) highlights progress in robotic dexterity while underscoring the immense complexity of replicating human-like movement and strength.
For robotics to achieve mass adoption, hardware costs must drop by an order of magnitude (10x) while ensuring reliability and scalability. The market often favors established players like Tesla or experienced founders like Brett Adcock (Figure), who have the capital and execution track record to tackle these hurdles head-on.
Hardware innovation isn’t just about cost—it’s about creating reliable, scalable systems that can transform entire industries.
Early Observations: Rethinking the ‘Right’ Approach
Many robotics solutions focus on automating existing processes to reduce costs. While practical, this mindset risks solving the cheapest problems with the most expensive solutions.
Take Wei Ding from Under Control Robotics (UCR), a startup I’m invested in. After embedding himself in warehouse operations, Wei recognized the disconnect between cost and value in automating logistics. This insight led him to pivot to higher-impact opportunities like robotics for oil & gas construction fields.
The lesson? Instead of optimizing a single process, founders should rethink entire systems where robotics can deliver exponential ROI, not incremental savings.
The Right Approach: Robotics as the Catalyst for Full-Stack Transformation
Robotics founders must think bigger—rethinking entire systems rather than incrementally automating single processes. Robotics shouldn’t just optimize workflows—it should enable a full-stack transformation where robots power safer, faster, and more intelligent systems at scale.
As Malcolm McLean revolutionized logistics with container shipping by reimagining the entire supply chain, robotics has the potential to redefine industries from the ground up:
Instead of selling robots to optimize warehouses, build end-to-end robotic warehouses where automation isn’t an add-on but the backbone—driving 24/7 workflows, eliminating inefficiencies, and setting new performance benchmarks.
Rather than integrating robotics into legacy operations, create next-generation businesses where robotics is foundational—redesigning processes, systems, and business models with automation at their core.
This first-principles approach positions robotics as more than a tool—it becomes the cornerstone of scalable, transformative systems that deliver exponential, not incremental, value.
Founder Qualities: What We Look For
At PaperJet, we look for founders who:
Immerse Themselves in the Problem Space:
Solve Critical Challenges:
Address data scarcity by acquiring and leveraging real-world datasets.
Innovate on hardware to enable scalable, modular, and cost-effective robotics solutions.
Reimagine Under-Innovated Markets:
Founders who take a first-principles approach to build systems that unlock transformative ROI, not just automate tasks.
Final Thoughts
Like The Wild Robot discovering its purpose in an unfamiliar world, robotics today is on the cusp of redefining how we live, work, and care for our planet. This isn’t about replacing humans—it’s about building systems that adapt, solve meaningful problems, and make our world safer, smarter, and more efficient.
At PaperJet, we invest in visionary founders who tackle robotics’ toughest challenges and reimagine entire industries with scalable, transformative solutions. As robotics evolves, the opportunity to solve humanity’s most pressing challenges—from safety and labor shortages to sustainability and innovation—has never been greater. The future is being built, one system at a time.
I appreciate you taking the time to explore robotics with me. If you have thoughts, questions, or insights, I’d love to hear from you.
Best,
Chris Kong
Founder & GP, PaperJet Ventures
P.S. Massive thanks to Daniel Theobald (MassRobotics), Wei Deng (Under Control Robotics), Stefan Seltz-Axmacher (Polymath Robotics), David Li (BHP Ventures), Lawrence Wong (Tesla), and the members of Tesla’s Optimus team I had the pleasure of meeting at the Robotaxi event for sharing their insights in past conversations. Special shoutout to my friends Jaireh Tecarro and Jen Liao for their invaluable feedback and support. Don’t forget to hit the sign-up button to stay updated on the latest trends and insights!
I do wonder unique technology core of Optimus to reach a new height.
https://www.the-waves.org/2024/12/25/optimus-humanoid-robot-demands-a-new-technology-core/