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A few days ago, the internet lit up with viral videos of Neo, a humanoid housekeeper. The robotic helper is a project by a company called 1X Technologies. To gain attention in a crowded market for a questionable product category, a decade-old startup that began as Halodi Robotics took a gamble and gave The Wall Street Journal’s Joanna Stern access to the robot. They knew even a moderately good review would be enough to achieve their near-term goal: to raise gobs of money from investors hoping to find a pot of gold in these robots.

The review wasn’t bad (but not good either). “With a humanlike body and hands, Neo can attempt many household chores,” Stern wrote in her review. “Emphasis on attempt.” As you read Stern’s review, you realize that there’s nothing autonomous about this robot. It is teleoperated. A human wearing virtual reality glasses controls the robot and makes it do the jobs. An oxymoron, if you ask me.

“It’s not autonomous at all, I don’t believe this company is going to achieve any practical degree of autonomy with this product, and even while it’s remote-controlled by human operators, it’s slow and clumsy,” John Gruber writes, not pulling any punches.

Whatever label one wants to assign to humanoids, the fact remains that this is a technology that looks great in viral videos, and no matter how much we want it to be real, the arc of technology will take its own sweet time. This story reminded me of the prophetic words from robotics guru Rodney Brooks, the founder of iRobot (and more recently Robust AI), who, in an interview for CrazyStupidTech, said:

I always say about a physical robot, the physical appearance makes a promise about what it can do. The Roomba was this little disc on the floor. It didn’t promise much—you saw it and thought, that’s not going to clean the windows. But you can imagine it cleaning the floor. But the human form sort of promises it can do anything a human can. And that’s why it’s so attractive to people—it’s selling a promise that is amazing. There’s a tendency to go for the flashy demo, but the flashy demo doesn’t deal with the real environment. It’s going to have to operate in the messy reality. That’s why it takes so long for these technologies.

Ask those in the know, and they’ll tell you that most, if not all, flashy robotic demos are likely doctored. The videos are sped up to maximize impact. But as 1X Neo’s demo shows, reality is anything but perfect.

1X CEO Bernt Børnich told the WSJ that by 2026, Neo “will do most of the things in your home autonomously,” though the quality might lag significantly. Well, that is the kind of promise that should allow a company like 1X (which has already raised about $123 million) to secure a rumored billion dollars from eager and easily impressed investors. It isn’t alone in tapping into the till. Another startup, ironically named ProtoClone, has started making the rounds on the internet as well.

Based on publicly available estimates, about ten non-Chinese companies working (or planning to work) on humanoid robots have so far raised a staggering $2.5 billion, a figure that could double if rumors of ongoing fundraising efforts are true.

Don’t get me wrong, I can see the possibility of market demand, but it is not clear how we get to that future. At least in places such as North America. If you really take a long-term view, aging populations in places such as China, Japan, and South Korea, along with declining population growth trends, mean there will be a need for robots. In the West, we are living longer with chronic health issues. 

Given how much progress still needs to be made in technologies that would make humanoids a reality, who knows if we will see a completely new class of robotic assistants emerge to deal with our future crises. However, if I were to bet, most of the demand is going to be met by Chinese robot makers, who seem to be far ahead of their global rivals. Even by viral video meme standards, the Chinese are beating Neo and Tesla at the robot-meme game.

Such attempts and stunts are to be expected when we are in a part of the technology cycle where valuations trump value. I have always been biased towards value first, not valuations. But during go-go years in technology, it all flips.

When value is perceived, customers (business or otherwise) are more than happy to change their behaviors and embrace the new and the novel. Facebook might not have been something the older generation understood, but college students totally grasped its value proposition. The same goes for Instagram, Uber, and Amazon’s S3 service. The rest of the world took its own time to catch up, and so did the valuation.

When the technology cycle flips, valuation starts to trump value. The funny thing is that it is easy to grow into your eventual valuation, but it is nearly impossible to do otherwise. I could list countless names that raised money at astronomical valuations. They are not even an afterthought these days.

Remember the recent past when you couldn’t put money fast enough into “gig economy” companies to do your laundry, park your car, or pick up household items for storage. The value was in on-demand mobility, and that is where the market settled: Uber and DoorDash, the only two winners. For now.

I have seen hot trends like “blitzscaling” come and go. Whenever I see a startup being labeled a success because it raised a lot of money at insane valuations, without discussing its true value, I can predict how this story will end. Just look at the wild herds of unicorns that were the talk of the town not too long ago. They are as invisible as their namesakes. Only a few have emerged. Vercel, Rippling, and Replit, for example. The reason they are doing well is that they provide value to their customers. 

As I have said before, “rather than try to wind vane the tech sector by looking at stocks and startup valuations, there’s a fundamentally better approach to gauging the future.”

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