Why Asus Zenbo is the new empty box syndrome

First it was Softbank's Pepper, then Kickstarter's Jibo and now Asus's Zenbo. These three robots have one thing in common: Not success. Let's see why and why these companies do it anyway. 

The empty box syndrome

The empty box syndrome is when you sell something like a fridge. A fridge was  high-tech back in 1934. But now it is a hardware commodity and margins are really thin (4%). So the Fridge &Co. CEO tells the CTO: we need to improve our margins. And the CTO does the only thing he knows, innovate (but not value innovation, like in the Blue Ocean Strategy). He only knows technological innovation so he scratches his head and asks himself... What do people want? Lacking any design thinking intuition or any basic UX research training he orders a market report on the future and trends of the fridge market. We got a hold on the executive summary:

Executive summary

• 21% of people want a fridge that hears them and whose door opens automatically.
• 99.5% of people don't want a fridge that tweets the milk status.
• 77% of people wants a fridge that monitors bacteria levels.
• 3% of people would buy a fridge with LCD screens that tells the news.
• 80% of people say design is important.
• 9% of the people would pay to customize the color of the fridge.
• 50% want bigger fridges.

After reading this report the CTO recalls Henry Ford's "Don't ask people what they want, give them something better". Throws the report to the trash bin and decides that they are going to do a really innovative fridge that will command a high profit margin, leave the competition behind and offer new and exciting functions by providing unprecedented value to the customers. He then makes a bold design statement (like in the Google Bootcamp): "We are going to be the Apple of fridges". A few months later Fridge & Co. launched the Frezzo a fridge that... 

Frezzo highligths

1. Reacts to emergencies and notifies family members no matter where they are. Delivers spoken reminders of important information, such as doctor's appointments, medication schedules, or anything else that needs to be remembered. 
2. Facilitates stress-free digital experiences by helping with a variety of online tasks, such as browsing social media and shopping.
3. Tells fun interactive stories to keep kids entertained...
4. Teaches and entertains with a variety of educational games and fun learningmaterials recipes.

The board was ecstatic! Fridge Co. was all over he news and the CEO was praised for her vision and courage. Unfortunately, a few years later no one remembered Frezzo. Frezzo failed to deliver on its promises. It was not fun. It was not smart. Its insufficient Artificial Intelligence IQ made it boring to interact with. It talked at inappropriate moments. And suggested silly foods to buy from Google ads. Its speech recognition was glitchy beyond Siri. The only thing that Frezzo did well was freezing food. At the end Fridge &Co. killed the project, and replaced the CTO, just before ousting the CEO.

Zenbo vs. Frezzo

Did you notice something? The Frezzo highlights! I just copy pasted them from https://zenbo.asus.com/ 

Never the less, I slammed them onto a generic white box (a fridge) and few of you noticed. The danger for Zenbo is that it is indistinguishable from other white boxes. (As we just proved). Yes, Zenbo is not square. Yes, it is connected to the internet. IoT, P2P, MP3... However, there are some fundamental problems in the way of its success:

First, the lack of AI-on-demand that can fulfill all those claims. Right now, that AI-on-demand is not available. Even the front runners such as Deepmind, Vicarious.com, Baidu.com and comma.ai are still not there yet. 

A second problem is that Asus, as Softbank and Jibo did before, assumed that people are willing to pay a premium for a cute pet with little utility. In this case the "pet" has no arms and no legs. And so its marginal utility compared to a smart phone is almost zero. We know this cannot be the basis of a solid business model. Because, in such case, wouldn't there be already an army of cute fridges out there (SMEG)? 

People are willing to pay for utility and happiness

In Summary

In summary, what Fridge &Co. should have done is value innovation, for example in the direction of instacart.com. In general, people seek to fulfill their basic needs (utility) and then happiness. Maslow said it before with his pyramid and there are many examples of people willing to pay for happiness (meditated in the form of design, see Don Norman or in the form of self actualization, see: MBA programs).

It is not surprising that hardware companies try to escape the death spiral of commoditization. But as we said before, I am willing to short any company that tries to do hardware and software at the same time with the exception of  Tesla, Space X.