This month I spoke with Stephen Houghton, a pioneer in swarm robotics, a cutting-edge technology field where multiple autonomous robots work together to accomplish a common task. We explore how his 20-year journey taking in the Marine Corps, multiple start-ups, and large corporate managerial consulting, culminated in his co-founding Swarmbotics AI. Mr. Houghton speaks of the necessity of being able to persist in the face of high risk, conducting extensive early market research, and being able to weather the constant daily grind, as key elements of successful entrepreneurship.
The Interview
Griffin Connolly: Welcome Mr. Houghton. Let’s begin with some insights into your background and the essence of Swarmbotics AI.
Stephen Houghton: Certainly Griffin. In brief, my background is rooted in Midland, West Texas, followed by Ruidoso, New Mexico. I pursued my college education at SMU with a focus on finance. I then diverged from that path, joining the Marine Corps as an officer, and serving in counterintelligence.
My Marine deployments included the initial invasion of Iraq in 2003 and later engagements in 2004 and 2005. Following this, I pursued further education through a joint program at Harvard Kennedy School of Government and Stanford Business, intending to enter the renewable energy sector. However, the political landscape in that industry led me to reconsider.
Subsequently, I transitioned into management consulting with McKinsey before venturing into startups. I was involved in three start-ups, one on my own. Then about eight years ago, I got recruited as an early employee with Cruise, General Motors’s Autonomous Vehicle subsidiary. I eventually lead a team of 700 in operations. It was very rewarding. The hyper-growth phase of start-ups is incredible, but very demanding.
After a stint at Amazon overseeing their autonomous vehicles and robotics business, I took on the role of COO at Embark, a company that went public on NASDAQ.
Last year, I founded Swarmbotics AI, a dual use ground swarm robotics company, meaning it has both defense and commercial applications. We’re focusing initially on defense products. Our projects include building an autonomous ATV for various purposes such as transporting goods, aiding in medical evacuations, and engaging in electronic warfare and intelligence, surveillance, or reconnaissance. Currently, we are in the early stages, having recently secured venture capital funding and initiated team expansion.
Griffin Connolly: This is an impressive journey. Could you elaborate on the motivations behind starting Swarmbotics AI and sustaining the initiative to date?
Stephen Houghton: My inclination towards being a builder and my affinity for early-stage startups, technology, and robotics played a significant role. And of course, a desire for autonomy. Analyzing the market, we expected there to be many robots out there but surprisingly there really aren’t. This realization drove the inception of Swarmbotics AI. Recognizing the untapped potential of swarm robotics and the existing gap due to cost constraints, we set out to create low-cost robots that could be aggregated into swarms, offering diverse capabilities.
Griffin Connolly: Seeing opportunity is a crucial part of entrepreneurism. Navigating through the challenges of the startup phase, what were the primary hurdles, and how did you overcome them?
Stephen Houghton: Securing capital emerged as an initial challenge for a hardware-intensive venture. You need a lot of money to build the prototypes. The current landscape of venture capital, marked by its tightness, posed difficulties in raising funds swiftly. Additionally, recruiting skilled personnel presented challenges due to the inherent risks associated with joining a nascent organization. We needed sophisticated engineers, who are in high demand, and many people don’t have that risk threshold. The initial phase of a start-up is high risk for everyone involved.
Griffin Connolly: So, reflecting on these challenges, is there anything you would have approached differently in hindsight, especially concerning capital raising or strategic decisions?
Stephen Houghton: At the onset we were focusing on a commercial first strategy for the application of our ground swarm robots. Early feedback from investors suggested a pivot towards a defense-first approach, prompting a realization that aligning with the defense market initially was the more strategic move. So, we revisited our choice to opt for a commercial-first strategy and later transition to defense. In retrospect, I would have done more extensive market research into the defense sector, rather than relying on our commercial market research to drive our decision-making process in that direction.
Griffin Connolly: Obviously the ability to pivot has served you well. You’ve been involved with start-ups in different roles for many years now. What have you found to be the most fulfilling aspect of entrepreneurship?
Stephen Houghton: I like what Peter Thiel calls ‘Zero to One’. If you haven’t read that book, it’s a great one for entrepreneurship. It essentially means going from nothing to something. It’s very exciting to get the first version of something built. There aren’t a lot of people that truly make something from nothing. Entrepreneurship is a huge struggle; it is essentially conjuring miracle after miracle to will something into existence. But the outcome is hugely rewarding.
Griffin Connolly: That’s great. Are there any other specific books you would recommend to those interested in entrepreneurship?
Stephen Houghton: Certainly. ‘The Lean Startup’ by Eric Ries is valuable for its insights into rapid prototyping and testing. For those interested in venture capital, ‘Venture Deals’ by Brad Feld and Jason Mendelson offers a comprehensive understanding of the back-end dynamics. I also recommend ‘The Startup Way’ again by Eric Ries, and ‘Influence’ by Robert Cialdini for their perspectives on communication and collaboration.
Griffin Connolly: Thank you for these recommendations. Transitioning to the technological aspect, Swarmbotics AI operates on the cutting edge of technology, incorporating AI. With the ongoing AI boom, what changes do you anticipate in the realm of AI and robotics in the coming years?
Stephen Houghton: The current AI momentum indicates an imminent revolution. The increasing ability of computers to interface with people suggests a realization of concepts depicted in science fiction. Moreover, the anticipated reduction in the price point of robotics and associated software should make them more prevalent in society.
Griffin Connolly: Shifting gears, you co-founded Swarmbotics AI with Drew Watson, could you shed some light on the process of finding the right counterpart?
Stephen Houghton: My co-founder, Drew Watson, and I had prior experience working together at Embark. This existing professional relationship served as a strong indicator of compatibility and effectiveness. Building on our positive working experience, we ventured into exploring startup concepts together, creating a synergy that made him an ideal partner.
Griffin Connolly: Considering your diverse experiences, do you believe embarking on an entrepreneurial venture like Swarmbotics AI would have been possible without your prior real-world experience?
Stephen Houghton: For ventures of this nature, prior experience is instrumental, especially given the current stringent funding environment. While exceptions exist, individuals with experience in autonomy are better positioned to attract capital. Transitioning from an unrelated industry without such expertise would likely pose significant challenges in raising capital.
Griffin Connolly: What was the primary method or strategy employed to secure the substantial capital required for Swarmbotics AI during the early stages?
Stephen Houghton: So, there are different ways that you can build businesses and venture capital is probably the most publicized way. While it’s not the best way for all types of businesses, recognizing that venture capital is best suited for high-growth and disruptive businesses like ours, we aligned our strategy accordingly.
Networking also played a crucial role, utilizing our connections to facilitate introductions and generate interest among investors. Announcing our venture further attracted attention, culminating in successful fundraising. It’s key to find people that are philosophically aligned that want to invest.
Griffin Connolly: Returning to your military background, you continue to serve in the U.S. Marine Reserves. How has this experience shaped your perspective and influenced your journey, particularly in the defense-oriented projects at Swarmbotics AI?
Stephen Houghton: My extensive military experience, from active duty to reserves, has provided a unique dual perspective. It allows me to understand both the customer’s needs and the technical aspects of fulfilling those needs. This dual lens contributes significantly to our approach at Swarmbotics, especially in the defense realm.
Griffin Connolly: Shifting to mentorship, as someone running a Student Launch club, what advice would you offer to aspiring entrepreneurs or students interested in startups?
Stephen Houghton: Perseverance is key. Understand that entrepreneurship is a constant grind, marked by rejections and obstacles. The ability to persist in the face of challenges is crucial. It’s not a short-term endeavor; rather, it demands a long-term commitment to weather the ups and downs of the journey. You need to have the personality to handle this, the time to devote to it, and the belief in what you’re building. It’s not for everyone. As challenging as the journey is, you need to be able to enjoy it.
Griffin Connolly: That’s great advice. It has been a pleasure talking to you, and I appreciate your time and insight.
Stephen Houghton: Best of luck with your entrepreneurial journey Griffin. It’s not for everybody, but it’s so important and we need great people doing it. I’m excited that you’re interested.