“The value of a robot is how much work a robot can do divided by its cost. And that's it. Everything else is commentary. If we can compete in these highly liquid labor markets across the American physical economy and offer greater equivalent capability at lower cost, the market for that is the whole market.”
a16z Podcast · Startups & Venture · November 2026
Context
Asked whether there is real demand for robots in factories and warehouses, Tutor Intelligence's Josh Gruenstein says buyers often don't know a robot could do their job, so he frames it as a plain labor-cost comparison.
Transcript
…initial deployment of tutor robots, we could be saving $100,000 a year, $1 million a year, $100 million a year. And that's not like, okay, this is a roadmap over five years of custom engineering. It's like, no, you could save that $1 million a year two months from today without putting CapEx down.
And have you found that there is like demand for, I mean, it's just such a sci-fi thing. Is there demand out there?
There is so much demand. And it's not even demand for robots. Cause again, like people don't know that the shape of a robot exists or that it works or that it can do this job. So it's ultimately like, you know, we have this framework of the value of a robot is you take how much work a robot can do and you divide it by its cost. And that's it. Right. Everything else is commentary. And so if we're able to compete in these highly liquid labor markets that exist across American physical economy and we can offer something that delivers greater equivalent capability to lower cost, the market for that is the whole market, right? It's all physical word of done.
And just one quick wonky question on this, which is how much when you say cost, do you mean amortizing the upfront cost versus like the ongoing cost to operate it?
It's both, which is very interesting and different, right? Traditionally, we've thought about robotics as ROI, right? Big CapEx expense and then 10 years to make it back. And now it's actually like, no, more and more of the cost is going into ongoing inference teleoperation.
But does that also include like maintenance and breakfast and all of that stuff? And then what and like, what is the dominant cost or are they roughly equal?
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