Social robot company Jibo is sadly running on fumes after burning through nearly $73 million in funding. In a story first reported by BostInno and since confirmed by The Robot Report, Jibo has laid off the majority of its workforce to enable “additional time to secure additional funding or pursue an exit.”

Jibo was once heralded as “the first social robot for the home.” Founded in 2012 by famed MIT roboticist Cynthia Breazeal, Jibo successfully raised over $3.5 million when its Indiegogo campaign ended in 2014. At the time, Breazeal promised to usher in a new age of social robotics.

“The way that the personal robots revolution is going to really happen is by making it a platform. Because once you do that, suddenly you can have a robot that can do many things for you, for many different people, versus these niche robots that only vacuum or only clean your gutter.”

In Breazeal’s mind, Jibo was indeed that platform. Jibo was even recently endorsed by Time Magazine as one of the best innovations of 2017.

There are many exciting things happening in robotics, but Jibo is the latest reminder that most of the innovation is taking place outside the consumer market. Other than a few robot vacuum companies, mainly iRobot, no company has developed a successful home robot. And the list of companies that have tried includes Honda, SoftBank, Sony (Japan Times reporting Sony has sold more than 11,000 units on its new Aibo robot dog), Samsung, Toyota, all of which have tremendous financial and engineering resources. Even iRobot’s success is pretty limited when compared to a consumer device like the iPhone, which sold 40.6 million units in the first quarter of 2018 alone.

The Robot Report reached out to Jibo multiple times, but we have not heard back. Where did things go wrong for Jibo?

1. A series of delayed shipments

The first indication of Jibo’s problems were a series of delayed shipments, forcing Indiegogo a year ago to offer full refunds for unfulfilled orders. In September 2017, Jibo started shipping its first units. However, the product reviews were less than stellar. Jibo began selling to the general public in October 2017 with a price tag of $899.

2. Cancelling international orders

After initially taking international orders, Jibo in mid-2016 cancelled orders overseas. It said it would only ship robots to customers in the US and Canada. “After exploring all the options, we have come to the conclusion that we will not be able to deliver Jibo to your country” because the robot “won’t function up to our standards in your country.”

International orders add layer upon layer of localization issues: electrical certifications, language, speech recognition, cultural nuances, etc. Jibo’s solution to these mounting problems was to cancel all international orders and endure the disappointment of customers in the 45 countries involved.

3. Cheaper, more skilled competition

Soon after Breazeal successfully launched the Indiegogo campaign, Amazon unveiled Echo and priced it seventy-five percent less than Jibo. Almost simultaneously, the e-commerce behemoth announced The Alexa Fund, a $100 million investment vehicle “to fuel voice technology innovation for developers, device-makers, and companies.”

Instead of pivoting in 2015 to meet the new demands of the changing landscape, which eventually became more competitive with Apple and Google joining the fray, Jibo’s Indiegogo commitments became an albatross over the company. In the end, the robot that eventually shipped for close to $1,000, and was merchandised next to a series of more functional machines priced under $100.

It’s unclear exactly what percentage, but a chunk of Jibo’s cost is tied up in its three-axis motor system that allows it to spin 360 degrees. Before the layoffs, a former Jibo employee told The Robot Report that Jibo was exploring the idea of downgrading the motor system. To compensate for its non-human appearance, Jibo over-engineered the robot’s motion to make it seem more human. The thought was that lessening the motor system might not have a major impact on the robot’s performance while significantly cutting costs.

4. Jibo knockoffs

One major issue with crowdfunding campaigns is that companies essentially are revealing their product plans before they’re ready. And in Jibo’s case, well before they’re ready. Jibo knockoffs starting popping up in China in late 2016, and there was a slew of Jibo knockoffs at CES 2017. And soon there after the floodgates opened to other consumer companies introducing Jibo-like competitors.

Jibo another crowdfunding casualty

When analyzing the success of crowdfunding projects, analysts often cite a 2015 study by the University of Pennsylvania that surveyed more than 500,000 online financial backers of Kickstarter projects. According to the report, “project backers should expect a failure rate of around 1-in-10 projects, and to receive a refund 13 percent of the time. Since failure can happen to anyone, creators need to consider, and plan for, the ways in which they will work with backers in the event a project fails, keeping lines of communication open and explaining how the money was spent. Ultimately, there does not seem to be a systematic problem associated with failure (or fraud) on Kickstarter, and the vast majority of projects do seem to deliver.”

This research was conducted before such high-profile fraud cases as the $179 million campaign by Star Citizen, $35 million scam by Lily Drone, $17 million by Elio Motors Scooter, and Coolest Cooler’s $13 million fiasco. While more than half of crowdfunding projects never successfully receive funding, it is surprising how many do and never ship, including a grab-bag of very peculiar projects like underwater breathing tubes, anti-radiation underwear, edible drinking cups, and (my favorite) the ostrich pillow.

In response to the growing number of dissatisfied backers that never receive shipments, both Indiegogo and Kickstarter have partnered with product sourcing firms to provide fulfillment services to their funded projects. Last month, Julio Terra of Kickstarter explained to Digital Trends, “The reason why we partnered with Avnet and Dragon Innovation is that we wanted to help creators better prepare for manufacturing before they launch a project on Kickstarter.”

Terra continued, “What we’ve learned over the years is that project problems are often recognized after a product is funded, and at that point, it’s often too late to solve the problem because it’s an issue that was caused by decisions that were made very early on in the process.”

Social robots aren’t dead

With all that said, social robots aren’t dead. Unfortunately, the technology Jibo requires to be compelling at an affordable price isn’t ready. The company underestimated the its competition and what it would take to get the product off the ground.

Jibo won’t be the product that sparks the social robotics market, Intuition Robotics (ElliQ), Mayfield Robotics (Kuri), Norby (Australia) and others are hoping to do so. Will they be successful or suffer the same fate as Jibo? Only time will tell.

But in contrast to Jibo, Intuition Robotics, for example, will begin commercially marketing ElliQ to geriatric homes later in 2018. Rather than following the Indiegogo route, the Israeli company implemented beta trials with seniors in Florida and California.

And unlike Jibo’s one-size-fits-all approach, Dor Skuler built Intuition Robotics to fill a specific market – aging baby boomers. As Skuler explains, “Our mission with ElliQ is to harness the proactive power of cognitive computing to empower older adults to overcome the digital divide and pursue an active lifestyle.”

Social robotics is forecasted to expand to more than half a billion dollars by 2023, driven largely by the growing demands of the aging-in-place market that is expected to reach 98 million people in the USA by 2060.

While Jibo languishes, the future of robotics will be written by innovators carving out their own market niche against the backdrop of a very competitive economy. Survival will no longer depend on just money, but creativity.

Steve Crowe contributed to this report.