The Robot Graveyard Problem: How Formic Overcame Decades of Failed Deployments

The Robot Graveyard Problem: How Formic Overcame Decades of Failed Deployments

In a recent episode of Category Visionaries, Saman Farid, CEO and Founder of Formic, described a pattern his team encounters at nearly every manufacturing facility. Somewhere in the building sits expensive robotics equipment gathering dust. These aren’t old machines being phased out. They’re recent purchases that failed to deliver.

Welcome to the robot graveyard. And it’s killing robotics adoption across American manufacturing.

The Failure Pattern

The cycle plays out predictably. A vendor convinces a manufacturer that automation will solve their problems. The manufacturer writes a $100,000+ check. The vendor deploys the robot. Within weeks, problems emerge. The robot doesn’t perform as promised, breaks down, or requires expensive reprogramming.

The vendor returns with solutions—for a price. Another $50,000 for reprogramming. Another $30,000 for maintenance. The costs pile up. The robot still doesn’t work reliably. Eventually, the manufacturer gives up and pushes it into that back room with other failed experiments.

“Because there’s all these failures, people are not adopting new technology, and as a result, we’re ending with much lower productivity in our factories,” Saman explains. The robot graveyard doesn’t just represent wasted capital. It represents destroyed trust.

The Trust Problem

When Formic enters a facility with a robot graveyard, they’re not just selling against competitors. They’re selling against accumulated skepticism from years of broken promises. The prospect has heard it all before.

Traditional approaches—better specs, lower prices, stronger capabilities—don’t overcome fundamental disbelief. The prospect doesn’t doubt your robot works in theory. They doubt it will work for them.

The conventional model makes this worse. Vendors sell expensive equipment upfront, then charge for every modification and maintenance call. This creates a bottomless pit where costs keep escalating.

Each failure feeds the next. The burned manufacturer tells others. Industry associations share horror stories. Skepticism compounds. By the time Formic shows up, they’re overcoming an entire industry’s pattern of disappointment.

Formic’s Radical Response

Formic realized incremental improvements wouldn’t solve this problem. You can’t overcome systematic trust destruction with slightly better technology. You need to rebuild the entire commercial relationship.

Their solution: guarantee performance. “We are providing the only solution out there that actually guarantees performance and guarantees throughput,” Saman says. “That means that we are able to provide robots to a whole class of customers that previously never thought they would adopt robotics.”

Making guarantees work requires capabilities most robotics companies don’t have. Formic assembled $250 million in debt facilities to finance deployments. They built a nationwide maintenance network with predictive monitoring that catches issues before failures. They productized robots for fast redeployment if needs change. They developed rigorous project vetting to avoid doomed deployments.

Every piece exists to support one goal: making it safe for burned customers to try again.

The Commercial Model Shift

Beyond infrastructure, Formic rebuilt how they sell and charge for robots. Instead of selling equipment, they offer robotics-as-a-service. Customers pay hourly like wages. They can try before they buy. If the robot doesn’t work, they’re not stuck with a $100,000 paperweight.

This model forces Formic to absorb all risks that traditionally fell on customers. If something breaks, Formic pays. If requirements change, Formic handles reprogramming. If the robot underperforms, Formic loses money.

This sounds terrible—until you realize it’s the only model that overcomes the trust problem. Customers who’ve been burned don’t need better promises. They need a vendor with skin in the game. Who loses money if deployment fails. Who can’t just collect their check and disappear.

The guarantee works because incentives finally align. Both parties want robots that work reliably. This alignment didn’t exist in the traditional model, where vendors got paid upfront regardless of long-term performance.

The Reliability Requirements

Making guarantees viable requires extreme operational discipline. Formic can’t afford robots that might work. They need robots that definitely work.

This explains their obsessive focus on reliability over innovation. “Let’s not necessarily go and find the newest technology out there for every kind of robot in the world. Let’s go find the things that are the most reliable and choose the path that leads to the highest robustness for our customers,” Saman explains.

It also explains why they target 99.98% accuracy or higher. When you guarantee performance, small failure rates become existential. “If your robot is down even 2% of the time, what that means is you’re dropping hundreds of boxes a day or hundreds of parts a day,” Saman notes.

The traditional model could tolerate failures because customers bore the cost. The guarantee model can’t. Every failure costs Formic money directly through service calls, plus indirectly through damaged relationships and lost upsell opportunities.

The Market Shift

This approach is working. Formic now operates in about 100 factories across the US. More importantly, they’re reaching customers who had completely sworn off robotics after previous failures.

“We are able to provide robots to a whole class of customers that previously never thought they would adopt robotics,” Saman says. These aren’t early adopters. They’re skeptics who got burned and decided automation wasn’t for them. The guarantee model brought them back.

This represents a fundamental shift in who can successfully adopt robotics. The traditional model required sophisticated manufacturers with internal engineering capabilities. Everyone else created robot graveyards. Formic’s model extends robotics to manufacturers who lack that capability. They don’t need to troubleshoot or reprogram robots. Formic handles all that. They just need the robots to work—which Formic guarantees.

The Broader Lesson

The robot graveyard problem reveals a principle beyond robotics: in markets damaged by previous vendor failures, product improvements don’t overcome trust problems. You need to rebuild the commercial model to realign incentives.

This means absorbing risks that previously fell on customers, guaranteeing outcomes rather than capabilities, building infrastructure that makes guarantees viable, and charging in ways that align your success with customer success.

It’s harder than improving your product. It requires capabilities most companies don’t have. But it’s the only approach that works when selling into a market that’s been systematically disappointed.

As Saman discovered, you can’t out-feature the robot graveyard. You can only out-guarantee it.