Dyson CEO Max Conze: Watch Out for Our New Robotic Vacuum

The head of the innovative British technology firm talks about Dyson's big bets on intelligent vacuums and new battery technology.
By Brian Sozzi ,

Designing innovative consumer products has always been a hallmark of British technology firm Dyson.

First came the dual cyclone vacuum cleaner, which company founder Sir James Dyson spent years developing and perfecting. Instead of people fumbling around with the dirty bags and filters used in vacuums at the time, Dyson developed a machine that would suck dirt into a plastic canister that could easily be emptied out. In 2006 came the now ubiquitous Airblade hand dryers, and in 2009, Dyson introduced its "Air Multiplier," a blade-less electric fan.

Now under CEO Max Conze, who took over the top position in 2011 from long-time exec Martin McCourt, the company is focused on building and selling an extra lightweight cordless vacuum, as well as a robotic one that can be controlled via a smartphone app. And in April, the company unveiled its first hair dryer coined the "Dyson Supersonic", which promises to be significantly quieter and more effective that its competitors. 

But the company's biggest project might be trying to solve another consumer annoyance: quickly dying rechargeable batteries for cordless products. Dyson plans to invest a whopping $1.42 billion in developing new battery technology over the next five years in order to increase the amount of time a consumer can use its cordless products without a charge. As part of that investment, Dyson acquired Michigan-based solid state battery technology outfit Satki3 last year. 

"Some of the technologies we are working on, such as solid state, are a leap from today, and like all transformational technology. it's all very challenging work -- if it were easy, somebody would have done it already," Dyson CEO Max Conze told TheStreet, adding that "[Better batteries are] probably one of the most meaningful 21st century technology breakthroughs the world needs."

Privately-held Dyson is fresh off a year that proves with huge gambles, comes rewards.

Dyson's sales in 2015 rose an impressive 26% from the prior year to $2.42 billion, powered by the launch of 17 new products in five categories. Growth was led by a 70% sales increase in the Asia-Pacific region, and a 38% gain in Europe. The company sold 10 million machines globally, up 25% from the prior year. Sales of battery-enabled vacuum cleaners grew 66% globally, and according to Dyson, it now holds a quarter of the global market.

Net profit increased 19% year over year to $638 million.

Recently, Dyson has been in the news not because of its latest whiz-bang vacuum, but due to comments from its founder on the British referendum to leave the EU. 

"When the Remain campaign tells us no one will trade with us if we leave the EU, sorry, it's absolute cobblers," said Dyson in the weeks leading up the U.K.'s vote on whether to stay in the EU. And in an op-ed in the U.K.'s Sun after the vote, Dyson laid out a 10-point plan for how the U.K. could succeed economically and socially on its own. Said Dyson, "We have nothing to fear and everything to gain from the new opportunities."

The company had no additional comment about Dyson's remarks on Brexit. 

TheStreet talked with Conze about Dyson's ambitious battery plans, what's driving the company's international business and how he stays ahead of the competition. What follows is a condensed and edited version of our conversation.

Dyson CEO Max Conze

TheStreet: You recently launched a robot vacuum called the Dyson 360 Eye. Tell us more about that.

Conze: We tried to solve two problems with this robot vacuum. First is that we need a robot vacuum cleaner that cleans properly and does so intelligently. If you look at most of the other things out there they are not powerful enough really to clean properly. We can solve this problem because we have our own digital motors, the same ones in our cord-free vacuum cleaners.

The second problem we tried to solve is that the vacuum had to clean intelligently because a lot of robotic vacuum cleaners kind of bounce around randomly. The way we approached this is by focusing on a vision system -- the vacuum has a 360 degree camera that takes 10 pictures per second and then that data is fed back and then could build an image of the room and understand where objects are. It knows where it needs to clean, and where it has already cleaned.

There is also an app. You can schedule the robot, which may be very convenient because in all likelihood to clean your house while you aren't there. It's actually quite satisfying to have an autonomous machine that you tell to do a certain thing and it does it.

TheStreet: Where can you find one of these things?

Conze: It has been selling for a little while in Japan. Why? Because it's the most advanced robot market in the world. It's probably the most sophisticated consumers around. We wanted to make sure that the toughest consumers in the world are satisfied with our technology. I think by early fall, it will become available in America. [Editor's note: The 360 Eye sells for the equivalent of about $1,200 in Japan]

TheStreet: So, any more robots in the works that you could share?

Conze. Yes, and no. But I can't speculate. What I will tell you is that we have over 50 programs with 20 universities where we are investing in research ranging from robotics to aerodynamics to batteries to artificial intelligence and connectivity. As technical progress becomes available in these areas, it will help our existing product categories but also we have some programs looking at completely new areas for us to get into.

TheStreet: When you say aerodynamics, do you mean drones?

Conze: Well, because a lot of our products have to do with air movement, thus fundamentally, how air moves is quite interesting to us. We have a lot of people looking at how you make machines autonomous and intelligent. We have people that are looking at sensing technology.

TheStreet: Dyson is investing a lot of money in battery technology. What are you trying to achieve here? An electric car?

Conze: We have been researching batteries for the past seven or eight years. We have our own battery lab, and a couple top battery specialists and are also working with Cambridge University. Just like how we got started on motors 16-17 years ago by looking at the motors available in the market vs what we want to do and James rightfully feeling there has got to be a way to do a better motor.

Today that has gotten us to a place where we can make the singularly most advanced, digitally-switched, fastest motor in the world. Similarly, several years ago we felt that where batteries are in terms of energy density they are really becoming a limiter to the generational development for some of the products that we are in today and other things we are looking at. So that motivates us.

We then found a great partner that has been working on solid state battery technology and we feel they have very credible technology. So we felt putting our resources together, then maybe we have a chance of bringing this alive. The end game is to deliver batteries at twice the energy density which means they can run and last twice as long or feed twice as much power. That would be transformational for products we are in today such as vacuum cleaners but also a lot of other categories.

Dyson's robot vacuum went on sale in Japan in 2015 -- it will hit other markets this summer.

TheStreet: How far away are these batteries from arriving to market?

Conze: It's probably one of the most meaningful 21st century technology breakthroughs the world needs. If you can unlock batteries that are two times better or more of what they can do today, lots and lots of things become very interesting such as energy storage and mobility. To be fair, some of the technologies we are working on, such as solid state, are a leap from today and like all transformational technology, it's all very challenging work. If it were easy, somebody would have done it already. It's big stuff that takes time.

TheStreet: You served in the German army as a young man. How did that experience set you up for the rigors of corporate America?

Conze: To be fair, I only spent quite a brief period in the army -- two years. What it did teach me as a young guy who didn't know anything really, it forces you into responsibility at a very early age. You go through two courses and suddenly someone says you need to take care of these 15-20 guys and of course you are terribly scared and you don't really know what you are doing. And that is a very humbling experience.

You really get to know yourself and then very quickly learn that it is all about making a difference and getting the best out of everybody on the team.

I think what the Army has given me is a lasting belief in the ingenuity of humankind, that ideas rule the world and the best ideas often come from those that are still young and naive in many ways. That's why James and I are very big believers, and do most of our recruiting straight out of universities and really try to bring graduates into Dyson. In a funny way often the most disruptive solutions to the technical problems we are looking to solve come from people who have relatively little prior knowledge to the area that they are looking at. Thus their eyes and their minds are unsullied and open, and could come up with original answers.

A great example is if you look at our environment control machines and bladeless fans that have become pretty cool [to have]. I think if you are in the business of fans, and I tell you to make the best air movement machine in the world then you will make a fancier set of blades. I don't think your mind has the ability to abstract enough and ask what is the problem really trying to be solved. By the way, at a personal level it's incredibly enjoyable because you get to work with young, enthusiastic and passionate people all day long.

TheStreet: How have you evolved as a CEO since being named to the role in November 2011?

Conze: First, in my role I felt what was most important was to embrace the leadership around engineering because I am not trained as a technologist or engineer. For me, that meant immersing myself very deeply with our scientists and engineers.

Despite that, I am still not an engineer nor a technologist. But it has been a fantastically insightful learning journey. It has given me deep admiration for what it means to be in a lab and bust yourself against solving a technical challenge, sometimes for years. I think the real heroes of Dyson are often those that may be slightly more hidden but are those that are the creators of our technology.

The second thing is that all good things come from change. Because we are developing rapidly and the world is changing very quickly, we are constantly in a race to be true to ourselves but also to evolve and change. I think getting an organization to embrace that and be energized by that is a big part of my job. To some extent, we are paranoid. As James and I say to one another we are relentlessly dissatisfied, which is a healthy attitude to have.

This mindset keeps us from getting self-satisfied. Getting self-satisfied I think is usually the beginning of failure and a disease in any organization.

Dyson founder Sir James Dyson holding the company's new robot vacuum.

TheStreet: What is it like working alongside somebody like Sir James Dyson?

Conze: Everything that Dyson is today is built on James' invention of vacuum-cleaning technology. But more importantly, I think the ethos that he brings to Dyson everyday is very integral -- which is is one of technology obsession and problem solving and embracing young minds and not being afraid of failure. What I try to do is take those inspirations and make sure that as we grow rapidly and as we become bigger with more people around the world that we live true to the ethos.

TheStreet:

Dyson's products are proving to be very popular in

China. Is it primarily because of the air pollution there and the fact that people are trying to breathe clean air with help from your purifiers?

Conze: To be fair, we have been in China not very long -- since about 2012. We are growing quickly yes -- 222% last year and I think we will see very strong growth this year. It has become very meaningful for Dyson. By the end of the decade, I think China could be our biggest market.

What is driving that? At its simplest level, it's because I think Chinese consumers are really tech-savvy and can get very excited about our products when they get to know and experience them. And then yes, we are particularly successful with our cord-free stick vacuum cleaners which by now are the biggest part of our business in the world.

We are also very successful with environment control products such as fans, heaters and purifiers. Some of the air problems in China are quite prevalent, and so it really matters to people to have filter technology that really purifies 99.95% of the air.

TheStreet: Do you feel as though your products get displayed properly at big box retailers here in the U.S.? Usually I see them sitting next to some cheap-looking alternatives.

Conze: We really want to bring alive Dyson products in what we call demo zones so we can show them properly. In most of Asia, virtually all of our distribution points are Dyson shop-in-shops and increasingly, shops of our own -- either permanent or pop-up locations with Dyson employees that can explain the products.

It's fair to say that we have found that more difficult to do in America because the distribution environment is more complicated. So we are now really doubling up our efforts to work with the big box retailers and establish more shop in shops and Dyson demo concepts. We are also quite actively looking at more distribution points of our own.

We opened a flagship store in Tokyo last year, and we are in the midst of constructing a flagship store in Oxford Street in London. We are also looking for up to three locations in America.

TheStreet: Will these flagship stores be as big as an Apple flagship store?

Conze: Not as large. The Oxford Street store has two floors, maybe about 400 to 500 square meters.

Dyson is investing in battery technology to extend the life of its cordless products.

TheStreet: Why is Dyson still mostly headquartered in the U.K.? Do you feel as though you are missing out by not being in the heart of Silicon Valley given your ambitious tech projects?

Conze: We do have one or two people in California. I think we will have more people there because we want to make sure that we are where technology development is happening because it's meaningful for us. Also, I think it's very important that, as someone who has lived in America three times in my life, who loves America and has visited almost every state, that one needs to realize that America is a big country. And if you want to be successful with Americans coast to coast, then you have to make sure you have your people in a few places so you understand things at a macro level, but also understand the needs and concerns at a micro level.

TheStreet: What's a typical day like inside a company building things for 10, 20 years into the future?

Conze: There is no typical day. I travel about 50% of the time, which I enjoy. I think it's very important to be where our consumers are, in stores and in homes. And also I enjoy being with our engineers in Singapore and Malaysia, I mean phone calls and video are good things but still we are humans and we need personal touches and physical interaction.

TheStreet: Are you the type of CEO that is constantly checking emails and text messages?

Conze: Well certainly if you ask my family I check both things too often. I am quite connected with a number of different devices because what we do is very global and spans the time zones and the things people are working on don't necessarily stop when the clock stops on Friday and the weekend starts. But I do think you need to be in touch, while also balancing all the needs of everyone.

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