Robotics for fun and profit

September 19, 2013, 11:50 AM UTC

Robotics can be a tricky business. Even the most successful of consumer efforts, like the 23-year-old home-cleaning-focused iRobot, generate modest sales. But the founders of Anki, a San Francisco startup, have grander ambitions. Anki and its all-star backers (Andreessen Horowitz) hope millions will snap up the company’s first effort, a toy-car game called Anki Drive, for around $200 a pop, on day one.

Co-founders Hanns Tappeiner, Boris Sofman, and Mark Palatucci were postgraduate robotics students at Carnegie Mellon University. By day they worked on assignments developing algorithms for bomb-disposal robots and self-driving vehicles that traversed over 10 miles of forest at a time. “A lot of the projects that you work on are really far-out: how you make a humanoid robot that can fold your towels,” explains Tappeiner. But on nights and weekends the trio toiled on Anki Drive, a pairing of highly sophisticated artificial intelligence with toy cars, each of which contains an optical sensor. When connected to an iPhone, and using an app they developed, the cars are able to automatically weave, round corners, and change competitive racing strategies on the fly — feats that Sofman first showed off at Apple’s Worldwide Developers Conference in June. The toy will be available in the next few weeks and sold exclusively in the Apple Store and on

While Anki’s team could just as easily develop a high-end, high-priced product, venture capitalist Marc Andreessen says he thinks the company is wise to launch with something more affordable. “In the whole history of the technology industry, things start out at the high end,” says Andreessen, who argues that whoever aims at the low end winds up growing over time to dominate a market. “Anki is the first kind of world-class robotics and AI team with perhaps the most fundamentally bottoms-up approach you could have.”

Michael Ovitz, a former Disney president and an Anki adviser, puts it more simply: “When they showed it to me, I could see what the future could be.” (His claim isn’t far-fetched: Anki’s 45 or so employees are writing new robotic patents every week.) Ovitz hints that the next Anki product is so advanced that it blurs the line between entertainment categories even further.

Indeed, what Pixar did for computer animated film, elevating it to a medium appreciated by young and old, is what Anki’s founders say they ultimately hope to do for physical entertainment. “We don’t want to make something where a 40-year-old would say, ‘Oh, I don’t want to play with that,’ ” says Sofman. Spoken like someone who understands that robotics is anything but child’s play.

This story is from the October 07, 2013 issue of Fortune.