The Robot Is the Giveaway. The Instruments Are the Business.

Early in my years in surgical robotics, I learned the part of the business that never makes the pitch slide. The robot is the giveaway. The instruments are the company. A hospital can amortize a capital system over years, but it cannot escape the steady invoice for the cautery hooks, the graspers, and the scissors that get used up case after case, and that recurring line is where the margin actually lives. So when Restore Robotics announced in early April that the FDA had cleared it to remanufacture two more of Intuitive Surgical’s da Vinci instruments, I did not file it as a small aftermarket item. I read it as someone testing, in public, how well defended that recurring line really is.

The business hiding inside the capital equipment

Surgical robotics runs on a razor and blades model, and the da Vinci is the textbook case. The system itself is a large one time sale. The instruments are the annuity. Intuitive treats each instrument as usage limited, so once a unit reaches its cap the hospital buys another, and across a high volume program that adds up to far more revenue than the robots ever did. That is not an accident of the technology. It is product architecture, a deliberate decision about where the recurring money sits, made long before the first unit shipped.

I have argued for years that the da Vinci’s contribution was never about whether a robot assisted surgeon beats the rare expert who can do the procedure by hand. It was that the platform grew the population of surgeons who can perform a minimally invasive operation by orders of magnitude. More surgeons, more patients, and that is how everyone wins. But the same population scale that makes the clinical case also makes the instrument stream enormous, and a large, predictable revenue line is exactly the kind of thing a competitor eventually decides is worth attacking.

Know what actually defends your recurring revenue

Restore now holds four FDA 510(k) clearances to remanufacture da Vinci instruments: the two new cautery tools, a permanent cautery hook and a permanent cautery spatula, on top of monopolar curved scissors for the Xi and the older Si system, per MedTech Dive. Its chief executive described the clearances as a step toward transforming the economics of robotic surgery. Strip the framing and the claim is direct. Take the most dependable margin in the category and hand a piece of it back to the hospital.

The lesson I want founders to take is underneath it. Every company that sells hardware plus a consumable rests on a question most never ask out loud. What actually defends the recurring revenue? There are three answers, and they age very differently. Sometimes it is physics, because the consumable is genuinely consumed, a reagent that is spent or a filter that clogs. Sometimes it is regulation or intellectual property, because the item is durable but the maker has wrapped it in a usage limit, a clearance, or a patent. And sometimes it is nothing but habit.

Intuitive’s instrument moat leans hard on the second kind. The instruments are durable enough to remanufacture, which tells you the limit on reuse is a design and regulatory construct, not a property of the steel. A construct can be matched. Restore did not build a better instrument. It used the same 510(k) predicate logic that Intuitive’s own clearances rely on and aimed it back at the company that built the category. If your recurring revenue is defended by a rule rather than by physics, assume a well funded competitor will eventually clear a substitute through your own predicate, and price and plan for that day before it lands.

Dave Saunders is the founder of Base Reality Group and a Fractional CPO for hard-tech founders. He was a founder and operator at Galen Robotics, where the surgical-robotics platform earned FDA De Novo authorization in 2023, and he managed a 35-patent portfolio licensed from Johns Hopkins. He wrote Founders Who Finish and publishes The Build. More about Dave →