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In supply chain where so much is dependent on your ability to see and decide, it won’t matter how sophisticated an algorithm we develop it plus one, it won’t matter how deep our convolution neural network is, it won’t matter how much data we can feed the reinforcement learning model. In the end, people are superior. We just are. It’s a qualitative difference. So that’s why our mantra is robots work with people rule.
Jay Clouse 0:33
The startup investment landscape is changing. and world class companies are being built outside of Silicon Valley. We find them, talk with them and discuss the upside of investing in them.
Welcome to upside.
Eric Hornung 1:00
Hello, hello. Hello, and welcome to the upside podcast, the first podcast finding upside outside of Silicon Valley. I’m Eric corner, and I’m accompanied by my co host, Mr. Updated calendar himself Jay Clouse J. You are reorganize and reinvigorated. What’s going on in? Domo arigato, my friend?
Jay Clouse 1:20
Yes, I am excited that I have updated my calendar, which is the gatekeeper to access my calendar.
Eric Hornung 1:29
And and by extension access to you.
Jay Clouse 1:31
Yeah, I had opened up my Calendly, very broadly, while I was marketing the new cohort of unreal, our accelerator, because it’s a super front loaded effort. And so if people wanted more information, or if I was doing onboarding roadmap calls to the new members, I just wanted to get it in as soon as possible. So I really open up my calendar, it really screwed up how I normally structure my time. And I finally got back in there. So now I will only take meetings on Thursday’s or early Friday morning, and it feels good
Eric Hornung 2:03
look at you specializing your specializing.
Jay Clouse 2:05
Yeah, yeah. Well, I mean, I wrote about it in my newsletter this morning, but I wasn’t setting appropriate boundaries for my time for myself or for others. And it was really messing with me and getting me out of the flow of how I like to accomplish things. So getting back on that train, you know, I really think that I have more or less created myself a virtual assistant with technology using some tools. I mean, I can’t they can’t, it can’t do creative tasks are real problem solving. But a lot of stuff that people spend time on, I’ve mostly automated with different software.
Eric Hornung 2:35
It lets you take some low intensity tasks that are maybe a little administrative and kind of off, ship them so you can focus on things that are a little bit more meaningful
Jay Clouse 2:45
things that need a human touch.
Eric Hornung 2:47
There you go. Speaking of meeting, a human touch, I think our guest today has a mantra that kind of fits that vibe.
Jay Clouse 2:54
That’s right. Today we’re smoking with Eric Nieves, the founder and CEO of players one robotics in San Antonio, Texas. Plus one robotics mitigates the persistent shortage of manual labor, and allows factory personnel to flow from monotonous tasks to higher value work. Through the integration of off the shelf high performance manipulators with their advanced vision capabilities. Your robots will bridge the gap between steady state volume and surge plus one robotics to make it a little bit more simple, helps robotic technologies with the handling of packages from one place to another.
Eric Hornung 3:31
Yeah, it did identify it does two things, right? It identifies the packages in front of it, and then manipulates them.
Jay Clouse 3:38
Yeah. And I don’t know a whole lot about robotics. This is going to be one of my first deeper dives into the world of robotics with Eric here. But it does seem like robotics is a hot topic in the venture landscape. Right now. I know that Dr. Capital here in Columbus, Ohio, has a focus on robotics. They just moved a robotics company from Baltimore, to Ohio, Eric seems to have a lot of experience in the robotics realm. 25 years of experience deploying industrial robots for Yes, scour robotics. The company was founded in 2015. And this point, they’ve received $10.6 million in funding from Pritzker Capital Group, which put in $8.3 million in a series A and schematic ventures, which was a almost two and a half million dollar seed raise.
Eric Hornung 4:26
So one thing that I’ve noticed about robotics and I have as limited insight, as you do so this will be a huge learning episode for us is that they tend to start as stealth companies, and then emerged with some huge series A or huge seed or just some monster rays. And I’m curious as to why that is, I would expect it’s hardware, but I could be wrong. It’s more of a capital intensive business. You have smarter people working on it, so you have to pay them more. But I’ve noticed that trend. And I feel like I remember it happening with Boston Dynamics, and I a couple other just robotics startups. So I’m curious if that trend is real, if it’s not real, if it’s just something I read on the internet, but also just learning about how this is different from maybe some of the other startups we talked to on the podcast?
Jay Clouse 5:14
Yeah. Interested in learning more about the cost drivers as well. This is our first company in San Antonio, Texas. We spoke with Brian Chambers from capital factory recently, and he spoke about San Antonio is one of the major cities in Texas. This is our first dip into that realm. Plus one having raised a series A will probably ask fewer questions specifically about the model and use this as more of a mechanism for learning more about the robotics industry. And here Eric’s experience raising a series A.
Eric Hornung 5:47
Alright Jay, are you ready to jump into the interview?
Jay Clouse 5:50
Yes, but wait one minute. While you guys are listening to this, if you have any thoughts about this episode, please tweet at us at upside FM or email us email@example.com. You’re listening to this on an Apple device. If you listen to this on iTunes, go on over to iTunes and leave us a review. We’d love to see read your review and it helps us bring on high quality guest to the show. Alright, let’s talk to Eric.
Eric Hornung 6:14
But before we do that, let’s bring in Rob McDonald, a partner at Taft serious and Hollister to teach us about private placements and fundraising. Taft is a law firm known for assisting entrepreneurs across the Heartland. As a reminder, the following remarks by tax attorneys are for informational purposes only and are not legal advice. This information is not intended to create and receive it does not constitute an attorney client relationship. No person or organization should act upon this information without first seeking professional counsel. Rob, thank you for coming on. Are things going down in Cincinnati?
Rob McDonald 6:49
Things are great, it feels like the weather is finally turning here. We’re really excited.
Jay Clouse 6:53
Weather turning in Ohio something I can look forward to at least a dozen times a year.
Rob McDonald 6:59
On an hourly basis!
Jay Clouse 7:02
You know, we talked to a lot of founders, and we often hear this idea of smart money. How do I identify investors that would be a good fit for my startup?
Rob McDonald 7:11
I always encourage startups do as much homework as possible identify potential investors. Now more than ever, there are plenty of resources available to help founders with this, namely crunchbase angel list and pitch book using these sources. And Google triangulate investors that invest in the dollar amounts of startup is targeting, invest in the vertical of the startup and invest in the geography of the startup. Shockingly, founders can triangulate these three things. Usually we are going to be talking about a huge list of investors from their develop and use their network to get introductions so that you can avoid fruitless cold emails to investors.
Eric Hornung 7:46
Awesome. And if people want to learn more about Taft or yourself, where should they go?
Rob McDonald 7:50
Best place to go is www.taftlaw.com or my Twitter @rwm.
Jay Clouse 8:02
Eric, welcome to the show.
Erik Nieves 8:03
Glad to be with you this morning.
Eric Hornung 8:05
Glad to have you.
On upside we like to start with a background of the founders. So can you tell us about the history of Eric?
Erik Nieves 8:12
Sure. So Eric with a K is a robot geek full time. This is all I know how to do. And it’s because I’m a failed physicist. So I went to college, got my degree in physics knew I was going to starve. But all through college, I had worked my way through at a factory in Minnesota. Now I’m from Texas. But I would take in every summer trick up to the Northland and spent the summer working at a cement mixer factory of all things. That first summer, my gig was to hold an 11 pound electric grinder in my hand and grind welds down on the body of a cement mixer drum.
Eric Hornung 8:55
Erik Nieves 8:56
Yeah, heavy, exhausting. I think
Eric Hornung 8:59
Were you jacked after that? like, you had to just be so strong.
Erik Nieves 9:02
my forearms and my wrists..And you know, so I did that for you know, the first summer and, you know, towards, you know, the end of the summer, the foreman comes rolling up in this little cart. He says, Eric, I hear you know something about computers. This is 1988…87.
I don’t know what he’s got in mind. I don’t know that much about computers. But whatever he’s thinking about has got to be better than me holding this grinder in my hand all day. Oh, my God. Yeah, sure. You know, and he says, Well, we’ve got this machine over here. And he pointed me in a direction since we bought it and nobody knows how to make it run. And it was an industrial robot. And hey, man, rtmp, I read the manual. And life got a whole lot better. I put some parts in this machine, I hit a green button, I’d sit down for like 20 minutes out of this game. So I did that every summer after that through undergrad. And after graduation. We were my fiance at the time. And I were getting ready to grad school and he says, Hey, once you stick around for a year, skip grad school for a little bit. Would you help us install two more robots like the one you’ve had running? Long story short, I did that ended up going to work for the company that made those robots Yes. Gala. And was there for 25 years? Wow, yeah, pretty much spent my adult life putting robots in manufacturing plants all over the country, in 2015, saw a new opportunity to bring that technology to a new space, logistics and supply chain. And so that’s what we do. You know, we teach old dogs from Detroit, new tricks, industrial robots, how to be effective in a new area.
Jay Clouse 10:43
super interesting. So what was it about that opportunity that or that company that kept you there for 25 years, when you had the initial edge to go to grad school?
Erik Nieves 10:53
Yeah, so robots are cool, you know, and I was in robots early. So this would have been 1990, when I grew up, graduated, went to work for him, I think I was like, the 56th employee, you know, I mean, they’ve got hundreds now. And I think the best part of the automation world is the fact that you see something new every day, it’s like living episodes of how it’s made, you know, week after week after week. And so you see the, you know, inside of all these different processes and such, and it was just fascinating to me, you know, everything is buried is laser cutting on car components to water jet application to assembly to who knows what all, you know, to this day, I’m still involved in a project that we worked on for NASA for satellite servicing, where they have this notion of grasping satellites in orbit and refueling them, which was something they were never designed for, it was supposed to just use up the gas, and when it was done, kinda either right up there or fall back to Earth. And instead, you know, we’re helping them, you know, sort of extend the life double life of satellites. I mean, how cool is that? It’s robots in space. Yeah, I’m in. So I did that for a really long time.
Eric Hornung 12:07
Did you go up as someone who’s really into sci fi, because you seem really jazzed about this now and I love it. But it was this how you always were kind of growing up? Or did it kind of click
Erik Nieves 12:16
your it kind of clicked? You know, I was a sci fi guy, but I wasn’t a hardcore, you know, Star Wars or Trekkie, or trek or what have you, right. My thing was Asimov, actually. And it wasn’t the whole robot series, it was actually foundation.
Eric Hornung 12:31
I don’t know what as a month is
Erik Nieves 12:33
Isaac Asimov. So the writer, he’s the one that declared or penned the three rules of robots, right, a robot shall not cause harm to human. Rule number two, a robot shall not cause harm to itself, unless it violates rule number one. And this is a sort of a series of rules that we all kind of adopted in this space as as off hand. And as I’m always that guy, but when I sort of fell into the industrial version of robotics, and saw that, you know, this really applies to solving problems in the real world, in industry and application. You know, that was pretty exciting. I’m old enough to remember when folks would say you don’t want to buy a car that was built on Monday or Friday. And that that joke is gone out of our lexicon anymore. Yeah. Be the, you know, sort of repeatability and the process control that that factory automation is broad. And that was kind of a cool thing to watch happen.
Jay Clouse 13:37
I hadn’t heard that joke, but hearing it, it was pretty obvious to me what that meant. Yeah. So you know, you, you mentioned that you, you are tm, you read the manual. And that’s how you kind of got started with this first robot, is that how a lot of your peers also got into robotics, my assumption had been that there must have been some heavy studying and research involved again, in this field. And it seems like you just kind of went into the practical route the entire time.
Erik Nieves 14:00
The truth is, at that point in time, there were no robotics programs you could graduate from. Right. So most of the early robot industrial robotics, people are electrical engineers, or mechanical engineers that just moved the direction of factory automation, and then found themselves in robotics anymore. That’s not true. So you know, at plus one, we get the opportunity to, you know, have masters level graduates from Carnegie Mellon, or Georgia Tech or a number of schools that have proper specific disciplines in in robots and, and automation. But back then it was kind of catches catch can. And the truth is the folks at at your school at that time, they were less interested in the fact that I had programmed one of their robots, and more interested that I had worked in college teaching high school physics. And they said, Hey, you know, that’s really the skill set we’re looking for. I worked there as an instructor, I was teaching people how to program and maintain robots for the first few years I was there.
Jay Clouse 15:02
Yeah, I would love to hear more about your career arc with that company being there. So long, what what did it what changed for you over that period of time?
Erik Nieves 15:10
You know, you’re someplace for as long as I was and do a lot of things. And I started out sort of setting up their, you know, training facilities and, and getting, you know, college level CPUs accredited for that type, of course, work and such. And then in 94, we moved to Mexico, my wife had just finished her master’s in ESL needed enough to work abroad to sort of round out her resume. And I was afforded the opportunity to open the subsidiary, for us gala in Mexico. And that worked out just great was supposed to be a two year stint, although the Peace Corps ended up staying four and a half. Because we, you know, really enjoyed our time down there, the business needed that much time to sort of mature and get its own legs. But you know, I never did go get an MBA, but for years setting up a subsidiary abroad, it teaches you a lot. And that was really important part of my sort of development in this industry. I came back and I started running, you know, effectively the r&d group. I did that for a number of years, spent some time running customer service on the West Coast for a while, and then ultimately, was the technology director there. And that’s what led me to finally separate and, and found plus one, it’s 2009. The recession is in full effect. Anytime the automotive industry sneezes, the robot industry catches the flu, right? And we had to go find other things for robots to do. What was that going to be? And it was my team, along with my colleagues in the marketing department that turned over a bunch of rocks, aerospace, biomedical surgical, this is 2009. Everybody believe, you know, in da Vinci’s are going to be the future. So all industrial robot companies explored these things. And you figure out pretty quickly now, that’s not where we need to be. And it effectively came down to two major markets, that we’re going to be the next industries to adopt our technology in a big way. One of our chronic assembly, all are glowing screens. And the second is supply chain and logistics, because they’re the only ones that can absorb that takes so much labor that automation has a role to play. And the truth is electronic assemblies a better fit for industrial robots, then logistics is it’s about manufacturing and repeatability and precision, a lot of the things the concepts that robot people are comfortable with. But I wasn’t excited about that. Because no matter what I developed, it was always going to go to Malaysia, it was always going to go to you know, Southeast Asia or China. And we would never enjoy the benefits of it here. But that’s not true with supply chain. By definition, logistics is all always look, and I was jazzed about, okay, let’s teach robots to work in this new space. And that’ll make a difference here.
Jay Clouse 18:10
And at that time, you you mentioned that you went to Mexico for about four and a half years and that was mid to late 80s. You came back then I’m guessing to San Antonio, Texas around 1990.
Erik Nieves 18:22
Yeah, the other way I joined this gala in 1990. went to Mexico in 94. Came back in 99. And back was not to Texas, where I’m at. It’s actually to Ohio, where all the robot companies are in the rust belt. I was there all the way until 2015. Where were you at Ohio? in Dayton actually.
Eric Hornung 18:45
okay Jay lives in Columbus and I live in Cincinnati, so…
Erik Nieves 18:48
Oh, is that right? Yeah. Well, you pass Yaskawa went north on 75. Right there, right. In spring borough, you’ll see us off to the left.
Jay Clouse 18:57
I see. I see. So okay, so now in 2009, you’re in Ohio, you’re starting to turn on this box. You see, okay, it’s electronic assembly is supply chain. I’m guessing then you took that back to school? And you said let’s focus on supply chain. What did that look like for you? sky was business.
Erik Nieves 19:14
Yeah, so you scour says, Okay, let’s do this. And we start trying to understand what are the technology gaps? Hey, Eric, at this such a great idea. Why are there 1000 robots a year going into this space? Now? Those because there’s technology gaps in the logistics world, it’s almost orthogonal to manufacturing. Because in manufacturing, what do we care about? We’re going to make a million of the same widget over the next four years, you just need to have physical memory and endurance. But in supply chain, I don’t know what’s going to come down the line. Next. I don’t know what you ordered on your favorite e commerce site that I need to manage coming down the line next. So you have to discover everything in supply chain, it’s less about the arm, more about the eyes and the hand. And you kind of know that intuitively. Right? So yes, gala being an arm company says okay, well, let’s see what we can do about making a proper arm for that space. Well, that’s not going to effectively break the market open. Because it’s not about the manipulation. It’s about the perception. And that’s what we ended up having the found plus one to go do.
Eric Hornung 20:26
how much of the eyes at that time had been like created in an academic setting? Like how much of this work had actually been done before you were like, We need to take this two plus one. Was there so much creation happening? Or was it we just need to aggregate a bunch of things that are happening, test it make it work?
Erik Nieves 20:44
Well, first, there’s this qualitative difference between 2d perception 2d vision and 3d vision to the vision was a well understood established technology that all robot people were applying in manufacturing applications. But 3d is what’s necessary in supply chain, you got to know everything steps where, you know, and and that’s what was emerging at the time. So the academics world playing with it, there were some startups, particularly out in the valley that we’re looking at applying 3d techniques to industrial applications, but nobody from sort of the delivery of the system, you know, perspective, what really got plus one going was a group out of Texas called Southwest Research Institute, swearing for short, and swear he is a not for profit contract research house, they had taken some internal development dollars to pursue what we call today, the cluttered pile problem. If I have a whole mess of boxes, envelopes, padded mailers, etc, how do I sort them out one at a time to feed the rest of the system. And that cluttered pile problem is you pick which, in supply chain, you can imagine it in an e commerce fulfillment center, you can certainly imagine it once it hits the parcel, you know, shippers, so they had built this piece of technology, and had nowhere to go with it. And so plus one is three co founders. It’s me, but Paul and Sean, were at Southwest Research, Sean was the developer of that solution. And ultimately, that’s what we did. We took the developers we acquired the source code. And that’s what gave plus one it’s kind of commercial start.
Jay Clouse 22:33
So did Plus One spin out of Yes, gala? Or did you say I see an opportunity, it’s time for me to go out and do my own thing?
Erik Nieves 22:40
not a spin out, I left for the purposes of doing this. In some ways, we could have been considered a spin out from Southwest Research Institute, because it was two of the founders and the technology. But likewise, they weren’t able to do that, unlike Sri that lives on spin out. So he doesn’t, you know, sort of have that charter. So the only way to really do it was to propel and Shawn to separate and us to acquire the technology.
Jay Clouse 23:08
So Yaskawa, I would assume has more resources, then Eric, the individual. So were they not interested in incubating it in house? Or were you not interested in incubating it in house?
Erik Nieves 23:20
it became clear that no, our manufacturer was really going to be able to solve a perception problem. Robot manufacturers are in the business to sell iron and motors. And what we were looking to do doesn’t fit directly with that. So it was going to be we’re going to be an enabling technology. Ultimately, that enabling technology is going to move iron. But we’re going to have to go do this.
Jay Clouse 23:47
I see. Well, before I start sort of speculating, then can you explain what plus one robotics is today and the breath that it is today.
Erik Nieves 23:54
So you can think of Plus One as a 3d perception company, that bringing that technology to these industrial applications and supply chain. So what we’re about is vision guided manipulation, you have a robot arm, that robot arm has a set of cameras associated with it, sometimes they’re on the arm, sometimes they’re off board, but they are visualizing the scene. And through our technology, we can command the robot, what to do next, where to go next, and what to pick next, where to put it, etc. That’s what plus one does. But we come to this from the premise that people are better than robots. And that’s certainly true at everything associated with supply chain, and manufacturing, I would argue people are better than robots at everything except stick to it Ignis and mundane tasks. But in supply chain, where so much is dependent on your ability to see and decide, it won’t matter how sophisticated an algorithm, we develop it plus one, it won’t matter how deep our convolution neural network is, it won’t matter how much data we can feed the reinforcement learning model. In the end, people are superior, we just are. It’s a qualitative difference. So that’s why our mantra is robots work, but people rule. And the notion is how do we seamlessly integrate people’s can capabilities to robot capacity? Right? How do we take the best of the robot, it’s endurance and its strength, and made it to the decision making that sometimes you just have to have from a person. And and frankly, that’s why we’re called plus one robotics. Because as we see this network of robots in the field, we view them as becoming much more capable, fault tolerant through the addition of a person a human being. So the plus one is really you.
Eric Hornung 26:00
Is that a mantra that you developed over your career, or is that something that you your co founders kind of sat down and said, this is the vision we want for the company going forward?
Erik Nieves 26:09
No, it is something that I have come to over, you know, the 30 years I’ve been doing this is, you know, whenever you watch a robot do its thing, if it’s anything beyond a rote assembly task, you’ll watch and go, Wow, that was a dumb decision it made. Right. And, you know, it should have picked differently than it did. And the other is just think in terms of what happens to a robot when the upstream process goes down. You know, they’re always going to do absolutely nothing. But think about if a person had been there, and the upstream process went down, that person would turn to their colleague and go, Well, my lines down, let me help you with yours. If there’s nothing to do, that person would at least pick up a broom and cleaning the robots bringing, you know value when the upstream project says when it’s starched, people are much more flexible and capable than robots are. And that’s just sort of our ethos at Plus One.
Jay Clouse 27:08
let me repeat this back to you and make sure I’m understanding kind of the order of operations. You’re at Yaskawa, you’re looking to solve this problem, you discover the Southwest Research Institute their approach to the cluttered pile issue and you say, you know, I think I have a better chance accomplishing this. If I go out on my own, and move back to Texas to work with that team. Is that all correct?
Erik Nieves 27:29
One caveat, I had moved back to Texas by that. Okay, I moved back to Texas in oh five, because it was time to come home and take care of my people. As a result, I had a lot of contact with Southwest Research naturally. And I supported some of their initiatives and such. So it would in fact, be more correct to say that, you know, folks at Southwest Research said, this is a real opportunity. And, you know, we want to partner with somebody from the industry that we know and trust. And that’s how, you know, I came to be involved. So what is the physical manifestation of your product look like? It sounds like there’s probably a sensor components and software components, but is are like the sensors, the extent of hardware? Yeah, so the pink one system, as we call it, is a set of 2d and 3d cameras. And it may be more than one, depending on the application, and an industrial PC. So that IPC is running our code on it, and it’s all Linux, you know, based work. And it’s built a lot on the Ross framework. So Ross robot operating system, is an open source effort at trying to broaden or democratize robotics more broadly, it came from some efforts in Silicon Valley that were aimed really at personal robots and your home, you know, aid robots and that type of thing. And it was actually Sean, who, while at Southwest Research, understood the benefit of bringing Ross tools to industrial applications. He said, Hey, a lot of the things that they’re doing for autonomous driving, swarm control, perception, all of these things that they think only means something in mobility have a lot of benefit to us and industrial applications. Well, the folks out at Willow Garage, this is the incubator that that birth cross, they had no idea to them industrial automation was a solved problem. Why should they even care about that space? But Sean having to deliver industrial application says no, listen, this is the thing. And that’s what became Rawson Austria. So Ross industrial is like a cig. It’s a special interest group for open source robotics. And, you know, it’s a very successful open source project and robotics, it’s got a lot of backing from industry, Caterpillar, Ford, Amazon, you know, you name it, that are supporting that effort.
Eric Hornung 30:02
So I’m trying to understand a little bit more here on the timeline, when you guys come up with this idea, or swear, he comes up with this idea. They say, we’re looking for an industry partner, they find you. And then you guys go into stealth mode. How does that like? Where does this all walk me through this process of getting from? All right, this is an idea that we’re going to pursue because it has legs. Now we’re in stealth mode, what are you doing in stealth mode? And then why do you emerge out of it?
Erik Nieves 30:31
Yes. So we went into self, because while we had brought some important customer contacts with us, upon acquiring the the tech, it wasn’t baked, yet. We were not in a position where we could commercialize what we had taken from the Research Institute. So we bootstrapped it for the first year. And it wasn’t until April of 2017, that we took our first seed round from you know, other people’s money. And that helped us grow the team so that we could put handles on this software, and wrap it up nicely and say, here it is. And then we’re, of course, some parallel efforts on the hardware side, what’s the best answer for this application. And, as I said, this is kind of an emerging tech. So sensors were like crawling out of everywhere, and some were great, and some were lousy, and some were terrific. But you could get any support all of that you had to weed through until we got to a stable deliverable. And as soon as we had that, then, you know, we we came out of stealth and and announced the round and announced the product for the first time.
Jay Clouse 31:40
Give me an example of the type of customers that Plus One Robotics services.
Erik Nieves 31:45
Well, as you can imagine, this is an elephant hunters world, right? Everybody you’re talking to is a fortune 100 company, right? So you can think in terms of Econ, retail parcel, district, Bhushan, etc. And so, you know, if you were to just think through all of the folks involved in getting you something that you wanted, we’re probably talking to those folks. And you know, this industry is defined effectively by our own six players, you get half of them, and you’re going to be really busy for a long time, you know, so we’re actively continuing to broaden our footprint amongst, you know, all of these players,
Eric Hornung 32:31
how do you think about customer revenue concentration? So if you only have two of the six, at any one point, if so, if one of those two customers decides that they’re just going to spin up their own in house robotics, using this open source industrial software, you’re building a company based on 100% of revenues, and all of a sudden, now you have 50%? So how do you think about the risk that comes along with selling to a consolidated industry?
Erik Nieves 32:56
Yeah, no, clearly, it’s, it’s a legitimate concern, and certainly one that we’ve had to work through. And as we raised the A, and, you know, yes, there’s this set of customers, and then you’ve got the next hundred, that are all fighting for the same labor pool that have the same, you know, constraints need the same solutions, they just don’t need it at the same volumes. So yes, you have to think in terms of what’s the next level of the sales effort? And how do you how do you access that market? Do we do that direct? Do we do that through distribution? Do we work with channel partners, etc, to continue to push our technology to the next level in this space? But clearly, there’s some concentration issues early, but it’s ones we’ve chosen?
Jay Clouse 33:46
Is this deployed in production at any one of those customers yet?
Erik Nieves 33:49
Yes. So we have, you know, on our website, you’ll see the first application that we’ve done, which is induction, meaning here’s this big clutter pile of parcels, and we need to take and put lot of them out of time into the system. And these all these customers have stage gates by which they deploy technology. And, you know, we are working through those processes with that
Jay Clouse 34:12
That was my next question because I would imagine any downtime at all is a huge cost for one of these customers. So I was going to ask, what stage getting looks like what that implementation process looks like?
Erik Nieves 34:23
Yeah, so all of them, you know, first day, every customer believes that their particular mix of widgets or packages is unique, okay? None of them believe that, just because you did it for the last guy, it’s going to work on there. So you end up having to do some upfront work that okay, send me your stuff, I’ll put it front of the cameras, we’re going to run through the software, and you’ll see that we legitimately can discriminate the pic points adequately. So you go through that process, then well, let’s go on site. And you kind of you know, do a proof of principle, then it it’s kind of an a next step pilot project, where let’s do one of these in a live kind of production environment. And then Wow, that’s good. Let’s take the next step and do a facilities worth it or aligns worth. And then from there, you can go, you know, indiscriminate way through the rest of their facilities. So those are the stage gates that, you know, you’ll have to just work your way through.
Jay Clouse 35:27
And is that like, all on speculation? are they paying you to do the stage gates? Or is that just like all part of the process of trying to court these customers?
Erik Nieves 35:35
some of them would be happy to support that work. I’ve never taken a nickel from anybody for that. I want them to be exceedingly clear lines of demarcation regarding IP. So anything that we have done, I am providing the market, a product, not an engineering service.
Eric Hornung 35:54
Who else is doing this in logistics? Because I remember seeing four years ago, three, four years ago, and Amazon bought those little drone, or those little like, keep robots Yeah, that go around everywhere? Like what? Who else is doing things like this?
Erik Nieves 36:08
Oh, man. Okay, so I’m going to back up. And first day, look, if you were to step into a fulfillment center, or a warehouse and just stand against the back wall, just watch, you’ll quickly observe, there’s two classes of labor happening in the building. One of them is what I call the mobility class. These are people on forklifts, pushing dollies, Dragon cards around etc, something associated with the wheel. That’s the mobility class. The other class is people with stuff in their hands, the manipulation, classic pulling things off the shelf, they’re sticking, they’re taking things that moving parcels around, it doesn’t take very long for you to count noses, and recognize there’s a lot more people in the manipulation class and in the mobility class, but mobility is the easier problem to solve. Now, my mobility colleagues would argue…it is a two and a half degree of freedom problem, the robot ghosts forward, back left, right, and it turns. And that’s what Amazon did. If Amazon could buy a mobility company, they would Oh, they did. That’s what the Kiva acquisition was, if Amazon could buy by extension, a manipulation company, they would, oh, they can’t, there’s nobody to go acquire. So instead, what they did was created the Amazon picking challenge, the APC, and they did this for three consecutive years. And what it was, it was an academic challenge. It turned out to be an academic challenge. They opened it to anybody from industry that wanted to, you know, participate, but none of those would because of IP issues. And the way it worked was Amazon would say, here’s a set of our widgets, you know, here’s some models will send you a shelf, and you can program your robot to do picking and placing, which is what we need to do, ultimately, and we all gathered in Seattle. And I think that we’re all 11 teams don’t quote me on that. But it’s some handful of teams. The first year, I was doing a scowl, I sponsored three of those teams, I’m telling you, it was painful to watch. All these robots were slow, most of them pick nothing, I think we probably pushed over more shelves and we picked from it was bad. And then they did it again a second year. And they did it again a third year. And they moved it from Seattle, to I think the Netherlands and to Japan. And what was Amazon really doing they were seeding the world with the manipulation problem. And today, they have plenty of labs that are working on that problem for them. Right. So to your question, you know who else is out there? The first thing you got to decide is Who else is doing what? Because there’s plenty of companies on the mobility space, fetch six river locusts, plenty of folks that are entered into warehouse automation from the mobility perspective. And now you’re starting to see plenty of them on the manipulation side. So there’s no lack of smart people putting cameras on robots to try to do vision guided picking.
Eric Hornung 39:11
So put me back in this warehouse, my backs against the wall, I’m looking I see, okay, there’s mobility, there’s manipulation, there’s a lot more manipulation and there is mobility. And I sub out all of the people who are doing manipulation, whatever ratio it is to put in plus one robots, how many are there like a DC? Like, how how, how many do you need? Is it? I feel like it would be an army of them if there’s so many people doing manipulation now?
Erik Nieves 39:39
Well, I mean, no FC is going to know warehouse know material handling company is in the business of just bringing robots on to displace labor. Right. That’s the first fallacy. The problem is they can’t get enough workers as it is. This is a labor availability problem, not a cost reduction issue. And and again, from plus ones perspective, if you believe people are better than robots anyway, we welcome that. I’ll tell any customer, hey, if you can get the labor you better, because they’re way more effective and flexible than any automated solution is going to, you know, bring to your into your building. But if you can’t, if your labor is the, you know, shortage, if your human capital is the most valuable asset you have, you better maximize it. And so what happens is in that building, there are some tasks that are less cognitively loaded than others. So let’s think about just some applications. If your job is to just move stuff from left to right, okay, here’s an ottoman moving from here, I’m going to move it from there, not a whole lot of decision making going on there. Let’s take and follow the rest through the rest of the facility. And now I’m have to take and build a pallets worth of stuff. And it’s all mixed. And some of its heavy, some of its solid, some of its, you know, sleeping bags, whatever, you have to make decisions on how you’re going to do that. Those are ones no robots going to help you with. So you had better take, if you need the human capital, you need to reassign it from those lower intensity tasks and move them to the higher intensity tasks with a robot can’t help you. This is a augmentation play. Right? So I actually try to stay away from the word automation, because it has this connotation of people out robot in. And that’s not what you see in this space. In fact, I’ll put it like this. No warehouse that put in a robot has ever resulted in a pink slip.
Eric Hornung 41:52
Hmm, I guess my just kind of clarify my question a little bit. I’m trying to get a sense of the size and scale. How many of these things come in? So you said low intensity, we can specialize with robots, high intensity specialized with humans who rule, right? Humans rule robots work? How many of these things go into a warehouse? I guess that’s what I’m like, I don’t understand. Is it? Is it 10? And then you can knock out all of your low, low intensity work? Or is it? Hundreds?
Erik Nieves 42:22
Yeah. So you know, your low intensity work is going to be counted in intense, not hundreds, right? So you’ll be deploying the technology the first time on those applications. And then you can kind of just scale from there as the technology matures, as the facility becomes more capable, as the tech as the labor market gets even tighter, and the facility continues to expand. Right? So it’s, in some ways, no different than anytime robots have been deployed. Right? So when robots were first deployed, in the automotive world, what were they doing spot welding, which was the easiest application to do. And that’s what you know, put the foothold in place, allow the industry to become comfortable with that technology, master the technology, and then you will always find other things for it to do. So what’s pens today? Better be hundreds tomorrow, or plus one chose poorly?
Jay Clouse 43:27
I’ve kind of a silly or what seems to be like a pretty simple question. There are some warehouses around Columbus here that I’ve talked to who have a real labor shortage. And they’re constantly having high turnover because people don’t show up or they don’t have vehicles that are reliable. And I’ve always just kind of wondered, why don’t you just increase the wages for those jobs to get a more capable labor? Who’s happy to go get that job? What where’s the labor shortage come from?
Erik Nieves 43:53
I’ll tell you, the labor shortage isn’t just about the dollars. It’s not just about the rate and the way, right, because george bush was right. And I don’t agree with him on a lot. But he did say that there are jobs, Americans just won’t do it. And he was referring to ag. But the same is true here. The churn that you’re talking about, isn’t just because it was so many dollars an hour. The fact is, it can be kind of crummy work. And a lot of times it’s anti social working hours. I mean, why do a lot of these sorts happen? overnight. So look, all of us knew somebody that during college worked at UPS, loading or unloading trucks, but they’re not doing it now. Because they have options. And that’s the issue, when we have options will find something else to do for the money.
Jay Clouse 44:46
Yeah. Another aside that I don’t think we have a lot of people with insight on. And so I’d like to hear your perspective. You mentioned this Amazon picking challenge. And we frequently see just how much Amazon is doing all over the place. But it’s right me that logistics is specifically an area that Amazon excels that we don’t have a ton of visibility into. So from your perspective, can you give us a short aside about Amazon, the company and what you see from them on like an operational standpoint about how they’ve been able to dominate?
Erik Nieves 45:15
I don’t I don’t know that I can. But I can tell you that, you know, the whole question of Amazon, as shipper is the one that dominates a lot of the airspace right now, right is, hey, are they really coming after, you know, FedEx and UPS or aren’t thing, and I’m over the volition that they are not. And what they’re really interested in, is zone skipping, right? Where zone skipping is, you know that anytime you send a parcel out, it’s going to go from your local hub, to the main hub, whether that’s in Louisville, or Memphis, and then out to some secondary have more close to you, and maybe a third, before it gets out on the last mile. And that, you know, all Amazon is trying to do with prime air is skip a couple of those zones and get maybe to the second to last one or the last one more readily on the you know, those markets that are significant to them. I think it’s just a way to move the bar on, on delivery. I mean, when prime came and we were getting stuff in two days, that was amazing. And now that’s a table stake. And, you know, major metropolitan areas, I’m sure Columbus is one of them Cincinnati to that our prime now cities. And Heck, if I can’t get it this afternoon, and I don’t want it. So what does this do? This just keeps pushing the velocity issue at every turn. And so I just view Amazon is trying to stay ahead of the delivery issue. Now, you know, the only other thing that I’d say is kind of on the when is the backlash coming? And are we starting to see it? My Way wife and I are vegetarian? Whole Foods is a place that, you know, would be natural for us to go shop. But you know, if we did, you could legitimately spend all of your dollars except for gas within sort of the Amazon umbrella. Yeah. And, you know, I think that’s ultimately what will cause the backlash is we just don’t like that sort of concentration. I am as the fight like.
Eric Hornung 47:30
So earlier, you mentioned that you’re not selling an engineering service, you’re selling a product. How do you price this product? Given just the kind of setup you have? Where you have these large potential buyers a pricing on a per unit? Is there a continuous feeling? How does how does the pricing work?
Erik Nieves 47:47
Yeah, I came into plus one with the notion that everything was going to be robots as a service, we were all going to go to a subscription model and bow to the Salesforce, Tyler. And maybe it’s a function of just the scale of the users that were that were involved with. But, you know, subscription is not a catch all for everybody. The automation world is a cap x world, when they take and they buy a solution and it’s going to have conveyors and equipment and such, they want to cut a check to somebody that delivers that whole thing owns the responsibility of that and, and moves on. So while philosophically, you could make the argument that, hey, we’re just augmenting your human labor with electromechanical labor, and it should be dealt with the same way from an op x perspective, they’re not interested in that. They would just assume, you know, I’ll I’ll take the equipment and software license on cap x and, and we’ll take the depreciation that’s, that’s what we do. Right? So you have to first sort of establish the appropriate model. And then, you know, kind of what’s the value and the pricing that supports that?
Eric Hornung 49:03
What are the cost drivers and your business?
Erik Nieves 49:06
The cost drivers on us as the supplier side is all development. I mean, my burn rate is people, it’s folks typing ones and zeros, to make sure that we each time make the system more capable, make the software more adaptable, and, and robust. So you know, that’s, that’s where our money goes. Our customers cost drivers are not just the direct labor dollars, but the churn associated with it, you’re perpetually onboarding and off board and search capacity. Right? That industry works, you know, sort of a follow level for 910 months of the year, and then spikes at the end. And how do you float that much labor in and out of a market? That’s a constraint, I think there’s a real premiere on the state of labor availability in this space, by just going in and googling Amazon camp or force. If you’re not familiar with camp or force, I’m not always worth checking out. I mean, I think there’s like an off Broadway play about camp or force. But camp or force is Amazon, recruits in RV or magazines, and says, Hey, if you will park your RV, next to one of our major installations Heaven, Heaven is the closest one to you. And if you will come any November, we will cover your you know, will pay you so much an hour will cover your rent at a local RV space. And if you can manage to be here through the 22nd or whatever of December will pay you or retention bonus or something right a bonus for having stuck around. And I don’t know how many, you know what percentage of the camp or force actually gets to that date to receive their money tension both because I’m just Sure, Graham, I interested in doing you know, this motion and you know, putting stuff in slots for 810 hours a day for five or six days a week, I just don’t think that, you know, it’s going to work. But that’s how tight the labor market is in this space, that they’ve had to become creative and look at things like camp or force.
Jay Clouse 51:21
See that’s the kind of thing I’m talking about this picking challenge or camp or force. This is stuff behind the scenes that there are people at Amazon constructing an architect thing and implementing that we don’t even see that’s probably a huge reason why incrementally they dominate so much. Something that you mentioned, Eric was that the first year, you were bootstrapped before you did the seed round. And now you’ve had a series a given that most your cost drivers are development is that funding so that you can continue? Is it primarily so you can continue to the development on the product to making it better or to afford what I’m guessing is a pretty long sales cycle.
Erik Nieves 51:54
you are correct that the sales cycles in this space are long, but that’s not really what the drivers, the dollars are for taking this technology, and then applying it in the next circumstance, right. So if you think about vision, guided manipulation as a capability, that capability manifests itself many different ways in this context of logistics. So we’ve knocked out these two sorts of applications, but there’s always something more. And that’s what we’re looking to do is increase sort of the application breath that the technology can address.
Eric Hornung 52:35
When I first looked at plus one, the first thing I thought was man, maybe this can make recycling cheaper by picking up because you know, right now like recycling, 75% of it is just like, Bs, right? It just ends up going to a landfill anyway, because people mix recycling, and you can’t do anything with the recycling process. So all I thought was, man, this could be like in the middle of a huge conveyor belt full of trash, just picking out and sorting information. So is that what you’re kind of talking about different areas like that, or is it something different?
Erik Nieves 53:08
I’m talking about directly within the material handling supply chain base. But your intuition is correct that, hey, if I can see, decide and act, right, then I should be able to do this in this other context as well. Now, I am focused on doing it within the walls of a warehouse or a distribution center. But this time, the same type of technology is being applied to that problem. There is a group in Boulder, Colorado that’s doing just that. Amp robotics. And this guy is my hero, his name is Tanya Horowitz, he’s worth your time to go check out. But that’s what they’re looking at is how do we facilitate single stream recycling so that it’s real.
Jay Clouse 53:56
robotics are pretty hot right now, it seems and we don’t have a lot of guests that have eclipse the series a mark on the show. So I want to ask a little bit of questions about that. It’s it’s a focus of Dr. Capital here in Columbus. So I’d love to hear what series A conversations were like for you, and what type of information investors were asking in relation to the robotics industry.
Erik Nieves 54:16
You know, my view on funding is, it’s less about our solution. And more about finding those VCs that understand the problem you’re solving. It’s to the place where you have to get in front of those that know the industry that you purport to serve. They’re the ones that are going to be the most receptive because they understand the pain. So that was my focus the questions that we’re going to get, and you brought one of them up with concentration issues. Another one is, okay, what’s, what’s the legitimate Tam, for vision guided manipulation? It’s kind of hard to quantify. Because I, there’s, you can either say, Wow, anybody that has one or two hands, you know, qualifies? No, not really, there are other things that enter into that, that, you know, sort of whittle away at it. So they’re going to want to know, you know, the addressable market, they’re going to want to know what you have to deal with on sale cycle, they’re going to want to know, Hey, you guys aren’t the only ones out there. Putting cameras on robots. There’s 12 startups today, there’s going to be another dozen tomorrow, the space is that hot? So what’s the differentiator for this team? What is the what is inherited the DNA of plus one that makes you think that this is going to be worth my dollars, time and effort? And I’m bullish on plus one, because the leadership team is so strong, because we’ve been delivering real systems to the real customers in the real market for many, many years. And I just believe that, you know, that understanding having all those relationships in the industry with the channel and the system integrators and such, puts us a step ahead of really smart folks coming out of, you know, Berkeley, or where have you that just haven’t had to do that. Right. So those are the types of questions that that we get at the A. Yeah, I mean, you know, what do investors want to know that this team is going to win, and that this problem is legit, and that there’s a real path to be? Right. My view on that, and it’s not very popular is, look, I’m not here to do the Silicon Valley shuffle. I’ve never seen the show God put that out there. But I’m gonna do this belly shall flow, you know, I’m not going to do seed a be exit, I was a discount for 25 years, I’m going to be an exit strategy is retirement, I’m building something here that is endure. And that’s what I believe that, you know, this human in the loop. So important. That’s what really helps it scale.
Jay Clouse 57:03
What type of feedback Did you get from investors on that point? Like, if you’re trying to build something in during usually, you know, they’re specifically looking for an exit strategy? How difficult was it to find an investor that was aligned with you on on that mission?
Erik Nieves 57:17
You’re right, if they are specifically interested in what’s the valuation at your next round? Then? You know, we don’t play that. Well. But you saw that Pritzker lead are a Pritzker is in it for the for the long haul. They understand. I mean, they they do a lot of industry, is it? Is there not uncomfortable with the direction that we want to take this? Of course, it’s always true. You know, everybody’s got a plan to get punched in the mouth. Right? And that’s true of us to we will certainly look at anything that comes our way. But that’s not what we’re building here. I think you make different and I would say, less customer focused decisions, if really what you’re all about is can I get to the be?
Eric Hornung 58:05
So if there’s two paths, let’s look past the be let’s to the very future, there’s two paths. There’s one where you service all six of those big customers in your your own standalone company, and there’s one that in six to 18 months, you get a billion dollar offer, from one of them, like which one is more enticing? Because both of them, you’re going to retire pretty nicely.
Erik Nieves 58:29
Yeah, one of em might just get to do it sooner.
So yeah, that’s a fair question. I don’t, I don’t know that I’ve thought about it in those terms. But I am committed to seeing this technology develop. Right? It would be a shame, if for whatever reason, good, bad or indifferent, this technology stops growing in its capacity to serve. You know, that was really my intrinsic motivation here is know how to robots, the same thing over and over again, I want to teach robots to do different things every time that is 180 degrees. And that’s going to take time, effort, and my focus to do that. So you know, if somebody comes in says, Yeah, billion dollars, you know, but we’re going to do with the technology, what we think, and we’re going to constrain it the way that we want to, that’s going to be a hard sell for for not just me, but from Paul and Shawn too.
Jay Clouse 59:31
obviously, San Antonio was important for meeting Paul and Shawn, and getting this started. Now that you guys are running, talk to me about San Antonio, as an ecosystem and what it means for Plus One?
Erik Nieves 59:44
yeah, I’m glad you asked that, because that is a question that we got a lot, not even not just at the A, but also to see, you know, hey, we’re gonna give you the dog, we want you to move out here to the west. Right? Or, you know, Dr. Did that, right, they acquired the folks out of Baltimore moved on the Columbus not interested in doing. And I would argue, it’s not best. And this is why where’s this all going? It isn’t going to be very long, but we’re not going to care about robot arms anymore. And that perception will be, you know, robust. And what you’re going to have then, is network connected assets in the field that you are having to, you know, maintain, keep up or whatever. What does that do to that the two most important sort of technical risks are connectivity, and cyber security. So the whole Stuxnet, you know, scare, nobody wants it to happen to industrial robots. So if you’re going to have connected, it’s got to be cyber security. Well, that is the two things San Antonio does best. You got Rackspace, here, inventors of the cloud. And the US military Cyber Command is here. You can’t swing a 40 foot rope in this town without hitting somebody is doing cloud or site. And those are the things that really matter to the future of industrial automation.
Eric Hornung 1:01:09
So you have launched a subsidiary from nothing in Mexico, and now you’ve launched a start up from nothing in San Antonio, what has been harder?
Erik Nieves 1:01:18
And oh, my gosh, definitely launching the start.
Eric Hornung 1:01:22
And what has been similar?
Erik Nieves 1:01:24
What’s been similar is so many things you don’t know. Right? So you don’t know to plan for them? Because you just don’t know what you don’t know. And you discover something next week that you just hadn’t known you had to consider? What do I know about DNO insurance? Right. And I didn’t have to know about that when I did the startup in Mexico or the the subsidiary in Mexico. So there’s always things you don’t know. But when you’re doing a subsidiary, you have an entire organization behind you that, you know, you can sort of rely on, I can say, Hey, I’m getting this, you know, the import export, people are asking questions I have answers to, but I’m going to pitch it over the wall to corporate back in Ohio, you get none of that in the startup world. So that’s why you have to, you know, lean on your advisors on your board for that sort of expertise. But yeah, definitely harder startup and the subsidy, I guess, you know, I’m sort of not name is similar. And the fact that you have to build a team is similar. In both cases, you have to get together the people that are going to make it work. And if one of the things that I’m proudest of, of my career, is that folks that I installed in Mexico are they’re doing important work for your scour Mexico. And you know, that’s very gratifying to know that, Hey, you got I talent. That’s so important in the startup world. So bring come in, motivate them the right way, make them feel like they’re part of something bigger, compensate them as they need to be care about them and family, good things happen. That’s the same what your endeavor is.
Jay Clouse 1:03:14
This has been awesome. Eric, thank you so much for sharing this with us. After the show. If people want to learn more about you, or plus one robotics, where would you send them?
Erik Nieves 1:03:21
I would send them to plusonerobotics.com. And you can, you know, get a sense of the team get a sense of the products, the sort of work that we do. Email us if you need to, there’s always a link there. But always glad to connect
Eric Hornung 1:03:34
Jay we are not big robotics guys. We have not had a robotics company on the podcast yet. You didn’t go to robot school? And neither did I. So I think it would be good to bring someone on to give us and the listeners a little bit of insight. What do you think?
Jay Clouse 1:03:56
I agree. So we brought in Nick Solaro, an investment partner at the Columbus venture capital firm, Drive Capital. One of next focuses at Drive is its investments in robotics companies, of which the firm has made a handful in recent years. I’ve noticed anecdotally that drive here in Columbus has been focusing on robotics, I reached out to their team to say who’s the best partner for us to talk to you about robotics. And they said next, our guy, so enjoy the short interview with Nick Solaro.
Nick, welcome to the show.
Nick Solaro 1:04:26
Thanks for having me. Looking forward to it.
Jay Clouse 1:04:27
You’re with Drive Capital here in Columbus and in the Midwest, and Drive seems to have taken a an interest in robotics companies. Can you talk a little bit about that, and whether that’s a state of interest, or just kind of happens to be the types of companies you guys are finding?
Nick Solaro 1:04:42
Yeah, so we tend to be very cinematic in the way that we’ve invested Dr. Capital, we like to consider ourselves hunters as opposed to Farmer so we’re proactively pursuing companies. It’s very specific themes. And the trend towards robotics. And automation is one of our most central themes here at Dr. We think this is one of the most profound things that’s going on in the technology landscape today. And it’s something that I expect us to be investing in, not just this year, but for multiple decades, investing in robotics today feels a lot like what it would feel like to be investing and say, you know, computers in the late 70s, where we were at the front end of this massive adoption curve. And it’s going to have all sorts of implications, not just for the ones that we know, but all sorts of things that we that are yet to reveal themselves.
Eric Hornung 1:05:28
I can think of some Wall Street Journal headlines for why robotics industry is so profound. But what are maybe some of the deeper reasons for why robotics at Drive?
Nick Solaro 1:05:38
Sure. So if you think about the context, right, and I think pointing to the PC as an analog, is it helpful framework to understand what’s going on? You know, Thomas Watson, who was the founder of IBM, one said that he, you know, his his prediction for the global market for computers was maybe five or six units in the world, right? And what he was talking about at the time, are what are called mainframes, right? So these were massive, custom built computers that took up an entire room, right, in a building, they did, you know, maybe one or two things really, really, really well. And once those things for program, they were fixed, and marginally useful. And so only the richest companies in the world that could afford to push the processes through those, those computers many, many, many, many times. Only for them, did it make economic sense, because you had to amortize the cost of that very expensive machine over the, you know, hundreds of thousands or millions of operations that would run through, but what you saw happened was it the era of mainframe computing, gave way to the era of desktop computing, and ultimately, mobile computing. And so what was once fixed and expensive and purpose built and narrowly useful, became flexible, and inexpensive, and very broadly useful. And so the global market for computers went from the you know, Thomas Watson since forecast of maybe, you know, sub 10 units in the world to every desk in America, every home in America, and soon every you know, every now every pocket, damn near every pocket in the world. And I think robotics is on a similar trend. robots have been around for many decades, just like mainframe computers have been around for many decades. And I think that we’re in the midst of the transition from mainframe robotics, to desktop robotics, right to stick with the with the analog, robotics historically have been big, very expensive. Fixed automation, right. So the robots that you see in Detroit producing cars, amount to very expensive capital expenditures that can do one thing really, really well. They’re highly engineered, and they cost lots and lots of money. So you need to be a company on the order of magnitude of a general motors to justify the cost of installing all those robots. But what’s happening is similar to computers is the cost of the hardware and the flexibility inherent with the software is dramatically lower, lowering that barrier to entry. So you know, what was once fixed and caged and purpose built, and narrowly defined, which is historical mainframe robotics, is now lightweight, and flexible and accessible and reusable, because you have all of these converging threads on the technology side, right, which is where we come in. So with rapidly increasing sensor packages, right, that are decreasing costs and increasing capability, the sensor packages, decreasing costs and increasing capability of the compute and software means that you can have very flexible automation, and therefore you can justify it and all and a lot more places, right? So we’re you look around at the ability to automate is going up, and the cost of that automation is going down. Right? So you So by definition, you’re just going to see a lot more automated processes around you.
Jay Clouse 1:08:50
So let’s say a robotics company comes to drive capital and says, We are Jay Clouse robotics. What’s the progression of how you dig into that company to see if it’s a fit for Dr. What types of things are you looking for in robotics, specifically?
Eric Hornung 1:09:04
The worst robotics name I’ve ever heard, by the way.
Nick Solaro 1:09:08
So you know, if you look at Drive Capital’s…take a step back, right? If you look at Drive Capital’s website, you’re going to see robotics companies, you’re going to see software companies, you’re going to see consumer companies in to see early stage businesses and later stage businesses things in Columbus things outside Columbus, you might ask yourself, well, gosh, what have all of these have in common. And for us, it boils down to really two things, common thread through all of our investments is a is a fundamental belief in two key characteristics. The first is, is it the company is going after a large market, for US market size is very much our North Star. And it’s for a very simple reason, large markets have enough room to yield very big companies. So we want to invest in businesses that had the opportunity to become multi billion dollars of shareholder value. And the best way to give yourself a chance at that to start with a big market, right, it means you can be wrong and still end up with a big company. It means, you know, even if you don’t have the exact perfect product, or the exact perfect pitch, there are enough customers out there for you to go and ultimately build that big company. If you start with a small market, even if you do everything perfectly, you’re going to end up with a small company. Right? So So for us, it’s more market sizes, the first question we ask, and if we can’t get past the market size gate, and we’re just going to politely pass, regardless about of how cool the product is. The second thing we ask is, is this company today? Or do we think this company is destined to become the category defining company, right? So we want to invest in the number one company in the market. So if at the end of the day, we can invest? We can build a portfolio of companies, all of whom are category defining companies and big markets? We think that’s a recipe for generating some pretty nice returns. answering that second question is difficult, right? It requires and that’s where the, that’s where the venture in venture capital comes from, is you’re going to lean on your expertise, or your your hypotheses, your your views of the future, in order to create a best assessment of whether or not this company can become a category defining company. And that’s where, you know, market size is fairly easy to get at, it just takes some very basic math and some very basic assumptions about what we know about the world that does exist today. And then the near future. It’s answering that second question. That’s, that’s more difficult. And that’s where we spend a lot of time with the team, we spent a lot of time with the product, we spent a lot of time with the technology, because in order to create a category defining company, you know, those things that evolves, that that unfolds over this space of, you know, 10, 15, 20years. And so you need to have not just a really great product today, but one that is durably great, right, that there’s some moat around or some product roadmap or some insight that no one else has, that’s going to enable you to put one foot in front of the other for a decade, and at the end, still emerge as that category defining company and and that’s really where we spend time doing that.
Eric Hornung 1:12:06
how large is a large market?
Nick Solaro 1:12:09
So for us, and you know, this is, this is just us, right? We start a good kind of gut check, is it we asked a very simple we do a very simple thought experiment, we said if you had 100% market share today, would you have at least a billion dollars of gross profit every year from customers in North America? Right? So if he said all right, well, you know, I’m, I’m in the widget business. And there’s, you know, if I had 100%, market share of widgets, would generate a billion dollars of gross profit per annum? If the answer that question is, yes, that’s the beginning of a big enough market, in our opinion, because, again, we want to, we want to invest in companies that have the ability to build billion dollars in revenue businesses, right. And, you know, ideally, it’s a lot, it’s much larger than that. But that’s kind of that as the beginning of something that feels big enough to us, if your market is, you know, 500 million, or, you know, nine 900 million and growing slowly, it just gets harder and harder. And I understand that part, you know, especially in these emerging markets, like robotics, your market size, you know, strictly speaking, your market size today may be a little bit smaller. But if you kind of squint at it, you believe that this is a big shift that’s happening, that market should be rapidly increasing. And then we can get comfortable there as well.
Jay Clouse 1:13:26
Our guest today, Eric from plus one robotics, he referred to the the game that he’s playing here as kind of a whale or elephant hunting world, he’s going after a handful of giant companies that would he would have to get customers to be the number one category killer, do you see that as a pro or a con for a company where they need a small number of customers to be definitively the number one versus a lot of customers, they need to have just the majority?
Nick Solaro 1:13:53
It’s neither a pro nor a con, I think, you know, at least in a in a strictly speaking sense, right? It’s all going to be context, the past. You know, if I, if I think about robotics, I have a very strong view that in 10 years 15, pick your pick your long term horizon, that there’s going to be a great deal of things around us that are automated, that doesn’t mean the adoption rate of automation is is equal across all these different places. And if I look at who is buying, which parts of the market are the most rapid adopters today, it’s folks in that in a warehouse automation supply chain space, Amazon has basically set an impossible standard for the logistics business and the e commerce ecommerce is growing rapidly as a portion of overall commerce. And Amazon is growing as a portion of e commerce and their ability to maintain their superior customer experience really relies on their ability to get you your product in almost a magical amount of time. And if you look at how they do that, they have rapidly automated a number of those things processes on both a forward and reverse logistics space. And you know, the rest of the world, you know, the rest of retail, the rest of commerce basically has a fundamental fork in the road, they can either roll over and die, or they can compete on on this this new paradigm. Right. And most of them are opting to compete and the only way they’re doing it is they’re rapidly automating a number of the workflow processes from basically receiving goods in bulk, to then ultimately getting you your order into a brown box and delivered to your doorstep. Many of the steps along that path are being automated and that you know that the big player, you know that that’s kind of the the market that we’re talking about here. And many of those logistics players are big companies, right? So and they have need not for 10 robots or 100 robots, but sometimes 1000 or 10,000 robots, right? And so that is that is a whale, that market right there is filled with a bunch of whales, for sure.
Eric Hornung 1:15:57
How important is technology in the robot space as compared to operations marketing, sales, general business acumen?
Nick Solaro 1:16:06
Well, we come from a view that, you know, we we tend to favor technology over sales and marketing, because technology is how you build that durable lead, right. So that that category defining company for four decades is one that typically foundation is a great product and Anna and a one that’s not incrementally better, but they don’t want one that’s a step function better. During my time at when I worked at Google, Larry Page used to say all the time, you know, we don’t want to build products that are 10% better than our competition, we need to we need to be 10 x better. And so all of our ideas need to be kind of those 10 x sorts of ideas. And I believe that to be true. Now, that doesn’t mean you can’t be good at sales and marketing and so on. But ultimately, you need to be you need to have superior products. What’s interesting in the automation space is a lot of the features that even just a small handful of years ago, felt like science fiction are going to be table stakes, right and there, they will not be your your key differentiator of you know that to pick a specific thing, you know, like self driving cars. When I was at Google and the project and the internal code name was chauffeur, this is top secret stuff. They were building science fiction, but it from then until now. And it really in the not too distant future, self driving cars are going to go back to being called just cars, because it’s a feature that every single car has. And so if you’re going to win, if you’re going to be the most popular car, you’re not going to differentiate on the ability to be self driving, even though that that is a amazing piece of technology, the same thing is going to happen in the robotics and automation space, some of those early to market that are doing really inventive things around computer vision or autonomy. I like to describe it as robots transitioning from motion driven to mission driven, right? The old school robots basically are machines that are programmed to do a set of motions over and over again. And so you what you’re telling that robot to do is basically hit a bunch of waypoints. We’re in the midst of transition to mission driven where you can you can give a robot a directive, right, like move this thing from here to there, or separate all of the red widgets from the blue widgets, you don’t tell it how to do that, or how to make movement, you give it a mission, and then you let it figure out how best to complete that mission. That is really amazing computer science, if you think about it, but those sorts of things won’t be sustainably amazing, you’ll have to continue to invent new applications or solve increasingly more difficult problems. And and that’s, you know, that’s how we have that’s how we have progress.
Jay Clouse 1:18:35
I would guess that in the robotic space, since r&d is so much more intensive here, and often the physical product itself has a lot of cost to it. How does that affect your thinking as a venture capitalist and the amount of capital that you’d have to put into a company like a robotics company?
Nick Solaro 1:18:50
It’s it’s certainly something to consider, right? You know, the, the zero marginal cost and scalability of just software is very attractive. That’s, you know, many investors shy away from things that have a hardware aspect, but it’s, you know, most of the especially at the at the beginning of the adoption curve. Most customers are, they want to buy a full stack solution, because they have an acute pain point that they need solved. We haven’t yet had a maturation in a market where you start to have stratification of companies where you have the hardware companies that are separate from the software companies that are real from the platform companies, which are separate from the application companies like you do and say PCs, right. So you have, you know, Dell may make your computer and Microsoft, and you make your operating system. And then you can have, you know, Adobe that sits on top of windows, I think we’ll get there eventually, as everyone focuses on their core competencies. You know, ultimately, you want to be investing in the things that make you differentiated, and then, you know, buying things that are not your key differentiators. But for now, a lot of these companies are going to deliver full stack solutions. And it’s just something that we need to be mindful of. This has been awesome, Nick, if you want to learn more about you or Drive Capital after the show, where should they go? Well, you can come to DriveCapital.com, see what we’re all about. Also, anybody feel free to send me a note on Nick at DriveCapital.com. You know, we here in Columbus feel like we’re building the robotic center of the universe. So please, by all means, come visit, we’ve got 10 companies, if you can believe it here in Columbus, and that number is going to continue to grow. And, you know, this is a great example of where the whole is greater than the sum of the parts, because we’re creating an ecosystem here. So I encourage you to come visit. We also have our annual robotics and automation event here in Columbus, and October called devolves dance, so you can check it out at devolsdance.calm.
Jay Clouse 1:20:42
All right, Eric, we just spoke with Nick Solaro of Drive Capital. Let’s dive back into the company at hand here Plus One Robotics, where do want to start?
Eric Hornung 1:20:51
I love the idea of the company. I love that there is this human augmentation, not human replace factor. And that Erik was so adamant about that vision, and that incremental benefit of plus one, I also really like how Erik kind of segmented logistics robotics for us and made it easy enough that we could understand into mobility and manipulation. I also like how Eric segmented the history of robotics, from what he’s doing, and how what he was doing, and how robotics has been is all about the arm. Now what he’s doing is more about the eye, and the hand. So Jay what I really liked about this interview, and to take those three things together is the way in which robotics was explained to us in a way that I could readily and easily digest with very simple takeaways.
Jay Clouse 1:21:47
I just kept waiting for you to say, but here’s what I didn’t like, and you didn’t! just all things that you liked.
Eric Hornung 1:21:52
I’m usually more negative. I know. And I’m sure I have some some negativity coming. But I really enjoyed that interview. It was one of my things favorite today. And that’s I don’t usually say that live on the podcast. So here we go.
Jay Clouse 1:22:03
Same, even down to the cadence and just way Erik speaks, almost comforting. It just felt kind of comforting. It’s like, you know what I do understand this. I’m tracking with you. I’m here, I get it. Here. You’re saying. And honestly, that insight from Nick’s Laura also very, very insightful. For a short period of time, give us a lot of information there. And, you know, Part The reason we do the VC mashup episodes is to get some of the information we just got from Nick right there, it changes the way I think about some opportunities. So I’m with you, I, I definitely know a lot more about robotics now than I did before, this opportunity. Seems, you know, something I asked Nick was this opportunity seems like plus one is gotta win some big big clients, and there aren’t a ton of them. So to me, that’s kind of where this opportunity hinges and whether or not if we’re looking at this through the frame of an investor, if that’s the type of risk profile and reward profile that we’re looking for.
Eric Hornung 1:23:01
yeah, to me. And I mentioned this in the interview, it’s, it’s almost like there’s two paths that you can go down. Either you get purchased by one of those six, as an acquisition, or you build out all six of them. So you have all six of them are your customers, and you’re just minting money, and robots. For all six of them. I think depending on the path, you go down as an investor, that’s how you would think about the valuation. Because Kiva, who we talked about who Amazon bought raised $18 million, which is a little bit more than plus one. But they were purchased by Amazon for 750 ish million dollars. So if you’re going to get purchased by one of them, we can use what’s called a comparables model, or a comps model for evaluation here, which is something we haven’t really talked about much on the podcast. Okay, I like where this is going, what is a comparables model. So if we’re doing a full kitchen parables model, we would take a bunch of different comps, and we would say, Okay, this company was this far along, and they sold for this much this company was this far along, they sold for this much. And we would find things that were in the robotic space that were also sold to logistics type companies. Obviously, it sounds like the manipulation space is different than mobility, but at least gives us a proxy for what these companies are selling for. I didn’t do that I didn’t go through and find a bunch of these and run some discounts, run some premiums and find a range. But I think if we just use the Kiva systems acquisition as a ballpark figure, we get that as a robotics company, you can raise under $50 million. And you can sell that company, if you have the right technology and the right buyer for 750 million dollars, call it a half a million to a billion, maybe more it because manipulations harder, there’s probably some adjustments you can make there. But I think what we’re looking at is if you go the acquisition route, and it makes sense, and the technology works, and the companies are excited about it, that Amazon or FedEx or UPS or any of the other major players, there is a huge premium. On that side. The side I’m less comfortable with is our typical build upside. Here in the dilemma, which is we start with the unit economics, we figure out what the demand in the market in the total market is, and then we kind of back into some sort of valuation. And I, I don’t have the numbers from that interview where I can say, Okay, here’s how many robots, here’s how many warehouses, here’s how many, whatever, here’s the price point, like, Look, I’m missing a lot of information for me to be able to say, Okay, if we sold to all six of those, what’s the value prop? What’s the valuation? What’s the yearly revenues?
Jay Clouse 1:25:54
Yeah, one point you asked the question that you’re looking for the size and scale of how many of these machines go into a warehouse, he said is hundreds is this 10s? And Eric said, it’s in the 10s, more likely than the one hundreds. But I’m with you, I didn’t have hard numbers on how big that opportunity can be. I’m not familiar with this key of acquisition, either. So what year was that, and what type of what was this company doing?
Eric Hornung 1:26:18
So Kiva makes these little robots that move around the factory floor, really hard to explain, but it’s almost like a little beetle that things can go on top of. And they can be programmed to move packages from one part of the factory to another. They were purchased in 2012, by Amazon. So it was a while ago. So my comps, if you’re doing a cost model, you’d also look at history. So likely the number is higher than 775 million.
Jay Clouse 1:26:48
Yeah, I’m going to come at this from a slightly different angle here. Being that it’s clear the industry is going this direction. It also seems clear to me that Eric’s team is at the edge of it, if not the market leader. And so to me, that that reeks of opportunity. Something that Eric took a stance on that I appreciate as an entrepreneur, that gave me a little bit of pause as a potential investor. As he says, I’m not here to do the Silicon Valley shuffle, I’m not trying to raise a seed than a series A Series B, series c than a series D. I’m not trying to move from San Antonio, Texas. And it also didn’t seem that he was really angling for a quick exit, either, which is kind of what your argument here is predicated on. However, it seems clear to me that there would be that type of opportunity. At some point, Eric’s going to want to take something off the table. And so therefore, an investor would also take something off the table at that point, I believe. So to me, it seems like a good a good opportunity to get in on as an investor. But I don’t have that top market size. If you want to use this Kiva comparable. That does seem large. Sounds like it might be right at the edge that makes was talking about of large enough for a fund like Drive to get involved. but pretty close to the edge.
Eric Hornung 1:28:07
I think that you look at acquisition in this context, as when Amazon bought Kiva for $775 million, they probably thought they were going to get something like $5 billion of value out of it. What that means is that if you were to go this selling to all six route, there’s probably a significant uptick in total addressable market. It’s also a harder road. But it’s definitely probable that you become bigger. And that number is significantly higher. If you were to work the math and say, okay, Amazon has 75 distribution centers or fulfillment centers around the country. And ups has this many, and it says this many. And let’s get the number of total number of robots, that we would need just our pick one robots, this doesn’t go into the other use cases that Eric talked about. But pick one system that’s 750 for Amazon, and it’s however, running for ups, as however many for FedEx, and then if we took the price of each of those, and multiplied that we would find, okay, this is what more of a market size looks like. And that number, I can almost guarantee you will be higher than 750 million.
Jay Clouse 1:29:19
And the fact that his series A he said that investment is to take the technology they have and apply it to the next circumstance within that realm that they’re attacking that logistics industry. Sounds like they’ve already found and confirmed some level of product market fit for the first application, which I think it’s a good sign.
Eric Hornung 1:29:36
And now it’s just time to run that sales funnel, which is this Stage Gate process. I do want to touch on one thing real quick about who lead is series A, from what I understand. Pritzker is a family office, JB Pritzker out of Chicago. And when you are a family office, you have different constraints on your investments, your time horizon can be longer, for instance, because you’re not at the behest of LPs and have fun mandates, your money is your own, so you can invest it however you want. And I think that might be why Pritzker is leading this round is that this is a longer vision
Jay Clouse 1:30:15
for the listeners, something I want to shed light on because this was new to me until very recently, the term family office refers to essentially the funds within a high net worth family, correct?
Yeah, that’s correct.
Eric Hornung 1:30:29
So now I want to turn our attention to Erik as a founder. And I think we glossed over this, I want to the opportunity, because it’s pretty straightforward that his background checks out for doing this exact type of thing, and is probably one of a very small handful of people in the country in the world who know exactly how to approach this space and build this type of business. Did you get anything other than green flags? And talking to Erik, as a founder for this opportunity?
I think the fact that I only have green flags is probably at least a yellow flag. Because if you only have green flags, that means that there is something that we’re likely missing, or we didn’t ask, that could have turned over something that was a little shadow. So my biggest yellow flag, I won’t call it a red flag is that everything seemed in line? Obviously, one thing we don’t really get to talk much about here on upside, is the idea of the actual technology. does it actually work? Right. But assuming that it does, like we do with every other company? I don’t have any real yellow or red flags. What about you?
Jay Clouse 1:31:46
Yeah, my my biggest pause, like I said, would be if I’m approaching this from the lens of an institutional investor, and wondering, is Eric’s interest in running this for the long term aligned with what my fund is trying to do with our investments? Similarly, you know, Will our fund invest in San Antonio? And if it’s a Jay Clouse bond, you know, the answer is yes. But if it’s not, that would probably be a problem for me if he’s not willing to move or be closer to me or whatever. So for me personally, now, I got a lot of good indications. I’m with you on that, if I am, totally bought it. And I should probably be thinking harder looking, looking harder. But like you, I believe in the black box, the video on their website is really fun to watch listeners, I’d recommend you go to the plus one website, which is in the show notes and watch the overview video of how plus one works. But yeah, it’s clear to me how he got into this opportunity. It’s clear to me that he’s committed, like I said, he’s committed to a degree that might even be problematic to some institutional investors, if they’re trying to just return their investment and five to five to seven years. I believe that, you know, he will be successful. Something that you started this deal memo off with was talking about how he was able to make this rap complex in new idea to us very simple. And I always use that as a benchmark of how well does this person understand the subject matter? Can they take it and make it very simple for me, someone who’s coming to it new, and he did that in spades, so get good marks. For me.
It’s almost like that that benchmark that you have is almost like the opposite of Chris Dixon’s idea maze.
Really? tell me more.
Eric Hornung 1:33:24
Chris Dixon’s idea maze is, how long can I talk to a founder about what they’re doing? effectively? That’s like a really short way to put it together. But it’s all right, how do we twist and turn that down every single potential path of this idea? And by talking to you, have you thought about this before? Are these new questions for you? So founders that really understand and know their business and idea, have thought a lot about every problem? So they can go into every alley, but you’re kind of saying, What is unique to you is when a founder can pull back and say, here’s the beginning and end of the maze, don’t worry about what’s in the middle. But if you want to go there, we can jump in.
Jay Clouse 1:34:02
No, I’m not quite saying that. I like that idea that Chris Dixon is saying to. I don’t think those things are mutually exclusive. I’m saying that taking complex ideas, and being able to share them in a language that a layman would be able to understand, I think takes a level of understanding that an expert must have. That being said, I think that you can dive into any of those nooks and crannies and go deeper and still continue to take complex information, complex ideas, and simplify them in a way that I can understand. Going through the maze. I don’t necessarily need like, all encapsulating here’s the beginning or the end, here’s all that there is. I just want to be able to talk to you and feel like I’m staying with you.
Eric Hornung 1:34:43
I just want to be able to talk to you and feel like I’m not an idiot. Right? Seriously. But that’s like true of I think that’s human nature. I feel like the people who are the biggest cons make you feel like an idiot by using the biggest words?
Jay Clouse 1:34:54
Well, I just don’t think it’s good practice. Like, I don’t think you’re going to have a good outcome. If you go into a pitch meeting. You you’re using language and saying things that you can’t get your audience to understand what I invest in something that just I couldn’t wrap my head around? Absolutely not. It might be new to me, but I better be able to understand it when you explain it to me.
Eric Hornung 1:35:11
So Jay, what are you looking for in the next six to 18 months?
Jay Clouse 1:35:16
I’m going to piggyback on one of Nick Solaro’s points, where he says, one of Drive Capital’s fundamental beliefs, is this company today? Or could it become a category defining company, the number one company in that market? So I’m looking at indications for plus one being the number one category company or number one company in the category of this logistics robotics for those big six firms? You know, those are long sales conversations, what are the indications on them? How are they going? He’s got to be in contact with all of them already. So I’m looking to see how are those Stage Gate process is proceeding?
Eric Hornung 1:35:54
I think I’d be looking for the same. But for purposes of this deal memo, I will say, well, they raised this series A not to do the sales side of things, he made that pretty clear. Instead, they raise it to look at new use cases. So I want to hear what those new use cases are. Are they effective? How are they getting the technology? What academics are they working with? Are they working with new types of institutions like scary? How are they developing these new use cases? And what are they? And how do they fit into that stage getting process that is happening simultaneously.
Jay Clouse 1:36:30
We love to hear your thoughts, guys. Thanks again to Nicks the Laura for being on the show. If you have ideas on plus one on the robotics industry, you can tweet at us at upside FM or email us firstname.lastname@example.org. We’d love to talk to more robotics companies in different areas across the country. So if you have a lead on a good robotics company, you can email that as well to email@example.com. And we’ll talk to you next week. That’s all for this week. Thanks for listening. We’d love to hear your thoughts on today’s guest. So shoot us an email at Hello at UPS dot fm, or find us on Twitter at upside FM. We’ll be back here next week at the same time talking to another founder and our quest to find upside outside of Silicon Valley. If you or someone you know would make a good guest for our show, please email us or find us on Twitter and let us know. And if you love our show, please leave us a review on iTunes. That goes a long way in helping us spread the word and continue to help bring high quality guests to the show. Eric and I decided there were a couple things we wanted to share with you at the end of the podcast. And so here we go. Eric Hornung and Jay Clouse are the founding partners of the upside podcast. At the time of this recording, we do not own equity or other financial interest in the companies which appear on this show. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinions of death and Phelps LLC and its affiliates under collective LLC and its affiliates, or any entity which employs This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. We have not considered your specific financial situation nor provide any investment advice on the show. Thanks for listening and we’ll talk to you next week.
Interview begins: 07:58
Insight begins: 1:03:34
Debrief begins: 1:20:42
Erik Nieves is the Founder and CEO of Plus One Robotics. Plus One Robotics develops computer vision software to enable robotic automation in supply chain applications. The integration of off-the-shelf high-performance manipulators with Plus One’s advanced vision capabilities enables robots to bridge the gap between steady state volume and surge.
Plus One’s technology mitigates the persistent shortage of manual labor and allows warehouse personnel to flow from monotonous tasks to higher-value work. Plus One’s novel approach to human-robot collaboration and supervised autonomy ensures the systems are scalable, flexible and fault-tolerant.
They’ve received $10.6M in funding to date from Pritzker Group Venture Capital ($8.3M Series A) and Schematic Ventures ($2.4M seed)
Plus One Robotics was founded in 2015 and based in San Antonio, TX.
Learn more about Plus One Robotics: https://plusonerobotics.com/
Nick Solaro is an investment partner at the Columbus venture capital firm Drive Capital. One of Nick’s focuses for Drive is its investments in robotics companies, of which the firm has made a handful in recent years.
This episode is sponsored by Taft, Stettinius & Hollister, a full-service law firm known for assisting entrepreneurs across the Heartland.