The Global Startup Ecosystem: Automating Industrial Mobility with Saurav Agarwal

Jeff Kavanaugh: Welcome to the Knowledge Institute podcast, where we talk with business experts, deconstruct main ideas and share their insights. I'm Jeff Kavanaugh, Head of the Infosys Knowledge Institute, and today we're here with Saurav Agarwal, CEO and Co-founder of SIERA.AI. Saurav, thank you for joining us.

Saurav Agarwal: Thank you so much for having me on your podcast, Jeff.

Jeff Kavanaugh: What is unique and different about what your company is trying to do your mission, or maybe your value proposition compared to others?

Saurav Agarwal: In the simplest format, we are an AI and robotics company that helps warehouses and manufacturing facilities digitize their forklift fleet and prevent accidents using computer vision and IoT sensors. Our benefit to our customers is to make their operations safer and more efficient.

Jeff Kavanaugh: An interesting aspect of warehousing, inside the company, is you don't have to deal with the consumers out on the road. You can control things a little more. What's that environment allowed you to do and what do you see that's distinct about automating forklifts and equipment that might be off-road?

Saurav Agarwal: If you look at the autonomous vehicle industry, the car industry, they've got very long timelines. And right now it's in that phase of trough of disillusionment where the expectations were too high and the promises didn't really deliver. And because of the complexity of doing autonomous vehicles on public roads is too challenging. But when you move into a warehouse or a factory, as you rightly said, things are very structured. It's not that it's super easy, but we definitely expect, and the broader market consensus is there, that industrial vehicles will tend to get more and more automated and broadly automated much earlier than automobiles on the road. What we are doing in that domain is we first go in and digitize their offline processes from their inspections of the vehicle. And then we add automated safety. So we actually enable the driver to be additionally safe, very similar to what you now see in cars, you know, level two, level three automated driver assistance. We add that in, and then taking a very similar approach to Tesla. That system learns from how the human drives, how the operations work and then makes the self-driving system more intelligent.

Jeff Kavanaugh: How did you maintain your footing and your momentum during the pandemic? And then second, how has it evolved your story? And, and maybe that's a lesson for someone out there that has to take their value proposition and keep it current.

Saurav Agarwal: It was a challenging time for sure. The pandemic when it hit. In the investment community, as it was called the nuclear winter of sales. Industries stopped spending money for a while. So there was about six months of real, radio silence from customers because they were trying to figure out their own situation. What we had to our advantage is that we are agile, we're a startup, we are nimble. So we can adapt to changing situations pretty rapidly. Just before COVID hit, we had started picking up a lot of bigger orders. So we had a customer rich customer pipeline and orders to fulfill, so we went through with that and in that timeframe while the industry and the broader market was trying to figure itself out, trends started to emerge. We had 2030 levels of demand with infrastructure that was, you know, I dare say at 2010 levels and these businesses, these warehouses and factories were now under immense pressure. If you'll think about it, they need more people to fulfill higher order volume. At the same time, not enough, people are able to come into work. So it created the perfect storm for them to start thinking about digitization, automation. So coming out of COVID it's actually really good for somebody like us because the market's primed for what we are offering.

Jeff Kavanaugh: Has the value proposition evolved? And maybe what's a lesson that someone else can take whenever they have to think about their own value proposition and keeping it current?

Saurav Agarwal: So when you start a company, you first go with a certain thesis in mind and you take it to the market and you soon realize that in some places, your thesis is right. And then other places that doesn't really match what the market is looking for immediately. So when we went out with autonomous vehicles, we realized that there was a lot of problems, much simpler, or at a much lower level than autonomous vehicles that the customers needed to be solved. Let's take an example, quality checklists. So OSHA says, it's a mandatory law that every vehicle, every industrial vehicle that has to be operated must be inspected visually and for safe operation by the operator before taking it out into the warehouse or into the field. What happens is that in a typical warehouse, it's already being done on paper. And what happens is that the paper either gets lost or doesn't get reported, or the operator will not do it throughout the week and then come in on Friday, print five sheets of paper, fill it out and give it.

Saurav Agarwal: And then management spends about an hour a day trying to turn that paper into an Excel sheet. It may sound strange to somebody, you know, listening to this podcast that, hey, in 2020 people are using paper inspections and haven't digitized, but that's true. So we had customers coming to us and saying, “Hey, do you have digital checklists?” We were like, but we came to talk to you about autonomous vehicles. They're like, but no, no, no. Can I get digital checklists? So that's what prompted us to get into that. And we saw a huge opportunity because now that becomes kind of like a gateway product to our customers. And it helped us expand our, what we call the ideal customer profile, expand our market reach by offering something at a much lower price point and enabled us to generate revenue, to feed the long term vision of the company.

Jeff Kavanaugh: You know, it's interesting with, with sales people buy hope of gain, or fear of loss. Of course the gain is more revenue or less costs. The avoidance of loss is with regulation, you mentioned OSHA. So can you comment on how that plays into your business plan or at least your go-to-market for a particular offering?

Saurav Agarwal: Absolutely, Jeff. I know you actually put it in very succinct terms. It's, you know, in sales they say that “it's greed or fear that sells. So it's either preventing loss or making more money. Preventing loss, let's talk about that. OSHA says that one in six workplace deaths involves a forklift and actually missing forklift inspections as one of the top five OSHA forklift violations. Now across the industry, there's about 96,000 accidents in North America. And out of that 35,000 involved serious injuries. And when we've talked to our customers, we've learned things like we're spending a hundred thousand dollars a year just repairing damages to our facilities caused by these industrial vehicles. OSHA, will even fine a factory or a warehouse $10,000 if they find a missing inspection, that's $10,000 per piece of equipment. So if they have a hundred vehicles in that facility, you can imagine they’re paying a million dollars in fines. It’s rare, but it has happened.

Saurav Agarwal: How are we helping our customers? And what does that mean for us in terms of go-to-market? So what we enable our customers to do is first of all, not rely on paper, go digital entirely for the inspections and compliance processes. It makes everybody's life easier. The operations manager, the warehouse manager, all they need to do is click one button to generate an OSHA report and send it to the inspector, instead of having to go run around and look for that piece of paper. And if it's not found, you'll get fined. It's wonderful for the maintenance person, because, now here comes the saving money part, if you find out about a failed inspection, which could mean a mechanical failure or an electrical failure on a vehicle, and you find out as soon as it happens, you can repair it. Versus when it gets extremely broken down, or, you know, too bad to fix?

Saurav Agarwal: So it's things like that, that add up. So what we did is, using this information from our customers, we worked out and go-market-plan. We realized that it's really three kinds of people in any big organization that end up working with us. It's the people in operations, the people who run the facilities, the people in environment, health and safety, and the people in engineering slash innovation. The people in operations control the money. They have the biggest budgets. So we say that these are the decision makers. They have to get the value as soon as possible. And there's the safety people who act as the champions, they're always out there looking for new ways to improve safety. They may not have the biggest budgets, but they influence the business. And if an accident happens, their job is on the line.

Saurav Agarwal: So they're incentivized to make sure an accident never happens. So what we ended up doing is using this information. We created a go-to-market plan, where we target the safety people, and we educate them on what we call a five-step strategy for forklift safety. And it's purely education based approach. And from that, we work our way backwards to, okay, what strategy works for you? What's your forklift safety score? What are the gaps in your current processes? And then we bring in the operations people because the operations people can just look at the gaps and say, yes, yes, yes, that's my problem. Can you fix it? And that turns into a sale. That's how we've kind of worked out our go-to-market strategy and our sales plan

Jeff Kavanaugh: Digging a little deeper, I think supply chain has emerged, I think it's safe to say from the shadows where, before it was very invisible. People focus on the product, maybe the money or the customer experience in that supply chain set of processes or flows. What about the warehouse? And what about that critical link of making sure goods that come in and go out? Do you see enough visibility there and what steps are you taking to raise that visibility to more executives?

Saurav Agarwal: Those are some of the things that we're looking to get into the things like inventory counting. A warehouse is like a city in and of itself, right, we've been into warehouses that are 2 million square feet that operate 24 by 7, 365 days a year. And there's, there could be two or three hundred vehicles operating at any point in that one building. So what's happening is constantly trucks are coming in unloading goods. Those goods are being unloaded from the truck, using a forklift and then put into some kind of a rack or storage area. And then an order comes in, the warehouse management system figures out, okay, which operators should get that order, that operator drives the vehicle and takes the order out and gives it out. The kind of problems these warehouses face is lot of time, inventory does not get put in the right place.

Saurav Agarwal: Lost inventory is a multi-billion dollar a year problem. So things that we're looking to get into is how do we use computer vision to get insights into where, by scanning barcodes, where that inventory is, and then telling the shift manager or the operations manager or the decision makers on a day to day basis, hey, this inventory is actually not supposed to be here in Rack A, it should be in Rack B. Today we are already telling these managers and decision makers, how many times did the industrial vehicle get close to a pedestrian and almost have a near miss? How many times have they actually hit something and damage something? How many failed inspections are there? Why did that inspection fail? And we can then inform the right person with the right piece of information to either take right maintenance action, to take corrective coaching for an operator who's driving very dangerous dangerously, or maybe, hey, somebody needs a drug test because they're having too many impacts today. They're hitting things. What's wrong? We can do all of that today.

Jeff Kavanaugh: It looks like, based upon my research, and understanding of your business, you've almost have a bifurcated or dual level approach to things. You've got the checklist and things that are very important and it's about being connected and digitizing. It's a little more rules-based. And then you've got the rocket science, the AI, you know, the really advanced types of things. We talked about the former for a bit. Let's get into the secondary, first of all, can you demystify what it means to have artificial intelligence and autonomous vehicles running around a warehouse? What does it mean for the average professional who has heard these terms, but doesn't quite know what they mean?

Saurav Agarwal: Absolutely. So AI is a, is a broad term, right? And it's been used to define a lot of different things, but in the context of a warehouse or even a factory. And when we talk about industrial mobility, industrial vehicles, what we're really talking about is a vehicle that has the ability to drive without an operator in it that has the ability to get an instruction. For example, go to Location A, pick up Pallet #565 and take it to Location B and then go do something else. So an AI driven autonomous vehicle in a warehouse should be able to understand an instruction go to that place without somebody telling it how to get there. So there has been warehouse automation and factory automation since the sixties, since the fifties, that actually have been automated forklifts in the market for a long time. The problem was that they needed some kind of guiding tapes or guiding wires or some kind of external system to actually tell them how to go from Point A to Point B. Today, we have the ability to take a vehicle into any warehouse, drive it around the warehouse and build a map of that facility. And then the vehicle can itself figure out how to go from Point A to Point B. That's the game changer. That's what enables these decision makers, the warehouse managers, to be hands-free to not have to constantly monitor and babysit the system.

Jeff Kavanaugh: How much of an improvement, or how much of an edge is it that you can control the environment? Like you've got a roof or a ceiling and you've got fixed points as compared to throwing one of these forklifts out on a highway or open road?

Saurav Agarwal: That's an interesting way to put it. So in the open environment, Jeff, an autonomous vehicle has to deal with rain, snow, kids running into the street, somebody's dog running out of their house and coming onto the street, even wild animals. In a warehouse or in a factory there is none of that. The good thing is that the people who work in a warehouse or a factory can be trained to co-exist and cooperate with the automated equipment. In a warehouse, there can be well defined pathways for the vehicles to travel and for people to walk on, for automated vehicles to go on and non-automated vehicles to go on. So those are a lot of good things that can be done.

Saurav Agarwal: But the challenge is that as soon as you put non-automated things in the same environment as automated things, so, you know what I'm getting at, as soon as you put people in the same environment as automated vehicles, there's potential for things to go wrong. People don't always follow rules. People may want to do horseplay and jump in front of the vehicle to see if it stops. They may not even look where they're going or not walk in the pedestrian walkways. So that's why, although the environment is definitely more structured and there's less environmental issues like an extreme sunlight or rain or snow, you're still dealing with people. And whenever you're dealing with people, you cannot forgo safety. So your safety comes first.

Jeff Kavanaugh: What are the three things that you might convey to a business leader who's thinking about industrial automation, industrial mobility, and maybe taking steps towards automation or autonomous navigation?

Saurav Agarwal: When talking to a business leader, I like to always put things into three buckets. “Why,” “what” and “how.” So let's talk about why, what and how, from the perspective of industrial operations. Why aren't you looking at automation? Is it because you have a shortage of people or is it because you think people are too expensive? Because when you define the problem clearly you asked the right question, then you can define the solution. So you have to start with the why. So when we talk to our customers, for example, we ask them, hey, why are you talking to Siera AI?

Saurav Agarwal: We have heard things like, oh, well, you know, we're tired of paper being littered across our warehouse floor, or we're tired of, you know, forklifts driving into racks and damaging millions of dollars of customer product. That's why we care. We're coming and talking to you. Now, once you've defined the why, why you're looking into automation, why are you looking into digitization? Then define the, what, what can you do? Maybe you are only looking for digitization moving to the cloud because that's where you're not even in the cloud, you may be using on premise servers. What happens is a lot of these companies, they can get to the why, but when it comes from jumping from the why to the what to the how they get lost in what to do, because they get confused. There's so many options there. And the bigger the corporate, the more confused they're about what they should be doing, because there's so many stakeholders.

Saurav Agarwal: So what I recommend to business leaders is when you come to the what part, don't have one what. Define bets that you can take in your business, because you have a clear vision of what problem you're trying to solve, why you're doing this. What can you do to solve this problem? You may not know all the answers today. So define bets, take strategic bets. In Jeff Bezos's own words, “Don't take back the company bets, don't bet your entire company, but take small bets, but take lots of bets and iterate and learn.” And as you learn from these bets and you understand what works and what doesn't, you can get a clear picture and understanding of how to implement, to get the what you need to answer the why. So at the end of the day, my, two cents to business leaders is take bets, don't be shy from taking bets and move fast.

Jeff Kavanaugh: I think that speed element, it’s not just to be agile, but also increases resilience because you could make lots of course corrections. Great advice. And everyone, you can find details on everything that Saurav said, and more, on our show notes and transcripts at Infosys.com/IKI in our podcast section. Saurav, thank you so much for a great thought provoking and highly interesting discussion.

Saurav Agarwal: Thank you for having me, Jeff.

Jeff Kavanaugh: Everyone you've been listening to the Knowledge Institute where we talk with startup leaders deconstruct main ideas and share their insights. Thanks to our producers, Catherine Burdette, Christine Calhoun, and Dylan Cosper until next time, keep learning, keep sharing.