Robotics Companies. You Got Funded by a VC Investor. Now What? Advice from an Industry Veteran. Part 1.

VC-funded mobile robotics upstarts --- you struck the lottery!!! Now what are you going to do with the money? Flashy new offices? Big splash at a trade show? Double-down on your AI initiatives? Hold up. If you want to create shareholder value, you need to create customer value. That means solving problems. Flashy offices and trade show booths are a distraction. Let’s explore what it takes to be successful in the world of industrial automation. Shall we?

First, we shall dispel with the myth that warehousing is a controlled environment and therefore ripe for automation. Ask any veteran warehouse manager, and they will quickly confirm one of top reasons they like their job is “every day is different”. The US Census Bureau conducted a survey in 2018 and found that advanced technology in warehousing was single digit market penetration. If it was easy, anyone could do it (and it would already be done). But you got funded to deploy your fancy new tech, so it’s time to figure things out. Let’s go!

1.  Relationships sell. Not pitch decks. 

You thought VC investors had short attention spans for long slide decks? They’ve got nothing on a warehouse manager! The VC investor wants you to do well and make them buckets of money. The warehouse manager doesn’t have enough time in the day and your offering doesn't make their top 5 problems to solve TODAY.

A fancy pitch deck from someone they don’t know isn’t going to convince a warehouse manager to put their job on the line for some ground-breaking new tech. That takes strong relationships and trust. Which takes time. You’ve got to earn it by doing what you say, again and again.

VC startups… spend less time perfecting a sauve presentation and more time developing relationships and understanding what your customers need. In 20+ years of selling multi-million-dollar warehouse automation systems, I can’t think of a single sale where a PowerPoint presentation clinched the deal.

Do you need a pitch deck? Yes. Functional and professional. Sure. But it only reinforces the credibility you’ve earned by working hard to develop a strong solution, a strong relationship, and trust.

While we are on the topic of relationships and trust. You can’t do that remotely. Zoom doesn’t cut it. You’ve got to go see your customers in-person. Anybody who says they can do it remotely is only remotely correct. Wait, scratch that. They are wrong.

2.  Build it Tough.  

The real world ain’t no university lab! However durable and strong you thought would be enough, double it! Most warehouses (that need automation) run 24 hours a day, 7 days a week. This isn’t a lab where you show up and run the equipment 7 hours a day for a semester.

Those jokes you see on the internet where all maintenance has is an adjustable wrench, duct tape, and baling wire isn’t far from the truth. In reality, they have an adjustable wrench, electrical tape, a hammer, and 2 or 3 screwdrivers. They are overworked and underpaid. Frankly, they didn’t spec out your equipment, and while they’ve got a job to do, they won’t cover your butt for any design deficiencies.

If there was an area where you thought you could design it “just the right size”, or that a certain motor, battery, wheel, whatever, should be just right, rest assured, the real world will turn marginal designs into demonstrable failures. It may take 6 months; but any aspect of the design that wasn’t over-engineered will turn into premature mortality. Don’t let product mortality be the early demise of your budding startup.

Maintenance? Sure… when it breaks, the customer will fix it. Most maintenance literature reads as-if machinery will spend more time getting lovingly maintained than it does working. If you specify that equipment needs a daily check… you can be sure it will be given a quick once-over when maintenance responds to a problem. Otherwise, let er’ run!

Don’t scoff at machinery manufacturers that have been building industrial machines for the last 30-40 years with what seems like (to the outsider) designs past their prime, over-sized, or too heavy. Those machines will still be running 30 years from now.

3.  Systems will take 2X longer to get running than you expect. 

The first systems (frankly, most systems) will take 2X longer than expected to get running. Meaning, if you think it should take a week, and you’ve budgeted 2 weeks for the first few systems, it really means it will take 4 weeks. Queue up all the “yes, but our technology, solution, planning… will avoid that”. Be prepared that it will take 2X longer than planned.

That fact that it took 2X longer than planned isn’t really the big deal. It’s all VC money anyway, right? The first few systems were nearly given away, so does it really matter? Be honest, your customer already doubted the schedule in their heart of hearts, so don’t lose any tears on behalf of the customer. It’s your people that take the brunt.

The engineers that signed up to develop the product just spent the last few years working in the lab. They probably went home to sleep in their own bed every night (such a nice thought, eh?). Urgency to meet milestones were self-imposed. Now it’s deployment time! The engineers were excited to go on an all-expenses-paid work vacation and see all their hard work come to fruition!

The first 90-hour week and sleeping in a hotel was fun. The second 90-hour week was needed to get over the hump of a few unforeseen challenges – but doing laundry in a hotel kind of stinks. The third 90-hour week? Um… when do we go home to see our family? This is getting old. Cheer up, take a long weekend at home, and we’ll see you back next week! The fact is, project startups are hard on people.

It’s hard when your own baby (tech you worked so hard to develop) isn’t working like expected. It’s doubly hard when you are away from home, short on sleep, with a grumpy customer breathing down your neck. Things that worked so well in the lab, don't always work in the field. People get burned out and frustrated. Some of your very best will decide this isn’t what they signed up for. Welcome to supporting 24x7 operation!

4.  People don’t WANT what you sell. They are told that they NEED it.  

Industrial warehouse automation equipment is not the latest iPhone app. This isn’t the latest video game. It is not a (disposable) discretionary consumer device. It is industrial equipment. Sure, it may include some tricked out software. At the end of the day, nobody really WANTS industrial robots. The people responsible for operating and maintaining the robotic system don’t WANT it. Somebody (umm… management) told them they NEED it.

Are some people excited for the new system… yes… but that new car smell wears off pretty quick! When the startup is going a bit rough, that excitement gets forgotten so fast your head will spin. Sure, you got management buy-in. But management buy-in and boots-on-the-ground people running the system buy-in are two different things.

You know the drill. The warehouse floor people that are responsible for success of the automation may have told management “we’re so excited”. But what they wished they could say was that they had enough work to do already, and the old process was working fine. That, and give us a raise!

What does this mean? It means you need to show up with solutions that provide value and smooth startups. If you steamroll into success, it doesn’t give the naysayers room to say, “we told you so”. The equipment better be solid and the software stable. You’ve got about a 4- week grace-period from go-live to reliable operation. Beyond 4 weeks of headaches, and you’ll be losing support from the people who matter most to your success.

If you are brimming with confidence at the thought of 4-weeks, it means you haven’t really lived through a complex startup. Start thinking about how you can phase in the startup with a soft start and gradual ramp up. You’ll need every day you can get and don’t want to burn out customer goodwill on the way to success.

5.  Customers are gold. Did we already mention relationships sell?

People don’t buy from startups. People don’t buy from pitchdecks. People don’t buy cool technology. People buy from people. People buy from people they trust. Why are they trusted? They are responsive, honest, knowledgeable, and friendly. They are trusted to provide good solutions and go to bat on behalf of the customer.

Friendly, but not knowledgeable. No thanks.

Honest but not responsive. No thanks.

Offer a good solution, but don’t go to bat for the customer. No thanks.

Slick pitch decks? Nope. Fancy trade show booth? Nope. Fancy website? Nope.

If you want to sell complex, multi-million-dollar projects that make-or-break careers, it is the relationship. The customer doesn’t NEED what you’re selling. Status quo doesn’t get people fired (it may lead to eventual demise, but rarely results in termination). A project gone awry with a new startup? That can get you fired.

Some VC backed startups have a bit of runway ahead before they need to start knocking down big orders. Word to the wise: find a highly experienced, well-connected sales executive that knows warehouse automation intimately. Someone with at least 15 years of applicable robotics/automation experience. They’ll know which doors to knock on and what to say to get those doors to open. Will they cost you dearly? Yes, they will. Do you want to wait until you’re at the base of your hockey stick growth curve to hire them? Nope, too late. Think you can pick up a few SDR’s fresh out of college to do the same thing. Good luck.

---

This concludes part one of a two part series. This advice may read as common sense - and it is. For whatever reason, VC-backed companies entering the automated material handling and robotics industry appear to forego common sense. In the words of Will Rogers: “Just because it’s common sense, doesn’t mean it’s common practice”.

Topics for part two include:

• Service, Spares, Support. 24x7. Right now.
• There is no substitute for real life experience.
• Project managers will make you or break you.
• Integrator partners can help and hurt. Choose carefully.
• The sales cycle is long. You might get lucky.

Good luck out there!