Labor shortages, human error, and logistical complications were creating demand for change in the retail, e-commerce, supply chain, manufacturing and logistics industries long before the COVID-19 pandemic increased the yearly e-commerce spend to over $250 billion worldwide – sending fulfillment operations into a tailspin. These complexities existed before and have proven ‘they’ are here to stay until innovation can provide lasting improvement.
With businesses up and down the supply chain still searching for a permanent solution to constantly growing demand and persistent friction, robotics and AI businesses are on a mission to reimagine fulfillment with the help of hyper-intelligent robots designed for a variety of picking, processing, sorting, transporting and other manual labor tasks. At both micro and macro levels, there is stress and strain on meeting consumer expectations, all while doing it in a way that is effective and efficient from an automation and business perspective. The world has found itself in the midst of a new age industrial revolution with a story that is still unfolding but being told by the companies who can innovate and help solve problems faster than ever before. This includes reshoring manufacturing, getting people back to work safer, giving people more fulfilling work and finally living up the promise of automation outside of manufacturing that has been foretold for decades but has yet to be realized.
Over the past 2 years, I’ve had the good fortune of helping one of the companies on the leading edge of robotic technology build their management team as they look to be a guiding light in the new world we are moving towards. That company is Berkshire Grey and recently, I sat down with Sri Solur, CPO at Berkshire Grey, to discuss their recent IPO and $1.6B valuation, the impact the business has had on the industry to date, and what’s next for their robots, fulfillment, our post-pandemic “normal,” and even a reference to one of my favorite Brad Pitt blockbusters. Nothing was off limits and I got some incredibly valuable insight on the past, present and future of the robotics and frontier technology industry.
Let’s start with an intro. Who you are, how do we work together, how did you get to where you are today, and what you’re up to?
I’m currently the Chief Product Officer and GM for Mobile Robotics at Berkshire Grey. Anything to do with mobile at Berkshire Grey, from engineering, product, quality, manufacturing, sales, essentially all aspects of mobile report to me, so I’m like the one throat to choke. Before this, I built over one hundred million products. When I say that, those products are being used by people so I’m a product builder. I was the Chief Product Officer at SharkNinja and we took the company public in 2019. Before that, I was the Head of Product and Engineering at Comcast as a VP there, and before that I was an entrepreneur (in terms of being an entrepreneur in residence and building new businesses).
I’ve built two businesses for HP, one is Cloud Print which provides the ability to print from mobile and the second one is the wearables business where we built products for brands like Hugo Boss, Juicy Couture, Ferrari, Coach, etc.
From a structured education perspective, I went to an engineering school called Electronics and Computer Science back in India and went to business school here in Boston. I’ve lived and worked in six countries.
You have a varied background… So what got you excited about robotics and led you to taking that leap? And what were you seeing ‘back then’ when the opportunity first came about?
The first thing was that I was more focused on building complex products. I’m a product builder and that’s what excites me. I knew nothing about supply chain, but having built products on IOT, and before this having built close to two and a half million consumer robots, the love for robotics basically remained and I was more intrigued with robotics for supply chain. It’s not consumer, but it’s B2B. Here’s the kicker — there are certain things in B2C robotics that you could imbue into the B2B world to accelerate product development. B2B robotics tend to be very customized, and the product development life cycle is usually 18–36 months, whereas B2C is closer to nine months. So, I wanted to experiment to see if we could bring in some of the methodologies and the hacks of B2C into B2B. Lo and behold, we have the next generation mobile robotic products shipping and I definitively say we can get something out in 8–11 months that used to take two to three years to build. That is a drastic change. My ability to experiment with those hats was something that excited me.
I’m assuming that there’s been some evolution in the industry, even since you joined Berkshire 20 months ago. What changes have you seen from a market perspective, industry perspective, and competitive perspective?
The pandemic has been an accelerator for all our customers if you look across retail, eCommerce, 3PL, parcels, groceries, etc. People are buying more, and when people buy more, our customers need to expand their capacity in distribution centers. People’s expectations have also grown. What started off with receiving packages in three to four days became two days which became one day and is now down to 15 minutes in some cases. So, the two vectors of buying more and wanting more in shorter periods of time certainly accelerated during the pandemic. There was huge customer demand for automation driven by consumer demand for online ordering, and robotics had to play a role with the pandemic because companies wanted to keep employees safe with social distancing and therefore needed to do more with less.
Basically, this was a huge shift into overdrive for tech companies. So that’s number one. The second thing is, remember the S-curves from 30 years ago during the rise of the internet? There were two S-curves, desktops and laptops took off and broadband took off. In the last 10 years, the three S-curves are mobile, social, and cloud. In this decade, there are five S-curves: AI, robotics, 5g, quantum computing, and cyber. And in addition to the pandemic, there are these S-curves that have taken off and together that’s been the perfect storm for companies like us.
Looking forward, what predictions do you have for the next 2 to 5 years in terms of robotics and automation? And how will it shape your world, both at a micro and macro level?
Let’s talk at the macro level, and the best way to look at the macro level changes is to look into the history of the other two shocks in recent history. In the last 20 years, we had the recession after 911, and you saw what happened after that. There was an acceleration of e-commerce which was driven by the two S-curves, which are broadband and desktops meaning you could sit at home and basically buy stuff online. The second recession happened in 2008, and out of this shock came S-curves like social, mobile, cloud. Now, in the last 10 years, anyone who had a data center migrated to the cloud, any product or digital feature had a mobile and social component that were used for marketing or driving awareness. So if you look at the historical aspects of how things have evolved after a shock, these S-curves are starting to take off. Even if you just look at history repeating itself, you’re going to see the five S-curves that I highlighted, basically playing on each other. So anything that you do in robotics needs to have AI.
Our mobile robots operate as a coordinated system, working together to process products and cases for orders. The entire system operates as a very flexible robotic ‘field’ within a distribution center. The system is learning and improving performance on its own, so you can have your number of robots constant in the field and the throughput keeps on increasing because we learn the patterns. That means the product keeps getting younger and younger. The only name I can give to this phenomenon is the Benjamin Button effect, and the only other category where this can happen is with fine wine. So the key takeaway is acceleration.
The second thing that I want to highlight is consolidation. Robotics is an industry that is massively fragmented. Traditionally you have different vendors supplying point solutions for unloading, de-palletizing, picking, and sequencing. And you have all these small robotics companies jumping in with new point solutions and the customer, let’s say a retailer, had to work with a systems integrator who had worked with these individual robotics companies to put a solution together. But many systems integrators really don’t have deep robotics domain expertise so you are seeing the emergence of a new breed of robotics solution providers like Berkshire Grey that take a more holistic approach to robotic solutions that automate entire processes rather than individual tasks.
And lastly, of course from a consumer perspective, the expectations are going to go higher and higher — more choices for products, more choices for fulfillment options, and more desire for faster service. Retailers and others involved with supply chains need to meet these consumer expectations and they need to figure out how to do it profitably. Gone are the days when you can potentially say 15 minute deliveries are not going to be profitable because they have to be. For example, if a customer wants ice cream and alcohol delivered at one in the morning, they can find someone willing to make that happen. That’s really where the world is at so providers need new technology and new approaches to stay viable.
Do you see companies building end to end solutions and still going public? Or how do you see the market from an M&A activity perspective?
Again, let’s look at the market demands — there’s acceleration and consolidation. If you were to pick both, that means for a company to accelerate very quickly, you might go from basically delivering a solution for one distribution center to let’s say 10 distribution centers. That means you will need capital to run the supply chain, whether it’s raising money through a public offering or raising money through VCs.
Long story short, you will see a path. For example, in the last 12 to 18 months, we have seen more and more robotics companies either raise money or have begun down the path to IPO — this is going to continue to happen. In relation to that, there are companies that have fallen behind. They have phenomenal technology, but they have not been able to execute. With those companies, there has been consolidation. There’s a lot of M&A that’s happening and you will see that accelerating. You will also see an acceleration of consolidation between companies doing specific parts of the supply chain together, so that they can be an end-to-end service provider, and this is 100% going to happen.
Most importantly, this is not about incremental automation. You can make a lot of automation to increase efficiency. Robotics can actually increase that by 10X, which is transformational. So it’s not incremental automation that we’ve seen, it’s going to be transformational automation.
There are people who have been resistant to macro level robotics because they see it as ‘robot replacing human’ or human vs. robot, instead of the perspective that this can and should be a harmonious relationship. What are your thoughts on that? And how do you see robotics in frontier tech helping with the global labor shortage that’s happening?
There are two things that I want to highlight, so let’s start with a historical perspective. The world is going through a change. We went from an agrarian economy to an industrialized economy, and at first people were going into the field to grow stuff, then they started going into factories. So we are moving from one economy to the other.
Point two, in the pandemic robots actually played a huge role in keeping everybody safe and keeping the economy peaking. At Berkshire Grey, we have an initiative called Picking with Purpose. During the pandemic, people were donating to the food banks but there was no one there to sort and pack the food so food was being wasted. So, what we did was we used our robots to pick, sort and pack the food into meal kits. Robots were there to save the day when humans couldn’t be there.
The second scenario is that it’s basically a force multiplier for humans.Today, when you walk into any distribution center you will see signage everywhere for hiring with $3k-10k sign on bonuses and high hourly rates, yet they are still unable to hire. And when I talk to customers, they have doubled their workforce in the distribution center to keep up with demand and they’re still unable to find people. In those scenarios, robots are not taking away jobs, robots are being complimentary.
In my opinion, that piece about robots taking away jobs is a myth.
There’s a war on talent for tech companies and high growth companies. From your own internal hiring perspective, are you struggling to hire? What are you seeing out there in terms of getting folks into robots and robotics and frontier tech?
Three things. One, take a look at Berkshire Grey and the talent that we have. We have people on my team from Tesla, Amazon Robotics, Google, Mackenzie, and Boston Consulting Group. Those are amazing companies to work for and they have come to work with us because they believe in our mission.
We have a mindset of being tenacious but with humility. Our job is to get things done and we are focused on the job. Culture and mindset play a very important role to attract expertise.
We have been very creative with our hiring strategies, like getting the right people on the bus to help attract talent. Look at why we hired Daversa, it’s because you guys have a very clear understanding of the startup ecosystem and each industry.
We also use the concept of talent magnets. When we get someone new on board, they make videos that attract a group of individuals to come join. There are individuals in the organization who are very well-known in certain technologies and they tend to attract the right kind of people. It’s a three pronged approach. First is our ability to attract talent from really well-known companies where the culture is also really good and they work on leading edge technologies. Second is the culture that we have within the company, which is tenacity and humility working together. Finally is our innovative approach to hiring. It may sound intuitively obvious, but sadly not being done across the industry.
Can you talk about how you think through the hiring process in terms of bringing on folks who are a culture fit?
I look at the culture fit like vowels, like in English they are A, E, I, O, U.
On the mobile team at Berkshire Grey, when we go through the process, I look at A for attitude, E for energy, I for integrity, O for openness, and U is understanding or empathy. We have to have a clear understanding of a person’s behavior through behavior-based interviewing, where we gain an understanding of how people have behaved, and by providing tangible examples that highlight the cultural idiosyncrasies that are going to make someone successful here.
On top of that, expertise plays a role. But most importantly, we want to make sure that we are hiring people with the right attitude, energy, integrity, openness, understanding, and also asking behavioral-based questions just to see how people respond.
Those things basically help us find the right people on the technical side. On the go-to-market side, they do two things: understand the customer and tell great stories. Storytelling is amazingly powerful to me. We want leaders who are great storytellers, who model the right behaviors, who inspire, enable, and encourage. We go through those aspects of mindset and expertise and merge those together as a powerful recruiting process.