The Startup Defense
The Startup Defense explores the intersection of commercial technology and defense innovation. Callye Keen (Kform) talks with expert guests about the latest needs and trends in the defense industry and how startup companies are driving innovation and change. From concept to field, The Startup Defense covers artificial intelligence, cybersecurity, mission computing, autonomous systems, and the manufacturing necessary to make technology real.
The Startup Defense
Robotics, Customer Focus, and Academia to Entrepreneurship with Matt Bilsky
Join Callye Keen as he engages with inventive engineer and entrepreneur, Matt Bilsky. From innovative product design to the challenges of running a successful startup, this episode uncovers the intersections of creativity, technology, and business.
Topic Highlights:
00:00 - Decoding Product Design with Matt Bilsky
Matt Bilsky explores the intricacies of product design, discussing the importance of user-focused development and its role in creating successful, marketable products.
17:12 - Emerging Trends in Engineering
Bilsky provides an overview of current trends in engineering, their impact on product development, and the exciting potential they present for the future of technology.
22:50 - The Role of Persistence in Innovation
Bilsky highlights the pivotal role of persistence in the realm of innovation. His personal anecdotes underscore the necessity of resilience in the face of adversity.
41:07 - Deciphering the Start-up Landscape
Bilsky delves into the thrills and spills of running a startup, sharing insights on the journey from conceptualization to realization, shedding light on the dynamics of modern entrepreneurship.
43:04 - Navigating Business Challenges
An honest examination of the challenges encountered in business from Bilsky's experience, offering valuable lessons for those stepping into the entrepreneurial world.
44:12 - The Future of Technology
Bilsky concludes with a thought-provoking discussion on the future of technology, exploring its potential impacts on society and speculating on emerging trends in the field.
Parting Thought:
"The secret to successful product design is in understanding that it's not about what we make, it's about why and for whom we make it." - Matt Bilsky [01:45:30]
Callye Keen - Kform
https://kform.com/
https://www.linkedin.com/in/callyekeen/
https://youtube.com/@kforminc
https://twitter.com/CallyeKeen
Matt Bilskey - FLX Solutions, Inc.
https://twitter.com/flx_solutions
https://linkedin.com/company/flxsolutions
https://www.facebook.com/FLXSolutionsInc
https://www.linkedin.com/in/mbilsky
I draw a lot of analogies between being a founder and startup life dating, whether it's meeting investors and it's just like going on dates. Sometimes it's good, sometimes it doesn't work out. But are you a bad person or was it just not a good?
Speaker 2:fit. Welcome to the Startup Defense. Today I have Matt Bilski of Flex Solutions. Matt, we met through a mutual friend of ours, Jade Garrett, and she's been on the show. We got to talk and we actually were able to share dinner at an event that you were up here in my neck of the woods, which you won something. We'll get into that. Before we talk about winning funding and what you're doing, I want everyone to hear the saga. Who is Matt? What is saga of Flex Solutions? Because it gives some really good gravity to what it takes to create innovation. You're going after different markets and now you've hit a market that's close to my heart and you've gotten some traction in that. It wasn't an overnight. You came up with an idea and then, just magically, we're working with the Navy. We'll set that as an end point and then can you walk us through. Who are you? What are you doing? What are you passionate about right now?
Speaker 1:Yeah, that's a hell of a prompt and a heck of an intro, so I appreciate it. Happy to tell the story, although I like to joke when they write the book about Flex, it's probably only the last couple of years that they'd even start the book at, let alone the other. Close to a decade I've been working on this technology, but yeah, so for everybody out there who I haven't met yet, my name is Matt Bilski, founder CEO here at Flex Solutions, and I guess my story starts usually the way I always kind of been an inventor, innovator, that sort of thing, growing up. My first companies when I was 13 or so start fixing computers for people, do an IT, stop being a handyman. So oh, okay, somebody needs a fence or whatever. So I'd go around. My parents drop me off and I go and fix people's things and go hang tags on people in the neighborhood. Oh hey, you got a computer issue, I'll come and fix it.
Speaker 1:And ended up here in Bethlehem, pennsylvania, to go to Lehigh University, came here as an undergrad and fast forwarded through some of the highlights, the details here, but basically, going into my junior year, moved into an off-campus house, like many of us do, and at the time was working to fill my summers with more gainful employment than just river guiding and fixing some stuff here or there on the side. And so I went to the landlords that I just moved in with and said, hey, you need any help fixing these houses. And they said, well, we don't really need any help fixing the houses, but we could use somebody to clean because we're turning over all these properties from the old college students to the new ones. So go scrub toilets, quite literally. And things were broken and nobody had the tools to fix them. But I did so I was like, oh, we need to fix this. I ran back to the house, grabbed what I needed, started fixing things, so very quickly went from just scrubbing to yes, I had to still scrub here or there, but actually becoming their superintendents. So at the time they had about seven, eight properties, and over the next five years I grew them to 35 in an apartment building. It was really interesting because there was a couple of guys, childhood friends, who really saw the opportunity here in Bethlehem to grow high quality student housing, and so I was really their first person. That wasn't the two of them that they gave keys to.
Speaker 1:And here I am junior, senior in college fixing what drunk kids broke, and once in a while I'd be at that party too. So it was kind of a win-win. It was not in break it I didn't create my own work, but it was a good way to earn some beer money in college. Every time we'd buy a new property we would renovate it and I would generally be the one who'd come in and do the punch lists and kind of tidy everything up at the end and do all of the in-between stuff that the contractors tended to neglect. And every time we finished that renovation they'd be like, hey, we forgot to run a wire. And I'm really good at old work electric but I was trying to earn my beer money and have time to spend it. So it's like you know, last week this floor was up and now I have to instead figure out a way to fish wires underneath this.
Speaker 1:Fast forward a little bit, so do the junior senior year, finish out my undergrad in mechanical engineering and have an opportunity to come on and go to grad school. That first couple of opportunities didn't quite work out, but basically created my own reality of I was had a full PhD, funded with a faculty member, and I wasn't passionate about the work and wasn't the right fit, and I definitely took that job for the money. My original grad school plan fell through, kind of. Somebody told me about this, and this is the same person who taught me what the word mechatronics is. For those of you out there who don't know what mechatronics is, I'm a mechatronics person. Mechatronics is the intersection of mechanical, electrical, computer engineering, and some people put programming and control systems on top of that as well. But the way I kind of also explain what mechatronics is is take a car.
Speaker 1:A car is a mechatronic system. You have the gears and the motor, that mechanical part. Then you have the electrical system, whether it's the battery, the charger, all the power distribution and all of that. And then you have the software, whether it's the infotainment system or the cruise control. And a fun fact that I liked from a few years ago was that there's more lines of code in a car than a 747. Another parenthesis on this 747s are more cable, older technology. So I don't think that's necessarily the same for a 777, 787, but there's a lot of software in a car. So if you're saying, oh, I want to build a system, it's the mechatronics person that makes this a reality.
Speaker 1:And so this faculty member told me what I'd always been doing with my wife of tinkering, teaching myself how to solder and program and all this that I was always self taught. He said, no, you're a mechatronics person. I'm like, oh, okay, then I'm an electrical minor and he was the one who was trying to get me into grad school but couldn't figure out the funding. So had that job with that first semester and I remember to this day, if you got a call from the department chair asking me to go help teach the I guess, the first year programming class, and then I had this epiphany that teaching position comes with full tuition, full stipend. For those unfamiliar, grad school, it's 20 hours a week is all you're allowed to work, and you work those 20 hours a week doing something and you get your full tuition, full, everything. So if I was teaching 20 hours a week and that was giving my full tuition, full stipend, then any research I did on top of that would be, for all intents and purposes, volunteering.
Speaker 1:So if I'm going to do unpaid research, why am I working on somebody else's project instead of what I want? This is a novel concept. So I went around and I found the head of the entrepreneurship program in the engineering college then became my PhD visa, john Oaks, and I said hey, john, why can't I teach my way through a PhD and start a company and do what I want to do? And he said Well, why can't you? This was May, june 2013. That's when the journey that brought me to this conversation really started, and so I left my traditional, fully funded PhD.
Speaker 1:You do your time, you publish, you go through for, okay, I'm going to have funding one to two semesters at a time as a teaching assistant and I'm going to figure out what I'm going to do. I have somebody advising me through this process but, as he said to me explicitly, I'm not your dad and not your boss, I'm not your coach. You know it's on you to drive this. I will advise you through the process and help guide me. Here I am. I've been working as a landlord and I full time in the summer fixing houses. So I'm like what am I going to do? What am I going to start? What am I going to focus on to get a mechanical engineering PhD? So it's got to be novel enough to actually go through, because I have to do all the core classes, all the stuff to get this PhD, but it's got to be mine and something I'm passionate about.
Speaker 1:But working as a landlord, I kept thinking about every time we needed to go behind the walls or look under the floor, look in the ceiling, all this pain in the butt stuff I had to deal with so well, why am I doing this? Why isn't there some robot that we can put in through an outlet sized hole and have it drive through the wall and drill through every stud and joist along the way? That is what we now know as flex solutions. And in this odd turn of events, you know, john, when he was in grad school, was a union electrician and for him he was working at new work airport many, many years ago, and his job as an early journey man was to make sure nobody changing the light bulbs got frostbite Out in the freezing cold when we step winters here on the east. It really resonated with him as well, and so I figured out this way that teach my way to the PhD.
Speaker 1:But One of my many isms is read the directions you know, read the manual. If you teach your way through grad school, you pay for all your own research. You use resources commonly available to all students. You own that IP. Figure out a way to start a company, get a free PhD and own all the patents. So stayed on. You know, grad school is about four, four and a half years, finished and defended, I guess, end of 2016. And then stayed on as a faculty member at Lehigh for a couple of years, teaching the senior design there, before leaving to go into startup life full time at the end of 2018.
Speaker 1:So Jan first 2019, first day in this room as full time startup, put my job, let's figure it out. And there was really this notion as I was on the way out the door, august, september of 2018. Up until then, I'd be focused on this snake robot that put it in, imagine it climbing through, and so this drilling robot drill through studs, joyce, I figured it all out how to do it, be this kind of expensive thing and need some more, many more years of development to actually get the locomotion. And that's where I really had the, I'd say, horror epiphany that led to the modern incarnation of the flex spot. And that is well, what if we kept the price down and built this low cost tool? And this was right when Prusa had the mark three, and it was my first 3d printer that just worked. And so this notion of just being able to print parts, and what if we 3d printed? What if we just made this more prosumer style of robot rather than this expensive robot? And that's this paradigm of when you make robotics affordable, it becomes master and really changes out the whole market opportunity. And similarly, 2019 got into a startup accelerator with Comcast Labs and was out there in 2020. And that was also when we kind of pivoted away from this notion of robot striving themselves to what could we do with just somebody holding this? And all of this is now what we know.
Speaker 1:Here is the flex spot. The flex spots, this one inch diameter snake like robot, may have all these identical links. They all have cameras and lights and this is one link here, but typically you'd have three to five in a system and users are able to insert it. Have it been to avoid all these obstacles along the way? And we put different tools on the end, like 360 cameras, you name it.
Speaker 1:Imagine doesn't just have to be handheld like this, but on the end of a 20 foot pole, this notion still of just going to get in there. I just got to see this, but even just the worker being able to do this. So this notion of keeping the price down and really the minimum viable product, right, what is a engineering problem versus a PhD problem? Like we look at, self driving and the many milestones yet to be hit, despite all the money and time, but into that and so where's will, we will flex going to hit that, and so that's really now where we were focused in on portable robotics, robotics, the worker kind of using this, and that kind of takes us into a whole product market fit journey that I'm sure will probably end up getting into as well, one thing that I'll say about you, matt, is that you're an energetic person, so you're really into not just your idea but the idea of your idea about developing and executing and what it can do in the market.
Speaker 2:so it's always it's always awesome to hear how excited you are in your voice about Flex and about just the process of it. Were some unexpected differences between moving from that academic environment into, say, other programs or into the general commercial environment.
Speaker 1:I had such an interesting academic experience in you know my, since my doctoral work itself was focused on Starting companies. So then and I was teaching through I really got involved in entrepreneurial engineering education, so teaching development, how we actually get students engaged. So a lot of my conference work and all was on Engineering education and how we an entrepreneurial engineering education, being an entrepreneur on the side in a room, full tenured faculty, and so it was really kind of interesting seeing how that world works and this world works and I think the lines are getting more and more blurred. But I've always maintained that they're actually very similar and I see over your shoulder they're good to great, which is one of my favorite business books and they really talk about this. You know the hedgehog concept right.
Speaker 1:What can you be the best role at? What drives your economic engine and what are you deeply passionate about as the core of a great business? Really, faculty and their research groups are kind of like their own business entities and of themselves. I pitch investors here, they pitch tenure boards there, chasing grants, chasing funding, both kind of going here. So there's a lot of similarities but there's also a lot of differences and I'd say one of the toughest things that I had to learn. You look at programs like I, core for the NSF, whose mandate essentially is taking Basic research and translating it into businesses to hold and try to go.
Speaker 1:Spi are not all that and there, you know, you kind of go through that. And there's the NSF realized. How do we take faculty mindset and teach them about entrepreneurship and value props and this sort of thing and all that kind of boils down to part of the crudeness on this. Nobody gives a shit about your tech, and that was probably one of the hardest lessons I've had to learn and I think is so important in the entrepreneurship side, whereas, you know, in academia it's really a lot about what you're working on. What is this novel thing you've created and validating that thing for its own merits. This algorithm is new because it could do this, and here's this metric or this process is new, and so it's all kind of about the invention itself, whereas on the business side the invention doesn't matter, it's the value, it's the value prop and what comes out of that.
Speaker 1:In a lot of ways, people just assume it works right. Yes, there's due diligence and Headlines on both sides of whether or not they do, but there's that kind of underlying up. I have this black box widget that does magic. What does that magic do for some somebody? Somebody asking me about how my motor or how the code works or these sort of things at a investor meeting, but that's not what they're worried about. One of the things in this the words what versus how right I would say. What is very much startup, entrepreneurial, how you do it is still more of that development could be thought of more, maybe on the academic side the process, how this thing works versus what does it do for yeah, we'd say objective versus subjective value or novelties.
Speaker 2:so in the commercial market or in business, it's the market itself gets to decide whether we have a good idea or not. If it's novel to them, it is from their perception versus our internal perception, whereas academically we're searching for something that is new territory from a Patent or research perspective is objectively novel hopefully it is objectively valuable whereas in business objective value has no bearing. Otherwise products would be like All five percent of what their bill materials cost would be, you know, and that's just not the case of how anything works. I have seen a Learning of the lines between the education is happening in universities. We work with a number of the local universities.
Speaker 2:They've had more and more programs, whereas when I went To college that stuff didn't exist and it was super frustrating to me because is like Okay, I'm trying to get a computer science degree but I already professionally code, having people that have never made a software product tell me that I don't know what I'm doing, but they don't do it, and similarly down the line well, I want to actually get this done. So what does it look like to run a software team and like, I don't know? This is a class on algorithms. I value that, but also it's not solving a problem that I Truly value right now. And then now I'm seeing more project or work experience or Even entrepreneurial level education in computer science, in engineering, in cross stem education in general. What can we actually do with this? Because Math becomes fun when you make a robot move.
Speaker 1:vector calculus isn't going to get me excited otherwise when I was talking about having gotten involved in entrepreneurial engineering education. That Insight that you just had was what we were basically I'll call pioneering in a lot of ways, this shift from Guru professor just lecturing to a room full people to a lot of the research has been coming out on active, collaborative learning and project based learning, problem based learning, and we kind of had to end up turning that all together as entrepreneurial minded. So this notion of framing math right, and we could go on a lot of these different rabbit holes. But as somebody who, unlike my peers when I was a faculty member and my professors are also student, I don't see math the way mathematicians do. I fundamentally can do it, I get it and all this but math for math sake, versus when you get to learn through the project in that and then the outcomes that kind of come out of all of that, it all does combine in a Much better way. And then one of the other things I wanted to kind of talk about with the sort of merging of academia and that I actually had given a talk on my way out to the faculty and the grad students on.
Speaker 1:If we look at higher ed and especially graduate school, there are some great articles that basically, the average professor graduates something like eight PhD students in their lifetime. And then there's another article out of NIH basically framing it as think about a professor graduating a PhD as giving birth to a child. So each faculty member has eight children throughout their career. Well, only one of those children can replace that faculty member as a professor at the university. And while, yes, college rates have gone up, it hasn't been exponential growth to the rate of one to eight. So the mass majority of graduate students, whether it be masters or PhDs, and fundamentally that undergraduates, are not going into basic research at an academic institution. Right, they're going out into industry, whether it's industrial research or just becoming a great member of an organization. Because education's adapting I think we're starting to see this more and more it has to meet these students, regardless of undergrad, master's, phd, and better prepare them for the fact that they're going to end up most likely in industry as opposed to pure academic.
Speaker 2:We found a common tie that one of your students is actually a friend of mine and done some advising for Altor locks right the giant lock and that came out of that education and almost for Dylan, like this is something I developed while I was in school, or the concept of this is something that I developed while I was in school, and then to see how he's gone viral, he's done some crowdfunding and he's been around for a while. So, by all normal measures, a fairly successful entrepreneur with a great product Seeing that effectiveness. I think with the traditional academic approach, there would be very few people that are graduating as mechanical engineers with a business that is selling thousands of products online. So, whatever you're up to, it seems to be working because Dylan had good results and good things.
Speaker 1:And that should be based on that one data point, because that's a great data point, yeah.
Speaker 2:Well, it's the only data point that I have, but I think a data point that we both have many more things to sample from is looking at both academic institutions and then programs that are out there to help startups and how many of them are ineffectual because they're run by people without venture experience.
Speaker 2:They're really run as here's some YouTube videos or here's some information I really see. It's a different flavor of the same parallel I don't want to be lectured to. I'm a bad fit for a traditional academic environment probably the worst fit that you could get and then, as I've gone out and worked with startups worked with people like yourself and been a mentor in a lot of programs or helped people launch their programs, or sat in and been upstream, downstream of those locally, nationally, including ICAP and ICOR, so I'll put that on the table as well is, the results aren't very great and I think that we can draw a common line between activating somebody to take action in both of those settings. But you've been a member of a number of different programs and so I wanted to hear your take on this, because you've gone from academic programs and then you've gone through several accelerators, several different groups or consultancies or however you want to flavor that. What's your take on this?
Speaker 1:Yeah, and it's funny you bring that up because it's something that I've always myself wondered. I guess the question of the phrase that I always found in my head that I've heard nascent entrepreneur and I always thought about the programs we were doing and what percent of people did we change versus they didn't know they could do it but we allot that in them, versus didn't know anything and taught them from scratch. It's interesting because fundamentally there's that question can entrepreneurship be taught? Is there a process you go back to, like steep lengths, we're right on, like no, that's why I answered.
Speaker 2:My answer was no. It has to be experienced, and somebody becomes this new identity of it through experience.
Speaker 1:Sorry, and I think that's I 100% agree that there is no lecture that can teach entrepreneurship. So it's through the act of doing it right. You can get the concepts, you can get ready, but it's project-based learning, whether it's gimmick or the project of starting a company. You kind of need to go through that. I'm not Elon Musk fine boy, and there's a lot of stuff he says that I think is somewhere. But one of the quotes I heard that I thought was a good one was if you have to ask yourself you should be an entrepreneur not the answer. It's one of those things that it's all consuming.
Speaker 1:But as I'm telling you this, something just popped in my head because I draw a lot of analogies between being a founder and startup life and all this and dating, whether it's meeting investors and it's just like going on dates. Sometimes it's good, sometimes it doesn't work out, but are you a bad person or was it just not a good fit? Should I quit what I'm doing? Or it just wasn't a good impedance match, and so there's a lot of these. What popped in my head was parenting. Right, I'm not a parent, but my understanding is, you know, a lot of people are parents and they have no prep for that. Maybe you raised a younger sibling or whatever, but for the most part nobody practiced that. Yet they do it and in a lot of ways I kind of described, you know, my snake robot here is. You know, it's kind of like my kid. When I was meeting my partner it was like cool, you've got to date me and this company and this robot that takes up all my time is.
Speaker 1:What I think about is kind of you know, kid comes first, robot comes first.
Speaker 1:Oh, either I'm doing something for flex and if there's no flex things, then I can go do something with my friends, and you know that sort of notion of I always thought of my snake like robot as my child and so drawing this analogy out just totally off the cuff here of people are parents without all of this training and practice and they just figure it out by doing it, and so maybe that is the answer that I, on the one hand, I want to say that, like I can't teach you how to have that motivation or how to care, but on the other hand, I can teach you how to be a parent.
Speaker 1:Yet for the most part, I'd say most people are at least average, if not better. I think it is something that people can try. Some will succeed more than others, but fundamentally, I think the underlying thing is that drive, that ability to persevere, and just when the going gets tough, the entrepreneur keeps going and everybody else just go get some regular job. You know, I don't know if you can teach tenacity, but tenacity can be learned from any number of life hats.
Speaker 2:Let's talk about tenacity, because I don't like to use the word pivot or evolve or things like that. But it is natural over the course of bringing a product to market that you get progressively less wrong. We as entrepreneurial scientists can disprove a lot of our hypothesis and find a way that we get a better fit with what we're trying to do. And I know that you started in the construction market and that comes from personal experience, so it's intuitive. It's natural that you would approach that market first when we initially talked. You are exploring new markets and manufacturing. More recently you've had some traction and success in my core market, which defends.
Speaker 2:I see what you're doing and I also know that the Navy is pushing really, really hard in on-ship robotics to get more than just maintenance done, so it seems like you have additional opportunities. They're really publishing hey, we want solutions that can do XYZ Anything that needs to get done on a battleship or on a submarine or on an X. We want a robot that can do it. Who's got it? I saw this article and I thought I'll send it to Matt, but he's probably already seen this. Can we talk about tenacity a little bit and what that process of going market to market and honing in on specific opportunities looks like, or looked like for you.
Speaker 1:Great setup there. I definitely have not the easiest of entrepreneur journeys and we're in a lot of ways still at the beginning, but also have a ton of knowledge. In other aspects of my life I've had to learn tenacity. I had a lot of health issues early on in my life and I still have some things that I just have to fight through, and so I know for me that gave me this general disposition of sick days don't exist. Any pain that goes away within the next six weeks isn't that bad. I mean, six in a stone breaks my body. It's kind of true. In six weeks your broken arm is not going to hurt anymore. But we can argue emotional pain is a whole different story. But fundamentally I had to learn as an individual how to just keep on keeping on Right over. There is 36 notebooks, each with 220 pages. That's the majority of notes.
Speaker 1:Now I finally went digital, but I've been at this a while and working hard and just keeping going and I don't know how to articulate it. I know it's just kind of who I am that I want to succeed, but I don't want to fail even more than I want to succeed. I don't like being told no, and I think it came from. I know part of it at least, was other things in my life. People were telling me no and I had no control over it. So anytime I have the choice to just prove myself wrong, prove something or just keep fighting forward. That's what I do and I think that's what I'm not going to say all entrepreneurs do, because some people get lucky, it's oh wait, we did a couple of things, boom, boom, boom, it just worked out. Or there's different entrepreneurial journeys, whether it's being asked by your company to leave, start a company and have them be your first customer. That's a very different startup journey than mine of I don't know anybody.
Speaker 1:I got to pick this up as I go along and I'd say kind of two main transitions we had. One was, I alluded to earlier, of originally leaving a patents around the ability of this robot to climb and move and locomotive, and while that ultimately has a huge application in terms of business, that's not where we start. So there was this. Okay, let's get okay with this notion of I'm not building a walking robot today, a self-driving robot. I could go to hell with a lot of value with just a handheld flex spot on a pole or something like that and that was kind of the first understanding and we were really in this construction real estate market.
Speaker 1:So we spoke to everybody from top three multi-billion dollar construction companies across the world who were like this is great, we love it, to folks coming in inbound and you'll get a lot of people telling me I was pretty. I think my kindergarten or first grade teacher also told me I was going to be president one day. This is what they say to make you feel good. But it's not actually based. But okay, that's kind of their role is to make you feel good and feel passionate about this. And so we got a lot of this would be awesome and people would talk.
Speaker 1:So we had a lot of anecdotal excitement. But one of the phrases I've learned as I've transitioned things in life is you can take it to Harpe, you can't take it to the bank, and so it's like this is great and we can go back to this construction real estate when the price point is lower and it kind of falls into that. Nice to have. But we couldn't find the hair on fire, time is money problem and kept going around in this circle of and still to this day, there's people who are excited about this in AEC architect engineering, structure, like that whole area and ultimately we'll get back to it. But it came a point actually this is part of where having networks and mentors and meeting people I mean good advisors and one of our advisors was like, look, man, I've had startups in this, trust me find something different. And it's pretty hard many, many years down the road to basically be like, okay, I'm back to a solution, looking for a problem and the world's my oyster, but spoken to hundreds, if not a thousand, people across name and industry or something, I've probably spoken to at least one, if not more people who work in that industry and know their problems. So we had to go out and really start at day one and just start talking to people, and I was fortunate to bring on some folks that are really good at this and we had at work Natalie, who specialized a lot of this, talking to folks in design of experiments. She helped lead the charge on this front, talking to folks, and so we really dug in further on the construction of real estate and understood that when we're at that like 1500 bucks which is not that far out, but it's not the first 100, we get back to them and we have all that. But what else is there? And it's really interesting to explore the economics of industries fundamentally.
Speaker 1:And time is money, and one of my number one rules of robotics is, unfortunately, never underestimate the cheapness of human labor. There's a lot of things that people are not making that much money doing, so you save them 15 minutes a week. Their time is not worth that much, and so I could save you 500 bucks a year. A robot's just not going to make sense, and so we had to go through a number of industries and you pull on every single thread. I think that's one of the my rules of entrepreneurship is meet everybody. I can go to everything. Just try to connect the dots and try to leave a call with two people if I met one. And so we went down all of these and where we've really honed in is this industrial facility maintenance, specifically things like manufacturing and high availability, so continuous processes, and in industries like manufacturing, the average manufacturer has between 38 and 40 hours of downtime a month, and that averages out in costs to like 4000 bucks a minute. So if I am a flex bot, that's 10 K to start. I just save you three minutes. We paid for this whole system Instantly.
Speaker 1:We found time is money. We found a bunch of folks the maintenance technicians who are faced with that exact same problem I had of can't go where I need to get, can't see what I need to do. They got to get in this machinery that wasn't designed just. I got to get in this wall that wasn't designed for me and, at the end of the day, really thinking back to where this all started, I was a superintendent of properties, I was a maintenance tech. I wasn't building the property from scratch, I wasn't going down to the studs with the renovation, I was coming in and doing the maintenance on it and so it does feel very full circle in a lot of ways. Going to maintenance techs, it's just which maintenance tech is it? And that's where whether it's manufacturing places like airports you look at an airport like Heathrow 99% utilization, so there is no extra time All this downtime adds up.
Speaker 1:So being able to help on the one side with everybody trying to do more preventative maintenance, but a very short staff and this stuff wasn't designed. So can we go find leaks and systems before they blow up or do thermal analysis on bearings, all without ladders, which are the most dangerous thing on any work site. And then also, like in a lot of situations, you need two people to climb a ladder, one to hold it, one to climb it, and going up and down takes time. So we have all these ways we can help with preventative and this shift in industry 4.0 to predictive. So we're collecting this data, feed it into algorithms and not just here leak, but look at vibrations and stuff and be able to predict what's going to happen. And then where the flex about really can shine is when, inevitably it doesn't matter how much preventative maintenance you do things eventually go down, and so can we just shorten the diagnostic time when that whole plant is down. Think of a paper mill or a lumber mill or something like that where logs come in. So these places have 4, 500 trucks a day. If that one conveyor belt goes down at the entrance, everything downstream is shut down.
Speaker 1:You and I have talked a bunch about like machine shops and stuff and at first glance it's like, okay, well, one CNC machine goes down, that's bad, but typically you have a number of work cells so you're not 100% shut down. But as I look at a lot of machine shops out there, a lot of them have one compressor, maybe two, and probably one air loop that all those machines are attached to, and I have known for my own time at the machine shop, when I had air pressure cuts, that machine E stops with the tool in your part, no matter where you were, usually at the worst time, and so there is a way for one week to take down an entire machine shop. So these notions of where you can have these domino effects, we can come in and A help prevent, help recover quicker, and so it's been really interesting to actually have this time is money, people excited, and well, yes, it's really hard to start over. We've been in this since, I'd say, probably April of this year, and, having spent a few years building up a large roll of decks of VCs, corporate innovation partners you name it organizations in the construction real estate space, and what got us connected was meeting Jade through. We were one of three winners in the robot prize for building envelope retrofits. We were working with the world's largest architecture firm and a major construction company out of California, you know so, gensler, skyline Capital Partners and a startup, lamar AI. So we won over a million dollars in the Department of Energy to use the FlexBot to do things in construction, but they were a little bit down the road right, so I had to walk away from all of that and start from scratch and basically go back to my network and say hey, you're here, but do you know anybody over here connect those dots? We're all in the process of building that up, but we went from I think I'd like to have a flex spot in construction too. I would pay a hundred grand for that tomorrow. People really getting it and the economics working.
Speaker 1:Yeah, the pivot really sucks for lack of a better word because there's two alternatives right Pivot, fail or have succeeded already. One of those other options. It would have been great to have just hit that out of the park on the first try, but that didn't happen, so left with the options of fail or pivot. Is it really a pivot or is it an evolution? What do people in manufacturing want to do? Well, some of them also have to go and find the leak above the ceiling. Some of them have to go and do so there's a lot of overlap. It's that understanding of what we do and how we phrase it and really just who the first person is. But they don't kind of connect sin. And, yeah, happy to take the conversation over to the defense side, because that's kind of an independent story. That's also kind of mirroring this.
Speaker 2:It's a process of exploring value and, going back to our earlier point, is that value is subjective, right, it's experienced by someone else. Our value is in the solution and it's solving what. It's a bucket of X. And so if I have a bakery and I need to inspect inside of a bagel oven, well, it's very difficult to do, and so that one inspection routine might pay for your robot, whereas if I'm a home remodeler, I get paid per job, honestly, and I could just hire somebody and if I need, I'm not going to get two robots, I'm going to get three people. At the end of the day, it's doing the same thing and in my experience, because hardware is expensive to develop which I really like because we're building our entrepreneurial boat it's just as expensive for everybody else to follow. In my experience, there's always a 110 and 100X value application for any idea, and usually people approach their ideas from a 0.5 or 0.8X where they look at it and say there's this product, but we can be cheaper than all of the competition in the same exact market, and that's inherently can't possibly be true, because when you dive into the analytics of those businesses, most of the time they're not really making money on the product in the first place and they have millions and millions of dollars worth of funding and huge teams. So how are you going to slingshot past those financial issues and then be cheaper than them and stay in business? Whereas, yeah, go to manufacturing where there's a clear, demonstrable value that you can attach and you can put numbers and you can pull numbers from them, and generally manufacturers of some kind of reasonable or credible size are good at knowing their numbers. Because it's an operations business. You have to understand operations to exist.
Speaker 2:And then in defense, if manufacturing is 10X, defense would be 100X for certain applications because it's a life or death thing or it's just flat out impossible otherwise. So if I have to make 10 flex spots instead of 10,000, I know that it can't be $1,500. It's got to be $15,000. And I'm like, well, I'm not going to sell that to a GC. Maybe one day I will, but who is going to be my beachhead customer where they're absolutely pumped to buy a $15,000 flex spot? And it's never my primary market or it's never the first thing that people come to us with, but I'm super biased, so you don't have to listen to me.
Speaker 2:About defense In general, I find that any problem that's experienced by industry is experienced in defense, but just at a 10X level. Getting in front of somebody getting a demo is really hard. In certain industries it's very difficult. So dealing with especially data or financial data or healthcare getting in front of people has taken a really long time to develop relationships where I can get startups in front of a healthcare provider. That's not easy, Whereas in defense there's just competitions right, there's open calls, there's rodeos, roadshows, showcases, demo days, private invites and competitions. It's a lot more accepting or porous than other industries.
Speaker 1:It is interesting, I'd say, the various roadblocks and things like that when you look at different industries and people are like, the things you'd assume would be hard are actually sometimes easy and vice versa. And it's like oh, such and such has XYZ regulation, but then they also very well developed sandboxes for you to play in. Getting the foot in the door is fundamentally, whatever it is you're trying to do, the hardest thing for most people, unfortunately the gatekeeper for a lot of people changing what they do. And as an entrepreneur, fundamentally we're walking the fine line between sales and learning, especially with the earliest conversations. I'm trying to learn. I just want to get on the phone with you to learn.
Speaker 1:For the most part of this journey I couldn't even give you a flat spot if you wanted. I'm not here to sell you because I have nothing to sell you. I'm here to learn from you and understand and better these sort of things. But nevertheless, still, getting your foot in the door is not trivial and I guess you kind of teed me up well for how we ended up in defense, one of my learnings I think we've intersected the stories here so many ways of having not been a traditional academic, also not being somebody chasing basic NSF grants or even SBIR grants at this point in our journey.
Speaker 1:But what we have found and I think the first one that really hits the nail on the head for us was the story of Jade and the Department of Energy's E-Robot Prize for Building Envelope Retrofits. It was a prize, it was a competition. That was really eye-opening of this is not. I submit a proposal for 10 pages. They wait nine months to decide if I did the margins correctly, to then pass it off to the next person to review. Then eight months later I find out if I got it or didn't, and then I have to wait 12 months for the money to go to some institute. Versus the challenge.
Speaker 2:Yeah, Two, three months. You could get $50,000 for, effectively, a video and a pitch deck, which is it's non-dilutive fun day, no strings attached, ridiculous.
Speaker 1:Exactly Wired transfer to your bank account. And it's really interesting, by the way, for those of you out there who are in Congress, if you don't mind bringing back the old R&D tax credit, that'd be great. This challenge. That just changed us. So we had those two. And then networking people.
Speaker 1:You never knew who you're going to meet and met folks at Ensign who, national Security Innovation Network, and we'd applied to a couple of their programs and I was at there's an annual robotics event, the Kaskia Connect out in Pittsburgh, just was sitting on a bench next to somebody and started talking to woman Liz and tried to actually work for them. And she's like there's this challenge coming up called Navy Tank Inspection. You should look at that. And I'll be honest, we looked at it and we saw the title and we said we don't swim, we're not currently waterproof yet. This does not necessarily seem like the thing for us, but the application, the first round, was fairly innocuous to put together. So we put in the application, got to pitch and the next thing, you know we're getting paid $10,000 to go on the USS Midway aircraft carrier, to go and do a demonstration in Ballast Tank on that aircraft carrier, and so you'll show up for that with the bot. I'd never been in a Ballast Tank, I'd never been on an aircraft carrier and I just knew that we had three hours to go and find corrosion in this tank. So we brought the bot, we had our 3D mapping head so we were able to kind of map of the area and then we were able to identify the different areas of corrosion in there and kind of show this is it, but going into it. You know, in the back of my mind and I guess this is that entrepreneurial spirit or that tenacity of okay, so we're here to do this, but hopefully there'll be some other opportunities for us to do what we know we're better at Right Because I go.
Speaker 1:My goal going there was I don't think I'm going to win Ballast Tank Inspection Because I know there's robots out there that do take inspection. That is their core competency. But I do know I have the best robot for everything but Ballast Tank Inspection and even then we can help in a way that I carry this on a plane. I just show up with my little thing. The people needed to bring a crane to get their thing in. So for us we show up, we do it, and then we were pretty fortunate that it was a museum ship and they said well, you're here, go and do whatever the heck you want, okay. So next thing, you know, we had our extension poles with us.
Speaker 1:We're busy inspecting above the HBC systems on the Hanger Bay and people attending the museum just started watching us. We started getting this whole circle around, and so people from the other judges there started looking at wow, this is awesome. And then the chief engineer comes out and he's like I've spent 20 years defending the US to promote capitalism. I'm happy to help startups. This is awesome, all these things that he wished he could do with it. So then he takes us in and there's the cryo plan. He's like oh, can you go and read this gauge? Oh, yeah, then we go up to the Hanger Bay, to the Blake Deck, and we're able to go in and look at aircraft and stuff like that, and so it was a great opportunity for us to just take advantage of us being there, get a lot of footage. If you go on YouTube, you can see some of that stuff.
Speaker 1:What came out of that was we didn't win, but we did win Best Robot for Everything but Ballast Tags. So then met some folks who win? Shipyards. And next thing you know, oh, shipyards is calling for us to go down because they want us and then met folks who their job is to find folks like us and bridge it with the organizations like Tech Bridges. So working on proposals to get us to go and do non-destructive testing while things are out there so they better know what to do when it's in for service. And so then, similarly, it's like great, they tell you about the carrier team one to go and meet all the carrier folks that are meeting the carrier fleet. And so go down there and meet more folks.
Speaker 1:And all of this kind of led up to this challenge where you and I got to meet in person, so down in the National Harbor for this part of the Tech Connect World Expo. And so it was the ATI Navy man tech or maintenance tech, advanced manufacturing challenge. And so, mind you, we applied for this our first month in manufacturing, we're one of the finalists, I go get to pitch and how do you know, that trophy right behind me says I won first place. And so it's like, okay, great. Well then some of the judges are heads of innovation at the major shipyards that are building the fleet of tomorrow and next thing, you know, in a couple of weeks I'm going to be down in the shipyard with the FlexBot and there's these opportunities for further funding, and so it's all kind of chipping away but bringing this awful circle to tenacity and fighting the CG plan today, minimum six months, typically 12 months for them to bear fruit.
Speaker 1:Right, here we are at August, almost a year from when we first just threw our at the Navy ring to. I will have been on two aircraft carriers in the last 12 months. I will go to at least two shipyards and hopefully many more. And all of this out of something that the 10k was cool. But that's not the grand prize. Right, the grand prize is what we're finally starting to hit now and that kind of validation of in construction, real estate. I was really good at getting into top 10. So I got to go on stage but I never was able to bring home the winner First time.
Speaker 1:Pitching, you know, manufacturing and folks like that. They get it. That was really gratifying in a lot of ways and so excited to help on the two sides of this one. A lot of it is as you kind of were mentioning. They want to do things during deployments, so being able to help support them and do better analysis out in the field, because when these ships come in, they don't all these cost overruns of things we hear about. So can we help the project management side?
Speaker 1:And then the other side is, especially at the shipyards is we're trying to turn more and more ships over, and there's great 60 minute interviews and stuff like that around the Navy and it's I guess we'll call it, the 2023 and beyond, and so can we help them better be able to check things before they call in for repairs, because one of the things we're seeing is, as we get a more diverse workforce out there, people are different shapes and sizes than they used to, and so people don't feel what they used to, and so now we need a way to enable people to get where they can't get, so that they call the inspector the first time, as opposed to buy it and all these other things. And then safety are we able to go and check these things and minimizing disruptions and then even supporting the plants themselves. So we're, I'd say, early, yet accelerating in this journey and while you know our our anecdotes to date have been on the Navy, we're pursuing some of these things coming down from the Air Force and Army and could definitely help support a lot of these different, I guess, branches of the military. And so that's something that I'm really passionate about is us being dual use of. We're able to support the defense industry, which you know is really great right now, as we're going from first units to, we need to rapidly produce the first batch and that's something that the DoD is really good at helping to make happen of great. This is a tech we want, we can be.
Speaker 1:Sbir calls themselves America's seed fund. I'm going to jokingly call DoD America's pre seed fund. Like you know, they can help get you across that kind of pipeline here and then, of course, they can be a great SBIR phase three resource, right, a great ad user. But at the same time, in parallel, especially at that seed level, that's where the commercial success and ultimately I'm passionate about this company being successful commercially.
Speaker 1:If any one of these independently is successful, that's great. So then it both strike were even better off, right. So it's really looking at it of let's grow this dual use, so continuing down this high availability, manufacturing and getting these in and, as one of the things and I think you're kind of looting to pricing earlier of. You know, what we've been working on is how do we get the first hundred units sold at tank. Everything else, price drops, scales down and more and more markets open up, and so we have this great journey here, with then also being able to support the armed forces, the defense sector, and we benefit from that and they're able to benefit from us.
Speaker 2:So really excited about that aspect as well, that thank you so much for spending time and being on the show and really breaking that down where you've been, where you're going and what those opportunities look like. I think that's incredibly helpful for the startup founders that are listening to the show, so I really appreciate it.
Speaker 1:Yeah, thanks, callie. I mean wasn't sure where the conversation was going to go, but knowing you, I knew it was going to be a good talk, and I think that this is one of the more unique ways I've gotten to combine all aspects of this story, and I guess it's all retroactive. I now have some great things to tell, but really appreciate the platform to share. Thank you.
Speaker 2:This has been the startup defense.
