Re-defining The Supply Chain With The Help of Hyper Intelligent Robots ft. Sri Solur, CPO @ Berkshire Grey
Authored by Taylor Guthrie
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 re-shoring 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 insights 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. That means, I am responsible for engineering, product, quality, manufacturing, and sales across the board. Having built over one hundred million products, from appliances, IOT devices, to robots, I can confidently say that I am a product builder. Before Berkshire Grey, 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 SVP driving multiple product categories, heading digital home initiatives. Before Comcast, I was an entrepreneur in residence at HP…The two businesses that I’ve built for HP that achieved critical mass are Cloud Print/E-Print (which provides the ability to print from mobile devices) and the fashion tech 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 NIT back in India and then went to business school here in Boston. I’ve lived and worked in Europe, Asia, and North America.
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, I was focused on building more and more complex products from SaaS to home automation/wearables/IOT to robotics. Hardware is super hard. As a product builder, that’s what excites me.
Before joining Berkshire Grey, I knew nothing about supply chain, but having built millions of IOT products and then falling in love with consumer robots, I was more intrigued with industrial robotics for supply chain. Here’s the kicker — there are certain things in consumer robotics that you could imbue into the B2B industrial robots to accelerate product development. B2B robotics tend to be very customized, and the product development life cycle is usually 18–36 months, whereas consumer can be closer to 9–12 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 now have the next generation of 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. The ability to experiment with those hacks/methodologies 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?
Two major changes. The first one being the pandemic, it has been an accelerator for all our customers across the board; retail, eCommerce, 3PL, parcels, groceries, etc. People/consumers are buying more, and when people buy more, our customers need to expand their capacity to fulfill their orders. This means, more distribution centers, micro-fulfillment centers, and back-of-store automation.
Consumer expectations have also grown. What started off with receiving orders 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 it in shorter periods of time — certainly accelerated during the pandemic. There was surge in demand for robotic automation driven by new consumer behavior. In addition to that, companies wanted to keep employees safe during the pandemic and robotics naturally played a big role.
The second thing is the confluence of multiple S-curves…Bear with me as I explain this. Remember the S-curves from 2001 during the rise of the internet? There were two S-curves, desktops/laptops took off and the option of broadband. In the last decade, there were three S-curves — mobile, social, and cloud. In this decade, there seem to be five S-curves — AI, robotics, 5g, virtual/augmented reality, and distributed computing/crypto. And in addition to the pandemic, riding these S-curves has helped companies like BG.
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 examine the economic shocks in the last twenty years. We had the recession after 9/11…There was an acceleration of adoption of e-commerce which was driven by the two S-curves (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 the three S-curves — social, mobile, and 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 a social component. So if you look at the historical aspects of how things have evolved after a shock, these S-curves start to take off. Even if you just look at history repeating itself, you’re going to see the five S-curves that I highlighted before amplifying and playing on each other. So anything that you do in robotics riding AI, distributed computing, etc is a winning recipe to solve customer problems.
Our mobile robots operate as a coordinated fleet that works together in the world of material handling and order processing to process products and cases for orders. The entire system operates as a flexible robotic ‘field’ within a distribution center. The system is learning and improving performance on its own, which is fascinating. Even with the number of mobile robots being constant in the field, the throughput keeps on increasing…This is because we learn the patterns of order fulfillment and start to predict traffic flows. That means the product/solution keeps getting younger and younger, faster and faster. 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. Industrial Robotics as an industry currently, is massively fragmented. We have different vendors/companies supplying point solutions for unloading, de-palletizing, picking, sequencing, etc. So, when a retailer wants an end-to-end solution, they have to work with either a systems integrator or they themselves have to integrate the solution together. Berkshire Grey is unique in its positioning as a new breed of end-to-end robotics solution provider taking a holistic approach to 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 (while being profitable). That’s really where the world is at…
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.
For example, in the last 12-18 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, some companies have also fallen behind. They may have phenomenal technology/solutions, but they have not been able to execute profitably in the marketplace. M&A is perhaps one of the viable options for survival for those companies, and this has lef to consolidation. There’s a lot of M&A that’s happening now and you will see that accelerating. In summary, 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.
One other thing, the companies that are thriving have focused on delivering transformational change to their customers’ supply chain. You have to distinguish this phenomenon from traditional incremental automation…Transformational change is defined as a 10X improvement (versus incremental change with is 1–2X). Berkshire Grey has delivered tangible transformational change to our customers’ supply chain.
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?
Two things that I want to highlight, so let’s start with a historical perspective. Our world is going through a massive change. Just like we went from an agrarian economy to an industrialized economy (people were going into agricultural land to grow stuff, then they started going into factories), we are moving from one economy to another as a society.
During the pandemic, robots actually played a huge role in keeping people safe and keeping the economy peaking. For example, at Berkshire Grey, we have an initiative called Picking with Purpose. During the pandemic, people were donating to the food banks but there was a shortage of people 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 point is, robots are a force multiplier to humans. Today, when you walk into a distribution center you will see signage everywhere for hiring with $2k-5k sign on bonuses and higher hourly rates, yet they are still unable to hire. And when I talk to customers, they claim to 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, but being complimentary to humans, in essence, a force multiplier.
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 we have managed to attract. We have people 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 and love our culture.
We have a mindset of being tenacious but with humility. Culture and mindset play a very important role to attract talent.
We have also 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. BG employees on the mobile team are encouraged to author thought leadership articles…There are individuals in the organization who are very well-known/domain experts and they, in turn, attract phenomenal talent. In summary, it is a three pronged approach. First, is our ability to attract talent from really well-known companies. Second, having the right culture within the organization — tenacity, humility, and flexibility. Finally, our unique 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?
We look at the culture fit like vowels — A, E, I, O, U.
On the mobile team at Berkshire Grey, when we go through the hiring 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 react to situations, the level of customer centricity, etc. We question candidates to provide tangible examples that highlight the cultural idiosyncrasies that are going to make someone successful here.
On top of that, expertise plays a role. We would like the confluence of supply chain and robotics expertise with BG cultural mindset.
On the go-to-market side, I look for storytellers. 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 them together as a powerful recruiting tool.
