Speaker 1 (00:15):
You're listening to the TechTables podcast, a weekly Q&A podcast dedicated to interviewing industry leaders from across the world, ranging from startups to Fortune 500 companies, mixing it up each week with topics ranging from design and product innovation to IoT and Industry 4.0. Let's do this.
Joe Toste (00:33):
Hey, guys. Welcome back to another week in the world of TechTables, mixing the best in design and tech Innovations with me, Joe Toste. I'd love to connect with you behind the scenes on LinkedIn, Twitter and Instagram. There you can even message me questions for future guests coming on the show.
Joe Toste (00:46):
But today I'm super excited and stoked. Today we're going focus on Series B startup, RealWear, as we welcome Andy Lowery, co-founder and recent CEO of one of the world's coolest companies and global leader in the enterprise head-mounted wearables with around a hundred million dollars in total funding. This is Episode 3, Connected Worker 4.0: How Head-mounted Wearables Are Changing the Way We Work and Will Save Your Industry Hundreds of Millions of Dollars Very Soon.
Joe Toste (01:13):
Huge thank you to Andy for taking time out of the madness of CES to do this interview. But that's quite enough for me. Without further ado, I'm thrilled to welcome Andy Lowry, co-founder at RealWear.
Joe Toste (01:23):
Okay. So let's kick off today a little bit about just you and the idea for head-mounted wearables. Let's start with that.
Andy Lowery (01:29):
Yeah. So me, I came from the military originally. When I was 19, I enlisted in the military. Spent about 11 years active. 10 years reserves. Retired a few years ago. When I went from active service to a civilian career, I ended up at a couple big corporate companies. Finally ended up at Raytheon where I was a chief engineer. And in that role, I learned a lot about all stages of the most sophisticated systems of the world from bidding on them and winning them there to manufacturing to fielding, deploying. And what's pertinent to RealWear maintaining, operating these systems and repairing these systems out in the fleet. It's called MRO a lot of times.
Andy Lowery (02:14):
So at Raytheon is when I was first introduced to the concept of augmented reality in 2010, and it was done by a fellow by the name of Brian Mullins, who he and I later founded a company named DAQRI. When he showed me the first augmented reality experience I've ever seen, and if you've never... Everyone's seen augmented reality, but I'll bet you just about anyone who was seeing augmented reality back in '10, '11, '12, they'll remember it the very first time. You know how you remember the space shuttle unfortunately sadly blowing up? This is a good thing, but it's something that everyone remembers. And I remember seeing that little peg board where he had some bolts and washers and it was just this iPhone 3GS. Look through it. Move that one there. Next. Move that one there. Next. And I just put the phone down, and I said, "This is going to change every single thing about everything we do in industry."
Andy Lowery (03:10):
And the very moment in 2010 that he showed me, I stated that, and I've never deviated or wavered from that belief. I do believe that it's changing and is now changing everything we do as far as process and error checking and inspection and all of this stuff when it comes... and training, of course, very important in training. And so, when I started with augmented reality, it was a software. DAQRI was software. We were phones, tablets.
Andy Lowery (03:42):
But what we came across again and again even back then was the whole idea is interaction of the real world and digital elements. And when you're interacting, you want your hands free. You don't want to be holding onto a tablet. Shoot, they even make mounts now for tablets so that you can take your hands off of them and see the augmented reality experience through it.
Andy Lowery (04:07):
We realized at DAQRI that it wasn't going to work to have a hands-occupied product in industry trying to see some digital information. So we started to build a system called the Smart Helmet, and I was originally engineering that guy. But the Smart Helmet went a little too far. I think it tried to take on too much. It was an audacious product and project that ended up not really going or really taking root. And it was, I think, aspirational, but not pragmatic enough.
Andy Lowery (04:42):
So when I separated from DAQRI in 2016, I had met a fella, Chris Parkinson. Dr. Parkinson had worked for a better part of the decade at Kopin, and Kopin basically built a reference design on a system and they called that the Golden-i system. They released it first in 2009, and then iterated and iterated and iterated. And by 2013, when Google Glass came out, they had a really nice product, ran on Android. I think Android 4.0 or maybe it was at 6.0, but I think it was at 4.0. And they released that product to prototype in Cisco and a bunch of other companies, GE and a bunch of others, and kept getting feedback. Well, when the Glass product came out, Chris went to John Fan, the CEO of Kopin, asked, "Can I leave? Can I take my prototype and my reference design and get a license and go out and start a company?" And that's when he started RealWear.
Andy Lowery (05:38):
So right as I left DAQRI, Chris said, "Andy, can you join me? Can we join forces?" And I said, "Well, Chris, ask the wife. Ask the family. See what we want another run at this crazy world of startups." And they all fell in love with the product like I did. The RealWear HMT won. It is, I think, in my opinion, the best product for industrial wearable type situations that is out there. And I knew that when Chris first showed it to me in 2016 or the early prototype.
Andy Lowery (06:12):
So that was how it all started. And that's really the genesis. I know you wanted to know why wearables? Well, it just had to be. You can't mess with digital things and have a device that you have to look through as you're doing it. You need to be free in order to consume this digital information that's called augmented reality or, in some cases, assisted reality if it's not as immersive.
Joe Toste (06:37):
Oh, that's great. Can you just touch upon, through a little bit of research, I know the original Star Wars, Boba Fett, had... If you could just touch upon that. It was so great.
Andy Lowery (06:46):
Yeah. I didn't even know this story at all. And then a year into the company, someone told me this and I was like, "Oh, my God." I'm like, "We got to tell people about this." So Stephen Pombo was an employee. He was a colleague of Chris Parkinson at Kopin. But he had worked at Kopin since the early '90s, like 1990 or '91. And he had come there with a guy, a partner of his, named Pete Roselli. And Pete Roselli worked for a guy named Joe Johnston. And Joe Johnston was the guy that was accredited with all the original Star Wars costumes. He was the manager. He would over... Well, Pete and Steve worked on Boba Fett. And at that time, Pete and Steve came up with this idea. It looks like an antenna coming off the top. But there's a scene... If you know your Star Wars-
Joe Toste (07:40):
Andy Lowery (07:41):
... there's a scene where-
Joe Toste (07:41):
Andy Lowery (07:42):
... the Millennium Falcon's on the back of that destroyer and they jettison the garbage and he jettisons off and Boba Fett follows them to Cloud City. Well, when he's in the mode where he's flying his ship, Boba Fett's ship, he has his monocular, HMT0, basically, in front of his eye. It's a wearable computer. They call it a rangefinder. Well, Steve artistically made that when he was a college student and then pursued a monocular wearable camera... camera, I mean system, computer system to have reality imitate art. It's just, I couldn't believe it. It's such a great Silicon Valley or early tech or tech type of history that such an iconic movie and iconic character ends up delivering the spark, I guess, if you will, in order to give us the idea to go off and build the HMT. Basically, Boba Fett's helmet is the HMT-0.
Joe Toste (08:40):
I love that. I love that. Now I'm really going to test you real quick, because the Mandalorian came out and I was very curious. I was like, "Did they put a rangefinder in there?" And I checked. In Episodes 3 and 8, it's in there.
Andy Lowery (08:55):
Oh, it is?
Joe Toste (08:56):
It is. Yeah.
Andy Lowery (08:56):
Well, now I have to watch them, because I haven't watched Mandalorian, and the only reason is my wife won't let me join Disney+.
Joe Toste (09:04):
Andy Lowery (09:04):
Because she's says I've got the Hulu. I've got the Netflix. I've got Amazon. It's just, "How many of these subscription services are we going to have?" And I said, "But there's a Star Wars series." And I'm a huge fan. And thank God that Abrams brought back the series with Episode 9. I was not happy with Episode 8.
Joe Toste (09:27):
Andy Lowery (09:27):
Joe Toste (09:27):
Yeah. No, I love it. The Mandalorian is phenomenal.
Andy Lowery (09:31):
Joe Toste (09:31):
Yeah, it's phenomenal. You have to see it.
Andy Lowery (09:33):
I'm going to go. I'm going to rebel, and I'm going to see it.
Joe Toste (09:37):
I love it. I love it.
Andy Lowery (09:38):
I'm going to join the Rebel Alliance and buy Disney+ without my wife finding out.
Joe Toste (09:43):
If you're on Verizon, they'll give it to you for free for a year.
Andy Lowery (09:46):
Oh, they will?
Joe Toste (09:46):
Andy Lowery (09:46):
Okay. Well, there you go. All right.
Joe Toste (09:49):
So I do want to touch upon your latest release at CES. I think it might have been today or yesterday. The French car manufacturer that RealWear has successfully rolled out its flagship, HMT-1 head-mount enterprise wearable for factory technicians. Can you talk about the productivity improvements bringing assisted reality to the technicians?
Andy Lowery (10:09):
Right. So first of all, we also had a pretty well-regarded and high-profile press release around BMW. We had previously gotten into the service center. So on the service side, repair side, of these cars, occasionally they get stuck and they need someone that has a little more knowledge. Well, versus that person driving there, they can remotely assist. And so that was our first big public win in automotive. But we hadn't had a public win in manufacturing. And PSA, for those who don't know, is Peugeot and Opel and Citroën. It's a few of these car brands, and they have CEOs for each.
Andy Lowery (10:51):
I visited there about a year ago, and the head of digital told me when I presented the ideas and use cases, which consists of things like remote guidance for someone who may be at another factory or at headquarters or some of the actual workflow, which is what got me real excited, like inspections and checklists and things like that. I have to take a photo at this stage and so on and so on.
Andy Lowery (11:15):
Well, all of this in a hands-free modality shaves not 3%, 4%, 8%. It shaves 50%, 60%, 70%. I've seen manufacturing examples from companies like Schlumberger. This is a Schlumberger example that I'm allowed to talk about, where they sat a wearable operator and then they competed with the paper and competed with a handheld tablet. And by far measure the wearable tablet won, even over the handheld tablet, because they weren't constantly moving to the tablet and back to work. It was next up, next up, next up, as they were engaged with the work. The knowledge stays more fresh. The digital information is on the tip of your fingers. And what Schlumberger found was nearly 86%... I know these sound like crazy numbers... 86% faster than paper. 86%. We are 18 or 20% faster than a tablet. So tablet did a lot of the good work just be in digital. But 86% faster than paper. People that are manufacturing with paper, their windows are open and money is flying out the door.
Andy Lowery (12:29):
And this isn't a "Are we sure about that?" The jury has deliberated. They have come back. This is a technology that will save companies hundreds of millions of dollars at scale, when we get to scale. The trick is to get to scale, and I'm sure we'll talk about that a little bit.
Andy Lowery (12:47):
Very excited about PSA. Early use cases are remote help, workflow, checklists. All of this enabled hands-free. All of this that's networked to the backend of SAP or whatever they're using. I'm not sure what database program they're using. And all of this gets integrated in their overall processes and flows.
Joe Toste (13:06):
Oh, I love that. I wish I had a helmet right now. I've got an iPad in my hand asking you questions.
Andy Lowery (13:12):
Yeah, [crosstalk 00:13:13].
Joe Toste (13:12):
So constantly my head, I'm going up and down up and down.
Andy Lowery (13:15):
Joe Toste (13:16):
Up and down.
Andy Lowery (13:16):
We can provide you one. I got one in the other room.
Joe Toste (13:17):
Oh, I love it. I will walk around CES with that on.
Andy Lowery (13:21):
That's right. That's right.
Joe Toste (13:24):
When it comes to industrial manufacturing, whether it's autos, telecom, et cetera, where do you see big time opportunities in that head-mounted enterprise space in 2020?
Andy Lowery (13:32):
Yeah. We really, and I was talking a little bit before we got into the podcast about this it's if everything hits for us, it will be a hell of a thing to try to just supply to the demand. Because we have over a thousand, or maybe it's 1,500, customers, and they range the gamut from oil and gas and energy, which was our core market, by the way. We started out with a focused approach on energy, oil and gas, power, power distribution. But then we realized that the solutions that the system provided were broadly applicable to anyone climbing towers, like a Teleco. Anyone manufacturing that needed their hands for tools and stuff. So we saw all these other use cases and... Oh, by the way, medical. Medical is a huge use case for us now and we never... You'll see on single piece of literature and us talking about medical, but we're in ambulances. We're in hospitals. We're in surgery rooms. Medical has been a huge pull.
Andy Lowery (14:32):
So when you say, "Where are the biggest wins?" Well, the biggest wins will be coming from the people that can adopt the technology the quickest. And we're finding the industries that have the most propensity for new product introduction are industries like automotive, because automotive has just this learning of years and years of Six Sigma that have something shaves 3 or 5% off the overall assembly, get it implemented and they know how to implement it, or military, because military makes a living out of doing new product introductions. That's what military does. They have the training. They have the ability to support it, to develop the right habits. So between military, aerospace and defense, which will be a sector that we'll focus on this year, automotive manufacturing... And when we say automotive, that can extend to... It's very similar use cases in aviation and rail and other transportation modalities.
Andy Lowery (15:30):
So if you take the gambit, we just covered them all, and I know that it's big sectors of industry, but... Energy is a major sector. Telecom, like AT&T, Verizon, major sector. Manufacturing, major sector. And then finally, transportation in a broader sense. Automotive being included in that description. Those are the four areas that I would see that we focus on, and then going forward with the military and the defense being able to adopt. We see scale coming out of both the military and out of automotive in a pretty big way in 2020.
Joe Toste (16:07):
Oh, that's great. Yeah, when I was just researching and preparing for this podcast, I didn't see anything from medical. I'm glad you brought it up. My brother-in-law is a spinal surgeon, and I always ask him, "Hey, what kind of technology you trying out right now?" Because it's very dangerous if you slice into someone's back. If you mess up a millimeter, they're paralyzed.
Andy Lowery (16:31):
There's machines... I'll show you this after a podcast. I think we have a video of a spinal surgeon, coincidentally, using a machine that shows the see-through of the spine and then repeating what the machine... You would typically like you're doing with your iPad. You're looking at the patient. You're looking at the screen. The doctor's looking at the patient, and you've got the HMT, and he sees what's on the screen. They do a repeat of what the see-through machine, MRI, whatever it is. I don't know what technology it was, but looking at the inside so that he's not going back and forth. He's focused on the patient but able to see the digital information that's required.
Andy Lowery (17:10):
And I think it's an important point. And I know you didn't ask me about this, but I'm going to talk to your audience for a second. There's a lot of confusion in the space. You say, "Well, HoloLens must be a competitor to yours, right?" No, no, not really. DAQRI, was that a competitive product? Not really. Some of the other new systems come... Nreal, is Nreal a competitor? No, not really. And why not? And I'll tell you this, and I'll try to answer it as simply as possible. If you look at the user interfaces for all of those aforementioned products, HoloLens and so on, versus the user interface of Google Glass and RealWear, there's a massive chasm tween those UIs.
Andy Lowery (17:50):
Why? Why is it? Well, I'll tell you why. Because in a HoloLens system, they're about the digital information. It's digital first. Reality second. It was built around the idea of engaging with digital elements that don't really exist as they're contexted into the real world. So it's digital first, reality second. If you look at a RealWear HMT-1, we did not design the system to be constantly preoccupied by digital information. We want the user to be more or less completely unhindered by any sorts of digital things. We want them undistracted. We want them looking at the job, keeping their peripheral vision open, making sure they don't get hit with a forklift in the side of the head or something like that. And because of that, we've designed our system to be more of snacks of digital information.
Andy Lowery (18:46):
So if you think about a pilot, the pilot doesn't want HoloLens digital stuff flying all around their head and getting in their face and not being able to see all around. They want that full situational awareness in those critical moments, but they still need digital information. They need to know what frequency approach control is. They still need to know what altitude they need to descend to at such and such of approach vector. And those types of snacks of information are quite nicely provided by a RealWear heads-up display, that they get the digital information, but as a secondary. So RealWear is reality first, digital second.
Andy Lowery (19:23):
So those are, I think, a massive chasm that you'll see start to split out between people focused on the digital elements and the UI that's involved with digital elements, very akin to VR, virtual reality, and the people that are focused on digital snacks and keeping the person in situational awareness or relevance.
Joe Toste (19:42):
Oh, that's so good. A big theme in this new decade is the Connected Worker 4.0. It's possible only by adopting really a combination of technologies, such as reality technology, mobile Cloud, data analytics, AI. This is leading to a greater emphasis on leveraging devices and data for better decisions. What's your vision of the Connected Worker in the next three to five years?
Andy Lowery (20:05):
Yeah, it's a great question. We are the hub for the connected worker. And not to say we're the only. You've got haptic watches. You've got boots with intelligence, gloves with intelligence. I do believe that it's a symphony, if you will, of different wearable systems that that connected worker could be equipped with, but they need a hub. It needs a hub to aggregate the data and then communicate. Our system, our heads-up system, is that hub. So you can even start, you can think of starting with a system like ours to begin that connectivity journey, because that's from which the connectivity will start and it will probably continue and we can Bluetooth different devices to our system and read different things like that.
Andy Lowery (20:49):
Now in that space, I've been in this for like 10 years now with DAQRI and now here, and what I've seen is a lot attempts to do these boil the ocean, tip to tail, IoT 4.0 rollouts, and I've seen a lot of failures. The most prevalent, I think, Predix. A lot of people say, "Whoa, that was way over its [inaudible 00:21:10]." A lot of this tip to tail type of AI coupled with this, coupled with that, is not getting the ubiquity and the traction of ubiquity that they thought it would 10 years ago, 5 years ago, when they started On these types of journeys.
Andy Lowery (21:24):
I think the reason is that people need to handle it more piecewise. So when I look at out on the front edge or the edge worker... What do they call it? Frontline worker. When I look at the person that's at the edge, the guy doing the actual work on said piece of equipment or car or whatever, oil drilling site, whatever. Hands are dirty and they're doing. That's the edge. Well, the edge can be... As an architect or a systems engineer, the edge can be all the way up to the connectivity solution that provides the connectivity map at that edge. So let's think about an edge solution out there.
Andy Lowery (22:04):
It could have a little bit of AI, but probably not the hardcore AI that the big servers back at the plant or whatever would be running, but a little bit of AI, certainly a tether back to file systems, workflows, SAPs. Can have equipped connected workers out there in the field with one of many connectivity solutions, hopefully with somewhere along the line, a Wi-Fi switch. Harris has got radios that have HF frequency radios with Wi-Fi switches. Inmarsat has Satcom out at sea [inaudible 00:22:38] with Wi-Fi switch. Most people are beginning to gravitate towards that standard to have that last 12 inches, 4 feet, whatever it is, to the connectivity platform and then it may convert and turn into another connectivity situation.
Andy Lowery (22:54):
5G, of course. 5G out the window. 5G everywhere. 5G I think will be very regionalized. I think it won't be ubiquitous. You won't see cell towers globally going up to distribute 5G. I think the first wins at 5G will be a Shell plant in Nigeria that decides to canvas that particular plant with 5G. Those will be the type of wins that 5G says. And I love 5G. It's strong signals. It doesn't have all the Wi-Fi attenuation that the Wi-Fi will have. And it can provide, though, a local and secure network at the edge.
Andy Lowery (23:31):
So I'm talking about a lot of pieces, but this is the symphony of pieces that need to come together for even one solution of the overall big piece of pie that we want. Oh, we want to have this and we want AI and we want our financials in ordering and all of that. There's just so much to reconfigure and redo that if you try to take it on as a one-time, full-up project and not piece it together more in chunks, you're going to have a hard time with it. You might win. I hope you do win, but a lot of people have not won under that approach. So my approach to the connected worker is to regionalize them into where are they at in the whole network, define an interface, where we want that interface to be up to, equip the person and think about these six things. Think about the hardware that you need to implement this digital information and then the digital of that. Think about the software. Think about the system integration. Think about the training. Think about the support. And think about how you're going to finance it. Get those six things well covered at a high level and you're going to be successful.
Andy Lowery (24:36):
In the future, I think as we now develop out these edge systems in these edge folks, what you're going to see is a begun to become a reliance on your workforce as being sensors. So now we don't only have a person out there getting information, he's sending or she's sending information. She's a walking sensor. I have a system, a computer, that's on a hard helmet, on a baseball cap or whatnot, persistently, every single time they're out there, facing the same direction, in the same location, that can pick up data, sound data, visual data, thermal data, and persistently compare that to what it was yesterday.
Andy Lowery (25:18):
So if I have a lidar map of my facility, I hear something to the side, tomorrow, 330 dB higher. This frequency, maybe a bearing's going bad. Today I've got a heat of 60 degrees Celsius. Tomorrow, it's 90 degree Celsius. What's going on with that pipe.
Andy Lowery (25:34):
That persistent monitoring we don't do today. We don't do that today. But by bringing that stuff. And that's one example of how a human or our frontline workers can also become a sensor to the various data and the information around them. But that's what I believe will be the evolution. And then, more and more automation. And then, how do you deal with the automation? How do you plug yourself into the matrix? Well, the RealWear HMT-1, it's not nearly as painful looking. You don't have to jam it into your head. You just put it on your hat and where it up here as a front-end display. But that's your plug into the matrix, so to be speak. Plug into this internet industrial Ford auto and all the rest.
Joe Toste (26:14):
Oh, I love it. And just the symphony, that's such a great word just to encompass everything you just said. When you meet with clients and they talk about their problems, what are you hearing on the ground in the industrial enterprise market?
Andy Lowery (26:27):
Yeah. I hear a lot. I hear a lot of stuff we just talked about. What about this? What about this? It's interesting. The number one thing that, I guess... There's a couple ways I can answer that. I can answer, okay, here's what we're facing. Here's the challenge we're facing. And then, there's another way I can answer that. Here's the challenges we are facing, RealWear is facing. Because, in some sense, our industrial clients, our customers, are coming back to us saying all the things that... I'm going to sound repetitious to things that your audience had probably heard before, but there's an aging workforce. I don't know if folks know this, but they can look it up online. Between the period of 1946 and 1963, I think it was, the average birth rate in the United States of America was 25 births per thousand people per year. Since then, it's been less than 15. Now, today, it's dropped all the way to 12, 11, 10. In places like Japan, it's down below 7.
Andy Lowery (27:34):
How are we going to replace the jobs that are leaving when we're only having births at half the rate we were having between the whole industrial expansion in the '40s, '50s and '60s? What are we going to do? Where are we going to find that workforce? Well, we're going to have to train faster. We're going to have to leverage the retiring-aged folks that could maybe leverage jobs and work from the comfort of their homes as they're in retirement. We're going to have to automate things. We're going to have to improve efficiency. So yesterday it took ten people to do the job. Today it takes five.
Andy Lowery (28:11):
And not out of like, "Oh, everybody's afraid. Andy wants to eliminate jobs." There won't be the people to fill those jobs. There won't be. We are less than 3% or whatnot, in last check I did, of unemployment. That will continue. We won't have enough bodies to fill good, high-paying jobs that work with their hands, unless we figure a way to recruit, train and actually inspire this younger generation to get into the trades and do so in a digital way, like a super maker, like they're a maker of the 21st century. Work with my hands, but I'm digitally enabled. Those are the types of initiatives that I think will, in a certain sense, continue progress, continuing generational progress to continue the expansion of information technology and industrial technologies to a more and more advanced level.
Joe Toste (29:06):
Oh, it's great. No, I really like that. What makes the HMT-1 ruggedized head-mount so fascinating to you versus some of the other mobile and reality technologies out there today?
Andy Lowery (29:16):
Yeah, I think the thing that I'm proudest when it comes to HMT-1 and, in general, RealWear and all the products that you'll see coming from RealWear and how we approach the market, is a core belief around the customer and solving the customers' problems. And I know it can sound a little pandering to say that almost. "Oh, I'm concerned with the customer." Of course every person selling to a customer is concerned with the customer, but I don't see it. Remember, DAQRI's theme or philosophy, whatever you call it, mission, AR everywhere. Augmented reality everywhere. I see it. I'm not going to mention any names. DAQRI's retired now. It's off the market. But other companies are out there pushing a technology for the sake of technology. Doesn't matter it's a round hole and... It doesn't matter that a round peg, and it doesn't matter it's a square hole. Where can I put my technology in such and such and such and such?
Andy Lowery (30:18):
The orientation towards trying to push a technology, or the orientation on trying at all costs to get revenue in the door, is the wrong way to lead the initiatives around product development and also selling that product into customer. The right way to lead those initiatives is to understand what the... Pareto out what their problems are. Take trips and visits with the specific workers that are in the field, that are doing the work. And then build products and accessories and solutions and software and partnerships that help those people out. They'll tell you what they need. You don't need a show up with what they need. They will tell you what they need if you listen.
Andy Lowery (31:00):
And so what I'm most proud of at RealWear is we listen and we adapt and we build and we continually iterate to ensure that those folks out on the frontline are being taken care of, both on a safety perspective and a productivity perspective. And I'd say that's what I'm the most proud of at RealWear.
Joe Toste (31:17):
Oh, I love it. So RealWear just closed, pretty recent, its Series B round at 81 million, for a total funding of a hundred million to date. As far as scaling your engineering and manufacturing teams, what's been the biggest challenge so far?
Andy Lowery (31:34):
Again, I'd say the biggest challenges is when we put together the team, we leveraged some of the relationships in the early days that people brought in from other job experiences, so contract manufacturer in Shanghai, and ODM, a design team, in Beijing, a test and acceptance team in Bangalore. And then on top of that, the symphony, that you love the word of, is no easy thing to conduct in a lot of situations, especially when you're a small start-up company like us.
Andy Lowery (32:06):
So what's been difficult for me is this evolution of how much work or how much participation RealWear has to do in order to win at the end of the day and provide those solutions to the customers that need it. And so, what we've done over the course of last year, year and a half, and as we built, because of the raise has been a big win for us to be able to expand upon this, is we've begun to take more of a frontline role in direct touch of our customers, making sure that we're helping on the services dimension, on the software support dimension and on all these things. And you've seen some recent announcements. We're talking bundling. We're talking accessory bundles. We're talking software bundles. That's us trying to take more of a prime role or an integration role in order to provide those solutions. But with that being the thing that's sounding super good, it's also been the biggest challenge from an engineering point of view, considering the size of the team that I'm working with, which is a little over a hundred or so folks over the course of the last few years.
Andy Lowery (33:12):
So with that size of a team and the global nature of it and the global nature of our customers and the global nature of the whole space, it's been a really, really big challenge for us to understand where we should stop and start, where we should invest more money to assist people with, where we should just allow a partner to go off and do that. That's been the hardest thing for me to get right when it comes to integrating the products altogether.
Andy Lowery (33:38):
The engineering, the hardware and the software and stuff, it's pretty straightforward with what we do. And we've got one of the best engineering teams that I've ever had the pleasure to lead before in my life. So between the great team that I have and everything else, the bread-and-butter stuff comes, for us anyways, fairly easy. It's the complexity of that symphony we keep talking about that's been the biggest challenge.
Joe Toste (34:02):
Oh, that's great. How does being outside of Silicon Valley affect your ability to hire top talent as a CEO?
Andy Lowery (34:09):
Yeah, we started in Silicon Valley, and my first office was in Milpitas, right near Cisco. And we moved then to San Jose. We had a big office in San Jose for awhile. And just recently, back in September, I decided to keep a couple folks there. Sanjay, a president, still works there. One of our solutions engineers works there. But I decided that office presence wasn't necessary. I have a good inroad to Silicon Valley. I know a lot of folks there. But what I found was the reason why I wanted to be in Silicon Valley was proximity to customers and proximity to investors. Well, for whatever reason, the investors can tell me if they're listening to my podcast, I didn't get any Silicon Valley investors. They're all in Boston for some reason. So I didn't need to be there for my investors.
Andy Lowery (35:01):
And then I wasn't needing to be there for the customers, because the customers start in Silicon Valley. A lot of these customers have innovation groups and stuff there. But then as soon as they get into the real business, they're in Houston. They're in Damas, Saudi Arabia. They're all over the place, in Georgia, everywhere. They're not in Silicon Valley. So my industrial customers don't exist there. It's not really, I'm not a consumer company and so I decided to move us to a lower cost. Somewhere that regionally is still between Seattle and San Francisco on the West Coast, but a very, very wonderful place called Portland, Oregon. And we're in Vancouver, Washington, just across the river. But it's a wonderful place to work, live, everything.
Andy Lowery (35:45):
However, the question about talent comes up again and again. But I ask everyone that ask me about talent this" What kind of talent? Do you want me to find an inventor of the greatest computer vision algorithm in Portland? Probably not. Maybe that person's in Silicon Valley. Valley. Maybe somewhere else. I don't know. Do you want me to find all the geniuses that do all this? Okay. If I needed that, I would say, "Yes." But I have my geniuses. I have my Stephen Pombo's, Boba Fett creators. I have all of those folks. Those aren't the folks I need. What I'm looking for are junior engineers, a couple years out of college, maybe five years out of college. I'm looking for purchasing people, logistics people, salespeople. All of that talent exists in droves almost anywhere in the country.
Andy Lowery (36:31):
And so I think sometimes Silicon Valley can get over itself a little bit that there aren't any talented people in the Midwest. I come from the Midwest and guess what? Silicon Valley came from the Midwest. Where do you think Shockley got all the guys back in the day. It was University of Illinois, blah, blah, blah. That's who moved out and settled that place. So it is a great renaissance and epicenter of talent and tech and all of that, but it's not necessary in this day and age, I think, to be rooted in a location like that, that's so expensive and hard to live in.
Joe Toste (37:04):
Yeah. No, that's so great. I love Portland, Oregon, too. I've got a number of buddies up there, and it's really fun. And even for the Midwest, I used to live in Chicago myself in Lincoln Park.
Andy Lowery (37:15):
Joe Toste (37:15):
Andy Lowery (37:16):
Joe Toste (37:16):
Yeah, yeah. I had a lot of fun going to Cubs' games.
Andy Lowery (37:19):
Yeah, it's brilliant. Chicago's a wonderful city.
Joe Toste (37:23):
Lastly, before we hit the 60-second seeking breakthrough segment, what's the number one problem you're seeking to solve on the engineering side right now?
Andy Lowery (37:30):
Right now, we're building a secure, scalable, extremely compelling series of Cloud offerings. And that has been a struggle, and I'll tell you why. I, at my nature and my core, I'm a hard work guy. I pretty much grew up in hard work. Now at Raytheon, I had software. I had hardware. I had everything. I had everything. So it's not foreign to me, software.
Andy Lowery (37:59):
But what I'm struggling with currently is how do you take a startup of 100 and 125 people and create a software-oriented company times a hardware-orientated company, because they're very different cultures. I saw it even at Raytheon. Very different types of people. Very different sorts of ideas. I would say it isn't really an engineering issue that I'm trying to solve for. It's really an organizational issue that I've got a Cloud offering and some sort of software that we're starting to introduce to folks, and, of course, our core Wear-HF software, which is our voice layer and those sort of things. That's a software company. And then, the HMT-1, future HMT-2. Last June when we did our close, we bought technologies called Golden-i Infinity. Those are all hardware products, and they need waterfall systems and stage gates and stuff in order to go make. Two different worlds.
Andy Lowery (38:55):
And in order to house those two different worlds under one leader, one company, especially at the size that our company is, I need really, really, really excellent deputies. I need excellent, excellent deputies. And with Dr. Patrick Neise, who I hired about eight months ago now, who's taken over the Cloud development, I couldn't have found anyone on the planet Earth, I think, better and more well suited to take that software aspect to the next level.
Andy Lowery (39:20):
So the challenge we're in the middle now is software, but not client-side software on our system, more of the Cloud space, the APIs, getting integrated and networked with all the Cloud-based software on the customer side as well.
Joe Toste (39:35):
That's great. Okay. 60 seconds. We're seeking breakthroughs. What do you know now that you wish you had known at the beginning?
Andy Lowery (39:44):
I wish I knew the difference at the beginning between device owner and device admin.
Joe Toste (39:49):
Andy Lowery (39:51):
Not even 60 seconds.
Joe Toste (39:53):
Well, I got two more. I got two more.
Andy Lowery (39:55):
Okay. All right. Go ahead. Keep going.
Joe Toste (39:56):
What are your three most important roles as the CEO.
Andy Lowery (40:02):
The three most important roles are hire the right people, is to continue to evangelize and support a great culture and the third is to establish and ensure the right processes are being put into place as we scale. Those would be my three priorities.
Joe Toste (40:19):
I love it. Okay. Last one, what keeps Andy up at night?
Andy Lowery (40:26):
I guess it's just what has kept me up and I guess even now still keeps me up is the quest to get the cash flow positivity and not be burning someone else's money. And so, at this particular stage, 2020's a year, we will break through to cash flow positivity. So I will be obsessed with scaling us at the right speed and feeding the operational machine at the right level in order to strike that correct balance. I think that's the biggest challenge now where we're at on the mountain. That's our next big challenge or our next big leap.
Joe Toste (40:55):
Awesome. Love it. Thanks, Andy. I really appreciate you coming on.
Andy Lowery (40:58):
Yeah, you're welcome.
Speaker 1 (41:00):
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Speaker 1 (41:24):
You've been listening to the TechTables podcast. To make sure you never miss an episode, subscribe to the show in your favorite podcast player. If you have an iPhone, we'd love for you to open the Apple podcast app and leave a review. Thank you so much for listening. To catch more TechTables episodes, you can go to techtablespodcast.com. And to learn more about our sponsor, please visit nagarro.com. That's N-A-G-A-R-R-O.com. And, of course, you can Joe Toste, your podcast host, on LinkedIn, Twitter and Instagram. That's Joe Toste. T-O-S-T-E. Thanks for listening.