In this episode, we sit down with Bruce Welty, Founder and CEO of Quiet 3PF to talk about autonomous robots, warehouse logistics, and the future of e-commerce and omni-channel fulfillment.
Below is a transcript of the interview: Santosh Sankar 0:40 Hey ladies and gents, Welcome Back to the Future supply chain podcast. I'm your host Santosh Sankar. And joining me today is Bruce Welty, founder and vice chairman of Quiet 3PF, Welcome Bruce. Bruce Welty 0:52 Nice to be here. Santosh Sankar 0:53 Yeah, kicking it off here. I think a lot of our listeners have an understanding of what Quiet is what Quiet does but for those that, perhaps don't would you be able to give us that quick two minute overview? Bruce Welty 1:09 Yeah, sure, Quiet is a third party fulfillment. But obviously with a 3PF comes from what we do is pick pack and ship orders on behalf of our customers. So our customers would be, you know, brands that sell on the web. And mostly it's clothing and high end apparel stuff like that... accessories. And what they do is sell stuff on the web, and then we have it in our warehouses and so the order that they get from their customer, that's what happens when you and the consumer sort of presses presses a click, you know, decides to buy something and puts it in a basket that generates an electronic order to extend. We receive and then we put in a big queue, and then we optimize that queue. So we can be as efficient as possible. And then we'll ship the orders out. Generally speaking, is takes about an hour and a half, two hours to get the item in the box and get the box on the truck. It's all built around this whole concept of, you know, the new economy, buy stuff, get it quick. So we have probably, altogether about 2 million square feet of space across five buildings now and we're going to have seven buildings at the end of this year and probably nine buildings at the end of next year. So they're built the buildings are in strategic location, usually near city or cities where the people are, and we tend to shift to a higher end demographic so we're not trying to blanket the whole country and just the zip codes of our customers. Yep. tend to be...you, know I'd say upper middle class, demographic. So, that's pretty much what we do we use, we tend to use as much technology as we can, because the high tech world and you know, if use technology, right it can be very beneficial. In our case, it gives us a lot of information. It's extremely accurate, that we can run all sorts of optimization algorithms and know that we're operating with a good data set. So that's pretty much what we do. We've been around since 2009. shipped our first order in April of 2009. And we should probably 20,000 orders a day while I'm at work. Santosh Sankar 3:46 Yeah. So it sounds like a lot of your operations are concentrated around like Boston, New York, Chicago. A lot of the large tier one cities is that a fair way to think about it. Bruce Welty 4:01 Exactly. Yeah. Yeah. In Chicago, Boston, New York, Dallas, LA, San Francisco, Atlanta. Those areas, they're sort of where you think, yep. where we've been. Santosh Sankar 4:21 So how did you get into you know, industrial automation using that to build a three PL you and founded a robotics business in and of itself. And Locus, what's what's the Bruce Welty story? Bruce Welty 4:36 Well, I, you know, like every career is kind of circuitous. I ended up first as a software guy right out of college. I graduated in 79. So that gives you an idea how long I've been doing this. I was a programmer. And back in those days, it was all built around mainframe computers. So think about a $10 million machine that you needed to buy $10 million worth of programmers need to hire just to do sort of simplest things. And at that time, you know, the biggest companies in the world were automating warehouses. And it was always a big money game because you know, a big company game because you needed so much money just to be able to think about solving the problem. So we worked in big, big warehouses we did some work for big retailers, did some work for the US. General Services Administration, did some work for, you know, big chip companies. I mean, I sometimes laugh, but almost every big company I can think of I've had some interaction with at some point in my career. Then that resolved down over time to many computer networks. And about that time, we started our own software company. And we sold a product called a warehouse management system, which is based on the years of you know, automating these big facilities. So, you know, they really do three main things they do in inbound, inventory control and outbound. And they seem, it all seems very easy to stick out, right? You have to bring the goods in your house, you have to store them and track them and then ship them. But it's really quite a complicated business. And it's Oh, it's gotten more and more complicated. Sure, over the years, and then after that, we moved into networks of computers. And in the late 90s, the internet came along. So we started our warehouse system in 87, and then sold that in 19, and 2000. And I sort of at that point, got into investing as a joined a private equity firm and trying to figure out where the industry was going and, you know, it was a big crash in 2001 and 2002, when a lot of the businesses that were very exciting at the time, you know, you've heard the stories about the toys and so on. A lot of those early companies failed. And so the one that did survive was Amazon, but we were sort of looking at that and trying to figure out what that really means to the industry, because we all thought it was going to be the next big thing. And then there was a big crash. So I spent that period 2000 to 2003, trying to find businesses to acquire and see if we could, you know, build a new enterprise for the new economy. And it was a time of great uncertainty. So ultimately, we ended up sort of buying a company that looked a lot like the company we've sold, and that company has gone bankrupt in 2003. So we were trying to put put it back together. We interviewed the customers, we signed contracts with them. And that business got running. And I rent we ran that for about four years. And then around 2008 we saw this robot from a company called Kiva systems, which, now being always looking for the next big thing or thinking to ourselves, Hmm, this is really interesting. I had been told about it in 2002 or 2003 when they were looking for early investors and I just poo-poo the idea that well, you will never be able to use robots in warehouses. And I just kept hearing about it. It was based in Boston, I had a lot of friends that knew me and knew them and they kept dropping hints that I should go check that out. And I kept thinking, you know, someday I'll check it out. So I finally did, and it just knocked me over. I thought, wow, this guy's really figured out something cool here. And they turned the whole warehouse into the into, effectively a vending machine where you could push a button and you'd get any product you want. They're just starting to fall out the bottom. So we thought, Hmm, this could change everything. So that's when we decided to start Quiet. So we took our business which was automating other people's warehouses. And so let's just see, we can build our own and optimize it around this robot. So that's kind of how I got to the starting line here. Santosh Sankar 9:32 So you know, out of curiosity, when when you were making the decision to go build quiet and turn it into a full stack, third party fulfillment business, what led you to do that because the the benefit I see is that you had a blank slate, whereas you have legacy incumbent, 3PL's that, you know, can't just do away with that organizational debt. They currently have the, the the burden of legacy decisions they've made. Bruce Welty 10:05 Yeah, well, that was something that we saw as an opportunity because you're right, that people that have these big warehouses are accustomed to shuffling around large pallets full of cases. And then the other reason is pretty much optimizing that optimizing the process and limiting the cost of getting the item onto the shelf. And then the consumer comes on the pick pack and ship. And they do that for free so that they're really good at getting item by item onto a shelf. at the lowest possible unit cost, you can say because Walmart, which you know, they were so good at it, but that really became the business. The industry really resolved around the big guys who could get lots and lots of product in bulk to to store shelves in big stores. And that was sort of the state of the art at the time. And how do you take a warehouse and a supply chain that's geared toward that? And actually then do a break a box open and pull out a single unit and build an individual customer order. And so that was and to some extent, it's still that way. I mean, even though e commerce is a fast growing business, here it is 2020. And the industry is still facing this challenge of how do you efficiently at a low unit cost deliver an item, somebody doorstop stuff when most of the warehouses are still operated by people with pallets and moving around? big quantity at a time. So it's not as funny. I mean, a lot of people don't really think about it like I do. But at the detailed level, it's not like it's twice as expensive to move around a single unit. It's small, like it's 10 times as expensive to move around a single unit. So how do you add that cost to your supply chain and still have a business. And that was really the challenge that was facing us at the time. And we realized if we really addressed that cost issue at a fundamental level and created a whole new way to think about it, we might be able to drive that cost down quite a bit. And make the whole business efficient at the level of e commerce as opposed to, you know, trying to watch something that's geared towards store level replenishment or store level distribution. Santosh Sankar 12:32 Sure. I want to come back to some of the points you made right there. But many know that last year Related and Greenfield bought Quiet because of your leadership in automated, third party fulfillment. And I'd be curious like is this this is a recurring theme we're going to see where brick and mortar expose real estate investors start taking on eecom 3PL as a hedge? It feels like it makes a lot of sense. As e commerce accelerates, you just mentioned, you actually have to rethink, re-architect the fulfillment logistics behind it because it's not similar to just distributing to a single static brick and mortar endpoint. There's a lot of dynamism in serving ecommerce customers as a 3PL. Bruce Welty 13:27 Oh, yeah, for sure. I mean, related and Greenfield came into it with the attitude. And, you know, I obviously agree wholeheartedly with that. So we can optimize at the at the warehouse level. And I think we've done a pretty good job of that. Amazon, you know, this, Amazon bought Kiva and then rolled it out across its network and they have 200,000 robots doing this now. So obviously, that's now a well trodden path. And Locus, which is a robot company that we created, has grown quite rapidly, too. And that's sort of the phase two part of the story, which we'll get into. So clearly everybody in the industry is is seeing that we can optimize inside the four walls. But I think what related and Greenfield thought about was, you know, they have all this real estate, they have this real estate expertise, they understand demographics. And I've seen, you know, working with them, I've seen how sophisticated they are and understanding where the consumers are. And they've added a whole level of optimization to our business around how to think about where to put the facilities. And now we also have the dynamic of creating facilities that are purpose built to optimize around robots. And we did that originally with Kiva. So we can do that again with Locus. But we can actually do it at the building level, we were not just taking a big box, you know that someone else built or a warehouse or distribution center with high ceilings and middle of nowhere. We're taking the approach sort of a holistic approach of not only where should we put the facility so that we can get really good traffic patterns and really good density in our delivery routing. But how can we actually optimize the building itself, so that we use that square foot of dirt to its highest level, and they're doing things that you know, we as a fulfillment company would never be able to do. So it's really interesting to think about it in a holistic way, and optimized at every level. And then also gives us the opportunity down the road to optimize the delivery level, which you know, Amazon has recently, as you've all seen with their blue trucks, they've gotten into the delivery business. Meaning that once you've created your own land, so to speak, you've created all these orders every day that need to be fulfilled. Then you can start thinking about the last mile piece of it, which is also a huge optimization, opportunity, but you kind of have to own to be able to optimize within the whole stack. Santosh Sankar 16:23 And you you just mentioned Locus, and from my understanding you basically incubated it as you're simultaneously building Quiet. What's, the story there? Bruce Welty 16:39 You know, back to the, you know, starting of Quiet, we began Quiet in 2009. We shipped our first order in April of that year. And we use Kiva until about 2013. Sometime in 2012, we got we got the word that Kiva had been acquired by Amazon. We were trying to figure out what to do. So there was a 13 month period, actually 16 month period between the time that Amazon acquired Kiva and the time that we were told that we couldn't use Amazon, we couldn't use Kiva robots anymore. So that 16 month period was, for us one of those, you know, periods of turmoil and decision making. And it was very hard for us to know what to do because Amazon's not sharing its plans with us. Kiva was quite forthright, but the new owner, their parents was not so we didn't really know what we were going to be able to do. We had experimented with, you know, building a new robot, we had talked to other people that were robot builders and said, Hey, you know, imagine we had an alternative supplier to Kiva because Amazon owns them and we don't know what Amazon's gonna do. So we started exploring building our own. We got really smart about how robots work in that timeframe, not just the operation of them, but actually what's inside them, and how they how they work, we built a small kit robot and one of our engineers put it together. And we, we then kept enhancing it and we kept putting more capability into it. And then we bought another another kit robot and we started experimenting with that, but Wi Fi on it, and then we made it so that we could actually you know, manipulated like from a computer as opposed to a joystick. So we could say, you know, on a computer go forward by feeding time, right and, and all that stuff, and then send the signals electronically to the computer on the robot. And then we decided, after touring around, talking to a lot of our company, But they knew how to do, we could figure out. But we knew how to do they would never be able to figure out the only way they could do it is if we taught them. And then we thought, Well, how stupid would that be? If we told them how to build a robot, and then they ended up maybe selling their company to Amazon. We just couldn't take that risk again. So we decided we wanted to build our own robot. So we hired a bunch of engineers, we started working with a local college that had an engineering program, we sponsored a class project, we worked with some of the big schools around Boston. Met with the engineering department at Harvard and MIT. We hired a group of seriously talented PhD level engineers. And we hired an engineering company out of California that had some of the In other cool products for Apple and hp. So we put together this group, and we said, which I think was, in retrospect, the genius of local. We said to them, Look, this is how we want the system to work. Exactly, no more, no less. We don't want it to do anything other than that. We wanted it to solve a very specific problem for us. And we realized that that was a huge advantage in the world of robotics, because a lot of times, people that specify robots won't have enough specificity. They don't know, the end use to the level we did when we started. So they'll create these generic platforms and they'll sort of take a guess at what the thing should look like and how fast it should move and you know, they'll be they'll be trading something that doesn't solve a specific problem that we're creating something that might be able to solve lots of problems. And I think if you do that with engineering something as complicated as a robot, you'll get yourself into trouble. Because at the end of the day, it just doesn't really do anything. And there's lots and lots of robot companies like that out there. So we did that internally. And we installed it in one of our warehouses. And actually, it's funny. We actually built it in the warehouse. I mean, we took a corner of the warehouse and we put up a racking system and then covered the racks curtains so that people couldn't fit inside. And we brought our engineers in there. They weren't too happy, because it was cold and it was cold in the winter, and hot in the summer. There wasn't a very conducive environment, but they really kind of got the problem because if they really needed to understand how the system should work, all they had was walk outside and watch one of the workers doing the job and then they could go back and say, "Okay, this is how it's supposed to do that." And so that was really the, the, I think the smartest thing we did was just make this very specific problem. And we asked the guys to go solve it. So it finally worked. And it took us probably two years to make our first pick. It actually worked. It actually worked quite well, it was really easy for the worker. And it was kind of funny to watch everybody get used to the idea. The first few robots you know, they weren't that they weren't that good. They crash into each other and then crash into people. So one of the things he said was, let's make sure that it doesn't crash into somebody or something doesn't hurt them, and to let's make sure that it's easy to restart. So it's easy to kind of, yeah, I would say compared to the Control Alt Delete on a computer. The second, the first IBM compatible PCs came out, Microsoft, you know, the operating system and it would just crash all day long. Everybody was comfortable with the idea that all you have to do if it crashes is restart. So, simple, simple exercise. So we did that too. So no matter what, even even at their earliest stage when they were sort of the toddler type of robot, they still work. I mean, people could still do the picking project project, even if they did in some way, failed, so we built a really fault tolerant system. And then over time, we've removed those faults. We continue to remove them, they're still, you know, issues, they're getting more and more minor but even today, after we've done 100 and I mean up to 110 million picks across 50 customers, you know that the system is still not working perfect. And you know, I extrapolate this all into the world of say autonomous cars. It can be very difficult for us to get autonomous cars to work not because you know, we can't make autonomous cars, we can do that, but what we can't do very well is make a car that's at fault tolerate, because we can't make some autonomy that's going on 70 miles an hour and weighs 4000 pounds. So that process of making something work perfectly is a very long process in this world. Santosh Sankar 24:34 On the theme of industrial automation, I had a few folks asked him Hey, you know, what would you be curious for me to ask Bruce about and the one question that actually popped up was, if you have the motif in warehouse automation, between movement and manipulation, what are his opinions and thoughts? You know, I'm looping that back into an earlier comment you made where, you know, you have to open a box, break it down, reconstitute a customer shipment. And it's really, you know, a lot of that manipulation required still is done by humans. So, kind of where do you see it today? Where do you think it needs to go? How did these two concepts work together? Bruce Welty 25:24 I think everybody looks forward to the day when we don't have any humans involved. I don't think that's very close. I think humans are very, very good at certain things. There's a great paradox that drives my thinking on this. It's called moral paradox. And it's one of those things that's just so basically simple, and, and so important to everything every decision we make. And the paradox goes like this: robots and computers are good at things humans are bad at and vice versa. So, in our world, you know, we know what humans are good at, which is they are very, very good at picking up things and setting them down. They're very good at discerning differences between things. And stuff that a toddler can do or a two year old can do, can be very hard for a computer. And so we look at that and try to make that judgment up front. I think that we're up. We're seeing great strides in the manipulation of those hands and arms. I think that, you know, some of the approaches are really quite intelligent and over there, there's still a lot of sensors required, and a lot of compute power. And they're still pretty expensive. They're good if you can bring the product to the manipulator. manipulator can then look down from above and pick an item out of a bin and then put it in another bin. Unfortunately, in the warehouse to add that many of those kinds of circumstances. And, you know, most of our stars is not, we don't put something into a bed and then pick out of it, then we actually store it in a rack. And it comes in from the side, not the top. So it becomes more difficult to try to figure out how you might use these sensors. And then again, in addition, although I do see some cool new technologies that are coming out, where they are stored in these bins that are stacked up called autostore, that solution where they stack the pins and then you put the robots on the top and they pull them out. And then they dropped us down and somebody picks out at the top of the bin. And that stuff is is I think interesting and, you know we're watching that closely. But again, When you really do the math on it, and you really get into the question of how reliable it is, and you completely eliminate human, and does it work economically, those are still questions that have to be answered. Over time, I suspect we will get on top of that, I just don't know how long it's going to take because of the complexity of the problem. You know, so, and also those systems are very, very expensive, you know, $30 million, rather, versus ours, which requires really no capital at all. You're just like you're paying the robot instead of the issue you're paying a robot is salary, and we enhance their employees. And that actually brings us close to the topic of robots replacing humans. And I think that in our worldview, it is more: We can't find enough people to do this work. It's very challenging work and not particularly fun jobs. So what we're able to do is enhance the worker and make them more productive. So we get more work out of the same labor pool. So, you know, that's going to be a question that will be resolved over time. As to, you know, where robots and humans work with each other. And, and I suspect over time will have more and more robots, and fewer and fewer humans. But I just don't know when the lines are going to cross. I just know that right now, that Locus does a very good job of enhancing humans working together with humans, which is how we designed it. And it's a solution that works perfectly every day today. So that's sort of the state of the art now. Santosh Sankar 29:41 Yeah, you know that, that that totally makes sense and kind of to summarize it for our listeners. It's really where you need contacts dicksterity dynamic movement, people still reign there. There are other more repetitive, static or more static functions. That's where it sounds like robots do really well. Right? shuttling freight around the dirty doll dangerous as they put it. Bruce Welty 30:17 I think that's a fair statement. Santosh Sankar 30:18 What do you think about as being the biggest barriers to road robot adoption in warehouses? We talked about kind of the the capex requirement of ASR system there. There's all obviously labor concerns. There's like a broader socio economic discussion there. But is there anything else or anything practical you've seen over the years that, you know, we need to be mindful of as we try to further automate our warehouse environments? Bruce Welty 30:49 Well, I think one thing I've learned about this industry over the time, I've been in it 35 years now, is that it's really slow moving. And if you think about the typical life of a of a warehouse, manager or distribution executive, their primary goal in life is to just not make a mistake, just sort of get the job done. Nobody says to them, nobody calls him and says, Hey, you did a really great job. The only time you ever hear from anybody is when they made them, you know, made a mistake or something's gone wrong. So they're they're very risk averse crowd. And they tend not to do things they tend not to be interested in taking risks. Especially if at the end of that, if it doesn't work out and makes things worse, then they have to clean up whatever, whatever mess they made. So I think a very risk averse, very reluctant to take chances around new tech. Plus, it's an industry that has been for whatever reason, I think, because it's such a big opportunity, such a big industry. There's been a lot of people that have come into it and said I've got the greatest thing since toaster and they bring it in and it doesn't quite work. And so that people are a little burned about that once burned twice shy. So we find that you really have to make it very easy for these customers to buy this very risk, low risk and they want to do a proof of concept. I think locus is finally we spend locus out of quiet in 2013. So now it's its own separate company. And you know, it has its own customers. Some 3PLs some, some companies that look like Quiet customers. A lot of them are very well known brands. And when we first started as an independent company, and Locus didn't really have a track record beyond being able to say, Hey, come on into the quiet warehouse and check it out. It was very hard to get people to to buy them so what we did was we almost gave them robots. We almost said, look, you know, we'll cover all the upfront costs, we'll get it up and running. And if you like it, then you can start paying us. And if you don't like it, we'll take it out. And I think sort of 90% of the companies kept it. And so locus is the company's much beyond that now and doesn't, doesn't have to give stuff away. But it does give you an idea of how difficult it is to get those early adopters and just what it takes to get somebody. And so I think that's one of the big barriers is just convincing people that will go away because for the same reason that these people are risk averse. Once they see something that's productive and reliable and cost effective. Then they jump on the jump on the train quickly and certainly local 16 that now, they just announced 1000 unit order DHL and that's probably the smallest order DHL will ever give them. Right? There's, there's so many big companies that have this pick-pack-ship problem. Now, you know, it's a hundreds of billions of dollars of business every year. And everybody's stymied by the same challenges. How do you efficiently as this final mile cost the pick pack ship? And in how do you add that to your supply chain and still be able to make a profit? Everybody wants it, right? Everybody loves being able to sit home and buy 100% of the things that we need, and then have somebody bring it to the doorstep. So that's not going to go away. But if we don't figure out how to do that in a cost effective way, then it's going to be very challenging for the retailer to stay in business. So I think people are now starting to realize, hey, these things really do work and they're tremendously reliable and helpful and so now, you know Locus doesn't have to give stuff away and people just come in and say look, I'm I'm ready to go and they buy and we install and off they go. Santosh Sankar 35:11 Yeah, yeah we had Jason law actually on the podcast recently and had run into Jason at industry events and you know, to your credit the the whole team's credit it sounds like you've achieved you know pole position there in building you know these two companies I'd be curious as we shift to some business building related questions I had, how did your role as the founder CEO change as you went from you know, what we call seed to scale and now you've even you know, navigated Quiet into an exit how has your day to day your overall duties changed, and how did you in turn kind of develop yourself to accomplish those? Bruce Welty 36:06 When I first started, I was basically just an ambitious young guy who wanted to see if I could create a company. I've never liked working for other people. And it's always then just an ambition of mine to start a company and I was fortunate enough to meet a guy named Mike Johnson, who was in college when I met him. I was in business school at DC and he was a college, undergrad. And he was just a very impressive technology guy. Who was, you know, very modest, but extremely smart. And so he and I sort of linked arms and I didn't really do anything, I would say without his help. So, as CEO, I sometimes get a lot of credit, but he was always right there. And he was the guy Who could actually implement some of the things that I had dreamed up? So I made a pretty good team there. I was generally, we were equal partners that I was generally more equal than he was. The first company I owned the majority of us have minority partner. we exited that business together in one but during that time, we were really just a bunch of software people. We had built a team of really smart software guys who deeply understood warehousing. And we had big ambitions, but that business was just a hard business. It's hard to differentiate yourself. It was a we got paid by the hour. So we were either we had too much to do or too little to do, and it was a hard business. So when we actually did that in 2001. Mike and I might continue to support the customer base, but I went into this private equity business and tried to learn, you know, all the things that were gaps in my education around what makes a good business and how to structure companies and incentive programs and you know how to make a compelling brand and all these things because that's basically what private equity guys do is they look at, you know, what makes a good business. And that's how they make judgments about where to invest. So that rounded out a lot of my... I had attended Business School in the early 80s. But really, at the end of the day, I just learned everything, you know, by the school of hard knocks. And then when we started up our next business, we really had a purpose. And it was much more about trying to build a really big business and so we focused on market segments that we thought we're growing and potentially game changing and so I brought the team back together, but we're gonna have our first warehouse management team from our company in the 90s, which is called all point system. We brought those guys with us, we hired them back. And they became sort of the core team for both Quiet and then ultimately Locus. So we've been working together as a group for a long time. And I just really have to acknowledge their role in all this to these are guys that were just extremely talented. And if you do the same thing long enough, pretty soon get good at it. So I was really just the cheerleader and trying to, you know, helping get the business in and set the strategy and raise the capital. And our goal was always to build these super technology-enabled enterprises. When we saw the robots everybody got quite excited about that because it was this great combination of what we knew how to do, which was, you know, run warehouses and also technology Which we always liked, and were good at. And we thought it was disruptive. And so then we decided that it's the big decision at that point was instead of automating other people's warehouses, now we've seen hundreds and hundreds of warehouses, why don't we just create our own and really try to build something different. And that was the big decision around, you know, we have this opportunity, we know how to do it. We're entrepreneurial. That was the big defining moment in that in this endeavor, and then ultimately, that led to so on. As far as me you know, I was always CEO and chairman of these companies, mostly because they were my company's mine and Mike, but I always had that little extra vote, because I'm a bit older than Mike but also, now we just divided up the responsibilities that way. Once we got professional investors involved, and Mike and I cease to have control of the business then everything morphed quite a bit as when we split the two companies apart the board at the time, and had at this point put in quite a lot of capital. And they decided at that point that maybe the right thing to do was bring in a professional CEO. A guy who's who had just been, you know, building brands and going to market with new products. And so they hired a guy to be CEO and I was left with the chairman title and I stayed around, mostly working on Locus, but still helping out quiet I was chairman of both companies but my at that time, Quiet was really quite easy to execute. It was profitable and growing and we had a good management team in place there could operate the business and Locus was still a bit, you know, in diapers, so we had to get that company a little more mature. And so that was when we were doing all these experimental relationships with companies. I think our first real customer was DHL, so and I was working on a lot of a patent portfolio. So I was filing patents, I think we filed 85 patents. And by the time I left, and I was still involved with you know, a lot of the strategy and helping with the board. And then right around 2018, the end of 2018, the board decided to sell Quiet and I had been in contact with this guy from Greenfield partners who he and I had shared the vision about what what Quiet could become with the real estate arm. So put in an offer to buy it and at that point, I left both I left Locus entirely and when back to being CEO of Quiet logistics. And I just finished up a year of doing that the beginning of this year. So I'm actually at this point in the world of semi retirement, I'm still working with Quiet, but I just am a shareholder in Locus. So I think that's the arc of my career. It's been, you know, very entrepreneurial, very much, do whatever you, first of all, do whatever you have to do to stay alive. But second of all, try to, you know, move in a direction that's interesting and in a big market with the potential to do something different, and I think we've got a pretty good run. We'll see what happens with Locus. Santosh Sankar 43:43 So you know, to, to cap it off, you've had the benefit of navigating several economic cycles. We're here staring down at a downtown After what I guess about 12 years now, since the last one, how should robotics startups be thinking about navigating choppy waters equally? their customers, be it the three pls brands? What should they be considering as well? Because, you know, you don't necessarily stop investing in technologies that have these types of long term benefits. But what would what would your advice perspective be? Bruce Welty 44:29 Well, my my advice, I mean, it always it's hard when you're in the thick of these downturns to sort of imagine what the future looks like. And you know, I funny because I started my first company in July of 87.And, in October of 87, we had this huge crash, which is still the largest stock market crash we've ever had. And I do remember going down to the bank and taking out all my money, which is not very much, but it was our business. You know, we had some customer deposits, I took it all out in cash and I put it in a safe in my house. I still think that was kind of silly, but I just felt like well, the last time we had one of these crashes, we went into the depression, cash was king, so and did it. Then we had another crash in 2002. And it was hard to imagine the world ever recovering from that, especially my world, which is ecommerce. We had another crash in 08/09 which is called the Great Recession, somehow that it's, you know, there's nothing that's ever going to be worse. So now we have another one. And so it's it's hard for anybody to imagine what's going to come what's going to come out the other end, but I think that we should have confidence that eventually this will go away. I think that robots are like the world was for computers in 85 when you know, Microsoft was a start up and we just had no sense of you know how big this industry was going to be. People were saying things like, Why? Why do people need computers on their desk? And now everybody carries around, you know, four computers wherever they go. So yeah, I think the robots are really going to be a really big industry. I think we just need to push our way through, keep innovating. My advice to all people who build robotics companies is it seems so simple, but so hard is just focused on a problem where robots are the best solution to solve that problem. Don't assume that that's ever the case when you know, sometimes a machine is better than a robot. Robots are cool, but they're really not that cool if they don't present the highest and best way to solve the problem. And there's gonna be a lot of unhappy people, probably in the near term, trying to figure out how to use robots to do things that humans are really good at. And robots will never be good at. And you just have to be very, very married to that concept. If you do it the right way, you can build a huge business, but the NBL to make that judgment pretty quickly, and focus on you know, the real opportunities, not just Hey, robots are cool, look what they can do. I mean, Boston Dynamics is the perfect example of that, right? Where they continue to try to build great robots and then they try to look to the world and say, What are you going to do with my great robot? And the world just looks at me says, Well, I agree, cool robot but not gonna help me with anything. So you know, thanks for joining us. I'm not gonna buy it. Santosh Sankar 47:54 Yeah, if, if anything, I'm like, keep me in in my house. Afraid of robots...(laughter)... dystopic novel might be what it turns into? Unknown Speaker 48:07 Well, I think maybe they should sell them sell their products to Hollywood because, you know, Hollywood has a use for that. Santosh Sankar 48:15 Yeah. But hey, Bruce with that really enjoyed having you here, sharing the Quiet and Locus story and equally kind of imparting lessons from your personal journey. And with that, appreciate the time, cheers. Bruce Welty 48:33 Yeah, cheers. Thanks. Transcribed by Otter
About The Future of Supply Chain
During each episode of The Future of Supply Chain, we sit down with a different entrepreneur, investor, or industry veteran to discuss their story, views on the industry, and how we can collectively build the future of supply chain together. Listen to more episodes at https://www.dynamo.vc/podcasts.
About Dynamo Ventures
Dynamo Ventures is a pre-seed and seed stage fund that invests in supply chain and mobility startups, worldwide.