America Assembled: Robotics & Trade - #NYTechWeek

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  Ryan Musto (Alumni Ventures):
  Thank you so much for joining us. We are super excited to have you. My name is Ryan Musto, I’m an investor at Alumni Adventures. Thank you. I give it on Welcome to America Assembled. We know you have a lot of options for Tech Week, so we appreciate you making some time for us. Thank you to Lucid. They’ll say a word in a moment, but this beautiful space, give it up for these guys. Gosh, I’m going to keep it super brief because the real stars of the show, it’s the startups, so want to give a bunch of time to them. But a little bit about Alumni Ventures. We’re a seed through series B funds we’re generalists, but we’ve been spending a ton of time in advanced manufacturing and robotics and it’s for a reason that’s probably obvious to all of you because you’re share, there’s a ton of supply chain disruption these days and we are huge believers that American startups are best positioned to act, react, problem solve, and ultimately benefit in a macro condition where there’s a lot of chaos. So we are investing in those startups pretty aggressively and we’ve invited a bunch of them here today to share with some of their thoughts with you all. So going to hand it off to Lucid right now. But thanks again for coming. We really appreciate it.

  Tim (Lucid Motors):
  Everybody. Thanks for coming. My name is Tim. I’m the studio manager here at Lucid Motors and excited to have you all here. How many of you heard of Lucid before? Yeah, a little bit ago. There wouldn’t have been that many hands, surprisingly enough, but we’re starting to make our mark. Little history about us. We were a company known as Tiva founded back in 2007. We created all the battery tech for Formula E racing, not sure if any of you’re familiar with that. And then about 2014, that’s when Lucid was founded with our former CEO Peter Rollinson and they created the name Lucid because they thought Tiva sounded too much like a Greek yogurt. But we are the longest range electric car company on the market. We get up to 500 miles of range on the air sedan and up to 450 miles a range on our brand new SUV, the Lucid Gravity. So this is the latest and greatest of our technology right now and I think it’s going to be a game changer for our company. But I just wanted to welcome you all here and thanks so much.

  Ryan Musto (Alumni Ventures):
  New lab.

  Prad Parthiban (New Lab):
  I didn’t prep for this at all, but so hi guys. I’m Prad New Lab. I’m the head of defense at New Lab, which is a critical infrastructure platform and big fans of alumni. We do everything together and extremity as well. Well, so a new lab is a critical infrastructure platform that’s right now it’s headquartered in a Brooklyn Navy yard, but we have locations in Detroit, in Louisiana, in Riyadh, Saudi, and in Montevideo, Uruguay. And we’re expanding as well. Under growth stage, what we do is kind of three things. We provide critical infrastructure for startups and companies looking to prototype and test designs. So we have prototyping labs all over, machine shops, wood shops, et cetera. That’s cool. And then we also help startups operate testing, so autonomous testing. So we operate drone corridors, private roads for autonomous vehicle testing. We help operate a port in Michigan.

  We work with Justin to do manufacturing in Michigan. So we want to help startups do a full vertical stack from prototyping, design, testing and manufacturing, full scale production all the way through. And so that’s kind of what we focus on. We work heavily with state governments to unlock these infrastructure assets and subsidies and blended capital solutions so that we can make that more available, better, faster, cheaper for startups. My background, I’ve been a founder myself in heart tech, sold a company and worked formerly at Firefly Aerospace and it took us forever to get permitting for testing rocket engines, but we’ve actually tested rocket engines in the Brooklyn Navy yard. And so I think if you’re a heart tech company or startup and looking for place to build, to test, deploy, to manufacture, see new lab as like, Hey, we’re headquartered here, you can do that here, but also access our full global network of assets around the world.

  And our partnership with the state allows the economic development angle for workforce development and that we see startups creating jobs, et cetera, driving that funding. So we’re funded mostly by economic development dollars from the state and locals by federal dollars. We have a lot of dropper contracts. We work with DARPA very closely. And so if you’re a startup looking to build anywhere in anything in hardware, and we now do software, we focus on critical technology. So kind of like everything that’s going to we focused on right now at the moment. And so come find me afterwards. We’re happy to talk and share. Thanks everyone for coming. Thanks for hosting Ryan.

  Sherman Williams (AIN Ventures):
  Hey guys, my name is Sherman Williams. I’m the management partner of AIN Ventures. We are a pre CC stage D technology fund and we specialize in those companies that are dual use. We invest in areas from the space technology, life sciences, artificial intelligence, machine learning, developer tools. We do areas of stick sustainability tech. So it’s really cool to be here at the Lucian facility. We are actually based right here in Meatpacking, so if you ever want to get hot chocolate Cobra, that’s my spot. Chai tea at the Starbucks across the street. We’re got a sweet green over here, et cetera. You’ll see me walking around here a lot talking to founders on my phone, et cetera. I love this neighborhood. I live and work in this neighborhood, so it’s really exciting to be here. Something else about us is we actually have money from the state of New York for our fund.

  So I, we’re very active check writers right now, extremely active. We closed our fund one last year and for the state of New York money, we have to deploy the money back into companies that are based in the state of New York. So if anyone is building, you have friends that are building colleagues, anyone that’s building, please let us know. We come in extremely early, three seed and sea stage. By the way, we also have that deal for the state of Maryland, Virginia. So if you know any folks around there also, please let us know. I’m super excited to have you guys here. What we’re going to do today is we’re going to bring up a founder, maybe more Drew, we have two founders. Okay, I’ll introduce the first one named Drew. You introduce the second then. Alright, so we’re going to bring in some founders that are in and around the robotic space. So first you have Xavier Chi, him and his co-founder, Sebastian. They have a company named Mbodi. It’s a spatial AI company, so it works heavily with robotics. They actually are graduating from Y Combinator next week, demo day, but they’re based here in New York City. So the team will move back here to New York. So I want him to come up and tell us for about two to three minutes about you and then we’ll introduce next time.

  Xavier Chi (Mbodi):
  All right, thanks for the introduction. So you guys love robots? Great, great. Yeah, an interesting fact actually. The world is way less automated than most people saw. We definitely want more robots. However, robots is really, really hard to use. It takes a long time and a very high level of expertise to program. So that’s actually a fundamental problem like preventing mass adoption of robots and what we are doing. Quick introduction about myself. So I’m Xavier. I am co-founder of Mbodi. We start spring last year, a year from now. And before that I worked at Google, actually just two blocks away back there for a little bit over four years. I was the tech lead of the Google Public DNS team where we’re managing the whole world’s international traffic and now we’re working on robotics. And the thing we do is for, we have an AI software, a platform that can be plugged into any robots initially targeting industrial robots.

  So anyone can just simply go to the robot and talk to robot. The teacher run new skills and the robot will run it reliably in production. And one interesting and example use case that we saw for one of our customer, a Fortune 500 manufacturer, is they have to package a new product every day. And it’s just a different combination every time, every day, or even every week. Traditionally, it needs a long time to program these robots and also require a very high level expertise. So with our software, basically anyone in the factory just go to a robot and interact with a robot like a person, and the robot will do it reliably by itself in production. And what we are trying to achieve is to turn these robots more like consumer commodities and massive adoption. So that’s what we’ve been doing and hopefully the industry, we’ll see more and more robots everywhere. Alright, thanks.

  Alex Pfeiffer (Intramotev):
  Thank you. So I’m Alex Pfeiffer with Intramotev I was asked to speak about 30 seconds ago, so apologies for my lack of preparedness here, but we are a startup based out of St. Louis, closed our series A last year and want to thank Alumni Ventures for being a part of that and putting me on the spot here today. So we build battery, electric, autonomous freight rail cars. So we are one of the maybe bigger robotics companies or make bigger robots than most, and we’re really proud to be a part of the American advanced manufacturing scene making something that we have advanced technologies that we’re making, but we also are an enabling technology for additional manufacturing use cases. So we really want to make rail competitive with trucking again and enable quicker transit times, lower transportation costs so that we can make the small American manufacturer more competitive again. So I want to thank alumni and also since New Lab is here, I’ll also give you all a shout out, appreciate them and we will plug the event that they’re doing in Detroit this summer. So I believe our teams are actually on a call right now discussing a full, full-size rail car demo at their facility. So we are going to be demoing one of our autonomous freight rail cars, a very large piece of equipment at their facility in Detroit, and it should be a fun event. So thank you all and thanks again for alumni.

  Ryan Musto (Alumni Ventures):
  So maybe to kick things off here, let’s just go down the line and we’d love to get some intros out of the way, who you are, what you do, et cetera.

  Antony Samuel (Artifact):
  Hey guys, I’m an Anthony co-founder at Artifact with Corbin. He’s back there too. So we’re building software for electrical system designers. So everything from conceptual design, detail design, procurement, vendor management, manufacturing, really going through the whole stack of how do complex electrical systems get designed and made. We’re building the software for that. So prior to this, we come from the aerospace world, so we’re both really hardcore hardware nerds. I was working at a boom supersonic, they recently went supersonic earlier this year and then spent a couple of years at Hermes leading their avionics team and two weeks ago they actually flew two. So it’s been a good quarter. So yeah, we’re super, super stoked to get to chat a little bit about manufacturing and really what this looks like in America.

  Ed Mehr (Machina Labs):
  I’m Ed Mehr, a CEO co-founder of Machina Labs, engineer by background. Been early days of my career in robotics and Atificial intelligence both academically and in the industry. Then went to SpaceX, so I was a control engineer there, worked on different parts of the stack, but that’s where I started focused more on manufacturing side and kind of realized how challenging manufacturing is today. Every time you pretty much have to build a physical product, you have to build a factory for it. Elon famously said, factory is the actual product because the factory is very specifically built for the product you’re trying to build the moment you want to change your design, you want to change your material, you have to change your factory. So since then I’ve been in agile manufacturing, started mocking in 2019. The goal is to build robotic systems that can do different types of manufacturing operations autonomously without a need for new tooling, new hardware, just through change in software. It can go from forming sheet metal to do trimming, to do additive manufacturing so you can truly have a flexible factory that can be programmed to do different types of parts.

  Filip Aronshtein (Dirac):
  Hey guys, Filip Aronshtein, the co-founder and CEO of a company called Dirac. We are based here in New York. We just moved into a cool new office in the Empire State building. What better place to help rebuild the American empire than from its capital building in its capital city. My background’s originally in electrical engineering and robotics. Spent a little bit of time over at Northrop Bremen, got to his experiences, worked on some pretty cool radar stuff over there, did some electrical engineering work, some mechanical engineering work, some technician work. Just got to see how ridiculously archaic all the infrastructure was on the manufacturing side of things of, but to me seemed like a pretty advanced company on the engineering side of things and I wanted to do something about it. I was starting to get the feeling that the west was forgetting how to build great things and I wanted to make sure that didn’t happen.

  So I got my best friend and co-founder, Peter, and we said to go build our company. We have built what we call the first automated work instruction platform. If you’re familiar with work instructions actually, show of hands, has anybody ever heard of work instructions? Very low amount of hand raises, but definitely some. But in fact, pretty much everybody here probably has, if you’ve ever built IKEA furniture, that little paper instruction book that tells you how to build a thing, turns out everything around us was built by someone, a operator or technician in a factory. It turns out they need instructions too. It turns out those instructions look like several hundred page PowerPoints that are compiled over the course of weeks or months. Super manual, super brutal. We built what we call the first work construction platform. So we take a CAD file as an input, figure out the assembly sequence automatically then automatically generate 80 to 90% of your assembly work construction. That lies at the root of what we call unfortunately the tribal knowledge problem, right? There is an enormous amount of context that is being lost not only as folks retire, but as folks don’t actually write things down when they’re doing production planning. So at the root of what we’re driving is what we call context aware production planning. And so that’s what I love to talk about. It’s what I’m doing here.

  Allan Gibson (Formic Technologies):
  Awesome. I’m Allan Gibson at Formic Technologies. I really come to Formic as an end user of robotics. So I let all of Stanley Black and Decker and the Estee Lauder company’s manufacturing equipment operations for a number of years, which essentially gives me the perspective of our customers. So I largely go in to make sure that when we’re deploying systems, that they are reliable systems that the customer is going to be able to use for a long period of time in a reliable way. So that’s really my role now at Formic and excited to see the industry as it continues to evolve and grow and broaden outside of just manufacturing into the rest of the economy.

  Ryan Musto (Alumni Ventures):
  So softball to start us off here. Obviously a ton of noise these days about onshoring. Adoption is quite uneven across different sectors, industries, et cetera. What structural or cultural barriers do you see in reshoring at scale, and how are your individual teams working to overcome some of these discrepancies across different industries?

  Antony Samuel (Artifact):
  Yeah, so in my past life, there’s a lot of how do you actually build avionics? How do you build complex electronics? And a lot of people don’t know that currently, how people procure some of the most expensive, long-lead, high-stakes electronics is actually kind of like a travel agency. You’re calling some guy, they give you this long line card, and you’re really just playing this whole game of like, “All right, well my buddy Steve gave me some ideas on what hardware to buy.” And it really is the travel agency model where, hey, you’re really going off of who and who can sell you on something. You’re wearing your typical engineer button-down veneers. It’s crazy, the whole thing. And really the idea is like, hey, how do you actually make the industry a lot more competitive? How do you find the people building the most compelling hardware out there and then give them the tools they need to make smarter supply chain decisions? You’re kind of making the Google flights of it. So a big thing about how we’re thinking about building Artifact is saying, hey, how do we actually be way more transparent about where your parts are coming from, who’s building them, how fast can they get it to you? What are the capabilities? All these things. And really you start to incentivize things that are like your things. You’re not just doing the whole branding problem of American manufacturing, but you really get to see the whole value chain and how it’s going to affect the end user at the end of the day. So yeah, structurally there’s the whole how do you actually make things clear to the actual engineer so they can make clear decisions.

  Ed Mehr (Machina Labs):
  To me, as you explained, I think manufacturing is this complex web of supply chain. So when we talk about reshoring, we need to be aware that there’s a whole bunch that needs to come back before we can reshore one part of it because that whole web to some extent has dependencies to foreign suppliers and that’s why actually you see most of the new manufacturers go end to end and fully verticalized. When we were at SpaceX, you wanted to work with different vendors, but you can’t find them, you can’t find good vendors, you can’t work with. So you end up deciding, okay, some of this you’re going to bring in house. So I think basically what I’m trying to say is for manufacturing to come back to the United States, we are going to see probably a lot of fully verticalized manufacturers, but also we need to completely change the cultural perspective that we have on manufacturing because for the past 30, 40 years we have been outsourcing our supply chain to other countries. We also lost their ability, as he was saying, lost their ability to build stuff. So that will take some time, that will take time and it requires a lot of cultural change and also valuing manufacturing again more than we do today.

  Filip Aronshtein (Dirac):
  Yeah, funny enough, very similar perspective on it. When you look at automation and technology adoption across the whole ecosystem of manufacturing, it’s very… saying the manufacturing world is so vague, it doesn’t even really make sense to even say that. What I’ve seen and what we’re seeing is if you look at the way that companies get structured, the way that they interact with other companies that they supply from, you can describe that structure and that hierarchy as an OEM is sort of like the top level. They’ll make a vehicle, right? They’ll make a plane, car, train, whatever. Then the companies that they source from, let’s say Boeing is an OEM, the company that makes the engine that they put under the wing is not Boeing. Boeing sources that from General Electric or in that case is called a tier one supplier. So when we talk about suppliers, we’re talking about tier one through three suppliers. And so what I’ve seen is there’s a lot of very interesting, especially in the startup ecosystem right now, there are a lot of folks who want to be, if you look at it like a pyramidal structure, but a lot of people who want to be the top level OEM and make new attributable systems and sell to the DOD and wow, let’s make more drones. Awesome. And then there are a lot of people who want to make parts better and both of those are very critical, but something that I’m not seeing a ton of is the complex mechanical subassemblies that live underneath the hood, complex pumps, valves, things like that, heat exchangers, and those are the core complex mechanical sub assemblies that live on basically delay any sort of production timeline for an OEM, these are a ton of the customers that we work with. We work with OEMs and tier one through three suppliers. And so what we’re working on to make sure that this technology adoption is evenly distributed is working with and specifically targeting like a mid-market manufacturer. That’s a tier one, tier two supplier. I can tell you about one of our customers is this company called Ancra. They make 60% of all the cargo loading mechanisms on all the planes in the world. And if you look at a company like this, you can see this really interesting power law distribution across all these manufacturing companies for tech adoption. All the capital is concentrated in the top 1% of OEMs like the John Deeres and the Fords, and they have a ton of automation, ton of software. And then you look at literally everybody else, and it’s like the 99% of people who just are still on paper binders for work construction still on manual cards and whatnot. And it’s if we actually want to fully rebuild American manufacturing, we need to start focusing a lot more on those tier one through three suppliers. So basically exactly what I would say.

  Allan Gibson (Formic Technologies):
  Yeah, I definitely agree with the approach on the tiered suppliers. I mean, if you fundamentally think about it, the manufacturing that is still in the US is here for a very strategic reason. It’s either DOD related or it’s something that is such a large product from a shipping perspective, it doesn’t make ship sense to ship it from overseas. So in order to sort of change this paradigm where we ship everything overseas that we can possibly do, we have to bring those supply chains back. But a lot of the challenges bringing them back can’t be brought back in the same way where they’re made today, right? So there’s a lot of reshoring that’s been going on for many years now. I mean, when I was at Stanley, I guess this is probably about eight years ago or so, we were already reshoring back from China into the US because there was a marketing and a financial reason for doing so. But doing so had to be automated where when we were in Asia it was manual. And the issue with that is that when you design products to be built manually, it is substantially different than designing products to be built efficiently with automation. So we’re going to have to overcome that design challenge as well, not purely just build a factory in the US and staff it with people.

  Ryan Musto (Alumni Ventures):
  So we’ve touched upon some of the cultural things that need to change. So now maybe switching to the other side of the equation here, if you had a magic wand and could get policy regulation, incentive or otherwise passed that would accelerate American manufacturing, what do you think it would look like? Your ideal?

  Allan Gibson (Formic Technologies):
  I’m sure you guys are going to agree on this one, if we spun up trade schools and made ’em free, because the biggest issue that I see within manufacturing after it’s already here is that we don’t have the people to support automation at the scale that we need to. Yes, at your large OEMs you do because you’ve had packaging automation or robotics around automotive for many, many years. But for all of the other industries really outside of electronics, pharma, CPG and automotive adoption of automation has been very small. So we’re going to have to upskill a tremendous amount of people not to be operators on lines because that’s the processes that need to be automated, but the people that are going to support that automation and make sure that the production results come out of the equipment as they should.

  Filip Aronshtein (Dirac):
  So I’ve said this once or twice before. If I could wave a magic wand, I would talk a lot more about tribal knowledge. Again, that is the context, that is the stuff that lives inside of the heads of the guys who’ve been on the shop floor for 30 years. We as a country have spent many, many years spent billions, potentially trillions of dollars on environmental conservation. We have spent roughly $0 on tribal knowledge conservation. Wave of magic wand. I would do something akin to the office of shipbuilding, but Office of Tribal Knowledge Preservation. We could literally send college kids to production facilities and just sit with one of the guys on the shop floor, one of the old dudes and just write stuff down. We have in the past as a country made an intentional effort to catalog information, to catalog historical information, to do some of these historical, I guess, cataloging events right after World War II. I know this happened, it is in our best interest as a country to make an effort out of this. It probably wouldn’t even be that expensive. It is just a little bit of effort and some intention and it would literally drive us significantly more forward than anybody would probably even expect.

  Ed Mehr (Machina Labs):
  One thing that government can do really here is making CapEx a little bit cheaper. There’s a lot of work that can be done. There is this misperception I think still exists within the investor community that hardware businesses are not good investments. Some of it is because of CapEx and some of it I think is actually misperception. I think with AI now, I think we’re getting to the point where services businesses, software businesses are going to have a very limited moat. You come up with a service and then probably in six months, seven months, somebody else can disrupt you and push you out of it. Services that are not related to the hardware. So I think if you can adjust some policy so that the CapEx becomes cheaper with the companies, I think we can give a little bit of a buffer for investors to adjust their perception around hardware businesses being too expensive or too CapEx intensive to invest in.

  Antony Samuel (Artifact):
  Actually, quick aside, I was talking to a founder recently who had this bit that welders and people who do carbon fiber layup are artisans not. I figured you’d appreciate that just because the number of people who know how to do it has gone down so that everyone who can weld great is actually Picasso. I figured you’d appreciate that. No, I think the biggest regulatory thing is this dirty word compliance in aviation, in military construction. And really there’s a very specific difference between compliance and quality, which I feel like I always have to break people’s brains over what the difference is. Now, compliance is just a piece of paper that has some ink signed on it, but if you look at your iPhone, it is this beautiful, beautiful piece of engineering. There’s nothing compliant about an iPhone, but you can take apart million dollar avionics boxes and it’s the most hodgepodge hot glued, white wired, nasty thing. But it definitely has that piece of paper that was signed with that person in the FA or whatever. And I think if there’s anything that I can break, it’s like how do we think about our defense orders, our mill standards, our FA compliance processes that actually incentivize quality and modernization of the hardware that we’re building, not just, hey, this thing that they bought 30 years ago, and you have this nasty sustainment stickiness problem which anchors these OEMs, these tier one suppliers into just bad hardware that they’re stuck with. Very easily changing that incentive would be huge.

  Filip Aronshtein (Dirac):
  To that point. I call that checklist culture. It is sort of like the abdication of agency and autonomy of engineers over the pride and quality of the work that they do. This is I think one of the problems with the aviation industry and in general, just production in general. We used to take pride in our work. Now somebody says, here’s a checklist, make sure all these things check the box. And that abdication of pride has, I think, not only decreased quality but also led to a bunch of other snowball effects.

  Ryan Musto (Alumni Ventures):
  We have such a diverse group of businesses up here doing so many different things across the space. I’d be curious to know if you guys have encountered any sort of manufacturing bottlenecks or challenges over the course of building the business or in your conversations with customers or prospective customers and would be curious to hear if any of these bottlenecks or challenges were really surprising, right? Things that you did not intend when you set out to build a business in the first place, and how did you solve it or are still trying to solve it?

  Ed Mehr (Machina Labs):
  I think the most surprising thing that we saw, which I knew kind of theoretically, but once get to the business we realized is that goes back to the point I brought up earlier, is that manufacturing is this complex web of supply chain. You improve one piece of that. Think of it as raw material coming in on one end and this graph of different nodes in it and then on the other end comes out the product. So it’s a very complicated graph in the middle. So if you improve just one graph, which is traditional thinking, just improve one node. People who are familiar with graph theory might not necessarily improve the full throughput of this graph. So you can make one part of the graph really, really performant, but still that was not the bottleneck. Now some other part is the bottleneck, so it’s still slow. So one thing we realized very fast was you need to start from one node, but expand your capability more and more until you actually deliver 10 times improvement at the end of the graph, which makes it, I think, significantly harder than a lot of other businesses that could be point businesses. We knew it in theory, but in practice it was a painful learning experience.

  Filip Aronshtein (Dirac):
  So awesome to hear you describe it as a graph. I’ve never heard the way that we think about production at Dirac is like a graph, right? So exactly how you described it, what we’re trying to do, what we’re building is a hard-coded, very, very deeply opinionated high-speed rail for that graph, the best practices encoding them because we get to see and work with a ton of different manufacturing companies across tons of different industries, automotive, aerospace and defense, ag and construction machinery. And so we just get to see all the best practices. We see high mix, low volume, low mix, high volume. We get to see how can we take a high mix low volume producer and improve their mix? How can we improve their capability to handle high variance? And then we in general have seen companies, I would say some of the most painful bottlenecks. Just to answer your question a little bit more directly, some of the most painful bottlenecks that I’ve seen are folks on the shop floor who see the problems day to day. I don’t run a manufacturing facility, but I just see this over and over again. They want to make a change, they want to make a difference. They see where improvements can be made, but generally they are afraid to bring that to management. An operator on the floor wants to keep their head down. They don’t feel like they have that agency, that autonomy. They don’t feel like they can bring up that, like, “Hey, if we bring this tool in or if we reconfigure this line a little bit, we can see this sort of outcome.” And who knows better than the guys actually on the floor doing the work? And so I would say that disconnect bottlenecks a ton of manufacturers, it’s the inability for operators and production planners and guys actually doing the work on the shop floor to get feedback and convey optimizations in an effective way to folks who can actually do something about it. I would say, yeah, drives a ton of issues.

  Antony Samuel (Artifact):
  So at least in my background with doing the R&D one-off products or even the low-rate production stuff, it’s wildly asymmetric the things that end up being massively expensive to these companies. At Hermes, I was doing some analysis on the electrical design problem, and it turns out if you take all of the labor, all of the design, eight months of effort to design the crazy avionics of an aircraft that was about a fifth of the company cost to the two weeks that were on the runway troubleshooting and landing gear, it is clear that I was not getting paid enough. That was the obvious takeaway that I had. But no, it really is what are the big bottlenecks? What are the big values that you can provide these companies that are creating some of the most interesting pieces of hardware? And it ends up being how do you actually not just do a point design of a solution? You’re like, what is the perfect airplane? That’s actually not the problem. It’s like what’s the most robust design and set of designs? And this includes supply chain, this includes how you manufacture, it’s like what are all the things that I can do to cover my ass when something inevitably goes wrong? And that’s the actual problem. So when you start thinking about bottlenecks, it’s not just one bottleneck, it’s not just a single bottleneck for a detailed design, but really it’s how do we actually build a system that’s super robust to handling every single thing that’s going to break? And really it’s taking all of the potential bottlenecks and making them all shorter all at once. So it ends up being much more of a systems problem than necessarily any one thing. And it’s insane just how wildly asymmetric it is for a company that’s hundreds of employees because any one employee’s labor hours is wild to compare to an entire company’s critical path, shifting an hour. So that was a huge thing.

  Allan Gibson (Formic Technologies):
  For me, the biggest issues that we have from a bottleneck perspective are really oddly financial. And what I mean by that is in manufacturing environments, everything still has to be, it’s a business. Everything still has to be financially justifiable. And largely you have to continuously expand sort of the breadth of what you’re trying to automate in order to get to a justifiable place. In a lot of ways, what Ed was talking about in traditional manufacturing, like lean manufacturing, you have to make sure that you’re not just moving a bottleneck, right? Moving the problem further down the line. Because at the end of the day, in order to get any financial benefit out of any technology, it has to actually impact the bottom line of a business. And you can’t just deploy a little piece of automation as a silo into a factory floor and expect to get any meaningful benefit out of that. So largely what you see is the companies that have been really successful with automation have taken segments and completely redone them. So if you think about CPG and making toilet paper, that is a fully automated process that people monitor. Whereas if you look at a lot of the processes that are not currently in the US, those processes are largely manual and done by humans, and there’s not yet machinery that is doing those. So the custom automation space is solving for each of those individual challenges. And it’s partially because we don’t have generalized enough robotics, which is largely under development, but there’s also that financial component of how broad you have to base your technology in order to be justifiable. And then to some degree you’re general in nature and you can’t address those more specific problems like Anthony was mentioning.

  Ryan Musto (Alumni Ventures):
  As we come up on our time here, I would be remiss if I didn’t ask a question that I think is on everybody’s mind, which is how do you balance the promise of automation with workforce dynamics? Are technologies replacing jobs? Are these technologies creating new ones? Both would be curious to hear if you guys opine on that. I think it’s a really important one.

  Filip Aronshtein (Dirac):
  So there are a lot of ways that people talk about technology that are bad. When people talk about AI, they’re like, “Ah, it’s going to take all the jobs, it’s going to automate everything.” That’s not generally true, nor is that good. There is—I keep getting back to context. There are in the US, we do not want cheap labor. We want smart labor. We do not want, generally speaking, 100% fully automated tools. We want humans in the loop. What we’re building is not a fully automated thing, it’s an 80/20 tool. That’s how we sell it. It’s how we pitch it. Also, traditionally in manufacturing past 20, 30 years, probably let’s say 20 manufacturers have been being Silicon Valley folks will come to manufacturing facilities and say, “We’re going to sell you this magic fancy ERP and it’s going to save your life.” And the guy who was doing things manually, pen and paper now does things manually, but on a computer. So didn’t actually improve his quality of life, now he just management really liked it. So you got to frame that reference for you that these folks have been being sold like gobbledygook, fancy schmancy wizard software for 20 years, 30 years maybe, and it hasn’t actually changed their quality of life that much. CAD software at its advent did actually save some people a lot of time and effort still does, but by and large, most software for manufacturing doesn’t actually improve their quality of life. That’s why what we’re trying to build radically does. That is why we’ve had really great adoption. But when you think about the future of working with a manufacturing facility, you have to understand that the people there have this long history, have this long legacy, and you have to meet your customer where they are. You have to understand how to interact with them, how to interface with them, and don’t sell a magic pill, sell a solution to a real problem and really, really deeply understand that problem. Spend time with your customer, really spend time building a relationship with them. And that is what I think is the best way to compromise and work towards a better, more automated future for American production.

  Ed Mehr (Machina Labs):
  So first of all, on the workforce problem, we are hiring people and we can’t find ’em. So I don’t know where the workforce problem is replacing jobs, most of the stuff that we’re talking about. Honestly, America doesn’t have an industrial base. If you really want to be honest, there’s some industries that we have, maybe in aerospace defense, we have some older industrial base, but we don’t really have an organic base compared to Southeast Asia. So we’re not really talking about getting anybody’s jobs away. We’re talking about, okay, let’s bring some of this back, and there’s nobody’s actually doing it, so let’s add some automation in there. So overall, I think it’s going to be net gain. So I think that’s a myth that just automation will remove people from their jobs. And the last thing I want to add is, I mean the future is going to be hopefully drastically different from today. We need to go to space, we need to have a shit ton of satellites up in the orbit. We need to go to other planets. We need to have flying cars that were promised in 1960s. We need to have so many products that we don’t have today. So the market significantly will increase. I think there are going to be more people working in this sector as a result of automation, because now there’s capability to actually do things. But a lot of times also, automation enables you to do things you couldn’t even do before without forming process. For example, now you can form high temperature alloys much more cost-effectively than you could. We actually worked with Hermes a little bit on that one. So it’s opened up new doors of things that wasn’t even traditionally possible. So I think this whole narrative of doom and gloom that, oh, it’s going to replace their jobs. This has happened with every technology that came out and never was the case. So I would say, yeah, it’s just a little bit of a moot discussion.

  Antony Samuel (Artifact):
  So Corbin and I are working on the generative AI, AI copilot tools. So I think right now it’s like everyone who’s a software engineer is very scared of all the cursors. So we get this question a lot, and I think typically there’s a very large variance between how people think about, “Hey, are the hardware engineers going away when ChatGPT gets really, really good at building hardware?” Now, I think I go back to designing these electrical systems, designing these circuit boards. And kind of like Phil was saying, there often is a human in the loop, but something we get often is like, “Oh man, my job’s going to be so easy when this AI tool can read all the data sheets. It can generate all the things.” And I’m like, “Oh my God, dude, I disagree with you so hard. Your job’s going to be so much harder because all the easy clerical misses are, that’s the stuff that’s getting automated.” And I think the cool thing about these new tools is not only can you develop crazy complex systems that are wildly impressive, but it actually starts to filter out for the only people who can change the world are the smartest engineers. So the bar just gets so, so much higher. But what that means is they can do incredible things people can do now with cursor, what no one could possibly imagine. Not even the best software engineers could imagine. And I got really excited about what that means for hardware is it makes it harder. The bar is definitely raised, but I expect with these new AI tools, with these AI copilots people are going to be sending people to space and sending ’em some satellites at a rate and at a quality that we’ve never been able to achieve before.

  Allan Gibson (Formic Technologies):
  So I’ve worked across a lot of different industries. Coming out of school, I worked in oil and gas, I wrote software in oil and gas, then I moved to manufacturing power tools. I always joke that that was my dad’s favorite job for me. And then I moved to Estée Lauder, which was my mom’s favorite job for me. And then I went into the startup space, which was my favorite job. And in all of those spaces, I’ve been deploying automation the entire time, my entire career. It’s what I always have done. And not in any of those situations has it resulted in the true removal of a person from an operation. It’s almost always reallocation of that person to a different task. That’s honestly always harder to automate. So eventually we’ll get to the point where there is less people doing hand work, assembly work within manufacturing, but that is a really, really long ways away and for various reasons, not technology, but really anything that you can imagine.

  Ryan Musto (Alumni Ventures):
  Well, on that note, it is time for happy hour everybody. Please join me in thanking these awesome speakers.

  Ryan Musto (Alumni Ventures):
  Thank.

• Where can I view the full transcript of the Post Game video?

  You can find the full transcript below:

  Narrator (00:01):
  Missed the America assembled event during the New York Tech Week. Don’t worry, we’ve got you covered. On the Adventures Zone. Mike Collins and Ryan Musto are here to break it all down from the buzz at Lucid stunning Manhattan Studio to the big ideas shaping the future of the American innovation, manufacturing and robotics space. Let’s jump into the recap.

  Mike Collins (00:24):
  Hey Ryan. Hey,

  Ryan Masto (00:25):
  How you doing, Mike?

  Mike Collins (00:27):
  I’m great. So big event in New York.

  Ryan Masto (00:32):
  Yes sir. Yeah,

  Mike Collins (00:33):
  Tell me about it. I heard a ton of people were there buzzing about it.

  Ryan Masto (00:39):
  Yeah, I mean an amazing turnout, which we can get into a second. I think maybe to kick things off, we’d love to talk about a couple of the waves that we were trying to ride in setting up this event because I think it speaks to why there was so much excitement about it. The first, of course, is a macro. It goes without saying there’s a lot of supply chain disruption and shock nowadays as a result of policy changes, as a result of geopolitical realities. It’s my belief, and I think a lot of people’s belief that American startups are best positioned to act, react, problem, solve, and ultimately benefit from this disruption. So there are a lot of builders in this space, so we wanted to be a part of that. Two, there’s a ton of talent back in the day, maybe 10 years ago or something, if you were a really talented engineer, you were probably going to go into software nowadays for a variety of factors, we are seeing a once in a generation exodus of builders into hard tech, into robotics, into advanced manufacturing.

  (01:48)
  And as an investor, if the smartest folks in the room are building there, that’s where we want to be. And I think the third reason that this event was really exciting for a lot of us is more of a New York City story. You don’t have to go that far back in time for New York to be the single largest manufacturing headquarters of the United States and of the world. Right? Back in 1950, there were a million plus manufacturers, like physical workers working in manufacturing in New York. One in four workers were doing it 40,000 plus factories. Obviously since then we’ve lost most of that, but New York is starting to slowly but surely rediscover those roots. We have really wonderful talent here, whether it’s Cornell Tech, Columbia, Stevens, right across the River, Stevens Institute of Technology or NJIT. So we were trying to ride all three of these waves here in starting out this event, and it clearly resonated with the community.

  (02:51)
  We had 500 plus RSVPs, which even for tech week is pretty exciting. We had obviously a cap on how many people we could accept into the space which sunk because I would’ve loved to have all 500 in there. So we had to line out the door. But on the whole, I think a 10 out of 10 event, and what particularly was exciting for me, I had a chance to chat with a New York Post journalist in the lead up to the event, and he brought to my attention that last year at New York Tech, there were literally zero events about robotics this year, there were half a dozen plus, which I mean, talk about a really exciting time and place to be in this.

  Mike Collins (03:38):
  Yeah, it’s one of the great hacks of being an investor is go find where young talent is congregating and that’s where the next unicorns are going to be made in those kinds of spaces. And I think building stuff is cool. Again, I think the biggest challenges are combining hardware and software and I think you really tapped into that now. Talk to me about the space, the Lucid Studio. That’s amazing.

  Ryan Masto (04:13):
  So I think this was one of the crowning jewel elements of what we’ve put together. We wanted to try to engage some of the big businesses, not just the startups that we do a lot of work with, but the big businesses that are leading the charge in advanced manufacturing, particularly American advanced manufacturing. So we just dms, we literally cold outreached Lucid Motors who are one of the premier American EV auto manufacturers. They do well over the majority of their manufacturing at their facility in Arizona. They are leading the charge in advanced manufacturing. So we hit them up about this event and there was just this perfect synergy where they were excited about showcasing the sort of stuff they’re doing. Were excited about leaning into the earlier stage businesses following that playbook. The space was beautiful. It’s in the meat packing district, which is a really cool part of Manhattan beautiful space. They had a couple cars in there, they had a couple pieces of robotics from within the car kind of showcased around. They had a great bar, they had great TV screens all over the place showcasing some of the stuff that they’re building. So it was I think a real perfect matchup and we’re hopefully going to do some more events with them in the future.

  Mike Collins (05:36):
  It’s so funny and you talk about entrepreneurs and their pitches, and

  (05:42)
  I’ve been in so many pitches where it’s like, okay, it’s just kind of ideas and PowerPoints and when you can actually throw a physical thing on the table, just the energy level always just have the room just oh, amazing. Hopefully changes and they start passing the thing around and asking questions. Yeah, humans love three-dimensional stuff, so it sounded like a really fun atmosphere to be in.

  Ryan Masto:
  Totally, totally.

  Mike Collins:
  We talked, there’s a lot of buzz now about supply chain and strategic independence, and I think all of us believe in trade and comparative advantage and that we all do better as a world together, working together, doing business together, partnerships together. But there’s also this element of being in an independent country and having capabilities to control your own destiny. And I think that’s true for every country. So to the extent you can. So talk to me about your thoughts about that and supply chain.

  Ryan Masto (06:52):
  It goes without saying that this was kind of one of the central conversation points that we both discussed on the panel, but also the conversation afterwards between the folks and the audience. And I think if you pay too much attention to the media, there’s this real debate between the free traders versus the fair traders, but I think in reality, the majority of thoughtful Americans realize that, hey, it’s like you say kind of a mix of both. And there are certainly some sectors and spaces where we ought to be reflective and recognize that, gosh, over the past 20 to 50 years, we have disadvantaged our ability from a national security perspective to be able to provide for some of these really important goods and services. I think the ones that come to mind for me are probably the ones that come to mind for most folks. And where there is most attention from both a policy perspective as well as a building perspective, it’s semiconductors, it’s energy and critical minerals. It’s defense and aerospace and it’s biotech and pharmaceuticals. Those are the areas where through a variety of crises over the past couple of years, whether it be COVID, whether it be some of the geopolitical tension with China over the straight of Taiwan, things of that sort, we’ve realized we need to be firming up either French shoring or onshoring those supply chains. And that’s where you see most of the work underway.

  Mike Collins (08:21):
  There’s actually, again, there’s always a push in people wanting to get clicks or notoriety and try to push people into corners on all these issues. And I think most reasonable people say yes, and you don’t have to be all of one or all of the other to believe that there are some areas where for redundancy, for strategic concerns, we need to build better a lot of stuff. But that doesn’t mean we’re going to want to make t-shirts in Chicago. Talk to me about this promise of automation and robotics and the workforce dynamic.

  Ryan Masto (09:12):
  This was a big question that we asked the panel, and I think a lot of us are still trying to make up exactly our opinion. It’s hard to predict the future, but it’s part of our job as investors. I would say a couple things, and this actually, I can’t take full credit for this. This is really the panelist’s thoughts, but I thought they were instructive. The first thing I’d say is that a lot of the advanced manufacturing that we think is going to happen in the United States over the next couple of years to the next decade is manufacturing that really has never been here before. So semiconductors a great example. A lot of that process we want to automate. A lot of that process is currently done in Taiwan and has never really been done here in the United States. So when we think about building robots or other autonomous systems that might be able to do some of this manufacturing, it’s not as much replacing current workers as it is adding new capacity. So that’s the first point. I’d say

  Mike Collins (10:18):
  We’re kind of leapfrogging ourselves.

  Ryan Masto (10:23):
  Right, exactly.

  Ryan Masto (10:24):
  Which makes at least me feel a lot better because there are real concerns about the workforce dynamics and the question of what is the absorption timeline of how quickly and how much of these jobs will be replaced. I would say another thing that was a real point of discussion during the event was the idea that this sort of technology creates new sorts of jobs, jobs, titles that you’ve never even dreamed of before. Things like maintenance 4.0 specialists. You could have a human robotic interaction designer. They’re going to be a slew of new positions and roles that follow this enormous economic shift that are going to provide derivatives of growth for the communities where these factories are positioned, which is why I think it’s really important to have a real, and this is more of a policy and a politician sort of problem than it is an investor politician, but also opine on it. I think it’s important to have a really strong geographic dispersion of where these different factories are located because rising tides lift all ships.

  Mike Collins (11:39):
  And again, it’s the issue of it’s very dangerous to look at these in kind of polar extremes or non dynamically that it’s somehow like a fixed pie and you’re taking a job and there’s no new jobs created. And again, I think the idea of dispersion and looking at those things carefully I think can really mitigate some of that stuff. But we’re investors and we’re looking for opportunities. What are the things that aren’t just on the tip of everybody’s tongue that you think are maybe, I think real opportunities in Ryan’s brain might not be out there in the public yet?

  Ryan Masto (12:24):
  Yeah, totally. It’s a great question. It’s really what we’re hunting for and part of the reason we had this event, right? We want to find founders doing these sorts of things. A couple come to mind right off the bat. First mid-tier supplier revitalization. So I’m talking about tier two and tier three suppliers think of these sorts of suppliers as the connected tissue between the raw materials and final assembly. In the United States nowadays, most of the tier one and tier three suppliers are aging. They are under capitalized or they are just straight up, not here, they’re somewhere overseas. So startups that can modernize these layers through automation, ERP, overlays, working capital solutions that are tackling this unsexy but vital gap, that’s an area that I’m super focused on. So that’s one. Another I would say are domestic freight modernization, whether it be rail or trucking or maritime. There is a ton of white space for automation, for electrification, for hybrid freight systems. One of the companies that was there, one of our portfolio companies, intra Motive is doing exactly this as it relates to rail. So optimizing point to point goods movement without having to rebuild the whole infrastructure is an area that I’m excited about. And I’d say the last area, which actually gets to the prior point that we discussed about labor is skilled labor interfaces.

  (13:55)
  Baby boomers own most of the businesses that are now in traditional manufacturing and they do most of the jobs. So there’s this enormous unmet gap for intuitive human machine interfaces that lets newer workers come in and operate these systems and make them more efficient, faster, cheaper, et cetera, right? So think like ar, vr, maintenance, natural language ops for robots, no code machine programs, things of that sort that can ease younger generations of workers getting into this space and having an enormous impact. I think that’s a whole bucket of businesses that are going to do super well. Just given some of the tailwinds that we’ve discussed.

  Mike Collins (14:42):
  So I’m going to make you king for the day, and we have this assignment of just helping the themes behind assembling building in America. What one thing would you do?

  Ryan Masto (14:58):
  This is an awesome question, and I can’t take full credit for my answer honestly. I think I would’ve had another answer perhaps before the event, but I was catching up with one of our CEOs name’s, Phil, CEO of Rock, and we were talking about this and he had a really interesting proposal, which I’m a big fan of. So just a little backstory about deo, what it does and perhaps why he thinks this is a good idea. So DeRock transforms tribal manufacturing knowledge into AI for robots. And what I mean by tribal manufacturing knowledge is they idea that a lot of the people that work in traditional manufacturing nowadays, they have a series of skill sets that aren’t written down anywhere. They’re passed down generation by generation, just accrued with a thousand hours on the job. You hear the way that a machine is working and intuitively, okay, this is what’s wrong, right?

  (15:52)
  The Rock is trying to translate all of those learnings into actual AI for robots so that we can do these things without the people. And one of the things that he suggested that he thinks that the government should do from a policy perspective is create a bureau that goes out there and actually collects this knowledge and mass not just in the United States but around the world. Think about if we had a series of teams that we sent out to Taiwan, for example, that spent some real time with the aging folks that are working on semiconductors to understand, actually watch them and understand take notes, how do they build these darn things? And were able to translate that back to the United States. I thought that was such an awesome initiative, one that I hadn’t heard before. And so if I’m king for the day for example, or president for the day or whatever, I think that’s something I would take a long hard look at.

  Mike Collins (16:50):
  It’s funny, Ryan, because I’m in a mill building and the story of New England textile mills, one of our success stories is we basically went to Great Britain, and it’s a little unclear whether bribed or kidnapped or stole die making technology, which was really an art. And so there was a group of 15 people that came to New England from I am in Manchester, New Hampshire, I think Manchester. And yeah, it was a feel, it was touch, it was tribal. And if we could bring technology and AI and vision and machine learning and all of that, exactly. It is a huge unlock to accelerating building again in America. Absolutely. If there was one other thing you wanted to share with the audience on a takeaway, what would it be From the event?

  Ryan Masto (18:00):
  I guess I would say that this is something that is truly nonpartisan, and that was something that excited me a lot because here you have folks from all across the wonderful political diversity of our country coming together really on the same page about the idea of making sure that we are more resilient as a nation across a whole host of sectors. And I think this is one element that the event brought to light is that we had all sorts of conversations with all sorts of different people from a variety of really different backgrounds and political perspectives, but everybody’s on the same page about this. And that excited me a lot. And I think in a period of time where there’s obviously a lot of things to disagree on, it’s pretty cool that we get to work in a space where there’s a lot of people, something.

  Mike Collins (18:55):
  Yeah. Yeah. Well, thank you. It was a fantastic event. Let’s do it again next year.

  Ryan Masto (19:00):
  I’m super, super excited for it. More to come.