The Evolution of Robotics and the Importance of Organizational Culture: Q&A with Melonee Wise of Fetch Robotics

Fetch

Established in 2014, Fetch Robotics is an award-winning company that developed the first-ever cloud-based robotics platform for the intralogistics and warehousing markets. Through the use of autonomous mobile robots (AMRs), the company facilitates efficiency and productivity improvements in industrial and commercial settings.

Fetch-Robotics-Graphic-Concepts-v1Given the intricacy of its technology and regulatory barriers associated with the relatively new market segment, Fetch has had to deal with its share of challenges through the past six years, but is now recognized as an innovative and successful robotics enterprise. Among those aforementioned challenges was explaining the technology to prospective customers and how its AMRs differed from automated guided vehicles (AGVs). Now, the fact that there’s a conference dedicated to AMRs, combined with Fetch’s persistence in pitching its product, has shifted customer inquiries from questions about the technology’s functionality to its productivity and efficiency.

In regard to regulation, Fetch, like other robotics companies, has faced challenges in both the US and Europe. In the US, the Occupational Safety and Health Administration (OSHA) has yet to adopt a standard for robotics regulation. This has resulted in companies implementing different strategies to determine safe practices. In Europe, industrial products generally carry C-Type Standards for safety verification, but there is no C-Type Standard for AMRs.

Despite these challenges, Fetch has sustained its growth and become an industry leader in AMRs as a result of its superior technology and commitment to organizational culture. The company operates under a philosophy of extreme transparency and prioritizes organizational fit ahead of technical capabilities.  The new global pandemic will eventually put more and more focus on this industry which was recently highlighted by a report published by Pitchbook on Supply Chain in this new world.

I recently sat down with Fetch Robotics CEO Melonee Wise to discuss the state of the AMR segment of the robotics industry and how the company has thrived despite various obstacles.

 

Q: How has the robotics industry evolved in the last five years and where do you see it going in terms of commercialization and commercial success?

A: I do think that when you look at the industry there are two things that are true. One is just its risk-averse nature and that’s in one, trying new technology and two, its ability or willingness in adopting a cloud-based IT infrastructure or even any IT infrastructure. And so, if you look at, we’ve made a lot of good progress on the technology front.

When I first started explaining the technology, helping the customer understand what it was capable of and how it could be used, it was more like missionary work, getting people to even understand that it’s nothing like an automated guide vehicle (AGV), because it used to be you walk in and they’re like, “Yeah, it’s an AGV, BFD. Why are you here? Why are you wasting my time?”

And then when you show that there’s no magnets in the floor or tape on the walls, they start believing you. But that was like a year-and-a-half to two-year slog of bringing up the awareness of what the vehicles are capable of and how they work. And now it’s shifted. The questions have shifted from “does it work?” to “how safe is it?” and “how productive is it?”

There was a whole conference on autonomous mobile robots (AMR) this year. So, I guess that’s novel. It’s like coining the term AMR and now it’s like a thing. And it’s weird trying to get everyone just to call these things the same thing, and now there’s a whole conference for it.

I was the keynote speaker for that conference, and it was really about helping people understand more deeply how the technology works, how it creates safety, and helping the customer really understand what they were buying so that they could make an educated purchasing decision. Because now we’re kind of getting into the war of, “Okay. You guys all look the same. Who’s the best?”

So that’s where we’re at and I think Fetch is really winning that war. Fetch put a lot of effort into usability to overcome some of this idea that robots are a hard problem. But on the other side, the bet we made off the cloud is really paying off. It’s been a slog, and we’re still hearing closed-minded questions about the cloud like “Is it secure?” “Can you provide data security?” “Can you provide support and stuff like that in a way that’s meaningful?” and “Can you provide value for software service?”

On the AMR robotics side, we’re still seeing a slog. One, for security reasons, and just lack of understanding about how you can run automation from the cloud, physical automation let’s say. Robotics Process Automation (RPA). They should have never used the term robots. It’s causing so much confusion. It’s like, “No, we make real robots.” But I would say that it’s been difficult to get customers over this notion that the cloud isn’t safe.

I would say the other thing is we’re trying to sell a SAS-type product or RAS-type product into a market that’s always bought everything and never had to pay for software. This has been a pretty big uphill climb. But the clients are now really starting to see the value in a SAS-type product.

 

Q: You had Amazon buy Kiva and then we had 6 River Systems get bought by Shopify. In your opinion, what was the rationale behind Shopify’s acquisition of 6 River Systems?

A: I think they’re looking for a competitive edge regarding fulfillment against Amazon. I think companies like OMRON who bought Adept, and Teradyne who bought MiR, just rolled them up into their larger business and are making them omni-channel players for manufacturing, logistics, etc.

And I think that’s the more interesting question. For Teradyne and OMRON, both of it was we have a large need for the products internally, but we also want to expand our capabilities as a solutions provider. And I think that’s true with Honeywell acquiring Intelligrated or KION acquiring Dematic.

The Dematic acquisition was like a $4 billion-dollar acquisition. And I think it was to align the AGV portfolios of those companies. I think one of the reasons that they bought Dematic at the time was because Dematic said that they were going to build AMRs. Since then, they’ve walked back on that. They found out how hard it was to make them, and now they’re looking for a partner and Fetch is at the top of the list.

 

Q: Do you think that robotics companies will continue to be built as stand-alones or do think larger commerce or logistics companies are going to continue to acquire companies in this space?

A: There is just going to be enormous pressure on the market eventually for a company like Fetch to sell. If you look at what’s happening right now with Fetch, we have Honeywell, Zebra, Samsung, and Amazon’s as large players in the market. And I think that we’re going to be in a position in the next year or two where some combination of those four are going to be bidding over the future of some of the top cloud robotics companies.

AMR companies are getting bought up very quickly. There’s been three in the last five years that have been acquired, which for this kind of technology I would say is pretty damn fast.   It’s only been five years and everyone’s still in the middle of proving that the technology is really scalable. So, I think that there’s a real shortlist of AMR companies.

One challenge is that these big companies can apply enormous market pressure to snap up something like Fetch. I just don’t know how you justify building a big standalone company with that kind of market pressure, but we’ll see how the market evolves.

 

Q. Does regulation shape or form what you’re doing, or is it self-regulated?

 A: Our products are heavily regulated in Europe. You have to have a CE mark to sell the product and in Europe there’s typically a C-Type Standard for every type of industrial product, but there isn’t a C-Type Standard made for AMRs yet.

I’m on the committee making that standard, but at the rate we’re going, it’ll take another four years to get the standard up. Right now, it’s basically, “If there’s no C-Type Standard follow these other standards. They’re not perfect for you but they are good enough that they guarantee essential health and safety. Your device isn’t going to kill anyone, and it protects the company because you’ve proved that you weren’t grossly negligent.” So everyone’s happy. But the problem is, is in the US, OSHA has no robot regulation, like there’s none.

If you go the OSHA website, there is no standard that OSHA has chosen to adopt for regulating robotics. And that has put us in a world of pain, because large companies, especially US-based companies, all choose different strategies for how they determine what is safe because OSHA isn’t telling them what is safe.

If they’re Europe-based, or if they have enough alignment between their US and European teams, it’s pretty easy. You have a CE mark, but if you look at a company like Ford or something like that, they have their own internal US practice and it is just pushing a rock up a hill. Since there’s no regulation, you spend a lot of time with someone who thinks they understand what they’re talking about regarding regulation for your product, and they really don’t. And they’re almost impossible to convince.

I would say that the biggest risk for Fetch regarding regulation is GDPR or PII, personally identifiable information, because the robots have cameras in them. And there’s some greyness right now.  We don’t take the RGB images off the robot, but we take the 3D point cloud images off the robot. And I think that there is some risk, that someone’s going to say one day, “Well, the 3D point cloud of your body is identifiable enough to link it to a person.”

That’s going to be a difficult bridge to cross when these privacy policies start looking at sensor technology, though I don’t think that’s coming anytime soon. Until then, we’re doing everything that is required to be compliant.

 

Q: We have created a really unique and interesting team culture here at Fetch. What, if anything, do you attribute that to?

A: Well, I would say that the best thing I did was bring on Dave, my chief-of-staff. The role of chief-of-staff is pretty amorphous, because a lot of people view that person as the personal right-hand man of the CEO. And that’s what Dave does, but he also does it culturally. Dave is a big wrangler of our culture.

And I think one of the things that he does that is super important—I didn’t realize how important it was until the last year or so, that he’s not just focused on the larger teams’ culture. He’s extremely focused on the executive team culture. And I think that now that we have such a great executive team. I don’t know how we were like operating two and a half years ago without Gurmeet, Stefan, Barry, and now Tom. They all work so well together.

Rob connected me with a coach, Steve Russo, and Steve just did like a 360 degree review of me with the executive team. And he said that this is probably the best executive team he’s seen in a long, long time. I was pretty proud and shocked by it.

I would say though, one incredibly risky thing that we’ve done is extreme transparency. It has a lot of pros and cons. Every Friday, we have a team meeting and I answer anonymous questions. Some of them are very valuable. People asking why are we doing this or what are we doing? And sometimes it’s a little rough, because some people use it as a medium to get their point across and we have to edit the question to be more appropriate.

Dave has done a great job of creating team cohesion. We have this “no assholes policy.” One of the things that we do every once in a while is identify someone on the team who is being an asshole. And the challenge for Dave is finding out whether they know they’re an asshole or not. The plan for each of those outcomes is pretty obvious. If they don’t know they’re an asshole, we invest a lot of time and energy to help them become more self aware, to become more introspective. But if they do know they’re an asshole we just help them out of the company.

It has had a really positive impact on the team, because we aggressively manage situations with difficult personnel. It’s been frustrating for some of the engineering managers because I still interview everyone in the company, and I push really hard on cultural fit. I’ve killed some hires where the engineering manager has been like, “This guy is the best coder in the whole world.” And I was like, “Yeah, but I wouldn’t want to be in room with him for more than an hour-and-a-half.”

One of the interesting things is I had this really long talk with one of our guys about amplification and I asked, “Do you want a team member that is going to just amplify your output by writing a lot of code or is he going to amplify everything you do by helping you build a cohesive team?” I pushed hard on him on this and convinced him to not hire this all-star coder. For a while, I think he had some regrets around letting me convince him not to hire the guy.

We came to another decision in a similar situation, where I was on the fence because I didn’t do this one interview in person, and so I let this guy pass. And he hired him and is now eager to get him out of the team. He came to me the other day and was like, “Melonee, now I understand about amplification. They can also amplify in the exact wrong way.”

And I think we’re getting more of an understanding within young management that technical execution is not the end-all, be-all for building an excellent team. When certain managers get to a level within Fetch, Dave is made available to them as a resource whenever they want. We have a guy who recently became a manager, and he’s pretty rough around the edges sometimes. Dave has been helping to smooth him out channel his frustration a little bit better. It’s having this resource, who has been through so much, that has really helped our team grow and become more effective.

I would say that I’m not always well-equipped to advise someone who’s only four years younger than me. I’m like, “Dude, I don’t have much more experience than you do.” So Dave, who’s almost 70 and has this grandpa-like vibe, steps in and is like, “Dude, I’ve been there. Life continues. If it’s not on fire don’t worry about it.” And he’s just got this mellow vibe that I think really helps the team because it can be very stressful. We’re pretty high-intensity and Dave is a good counterweight to our intensity.

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