Gideon Brothers, one of the hottest tech companies in Croatia, is paving the road to the widespread use of robotics and software solutions based on artificial intelligence. With secured investments and prestigious clients like DB Schenker, Gideon Brothers has set its sight on scaling their business to produce hundreds of industrial robots in the upcoming years. We talked with Matija Kopic, the CEO of Gideon Brothers, about the vision, challenges and why building relationships is an integral part of this business.
Let’s pretend I’m an investor interested in hearing your elevator pitch. Shoot!
Gideon Brothers was founded four and a half years ago. Headquartered in Croatia, we build industrial mobile robots that are powered by a special visual perception system. Robots, that can actually see and understand their environment similarly to humans. And there’s a reason for that. This type of capacity is required to solve some material handling operations within the industrial domain, whether we’re talking about warehousing or manufacturing environment. Nothing less is good enough to solve these problems. It is very difficult for non-vision based mobile robots to actually localize themselves within big open environments. Or machines that have to operate inside the warehouse and then go outside and do something there.
On one side of spectrum, we have black box solutions, no humans in the loop type of automation systems, robots zooming around very structured environments, something along the lines of Amazon. We sit on the opposite side of the spectrum: complicated material handling processes that have humans in the middle and cannot be automated with any less than a rich kind of deep visual understanding of the space.
Do you build the whole robot or only part of it? How does that work?
We have a set of products. The one we have announced publicly is a low profile deck load mobile robot which was actually built in-house from scratch. We do also partner with other builders of physical machines, we put our brains on top of them and actually deliver the ultimate solution, the end solution to the customer. We consider ourselves as the ‘eyes and brains’ of the hardware. The sensory set up and the algorithmic brains of the system can work on top of any type of industrial material handling machinery, and right now we have a couple of different products in our pipeline and some of them are going to be announced later this year. These will be built on top of existing base vehicles.
So your clients would be both warehouses like Amazon, and robot companies like Mitsubishi?
Not quite. It’s always the Amazon’s of the world, because the state of robotics today requires companies that can deliver full end-to-end solutions. And we've tried the other way. Our major focus is building complete solutions for real customers that have painful problems and we have some publicly announced customers in that domain, like DB Schenker, one of the biggest contract logistics company in the world, who are just interested in buying end solutions. Just like we cannot assume right now, in this day and age of the market, that there's an ecosystem of component suppliers and integrators that can somehow magically put these solutions together. Somebody has to do it. I still firmly believe that it's up to us, it's up to the robotics companies to deliver the end solutions.
I think 10 years down the road there's going to be a more developed ecosystem of component developers that can actually have a have an easier job at trying to build a variety of different solutions or solution spin offs, in different domains.
From the financial point of view, it would be less risky to be a component provider for big robotics companies. You have decided to go to the end customer.
It would be less risky and more comfortable, but the component business is not a big business at this evolutionary stage of the robotics industry as a whole. We're technologists who build good algorithms, top sensors and good computers. We just package it and you, Mr. Amazon, or Mr. forklift producer, you just go and do all of the hard work on your own, because it's tough.
Going from a component to a full solution is almost an evolutionary step, similar to what we've experienced originally when we started the company, going from an algorithm living in a lab environment, in the academia, to a bulletproof component you can actually start putting into your solutions. It's that kind of jump, it's light-years away. Hence, we are very much focused on solutions. It opens up avenues for us to sell components to companies.
By focusing on solutions you are able to prove that you can produce the final product and that in turn, makes you more trustworthy, builds awareness and opens the door to component business as well.
Exactly. It’s very hard to buy a bunch of components and turn that into a product. It needs to be safe, it needs to be certified, it needs to be compliant, it needs to be well designed so that we can influence the cost of such solution. The latter is very important because the design decisions we make in the various phases of the product development cycle are ultimately going to affect our margins down the road and allow us to make more or less money out of this product line.
What’s the main strength of Gideon Brothers in this chain of production?
We’ve been strongest in the vision of autonomy space. We have proven within a real product that this actually works in the real world, that we can deliver what we say this technology can deliver. For future success it’s going to be critical for us to build many machines, scale the volume of things we can actually ship out of our facility to customers across the globe and provide support to those products.
How much are you producing now?
Just under 50 so far, but we're planning to do a few hundred next year.
And the main clients being, you said, DB Schenker?
DB Schenker is one of our anchor customers in the contract logistics space. Koch Industries, the biggest private company in the US, one of the world's largest manufacturing conglomerates, is our big customer in the US. We don't have hundreds of customers, we only need a dozen right now, that's what we can handle. We have laser sharp focus on making sure we can make these biggest of the biggest customers happy with what we can deliver, because we know that these people will need thousands of machines.
Thinking of DB Schenker, I'm sure they have a line of different startups waiting outside their offices to offer them whatever solutions they make. So how did you manage to crack the deal with them?
We approached them with a very specific solution and they were willing to test it out. Those conversations started three and a half years ago. We got our first shot at testing it out one and a half years later. Suffice to say, it took a while. Then we got into their international supply tender and ended up being their preferred supplier for certain vehicles. Eventually DB Schenker became one of the investors in our recent round.
Start small. DB Schenker has its priorities. Any startup who wants to pitch needs to understand what their painful problems are and what is the priority of these painful problems they want to solve?
You say you need dozen customers, but you have sales and marketing operations in-house. Why do you need sales and marketing for dozen customers?
It's not about having a dozen customers indefinitely. We're building our pipeline for what we have to deliver after we’ve serviced these dozen customers. When I say a dozen customers, we actually have hundreds of customers within that single account. So going from one location to the other has its own very specific steps we have to take in order to break that next barrier. Going from deploying five units to deploying 20 or 30 units, that's a tough, serious sales operation. These groups just have to work very closely with each other to deliver what we promised to these customers, which then unlocks the next opportunity within the company.
Using DB Schenker as an example, it's not enough to sell to one big boss?
Absolutely not. Different global regions have different objectives, different problems. Hiring forklift drivers is not a problem in Eastern Europe, but a dire problem in Western developed countries.
You have to do a lot of harvesting once somebody has opened doors for you. That's how you build very strong influence within those companies, scale them from one location to a dozen in a year, and then hundreds two or three years down the road. There are people right in the middle of the process you need to understand and converse with.
And you need to understand how the hierarchy and the system works as well. There's a saying that in every company, there are dozens of people who have authority to say no, and then one person who has authority to say yes.
You don’t know your customer until you’ve seen the posters on their fridge. A lot of tech companies could live long enough without actually physically interacting with customers, right? There is no need for them to get in touch. We, on the other hand, have to visit the site, see the location, understand the bottlenecks, get to know the people involved in the process. It’s a lot of relationship building. These people are putting their careers on the line by designing big automation budgets, betting on different technologies, trying out different things, so we need to support them on the ground.
Engineers are not known for their people skills. Sales and customer relations is not their strongest point. How do you combine this expertise in your company?
We are in the people business. We try to be human to each other and extend that to our customer relationships as well. We look for pleasant people when hiring, which eventually gets reflected on everything we do.
What's the biggest challenge for you at the moment?
We're about to double our team to 150 people in the next few months. Everything starts and ends on our ability to continue attracting amazing people.
Are you searching globally or mainly from Croatia?
Depends on the function. All our engineering, our R&D operations are here in Croatia, but we are starting to hire sales and marketing in some other locations. We're about to open up a Boston office, that's going to be our entry point to the US. We’re also scaling within the Dach region, but Munich is going to be the central hub in Western Europe.
You're not trying to get people from India to work here in Zagreb?
People are applying for this job from all over the world. We have experience bringing people, mostly Croatians, back home to work for us. We recently had an Australian sales guy moving here. It's becoming more of an international type of setting for us.
What’s your vision? Do you have a higher purpose with Gideon Brothers?
The world is in a delicate situation. A lot of Western countries are consuming more. The world’s supply chain cannot cope with this explosive demand. Machines like autonomous mobile robots are part of the solution. Robots, especially in the Western countries, can help deliver what people need and the key is having flexible robots that understand their environments. 95% of our manufacturing plants and warehouses haven't seen a single robot so far. And the reason why they haven't seen a single robot is because those machines were just not able to understand what's happening there.
Well, we need to consider the cost. For a smaller company it is still more efficient to hire humans because the cost of digitalisation and robotisation is just too high. Any chance of lowering this cost in the near future?
Absolutely. We are going to see an explosion of different use cases, the diversification of the actual physical form factors of these machines, and a drastic price reduction. These machines are going to become affordable. In order for this to happen, big companies need to start operating like Amazon.
But what's the main difference between an intelligent lawn mower and the robots you are talking about?
Big machines are dangerous for humans. It’s the biggest obstacle for massive adoption. We need to marry the need for this machine to be efficient with the safety requirements. Who knows how that's going to look like for the autonomous vehicles when they start penetrating the industrial domain in volumes?
What's the main difference between let's say, autonomous cars in the streets that can kill people as well, and robots, in terms of safety?
There's going to be millions of autonomous mobile robots in warehouses years before we see thousands of self-driving cars on our roads, and that is the hidden revolution happening while everybody's thinking about the self-driving cars on the open road.
So you're actually paving the road for self-driving cars in a way?
Yes. There’s going to be a massive number of these machines. Companies like ours, who execute within large deployments, are going to tell us quite a lot about how we as a society deal with autonomous vehicles.
What's the competition? Autonomous robots are a very trendy topic.
A combination of advanced vision technology, paired with solving very specific painful problems for some of the world's largest customers, is the winning combination for us. It just doesn't make sense if you're just doing it for the sake of building cool tech.
How important is branding? What’s the story behind the company name?
Gideon was a very interesting guy form the Old Testament. I just love his story. It's a story of quality over quantity and the story of perseverance. One of the reasons why I chose that name is precisely because it's unorthodox and opens up a lot of interesting conversations. It's important for us to communicate that we're not just another boring automation company. Robotics companies should be human, however strange that might sound.