How A.I. Will Change The SaaS Landscape with Martin Cloake @ Raven.ai
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Summary
In this episode, we sit down with the founders of Raven AI, a company that helps manufacturers do smarter things with all their data. We talk about how the company got started, how to get started, and why you should invest in it.
Transcript
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Even as an engineer, if you understand that, you know, your ability to persuade is going to have a significant impact on your personal success, you should invest in it.
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Martin, how's it going, man? Going pretty good.
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This is how we start. We just get right into it. Founder of Raven Telemetry. Is it just Raven?
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It was so tight that I had to give it to my wife.
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And we guide them based on their data to improve.
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Yeah, we pretty much help all sorts of manufacturers
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from fully manual processes with people putting tea
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You can imagine lines with 60 machines connected
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is how do we help the people that are in the plants
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a lot of automation out there, it's still fundamentally
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is by helping people know what to do with their time.
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And is the data component based on their equipment
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Or where do you get the data from the manufacturer?
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So basically, what we need to know to improve a process,
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So first off, we need to know what the process is doing.
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So we need to know that a sandwich has just come off
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So that human context is what you need to fill out that idea of what's happened.
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So we collect data from a machine that says, hey, I just made parts.
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And if something happens, we ask people questions to get their context.
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to create a timeline of what's happened at that process.
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And now that we know what's happened in the process.
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So we try and, and the way we talk about asking questions.
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So in order to get people who are working at a machine
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you need to ask a small number of smart questions.
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to create that perfect timeline of all the things
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that have happened at a process, whether it be good or bad.
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I remember hearing Elon Musk talk about some AI nerd.
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He's like, how do you get feedback loop on what errors
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His argument is like, if you had to touch the steering
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Let's find out why you touched the steering wheel.
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So in many ways, you build that data set of, OK,
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there was something that went off from what we expected.
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And then, is your algorithm help then automate that?
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or you need to know all the activities that have happened
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And then the next thing is, in order to get value from data,
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I think one of the things one of my co-founders
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says all the time is that there's fundamentally
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There's only value when somebody does something.
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So if you're in your car and you're driving with GPS
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and you ignore it, it's not going to do anything for you.
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So I think even to start, you need to know what's happening.
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And we can talk about bad garbage in, garbage out.
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But just let's take for granted, all of our technology
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Now, it's interesting you use the term control loop
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is to guide people to do the right thing at the right time.
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need to do to guide somebody effectively to do something.
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The first one is you need to provide extremely clear guidance
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They've been waiting for the inspector for three hours.
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when I think about how we present information to people,
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I always think our tech could work on a pager from 1997.
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that were born in 2001, and they don't know what a pager is.
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So if you can't condense it down to a tweet or less,
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And one of the things is that trying to guide somebody
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So the first thing is, well, now that you know what's happening,
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you know what the biggest opportunity is, right?
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Give me a use case of like how a customer, like before
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So just imagine that you're a plant manager and you have.
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One of my favorite books, by the way, is The Goal.
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If you haven't read it, if you're a systems guy like me,
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So in that book, he argues of just raw material
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So typically, the ratio of supervisors to staff
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So we have one client that has 150 machines, 40 staff
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responsible for all sorts of things so if you were to look at that the truth or
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that you know what's happened at each station and one of our clients was
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losing tons and tons of time because people were just waiting for maintenance
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waiting for support so at some point if you only see data at the end of the day
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in a chart in a report or you have a dashboard with all sorts of details it's
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not easy to tease out the fact that you know this machine is down right now and
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they need support so what we did for those guys was to set an alert
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specifically to this thing that we'd highlighted as being a big opportunity
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waiting for maintenance and then the second part to being able to could you
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predict when the machine might need maintenance the first the first thing is
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we just we now have we know we now know when they need support the operator has
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said hey come help me and then the next thing is once somebody starts working on
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this projects they start working on reducing this you need to provide
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feedback to them so if if they are putting effort into something you need
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to the work that they've done and their competence.
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So don't give me some metric that relates to corporate success.
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tell me how I'm doing at reducing waiting time.
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No, but in software, you know, just in data warehouses,
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Like, I think it's an important thing to know, like, you know,
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what is the, because there's so many systems now that do different things,
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could do different reports, but you're saying, like,
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Do you make them wear, like, some kind of, like, kind of GPS machine?
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How do you know that the person's been standing there or the machine?
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Yeah, yeah. So we have a wire that we actually drill in through their scalp.
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One of my first employees is now working for Elon Musk's company there.
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But no, there's a tablet computer at the station, and the operator-
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Just like the bathroom, when you leave, it says, how was your experience? You just answer.
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And it's really the same. In the bathroom, there's five options or three options,
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I'm setting the machine up, I'm waiting for somebody,
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is how could you get a six-year-old to use the system?
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If you're setting up for the next thing, it's blue.
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I remember one of my friends, he runs a sign company.
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He just gave everybody pedometers, like Fitbits, essentially.
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And then he looked at who was walking the most.
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I want to see that they're out there on the shop floor.
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OK, because you know that if supervisors are walking,
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I remember, so I started my career in manufacturing.
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So I'm a high tech guy, but I spent three years
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And I remember my plant manager, a guy named Alfredo,
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He says, Martin, I want you to learn all 200 names of the people in the plant.
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And then you can come talk to me about your process improvements, which was like my first experience as I'm a high tech guy, engineer, telecom and all that.
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But I spent three years in manufacturing for a company called Blinds to Go.
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And that experience is really what made me found Raven and sort of changed my view of manufacturing and just in leadership as well.
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That was a really neat experience for me personally.
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And I saw that, and that was like the first thing you ever did.
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So in 2003, so I was lined up for a career in telecom.
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where they were doubling in staff year over year.
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And I got recruited by Blinds2Go, a blind company,
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One of the neatest things that they do with their teams
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is that when you start, regardless of your role
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in the company, you have to go sell blinds in a blind store
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calling my wife and saying, this is our girlfriend
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that at the time, like, so what am I doing here?
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having never sold retail, to go in and sort of see it firsthand.
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Yeah, go on the other side of the conversation.
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Well, other side of the conversation, but also, you know,
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at some point I had, because I know that I'm there until I do well.
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It was like you had to do some volume of sales.
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to understand the front lines of the business is genius.
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So the first week I'm there never having sold retail.
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And they say, you know, Martin, I'll be right back.
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And then my boss comes over and says, Martin, what happened?
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Like, they said, they're going to be right back.
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And there's two of them, two women who had it priced out.
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And so I said, no, no, no, they're, I forget his name,
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and I go up to the front like a puppy dog in the window,
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so he started teaching me about as you're selling,
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So if they don't, so you should be converting 90% of people
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But I think that experience, basically getting boot camp
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in sales, like now I'm effectively a sales guy for Raven.
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And then going to the plants and working as an engineer.
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and it's one inch too big because you screwed up
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And as an engineer, I should not screw up measurements.
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So then they bring it home, and they try and put it in, and it doesn't fit.
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So that experience was really interesting on multiple levels.
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I think what that gave me early on was understanding how important sales was,
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And I think in all the things that I've done since then,
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thinking about the customer first, and then also in setting up Raven,
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And a lot of what I do is, you know, I tell stories that I'm trying to persuade, either, you know, persuade a customer to try us out, try to persuade a customer to take action.
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Like I said, we're not at the plant, an investor and staff and all that.
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But I think the understanding the power of persuasion, where in school as an engineer, you don't necessarily, it's not necessarily valued.
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But your whole career is predicated on your ability
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And this guy, Daniel Premier, or David Premier,
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And he speaks at Harvard on sales because they don't teach it.
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And it's just so crazy because it's such an impactful
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required skill but but it's interesting the uh in in ottawa the the fresh founders crew which
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which i know you you know of yeah um that's how i got indoctrinated they flew me out like six years
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ago seven years ago and it's been yeah so so that's that's the crew's been around for now i
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think 10 11 years it's kind of neat to see you know um what it's become what it's become but
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you know i think all of us recognize that especially for us founders and ceos that
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it's really sales runs everything it's that's that's the you know that's what that's what
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builds a business you know it's not not it's not devaluing what engineers bring to it um but it's
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just the product you need to build the product um so like whenever um you know i i uh whenever
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there's a good book out there one good book that um that was sort of making the rounds was a book
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called pitch anything by oran klaff yeah yeah fantastic very very um direct his his approach
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to pitching is very but yeah at some point i'm reading the book and thinking like if i do this
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wrong i can get punched in the face yeah like it but if i do it right it's gonna be super fun
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Yeah, it's interesting, just how he views things.
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So at some point, I think my buddy Paul was sort of describing the book.
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Basically, all the things that he's been doing, it sort of captures it pretty clearly, and it just works.
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So one of the things is when I go to a meeting and they say, hey, Mr. Cloak, please sit here in the waiting room.
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So you don't sit down, you don't stay in the waiting room, you walk around like it's your home.
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So I'm walking around here, I think at some point it was at Omer's.
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So I'm not sitting down and I'm not staying in the boardroom, because the book told me not to, and it's fun.
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But yeah, so we're influenced by Robert Cialdini, there's a bunch of books here.
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So that's the kind of thing here where even as an engineer, if you understand that your ability to persuade
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on your personal success, you should invest in it.
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And it blows my mind that that's not valued more.
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And in today's world, you said you have a co-founder?
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So Braden did his PhD at Institute for Aerospace Studies
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So he was doing unmanned navigation of vehicles.
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I always say how lucky I am to have paired up with Braden.
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And, like, you know, I'm trying to think of other people
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And we found out we complement each other very well.
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And maybe he's doing CrossFit every day at lunch
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I remember last time we were chatting over lunch,
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You know, you're saying, well, this is the way I like to approach calls and I get them to make commitments.
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What have you learned about selling technology that other founders can learn?
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I think one of the things that I find works well and sort of fits well with sort of my personality,
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and maybe I'll preface this where I think going back to my experience selling in the blind store,
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in the end, everybody figured out how to sell blinds.
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And I think they prove pretty conclusively that you don't.
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At some point, if you are given the right tools
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and you find your own personal style, your own rhythm.
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So the key thing here is the first part of any conversation
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I have with a customer is to understand them, get them
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So typically, if I'm on a half an hour sales call,
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first 15 minutes, we'll be asking them questions about their business. I'm taking down notes
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because I want to understand basically what the lay of the land is there. So then when I'm pitching
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what we can do to help them in the second half of the call, it references all these things that
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they have mentioned in the first half. Yeah, which tells them you were listening.
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It tells them I was listening, which is a really good crazy idea. The other thing which I think
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doesn't necessarily come as naturally is that you know so asking questions you know it's not then
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i know a lot of people think selling is talking you gotta get them talking like yeah like selling
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is questions they'll they'll sell themselves into the deal based on your questions yeah
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sometimes the best thing especially if you're in a room with with a bunch of people and you know
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you have them and like if i'm shut up shut up just let them talk and if they're talking then
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you just you just let the silence sit let it sit it's okay yeah they will feel that silence they
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will feel that silence and you just you sit there with a smile on your face and you're yeah you know
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i got the deal i got the deal shut up don't lose it don't screw it up just yeah let them talk the
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other thing so you know get them talking if if you know there should somebody should should develop
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an app where basically like it tells sales people um if they have gone over the 50 mark of well i
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haven't seen chorus or um gong gong oh my gosh the ai i mean it's ai it's uh essentially they
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analyze sales calls automated in an automated fashion and this is even cooler not only will
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it tell you what percent uh your reps your sellers are talking versus the prospect you can set up
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keywords where it'll email you as a sales manager to tell you if they did or didn't say words so if
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you if you know that they need to like here's the process you know step one is this two three and
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they have to say words like credit card, or proposal,
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And so just this new level of real time analysis
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around sales conversation, I think is fascinating.
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because you've chosen to use it for yourself, right?
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There's a lot of cool stuff where I can now clip out.
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I can look at all the calls where they won the deal.
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And if it's good, I can clip it, add it to a library.
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it's building the hit list of this is the best response.
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really about discovering your type of way to sell.
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I really believe that your archetypal or whoever
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you think was this type A salesperson from the past,
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like women that are introverted are crushing it.
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So yeah, I think there's really some neat tech around that.
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because ultimately you're trying to influence their behavior.
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But doing it by mandating the measurement, which is fine,
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then there's a lot of theory around gamification theory,
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around what is the most effective way to get people
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And I think the core parts of self-determination theory are people need to feel like they have the autonomy to turn on different parts to help them improve.
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You need to recognize them for achievement, but that's in the way that they're comfortable with.
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But the autonomy thing is key here where people have to feel like they have the ability to apply their own strategy to make things better or worse versus mandating that strategy.
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And in gamification, you know, I think, you know, it's not a game if you're forced to play it.
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if you can actually get them hooked into seeing it in the right way
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and adapting those three components of autonomy, mastery, and community.
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Is this from Daniel Pink's book, Drive, or where is this?
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It's from, I don't know, I'm married to a psychologist,
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But self-determination theory is the theory behind what motivates us to take action.
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A lot of gamification is based off of self-determination theory.
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Do you use some of this in the product to help your customers?
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absolutely and how does that show up in your product so at some point if there's options to
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have a leaderboard or not having a leaderboard here um if some you don't just put everybody on
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the leaderboard okay um at some point give people the the ability to get feedback in a way that
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you know is it works best for them private um so i think that's really important here where you know
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if if you're trying to move you know entire plant here you know you don't just want to motivate the
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top two percent this is true for any business if you just motivate the top 10 percent you know that
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may even have a negative impact on the rest so if you're trying to move everybody you know similar
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to her i don't know if you uh you ever heard of peloton the peloton bike i re it's funny you
00:26:10.200
mentioned that um at the hotel on matt they have one in the gym and i've done three days in a row
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it's fantastic first time yeah and it's like i got high five the other day oh yeah it's like this
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and i'm like but i was watching replay class but i guess it was somebody that saw me doing the we
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were both doing at the same time and like the leaderboard the interface today i mean i'm a data
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nerd too so it's like oh my gosh this is really good she's like minimum output should be this and
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i'm like game on yeah so some people want so i i want to like i think right now if i if i go like
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a lunatic and almost kill myself yeah i can be in the top one percent yeah um so then i'm going on
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or i want to beat myself my previous score but some people don't necessarily want to be you know
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competing they just want to see themselves yeah right i i won't you know i want to beat people
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who have annoying names, you know, like there's a name.
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But there's been points here where I'm almost passed out
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So you're saying it works for some people, other people,
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that might actually have a negative consequence
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And if you're trying to move, like, the whole group,
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you need to think about how to make it adaptable for the whole group, right?
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So, you know, a video game that's just impossible, people aren't going to play.
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And so the mastery component of this self-determination theory
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is recognizing when you've reached a new level, right?
00:27:42.420
Yeah, so I go CrossFit all the time, but you're probably lifting more than me.
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But if I get recognized personally, you know, to see that,
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It's compete every day, but it's compete against yourself.
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but then they do celebrate the individual PRs, right?
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Or there's things that, you know, so the assault bike.
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it's um cardio wednesday so but uh love that and what's an example of like a company that
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before they use your product and kind of the is it throughput that you guys help people increase
00:28:29.480
what's there's you know for manufacturers typically there's sort of two main things
00:28:33.380
that they're trying to improve the uh the first one is um reduce uh reduce the amount of time
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they're they're spending not producing barts okay so labor costs more output so people are people
00:28:46.560
are going into a plant and then they leave, how much stuff came out? What's the ratio of effort
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put in by people? People to output. People to output. So then if the demand is fixed,
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then it's a cost reduction. If you're not able to keep up with demand, then it's increasing top
00:29:03.200
line. So we work with one of our biggest clients is Danaher. One of our Danaher plants increased
00:29:09.440
output by close to 20% in the first year of using Raven. And again, we provided the
00:29:25.020
And the idea here is that a lot of the talk about AI
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And I think where we see the biggest opportunity
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is really to augment what people are able to do.
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They become better Go players because of the computer.
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It's the person plus the AI will always beat the AI.
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Plus, in manufacturing, that Go player is spending 80% of their time
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So just imagine all that untapped leadership capacity
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that we can unlock by allowing them to spend more time actually solving.
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I'd want to be doing something in kind of manufacturing
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I mean, that's why there's a show called How It's Made.
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You know, like people like to watch how things are made.
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going to see a plant that makes wings for plants.
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barns they uh they make barns yeah or they make giant so they said they built something they
00:30:48.460
called a garage mahal which was like a garage for 30 cars okay the other guy was calling it the
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garage mahal yeah um you know we have we work with tt like all sorts of things it's it's and but the
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the interesting thing is if you were to grab that excel file that they're spending all their time on
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they all look kind of the same so how much stuff did you make um how much did it cost in material
00:31:10.060
and labor hours? Did you deliver it on time? So almost regardless of what you're making,
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that like the formula for manufacturing is the same. So if you can find a way for people to fix
00:31:21.840
the biggest problems as they're happening, put out the biggest fires. And then the next thing is like
00:31:27.360
if all the fires are out, what is the most important thing for you to work on if the fires
00:31:32.240
are out? And maybe it's working on this machine's running too slow. Maybe it's working on why is
00:31:38.140
this guy or this person so much better at this process the bright spot and figure out what
00:31:43.180
they're doing to everybody else and often often the um the the anomalies that pop out in the data
00:31:48.400
that show top performers that's often the most interesting thing yeah i'm always looking for
00:31:53.220
bright spots that and then you and then you caught like as an engineer you copy it yeah it's just
00:31:57.680
like back to the the sales like chorus or refractor or gong it's like once you find that seller that's
00:32:03.820
closing at a higher rate and you listen to how he deals with objections or he does his discovery
00:32:07.640
component at the call clip it teach it reproduce i mean it's um we yeah we had one uh one example
00:32:15.340
that was pretty pretty funny actually not funny the so one client that when in manufacturing you
00:32:21.040
have to set up for another job so just imagine you have like your machine is configured for for a
00:32:26.260
certain thing and then you're making the next thing so you have to change the machine so so
00:32:30.080
this this one operator um was able to set it up twice as fast and so you know the client didn't
00:32:36.480
it until we were helping them so we got the truth of their data and then they said go go see what's
00:32:41.280
up what are they doing so they went over and uh and saw the operator um had this giant drum and
00:32:49.440
he had it tipped over in super dangerous unbelievably dangerous but because he had this drum tipped
00:32:55.600
over he could actually spool this wire and do this thing uh this operation at the same time as doing
00:33:00.960
another operation so first off they said that's super dangerous but hold on why don't we design
00:33:05.280
a little fixture to help you tip it right and then you then you roll that out to the whole plant so
00:33:10.700
that's kind of interesting where you know they saw something that was super ingenious yeah super
00:33:16.080
dangerous but you know that actually changed the process where you know typically if you're just
00:33:20.340
looking at you know that the dashboard you wouldn't see that in a dashboard you wouldn't see that in
00:33:24.480
the daily daily performance because you'd probably pay attention to the worst one right yeah that's
00:33:29.780
really cool and we see that like that that's where you're gonna get that step in creative it's I mean
00:33:34.500
this is what I find fascinating about AI is it's going to get creative regardless of biases or
00:33:43.460
predetermined, like it's just going to look for patterns and that's where we're going to get
00:33:48.660
these step functions of improvements, not these linear kind of paths. And you are helping your
00:33:55.580
customers figure that out. But it's still the, it's the sharing, it's enabling sharing knowledge
00:34:07.180
Do you see that movie with the guy who scaled that mountain?
00:34:21.040
But man, my midsections were tingling the whole time.
00:34:24.860
So what's interesting here is that he climbed with basically,
00:34:29.600
like the only modern equipment he had was maybe the shoe?
00:34:33.360
yeah what was the movie called come on man you watch all those movies you freak oh free climber
00:34:42.760
free climbers free solo okay so free solo so i i read this article that was describing how
00:34:48.340
you know what he did what he did was amazing um but uh like that could that could have been done
00:34:54.800
200 years ago so but so the only thing the only modern equipment he used was maybe a better shoe
00:35:00.300
right but but what was powerful was the fact that now with you know information technology
00:35:05.640
he had access to all the best techniques and tricks and knowledge so the idea is that it's
00:35:11.760
not that ai is going to be necessarily generating new knowledge but how but enabling us to find
00:35:17.660
um those ingenious ideas and concepts from people and spread it more efficiently and i thought that
00:35:23.720
was really transitions yeah that's a good point so so i think people are thinking oh just throw
00:35:27.740
the data in it and and and it'll tell us what to do and that's that's really not where the biggest
00:35:31.800
opportunity is the biggest opportunity is you know having taking all the the the things that
00:35:37.520
we have found out and and sharing that knowledge more um more freely that makes a lot of sense
00:35:43.680
martin when you look back over the last four years and just you know your career as um somebody
00:35:48.740
that's been irresponsible for like 50 plus people to manufacturing and and leading this business so
00:35:53.340
far um from a personal point of view leadership character who have you needed to become to be
00:36:00.180
you know the ceo that that gets to run this company today from it from a uh just like
00:36:06.600
personal growth point of view you know i i would say um i think one of the things that i learned
00:36:13.440
pretty quick you know when i when i first had people reporting to me is that when you're in
00:36:17.180
a leadership position um you are effectively responsible to act a certain way it's not that
00:36:21.820
you need to be an actor, but that you have a duty to behave a certain way.
00:36:26.520
And so, you know, one of the things I learned early on, you know, if you need to keep your
00:36:33.120
emotions in check, I think, you know, my default MO early on in my career was to be a bit of a
00:36:38.840
bulldozer, right? If somebody was standing in my way, I just run at them harder. And I think
00:36:42.680
learned pretty quickly that that's not the way to get things done. You know, so, you know,
00:36:51.040
I think one of the things is to make sure that, you know,
00:36:56.140
I am thinking about what, you know, if it's a coworker,
00:37:00.880
what they need from the interaction versus what we need the outcome to be.
00:37:06.300
And I think, you know, as you connect with your team,
00:37:12.220
So in the same way where you're, from a sales perspective,
00:37:15.060
learning about, you know, how to, you know, make a customer feel comfortable,
00:37:19.240
I think we, you know, that it's almost, it's some of the same skill set that, that, that
00:37:24.220
skill set per se, persuasion skill set is, is almost used everywhere.
00:37:28.900
I like, I like judo, like how do you work with that energy, but still get the outcome
00:37:36.520
Where it's, uh, you know, some of the same idea where like, how do you, you know, how
00:37:44.440
Um, but there's also opportunity for like at some point, you know, there's always, there's
00:37:51.920
So judo is a little bit more smooth than, say, boxing.
00:37:57.380
You and I are just punching each other in the head, right?
00:37:59.240
So I'd probably get hurt more boxing you than doing judo.
00:38:05.480
is thinking more about what somebody needs from the interaction
00:38:23.040
surrounding myself with people who are better at that than I am
00:38:27.040
and, you know, making sure that people are aligned, you know,
00:38:31.180
teamed up with people, you know, who are good fits for them as managers.
00:38:36.380
mostly responsible for unblocking and making people feel comfortable
00:38:42.220
And that's something that, you know, my co-founder Brayden and I
00:38:44.420
have thought a lot about, you know, how it's our instinct
00:38:48.440
to give people space but you know we're figuring out how to do it in a way which
00:38:54.800
is you know not necessarily abdication of responsibility how do we how do we
00:39:00.480
stay close enough to keep people on track but give them enough enough space
00:39:04.340
to run and that's always that challenge to find out you know what what
00:39:08.900
combination of space and guidance each person needs but once once you get that
00:39:13.100
dialed in it's pretty amazing that's where the magic happens one thing I
00:39:17.480
I love, Martin, as we wrap up, is the fact that you're taking stuff that's kind of like the cool word, like AI,
00:39:25.140
but actually like real use case, real customers, especially for manufacturers that a lot of us buy products from.
00:39:34.180
I just find it really cool that your passion for it, and as people have heard through this conversation
00:39:41.000
and other times we've talked, just how much you love doing what you do,
00:39:47.160
And I just want to thank you for sharing that and for continuing to kind of like push the standard of, again, great Canadian company.
00:39:56.400
That's just really at the beginning of a pretty cool journey.