The 21st Century Warehouse | Seth Patin at LogistiVIEW

DISCLAIMER: Below is an AI generated transcript. There could be a few typos but it should be at least 90% accurate. Watch video or listen to the podcast for the full experience!

Seth Patin 0:00
There’s still tons of companies that spend an inordinate amount of time, basically just managing a stack of paper, and managing stack labels or pink sheets or what have you.

Alexander Ferguson 0:17
It may be surprising to hear that despite the vast technological advances in nearly every sector over the past 20 years, 10s of 1000s of warehouses still operate on paper, Seth Patin, the founder and CEO of logistiview, recognize the inefficiencies and saw an opportunity. His solution is a product that combines virtual reality with artificial intelligence, guiding warehouse workers with real time information about where they should be, what they should be doing, and where they should go next.

In this edition of UpTech, Report, Seth talks about how he started the company and some of the many adjustments he’s had to make along the way. Seth I’m excited to talk with you today and dig in more to logistic view and the problem that you’re uniquely solving to begin, in a very brief five seconds, what would you say that you you exist to solve? Why are you what are you solving?

Seth Patin 1:11
It’s really simple warehouses are many times stuck in the past. And we are bringing the modern mobility revolution, which started with consumers, you know, in 2007, and has rapidly progressed over the last decade, we’re taking that into a warehouse and connecting the warehouse with with itself really, which is an interesting process,

Alexander Ferguson 1:33
connecting the warehouse with itself. And so they’re, they’re outdated, and bringing consumer tech into I love it. So digging in a little bit deeper, give me an analogy of a problem that you’ve seen in warehouses today. They’re like, wow, this could totally be solved.

Seth Patin 1:48
Well, one of the most obvious problems is just efficient work, distribution and efficient work execution. One of our one of the companies that logistic view works with, basically had a system where it was all done on paper. So at the beginning of the day, you know, Oh, yeah. And then I saw your eyes get big, that’s totally normal. That’s a that is absolutely normal. There are 10s of 1000s of companies today that still do everything in their warehouse on paper. And so, you know, there’s other companies that do, you know, technology enabled logistics as well. So it’s certainly not like everyone does that. But at the same time, there’s tons of companies that spend an inordinate amount of time, basically just managing a stack of paper, and managing stack labels, or pink sheets, or what have you, and converting that all to a digital platform. And, you know, helping, it’s helping sort of the transactions, you know, into a logical travel sequence. So they’re not walking back and forth, and back and forth all over the place, you know, helping give them good information. So they know the right thing to do. You know, our system ask answers three basic questions, you know, that every frontline worker asks over and over and over again? Am I in the right place? Do I have the right stuff? And what do I do next? If you can answer that with simple, you know, simple modern mobility and a little bit of AI around the process, then you can actually transform how warehouse operates. And that’s what we do.

Alexander Ferguson 3:15
So if anything, people are going to be paying more attention to their warehouses and be able to modernize it to ship in new and different ways. But appreciate your point that and the innovation game is usually focused on where revenue can be generated, not where cost can be reduced, necessarily. So let’s let’s dig in a bit more about, then, you know, how did how did this begin? The company began? And what’s kind of that journey? What how many customers you have today?

Seth Patin 3:41
So our customer base, we have, we’re still pretty small. We have five, I think five companies live in production at a total of eight sites. We have about 25 companies and pilot stages at via various pilot stages. And, you know, we’ve been, I started the company in 2014, late 2014. And actually came out of an r&d project, I started logistic view 2014, I should clarify, it came out of an r&d project that we did at exa logics to test this idea that I had had many years ago and initially started on Google Glass. And that was not the right answer. Let’s just put it that way. The software however, the idea that the idea showed a ton of promise. And so that was when following the completion of that we started, you know, started the company in 2014. spent about three years, three or four years, three and a half years and r&d, released the product in early 2017 kind of MVP. You know, the reed Hoffman says if you’re not embarrassed by your MVP, you didn’t release soon enough. I released in good time, and what I what we found I was convinced the market was really ready, who was going to be ready in 2017. And it just proved that that really wasn’t the case. There was that human factor? I was talking about the Hey, we like doing things the way we’ve been doing things because that’s comfortable, you start introducing really new technology. And, you know, there’s there’s a barrier to overcome there, there’s a great book called Crossing the Chasm that is, is, is really relevant in this in this particular type of technology. Because I, you know, I can, there’s a few companies that will buy based off of the innovation. But the reality is, especially in logistics, where it’s all a cost center, it’s going to be about pragmatism. And so we feel we’ve, I think we’re just now beginning to get to that point where big companies are buying our software for pragmatic reasons. And not because you’ve got the innovation visionary getting a r&d budget,

Alexander Ferguson 5:41
we’re what are the kind of the, the base layer that you’ve you’ve, you’ve got established, and you’re providing as far as the technology there, and then the next layer that you’re working on next.

Seth Patin 5:51
So the base layer, logist, you start off is what we call the human interface platform, human experience platform. And so the concept there was, you know, Telnet, is a really terrible way to communicate with a person, you know, it’s, it’s, it worked for, you know, for 40 years, or 50 years, almost now. And, sadly, it’s still incredibly common, because the majority of the warehouses that don’t run paper, run talent. And so, that is the bar, you know, that’s the bar that we’re that, you know, that the industry is used to. And so, you know, our, our, our obligation, our obligation, basically, was to find a way to do that better, because, especially if you, you know, if you consider, by and large warehouse workers are, you know, are considered, you know, they’re considered to be, you know, in many ways, like, you know, difficult or uneducated or anything, but that’s, that’s a terrible, terrible characterization. They’re actually incredibly smart. And they really resent the terrible systems that they have to use. And when you when they don’t have a good system, it actually impacts their job satisfaction. That’s one of the reasons why, you know, especially with unemployment, as low as it was pre pandemic, it was hard to keep warehouse workers in, you know, in one place, unless you had really good technology. The other angle of it is they all want to be more efficient. I mean, they’re, they’re just just like, we have our objectives, like the things that make us tick, a typical frontline worker, one of the things that makes them tick is knowing they did something really well. That’s actually like, that’s it, that’s a, that’s a point of pride. And when they know the system is holding them back, they get so angry at the computer. And so we you know, I observed that over nearly 20 years in implementing warehouse management software and said, you know, there’s, if we do it a better way, if we give them better instructions, if the technology feels more native, because let’s be honest, the warehouse worker is coming into the, they’re coming into the building, with a smartphone in their back pocket. They are not computer literate like that, not at all. So they they they a frontline worker lives their entire life, just as connected as a tech worker, most of the time, they have a smartphone, they have Apple TVs, they have Roku, they have Netflix, I mean, all the stuff we have

Alexander Ferguson 8:11
they have, it’s like we’re entering a phase where the average consumer is more tech advanced than the business environment, they’re going into salutely and that there’s a disconnect.

Seth Patin 8:21
Well, in tech workers, I mean, a tech worker gets to say, Well, if you want to keep me, you know, you have to give me a $4,000 Crazy laptop and give me three monitors and all this other stuff. Meanwhile, the warehouse worker walks in and goes, Wait a minute, you’ve got to be kidding me, this is a four and a half pound brick that I have to carry around and it has 20 lines of green text on it, you guys have to be able to do better. And so that was that was really where in observing that problem. That’s where that’s where we started.

Alexander Ferguson 8:47
So looking forward from here, what’s kind of the roadmap that in the near future that you’re going to continue to develop sounds like maybe that AI and then wasn’t the long term like 510 years that you see in the roadmap,

Seth Patin 9:00
I think the most the most powerful technology for a warehouse would be a solution or a solution that’s capable of requiring very little planning to get it up and running. But then is subsequently capable of learning from all of the tasks that it assigns. And all of the routes that it assigns, and all the workers that it assigns those routes to including robots or ai, ai components, you’ve got the digital workforce, which includes humans, robots and artificial intelligence agents. You bring that all together, and you build a system that the, you know, where, where, if it’s done, right, the time to install, and the amount of configuration required is actually lower than it’s ever been in history. In fact, you can set up a few basic things, maybe even send out a few robots or a few people to run some, you know, computer vision based machine learning algorithms to interact with sensors figure out where things are, and then now the system is set and it has the kind of the baseline paths, then be able to learn from constant testing of new new paths and new task assignments and new routings to the point where when you go live on the new on the first day you have the system live, it’s the worst, least efficient day that you’ve ever had, or that you’ll ever have on the system. And every single day, that system will get a little bit better and a little bit better and a little bit better to the point where, you know, a year in or two years in, you’ve fine tuned and tweaked that operational process. So, so substantially, that the people who are running the operation don’t fully understand why the system is making the decisions it’s making. Because the system has literally learned itself, how to optimize that particular business, that particular warehouse that particular, you know, physical layout. And obviously, if you introduce change, it then needs to be able to learn from that change,

Alexander Ferguson 10:57
or for this, the kind of next steps of where you guys are going, Are you focusing is there different types of warehouses or this your software applies to all all different categories of warehouses and pretty much

Seth Patin 11:11
applies to any warehouse. And we have actually, that the industry vertical, or the industry vertical, where we’re kind of having the most success is the, you know, the third party logistics provider, which is basically the anything warehouse. So, you know, the three PL three PL providers like our solution, because it’s SAS based, and because it can be, you know, it can be paid for on an OP X budget instead of a CapEx budget. And so if you take a look at a typical contract logistics provider, the contract is a three to five year, maybe seven year if you’re lucky, and the margins aren’t exceptionally high. So they don’t have the money to go and buy, you know, $10 million worth of conveyors and just, you know, automate the heck out of this warehouse, they need something that’s very flexible. And that’s where so three PL is the place where actually getting the most interest. But that’s not because of the capabilities of the system as much as is because of the business model.

Alexander Ferguson 12:08
Being a SaaS model where you said, it’s not a capital cost, it’s operational, and then they can can apply it.

Seth Patin 12:14
And it also it’s also a consume as you go. So if you have you know, there’s there’s no fixed, there’s no flat fee, to have the system, it’s based on the number of users, or the number of devices that are connected. So you get the value. Yeah, you get the value. As you grow. Not you don’t have to try and, you know, put this heavy cost over a small, small number of people, it’s very plausible to roll out logistics for a five person warehouse. And we’ve done that.

Alexander Ferguson 12:40
Wow. That’s impressive. So then I’ll ask what’s a good first step for people to take? Where can they go to learn more?

Seth Patin 12:49
Well, there’s a lot of a lot of a lot of places you can go to learn more, I think the best, the best place to go to learn more is to go to logistic you.com, or ex logics, comm you’ll get you’ll get some good, some good starter information there. I think if you really want to learn more, the best way to do it is by calling and talking to, you know, to us, because a lot of times, what I find is a lot of folks in our business, like the idea of automation, they like the idea of, you know, assisted vision picking and things like that, you know, all of that is really it’s a powerful concept. But the question is, you know, the deeper question of how do I get it all to work together? How do I integrate it with all the other systems? I already have? You know, how do I come? You know, how do I make my green screen system work with this next gen, you know, AI and computer vision system, we, we actually have spent a lot of time and a lot of our roadmap over the past couple years making that integration as painless as possible. And so, a lot of folks, a lot of folks could probably share their exact layout and we could tell them how it actually isn’t probably as bad as they might think it would.

Alexander Ferguson 13:59
Be sure to check out the second part of my conversation with Seth, in which he discusses how funding his own startup has been both a challenge and a motivating force.