Vivian Chu, Co-founder and CTO, Diligent Robotics Tessa Lau, Founder and CEO, Dusty Robotics
In conversation with: Phil Wahba, FORTUNE 

Brainstorm Tech 2023: Robotic Revolution 

Conferences

Before we get to our next session, I want to plug two great newsletters we have here at Fortune First Eye on A I my weekly newsletter, which is on how A I and machine learning are shaping the future of business. It's a great read. I should know. Please sign up second but definitely not least. We have another great newsletter, the data sheet, a daily download, giving business leaders insights and analysis on the company's people and trends shaping the future. If you're not already a subscriber, please do subscribe using the QR codes which should be displayed on the monitors here to get the newsletters delivered straight to your inbox each weekday on the with the program. Next up, we have another engaging segment featuring two trail blazing robotics pioneers at the forefront of driving innovation and disruption into the modern workforce. Vivian Chu, the co founder and CTO of Diligent Robotics is spearheading the development of a human centered robotics technology with a focus on creating hospital robot nurses designed to automate repetitive tasks and improve efficiency, allowing human workers to focus on patient care and other critical tasks. We also have Tessa Lau, the founder of Dusty Robotics, which is revolutionizing the construction and architectural sectors through cutting edge robotic mapping solutions. Dusty's robots can navigate and create 3d maps of construction sites, improving safety and accuracy for humans. Let's discover how these two companies with distinct robotic technologies are making impact. Here to interview them is Fortune's Phil Waba. Well, good morning again. So now we get to talk about an area of Texas a lot of fun but elicits a bit of fear in people robotics. But before we get into the discussion, let's look at a couple of clips. As we see, robotics can be very productive and helpful. So why don't we start with Vivian and tell us a little bit about Moxie as his videos running sounds great. One of the great things about robots is that we can show the videos and you can see firsthand what they're doing. So this is Moxie at Diligent. We make robots that work side by side with people. And Moxie is our first product that does so in the health care space, in particular, the robot delivers things like medication supplies, lightweight equipment. So that nurses, for example, you can see here don't have to leave the unit. They can spend more time with their patients. You saw here, a nurse is able to securely access the lock drawers on the robot and scan her badge and we know exactly who's put things in and outside of the robot. Our robots navigate all throughout the hospital. And one of our few distinguishing things about our product is one that it has an arm you'll know is that it has an arm here on the side that allows it to be able to interact with the environment so that the hospital staff don't have to integrate as much hardware into the hospital to be able to navigate through doors. You'll see an example here as well as elevators. The other differentiators, you'll notice that Moxie has a face and a head is, this is two fold one, there's a social robotic component with allowing people to feel like the robots are part of their team, someone that can help them do their task, so they don't have to worry about doing them as well as communications. You'll notice here, the robot looked at the position that the arm was going and that's a natural communication thing that people do. So we know how the robot is going to interact and people feel more comfortable and safe around this robot. So Moxi is currently deployed out in the world. An example of how the arms are being incredibly useful today. Our fleet of robots opened over 250,000 doors in just Q one of this year alone. And you can see here the robot is coming for a delivery to get picked up where the nurses will scan their badge. This really allows them to free up their time where studies show that they spend up to 30% of their time fetching gathering items. And that just doesn't make sense for someone with a nursing license where already their jobs are hard and we want to see how we can give them time to do that. Ok. Now, Tessa, your robot helps with construction. So tell us a little bit about what your robot does more specifically as we are on the video. Sure. So construction is the biggest, largest industry on the planet. It's a $12 trillion industry globally worldwide. And it's also one of the most industries that uses the least automation and robotics. Not only that, but the industry is heading towards a crisis. The average age of a construction worker today is 44 and growing about a quarter of the workforce is going to age out and retire in the next five years. And that means that the industry is looking for solutions. Um but it's an industry that can't stop. The construction industry builds all of the structures around us, it builds the houses that we live in, the buildings we work in and the hospitals that we, that we get sick in. And so what dusty is doing is bringing more digitization, ization and robotics to this industry that really, really needs it. And the way we're starting is with the robot that you just saw it. What it, where we, where we land is the place where the digital meets reality and that's where the digital models get translated out into the field today. That's done by people using their hands on their knees, using measuring tape. And what you just saw is a robot that actually brings those plants out into the world. And that's the first step towards the future in which the entire construction industry gets digitized. So both these robots are kind of cute and you know, a couple of times, Boston dynamics has shown videos with their robot that looks like a dog. And then, you know, you go on Twitter and you think it's the, you know, dystopic image of robots taking over the world. So is this the proof that robots are beginning to take the world? And how do you, you know, is there a sense out there that robots are something to be feared, start first go for it. We definitely, when we bring our robots to hospitals, there's a lot of initial skepticism, it helps that a robot is friendly looking. But for us, it's really important that we introduce the robot. We bring the robot actually all around the hospital and we talk to the staff to say, hey, this is Moxie and Moxie's here to help you do your job. So you don't have to do the parts. You don't like we want you to spend more time with our patients. We draw the line of the patient room and as soon as we have that dialogue and conversation then people understand and actually we get so many requests, like can the robot do this and do this and do this and do this for me. Now, once they understand that it's really here to take away the things that they don't want to do. And I do think a huge factor of it is thinking about the right case use cases. What are the things that people shouldn't be doing as well as thinking about form factor and interactions and that has made at least Moxie for us very successful for they will not come and draw blood any time soon. Right. Exactly. We want nurses to have more touch points for their patients and studies have shown more touch points means better patient outcome. Ok. Well, Moxie seems sweeter than a lot of our ends, you know. So maybe she should take blood. But anyway, how about you? So our robots have eyes for a reason. It's a ceo directive. They have to have eyes and it's, it's, I call it robot self defense and it's because robots that are working in the real world are going into a very hostile environment. Right. There's a lot of hesitation, there's a lot of skepticism. The workforce is worried about their jobs being taken by robots. And so by making robots cute, it's sort of like the baby effect, you know, you have big eyes, it makes you want to take care of them. And so all of our robots are designed to have that self defense mechanism to make everyone around them just love them because they're actually helping them do their jobs better. They're not taking away those jobs. Well, you know, the RBA is very popular and half of my Instagram feed is cats attacking the Roomba. So maybe you could have a cat attacking dusty and that way you get, you know, it'll have even more love for your robots. So, but on a more serious note, I want to ask vivi a question. So hospitals are not known for their early adoption of tech or for their efficiencies. How are you getting them to be your clients? Yes. So for us, we started even before the pandemic, engaging hospital leaders, understanding what are the problems and challenges and their challenges are very similar to a lot of challenges in the rest of the industry which is just labor shortage. They don't have enough nurses, they can't get, they can't educate nurses fast enough at a nursing school. And for them, they're seeing they need to change the way they're doing their model of care. And so for us, it's really engaging the innovative leaders and folks that understand that their staffing models don't work today and we start that conversation and that really allows them to embrace technology. I would say not all hospitals are the same. We focus on the more innovative ones to really prove out that this is making a difference and then we'll get the later adopters to have always, traditionally, even now are actually finally integrating hr and em, so we'll capture them after they go through that cycle and tell us where you got the idea for this. And could this robot, you know, down the line be adaptable and used for other things than what the video showed us? Yeah. So I really care about efficiency. That's something that's really near and dear to my heart. And I got into construction because I was remodeling my house for the first time ever about five years ago. And I had laborers coming to my doorstep using hand tools to reconstruct my house. And I thought, wow, that's really inefficient. And there's got to be something better that the construction industry can do with robotics. And so I did a lot of research and talked to a lot of people and discovered one of the biggest pain points that people have is where people have to do things that are really better done by robots. And the task that we're doing a layout which is measuring and marking with a very precise manner is something that just really has a much better use case when done by robots rather than by people in terms of what's coming next. I'm really excited about the digitization of the industry. And so what we're doing now is bringing digital models out into the field and once they're there, there's a lot of opportunity to bring more information and more digitize the work that's actually being done by those skilled laborers who are about to retire. And so that's what I'm really excited about. And so could Moxy get a side hustle working outside of a hospital? We've definitely been asked that question a lot. None of the technology they're building is fundamentally specific to hospitals and health care. But for us, we see the hospital and health care market as a place that needs robots. And so we're dedicated right now to staying in hospitals. Ok. How do your robots get smarter over time? You know, I think that's a trick question because like everyone's talking about A I, right? And everyone wants to know how are your robots making use of large language models and generative A I and all of that and the reality is they don't, you know, where I worry about A I is, is, is what does it mean for the workforce of the future? Right. You know, where's, where's the next startup going to be coming along? That's the robotics startup that's going to be able to leapfrog us because they are using A I that we're not, but in terms of the product itself, I think, I don't see that, that use case for A I. And probably part of the reason why is because what we build is a power tool. You don't want your power tool doing something unpredictable. Yeah. Yeah. Why not? No, I'm just kidding. And the interesting thing about like generative AI is being very popular today. But a I more the classical techniques that we use around path planning around trajectory generation. These are things that have been fundamental in our robots for years. So we've been using these techniques and using prediction and classification and using the same fundamental technology, but we might not utilize generative aii right now for the reasons that Tessa mentioned, right, safety, you don't want unpredictable trajectories of the robots doing. You want to know very specifically what control algorithm, what safety layers that we have and we still use a on top to generate the to generate some of the classification models and perception around people, but we don't have to use it for pure motion control. OK. I'm going to continue asking questions but if anybody here has a question of their own, raise your hand and one of the micro runners will come to you. And I have to, I'm a little disappointed. I thought my Roomba was, you know, getting smarter because I've noticed that I was about to say she, I noticed that it was starting to avoid one corner of our living room and we, we got stuck a few times. So I guess maybe I shouldn't be overestimating her. But uh um so let's talk a little bit about VC funding and all that. What's your sense? Not just for your own companies, but the environment is, is this two pie in the sky for them or do you think that they're, you know, seeing the opportunity in your case, both your, your products are very specific. So it's kind of easy to explain what it does. But you know, what's your take on the VC environment? I think the reason VC for robotics is hard is because most robotics companies suck. They're not really trying to solve a real problem. They're enamored with the technology. They want to build a robot and they assemble a team and raise the money so that they can build that robot and I can call out a lot of humanoid robots that kind of fall into that category. Um But I think it's different when you're actually solving a real problem and that's what we're doing, right? Both, both diligent and dusty started because we saw a real need in an industry that really, really needs the help. And so my hope, you know, we're series B, we've raised a large amount of capital to date and I'm sure we're going to be able to raise more. And it's because we have that fundamental business model, we have product market fit and that's different from a lot of the robotics companies that I see. Um I would say very similar things. The challenge is educating your investors to understand the industry. So both of us have to educate them about construction or health care sale cycles and both of these are very long and getting them on board and then all the hard things about hardware, right? It's a very cliche saying, but making sure folks understand that the investment cycle and the return is just a very different journey than other software companies. And when you can tell that story correctly about manufacturing our supply chain and why we feel confident what we're building and truly finding that product market fit. You have to find that right? Investor that understands that. And just from a market perspective, it's a very small niche in honesty, but like Tess said, we are funded and are continuing to support our customers and they see that demand and the investors see that there's demand and need, right? Because it's a very clear case. Could you see your products eventually being because right now your your customers are, are uh they're not the general consumer. Could your products be, could these robots be sold to Joe Q or JQ public? Eventually? I diligent. We don't have plans to and we're very much thinking about health care. We like to think about where spaces robots can be successful. So in people's homes, it's just a very, very different challenging problem. And so just thinking about our first product, thinking about focus and thinking about where we can be successful with startups, that's not an area we're initially going into right now. For us, we think about total addressable market and market sizing and the construction industry is a huge market, the vast majority of that is commercial construction. And so, you know, we don't really need to expand farther from the industries that we're already serving right now. New construction or also just renovations that ok. Yeah. So presumably with all these high rises and all our big cities that are empty being redone to become apartment buildings, there could be a lot of demand for you. I was just in Toronto for collision and they need to build a million new units in the next 10 years. It's a huge amount of construction in Toronto in Toronto. Yeah. Well, it's the same thing in all the big cities, right? So, um so I wanted to ask about uh the, the model, I think it's, is it dusty that rents you rent it, both your products are rented, right? Or are they bought by your, um could you see like what's the, what's the reason behind the purchasing model as opposed to leasing model as opposed to having them buy it? So, for us, you know, we're a venture backed startup that sells into the construction industry. And so we have to thread the needle between what our customers are willing to accept and what vcs are willing to fund. And so a raft model, a robot as a service model is, is the best solution that pretty much all the best thought leaders in robotics have come up with. Um as the best way to fund and, and go to market with robotics products. Um, from the customer's perspective, they don't have to invest in something that's going to be obsolete in six months. And they really like that. It's not a capital expense for them. From the VC perspective, we're not a commodity provider. We're like, we're a hard work powered fast company and so we get the best of both worlds. I would say it's a little bit also what your customer is looking for. Right. Do they have a Capex budget? Do they have an operational budget? And for us, we saw that our customers were able to find budgets in their operational side of the house and that was it allowed them to quickly test the robot. Like as I mentioned, they don't want to own these, they don't want have to figure out how to maintain these. They don't even under and robots. So having to staff their team to maintain them just doesn't make sense. And so for them, it's great that they get the latest in the software and the hardware upgrades and they just roll out when we need them to, to the customers. Ok, great. Well, on that note, join me in. Thanking Vivian and Tessa for joining us to tell us that robots are not monsters after all.