Episode 121: The Flat-pack Production Floor with Vention CEO Etienne Lacroix

John Pryor: It's always time for out of the box thinking, maybe sometimes they're even more relevant for this type of thinking than other times. But how about out of the box thinking when it comes to industrial automation and manufacturing, both creating new and improving old lines, can it even be done? Well, it can, for both large companies and small companies. Think about the design of machines at what it might take to go from a 3D CAD design environment to get something physically onto your factory floor. If I need to add a few more words that can capture the degree of disruption here, think Lego and flat pack boxes like IKEA, and don't think small. Think simple things like enclosures or work areas, but also think about a robot cell and that's the robot itself and all the surrounding equipment. We're going to talk about disrupting how companies might bring together sensors and actuators, motors, structural pieces with the CEO of Vention at TM Eloqua. Now, although all of this brings me back to my days of taking stuff apart and trying to put it all back together again, not well, there's a lot more to talk about. Think about retail, how it's evolved from brick and mortar to an online mall. Think about the evolution of software to SaaS, and that brings us freemium and low touch sales. So, can accompany actually be disruptive in selling if they're in the field of industrial automation? Turns out that you can, and the insight you're going to hear about selling in this environment should be of interest to all. Stick around. I'm John Pryor, and this is the Georgian impact podcast. Welcome at TN. Why don't we just start by having you talk a little more about your business, what might be meant by flat pack, etc.

Speaker 1: A lot of people have initially described Vention as industrial Lego. We like to call ourself online first self- serve platform for industrial automation. We let our client and users basically design program, simulate an order, automate an equipment online, and those can be then shipped for deployment as fast as next day. The core of our business is one of the digital engineering business, where we develop and provide a full stack of engineering software. For us, that includes machine builder, which is a Cloud- based CAD and includes machine logic, which is a software to program industrial equipment in a code free environment. It's a very simplistic way to make machine move. There's another piece called My Team, which is our PLM equivalent, product life cycle manager equivalent software. People can manage access ride, share file, manage life cycle of their equipment. We provide those software for free actually, and so users can then leverage those software to design their automated equipment. If we're doing a good job of providing software that makes successful machine, then user will buy. The fact that we're providing our software for free aligns or incentive with our client. Today, we're 100 people supporting that business model here working at Vention. We're lucky to work with close to a 1000 clients. On three continent, we serve 20 industries, the bigger one being automotive, aerospace, and robotics. This has been accomplished roughly in the last three years and a half, we've been there. We've been building invention. So, we feel very privileged and very lucky to be at the epicenter of democratizing industrial automation

Speaker 2: At TN, I'm thinking of using the term and ask him about the word agile. We get agile for software development, we get agile for marketing. Does agile and manufacturing work together for you?

Speaker 1: They do, but they not always been. Initially designing, commissioning, and operating industrial equipment has been a very cumbersome processes. This is where I started my career myself sitting behind a inaudible and a solid works, 3D workstation, designing those industrial equipment you've mentioned in the intro and typically equipped with a specification from our clients. I would go on and find components on industrial distributor website, bring those components to my 3D software, start to design a full fledge automated equipment, create 2D drawing. At some point, send a little package to procurement. Procurement would eventually start a coding process. Some manufacturers will be selected. By the end of that, it's very cumbersome process. Two to four months down the road. Finally, you have an automated equipment that you can commission at your factory site.

John Pryor: Not agile?

Speaker 1: Not agile and very costly as well. Now, with today's advancement in digital technologies, including WebGL and other pieces of libraries and software, you can imagine a world where this entire workflow is taking place online, and this suspension to what Vention is pioneering here, where our users go invention, select their part, design, see price in real time order, we deliver next day, they take roughly a day to assemble there. If I can use that analogy, Lego bays machine and they're up and running. So we can take a process that takes two to four months and really shrinking down as fast as three days if the users want to navigate that speed, and that creates agility. There's a reason why agility is probably more important now than ever, and is because product life cycle is really, really short nowadays. That's not always been the case. Today a consumer electronic product is going to last for a year and a half to two years. A car platform lasts for three years. So no longer manufacturers can afford to have the most expensive piece of equipment or the highest troop wood piece of equipment to operate their floor, because the ROI will just not be there. When you have a very short term window to design and depreciate your equipment, you need to work differently. Invention enables those manufacturers with shorter life cycle, obviously to stay profitable as their product life cycle revolution.

John Pryor: I really love that story because you do think about agile software and if the software changes all the time versus every 18 months or putting out a new release. I hadn't thought about it, but you're right, product lifestyles changes. As I looked through your customer references, is Tesla a good story here? Obviously, they created lines or nothing. I know from experience and reading that they had to keep changing along the way. So what they had three, four years ago is clearly not what they have today. They have to become, I'll use the word one more time, agile here?

Speaker 1: So I think a lot of automotive manufacturers that are trying to become agile and we're lucky to work with the vast majority of them. Time to ramp up production as always been a big challenge. We're lucky to work with some of those manufacturers. To take project, there used to be, again, two to six months design and commissioning time to ramp up production. With some of those manufacturers, we've done design to operating equipment as fast as two weeks. Those are not simplistic equipment. They can place machine that are fully customed to the end products design. They can be assembly jig or inspection jigs for a metrology of car body parts. This is really game- changing just from amount of time that we shrink out of this as processed. It really opened up possibilities for those manufacturers. Just to piggyback a little bit more, John, on your point of agility, when you start to envision a world where you design out a Lego parts, and those Lego parts and CoMMpass structural framing, tooling, motion control, robot cell components, all of those component can be upgraded and replace and repurpose over time. So this adds to the agility. The sets of what you have today, or the machine you've designed today with invention will evolve over time because it's entirely modular. As you can add Lego bricks on it to support a bigger parts or to add to the trooper over time. We've seen those continuously repurpose or improve equipment as a result of the modularity aspect, which translate into agility here.

Speaker 3: Now, with that manufacturing and you have to change the internal processes at your customers that have to change, how has the role of procurement changed?

Speaker 1: Yeah. So Vention is a self- serve platform to start with. We try to provide our clients and users, all the tools they need to do the work by themselves, and we compliment that with application engineering support and account executive support. Now the suites of software that we give to our user include 3D design software that is Cloud- based and industrial programming software that is called Free also Cloud- based, My Team dashboard. So then they can manage all their engineering file, manage access right, manage lifecycle, and a few more. That suite of digital engineering software enable our users to be self- served from beginning to the end. Now, what we've noticed is manufacturing as an industry is getting consumerized or democratize. As a result, the act of designing an industrial piece of equipment and swiping the credit card at the end is real and does exist. Obviously that will be basket size dependent, but are there a certain point to gain speed? Some manufacturers will try to avoid on purpose for criminal process, and as those deployment on those machine complexity increases, yes, procurement will be involved in making sure to get a good price for what they pay, and that's all fair. But we are going to see now manufacturers fast tracking a lot of project, not necessarily involving procurement, because the lines or the business depends on it. They want to go fast and sometime they will work with procurement.

Speaker 3: There's an evolution here. In the fact that there's a self- service model is really what makes you a fascinating guest to me. I think we've got a message that can resonate for our entire audience and this notion of remote selling people understand it, maybe in the world of simple software, but you've really thought hard about that and have taken a very complex world and simplified it. So talk to me a bit about your thoughts of selling in this world.

Speaker 1: Yeah, so Vention has been built on Fundacion to be a self- serve online for his business. This is selling industrial automation equipment that can range from a few$1000 to a few$100, 000 is a long journey, and the roadmap ahead of us is probably even bigger than the roadmap we've already accomplished. There's a journey there, and our mission has always been, we're going to build a self- serve tool, so users can be successful on their own, but we're going to compliment that platform with a proper inside sales team that will help our users throughout the journey of selecting component, designing machine, validating that machine before purchase, and eventually purchasing. For us to support that, we've built what we call an inside sales team made of both account executive and application engineers. Those work in pair to some extent. Account executive will be very good to understand the client needs, their budget concern, their timing, asking the right question about what they're trying to achieve, what's success for them for a given design, and application engineers will be very good to translate those need into a product that makes sense for a client. The support we will provide our client will vary. Some clients have done 95% of the work, and they just want to have a second pair of eyes on their equipment. Make sure it respects all the laws of physics, and we'll be happy to do that. When we deal with the larger fortune 500 companies, a lot of the engineers here are young, they're fresh out of school, they know how to design, they know like to program, and those guys are very self- serving. But we're also going to help another class of user, which are smaller manufacturing companies that understand that their survival longer term is really hankered in their ability to automate their shop floor. Those guys might not have all the expertise in house already to initiate that industrial automation journey. And here we'll provide more support. We'll help educate them, we'll help them crack their first application use case, we'll start small with them, and we'll grow with them as we automate one process after the other and their shop floor. So those two resources works in pair. We work remotely, and the fact that our entire platform and suite of software in Cloud base is stable stake. Yes, we can compliment our process with video conference, but that would not be as robust as if we're would not be able to join the design session of our users or actually share programming code live in the Cloud and test with them and both look at the same result or same simulation together to get to a final state.

Speaker 3: I love that you've got sales and tech sales, and historically I'm a longterm tech sales person. So I think that's always been a vital role. But it does sound like you've got some customer cohorts segmentations per se, where you might need more account executive work and less tech sales and other cases you really need to really, and I know you're using a different term, but I'll just generalize it. Well, you need to give them more technical advice and you almost become an extension of their team?

Speaker 1: To some extent. I think your view of the world is correct. The larger the company, the more account executive support will be required. The smaller the company, typically the more application engineering support will be required and as account executive and as just a reflection of our more established our processes and various companies.

Speaker 3: And as they become part in an extension of the team, and I think that works in either cohort. As that happens, how do you ensure that once the sale is done, they don't move on to the next sale? Because you obviously, it could be a problem.

Speaker 1: So, one big learning that we've made attention is manufacturing for our living animal. They always change. There's always a new product arriving on the floor, there's always an assembly line that is increasing capacity or reducing capacity, there's products that are getting obsolete, replaced with something else. As a result, there's always opportunities to help the manufacturing floor evolve through his journey. What Vention as become is this other tool in the engineering toolbox to make those shop floor transition fast. One of our clients called that ventioning, and ventioning is now their action word to, hey, we have manufacturing problem. We need to scale up that line or add a quality step check or whatever it is, is now they go- to word to crack something quick and deploy it next day. Obviously, we felt very unprivileged to have some one of our client use that ventioning as a word, but I think it portrays very much the final state for Vention is to become that engineering tool in the toolbox that is now being used to keep their manufacturing for moving.

Speaker 3: That's just great. The world knows what Googling is as a verb and perhaps the world, or a little smaller section of the world will know about venturing. But as cool as that is, I'd like to ask you to step back and let's talk about this as an opportunity. So, how does something like this fit into sales operations and what you could measure?

Speaker 1: There's a big data science aspect to the way we run the sale and Vention being an online for his business, we are by default, we are sitting on humongous spool of data, whether it's from our own sales people's behavior or from our client's behavior. Obviously, we try to inform ourselves from this to be more effective. Now, if you go back to the traditional body of knowledge on sales, a lot of the sales executive today, we'll talk about process leads to result, and they're going to enforce thing like task compliance. How many invites have you in a meeting invite have you sent today? How many emails have you sent today? How many calls have you made? With the belief that those actions will translate into resolved. In a world where data is not heavily accessible, I think that's probably the right way to go. But when you fall into a world where data is evenly accessible, you can start looking at this with a fresh lens. What you realize is not all of those actions leads to impact. I'll give you a little example here. The amount of email that somebody sent is actually correlated to sale at all. It's mostly correlated to the amount of lead that person has received in the month. So now starting to comply to those tasks can use to huge amount of value destruction. We have to rewrite a little bit the sales playbook here to understand what are the indicator. I would argue that most of them are actually not task compliance- based, but what are those milestone? What are those event that really leads to sales being effective? Obviously, over time and over months and months of looking at cohort and cohort of account executive and application engineers working together, we've been able to, I would say, rewrite our playbook and we use variable that are very different to understand how are we going to continue to scale and how are we going to stay effective for our users. But they're very different than what I would call the traditional body of knowledge on sales.

Speaker 3: Wow! So I hadn't really thought about the fact that traditional sales measures aren't relevant, and I guess this gets you into the environment. Customers keep coming back. As you said, the manufacturing changes more frequently than I really would think about it. That one of your measures would be the next inquiry as to the next piece part or the next, perhaps change in a shop floor or in the process of this 12 steps along the way, and they're adding a 13 step or replacing step nine. You see that right away. Again, you're really partnering and know a lot about these customers. Is that part of how you perform sales?

Speaker 1: We do. Let me share piece of story that I'm actually quite excited about. I love manufacturing. There's no question. I fall into manufacturing. I was probably around 11 years old and the passion never stopped. Today with Vention, with this remote view, we know what's going on in roughly a 1000 factories across the globe. From all the Silicon Valley tech startup that now have robotic lab, to most of the car manufacturers, to most of the aerospace manufacturers, we're so privileged to have that view into what is the world of manufacturing doing today? Application engineers at Vention, some of them start after three, four years of professional career in machine design or integrators, and they joined Vention, and they used to work on one or two projects a year, they see now 15 per day. So the amount of exposure you have to what's going on in the world of manufacturing is so interesting, it's so energizing as well. That change a lot how we are. We can help our customers find the best solution, we see a lot how people are pushing the boundaries of the industries, and we're able to see those trends first and of democratization and consumerization of the industries from that lens that we have.

John Pryor: Wow! So what makes me think a little different, and clearly you are a company that's disrupting so many elements of manufacturing and even the sales disruption is fascinating. Take me through a little bit of who are the companies that you would partner with now versus what somebody might have partnered with 20 years ago? This is a good way to get a kind of my sense of how disruptive you truly are.

Speaker 1: It's a very good question. John, the partnering and partnership is a big team of work for us. Invention operate as a online for his business. We also provide hardware to our client. We do have a venture fund branded hardware, but the world of industrial automation is made of hundreds of thousands, if not millions of components, and to provide full end to end solution to our partners and to our client, we need to work with partners that will be specialized in robot arm and of arm tool, conveyor, and other types of the components. So, we've actually built over time, what we call the Vention partner network, where component manufacturers are joining our platform with credit component. It could be one of their existing component line that has been venture in to some extent, so we can keep that simplicity, that single tool assembly experience that we pride ourselves to provide that ease of integration, that ease of deployment. So when they venture in some of those component, they can join our accredited partner network, and that enabled us to go end to end with our client on the other end. I think today we have around 30 partners, they range a spectrum of category is going from equipment safety to conveyor, to the robot arm again. All of those are working with us to provide this integration free experiences or this very easy deployment on the shop floor, where machines are designed online, they're shipped next day or within a few days, and the end user is the one responsible to commission it and to afford the bar for a complexity that can be allowed is much more younger. We used to say our application engineers and our product team, if your mom and dad can use it, we haven't worked hard enough to make it simpler. So that's the bar we're trying to impose in the industry. So, a product data sheet cannot be 20 pages. You need to be one or two pages. The configuration option for a component can not be more than three. In fact, we use something called a t- shirt strategy, small, medium, large. We don't have 20 variation of the motors on the Vention website. There's three; small, medium, large, and we're going to cover 95% of the use cases, and it went for outside of that. Well, we have a network of integrators and the industry has very qualified integrators that can do those very custom, very complex equipment, and we'll be happy to let those a project outside of the venture platform.

John Pryor: So there you are really having an in- depth knowledge of each individual customer at the same time, you're beginning to aggregate the data and you're getting some significant knowledge about the manufacturing process across an industry and industries, and you're working with all these different partners at the same time. So, how do you focus on ensuring the Vention is a trusted company to work with? How do you talk to your customers and your partners in terms of who you are and what you stand for?

Speaker 1: That's a very good question. The world of industrial automation is full of very credible player in there. That have done beautiful things of bringing the state of technology to where it is today. With our stance of bringing self- serve to that industry, the roadmap ahead of us is humongous. Humongous will be probably under qualified word to express how much work there is in front of us. So we know to be honest, that we will not get everything perfect first release because there's just so much to be done, and our stance has been one of humility. We know that the mission is real. The mission is very, very value add for the industries, but the journey is humongous. So we've had one of humility and for us to build trust, it means you need to be open to feedback. You need to be able to get that feedback and change quickly. That's one thing we've done is keeping a human, a humble tone. Now, the way we work with our client has been to maintain the relationship a lot of today and remote selling. For example, initial client will go through SDR, sale development rep, will be passed over to an account executive, and then it'll be passed over to an account managers. As a client, you almost feel that, okay, now I'm being qualified. So I'm not really talking to the right guy. Now you're being passed over to somebody who's just there to close the deal. So I know it was incentive or a little bit biased. Finally, in passover, it's when account managers that care about me and want me to stick around and their incentive, you feel the change of incentive as you go through the process. For us, we decided to go against that wisdom because we didn't fail. It was in the interest of our client. Our client from the get go engineers don't like to be sold to. If they reach out to you, is because they trust your advice. That means sometimes to be on bias, to some extent, sometimes say, yeah, Vention is the right solution. But also sometime be able to say, Vention is not the right solution for that application. As client build trust with us, we didn't felt it was fair to change who they're working with. So for us, we've taken a stance of when we onboard and your account executive at Vention, and we don't have SDR. Meaning the first person that your client will talk to at Vention is somebody that is equipped to obviously help them through the first sale, but that will also stick around with them through the journey. So we decided not to have SDR. We have already account executive, which tends to be little bit it more senior, a bit more experienced at guiding clients properly. Over time as they mature with us at Vention, and it takes more than a year to transition an account executive to a full portfolio where they've developed enough account, that they basically cannot take more account, and their sole job is to make their accounts successful. That journey takes over a year, and that means their role is going to change over a year. Initially they're very focused on obviously building those accounts and over time, they're going to be focused on making sure we serve them well. To get somebody who has been described historically as a hunter, and to move them to a farmer can be a difficult transition, and you cannot do it unless you invest a lot in training. For us, just to give you a sense, when an account executive joint at Vention, they undergo a full months of training. So, their first month we don't expect even them to be on the phone. They go over all of our product, data sheets, all the communication protocol that we support, all the future of the texta platform. They start to do call shadowing. We do a lot of role plays to make sure we can guide client in various situation. After that first month, they start to be on the phone, and then they're going to mature and become more and more into an account manager role over time. After typically a little bit more than a year, they're not going to be responsible to develop new account, but only to continue to develop the one they already working with. And that's a different playbook. That's a different training. Overtime, every single week, we have one hour training with our full account executive and application during team, and we go through those training modules, one after the other. So it's a big journey. It's a big commitment to training, but we felt it was in the best interest of our client that don't want to be failed. That they're being passed from one person to the other person. When we were successful at establishing trust, we going to build on that trust and not break the relationship.

John Pryor: Wow! There's no doubt that your investment in your team is clearly felt by your customers. That's a great story at inaudible. Thank you so much for spending the time with us today. This was an absolute pleasure. I think it's great how technology helps our vernacular evolve. I look forward to hearing about how more and more companies are ventioning. Thanks again for taking the time to be with us.

Speaker 1: Thanks also John.