The Exchanges

Q And these were, and these robots had like claws, like, you know, like you'd seen like a, an arcade with a claw machine, or how are they picking up the recycled material?

A So, you know, we actually did start with claws, and that was basically what my PhD was on, was having robots use claws in interesting ways, and it's really hard. It's just really hard to imitate what people do. There's so many sophisticated things you do, like when you're picking up something that's flat, like a, a flattened carton, If you kind of do it slowly, you'll see you do things like you push down on a corner of it to get the opposite corner to lift up, and then that lets you wrap your fingers around. And it's very hard to get a robot to do this kind of, um, kind of sophisticated multi-step planning. And what I saw was it was going to be tough, uh, and we ended up switching to a whole different technology that I, I didn't even know much about in graduate school, which was, uh, using vacuum technology. So basically using something that's an industrialized system, but it's not that different from your vacuum cleaner at home. You think about, okay, I can take my vacuum cleaner and I can kind of point it at an aluminum can. I'll probably be able to pick up the aluminum can. That's kind of what we started to do. Just point a vacuum at the thing you want and pick it up. And we found, uh, we could get that to work really well. Um, so we, we kind of hit the easy button on this. I mean, it's not that easy. I've spent like nine years of my life thinking about vacuums.

AI assessment note: “we ended up switching to a whole different technology... using vacuum technology.”

Q So do you have a sense of, of the accuracy? I mean, how much, so for example, in a traditional recycling center where it's sorted by humans, I have to imagine that oftentimes, you know, some glass gets into the aluminum cans, you know, and some paper gets into the plastic. How much more accurate are these machines and humans?

A So there's kind of two ways to answer. So one is a person can actually be very good and produce above 99% purity. But they almost never do, just because the staff tends to not be motivated, and it's a tough job, and you start zoning out and things. And so what you'll see is for most commodities, the recycling facilities will produce material that kind of bumps around 90 or 95% pure. And so our facilities, the biggest thing is, besides being fully automated and having this lower cost structure as a result, is they're just extremely consistent, like constantly producing Material of the same purity, but yeah, we'll be 95 to 99%. Interestingly, what you find is, you know, there's this broader supply chain. We're selling the plastics to somebody, and they take these plastics, and because the industry can't get to a high enough purity consistently, those buyers will actually have a whole sorting process where they sort it again. They're cleaning up what they just bought. We sell those guys robots, so our robots are helping clean the stuff up. And so the result, though, is, is we Can calibrate the purity to what the buyer will pay. So if they pay a premium, you know, we can hit a very high standard. You know, if they're looking for kind of something that's middle of the road, more like 95%, we'll just produce at 95%.

AI assessment note: “our facilities... are just extremely consistent... we'll be 95 to 99%.”

Q Let's talk about your customer. Who, in the United States, who handles recycling? Is it, because I think a lot of people assume it's like the government or municipal offices, but it's mostly not, right? It's private companies.

A Yeah, it, it'll be companies like Waste Management or Republic Services, so those are Fortune 500 companies. You'll find some small family businesses. We have one customer that's, uh, recycling and disposal services in Virginia, but the way the industry works is your city will have, or your HOA will have a waste contract, and they'll have a contract with one of these groups. Some municipalities decide to do it themselves, but, um, but for the most part, it's a, uh, A company, um, and they'll take your trash, and they'll take your recycling, um, they'll bring the trash to a landfill, or sometimes an incineration facility. They'll take the recycling and, um, sort it out and, and run that business. And yeah, the municipalities typically aren't doing all of it themselves, but, but in some cases, they do.

AI assessment note: “it'll be companies like Waste Management or Republic Services”

Q I've seen a video of this. It's like tubes Right? There's like a few tubes over the conveyor belt, and they'll just pop down and suck up each piece of trash, and it happens really fast, like in a millisecond. But how did you make it so it wouldn't just suck up like four things, right? Instead of just the actual thing it needs to suck up.

A You end up having this trade-off exactly like you're describing. It can't be too big, or it'll pick up too much. It can't be too small. Um, We rely a lot on our vision system to look at the items, even if they're overlapping and only target kind of promising areas to pick things up. And it's gotten pretty sophisticated. There's multiple layers. The thing self cleans, it reverses the airflow after every, uh, pick to clean itself out, uh, in case they picked up some plastic bags or something, but it's a tough problem. We're still working at it. We're constantly trying to make it better. The hardest part out of all of it ended up being keeping it from getting gunked up with that rotten milk pieces of glass debris. There's so much stuff that can just kind of accumulate in a recycling facility, and what we found was, even once we made something that worked, most concepts for doing this will get gunked up with stuff within half an hour, and we needed something that would last days, and that ended up being the hardest piece of it.

AI assessment note: “We rely a lot on our vision system to look at the items”

Q more efficient and economically viable. So when you were working on this and you got grants and you were starting to get some traction, what did you expect to happen that didn't happen? In other words, did, I mean, I, I think in this case with most entrepreneurs interview, you think that it's going to be easier to solve faster than it actually is. Was that the case for you?

A Absolutely. The tough thing ended up not being the technology. Like it did take a while. I thought it would take maybe six months. It ended up taking more like two years to have something that was good. But The hardest problem ends up being matching that technology to, uh, the business problem and having something that people really love. Uh, so when we got something working, I was like, okay, great. Hard work's done. And then I found out that the real hard work was beginning, which was to go sell a ton of these things, uh, and go visit the recycling facilities, understand how to price it, you know, and all of this sort of work. But I think it was surprising to me the extent to which, um, You know, even if you have great technology, you just really got to make sure that, um, you position it right to have a catch fire.

AI assessment note: “I thought it would take maybe six months. It ended up taking more like two”

Q Has it been fairly easy to convince recycling facilities to adopt this technology, or is there still resistance?

A I'd say it's kind of middle of the road. It's like the adoption of any new technology. People want to make sure they're, they understand the technology. They're going to be handing over a large fraction of their business to these robots. And so what we've done is we've tried to, uh, make it easy for the technology to be adopted. You can get one or two robots, you know, work with it for six months, Start to trust the system and then get another four. And then once you've kind of got comfortable with that, you get another four and eventually your facility is almost fully automated, but you never had to sort of take a huge leap and, um, and, you know, blindly believe in the technology. You could sort of step your way into it. And we've seen that strategy to be successful. Um, we have customers that still have one or two robots and they're kind of integrating it with their process. We have other Customers who have almost their whole facility automated with these systems. The question we're constantly focused on internally is how do we make the rate of adoption even faster? And that has a lot to do with technology, interesting pricing structures. Um, you know, what can we do to help insulate customers from commodity swings themselves? Because that'll affect the return of the robots. There's a real kind of like enterprise sales process. Um, you know, people are very deliberative and …

AI assessment note: “I'd say it's kind of middle of the road.”

Q that, for example, China used to import a lot of plastic and materials, and I think in 2017 they basically said, we're not gonna take it anymore. What does that mean for your industry? I mean, is that actually a good thing, that, that things, you know, have to be dealt with domestically now? From your perspective with AMP, does that mean that, um, there are opportunities there for you?

A Certainly. You know, one way of looking at this is, In the U S a lot of material was going to China or Southeast Asian countries. You know, one of the things I point out to people is it really speaks to how valuable this stuff is. Like it was worthwhile to move this stuff across the Pacific ocean and pull out these different plastics. Like that whole thing was worthwhile. If people were doing that at a profit, but, um, but yeah, uh, there were a lot of issues with it. One of the reasons it was worthwhile to do this in places like China was, um, One of the main reasons is they have lower labor costs. So it would be sort of easier for them to pull out the specific materials, uh, over there by lowering the cost of sorting here in the United States. It's, it's almost one of these manufacturing reshoring stories. Like we have lowered the cost of sorting so much. It's now worthwhile to do this domestically and us buying these low value plastic bales and separating the different materials out. That's basically what was happening in China. It was getting shipped over there and people were separating out these low value plastics. That shift in from China and Southeast Asian countries really happened a couple years ago, and the industry has adapted. So it has created this push for higher quality materials, and that does serve as a tailwind to us. But yeah, I take it as kind of like an ex…

AI assessment note: “it has created this push for higher quality materials, and that does serve as a tailwind”