Cobalt Call

4:58PM Feb 18, 2022

Speakers:

Keywords:

robots

security

people

sales

facilities

year

scale

deploy

companies

big

guard

customers

elevators

applications

janitorial

terms

record

doors

engineers

mental model

12341234 Check, check let's get it boy educational purposes for the most part. Okay? Cool Hey, Travis can hear me? I can Yes.

All right. I'm trying to start my video What was it saying how privacy settings and by the way, I had a bunch of our guys joined basically for training purposes for some of our newer people. You know it's helpful for them to have an interview with it. See how an interview with the CEO goes and just what questions are asked, and how

I might be a little weird as far as exemplars go, but happy to oblige,

right? Well, it wouldn't be as entertaining as nightscope See, so yeah, I'm definitely way more boring. There you go. All right, cool. So I'll say it's been,

man. Good, but it's like drinking from a firehose all the time, you know, on all fronts, but COVID was a gnarly kicking things off. Obviously, like every safety and security director on the planet was like, Don't talk to me, we're dealing with a pandemic. But the tailwinds that it is created, I think are pretty profound. Just in terms of getting people accustomed to remote management to not having the need for face to face all the time has completely changed how how security people think and operate and ways I think it's really beneficial for remote management and ultimately automation. Good

I saw we looked at LinkedIn says like you guys roughly doubled in employees, I guess in the last two years. So you're growing it looks like

that's probably right. Yeah, I think we have 130 140 people I can't really keep track all the time. That's roughly what LinkedIn said. Yeah. Yeah. That's that's about right. And then I miss you

guys haven't announced any new fundraising. I think and maybe almost three years. Is that correct?

That's right. Yeah. So we've been really disciplined the whole time. Right. So making sure that we continue to continue to have a expenditures track revenue growth. A fair way to put it as opposed to just like throwing money at the wall and seeing what sticks. And so when we raise that series, BD was fairly pre emptive. Like we didn't need the money for at least another 18 months, even when that came in. And so we kind of just put it on the backburner and let it sit and wait until it was time to deploy it. Effectively. That being said, let's call it Yeah, sorry. I said considering COVID happened the next year, Calvin sort of good? Yeah, no, I mean, we were in a very blessed spot when right like when, when COVID kicked off, we still had like two and a half years of runway, and so we could just stay heads down and focus as opposed to you know, left being left scrambling for I don't know just yeah, for everything. And I know a lot of people who went through a lot of heartache during that time, so lucky to have avoided all of it. Cool. And that can you guys any sense in terms

of like number of robots or growth rate or any sort of metric that gets a sense of like

healthy? Yeah, so we we've been growing basically doubling every year for like the last three years. I won't say the exact number of robots, but we are a significant multiple ahead of nightscope in terms of robots deployed,

fair to say multiple hundreds then or,

yeah, basically. Yeah. And, you know, for us, it's not there are two ways that robot companies fail. There is going out and having 1000 robots at one customer and being super concentrated. And the other way is to go out and put one or two robots at every single point. Just because the support costs keep you alive. And so for us, the focus over the last two years has been about going really deep with a handful of select customers. And as you know, like there are not really early adopters in the security world. These are like pragmatic security buyers, and getting them to know it, use it, love it and expand. And so for us, it's not about that one or two. It's about becoming like the office printer copier right and put it everywhere that you're at and so, you know, today we're operating in seven different countries. And this is from American companies pulling us to their remote offices overseas, because it is that consistent, you know, reliable service. And so that's, that's been our focus. And you know, like, realistically, there's less than, like, less than 300 security robots. deployed. Like, at least in the United States, at least as far as I know, like outside of the military and defense contract. And there's like a million security guards. So like, this is our biggest competitors. The status quo has nothing to do with nightscope or RAD or, you know, or any anyone else for that matter.

Is it fair to say that, like at least one or two customers that have like more than 10 robots?

Oh, yeah, yeah, definitely. In fact, the General Motors one is public because they post an article in like, the Detroit times or something, I can send you a link, if you're curious.

Grant Trump to google it, but yeah, they're the

only ones that I think are public about it. But there's some other big ones that have well over a dozen that are in conversations to expand to like 50 or 100 plus got

a GM introducing robots. This is from July 2021.

Yes, probably. If you're reading about it, it's GM. And it's deploying.

GM is putting robots in facilities to improve employee etc. Yeah, you're right, good. Good. And then so like on the record, you know, we joke around a little bit about nightscope. Did you have like a comment, like what would you say on the record? About Knightscope?

Notice it on the record. I think that they're tackling a valid use case. But I don't believe that traction has been good over the last two plus year. And I think the numbers bear that out. At least the numbers that are reported in the SEC filings bear that are Yeah.

And then what do you what do you think about basically obviously, you've seen Knightscope go public, and you've seen other companies, insecurity spikes stack? Like is that What's your philosophy about that? It's like, wow, that's exciting, not us, or is it like no, like, that's not basically what we want to sort of approach.

I mean, I think it does speak to just in general the reception in public markets, and it's obviously changing very quickly. But my default perception is that there's clearly an appetite for companies that are deploying new capabilities and new products. And you see that in terms of like, just the amount of investment both institutional and retail that apply to those those opportunities. That said, many or most of them are trading like 70% off their SPAC price. And so I think that I think there is probably a reckoning on the horizon for many of them, and so hopefully they have enough capitalization to survive that reckoning. That's a

fair to say that you're you aren't sort of super pros back then. For for for your company.

Oh, for COBOL not not certainly not right now. I think it's important you know, in the stack world is kind of like two dominant emos. Right. There's like the hopes and dreams pre revenue. And you see a bunch of these in the autonomous car space, or autonomous trucks and things like that. And then you have ones that are more mature that are maybe like 20 to 50 million in recurring revenue, that have like a clear pathway to getting to 100 million like the core unit economics of the business work. It's just that the spec is a way for the into to go public, maybe a year to three years before they would normally under like a typical s one. Like, yeah, a typical IPO. And so I think that those will, you know, it's a much better spot to be in we're not there yet. And so for us, we are not that pre revenue, hopes and dreams. We are like an actual product that works and provides value and so, like we need to align the capital sources accordingly. I do think some of the valuations are rich. Actually, they're very

much in the valuation originally. What's your Outlook are interested in getting more fun doing plots people would like to find you at this point.

Yeah, we will definitely take more funding. And we will be raising a private round I'm sure in the coming months. Yeah, because we are investing heavily in the technology and in growth. We don't want to announce any of the things that we're doing yet, just because they're not ready for primetime. But there's a whole bunch of stuff happening behind the scenes that are like it's a lot of blocking and tackling. Like you know, there's there's kind of two dominant mental models for what cobalt does right like the simple one is like, we are a timeshare guard, right, like me allow one guard to be in multiple places at once, like their eyes, fears and kind of some some some low level of cognition. That's one mental model. The other mental model and the one that I think it's more profound is that we allow all of shared services not just security, but it's more of like safety, security, facilities management, we allow them to automate physical workflows. Right and so this is going around and doing regular compliance checks. This is going around and looking for, you know, overflowing trash cans or on erase whiteboards as well as the type of security incidents that people like to point to because they're big and flashy and interesting. But it's really like, we had this profound realization, maybe about a year and a half ago. We hire a lot of veterans, right? Like people coming back from the military. They have a very, like operational security mindset. And one of them told me something that was really interesting. He was like, you know, I was working over in Afghanistan. And I saw these news articles about these, like crazy incidents happening back home. Like, there was a couple of workplace deaths that he pointed out specifically, and he's like, I looked it up, and there are more workplace deaths. In the United States in two years. Then there were total American casualties in Afghanistan. And he's like, that's absurd. And he's like, we all know that like, people points the accident, but it's always a series of behaviors and and lapses that cause these incidents like many of them are preventable, if you're just like, being meticulous and disciplined about operating your facilities. And so that's, that's what we do is we help overcome the complacency and change behavior, to be able to, you know, prevent these types of incidents from happening so that people don't have to focus on like the bottom part of Maslow's hierarchy, right. They don't worry about food, water, shelter, they don't have to worry about safety and security, they can focus on like doing their best work. And that's what you know, that's the type of thing that we try to enable. It just so happens that security is the core economic driver for what we do, right? Like when you look at the financial ROI equation, it's easy and obvious to understand, understand the security part, because that's where our budgets come from, but we actually end up providing value across the entire organization.

Try I'm looking at your website under applications, there's four list insecurity facility manager environment, revenue generation, can you elaborate, more analogous? You rank security is one or you think it's the combo like how do you look at those four holistically or compared to each other?

Yeah, I will say Our website is out of date relative to my currency, but security, like I said, is the dominant ROI drag. So for all of these, with the exception of revenue generation, for all of these security facilities, eh, and s, those are all cost centers. There is no revenue like, technically like the ROI is very hard to quantify. And so you really do need to find, to find savings in order to deploy new systems. And it just so happens ours, you know, you will save anywhere from 30 to 60%. On man guard costs for posts where robots can be deployed. That doesn't mean you're displacing labor necessarily. It just means you have any tool in your tool belt that you can deploy. That said the most common things that you will detect are usually around facilities. Because it's all these background checks that are happening all the time. Now some of them are security related, right? Like intellectual property, making sure computers or our, our locks, the whiteboards erased and things like that. But a lot of the stuff that you're going to detect on the regular are going to be more facilities related. The security ones tend to be more like outlier events. And so realistically, they're all merged together. And the practical reality, like security guards often end up doing all of these tasks, right? Like, the security guard is walking around, they'll detect the facilities thing, they'll file a ticket, or you know if if something needs, yeah, like if things are out of the ordinary, they'll take care of it, and it reports up through them. EHS kind of same same story. So yeah, I do look at it cohesively as a shared services and some organizations it's more tightly coupled than others but security is the clear ROI Driver

Yeah, okay. And one of the things is looking at how are you going to market these days because one things I was funny people talking about but nightscope stock went up a bunch when and made this press release allied universal so I'm curious. Now there's a value universe but in general, like, you know, talking to God companies or large integrators, how are those conversations going in general?

Um, so I'll say like we are, relative to the scale of things. Google is still very small, right and going through, going through that sales motion. It's something that we are rapidly iterating and evolving. And it is not. It is not a product people are used to buying and it also it has an element of like security operations and what you would see with the guard, but it also has like a technology component, meaning that you need to be very buttoned up on cybersecurity. You need to go through legal and privacy reviews. And so it's not the typical, like sales motion that you would see with a guard company, but it's also it's not displacing budgets. The integrators have like these optics budgets that guards are doing, and so it's this weird in between. We do have relationships with channel but the bulk of our sales today have indirect effects we work with gotten sorry. I was just gonna say we do work with I think two or three different partners on the channel side, they tend to be smaller in scale and then like an allied or Securitas, we're friendly with all of them like we have joint clients with all of them. And eventually it will probably make sense just because like managing those relationships is really key. And we're not there to displace them. We're there we're there to work in concert with with them and garden teams.

Got it. And then are you are you open to child partners like it's someone reached reach out? To you like obviously not like a tiny integrator, but like if a midsize integrator of our company, is that something you'd be open to working with them or our receptive? Are you to sort of the partners asking?

Yeah, we're certainly receptive to it. We've been very, very selective just so that we can map it out without biting off more than we can chew. And I do think it requires it is not a bolt on Attachment, like in for security program, right? Like we don't want a channel partner who's just there like fulfilling demand. Like that's not the level it's that it really is like, an art form and how do you deploy security comprehensively, like operationally technologically, on these sites, and I think there's a really profound mental shift that needs to happen in most of the guard companies to go in and say, not just like, where do we bolt this on when it makes sense but to say like, let's take a look comprehensively at the overall security picture and decide like, where should there be? Cameras? Where should there be robots? Where should there be human guards and then to design a program around that instead of it just being like, yeah, we have a gap here. Let's plug in a camera or there's a gap here. Let's put in a robot. It really does need to be like much more thoughtful than that. And so today, the ones we work with, they have sort of that mentality. And I think that's important as the technology is maturing. There's also just operationally like we still do all the remote monitoring and pieces like that for for our product because it gives us tight controls over the quality of service. And I do you have to get to a meaningful scale for that, for that remote monitoring to be handed off to a third party. And that scale is probably on the order of about 100 robots. And so as much as partners would like to take on that responsibility. If you're operating it at some scale, it just doesn't work.

Okay, so all the robots though, are being being monitored by COBOL. Currently,

first tier responses us and then second here is with the clients as well as partners in the in the event that they're over. Got it, okay.

By the way, I did because I forgot which record is there. MSRP or what is the sort of average retail price per year per month?

So, it depends on how you want to break it down. So if you're doing like an apples to apples comparison with like, say a hourly dark costs, it can vary anywhere from like low 20s all the way down to 12

but $12

dollars, dollars per

hour and it really I mean, like I would try to bet on on an on a yearly basis like literally charging on an hourly basis or he's like Hey, like

no no no we do we do monthly people sign up for like annual contracts. We build a monthly at the end of that, but it's pulling from the same office budget, you would see what the guard on average, our robot runs for 110 hours a week. fully contracted cost is probably on the order of 70 to 75 Pay for robot.

Okay, so that's not at least at least not respected. It's similar to Knightscope what people expect based on sort of that,

I think so again, you're comparing to like Amanda guard cost, so like 110 hours per man guard cost would be anywhere from 150 to 200,000 a year so that you're saving at least 50% compared to Vanguard,

right? No, I just the other thing I try to always figure out is like, like, what is the revenue of each company and sort of knowing basically, what's the unit sort of no sales price, you can sort of then try to work out sort of rather than us Yeah, at least an order of magnitude sense. This is now you know, millions 10s of millions, hundreds of millions.

Yeah, yeah, we're I mean, we're, it's, it's a scale that is meaningful enough to know that this is like clearly the future of how this is gonna play out. But it is not at a scale where it's like yeah, that is that is like a huge business in its own right already.

Got it. One thing I noticed on LinkedIn, I look basically using Sales Navigator to see like how many people are in sale and it says roughly 12 people is that the right ballpark because that radically undervalue

that strategy, really overcoming that's over counting. Yeah, our sales actually less. Yeah, it is actually less. Our sales team today is four people.

Okay. Yeah, a couple people basically like one is a reserve engineer. Somehow they got the twins a tech and operations lead. So yeah, it's okay. Yeah. So I guess my question to you is like, is is I want to say it's a mistake. But like, Are you thinking of sort of significantly increasing that right? Imagine if I was like an investor, I'd be like, Hey, man, like you got like 100 engineers, but you only have four salespeople, like, if you had 40 salespeople, you know, you'd sell basically an additional, you know, triple or something.

What's your thoughts when someone says, there's been a big focus for us over the last like two and a half years is making sure that we got to a point where we had not just really had a few clients that were at full scale, meaning they had robots at like all of their sites, and they were they were smaller, right? They had maybe six to 10 inch robots across their, their organization and that was as big as they were ever gonna. And what we really wanted to do was to get one of these larger organizations like big enterprise to be using it see the value and then scale up dramatically and so that's what we really focused the last two years on it's just like make sure that like all of this works, we built out you know, p&l for each independent customer showed that the gross margins were good. You know, what the acquisition costs look like? Basically, that that all of the fundamental variables in that equation before you hit, like, hit the gas really hard are working, and that you have these reference customers because security is so much about trust and reputation, but if you blow that you've lost all credibility. And so for us like the last two and a half years where like myself, my CEO, and maybe like one or two of these sales guys, like really engaging and then everything else was about how do we support the the rapid scale and expansion for those those opportunities. And so that's why you see like, a reserve engineer, for example, is we we maintain a presence in every city we operate, have trained reserve engineers who could plausibly go on site if something went wrong, and be able to remediate that. Think of it as like printer repair technicians. That is what a reserve engineer is, what operations are similar, but you're managing like hot spare units that are, you know, cash around the country or around the, I guess, around the country around the world. And being able to get replacements as needed and things like that, because we have pretty stringent SLA is like a robot goes down. It's like a security guard walking off the shift.

Right? So the reserve engineers, are they full time employees or

reserve engineers or not? No, so they don't they don't count that number. The thing they are 1099 contractors, god,

okay. So you didn't mention that he's got some point hitting the gas. So then that leads to the question of like, okay, when is the right time to hit the gas?

We started Yeah. Yeah, we started hitting the gas now. Okay, how the

new for 2022 Or like, ended 2021 Like when When did you

get started in October, November of last year of 21. Jack and there's a bunch of product related things as well. Like we have some really interesting ways that we can get to ground truth in terms of the quality of the service. So like, for example, being able to like read Hema guard program, we have the equivalent to being able to read team the robots to understand how well the technology is performing and how well the remote operators are performing. So that was a big thing that we accomplished in 2021 was like, we can tell you exactly how well we're performing. Like what fraction of things would we catch if they occurred on your site? And then elevators was a big deal for us and we rolled out the first ones in mid 2020. Like with this very simple system that like, I don't know, I don't know if you've seen the video.

I think I have seen the video the going into into into elevators.

Yeah. So there's kind of like two big ways to do elevators. me maybe more a little bit. So like, the long term way to do elevators is to have kind of like an API control. Think like Twilio for doors and elevators. And this is something that like will how you got

like a stick push out. I'm looking at the video right now.

There's exactly right. So we can do it with API integrations, but they take a long time. And so in mid 2020, we rolled out some early versions of this and now it's much more pronounced where it literally reaches out and just like pokes the elevator button, right which means that like, from the like, you put a robot on site and within an hour it's like able to traverse the floors. If you have a handicap buttons, you can go up and push the handicap button and it'll got it and then to the extent that it makes it that you're willing to do off the record I'll show you stuff that's coming but but isn't ready.

That's fine off the record. If you have trouble, but it's coming. So

doors are still a challenge, like new API integrations, doors that have like an N access for a, like a mechanism mechanism. But you know, my lab 15 years ago was the first to do door opening and traversal with the mobile robot so like, literally physically reaching out and opening the doors. And so this is a video that is now only about three weeks old, that is the DBT unit. So pre production units for a version that can support the basic parts. It can support the elevator poker or it can support a full arm.

This is just going to be called v2 when it's released.

I have no idea naming is like one of those hard things, man, if you can give me a name for the robot I would like I actually think v2 is

pretty good and people are used to basically something like that. So I think that's a clear way like if you call it max or Pro Super can be confusing, but if you say like second gen or something like what 2.0 web 3.0 Right, there's a little bit of simplicity, that people can understand that this is like a major upgrade.

So this was always the point for us is like so many people look at it as and they're like, it's about the robot. It's not actually about the robot. The robots like the 5% of the iceberg above the surface that people just see. But it's really about how do you automate these workflows and with opening doors being like, one of the most common physical tasks that a guard does like being able to open loops. Being able to reach out and like physically just like this entire robot, there's no off the shelf arm today that has the workspace prep, right that has the workspace and payload needed to open a spring loaded door. And so we were forced again to build our own custom hardware. And so this is a full custom arm that is built around being able to do doors and elevators like literally just be able to open a spring loaded door so the doors that segment a building Do you see

at is partnered with this company called Phalodi robotics from Norway? Yeah, no idea. Yeah, I mean, I only wonder because like it would seem more natural for them to partner with you on your talk ADT.

I have not, but it doesn't mean that. Right. I mean, I know Johnson Controls has one two, they were working with like Eva from iRobot. The simple reality is, it's not it's not about having a system that just navigates from A to B, like a typical robot. And it's not about putting my PTZ camera on wheels. There's a lot of other pieces that have to come together in terms of the intelligence running on the system. So like, our robot has an RTX you know, 3090 desktop scale GPU to process all of the sensor screens that are coming in. Because it needs to be running that anomaly detection, that semantic mapping. It's about going around to space and knowing that you know, you have that you need to be checking all of these things right. And you need to be keeping an eye on them. So whether it is like checking fire extinguishers are you know, whiteboards, things like that, like those, the algorithms to detect all of those are running contemporaneously. And so it's a lot more intelligence than this can be baked into like a floor cleaning robot or something like that. And then these deep integrations into like, you know, having cameras automatically alert and dispatch the robot to go check on a door or a door ajar alarm, being able to feed these up into other security systems. Same thing on the facility side, which is just as cute as the security side. And so there's there's a lot of intelligence and integration that comes to make to make the very simple kind of postorder type workflows that you want to get out of Roma.

So weddings On or Off The Record musical back on the record.

Yeah, okay. It's kind of the off record. There you go.

So on the on the records I in the last few years, what are the majors that are product advances that ability to press the elevator button? It's certainly one. What other ones are there is there like a top three like, Hey, these are the main these are the biggest product advantages or product developments in the last few years.

The elevator part was a big one. Some of these integrations I would say are important. Like to make an example of which integrations you think are important, like when else and secure are the ones that not only do they there's others in development. It is it is being able to feed the data that the robot has into systems that people are used to working with, as well as being able to subscribe to events from other parts of the security infrastructure. And it really just a lot around robustness and, and quality. Like being able to actually quantify that in a way that like guards never, never have and never put

back by the way any other any other nicknames isn't suddenly now and secure that you've integrated with Genetec milestone.

There are a number of them that we're developing or that we're doing right now. Like okay,

but in terms of what's released, you'd say lanell and CTR that you beg to biggest Okay, and they're really not so let me just go back because you said you were hitting your you. You hit the gas, and he did it basically in October, November. But let me challenge you here. You still may have four salespeople from a sales perspective, that doesn't seem like hitting the gas. So can you kind of elaborate on that? Is there a plan for 2022

If you look at our pipeline and I won't gonna pull up our pipeline, but sure. If you look at our pipeline, from a net revenue perspective, 80% of our pipeline is expansion. Okay. And that will keep us very busy. And that's like a conservative, a very conservative type. And so from a from just a purely like rolling things out, we achieve hyper growth in this year like 2022 from just expansion. And so those customer interactions, it is not hard to get people on the phone and engaged. It's just making sure that you go through and do the right blocking and tackling. Okay,

so is it fair to say that you think in 2022 You'll be experiencing hypergrowth?

Oh, yeah, for sure. Okay.

But okay, let me push back. Just one last sign. Again, if I was a sales oriented ECS, and listen great Travis, your hypergrowth but you only had 20 More salespeople, you could super hypergrowth. So I just want to make sure that we're clear on that point. Like do you think that's wrong? Or kinda like not the philosophy of the company? Like, I can't be the first person to tell you go ahead and you know, hire 20 More salespeople.

Yeah. So, again, it comes down to like, if you look, overall, we have like over 150% net retention, meaning that yeah, the

existing clients are expanding

existing like next year, we will have more than 50% growth just from the known expansion opportunities. That are budgeted for. Right. And so you know, that the important thing when you're doing that is like, okay, then you look at what number of clients do you need to add to make sure that you're filling the rest of that gap to get to like 100% or 150% annual growth, and you basically just need to like, effectively have 100% growth in your your new customers, right? We don't have that many customers. It's just the customers have a good number of robots each. And so we don't actually have to add that many logos. We just have to be disciplined about which ones we add, knowing that they will represent the bulk of our revenues in 2023 and beyond. And so

is that fair to say that you're not trying to maximize total number of cars and I think you said that earlier right, that you're not interested in sort of like what robot basically for some sort of mall and you know, Kentucky,

horrible client, and like, the way that it really comes down to like the way that malls typically purchase is that they do often have like a central security person. But then every single mall is its own independent facilities manager who makes the ultimate by no by decision and so you're having to sell and support basically individual customers across each of those those malls like that's not, that's not a good model for the type of enterprise product we'll be building. Yeah, we're much more like Palantir in that regard. And in fact, I think there's a mental model where you say like, we basically do what Palantir does, it's just instead of a warfighter being the data collections, I said we are, but we do the same type. of analysis and like dashboarding and workflows that Palantir does. And they think a very similar model. It's it's this like, acquire grow and scale. And so we today have a handful that are at full scale and then we have a whole bunch that are in grow. And so we just need to make sure we keep doing you know, building up that acquire bucket, but that has not been a problem.

So is it fair to say that you're not looking to hire a whole

bunch of salespeople? No, we'll probably at least double or triple the number because it is my love Yeah, I think

about not looking for like a big sales team. You're not looking to have like a you know, like 100 guys sitting in a bullpen sort of note that

we are much more enterprise sales and that it's like it's not it's not the SMB mid market, you know, giant SDR teams doing the book per sales. These are like, meaningful, long term inner engagements.

Right. Okay. Great. Chart. What questions do you think I should have asked or that I miss?

What questions do I think you should ask? And nothing's coming to mind. Give you Oh, go ahead. No, no, go ahead.

So I'll give you feedback then, you know, I mean, the beginning talks about like other CEOs and whatnot. It's my feedback to you in terms of how you compare to other CEOs, you know, most CEO CEOs are like yeah, we're gonna triple quadruple gonna hire 100 sales people are this that and like, so they did you're so good and giving giving sort of like feedback to our to the guys on our team. I think I've been on a few of these calls. So I do think you're right in terms of because the, the market is new for this technology. I think it makes more sense to be cautious, and sort of be thorough in terms of how you sort of scale and deploy. I think that the main thing, again, if I was on the investor side would be like, Hey, I'd really like a guy who's wanting to triple this here or quadruple right. But is your position that like hey, if we tried to triple or quadruple revenue this year, that it would expose you to sort of more sort of risks in terms of operational issues or what would be what would be

the other consideration for your growth plan is that you have to commit to it because we do have like a real supply chain, right? Like we are committing to robot production numbers now can take effect at the end of this year or early 2030. And so if we get out way over our skis on that and you know, we have this new design that's coming online in like, mid year, you're committing like significant amounts of capital, is that that growth plan now? And so, miss it, it's much less forgiving when you have these big capex expenditures. And so yeah, you just you have to be disciplined about these things. You can't. Yeah, we have the ability to 3x this year. Right now we know that we will to x. And so it's somewhere between those two,

right. And it's on the supply chain with it fair that talks about like even drone companies are doing things in security. Are these sort of like handcrafted at some level. I mean, it's not like basically a camera or something where it's just sort of like putting together components like how and crafted are engineered to these things at this point.

The P one is still very, I would call it artisanal. In that like components it'd be actually b two is not even close to that it can be made by CMYK. Pretty insane scale. Regardless, even if we work with a CMM is still being made domestically. So parts come in, mostly domestically, some from all over the world. Like we we get some castings and things like that, but centers as well that they come from some from Europe and things like that, but parts come in from all over the world. And then we we do the final assembly, QA bring up here local, and then they get shipped off to end customers. And so, you know, we have a pretty beefy now assembly line over in Fremont, just up the street from the Tesla Fremont facility. And so that's, that's where we build them. We can build you know, 1000s of years needed out of the out of that so

and then injured of what can we can we say anything about v2 or a new version sort of on the record? What are you What are you saying about sort of future advances

not much. The robot capabilities are improving dramatically. But nothing, nothing to announce yet. I will say one of the benefits of being a service is that from a customer's perspective, ultimately, they're just going to get upgrades anyway, like we don't plan to back support the, you know, new updates indefinitely. So it's sort of into the model that you get the latest and greatest over the span of a year or two. That's that's sort of important to the services model that we deploy. Okay. I think, yeah. That's it. That's all I

know. I think that makes sense. Yeah, we don't we're not really seeing outside of the Norway company. I think they're very early stage. We're not seeing a lot of robotics. We saw a lot more like five years ago, right? And 2017 There was all about hype. And I remember this one sort of famous entry guy said, yeah, the robots will be everywhere next year, and um, I don't think so. And so it still seems to be early days. Yeah.

Well, I think there's been a lot of false starts. Yeah, I mean, if we're off record, I can tell you a bunch of things, but

you know, like, the challenge with these things is like we you know, if you talk to like Boston Dynamics, for example, and you ask them the same question, how many customers do you have with more than 10 robots? The answer is vanishingly small. And like, we have talked to them like this is not this is not crazy, right? But it's just not ready. It's just not ready yet to be deployed and fielded. Right outdoors, the challenge outdoors is really around connectivity, more than anything, right? Drones are an obvious solution outdoors, but you have FAA regulatory reasons why beyond line of sight is still not easy. For any of these other systems is like connectivity outdoors, hinders your ability to do real time data collection and transmission, and you're not going to go to a customer and tell them like, Hey, can you install Wi Fi outside, like good luck, nine months to a year just to get them to do it. So we really said let's like, let's focus in when indoor safety security facilities. Outdoor is one of the few applications that security also translates for, for robots into you know, corporate real estate. But there's a whole bunch of these other categories in in robotic automation for corporate real estate that are becoming more mainstream. And so whether that's cleaning and janitorial, like Avid and brain Corp and others, or retail out of stock and inventory with like zippity and Cindy and others, you know, you have logistics hospitality. Yeah, or hospitality nursing. Like there's all of these applications indoors. And everything that we build, has like 90% overlap in terms of the hardware and the software and the need to do doors and elevators. And so we have sort of this most, the most sophisticated robot that you can imagine doing this task because the application we do requires it gives you a lot of optionality to move horizontally. To applications. Security as a use case can get you sort of vertically into outdoor and then there's other applications too, but they all share the same infrastructure like the monitoring and human in the loop type, ability to generate new applications the field service and maintenance the the sales and commercialization and then all of this engineering. It's like 80% overlap. And it just becomes these like application specific workflows. So people like to lump us in is like you're doing purely the safety security facilities thing, but it's actually like this is part of a much bigger story that is addressing a much larger market than just security ever was. And it's not completely missed by I think some of the big burning companies either who we do have like janitorial arms that are nascent and small, right? Well, I've

seen a couple of supermarkets, right, these sort of these sort of janitorial robots. So, you see that it's sort of just a different market segment. You're not trying to compete against them or compete in those areas or what when you when people talk about janitorial robots. What's your perspective on that?

I think most of them today are more or less like a commercial commercial route. And I think it's a really good application. I think it's really hard because the the requirements for security are very different, right? You're not trying to just cover every spring to the floor, you're trying to like comprehensively move quickly through a building, you're gonna have a very different sense of competence. You know, we can support the cost of an arm, but I do think that over time, you will see consolidation in the hardware platforms. And so today, we're like, let's win our specific group. Like we need to make sure we win ours, that all the economics are great that you're scaled up to a point where it's sustainable, maybe then you consider build by merge, you know, IPO, whatever, and then you can go after some of these other markets, but I think it's throwing multiple hold them together would be very hard right now today. Yeah. Good. Okay. Excellent. Anything else go? I don't think so.

Good. All right. So what we'll plan to do just a short posts are summarizing the conversation next week, and

I'll send you the link. Awesome. Appreciate it. Awesome. Hey, Matt crops to you and the team. I still read the ipvm newsletter that goes out every day. So yeah, well appreciate it. Awesome. Thanks for having us. There. Bye.