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“How to Sell When Every Client is Unique”

Interview with Roadbotics Co-Founder & CEO Ben Schmidt.

RoadBotics Co-Founder & CEO Ben Schmidt

Show Notes

No matter where you are in the world, repairing infrastructure, especially roads, is a constant battle. If only there was a way to use technology to repair infrastructure in a more efficient way. Well, that day is finally here thanks to RoadBotics, a Pittsburgh-based startup that works with governments all over the world to make digital maps of their infrastructure so that they can use tax dollars more effectively when it’s time to repair roads and other forms of infrastructure.

RoadBotics co-founder and CEO Ben Schmidt joined the Midstage Startup Momentum Podcast with Roland Siebelink this week. He shared all of the details of RoadBotics, including its product, its journey, and key lessons learned along the way.

Transcript

Roland Siebelink: Hello and welcome to the Midstage Startup Momentum Podcast. My name is Roland Siebelink and I’m an ally and coach and advisor to many fast-growing startups around the world. One of them is in our studio today. It’s RoadBotics and we have Ben Schmidt, the CEO and co-founder here today. Hello, Ben. Thank you for dialing in today.

Ben Schmidt: Hello and thanks for having me today, Roland.

Roland Siebelink: You’re in Pittsburgh, Pennsylvania today is that correct?

Ben Schmidt: That’s correct.

Roland Siebelink: Let’s talk about RoadBotics. For those of the audience that haven’t heard of RoadBotics yet, what is it that you do? Who do you serve and what difference do you make in the world?

Ben Schmidt: Great questions. We are based here in Pittsburgh because we are a spin-out of Carnegie Mellon University. What we’ve been doing for the last five years and change is working with municipalities, governments around the world to better understand their roads and their infrastructure. The state-of-the-art today for most governments around the world of managing these things is pen and paper. We help those governments to create digital maps of their infrastructure using a combination of low-cost sensors - smart phones - as well as machine learning and AI.

Roland Siebelink: Okay. Is the goal or the ultimate benefit that you provide to these governments that there’s a higher efficiency, better usage of their assets? What are typically the benefits you sell to them?

Ben Schmidt: There’s a couple of different ones. You’ve hit on several of them. One is just more objective understanding. Rather than having the subjective judgment of which road is in which condition, we create algorithms and pipelines that do that assessment for them. The other one - as with digitizing anything - you then have a record of it. You can see it over time. We can go back and review it, see what changed, and even investigate why did things change? Why did this road degrade faster than that road? Why is the sign missing? Things like that.

There’s this whole host of benefits of using these kinds of technologies to further the government’s mission of managing and creating services for its people. And we’re at the pointy end of that when it comes to infrastructure-related pieces.

Roland Siebelink: Okay. When you refer to that pointy end, infrastructure-related, are you looking at specific kinds of infrastructure that are more important than others in the overall assets of those local governments?

Ben Schmidt: I’ve given you two answers. From the inception where we started - hence our name, RoadBotics - we focus a lot on pavement. For most communities, if you think about cities, smaller suburbs, rural communities, the majority of their tax dollars when it comes to infrastructure are going to go to roads. Everything from basic maintenance, filling potholes, cracks, things like that, all the way to full reconstructions, which can become very expensive. You’re talking somewhere north of about $1 million per mile of road. That’s where we focus a lot of our time, was on helping them to manage that infrastructure, the road part of it. That’s what I mean when I’m saying that.

Over time, as clients gave us feedback, as we engaged with more governments across the United States, across the world, we got a lot of feedback about the other things that governments are managing, the other kinds of infrastructure that governments manage. And very much a similar flavor. It’s a lot of manual, it’s a lot of subjective judgment calls. Can we use some of the same techniques around mapping, data collection, AI machine learning, to actually further these other kinds of infrastructure.

What I mean is initially roadway furniture is one way to describe it. Traffic lights, street lights, signage, things like that. But then even branching out into other things that governments manage. That could be sidewalks, curbs - if you walk around any city, any town, and you really pay attention for a little bit, there’s a lot of stuff - where is it? What condition is it in? Does it need to be repaired? Does it need to be replaced? When does it need to be repaired? When does it need to be replaced? All of those are massive challenges. And then when you think about the sizes of infrastructure, you’re talking hundreds of miles, thousands of miles. It really becomes this overwhelming challenge for governments to manage. And that’s ultimately where we help.

Roland Siebelink: Excellent. The whole world is already opening up for me as I indeed imagine walking across the street and seeing all that street furniture, as you call it, and then the curbs and the sidewalks. It must be a massive number of assets or millions of dollars of assets that are just in the street that people are charged to take care of.

Ben Schmidt: Absolutely. And there’s two parts to it. There’s the common refraining of infrastructure is crumbling. If you go into your typical suburban town, it might have somewhere around 100 miles of roadway. A hundred total miles of road that they manage through mostly your local tax dollars. As I said before, it costs about $1 million to repave one mile of road. Roads last, if you’re lucky, maybe 20 years.

What you’re talking about is you have a community, 100 miles, 20 years that the road lasts, you’re talking about five miles, six miles of road that have to be repaired every single year. That’s $5 or $6 million. Your average small town, suburban budget is not that high, probably closer to a few hundred thousand dollars. This is how we end up in our predicament, which is as those roads degrade, we just don’t have the funding for it. And then even worse than that to compound it, where we particularly help, is do you make the right choices? Are you picking the right mile or two miles of road? And that’s where these decision-support technologies come in. What we like to think of ourselves as. We don’t make the decision. We help government officials, policymakers to make the right decision.

Roland Siebelink: You already mentioned that the origin story of RoadBotics was at Carnegie Mellon. Can you talk a little bit more about that? How did it actually get initially founded? Where did the idea come from? And how did the people get together initially?

Ben Schmidt: I don’t think we have enough time for all of that. One of my co-founders, Christoph Mertz, he’s been with CMU for a good while now. It was really his original idea. His first insight here was how could you use a smartphone - cheap, ubiquitous sensor; they’ve got great camera technology, they have access to the internet, they’ve got all sorts of additional sensors on them - how do you use that to actually understand something about roads and infrastructure.

The first thing that he tackled was around crack detection. Mounting a smartphone up in the windshield of a car, like a dash cam, could you use some advanced, sophisticated, machine learning processes to extract where are the cracks on that road? Pavement usually starts to degrade and creates those cracks. How do you identify those in the image and then ultimately generate a map out of that?

That was his original idea at CMU. We ended up taking that - myself, Christoph, and two others, so there were four original founders - took that idea, spun it out of Carnegie Mellon, formed the RoadBotics entity, the company, and then spent the next six months driving a real commercialized product out of that, that not only looked at cracks but all the surface distresses that a pavement engineer would care about. Potholes would be a big one. Cracks are important. But then there’s other things like graveling and other kinds of distresses that happen on roads that mean something about the life of that road.

That’s how we did it. It was a six-month sprint from spin out to commercial product. We had our first clients right around that same time. They were communities right outside the Pittsburgh region. For the last five years, that’s what we’ve been doing. We’re up to probably over 300 governments today, work mostly in the United States, but we also have some in the UK, we have some in Australia, Canada. Been very successful in terms of roads are roads anywhere in the world. There’s this massive opportunity to help.

Roland Siebelink: Whether people drive on the left or the right, it doesn’t really matter. That’s very good. But I did want to hone in a little bit on selling to governments. We had some other podcast guests already who are selling a form of gov tech - not competitive with you guys. But tell us a little bit about that. Like you said, five years ago, you had your first client and then you’ve grown it to 300 governments. How do you sell to governments? What is different about it than any other experience you may have in selling to more commercial entities? And what’s some tips that other other founders in gov tech might actually benefit from?

Ben Schmidt: The easiest way to put it is it is not easy. All the rumors are true. Gov tech is hard. We’ve been very successful. I think we have a product that definitely stands out and is unique, which helps a lot. That creates some opportunities that you might not have in a more competitive environment. That’s one. But product I don’t think wins necessarily. I think we all know that in the startup world.

I think for selling to gov tech, the hardest parts are really each government is very unique. And I would say that in two respects. Both, they are unique and they believe they are unique. Everyone wants their own unique concept around it. Much of the procurement world - I guess I’ll be a little harsh and say - is generally broken. Its original purpose of creating this fair environment has probably done quite the opposite. It’s created a very unfair environment. Trying to navigate those challenges - there’s a lot to navigate. But it’s definitely doable. And I will say - that was all the negative; I started with the negative.

Positive for gov tech, governments are very loyal. Once you start working with them, they continue to work with you, which is huge on many dimensions. It offers referrals and renewal opportunities and things like that. That is terrific. The other part is that for the most part, governments are not price agnostic, but if they find something that they need, they will go and get it. If you can find a solution that works, you can have great success with that.

When you first get into the room with the government, the first thing they’ll tell you is “No, we have it. We got this. Everything’s fine. We already have this on lockdown.” It’s the usual standard, get the people out the door because we’re about to be bombarded with terrible questions. It’s just the knee jerk response of government. Totally get it. It’s like a scab. It’s defense. The fascinating part is that if you can get past that wall and you have these open and honest conversations with governments, without fail - and I’ve sat across from hundreds of governments at this point - without fail, every single one of them are so excited to have any new tool in their arsenal that they can get at. Opportunities to use technology, to be a little bit more efficient, to leverage modern whatevers to help them, they are ecstatic about it.

For the exact same reason that gov tech is hard, there aren’t many innovators in the space. Once you do finally get past that barrier, governments are extremely excited to try to adopt these things. They still have a lot of problems. They still have challenges trying to get that across the line. But they are some of the most excited and excitable clients that I’ve ever gotten to work with.

Roland Siebelink: Excellent. But as you say, there is always the fear that having more data will also then cause a deluge of citizen requests to get things fixed or alternative requests. How do you break through that initial fear? You said people have developed almost scabs against that. How do you get beyond those?

Ben Schmidt: That’s the interesting part. Those comments around governments don’t want to know. It’s never the government that tells you that. It’s the external, the consultants, the VCs that come in and tell you, you don’t want to do this because of this. I’ve never heard a government say, “I don’t want to know this information.”

Roland Siebelink: You’re saying it’s the government skeptics out there that surmise in a way.

Ben Schmidt: Absolutely. All of us gov tech companies that have the real scabs here that are burned and scarred. I would definitely say that it’s not the governments that are interested in hiding. They want to know. And I’ll even say that in two parts. You have the staff, the government officials that work for the government, that’s what they do for a living. And then you have the elected officials. The elected officials want to know about what’s happening because they have a message around it. Here’s what’s happening. And here’s what’s exciting. Here’s how I’m changing it.

The staff want to know so that they can go tell the elected officials what’s happening, so they can get the funds to do what they’re supposed to do. It’s very funny - all of us external people are saying, “No, they don’t want to know about their potholes.” But it turns out when you get into the government side of it, they’re like, “I want to know everything because I can use it in these different ways.” I think it’s very characteristic of gov tech in general, is that it’s filled with this mysticism about what you can do and what you can’t do and what people will believe. And then you finally get in a room with a town manager or something like that, and it’s a totally different experience.

Roland Siebelink: I was wondering, by definition, governments are monopolistic and non-competitive, but since you sell into local governments, I can imagine there’s a little bit of competitiveness going on with the next-door government or municipality or council, whatever you want to call it. Do people actually look at what the neighbors are doing and try to keep up with them?

Ben Schmidt: That is a very good question. If I were to offer one tip, it’s that. It’s that if you go to almost any geography, anywhere in the world, there will be that one town that is 20 miles, 50 miles away, or it’s next door, the one town, they’re the innovator. You talk about an early adopter. There’s always one government anywhere, they’re the early adopter. If you can get them convinced, I’ll buy it.

It’s fascinating. There’s all sorts of local societies. There’s local professional chapters. And they’re very local. They have some national conferences. But public works - we work a lot with public works. Every single head of public works will know every other neighboring towns’ head of public works, socially, professionally, they will know each other.

And it makes sense, right? If you get snowstorms or the fire departments need to share equipment. They’ll just share it. They know each other very well. If you can find that early adopter, get them to be convinced - and by the way, every government will tell you who that is. They’ll say “Hmm, this is interesting. I don’t know if I would use this, but talk to them. They’re the ones that usually use all this new fangled stuff, and if they like it, I’ll jump on board.”

Roland Siebelink: Is there a pattern you’ve discovered? I’m just curious. Is it better funded governments that are the early adopters or younger citizens? What’s the pattern if you’ve discovered any?

Ben Schmidt: I don’t know that there’s one overarching pattern. I think there’s probably a couple - you named a few of them. One would definitely be communities that tend to have more money, tend to be more “okay.” The interesting part is that communities on the other end of the spectrum are also just as innovative by virtue of they have to. “We don’t have enough budget for this. You’re telling me we can be twice as efficient now? Sure. We’ll give that a shot.”

And then I do think there is quite a bit, as with any small government, the one pro of it is that it’s a few people that make all the decisions. If those few people are of that interest and tilts - they want to try new things, they want to see push the boundaries - those are your best early adopters. They’re the ones - the whole government will get behind you immediately.

Roland Siebelink: Ben, you mentioned also that you’ve started to sell internationally as well - mostly some English speaking countries, as I understand it. What drove you to that decision and how’s that been going? What are some lessons learned from internationalizing you’re offering?

Ben Schmidt: Internationally, one of the things that we’ve done, just given that we’re a smaller entity, we really look for a partner. We’ve brushed over it so far. We tend to work directly with governments, which is what we’ve been talking about a lot. We also, historically, a lot of the infrastructure management work is done by a civil engineering consulting firm. We’ll work with those civil engineering consulting firms to offer our services through them to the government.

Internationally, we work only that way. We find a private entity in another country that has a good understanding of the local market, the local jurisdictional pieces, taxes, accounting, gov tech, all that kind of stuff. We’ll work with them and then they’ll work on behalf of the governments with us. That channel relationship just makes it a lot easier for a small entity like us to do business anywhere in the world. It all boils down to finding really good, high-quality, trustworthy international partners; once we get that going, then it just takes off by itself.

Roland Siebelink: Very smart. Finding the right incentives to make them happy and make a good business for them as well. And have them deal with all the specifics of that country or province or whatever the case may be. Excellent.

You mentioned you have about 300 government clients that you’re working for at the moment or you’ve worked with so far. How big could this become, Ben?

Ben Schmidt: Let’s hope we have every road on the planet at some point.

Roland Siebelink: That sounds like a big, hairy, audacious goal. Every road on the planet.

Ben Schmidt: I totally agree. I think slightly more humbly, I would say I don’t think anyone that’s seen our technology will go back. I don’t think they’ll go back to pen and paper. Whether it will be us or someone else, I’ll try to say the jury is still out. But I think it’s very much, this is the future of how roads and infrastructure are going to get managed. And I would even go one step further, which is, I think you go five years from now, 10 years from now, you have autonomous vehicles, you have lane departure cameras, you have delivery vehicles or garbage trucks, vehicles that have sensors already on them. If we can distill that out - create or find the information that governments want to know about it - that’s going to be the chain going forward. And I think that’s how you create this - worldwide, you have a map of every piece of infrastructure on the planet, it’s being updated constantly, and that’s being handed on really a silver platter, a cloud-based silver platter to government to make decisions about what to do next. That would be the holy grail of infrastructure management. I will say I’d like it to be us. But understand that there’s a lot of stuff that has to be done between then and now.

Roland Siebelink: Very cool, Ben. I find it fascinating. On your way to serving every single road on the planet, what are some of your next milestones and what are you looking for - maybe people listening to this podcast to help you with?

Ben Schmidt: Great questions. I would start the second one, which is if you are a government official, please reach out. But in lieu of that, almost everyone here lives somewhere where the government runs the roads for them. Always happy to have referrals and things like that. Ultimately, that’s how a lot of activity gets done in local government - somebody just raising their hand and saying, “Hey, can we check this out?” We’re always up for that.

Growing commercial efforts. We need more folks talking to governments. We need more folks creating relationships and things like that. Hiring across the board.

Roland Siebelink: Always likes to see that a startup is investing as much in their go-to-markets capacity as their engineering capacity. That’s what makes you successful.

Very good. If people want to hear more about RoadBotics, Ben, where should they go? What’s your URL and what should they download?

Ben Schmidt: Our website is the best: roadbotics.com. You can learn all about us there.

Roland Siebelink: Excellent. Okay. Very cool. Thank you so much for your time. Ben Schmidt, the CEO and co-founder of RoadBotics. It was a pleasure to have you.

Ben Schmidt: Thanks for having me.


Roland Siebelink talks all things tech startup and bring you interviews with tech cofounders across the world.

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