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“How to Align with Natural, Unfair Advantages”

Interview with Emesent Cofounders Stefan Hrabar and Farid Kendoul

Emesent Cofounders Stefan Hrabar and Farid Kendoul: “How to Align with Natural, Unfair Advantages”

Show Notes

Drone technology has already changed the way humans interact with the world around them. Further research and development continue to make strides with new innovations. One company to come out of that research is Emesent, which has developed technology that allows drones to fly beyond the line of sight of humans where there is no GPS to guide them.

Emesent co-founders Stefan Hrabar and Farid Kendoul joined Roland Siebelink of the Midstage Institute on this week’s episode of the Midstage Startup Momentum Momentum Podcast. They discussed Emesent’s transition from a research project to a startup and the keys to the company’s rapid growth.

Transcript

Roland Siebelink: Hello and welcome to the Silicon Valley Momentum Podcast. My name is Roland Siebelink and I’m a scaleup ally and founder of the Midstage Institute. With me today are two founders of an amazing company from around the globe. It’s Emesent. And joining me now is Stefan Hrabar, who is the CEO and founder. Later on, we will be joined also by Farid Kendoul, who’s the CTO and founder. Hello, Stefan.

Stefan Hrabar: Hello, Roland. How are you?

Roland Siebelink: I’m very good, very good. Thank you for joining. Emesent, such an exciting company. Let’s dive right into it. What do you do? And what difference do you make for whom in the world?

Stefan Hrabar: Generally speaking, we’re enabling autonomous digitalization of very challenging and inaccessible assets and places. And that’s allowing our enterprise customers to derive new insights that were previously not possible because they can now access these assets.

When I’m talking about autonomous digitalization, what I’m talking about is automating the collection of the data in an area and then also automating the analysis of that data to derive insights. The way we do this is through autonomy capability and specifically through autonomous drones. We have developed a system which allows drones to fly autonomously beyond line of sight in challenging areas where there’s no GPS. For us, the key focus has been in underground mining because the system allows data to be collected in really challenging parts of underground mines and providing those insights to the underground mining customers.

Roland Siebelink: Are you saying your drones are actually going into mines and flying underground? Or did I get that wrong?

Stefan Hrabar: No, that’s right. Just to clarify, we don’t build the drones. We build a payload which mounts onto an existing off-the-shelf drone. And that’s a LIDAR-based system which processes the LIDAR data in real time to estimate how the drone is moving using SLAM and self-navigate. It basically turns a standard drone into a self-navigating autonomous drone which can fly beyond line of sight underground. And then it’s also capturing all that LIDAR data as it flies. And we process the LIDAR data to generate really detailed, accurate 3D point clouds of the environments that have been flown in.

Roland Siebelink: Wow. Okay. That sounds so fascinating. For someone who has almost no experience in natural resources and mining, what kind of data does that actually produce? Your customers being, I’m guessing, big mining companies, what data do they derive from that and how does it help them in their business?

Stefan Hrabar: It’s replacing some of the traditional survey tools in some instances. Some of the areas underground are inaccessible; they’re too dangerous to send people in. But they still need to map them to make sure there are no issues and to make sure that the underground blasting has gone according to plan.

After they blast an area underground, they use autonomous or remotely-operated bulldozers to pull out the ore and then they have to go in and scan the cavity or the void that’s left. That’s called a stope. And traditionally, they’d have to take a LIDAR scanner mounted to the end of a pole and get really close to these dangerous areas and poke those poles into the stope to try and scan it.

Not a safe place to be and the scan that they would get would be very partial and low-density, so they don’t get a full picture of what’s actually happened. But by sending in the drone, they can launch the drone from a safe location. And because it flies itself autonomously, it’s easy to fly into this big void and scan it in all directions to get a detailed view of what’s happened, so there’s no missing data. And that allows them to accurately measure the volume of the stope, make sure that the blasting hasn’t gone and done something they weren’t expecting. Cause that can result in diluting the ore or they might be leaving valuable ore in the ground.

That’s one particular use case. But there are many others underground when they use the system to go monitor, look for changes over time to see if there’s anything dangerous happening. For them, the mine is the asset. They’re inspecting their very valuable asset without putting the surveyors or mining engineers at risk.

Roland Siebelink: Stefan, you said that this company actually came out of a research project and a research Institute, and that’s not always a route that we find that often. I’d like to delve into that a little bit. Can you sketch the history of Emesent a little bit?

Stefan Hrabar: Yeah. Myself and Farid have similar backgrounds. We both did our PhDs in robotics, specifically on drone autonomy and control. And then we joined CSIRO, which is Australia’s national research organization a couple of years apart. I was there for almost 13 years before forming Emesent. We’ve been working together on drone autonomy projects and developing some really unique capabilities for drones above ground. And then started using a combination of LIDAR and SLAM on a drone and realized that would allow the system to operate where there’s no GPS.

It wasn’t long before we started getting some interest from the mining community because they realized the potential use case. A lot of interest from other applications as well, not just mining where you use a drone in challenging areas. We decided that we were both excited about this opportunity and wanted to create impact with the technology we’ve been developing. We went through an accelerator inside the research organization and decided to just found Emesent to commercialize the technology we’d been working on. It was a bit of a process, took a couple of years. But we finally went through and had a fundraising round and managed to form Emesent and spin out of the research organization.

Roland Siebelink: That’s awesome. And looking back at that decision now, a few years later, as you say, what would be a big gap between what you think you expected to happen at that time and how things really turned out so far?

Stefan Hrabar: I think what was really exciting for me to see as a researcher is getting out into the real world and being in front of customers and understanding their pain points and their challenges, and showing them what we could potentially do with the solution we were developing, and seeing their excitement and interest.

And then when we add a solution and we can go and offer it to market, I can remember the first time we flew the drone underground into one of these voids and showed the data to the surveyors, they were just blown away. It’s just such a clear value proposition.

Roland Siebelink: One thing I wanted to add still to this transition from researchers into company founders - some people who have that profile say that they really have to learn that what customers ask for is not always what you want to offer. Have you had similar experiences?

Stefan Hrabar: Yeah, like I said, when you’re just doing research for the sake of research, you’re developing a solution and then looking for a problem. It’s definitely the other way around now. We’ve learned that we’ve got to understand the problem first. We were very fortunate that we’d been developing a solution that had a very real problem. But as we keep innovating and doing more R&D, we’re obviously very focused on making sure that whatever we build is solving a real need and a problem.

There’s things that we were doing as researchers that are definitely applicable to running a company as well. Just the idea of testing hypotheses. Before, we were testing scientific hypotheses and running experiments to validate that. And that definitely carries on into business. You’re obviously testing hypotheses around your value proposition, and your market, and your customers, and running experiments to validate your hypotheses. I think there’s some sort of mindset in the research world which definitely translates into the business world as well. And it’s helped us.

Roland Siebelink: Okay. How do you now look back at the growth of Emesent and the different product lines, verticals you were exploring? Startup founders often ask me, “Should I stick to my knitting and really try to dominate one first niche? Or should I really expand as fast as possible and build my portfolio? What’s your take on that?

Stefan Hrabar: Yeah, it’s a great question. And we struggled with this for a while because - Hovermap is our product. That’s the payload that you mount on the drone. It’s such a versatile system. You can use it for so many different things. We’re getting excited about so many different verticals and opportunities. And we were struggling to really go for one and decide which one to focus on until we started to realize how strong the value proposition was in underground mining. And then we finally decided to just focus on that and put all the effort into that vertical.

It’s hard to say no to others and to give up other potential applications. But it definitely made things clearer and easier for us when we could just focus all our messaging on that and all our go-to markets activities just on one vertical. It suddenly made it clear and easy. And even the pitching - when we’re pitching for an investment, being clear about this is where we can have our beachhead market and become world leaders in this space.

Roland Siebelink: How have you built your organization to support all of that? How big is your team right now? And how have you split them up between different profiles?

Stefan Hrabar: In terms of the timeframe, we spun out of CSRO end of 2018, so two and a half years ago. To start with, there was myself and Farid as co-founders. And then five of the technical team that had been working on Hovermap as a project joined us as well. Seven to start with and now we’re now almost at 80. It’s been growing pretty quickly.

Roland Siebelink: Growing from seven to 80 people in just two and a half years, that’s a huge scaling journey. What have you found were the biggest challenges just from an organizational buildup front?

Stefan Hrabar: Getting the structure right. Obviously, we wanted to make sure we didn’t make any mistakes. To start off, we’re a fairly flat structure. As we’ve grown each team, we’ve had to put one or two layers in place. We now have team leaders and heads of departments or VPs. And then an executive level.

We’ve been very fortunate in that the team we’ve managed to grow. We have an awesome culture. Everyone’s really excited about what we’re doing. We’ve been able to attract a really high quality technical team and senior leadership team to manage and run those various departments. It’s always evolving as we go. As we grow each sector, figuring out how we should structure things is always a bit of trial and error. We’re looking at how it’s been done in other places. And so far, I think we’ve managed to strike a good balance between not being too fully structured but not being too flat either.

Roland Siebelink: Okay, I get it. You mentioned your amazing culture. Is that something you’re consciously building in a way? And if so, how do you do that? Or is it something that’s more just emerging by the people you hire?

Stefan Hrabar: I’m definitely conscious of it. We realized pretty early on that a great culture had evolved and I think that’s because of early employees. We’re all passionate and believe in what we’re doing and excited about it. That means we’ve attracted people that have similar interests. But now that we get into the size, for me personally, as CEO, making sure we are very conscious about not ruining that culture because it’s going to get harder as we grow. I’m quite conscious about the way we onboard people. Obviously, hiring people is important. We do that for energy and culture, not just for technical expertise. And then as we bring them on and onboard them, make sure that they get to witness and understand the culture.

Stefan Hrabar: Obviously culture is something - you don’t just write your values up on the wall, then suddenly everybody’s doing it.

Roland Siebelink: You don’t?

Stefan Hrabar: Definitely not. Doing a lot of reading in that space to understand and make sure we don’t mess it up. Keep the culture we’ve got. Understanding that what you do is what are kind of thing. Make sure we lead by example from the top as well.

Roland Siebelink: Yeah, absolutely. I think that was the title of Ben Horowitz’s latest book. Was that happened to be the one you were reading? I love that. As they say, “Great leaders are great readers,” right? They like picking up things from elsewhere and learning from that.

You mentioned that actually a few times in this discussion, I think. You mentioned how things are done elsewhere, reading about it. What are your big go-to sources in learning and making sure you keep up to date and copy the best models.

Stefan Hrabar: For me, the biggest problem is having the time to do that kind of thing. Podcasts are a great resource for me because I can do it while driving or exercising and flying. We can actually fly these days in Australia. Podcasts and then occasionally I do make sure I have some time to actually read the truth in a book.

Roland Siebelink: What about you Farid? Thank you for joining. Where do you pick up certain sources of learning? How to do better at Emesent? How to keep your company at the forefront of what startups are doing?

Farid Kendoul: Hi. Yeah, that’s a very good question. And there are so many things to learn. And as a scientist in the beginning, you are always curious and eager to learn new things. Finding time was really the main challenge. But the main thing is really to surround ourselves with good people and people who are better than us and people who have done that before. For me, it has been really very helpful to listen to these people ask the question and try to learn from them.

Roland Siebelink: How good would you say, at this stage where you are 80 people, how good are you guys with taking solid decisions in the sense that once a decision is taken, you can just implement it, then you don’t have to come back to it time and time again?

Farid Kendoul: I think one of the things - at Emesent, we have the culture of collaboration and transparency and trying to be credible. Generally, we try to make sure that we have shaken the tree in the beginning, asking all the hard questions against ourselves to make sure that we are looking at the problem and the decision from different angles. Considering the short-term goals and the long-term goals in terms of the company vision and what we really want to do. And try also to get the best perspective from different relevant people in the company.

So far, it has been more of a collaborative decision-making process. As founders and management, we try to provide the guiding star. What’s really the big picture that Emesent wants to achieve? And it helps everyone to put everyone in the same context to ask the right question and to head in the same direction. But usually once a decision is made, whether it’s a growth strategy or a product roadmap or things like that, we still try to get feedback from different people and to refine it and adjust. And then we have a framework and structure to make sure that we are implementing that decision effectively while still staying agile. Because as you start implementing things, you might discover a few things. The market is evolving, especially with this COVID situation. I think the main thing is to stay agile and to adapt as new information comes to light.

Roland Siebelink: Maybe we can talk a little bit about the traction the company’s had so far, accomplishments you’re particularly proud of. What would you say has been working exceptionally well for Emesent so far?

Stefan Hrabar: In terms of traction, again, I think we were pretty fortunate having been incubating within the research organization for almost two years with a product which was in a prototype stage. We had early adopters, almost 20 early adopters around the world using the system, and we’re generating revenue and we’re getting feedback from them about the good use cases for it. By the time we launched the company, we were almost ready to launch the product as well. It was only a few months later that Hovermap as a product was launched. And we really had pent up demand because early adopters had been using the prototypes and were ready to purchase the commercial solution.

Roland Siebelink: Farid, how big can you see Emesent become?

Farid Kendoul: I think as big as we can be. We are very bold and very ambitious and we want to achieve a big impact through innovation. In the future, wherever there is a problem that requires the collection of data in a challenging environment, Emesent solution is the go-to. We are really working hard on that.

I think some of the achievements amazes me every day, an idea that started as a research project at CSRO five years, six years ago, when we were flying a drone in an experimental area without GPS, it was a huge thing and everyone was excited. We didn’t just hover for a couple of minutes. And years later, we’re seeing hundreds of the systems used by our customers in some of the most challenging environments on earth and seeing those customers having confidence in the system, using it routinely. It’s really a big achievement for us.

Roland Siebelink: One question I always like to finish the interview with is what advice would both of you have for the founders of other companies that come behind you. What have you learned as a founder that you would convey as advice to other founders, whether in your field or some other fields? Let’s hear from Farid first.

Farid Kendoul: It’s very hard to summarize all the learning to put them into advice. But I think one of the things is just stay simple and true to yourself. Be transparent and credible with your employees, with your customers, with your partners. Don’t look for low hanging fruits and take shortcuts. For us, we have adopted that mindset from the beginning, and I think it helped us a lot. I think that’s really one advice.

And the other one, surround yourself with good people and don’t be afraid to hire people who are better than you. When you are a technical person and a founder and you love your technology, it’s sometimes hard to let go and hire people that are better than you. It will pay off and it will give you the bandwidth to do the things more strategically and do more exciting things. Roland Siebelink: Very good. That’s awesome. What about Stefan?

Stefan Hrabar: Obviously, perseverance is critical. I think for most entrepreneurs that comes next naturally anyway. If you really believe in something, you go after it wholeheartedly until you have success. I think what we mentioned earlier around finding a focus and a single beachhead market is critical as well. And it makes sense to try and align that with natural, unfair advantages that you might have.

Obviously, for us, we were in Australia surrounded by mines in this research organization, which had a very strong mining pedigree as well. A couple of things made sense for us to go off to that market. But also realizing that no matter where you are in the world, I think these days the world is your oyster because you can access markets almost anywhere in the world, even if you’re in a small part of the world that doesn’t have a large customer base around you. Being able to set up resellers and distributors around the world. Especially with SaaS products, you can connect with markets almost anywhere. That’s a benefit, I suppose.

Roland Siebelink: Absolutely. Very cool. Okay. That’s great advice for the founders listening to this podcast. Last, what is something that Emesent needs? What is something you’re looking for? And what’s something our audience could help you with potentially? Are you hiring? Are you looking to find new customers? Looking to get investors? What would be most appreciated?

Farid Kendoul: I think all of those. Hiring is a big one. We are expanding and planning to double or triple the size of our team in the next 12 months. Finding expert people, especially in our technical areas like robotics, machine learning, AI, SLAM, data analytics, et cetera. It’s becoming very hard. If anyone is looking for a job in those areas and wants to do very advanced research that will still achieve a big impact in the real world, just get in touch with us. And we are happy to have the discussion with them.

Roland Siebelink: That’s awesome. You’re such a sales guy, Farid. I love it. A very, very compelling proposition. How are you on the location these days? Are you looking for people primarily in the Brisbane area or are you also considering remote people?

Farid Kendoul: I think for now, most of our team is based here in Brisbane. It’s very hard to be somewhere else. It’s always sunny. It’s very nice weather and surrounded by awesome places. I think even though our growth plans, I think we are open to people working remotely, or even in the near future, try to have offices and branches in other regions and countries, including the USA. I think everything is on the table.

Roland Siebelink: Okay, great. That’s good to hear. Stefan, last word and what you need.

Stefan Hrabar: Just reiterating, hiring. That’s obviously a big challenge as we grow. In terms of the location, we do have a couple of employees in the US and in Europe already. We do have some remote workers. That’s more on the sales, technical sales, customer support side of things. That’s gonna be growing. Partnerships, like I said, this is an ecosystem that we’re building. If there’s anybody that’s got relevant technology that makes sense to partner.

We’ve just started the process of preparing for another round. Definitely happy to have some conversations, early conversations with potential investors. We’ve started the preparations and we’ll be running a formal process in the next couple of months.

Roland Siebelink: Perfect. Okay. And if there’s any investors listening to this podcast who would be interested in talking with Stefan and Farid, then I’m happy to provide an introduction as well.

Thank you so much, Stefan Hrabar and Farid Kendoul, the CEO and founder, respectfully, CTO and founder, of Emesent coming to us live, at least today, from Brisbane. This was an amazing interview. I’ve learned so much. I really thank you for your time.

Farid Kendoul: Thank you very much, Roland.

Stefan Hrabar: Thanks, Roland. It’s been really great to have a chat.


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