GreyOrange is considered one of the next robotics unicorns. Within 6 years of operations it has grown to more than 600 employees and while some may think this is a start-up, it now operates as a full grown multinational technology company (that’s why we have quoted start-up in the title).
GreyOrange offers whole solutions to automate warehouses in real time through robots. That could sound boring… but they are actually CHANGING THE WAY WAREHOUSES OPERATE and are opening a whole new market that may lead to having warehouses with no people in them, it sounds much better now, right?
We met Samay (co-founder & CEO of GreyOrange and interviewee) in EmtechAsia, held in Singapore (you can click HERE for more info about the event). The company’s headquarters are located there, although they still keep the R&D in India.
Let’s dive into GreyOrange’s best kept secrets!
Who are the brains behind GreyOrange?
The founders of GreyOrange are Samay (early thirties) and Akash (late twenties). They are both originally from India and went to BITS Pilani University in the north of their country.
The first year was about studying and getting used to the new ecosystem but all that changed the second year of college. They wanted new challenges.
“We started taking part in robot competitions. What we didn’t expect was that we actually started to win first prizes.
We thought there were two options to explain this, that we were very very intelligent or that there was something wrong with those competitions. We thought it was the second one, so we decided to go out of India and compete in other countries.
The most important one was the ROBOlympics (RoboGames nowadays) in United States, San Francisco. The first year we ended up being the 6th out of 30 countries which was nice because we weren’t the last and we weren’t the first either, so it was good to keep the motivation up.
For the next annual, we built two Kung Fu robots and we won the ROBOlympics, one robot won the golden medal and the other one the silver. So we said: this is done, what else now? Once you won it you don’t want to go there again, there is no fun in that.
One year we had the chance to go to the States while at university and work on some tech projects, autonomous cars and a haunted house for the city museum, for example.
We had a lot of fun that year.
When we graduated we had travelled so much that we were pretty sick of hopping from one place to another. We went to around 14 countries every year in different competitions, literally all over the world.
During the 3 years that we had been participating in competitions, we took around 500 flights each.”
Where is the idea coming from?
Post-graduation is a hard moment for many students. The moment to decide “what to do now” arrives. Sometimes the amount of possible options or the fear of choosing the wrong job blocks many, but Samay and Akash were clear.
“At the time of graduating, 2011, we decided that we wanted to build hardware but we didn’t find anything that fit what we wanted so we decided to create our own company, GreyOrange.
We didn’t have any idea of what we were going to do but we set it up.
That’s why the name GreyOrange has nothing to do with what we do. The words are just two colours that represent two values that are very close to us. Grey means experience, from the grey hair, and orange creativity and having fun, two things essential to us.”
This case looks similar to Velohub (a previous start-up of the week) in the sense that the decision of starting-up arrived before the specific idea of what to do, but these guys went even further and set up a legal entity, which I personally think shows a great commitment and determination, essential qualities to succeed.
I’m sure you have the next question in mind: what happened next?
“It took us a year to decide what to do, we were building robots for some customers but we didn’t focus on anything specific. After that year, we decided that we should focus on just one industry.
We analysed three to get in, but logistics was the final one.
We identified the problem that we were transforming everything to digital in our lives, activities and how we do everything, but we weren’t thinking about how to move the goods physically in the warehouses.
The main drivers of new changes are e-commerce and Internet. On top of that, manufacturing is becoming more flexible and mass customization is the trend now. Consumers have more choices than ever! We can’t hold 6 months of goods anymore, we have to produce what is going to be consumed right now.
There was a black hole in the real time management of warehouses. We pretty much created the market and that’s why other companies started to think: hey! There might be a problem here.
How do you build the giant that is GreyOrange now?
After a year, they had chosen what industry to enter but it was still a long ride until they’d reach the huge market share they enjoy right now, 92% of the Indian market.
“The first two years, we were very focused on building the product. It’s a whole different thing to build a hardware that works than a hardware that works infinitely. If you think about mechanical systems that work 24 hours a day and 365 days a year, there are only a few of them.
That was a tough time trying different technologies to get to the next level. Once we had managed to get to 98%, it was a huge leap to get to 99.9%. The process to get to 99.9% is not incremental at all, it’s more logarithmic so the closest you are to 100%, the more time you need to invest to improve.”
After this period of building the product they started selling their two products: sorters and butlers, and voilà! They got 92% of the Indian market. Samay explained to me this phenomenon with an interesting analogy.
“It happened in 3 years. I like to call it the domino effect. The real way to get such a market share is to catch a few customers in the first two years.
After that, if the applications are right and successful, and they were, the rest of the industry starts falling down like in the domino effect. If this one has it and this one too, I’ll have it as well.
In this way, the third year we went from 5 to 92 % of market share in the warehouse sortation segment. We had a time in which we had to postpone the shipping and delaying our products because we couldn’t deliver at the pace that clients were coming to us.”
For those still wondering, how GreyOrange’s robots work, here you have a video!
While researching about GreyOrange I found some robots that actually looked similar to GreyOrange’s “butler” but the name are Kiva Robots.
The company was bought by Amazon and they aren’t selling anymore. It looks like Amazon wants to keep all the know-how for them. They actually changed the name to Amazon Robotics.
So I had to ask it: what are the differences between the Kiva robots and GreyOrange’s butler?
“They could look similar because hardware is pretty standardised but software is what makes the difference here.
There are two fundamental differences. The first is that we use, machine learning. Our key line is that we optimise everything in the warehouse using the information that comes from outside the warehouse. Each morning the butlers don’t have a single clue of what they are going to do that day. They’ll “improvise” using the inputs of information.
For example, if you have to process two items, both with urgent status but you just have the capacity to process one, how is the decision made? If you don’t take into account anything from outside, you’ll process the item with the shorter processing time.
Instead of that, we take into account more than 50 variables and the system makes decisions in real time, depending on the different inputs of information.
Moreover, we model them to optimise and think very fast, so we take into account the time they need to calculate what to do and optimise that time as a part of the whole equation.
Another example is in Preventive Maintenance; if one robot becomes non-operational due to overheating, the system will analyse what happened and if it was due to the motor getting to a certain temperature, the next time the same pattern comes up, the system will decide that when the robots are reaching a certain temperature they must slow down to cool down the motors.
The second difference with GreyOrange is that we not only handle piece picking for inventory storage and replenishment, we are doing complete warehouses and solutions.”
I asked about the price for one of the butlers, but they actually don’t sell them individually, they sell the complete system with as many butlers as necessary.
“A whole solution with sorters would start from around $500.000 and a solution with butlers should be somewhere around $1.000.000 but each case is different.”
It could seem a lot of money at a first glance, but when you check that the ROI (Return On Investment) is from 3 to 12 months, the system seems to work pretty well.
What about the funding?
Two Venture Capitals are the partners of GreyOrange, Tiger Global (from United States) and Blume ventures (from India).
After a series A of $8 million in April 2014, in August 2015, they received a series B of $30 million.
“Although it’s said that it’s difficult to find funding for hardware we didn’t have problems to find it. They key is that we focused on practical applications rather than hypothetical/future applications. We started directly with something that had commercial potential.
We don’t plan future funding rounds. We can afford to grow organically now.”
The annual revenues aren’t public but I got a hint: double digit millions of dollars per year ($x0.000.000), not bad for a company that is 6 years old.
What awaits GreyOrange’s future?
Planning an IPO?
“Not yet, we are growing too fast at the moment so we want to focus on keeping the rhythm.
We have some key markets in mind first, Japan and Western Europe. We’re actually launching an office in Hannover (Germany) in March of this year (2017).”
Nowadays, their customers’ installed sortation capacity is 3 million packages a day. When asked about a target regarding this KPI, Samay gave me a different but still ambitious target.
“The goal would be that 1% of all the packages moved in the world, are sorted with our systems.”
At this point, we talked about the future of robots in warehouses and the supply chain in general.
“What I think is that this will end in a global value supply chain, everything across the world will be as what we do in the warehouse. All the decisions, as in the choice of shipping by planes, boats or trucks, will be taken in real time using thousands of variables and always be trying to maximize the value of the supply chain as a whole entity.
About the future of robots in warehouses, I think it’s absolutely possible to have warehouses with no people operating at all. But it’s going to end up being our choice.
We were shocked that in Indian warehouses the personnel turnover is around 300%! This is because the conditions are so bad that people just stay there for 3-4 months and then quit.
Now it’s more about making the lives of workers better but in 5 years we’ll probably get to the point in which we must decide if we want to have a fully automated warehouse, since the technology will allow it, or if we want to keep some people.”
Any tip for other entrepreneurs?
“The only important thing is perseverance. I strongly think that with hard work things end up coming through.
So first, pick the idea and then, work three times harder than what you did to think about the idea in order to make it happen. People tend to think that picking the idea is the important thing but that’s not right.
I absolutely believe in execution, mainly because the idea changes completely when you are executing it.”
With this great piece of advice we finished the interview. What GreyOrange has done with the warehouse real time automation market is creating a blue ocean where they can enjoy almost all the share until other sharks break into it and turn it red and very competitive (Blue Ocean Strategy).
But by the time it happens, GreyOrange will probably be in the next level since they are investing 25% of their revenues in R&D (Research and Development) and 60% of their workforce belong to this department.
We’ll keep tracking them and see what happens but we are sure they’ll do very very well in the future! Thanks so much GreyOrange!
That is all for this week, we hope you enjoyed this interview as much as we did!
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