#495 – An Interview with Eric Klein

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Welcome Eric Klein of Lemnos Labs!

• Eric is interested in technologies that have moved outside simply the “benefit of the iPhone” (which past guest Chris Anderson talks about)
• This includes things like batteries and ESCs, prevalent in robotics. LIDAR has also dropped in price in orders of magnitude.
• Venture capital (VC) really started in Silicon Valley with the chip industry
• There are two opposing forces in VC:
  • Excited about the future, so they want to invest in things like rockets and robotics
  • Venture capital needs returns and doesn’t like risks
• In hardware companies it’s extra tough, since the 1st 15 employees might need to have 10 disciplines
• “I need a hardware company to carry a 4x multiple”
  • Dealing with low volumes is tough for any hardware business, but extra tough when asked for that multiple and possibly selling into a consumer marketplace.
• Eric’s background is consumer hardware, working at Apple in his early days.
• Lemnos started at 30% consumer, but is now down to 5%. How does it shift from 30 to 5% over time?
• Eric asks himself, “What new solutions will be opened up in 1-5 years?”
• 3 or 4 years ago they looked at the lowered cost of components and how this impacted applied robotics
• Venn diagrams
• “Shooting in front of the duck”
• Transition from internal combustion engine (ICE) to electric infrastructure
• This includes direct things like renewables (solar, wind), but also energy banking and storage.
• One company Lemnos backs is called Electriphi, which schedules power charging for things like electric bus fleets.
• 2nd order effects
• Another company Lemnos is invested in that is doing robotics is Path Robotics. There are over 200K welding positions and the average age of welders are 50+. Eric visited a performance muffler place in Cleveland, where they were interested in using assisting robots.
• AI is actually reinforcement learning, not true AI.
• What else is on the list of Venn diagrams?
• Eric is also interested in aircraft and transport. There is increasing in “thinking”, “sensing”, and “communications”, so that leads to more focused autonomy for aircraft.
• Elroy Air is another portfolio company that helps villages in Alaska to get supplies.
• Eric is a personal investor (not through Lemnos) in Zipline. They started in Africa, no roads to get medical supplies to a village.
• Marble is an autonomous sidewalk delivery robot, but it has run into regulation problems. Now Marble is helping create rules in places they deploy to with localized governments.
• “The future is already here — it’s just not very evenly distributed.” ~ William Gibson
• College campus might be a decent place to deploy autonomous sidewalk vehicles. Starship did university deliveries.
• There is also potential market space for moving WIP between builds for manufacturing.
• Former guest Greg Charvat works at Humatics on indoor robots doing position finding without GPS>
• How does Eric consider pitches for funding?
• “The thing you didn’t study is storytelling”
• Eric was an intern in 1990 at Apple and lauded Steve Jobs’ ability to tell the story of technology.
• Hardware company requires 3 or 4 components
  • Hardware
  • Software
  • Business
  • Storytelling
• Eric will want to see a team of 2-3. The reason he usually says no to an investment is because the team wasn’t there.
• Chris asked where to seek out the sales-focused person?
  • At uni, you head over to the business building
  • Career development
  • Chris recommends meeting new people via a site called LunchClub.ai (the link here is Chris’ personal link and will get non-monetary “credit” for using it, but feel free to just go to the site and sign up on your own)
• Kipp Bradford
• Eric reminds people about the importance of networking
• Dishcraft is another portfolio company looking to take robotics to the restaurant dishwashing industry.
• Migrant labor peaked in the US in 2010
• Pay rates are similar as Sous Chef (Chris was surprised by this)
• Linda (the founder) looked at the problem and asked about automation
• Restaurants think about plate counts
• They can wash dishes as a service, akin to a diaper service or a linen service
• “You can put anything in front of an aas”
• The seed round is for proving market fit and reducing technical risk
• Approached by entrepreneur about how they might solve a problem for the business model
• Eric’s podcast for Lemnos is called “Into the Forge” and has 3 seasons available. He wants to capture stories of the variety of backgrounds of entrepreneurs. “Going to MIT is not necessary”
• How else does Eric recommend to meet people and network?
  • Going to conferences like Supercon
  • Hardware Happy Hour
  • Feed of all the virtual hardware stuff
  • Using meetups as a way to troubleshoot
• Reach out to Eric directly:
  • eric@lemnos.vc
  • @sircoolio on Twitter

Image courtesy of ARM video of Eric speaking