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Intrapreneurship in Industry 4.0: What You Need to Succeed

ABOUT THIS EPISODE

Innovation is hard.

According to Christopher Couch, SVP, Chief Technology and Procurement Officer at Cooper Standard, and Founder and CEO at Liveline Technologies, one of the keys to success is finding a low-cost and low-risk way to break things and continuously experiment. 

But once you hit on something innovative, something that solves a thorny problem, how do you know whether it’s something you should spin off into its own standalone company?

In this episode, we get into the weeds on intrapreneurship in industry 4.0.

We discuss:

  • The events that led to spinning off a new company
  • Managing the culture clash between the new and old
  • Navigating the paradigm of being both vendor and competitor
  • What you need to succeed

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And we were able to break into that and use it as a test pad and really for a year and a half we would and vent and break stuff on a daily basis, and that cultural aspect of what we're doing for anoviation is really not the way you want to run a factory for mass production. You're listening to over the Air Iot connected devices and the journey, brought to you by vary. In each episode we have sharp, unfiltered conversations with executives about their IOT journeys, the mistakes they made, the lessons they learned and what they wish they'd known when they started. Welcome back to over the Air IOT connected devices in the journey. My name is Ryan processors, CEO vary, and today we're joined by Chris Couch, Senior Vice President and Cteo of Cooper Standard, in addition to being the founder and CEO of liveline technologies. Today we're going to be talking about entrepreneurship through the scope of industry. For Oh, Chris, thanks for being on the show today. You are Ang Goo to be. Are So, Chris? We had a record setting number of pre interviews, so I know all about liveline and Cooper Standard, but for those that don't know. Give us a little background. Yeah, sure. Cooper standard is a global tier one automotive supplier, where leader in the ceiling and fluids business or also in industrial products and materials. And Live Line is a company does come out of some innovative work we did at Cooper Standard the past few years. And live line is all about enabling real time control of factory systems in an an expensive way using machine learning based controllers in the loop. So we think it's pretty cutting US stuff. We're having a great time with that. I think we're bringing a lot of value to industry. Excited to talk about it today. So right off the Bat, I think a lot of people out there listening are probably I think one of the topics they're most excited about is this idea of entrepreneurship within the broader context of Iot. So you guys have a really successful company. You looked at the market said Hey, I think there's an opportunity here to do something and it's different enough that it probably merits being spun out as its own standalone company. What did that look like for you guys? How did you ensure you're building the right thing and what did the conversation look like about spin out. Like where does a person even begin with something like that? Sure, well, we began by solving our own problem. We had no idea what we're going to end up where we are right now, to be honest, and we just were looking at our pain points in manufacturing plants around the world for Cooper Standard, the mother ship company, if you will, and thought we had an idea that might really help in terms of bringing a new level of automation and new level of quality and efficiency and a lot of associated benefits, even energy savings and Carbo flipprint reduction, and begin to just solve our own an engineering problem and started to put together the team that we thought it would take to...

...get it done from a skill set mix. We were going about it a little bit unusual way, let's say, for typical controls gear heads like myself, and once we got into it and came up with an approach that we thought was working, we said look, this is this is pretty unusual and maybe it's useful elsewhere. And covid was a blessing and a curse. Right, it's a curse, obviously, in terms of the impact of people's lives and health so there's really nothing good to say about it. But the blessing side of it was that we had to slow down a little bit in terms of doing rollouts within the mother ship company and we use some of that time sitting at home, you know, not being in the office, not being in the factories, to get on calls and talk to you potential customers and try to get a feeling for whether or not what we're doing would be value AD and other contacts, and we spoke with people and food and beverage and oil and gas and wire and cable and different extrusion base industry, is even some some bio folks, and really convinced ourselves through those couple dozen discussions that this is probably a relevant approach. It's novel for sure, and we know that there are some industries where it makes a huge difference, like ours, and are eager to keep pushing the gas paddle and see if we can add value. And lots of other verticals as well as we're all about. So you go around market, you have a bunch of conversations, super valuable. This is how you discover product market fit, something we take seriously and know a thing or two about, but one of the things we hear a lot, you know, is is when companies begin to spend something out, they begin to incubate something that's very different than the core. Thing. Is Cultural differences, you know, like this idea of hey, we're at eighty year old company. This is eight minute old company. It's looking for different talent, it's thinking about things in different way, it's, you know, it's not like dad. It's got its own hot new take on things. What did that look like for Cooper and liveline? Yeah, great topic, you know, I think to really answer that will we have to go back a little bit to just talking about innovation in general. Right. And Innovation is hard for every company, especially more established ones that have got a track record, like you said, of success with products that they know and love and with manufacturing processes that they know. I love and I believe that one of the keys to being innovative for anyone is the ability to iterate quickly with reasonably low cost and low risk. Right. And when you're talking about factory systems that we're dealing with, that's not always so easy. If you're talking about just, you know, pure software in the sense of writing a gaming APP or something it's a little bit easier, right. It's just code. You hit the delete button the start again the next day if you don't like what she did. So one of the questions we had to ask ourselves was how do we create that fast, you know, agile sort of of loop in...

...the context of what we're trying to do? And one of the secrets to making it work was what we call our secret weapon. Cooper had a technology center and Livonia, Michigan, and happened to have some fully fledged production lines for the types of products they make that were used for sort of validation type work once in a while but weren't fully burdened with daily production, and we were able to break into that and use it as a test pad and really for a year and a half we would invent and break stuff on a daily basis. And that cultural aspect of what we're doing for innovation is really not the way you want to run a factory for mass production, right, and so the ability to isolate our annovation activity in that center was absolutely key to US first of all figuring out what we're going to do from a text dowpoint and then working on industrializing that out, so in mass production environments, the name of the game was consistency. Right, predictability, reliability is the secret to safety. It's the secret to quality, consistent quality output, and we really needed to have a place where we could just break things and rebuild them on a daily basis. And so carving out the space and the text in or a cooper standard with a set of assets that were representative of what we need to look at, was really critical to the success of what we've done. Moving on to a second but related topic, was it clumsy at all to go through and talk with people that you know you might consider competitors but that live line would not consider competitors, and have those conversations, you know, because here's Chris Couch, on both sides of the you know the Cooper Standard and the live line. So you are both like vendor and at once and also competitor. How did you navigate that? Sure? Why? I started even before liveline was liveline, and originally we wanted to do the expedient thing and try to buy the type of technology that liveline ultimately invented. And before again, liveline was even liveline. As Cooper we worked with I think eighteen IOT types of companies from more established players to cutting ends, new startups and work with me, as we either did a paid pilot or we simply had a couple of working sessions right to figure out if we should be a paid pilot with eighteen companies and over the course of the year, and ultimately we couldn't buy what we wanted to do. And just for distinction, the critical aspect was the real time control part of it. Right, a lot of companies doing cool work and connectivity Platforms Doing Cool Work and visualization doing cool work and analytics that are descriptive of nature. A lot of wonderful stuff happening out there, but nobody was really hitting this problem head on. And again,...

...what we're trying to do is real time control with machine learning. Base Controller is at a factory level and got to the point where we still look, if we want this, we're going to have to build it. But by the way, nobody else can buy it either. So maybe right. That opens the door for a conversation, and that's when we pick up the phone and started calling companies in these other manufacturing industry is to try to assass of they had paint points that we could speak to, let's say about obstacles. Okay, so now you've made the decision, you guys have identified the issue, you've gone to market, you've done the interviews. By the way, ninety percent of companies don't do any of those three. So you're already in rarefied air. You've gone out to market, not just had to interviews, but like you're signing up competitors to be early adopters of this technology. Now you're really entering a rarefied space. What comes next is everything. A lot of people, you know, getting to the ninety five percent mark is about half the work and the last five percent is the other half of the work. What were some unexpected obstacles that you guys uncovered in that I'm using air quotes out here, last five percent, you know, that is always the majority of the work, or some of the unexpected technical and other challenges that you guys have had to uncover so far to, quote unquote, finish the job? We really had two main surprises. One was technical and one was a business model surprise. A technical surprise was that to pull off what we're trying to pull off, the answer to the question of what's the minimal stack that you need to run is unfortunately a lot, right. And you know, we're pulling data off sensors, we're putting it through transformation, signal processing, beach or creation, we're doing inference, making controls, decisions and pushing us back down into equipment and real time. Right, and that sounds sort of easy to say in a paragraph, but the technologies it takes to do that, even in the minimum scale, or pretty imposing. Right. And we, I think, thought that we could probably come up with a minimum viable product that was a little easier to pull off than what we've done. I think from a deployment standpoint, what we have is pretty easy. From a customer view point, we can, you know, ship service to to the client sites and and remote deploy doc images and we sort of get up and running. My infrastructure team would roll our eyes and say it. Look, it's never that easy, dude, right, but basically that's what's what we're what we're doing. But it to get there took more than we expect it, I guess. Right. And I guess you could say, look, you know, given what you're trying to do, are you really surprised about that? I guess not, but but it's a hard problem. Right. It's a very hard problem requires a wide variety of skills to pull it off. And, by the way, not into skills in the sense of, you know, data science and and streaming data protocols and all those things, but this the raw old school controls engineering. Know How to talk...

...to industrial equipment and design control loops and tune them to get good performance in the real old school sort of stuff. I got to do it all. The other surprise for us was on the business model side, and we thought starting off, you know, even with Cooper Standard, the the mothership company, that because of what we're doing right, we know what's happening in the equipment right and we can quantify to the nth degree how things are performing. When things go wrong, you know why do they go wrong and you know what can we do to compen say automatically, and what can you not do to compensate automatically? You know, if you got jump material coming into the plant, I'll sort of stuff. Because of that we should be able to say look, when you turn on liveline system and control, your benefit as x and if you turn it off, your you know demerits in the plants and your cost are going to be why you do the difference x? Why? That's that's what we're bringing to you. Please pay US right. And that's a wonderful thing to say in theory and it's a very difficult thing to pull off and practice. And early on in our journey we were talking to a lot of very savvy investors and software and I said what I just said to you and they would laugh and say, look, Nice idea. It never ever works. You guys should be thinking about subscription based pricing models, because trust me, you'll never get alignment on what that economic value is. It's not so easy. And we said Yeah, okay, great, you know, thanks for your advice. We don't sort of believe you because we're in there, we have the data, we know right, and Lo and behold, they were a hundred percent correct. And it's not easy to do, and that you know, even with Cooper Standard being the mother company, right, and we're all friendlies, it's still not easy to do. And the reality is when you're in doing plant level controls, every day is just different for the plant. The weather changes, right, we've had instances where people were saying our system wasn't performing well and there was a water leak and the plant from the ceiling and it was springing water on the sensors right, and so of course the system wasn't really working well. But it whose fault is that? It's not our fault, but you know that goes into the calculation. A well, we were running with your system on and we made crap product today. Okay, well, sorry. So that's sort of a silly and obvious example, where there's a hundred and one less trivial examples of stuff like that. Right, and at the end of the day it's very, very difficult to do it an economic gains based business model with the customers. I would say it's practically impossible. So that was another big surprise for us and I guess you between that and the technical side, what I'm trying to say is it's just a hard price solving. It's not. It's not been easy and that's how we've been. We've been, you know, essentially...

...two and a half years and and stealth mode on the inside, trying to bang our heads together and figure so I want to come all the way back to it's difficult. This is a hard problem. My question for you about, you know, doing this dual executive track but even if it wasn't dual and you had moved totally over to live line, and maybe that is the path three in the future. Talk to the audience. Somebody out there is asking themselves right now. Do I want to bother with the hassle? Is this for me? Do I have what it takes from the perspective of what you've been through? Every company's different, every spinoff is different. What you know? You're having a beer, your second beer in so but hey, Chris, you think I'd be good at this? What are the questions you would ask them to figure out if they have the resident skill set, personality type to be effective. All right, so the most important question that I like to ask anybody that I'm interviewing for this type of role is what they do on the weekends, and what I mean by that is what do they do in terms of side projects? That will demonstrate to me that they had the passion and the perseverance to just pick up new skills, because that is what we're doing requires, right and if I were to sit down and lest the five things that I know how to do technically today that I didn't know how to do twenty four months ago, right I can ramble them off and everybody on the team can do exactly the same. And the way we did it was just buckle down and we'd look around us like nobody here knows about streaming. You know, Protocol X. Somebody could learn it next week, right, and somebody goes and doesn't look up from their computer for, you know, a hundred hours until they figure it out and can write it into code. That's just sort of the mentality it takes when you're trying to smash together this many technologies into a blender, right, and trying to come up with with a milk shake that the tasty cent this is sort of what it takes. Nothing that we're doing is canned then off in terms of standard technology is that you can just, you know, pick it off the shelf and plug and play. It's just grinding it out, and so I want to know that people have the passion and the fortitude to just grind out learning new skills all the time. And it's pretty easy, right. You know, show me the the open source projects you've committed to, right, or show me your passion project on the weekends for Cool Tech that you've built. I don't care what it is is that to be even software right, and that's just sort of the DNA we found works with what we're doing. I'm sure some day, if we're successful as liveline and we have marketing departments and and other cool functions that aren't quite the same vein, fine, but right now we're really talking, you know, a core dozen technical people that are just grinding every day. So we talked a lot about the path up to this moment in time. Give us a sneak peek liveline looking forward. What are you really excited about? Pain a stricture the second half of two thousand and twenty two or beyond, or whatever that you're excited about, or some of...

...the things you think we might see? Yeah, absolutely. So. There's a few things that really keep us motivated. You. One is first just making a difference to manufacturing people, right, because most of us on the team have some roots and manufacturing. We just get excited about it, right, and making people's lives easier. But if you translate that to broader impact, right, when plants run better, they make less waste, they burn less energy, right, they reduce our carbon footprint. They would do reduce their way streams. They have safer environments, and those are the things that really matter and we think that we're contributing in a material way to that story and we're just passionate about it right. And if we want to have a chance to keep manufacturing from this country, but also in others. To write, we have to address this and the best way that I know how to do it is to make the job as cool as we can, and we think that interacting with the types of intelligent systems that were putting into plants is a way to make the job cool right. You know, no longer are are some of these jobs essentially, you know, checking gages and dials and making adjustments. It's offloading some of the more mundane stuff to an intelligence system and then upskilling those jobs to be interpretation and to be working on, you know, process improvements and trying to get ahead of issues. The by the way, we can alert them to given our predictive analytics. That job is is cool right, and working with some of the most cutting a machine learning. We think around right and we think we can contribute meaningfully to making manufacturing cool right and keeping talent in the pool making manufacturing great again. I love it. Talk about like you're passionate about space. I share that passion. I also love the broader ecosystem, like consumer iote. You know, I'm a big gadget DORC. What's a company you know could be as close or far away from where you operate as possible. Who out there in you know, connected device iote, you know to Tech Land? Are you looking at? And you say I like with these guys are doing. No more. People need to be talking about these folks. Well, I'll talk about stuff more related to what we're doing at liveline. There are a lot of companies with think are cool. I mentioned we talked to Agen of them and arst right in the last the last two years. So we and we've really used resource. On paper, you know, double that probably or triple. We think that the folks that companies like a tulip IO, they're in Boston. It's an MIT affiliated start up. They're doing some great way, we think, best in class operator interface and getting those spun up quickly at low cost by engineers and plants. We like the folks at site machine. They're originally in Michigan Company, so we got to give them props as a Michigan Company. Right. They've moved on to the glory land, I think, of having a headquarters and and San Francisco. But they're doing some cool and connectivity...

...platforms relevant for what we're doing. You know, we keep an eye on them. We keep an eye on let miss, let mess I, Oh, for the same reason, and connectivity platform. And you know, we obviously have something similar to that that we have built because we had to. But as we look out in the future, as as liveline grows and we expand and we sort of have things that we would like to focus on and things that we don't want to have to focus on, we live at companies like Tulip in site machine and let mess and say hey, you know, someday and maybe there's a chance for a beer and a conversation and we can lovert each other's strengths and help everybody go faster. You know, who knows? We haven't had this discussion. So nobody get excited to those companies, but those are those are the types of folks that we keep an eye on and you know, we're all like engineers and and very practical and I think if we can partner for stuff instead of having to reinvent the wheel every time as usually a when. So we'll see how the great well, we love that kind of like collaboration even within, I don't know, competitors. You know, hey, let's drive this thing forward. So we covered a lot today, and the thing I love about it, like I said at the top, we've never had more preaterviews than we had with you, and a big part was there was just so much interesting content to go through that it was get you know, we kept you and I kept nerding out, going off into right field and different directions. You know a lot. You've been around for a minute. I'm not calling you old. You said it, not me. For folks that want to follow the story, you know where's a good place to keep up with you if they want to follow along after listening to this episode. For Live Line as a company, you can always reach us on liveline dot tech and you can find our contact info. They're personally. You can find me on linked Don Christopher couch, and loved to hear from folks. We're always looking for good talent, people passionate in this space, whether they want to come help us build the real time automation that we're building or whether they want to talk to us about partnering up or talk about coming to help your company as a manufacturer. We love it and happy to happen to chatting us. Thanks for thanks so much for being on the show today. You Bet. Thanks for all right, folks, that's it for today. If you're listening on Apple Podcast, would love a rating. That's it for today. My name is Ryan prosser. Thanks for listening and will see you guys on the Internet. You've been listening to over the air, IOT connected devices and the journey. If you enjoyed today's episode, make sure to hit subscribe in your favorite podcast player and give us a rating. Have a question or an idea for a future episode? Send it to podcast at very possiblecom see you next time.

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