Welcome to Tectastic, where we navigate the intersection of technology and business, uncovering innovations that redefine our world. Ronan Duvalier. Welcome to It's Fantastic. This is so lovely to have you here. Thank you for me. So you were in a space that I have a lot of passion around, and anybody who's followed me recently knows that I care a lot about the logistics and operation inside the house. Which is often not the sexy part of technology. There's a critical need. It's really important.
It's how the world works. But it's not the flashy whiz bang stuff that we all get here. And you run OSS Ventures, which seems to be invested in that space. Tell me more about that. Tell me why you chose that space. So there are 2 big answers. The first 1 is just my personal story. I worked for 10 as an operation. I was a factory director, supply chain director, and then I created a tech startup and was lucky enough to to make some money in the exit of that company.
And so I just used my money to put back in operations. So that's the historical way of looking at it. The second way, which is way more interesting for me, is operation is 25% of the world GDP. Roughly, it's 0.7% of this Tiffany. So there's that in the almost gap. And the world is needing badly innovation in that space. Innovation in atoms was not fast enough compared to innovation bits And, there is incredible progress to be made there.
And what I often say is, if you really want to solve climate change, and the tensions in America and Europe over wages and cheap Chinese stuff and everything, we have to put technology in operations. And the way we are going to do it. And I dream of a world where robots are going to do a lot of the physical things, and we are going to innovate in the physical world, and we're going to change the world this way. So it's critical for me to put tech in there.
It's funny because my company does a lot stuff around tech debt. And the vast majority of tech debt, when I think of it, I'll use my wife as an example. She has alphabet supervisor named a lot of advanced certifications, all that kind of fun stuff, and heavily in the operation space. And what does she get asked to do generally speaking when she brought into a company? It's not those things she has, you know, those degrees for her. It's usually to manage broken technology. Yeah. Of course.
Because at her level, it's a lot about reporting. That's where I think a lot under investment has been a huge gap. We rely on both systems to give us good data about how we're doing. They're not telling us the reality on the ground so often because of the gaps in the technology itself and how fundamentally flaw they are. And you mentioned global warming and a lot of the the risks that are coming with, you know, advancement of technology in general, there's risks that come with it.
And the place that we've least solved are the places where the most people work, where the most of the jobs actually sit. 40% are full jobs. Yeah. And that's where I personally started leaning in about 10 years ago because I, like many technologists, was so enamored with the flashy, with the the stuff that was right in front of But as you move your way deeper into the operations of any business, you'd find more and more opportunities.
And I think I know why, lack of willingness to invest there The relative contrast, it's let's let me take some examples. Biggest companies in the world. Apple, Amazon, Tesla, Microsoft, arguably 3 out of those 4 companies our operations company and their Edge supply chain. So if you invest right into those functions, the payout is massive. What is problematic is that the average line of code in operations is 24 years old, so they can get a drink.
And when you have something that works, it's classic Innovator's dilemma. You don't really invest that much because you're not seeing the next frontier of what a significant investments in technology in that part of your business could drive. And so, that's, for example, what happened to automakers. It showed brutal the amount of software innovation for the last 20 years in cars is 0. And then Tesla comes, and then the amount of innovation in software and cars gets to a lot.
And separating would that never happen if there hadn't been a new player in the field. And so my personal take on it is that it's an ecosystem and we need descriptors to pave the way and do things differently and invest massively to show the way and then incumbents have to care to catch up, and so they start investing. And so I'm an optimist And so I think that there will be massive investment and opportunities in that part of the economy in the next 5 to 10 years.
The last thing that happens is that the Chinese are outspending us in every CapEx category that you can think of. But Biden came and said, okay, guys. We are going big. And now we have chips coming back to the US. We have, computers, making, coming back to the US, and we have a 100% tax on electric vehicles coming from China, which really help. So it came down to me to that exact point about the investment levels. And the sunk cost fallacy that's often associated with technology.
There's very real reasons to not worry about being pushed hard by a creditor and startup because the amount of capital they have to expend to catch up when it comes to something in logistics, like, I don't know, ocean shipping. Yeah. Every 1 of those ships is a $100, 000, 000 plus Fistag plus the port build outs and everything else to disrupt a space like that, we requires massive investment. Yes. Right?
And you're gonna see that coming from a long way out because as soon as they start asking for money, you're gonna know about So a lot of these spaces have had no reason to really change. I kicked on that particular industry partially because I was And I saw it firsthand the only innovations that have ever happened in the 3 1000 year history of ocean shipping or more, probably, like, 12, 000 year history of ocean shipping. Are no longer relying on mother nature to move our ships. Right?
We invented steam engine. Yeah. And the introduction of the container in the 19 fifties. Yeah. That's it. And we're at a point now, though, where if you're not digital, full end to end visibility at least, you can't optimize, you can't predict, you can't do a lot of the things that are necessary for just baseline today. Yeah. And so everybody that works with those parties works around them.
They get data from other paths, you know, they come up with other ways of doing it, which is terrible because it's a very big portion of global trade. Happens that 1 industry. Yep. So it's ones like that that I look at and go, I have theory on how we disrupt the space like that, but I don't really know how we go after that. It's hard. Whereas there's other places, the going around it pieces, where it's very clear how we do that. And technology is such a big enablement.
And when most people think technology. They're really thinking about the computer and automation that comes along with it. But there's a lot of other technologies out there that have a potential to disrupt this space. And I'm curious what you think some of those, like, most exciting ones are right now. So the first is AI. Clearly, and above all other categories, there is a case where AI is bigger than the internet in terms of impact on global trades. And we really think that.
Yeah. And the way we talk about it at OS adventure is very simple. Cloud and the internet gave us the way to reach anyone and any business owners. And AI gives you how to replay people who don't actually do things. So AI. Yeah. It it it's exactly right. But it's also 1 of those moments where it's like, I think that the future of AI for a period of time is largely a side by side, enabling of the people to do a much better job to be much more productive. But there is a point.
Yeah. Yeah. There is a point. You know, it's exactly like the when there is a takeover from an company to another. First, they say, we are going to work together and 3 years later, there's only 1 company standing. So, well, so AI robotics is a very big category. And we think that robotics is going from a whole base to learning. There's that incredibly interesting company called Figures that is doing a human with general purpose robot.
They just stroke deal with BMV, and the goal is to automate 50% of the factory without coding. Wow. So self learning robots, we think that this is going to happen for sure. Yeah. The third is new materials and new pro new processes. New materials and new processes are enabling us to do things that we could not do before. I have 2 stats that I love. The first 1 is that there are more scientists alive right now than the total tiers of who died ever since Jesus Christ.
So it means that the pace of innovation in material science is exponential. And with AI, we discovered in the last 20 years more materials than in the last 200 years. I did not know that. That's amazing. So that there's another 1 that I think is very interesting in this space that I I actually don't hear many people talk about anymore, though it was hot about 10 years ago. Which is advanced manufacturing, 3 d printing, CNC machining, all the things that are related.
Because for me, you know, I'm gonna say the exact opposite 1 I just said before, like, I actually think that's the way that we start to disrupt the global shipping industry and logistics as it is because my premise is this, marching forward, there's been this ever expanding, like, desire from consumers for 2 things. I want the product now and we're getting closer and closer to that. And the other is I want a custom.
And those are in direct conflict with each other if you don't have something like advanced manufacturing. So you're thinking of the syntitizer from Star Trek. And yeah. Yes. Yeah. There is 1 thing though for the Sentitizer from Star Trek. Which is 1 of the most counterintuitive truths that we hold at OSS Venture. The bottleneck to the scintatizer or star trek is not the process. It's the material. Meaning that you don't need 3 d printing and a mill and some smoldering and blah blah blah.
You don't need, like, those 14 different processes in a box. If you have the right material that needs only to process to do a variety of things. And then sending the instructions on how to transform matter is very easy. Like, we have 1 company in Europe. They operate factories where there is 0 people, and they can remote, create any number of 200 k SKU just by pressing a button, and people can deliver it. What's the name of that company I need to connect in the Wayfair?
It's it's a it's a Cognex and I will send it, to you. But what is very interesting is that those 200 K SKU, the constraint is not the information sending the constraint is not the processes and blah blah blah. The constraint is having the right materials to expand the type of SKUs that they can do. Yeah. Absolutely. So I was at Nike. I was their head of innovation for quite a while. And 1 of the things that we were trying to build was Nike Iggy, the custom shoe that you can design.
Yeah. The hard part of that was never letting people design whatever they want and being able to, like, do all the models and all the cut patterns and all for it. It was how do we get purple, green, gold, blah, blah, all the different materials to each factory that might make that So we actually started down an interesting process, though. We rethought how a shoe was built entirely.
And that led to 3 major innovations, the flyknit upper, which is a mid upper 1 piece instead of being, like, 20, the, I think they call it lunar on later or lunar soul, but instead of being air soles, it was the lunar soles because I 1 thing. And then it was the it was like sonic welding for the different parts together instead of stitching. And was all so we could do it faster. And it pushed a lot of, or sorry, we could get it closer to customer errors. We could do more things.
And I do think reef thinking the products themselves along those lines creates its own set of innovations, which is very positive. But you're absolutely right. If you can't get the base materials to that place where the thing's gonna be manufactured, you're no better off. And our supply chains are still built for raw materials to go 1 way. It Exactly. And so 1 of the biggest innovations of Tesla is that they reduced the raw material variety needed for the car.
And they verticalized a lot of the supply chain. And so that's how they got through the COVID supply chain descriptions and blah blah blah blah. And so they They thought the product with more constraint on the raw material at start. And we think that in the next 10 to 20 years, innovation materials you need to be so huge that it unlocks the rest because the bottleneck stops. I hear you.
That's a very good point I did not realize that that many innovations have already been made in that space because it what's interesting about that is it gets buried in everything you buy. You don't even know what's happened Yeah. But you have more comfortable shoes. You have shirts with less seams and, all kinds of it's, there was a commercial when I was a kid, but that was, like, we don't make the products you buy. We make the products you buy better.
And it reminds me of that because that was a material sciences company. Right? Yeah. Exactly. And it's so interesting because a lot of this is driven by AI. I think 2024 is on track to be the 1st year where more new materials are discovered by robots than by humans. So it's starting. For drugs, it was true in 23. It's already true for drugs. Now it will be true for materials.
And so it's it's a good space to be in because when that fundamental innovation happens at such a deep level, it changed the world's supply chain. Absolutely. I I wanna keep this conversation going for hours and hours, but but I can because we are running out of time rapidly, and I wanna give you a couple suggest to say some last words to the audience? Oh, sure. So, at West Adventure, we launch and build software and hardware companies for the operational world. We invested in 20 companies.
They are live in 2200 industrial sites. We are 25, 000, 000 ARR. And we are looking only for 3 things, which is incredible founders wanting to partner with us and change the world of operations. 2 are industrials. We work closely with industrials. We go to their factories. I have a 20 people team We went to 860 factories in the last 4 years, basically, all over the world, and so we get all the time from the ground up.
So if an industrial is listening to this and saying this is sounds interesting, you can contact us. And the third is, we are closing investment fund. It will be announced next week. So I think it would be a it will be already all news when the podcast goes live, but, it's 1 of the biggest fans in France. So we are very proud of We're not that, fantastic having you on. I will have you on again if you're interested.
I'd love to go deeper into any 1 of the companies you're invested in, the topics you wanna go into, love having you on. Thank you so much for being on the show. Thank you. And that's a wrap for this episode of wanna thank you personally for joining us, and we'll see you next time. Until then, keep exploring, and stay curious. Thank you for listening. If you are new here and enjoyed the content, please subscribe. It really helps us out.
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