Show 158 – Unicorn Interviews – Romain Moulin, Exotec
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The 28th in our series of interviews with leaders of unicorn companies being recording in partnership with the European PR Agency, Tyto, and their own ‘Without Borders’ podcast. This series aims to find out about the key issues, pain points and challenges that start-ups face and how they can address them with a strategic approach to marketing and communications.
Russell Goldsmith and his co-host Tyto’s Senior Partner, Holly Justice were joined by Romain Moulin, Co-founder, and CEO of the global robotics company Exotec. Founded in 2015, the company has since secured $477m in funding reaching unicorn status in January 2022 with a valuation of $2bn. Russ starts the conversation by asking Romain to give some background to the company and the area of business he is seeking to disrupt.
Romain began by explaining that Exotec is robotics for warehouses. He tells the hosts, ‘You have to understand that if you place an order online to an e-commerce player and you have people wandering around the warehouse to find the article, to put them in the send box and to send them to you’. Understanding that this is a difficult job which could see employees walking 15km a day and for this to be carried out, an army of people is needed. What Exotec propose to their customers is a robotic system based on a fleet of 3D mobile robots, which are able to go everywhere in the warehouse, but also up to the ceiling. And by doing so, the robots are bringing the articles to the operator, and the operator can really prepare your order very fast, multiplied by five times faster. Also allowing to store an article in a very dense manner up to the ceiling of the warehouse and really fill your warehouse with articles. So, storage and speed are really to what Exotec bring to their customers. And bringing a lot of flexibility because in fact, if you discuss with an e-commerce player, they don’t know what they will be doing in three or four years. So, you need to give them a system that they can modify. And if they do 20% more orders, Exotec come back with 20% more robots. So having the best of performance and the best of flexibility within the distribution centre is Exotecs job.
After Holly asking Romain about his entrepreneurial journey, he went on to explain Exotec was the first company he founded with Reunaud Heitz. They had the same kind of career, as they both started as engineers in an HGV company, HGV automated forklift moving pallet in the warehouse, same kind of robotic system, but for pallets and no single articles. And then moved to GE Healthcare and they were doing medical imaging, x ray imager. The foundations of Exotec were built upon these experiences both founders had shared because one piece is logistics, their first job. That’s where they learned what’s going on inside the warehouses. But the General Electric part is also super important because they were already developing advanced robotics and products that they would send all over the world. So, they built a company based on these two experiences and by their willingness to try to bring something new and bring something disruptive to the logistics.
Investment and the future for Exotec
Russ referred to the introduction whereby he mentioned the amount of funding they had raised, the most recent being $335 million earlier this year. Two questions were asked by Russ; where that money now is going to be used with the company and how they are investing? And what are the plans for the next 12 months in terms of the development of Exotec? Romain pointed out that the market is huge at least maybe even $50 billion with only a few players. He really wants to take Exotec into being a major player of this field. Continuing that the competitors get anything from $1bn to $3bn revenue, and there are only six or seven of them. This year they will do $180m so they must take Exotec within this big player doing robotics instead of traditional automation. They have two axes on which they must build the R&D. They need different building blocks to be able to deploy free robotics warehouse. Romain spoke about the Skypod system with this 3D robots, which is in the centre of the warehouse. But the warehouse, it’s nothing more than a big factory which is processing orders from the truck which are unloaded to the truck which are loading. So, they’ll build the different bricks to be able to have this value to their customer. And on the other side, it’s about building their footprint on different territories. Right now, Exotec have systems in France, Belgium, Netherlands, Italy, all over Europe, Japan, US, and Canada. But it’s been five years that they are selling in Europe, and it’s been only two years they’ve been in Japan and US. So, there’s still a lot of revenue to be made in these countries and therefore they will accelerate strongly on marketing and sales on these different territories.
Holly took the conversation to the topic of leadership. Asking if there are any individuals that have had a huge impact in his development as a leader? And if so, who are they and why?
Romain explained there were two kinds of individuals and one which are more personal. Usually, his different manager or boss in the different companies have really brought a lot to him. He explained he could talk about his first boss and first manager at BA Systems. What he earned from them is that doing business in a B2B business is about trust and the confidence that you build to your end customer, because their system is $2m for the smallest one to $30m. And for a customer place a $30m purchase order, you need to have built very strong trust. You cannot be fake or lie, but instead be super rigorous in what you say and give a clear answer to that question.
In fact, Romain was happy because he was out of school discovering the world of business whereby, he thought that he could be struck with disappointment. Instead, he saw that being right and clear are the steppingstones to be a great business.
Jeff Bezos and other influential business figures were also admirable to Romain. He learnt the future of a company is so important and tend to have learnt this from business books. He had that feeling also from his former company, but saw that businesses were built upon great futures, and he had spent a tremendous amount of time building that future and ensuring that the future would be respected. Romain stated: ‘It’s not more about the processes or product, it’s really about how your people are working’. Rounding off by saying this is going well at Exotec.
Holly assumed to build that culture of trust internally and externally, you need to have some exceptional skills as a leader. Which lead onto her next question: ‘What do you think are your main strengths when it comes to leadership skills?’ and ‘What are some of them that you’ve got that you’ve built as part of the wider Exotec management team?’
Romain would not say that he has exceptional strength, but he can tell you what the culture of the manager at Exotec is and how they are using that every day. They want people to be simple – low ego people, which he can take the example of their sales directors that they hired just a few years ago at Exotec, who was 55, has seen everything, and to Romain, was a kind of legend. He had the humility to understand what Exotec were doing differently and what they could bring to the business and keep having people who are able to keep this humility and listening what the other have to say. Exotec take extreme care bringing c-level execs which have this spirit of they know what they do, they know what they say. But at some point, when they don’t know, they just listen, and they build on that. He thinks you can really destroy quite fast the ambiance of a company if you bring someone which would have something to prove. He says that if you have delivered something to your customer you need to test it and all of your test plan conditions must be passed. If one of your test and condition is fail, then your full test is failed. So, the joke is that if he asks someone how your test is going and they say it’s almost passed, he will say by definition it’s failed. And it’s extremely important to have such rigor because their systems are critical to all of their customers. And as he said, when you will, when you want to build confidence, you need to be super clean and super rigorous on what you deliver. So, they have spent a lot of time developing this mindset in the company. And as a leader, you need to be exactly like that. If you do to the people that almost pass is fail and you are just approximating what you say, then you have a problem.
Romain pointed out at first with Renaud, the co-founder, they were telling the team that being a unicorn is not a target and wanted people in Exotec to understand that what they must do is take a purchase order and execute it perfectly. So, they did not have a plan to make a lot of marketing around becoming a unicorn. But saw, in fact, his team were super happy to have this recognition of the market, and this is a status that employees are extremely proud of. So of course, they built on that and what it changes on the market. Exotec were the 25th unicorn of France and that was sticking to a plan made by the government to have 25 unicorns in a certain amount of time. So, they gained a lot of PR, because President Macron just talked about them because they were the 25th and the first industrial unicorn in France. So, it made a big noise on the markets also in Europe and having Goldman-Sachs within the investors also made a big reputation in the US. So, in terms of awareness of the brand, that’s what was the biggest change. It created a lot of communication on the different media and a lot of awareness of worldwide.
Differentiation and Communication
Romain said he tends to say they are doing warehouse robotics instead of warehouse automation. And what he said about their ability to deliver a flexible system to deliver them fast is a key differentiator. Of course, they have some technological differentiators. Being the only one to have a robot which moves on the ground and then climb in three dimensions on the rack. However, this will only impress a customer for a while. In the end, they wants to know if the orders are in the truck at the right time and if they can change their logistics needs tomorrow and have a system which is still responding. So, Exotec build a lot of differentiation on this aspect of flexibility.
Romain reinforced they are a B2B business. So, they can really spend their energy on very professional and specific medias. The big channel for them is LinkedIn, which is seen a lot by the different customers. They have also an employer communication because hiring is key for them.
The culture of Exotec, Romain would say is they have two brains. One side of their brain would be the quite typical software start-up mindset which is going fast, delivering things to the market and then seeing what happens. You need a piece of that in your brain, but if you have just that brain, it will not work for a company like Exotec because they deliver hardware to the site. If you deliver hardware, it means you are an install base and you cannot update it. Romain said ‘you need on the other side of your brain a perfect execution and everything I was thinking about this almost specific. You need an industrial quality grade and to be able to deliver this robot on the field that will last for at least ten years. So, you need to go fast. You need to be agile.’
Playing with both aspects of their job is probably the biggest aspect and challenge of the future. Because if you are just focused on industrial quality grade, you slow down. He also said if you are just focused on innovation and going as fast as possible, you create a depth on your install base and at some point, you create dramas on your customer. So, you need to go fast with extreme quality and balance because of course sometimes both are contradictory. So extreme quality first, but then going fast.
Romain doesn’t see Exotec slowing down. He knows that everybody is feeling the current economic crisis and they have had some impact, for instance, on the price of raw materials. They have some in price of some availability of components. So, they have to redesign to get around this unavailability. They had no shortages so far, but he still sees a very good confidence in their customer, their willingness to invest, because in fact, one driver of the willingness to invest in their system is a labour shortage. People don’t find the people to do the job in the offices. He said it requires an army usually, and it’s a difficult job. So it could be in Europe, it could be in Japan, it could be in the US. He said he’s hearing the same story. They don’t have the availability of the workforce to do the job, so they know that even if some downside in the economics happens, they already see that problem.
The transformation of the supply chain is not slowing down. And so far at Exotec they are keeping the same speed on the market and have very good future in front of them.
Romain used to say that he’s a lazy guy, so he shows the same side to his investor, customer and employees. Every month they have meetings which are happening one after the other, the C-level meeting where everybody reports what’s happening. They compile that into the board meeting so that they share approximately the same stuff as they were telling the day before with the investor. And one day after they compile that into the whole employee meeting and explain to the employees where they are and where they are going. So, transparency is also very important in that company. Romain explains that of course, transparency was obvious when you are 20 people or 30 people but they are no more than 400. But keeping this transparency once again allows them to go much faster because everybody understands where they are going. And as your complexity and your department grows, if they know why you do that and where you are going in that direction, avoid putting processes everywhere because people, they understand what they are doing for the end customer. Romain understands that in the end, you just need an end customer which is satisfied. So, he thinks this transparency in the internal communication saved a lot of time and dramas.
Romain said that until Exotec were at 50 people, either he or Renaud had seen everybody, but they made the most important hiring of Exotec when they hired Jules Briatta, their Head of People. At that time, he was a headhunter. But by the moment they took that guy and took it quite soon in the company they created a war machine in terms of hiring and onboarding and then training. And without that they would still be probably 200 people and probably late on all deployment of the projects. He reinforced HR and the ability to hire and to get people on board was the most important function. He said you cannot do it yourself past 50 people as it does not work anymore.
Romain always sees everybody in a training session. So, when they come every two weeks, he takes the newcomers and has 2 hours with them explaining who they are, what they do in the future. Talking about all these key aspects, which is extremely valuable, and they had feedback that the employees love it.
Romain said he learned that he is lucky, because what he says about transparency, it also works externally. So, he managed to be the same guy inside the company, outside the company, and to have the same stories to tell everybody, which makes his life much easier. And he thinks it would be not so very confident if he had to say another story outside than inside. But what he loves more than anything is talking to the end customer and really what he was saying about building trust, He’s a more personal communicator than a broadcast communicator. And it’s super important for him to be very close to the customer to build. He’s still selling the big projects because that’s how he builds an understanding of the market of what they need. And with Renaud and the others, they discuss on what they should put in the roadmap to bring them more value. That’s what he loves more than anything.
Romain reminds himselfwho he was when he was in school, and he was at ease with a communication. He said that he wasn’t a good communicator and admits that he would not be as good as explaining who they are and what they do if he was 20, but that’s thanks to his experiences from 20 to 40 that he understood at least what people in front of him wanted to say. Also, to listen to people he thinks is super important. He explains you could say that when you assess people in his type of job, 90% of your job to be to listen to the customer and 10% to sell your stuff. He then reinforced that what he learned from 20 to 40, has been confirmed in his everyday life.
Romain said that in general, it was obvious the Esperanto of Exotec was English as everyone was talking English. But he saw that everyone could be French in a room but still speaking English, he said it takes 10 minutes for everyone to then realise this. And when they built that company, it was super important for them not to build a local company. So, from scratch, everything in Exotec was written in English, and sometimes people at the very beginning would wonder why. But after three years, when they had to start to working internationally, it was extremely useful of course, and you get all your documentation, which is already ready. And he thinks a second switch has happened probably one year ago. Each morning they do a stand up at 9am and take just 5 minutes to explain to the company what each different department is doing today or what the news is. And that was in French until last year, when they switched to English very naturally because now half of the company is not speaking French. But it’s important to put English in the company early and not to create a depth of things in local language. They have some people within the company who don’t speak English well, so they do need to have everyone on board.
Biggest communications challenge
Romain says this switch from talking to listening was the biggest challenge. Explaining that when you are not confident, you want to prove something, and you talk too much, and you are just trying to prove something. And he could even say that this advice has been given to himself by a friend during a party. She told him, so he stopped to talk, listen, which he used a lot in the party, but also after in his business. And that might be one of the biggest challenges. The main take away from that is to stop and listen, not having to prove anything.