Introducing Rich Rogers and Akhila Tadinada, Founders of Xemelgo
Sara Lindquist:
I'm Sara Lindquist from FUSE. We're an early-stage venture firm based right here in the Pacific Northwest - and just like the founders in our portfolio, we are just getting started. We believe that founders deserve more: more urgency, more community, more expertise, more reliability - more of everything. And we aim to deliver. Join me as I introduce each of our portfolio companies in the FUSE Family to date.
Today, I sit down with Rich Rogers and Akhila Tadinada, founders of Xemelgo. Join us as we discuss the evolution of manufacturing and the shift towards industry 4.0 and how Xemelgo is completely transforming factory operations and supply chains.
Let's get started.
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Sara:
Akhila and Rich, thank you so much for being here today. It is awesome to be with you both!
Rich:
Excellent. Thank you for having us. We're super excited.
Akhila:
Yep. Thank you for having us.
Sara:
Yes. Well, I appreciate you taking the time. I know both of you have crazy schedules right now. So, appreciate you spending some time with me to share about both of your journeys and also the Xemelgo story. So to kick things off, it would be great if you could share quick overview about what the company is and how it serves customers today.
Rich:
At Xemelgo, we deliver smart manufacturing software, right? And so this is software that really helps manufacturers be as efficient as possible in their operations. And so part of that is providing real time visibility to inventory levels, to work orders, to shipments, to tools and blueprints, that are sort of floating around. It is sort our goal to almost put the entire factory right in the pocket of that operational leader. And so, 24x7x365, anywhere in the world, pull open their phone and then see exactly where things are in the operation. The large majority of that data is captured through sensors, right? And so, we're also really working hard to eliminate the burden on the workers to barcode scan and to manually enter that data. So for us, it is really providing a win-win solution, minimizing the burden on the workers and at the same time, giving the leaders real time visibility to where things are at.
Akhila:
Yeah, I think the way I explain it to people joining our team is, manufacturing today is like driving around with a paper map. And we want to change that and replace that with actually having the map on your phone, like a Google map, right? And we want to use sensors, AI and machine learning in order to enable that for people.
Sara:
Love it. That is great. And it would actually be super helpful - I was going to ask this a little bit later, but - I think it just segues well here. Can you also explain just a bit about the industry and digital transformation shifts at large? I think that would be really helpful for anyone who isn't familiar with RFID - how is that looking across factories and supply chain and why is the timing so great right now?
Rich:
Yeah. No, I mean, it is a fantastic question. And the simple truth is, manufacturing is behind from a technology standpoint. And then, Akhila and I, when we first launched Xemelgo, one of the first things we did is visit factories all throughout the Pacific Northwest, getting tours, looking around, seeing how people were operating and it was sort of prehistoric. There is not a lot of software. There is not a lot of technology. The software that is in there is from the 80s and 90s, early 2000s. And so, we saw IBM PCs, we saw window applications and we saw spreadsheets up and running. There was a real lack of apps and a real lack of collaboration software.
And so, I think that is why we're so excited about the space. And we look at what happened in retail - and as everyone knows, retail has completely transformed over the last 25 years. Amazon started with the very simple website selling books, and then they proceeded to apply technology to every facet of the retail operation. And so, we got the sense manufacturing is about to go through that same exact 25 year journey. Again, these projects will start small, but they'll ultimately ripple through the end-to-end operation. They'll ultimately connect to the partners and the other supply chain participants in the ecosystem. But yeah, it just really is a fascinating space and super exciting.
Akhila:
My dad worked in manufacturing his entire life. And so, I feel like when I talk to him, a lot of the focus has really gone into making the machines like, the PLCs and all of that. But really the back office - how do you get data about your operations? - that aspect of it, the software there has been super lacking. And so, how do you manage your factory when you don't have access to real time data? When you don't have access to those apps? I remember the first person that we met on the manufacturing floor said, "Everything outside of a factory, I can do that using apps. Once I come inside the factory, I'm copying stuff from DOS prompts into Excel files. It just seems like two different worlds that I'm operating in."
Sara:
That totally makes sense. Gosh, well, it has got to be so rewarding and challenging, both at the same time to get your initial reaction from your customers or even when you're going out on market and trying to have these conversations. How have you found the shift in conversations? Obviously, you're taking a big role in educating them about what possibilities are out there, but how has that response been?
Akhila:
I think even in the four years that we've been doing this, I remember the first two years, the minute we would say "RFID" people were like, "What?" I remember one conversation that we were part of, somebody said, "Oh, I went in this conference and somebody mentioned AI to me. And I'm like, yeah, whatever. I don't care about that stuff, right? Because it doesn't really apply to me." And he said, "Your presentation is the first presentation where I'm looking at it and I'm going, Wow! this could be something that I can actually use." So exactly, like you said, I think the first two to three years were just like walking in and educating people that there was a different approach here. I don't think people had even in their faintest idea considered a different approach than how they were operating. They knew it was inefficient, but it was always like, that is the cheapest way to do it.
And there is no other cheap way to solve these problems that I have today. Or cost effective way of solving these problems. I think post COVID, the conversations have definitely changed. I think the supply chain disruptions have helped. I think there is a lot of onshoring happening here in the U.S. and people are really like starting to look at manufacturing afresh. And they're saying, "Okay. One, I can't be reliant on just global supply chains all the time. I need to be self-sufficient to the point where if something happens to the supply chain, I'm still able to process my customer's orders. And then in order to do that, I can't just keep hiring more people. There is a labor shortage that people are dealing with everywhere - manufacturing included - there is extreme labor shortage." And then if you want to hire qualified people, you have to be paying them qualified dollars, right?
You can't be paying $15 an hour because an Amazon warehouse is going to pay them more than that. Or if you want to hire millennials, right? You're not going to get millennials coming in, wanting to punch data into Excel files. And that is a real problem. I talk to a bunch of manufacturers and they say, the next day they leave and go to an Amazon warehouse because they see better chances of growth there. They can access more technology there. So I think it has been a little bit of an awakening in manufacturing, honestly, where people are realizing that if they don't innovate, if they don't come up with modern systems that they put in place, if they don't start to look at how to run their operations remotely, how to consolidate their supply chains, etc - they may not exist tomorrow. It is not a one manufacturer problem.
And I think that is what Rich and I have been trying to tell everybody. It is the community, it is the country has to come together to solve these problems. It can't just be, "oh, I solve it in my own small niche" because manufacturing at the end of the day is a community activity. So yeah, it has to be that the whole community has to come together and say, "Yeah, we have to innovate." It is not going to be "the guy next door is going to get my business", another country is going to get your business. It is definitely a critical point here at least for U.S. manufacturing that people have to either change how they do things or they may not even exist. It is kind of like Detroit when the whole automobile crisis happened. So yeah. Anyways, that is my take on it.
Sara:
That is great. That is really helpful, Akhila. Rich, anything to add there?
Rich:
Just to reiterate. The space itself is super exciting - there is tremendous investment coming into this space, there has been a lot of VC dollars and funds poured into it. At the same time, there has been a lot of false starts. When people talk about industry 4.0, there has been this challenge of "how do I get out of pilot into production, right? Because a lot of these projects don't make that jump from pilot to production.
And I think when Akhila and I looked at it, the challenge was that a lot of these projects were being led by software people, IT people. And there is people with 25 years of software experience trying to jam a solution into the factory without really connecting with the people on the floor or understanding the real challenges and the opportunity. And so for us, again, launching Xemelgo, we really wanted to make sure that every line of code we were writing was going to add value to the workers, right? And then so, rather than us going into a cave and coming out with something, we really took a co-creation approach, right? And so engaged very deeply with the workers on the floor, understand what their challenges are and build a solution that they can even operate. Because as you know, a lot of the factory workers are intimidated by technology. They didn't really grow up around technology. They don't have computer science degrees, but they are familiar with-
Sara:
And rightfully so to your point, about what has existed to date. Yeah.
Rich:
Right! And yes, like I was saying, they're familiar with the apps on their phone. And so at one point, it just clicked for us. We need to build Xemelgo solutions that are very similar to the apps that they're already using in their consumer lives.
Sara:
I'd love to actually back up a little bit, want to dig into that key 'aha' moment and what that was for both of you? But also would love if you could both share a bit about your background and how you got connected and then... Yes, how that 'aha' moment came about for Xemelgo?
Rich:
Prior to launching Xemelgo, both Akhila and I had worked at Hitachi. Hitachi is a fantastic company, 330,000 employees worldwide. They build bullet trains and power plants and heavy construction machinery. They build MRIs, elevators, electron microscopes. They really build everything. And on top of that, they have a tremendous number of software patents, right? And so for us, it was just this amazing place to learn about the challenges of industry 4.0 and IoT and then how some of those technologies could be applied to manufacturing and to the supply chain.
And so I'd say, let's just say like three or four years into that journey, we started to realize that we need to go faster, right? Because as you know, bigger companies can only go so fast in the market. We were realizing, the market needed these solutions today, they can't wait four years or five years. And so yeah, at that point we decided to leave Hitachi, launched Xemelgo here in the Pacific Northwest - and like we said earlier, just engage very, very deeply with the aerospace industry as well as other small to mid-size manufacturers. And so yeah, it has been pretty exciting.
Sara:
Yeah. Do you feel like the 'aha' moment was a similar timing and experience for you Akhila?
Akhila:
Yeah. I mean, I was just thinking. So this year, I've worked with Rich 10 years, so it is amazing.
Sara:
Oh, congrats you two! That is awesome.
Akhila:
Yeah, but I think it was two things. One, like I said, Hitachi was just amazing. We got the opportunities to actually work on a lot of new products at Hitachi, build them from scratch and launch them. And I think, I at least realized that was something that I enjoyed quite a bit - just blank sheet of paper, working on that. And I know we had joked around a couple of times saying, "We should go do our own startup." But when we really started looking at industry 4.0, it just became very obvious as to how massive this shift was going to be. And I remember one of the people that I worked at Hitachi telling me this saying, "Very few time in our lives as technologists, we're at a point where something is starting to take off and how amazing is it that you get to be a small part of it - to define what that next wave needs to be." Right?
Kind of like if you were there at the beginning of web or if you were there at the beginning of mobile, you get to define how that changes. And I think that is how we fundamentally looked at industry 4.0, it was not just, "oh, I build this app and that is the end of it, right?" This was going to be how manufacturing was going to be done for the next 50-100 years is fundamentally changing. And we are just at the very, very beginning of this, right? So I think, that was the most exciting part of it is that we actually get to define this journey going forward.
Sara:
Yeah. And for those of us who are just digging in, what is the key step change to the definition of industry 4.0?
Akhila:
Yeah. So people have talked about industrial revolutions. There was steam, there was electricity, then there was digital - and that has changed how manufacturing is done. And now we are talking about sensors and machine learning, there is 3D printing, additive manufacturing, there are some of these technologies which have come together where how you do manufacturing is going to change. There is going to be increasingly customized manufacturing. Something that you need is going to be different than what I need. And so far, it has always been built in bulk, right?
Instead of that, I can build for what you need and what I need. And then we can build Just-in-Time. And Just-in-Time has been something that Lean has done for a while. But we are talking about really being able to build Just-in-Time and being able to service customer needs. And we're also talking about new business models, right? So instead of like, "I ship you the thing and I have no idea how you're using it", now I actually can monitor it. And I was talking to friends that work on these big transformers, which are deployed somewhere in the middle of nowhere. But now they can actually monitor that, they can look at that and they can say it is being operated optimally or not, reduce pollution, etc. There are tons of use cases, but essentially, yeah, it's about how you manufacture, how you service, who you manufacture for - it is all going to fundamentally change using these technologies.
Sara:
Great. That was awesome color - thank you for that. So bringing it back to Xemelgo now, I want to talk about the team a little bit. So tell me about the team you've assembled and why, in your words would you say, this team is the team to build this?
Rich:
Another huge learning of ours is, if you're going to deliver solutions into manufacturing, you need a blended team of domain experts. That includes software and technology people as well as manufacturing expertise. We've been working really hard to find the best software engineers as well as the best people that can transition out of manufacturing into the tech world. And really help us make sure that we're building the right solutions and even communicating them in a way that industry leaders can consume and digest and make sense of. And again, that might sound super simple, but quite honestly, when Akhila and I left Hitachi and started to engage with manufacturing,
Sara:
Certainly not.
Rich:
We were talking about digital twins and AI and machine learning and graph databases. And they were looking at us like, "what are you even talking about?" It was super important for us to be able to change our language and be able to obviously communicate with the manufacturers and also even understand about lean manufacturing and even their languages as well. We feel like we've built quite honestly an amazing team. And this is a 25-year journey. And the thing that we love about these long-tail markets is that the best teams will win, right? This isn't a sprint.
Sara:
Yeah. That is right.
Rich:
This is an ultra-marathon. And yeah, every time we bring on a new person, we're thinking, what can this person do today? And then what can they do five years from now, 10 years from now, 15 years from now? And so with that type of approach, we can really hire based on values and culture fit and their aspirations and yeah, work together to get those aligned with where we're going.
Akhila:
One thing I wanted to add to that is, one of the key cultural tenants of our team has been listening. And I know it is easier said than done, but I think particularly in this space. And Rich and I feel pretty proud when we are on a call with a customer and they say, "I love your team because they listen." And I think that has been a key differentiator for us because like Rich said, we are not the startup which went off into a cave and said, "Listen, this is this amazing app. And Mr. Manufacturer, you should be using this." We said, "Hey, what is your problem? Let us figure out how to solve it in the most efficient way possible." And so when we deliver these solutions or when we talk to customers about what we are doing, they're like, "how do you know I have this problem?"
It is almost like they're surprised. The reason I want to mention that is, those are the people that we are also bringing onto the team. Everybody that comes on to our team has this deep rooted desire to help the manufacturer, right? So they're all sitting out there, every single engineer on our team goes onsite to customers, works with them, calls our team back saying, "Hey, they don't like this button. Wait, why did you place it there? Place it somewhere else, so that it is easier for them to use it." And things like that. So I think that has been a key cultural component of ours which I think is helping us in this market and working with manufacturers. And it is also, every company has its own personality. And I think it is helping us bring the right people together. Everybody who fits that personality, sticks, who does not, I think they usually understand and they leave, but other than Rich and I, a good portion of our core team actually came from Hitachi.
So half of our team are people that we've worked with for seven to ten years actually. So, I think which was also great because we just all jumped right in, we didn't have to get to know each other and "why are you doing this? Or why are you doing that?" We all just picked our roles and we were like, let's go. We know how to work together. And I think that has also helped with other people that come in because that level of comfort and trust has also grown as more people have joined the team.
Sara:
Oh, that is great. And I really appreciate you making the distinction about listening because you're right, it feels so simple but it is actually such a profound thing that people forget about, right? Because that equates to servant leadership and true focus on your customers.
You answered my question, I was going to ask if there was a word that articulates your culture best - and maybe you have another - but it really seems like you have that listening and a servant heart at the core of all your team members, which is fantastic. So my next question for you is about the startup journey at large, having both come from Hitachi and deciding to jump ship and build this awesome rocket ship in Xemelgo. But certainly, both rewarding and a challenging journey. And so based off of that, I just wanted to ask you both, what keeps you going? Especially in moments where things are challenging and others may throw in the towel, what keeps you both on the track?
Rich:
Honestly, it is the customers. It is just so amazing when we present our solution. And we've heard things like this is a generational leap forward, this is game changing. I have light bulbs going off in seven different places where this can help us in our operation. Yeah, they really do fuel the team and energize us. The other aspect of that is there is no other solution that can really be deployed by like any manufacturer and we have... Believe it or not, we have customers that have four people and they were working in Excel and now they're working in the Xemelgo app, right? And able to collaborate in there. We're going to be doing a rollout with Merck, which is a global pharmaceutical company.
Sara:
That is right. "Woo hoo!" by the way. That is so awesome.
Rich:
I think that it is amazing that we can help any manufacturer because they all have the same challenges, right? They all have raw material, they all have production, they all have finished good inventory, they all have shipments, they all have assets. And so, it is pretty cool that our solution can be used by a manufacturer of any size. We also have manufacturers in different sectors like, space and pharmaceutical - as you know, we have an apparel manufacturer, medical devices and so forth. And just to hear their challenges, their stories, how we can help them - it definitely energizes us. And even yesterday, quite honestly, we were talking to a food bank in Northern Washington and they were like, this can help us with inventory management. Well, how cool is that? The same solution can now help a food bank manage their inventory. And so, anyways, it is super motivating.
Sara:
That is really cool. Akhila, anything to add?
Akhila:
I don't know. That was a great answer.
Sara:
That was pretty good, Rich. That was pretty good.
Akhila:
I think that is it, is the customers. Yeah.
Sara:
Yeah. Yeah.
Rich:
I think it is interesting to us because a lot of startups are probably motivated by technology, right? And again, I feel like we're so unique in that it is really motivated by the manufacturers and how we can help them. In some cases, I feel like if it wasn't even technology, we would do that as well. Whatever it might be. Yeah. We'd gone on site and helped them cycle count things. We've helped them, I think in some cases, even rearrange their factory or their work self.
Akhila:
Yeah. There are days where I feel like if we didn't do that, they don't have anybody else they could go to.
Sara:
Oh, yeah.
Akhila:
Which, I feel like actually... I keep telling all my friends who are doing startups, I was like, why don't you do a startup in manufacturing? It is so cool. And they're like, it is so hard. And it is, but I think I've gotten appreciation for so much more outside the technology world now. There are so many nice people trying to do stuff in such inefficient ways. I feel like as technology people, we owe it to the shopkeeper next door or the manufacturer next door or the hospital next door to just build better software for them. I remember, we'd gone to... I was telling this to my friends because they're thinking of a startup idea - and I was telling them, we had gone to this pharmacy earlier on and I remember that pharmacy person showing us their software and the way that software was built, whoever wrote the database didn't even have basic checking in them, right?
So, say you had 20 pieces of items and somebody accidentally put in 30, it would just show your inventory as minus 10. It wouldn't even error out. Nobody should be running their business on stuff like that! I never thought of it this way till we started doing Xemelgo. And I'm like, there are so many places that technology can serve in so many better ways. That I think as technologists, we owe it to the world to look outside our purview because I feel like a lot of developers find it easy to build software for other developers, nothing wrong with that. But I think some of us should start looking at other businesses and start serving them also.
Sara:
Well, and how cool - so much of both of your careers has been entirely devoted to this. And then come to this juncture where you are at the front line, helping them move boxes, helping them implement their sensors, let alone help them think about these grand digital transformation strategies. So it is really cool and kudos to you both and your whole team for what you're building. It is really special. And so in closing here, I have one final question for you both. What right now, do you need more of, how can any listeners tuning in right now get involved or help?
Akhila:
I think Rich will have his ask. For me, if there are any super sharp developers who want to go change manufacturing, then we are hiring and please reach out to us.
Sara:
Good. Yes. All developers, did you hear that? Come join this awesome team.
Rich:
I would echo the same thing. We need developers that want to join the industrial revolution.
Sara:
Yeah.
Akhila:
Yeah.
Rich:
There is just a tremendous amount of software that needs to be written. It is a software that runs on the sensor, it is software that runs on the mobile phone, it is graph databases on the back end, it is machine learning. This is absolutely full sack development. So yeah, anyone interested - we'd love to connect.
Sara:
Great. Well, yes, reach out to us at FUSE anybody listening, we'll get you in touch with these great founders. Akhila, Rich, thank you so much for joining me today. So inspired by you both and what you're working on and how you're going to transform so many people's lives. So, thank you and we at Fuse are grateful to be a part of the journey.
Akhila:
Thank you so much.
Rich:
Thanks for having us.
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Sara:
As Akhila and Rich both mentioned, if you are a developer or in any other role and you're looking for your next journey, get in touch. There is no better time than now to get involved with a company that is forging the next industrial revolution. Feel free to reach out to us at Fuse and we can get you in touch with the team. Thanks for listening - see you on the next one!