Episode 57: Technology: The Key to Resiliency Amid COVID-19 (Transcript)

[00:00:00] Liz Bothwell: Hi, everyone, welcome to Waste360's Nothing Wasted Podcast. On every episode, we invite the most interesting people in waste recycling and organics, to sit down with us and chat candidly about their thoughts, their work, this unique industry, and so much more. Thanks for listening, and enjoy this episode.

[music]

[00:00:26] Liz: Hi, everyone, this is Liz Bothwell, from Waste360 with Matanya Horowitz founder and CEO of AMP Robotics. He's also one of our distinguished 40 Under 40 award winners.

[00:00:39] Matanya Horowitz: Yes. Thank you very much, Liz. It's great to be back on the show.

[00:00:42] Liz: It's been quite a year since we spoke last. Can you give a quick overview of AMP? Then, we can get chatting about the pandemic, and everything around that?

[00:00:54] Matanya: Yes, absolutely. At AMP, we're developing robotic systems for the recycling industry, powered by artificial intelligence. We deploy robots that can sort most of the commodities that MRFs cares about, different types of paper, metals, plastics, they can sort this material autonomously. We can install them with very little retrofit to existing operations.

We're a fairly young company in the industry, but things are going well, we're scaling up. This last year, we deployed systems all over the world in single-stream construction, demolition, and electronic waste. It's a lot of hard work supporting this many different systems, in all these different facilities, but I think we have some very happy customers. We've been glad to see that there's real demand for this type of technology in the industry.

[00:01:52] Liz: That's great. I know that AMP just hit a remarkable one billion milestone, could you tell us a little bit about that?

[00:02:01] Matanya: Yes. We highlighted that we've achieved one billion picks over the last year, between all the different robots we have deployed. It's something we're fairly proud of, we think the figure speaks to the persistence of all of these different systems. Billion is a huge number, it requires a whole fleet of robots working day in and day out, in these recycling facilities.

There's a couple different factors of it that really get us excited. One is, you can do some back of the envelope math, look at how much you have to sort if you want to go after the entire material stream, it's a lot, it's trillions or more, but we can see that we're chipping away at these huge numbers. We can really start to feel within the company that we're making a big difference, in an environmental sense. That's exciting to me, personally, and everybody on the team.

Yes, it's a milestone in the line, in the sand, we're just looking forward to getting to the second billion, the 10 billion, and onwards from there.

[00:03:10] Liz: That's great. We can't move on without talking about what's happening right now with COVID-19. Can you tell us a little bit about how AMP has pivoted during this time? And your ability to keep the industry productive and safe?

[00:03:27] Matanya: Yes. The pandemic, of course, surprised us like everybody else. It's been interesting to watch what the second-order effects of this are. Recycling facilities across the country were already dealing with challenges around labor, whether it was turnover, safety, or simply the cost of all of this manual labor that's necessary to run a typical MRF.

A lot of those issues have only become worse. Safety is even harder when sorters have to maintain these social distancing guidelines, within a MRF, that wasn't really constructed for sorters to be able to maintain their distance. I've heard all interesting things about MRFs trying to protect their workers, whether it's putting in physical barriers between sorters that are, basically, working side by side or trying to do split shifts, and other things, that really make it very hard to run a MRF. Maintaining that safety is difficult, but what I've also heard is that the turnover in these MRF increased significantly. The sorters, themselves, are quite worried about COVID-19, both getting it from the other workers, and also, getting it from the packaging.

Although the guidance from the WHO and CDC- at least, the guidance that I've read- is that workers shouldn't have a whole lot to be worried about from this packaging, you can imagine [laughs] despite having that guidance, thinking about all of these milk jugs and plastic bottles coming from a house that might be infected, maybe it's only been a couple hours since that material came from the house, you're going to be sifting through it, that material is going to be bouncing around, the dust is going to be in the air and stuff. It's understandable that the sorters are concerned. Facilities across the country, are having real challenges with turnover.

For us, we think we can provide a tool that helps in this environment. The discussion with different MRFs has evolved towards how-- rather than necessarily putting the robots in the highest throughput areas or, maybe where there's the most direct financial return, facilities are becoming more interested in how can I deploy these systems to space out my workers, or how can I deploy these systems in the areas where the workers are most hesitant to be sifting through the material.

We're really-- excited is the wrong word, because it's a really challenging situation, but we're happy that we can play a role in helping these facilities plan their operations, despite these challenges. That's where the conversation has really evolved with a lot of the customers we're talking to right now.

Something we are proud of is that, I draw a direct line through the ability of the recycling industry to stay healthy, to the supply of resources for the country where-- you can see that over the last several weeks, in the last several months, there's been all sorts of weird supply chain issues, whether it's masks, also toilet paper, cardboard, and things like that. I think, a connection that's starting to really be visible to the public, is that recycling allows us to create domestic supplies of materials, and the recycling industry is helping support the production of paper towels, napkins, and toilet paper, that otherwise, we're running short on.

Our ability to play a small part in maintaining that access to these resources, I think it's a big deal, and I'm glad we can, at least, have a small part in it.

[00:07:21] Liz: Absolutely. Then, on your end, you're still installing, right? I think it's, actually, a good time to do the install.

[00:07:28] Matanya: It is. Well, in several cases [laughs]. Yes, we are continuing to install. I'm sure, many of your listeners know, waste and recycling has been deemed an essential service, fortunately, despite many lockdowns, we are able to continue to install. Logistically, it has been more challenging. When the pandemic first started really being visible, we reorganized some of our installations, and we were prioritizing those we could drive to locally. Then, we began going back out to the ones we could fly to, that were further away.

We've been reorganizing things, so we are able to do things with smaller installation teams that are a little bit more spaced out. We spend a little bit more time on-site cleaning the location, and protecting our installers. But these are simply logistical challenges. I think, we've come up with a good system to allow us to continue to install, despite the pandemic, while taking care of our workers.

[00:08:35] Liz: That's great. How's your field operations team responding to all of this?

[00:08:40] Matanya: They've been doing an amazing job. When we were sitting there in early-- let's see, what was it? Mid-February, maybe it was late February, wondering how exactly are we going to deal with this. What we saw was that our field installation team, our service team, our fabrication team really rolled up their sleeves, and grappled with this question of, "How do we keep the business running while protecting ourselves?"

We came up with a couple of sanitary procedures, across the whole company, and everybody dove in and kept working. I think everybody understood that, maybe, the easiest thing to do would have been to just go home, but to keep the business growing, to keep the business thriving. We had to keep producing, and we had to keep taking care of our customers.

The conversations I had with them were, "This virus isn't a mysterious thing, there are certain things that are still mysterious, but there are ways we can protect ourselves. If we have good procedures in place, there's no reason we should expect we will get infected. That means, maybe, an excess amount of cleaning, an excess amount of protective equipment. It'll be a bit of a hassle, but we should be able to control our response to this. Therefore, take care of ourselves while continuing to grow the company".

The whole team got behind that, I would say, it was a fantastic response from the team, where they really helped figure out how we were going to deal with this while moving forward.

[00:10:18] Liz: That's great. Are you seeing the industry pivot as well, the MRFs, your customers around? You mentioned a little bit about safety, but also materials coming in.

[00:10:27] Matanya: Yes. I would say that I think it's, mostly, a short-term thing but, of course, there's a lot of interest in automation for the sorting of fiber, because the prices have gotten so high. I think it'll be, mostly, a long term shift, even if the pandemic subsides over the next month or two. People, really, are focused on not letting themselves be caught flat-footed.

Maybe, pandemics are a rare event, but something like this is sure to happen again sooner or later. Having their facilities, have sufficient automation to be resilient by these types of challenges, is a broader concern that I think isn't going to go away anytime soon. Maybe it's not a pivot, but it's a greater appreciation for the benefits of automation, not just our automation, but a lot of the different automation, that's available across the industry.

[00:11:28] Liz: To that point, do you see the pandemic pushing the industry to adopt technology faster than it normally would, beyond just appreciating it? Do you think that is turning into actual adoption rates improving?

[00:11:42] Matanya: Yes, absolutely. I think, there's a couple of interesting case studies, where you can see the benefits of this type of automation. One of our customers is a gentleman named Joe Benedetto, who runs the RDS facility in Virginia. Joe uses our robots on his paper line and a lot of the time, he's able to run his paper line, entirely, on robots.

For Joe, he was kind enough to say some nice things about us, publicly. But for Joe, he's able to continue running despite that area in Virginia having broader labor challenges around the pathogen. What I see is, other facilities look at the capabilities of facilities like Joe's, and now it's not only about, "Can I shave a couple of bucks per hour off of my processing cost?", it's, "Joe's facility is resilient." He's able to continue checking along despite the pandemic, it really hasn't been all that disruptive to his operations, he's able to produce paper, and take advantage of these price spikes around paper.

Joe's ability to continue going forward despite adversity, I think, it underlines that capability. It's a bit of a different message to a lot of facilities where, primarily, up to now, it was about cost savings. Of course, the robots do provide significant cost savings, that's a benefit, but that's not the only thing that they're about. They're about quality and they're about consistency.

Unfortunately, these types of scenarios that we're going through right now, highlight that capability of the robotic systems. We are seeing other facilities in our pipeline, able to appreciate that. We do see it, most generally a broader, and faster adoption of robotics across the industry.

[00:13:47] Liz: That's a nice positive coming out of all this. I know you've spoken about some of the ways that your team has adapted to this, what do you feel you've learned about leading during these wild times?

[00:14:01] Matanya: [laughs] I don't know if I've been a leader long enough to really have any good lessons. I think, what I've seen is that in times like this, there's a couple of things you got to get right. First, is your decision-making has to be correct. What I mean by that is, when you start replanting and when you start saying, "This is how we're going to move the ship of the company", you have to be making really good decisions that people understand and that they believe in.

Not only do they see the response, but they feel they're being taken care of in a responsible way. What I've also seen is that there's a strong need to communicate, where the path the company is going to take, maybe, it's very clear to me. I have all sorts of information, whether it's the company's financials, whether it's one on one interactions with our customers, but a lot of that information isn't available to, say, our programmers, or the field technician, they might get a little snippet of it from their interactions with customers, but that lack of access to information can be unsettling when you don't know how severely an event, like this, is affecting the company.

Communicating a great deal about the shape of companies in, the direction we're going, how we're responding, really puts a lot of minds at ease, and can help rally a team behind a change of direction of the company. Yes, I suppose my response would be, in times like this, leadership is about a lot of communication and setting a clear direction that people believe will see them through a tough situation like this.

[00:15:39] Liz: Totally, that's spot-on. Matanya, I know that you guys have grown 40% quarter-over-quarter, that's remarkable. How are you adjusting to this tremendous growth?

[00:15:51] Matanya: It's really exciting for us, we're very fortunate to have a team of- it's hard to put into words, but a team of really sincere individuals where everybody really wants the company to succeed, and they know that their personal success is highly correlated with the company's success, what it's led to is a team that's really welcoming to new people, who helps integrate new employees very quickly. We were a pretty lean group for a long time and we still are, but there are a lot of people wearing a lot of different hats and doing a lot of different jobs.

The influx of new players in the company is giving everybody, I think, a lot of relief, it's like "Okay, all right. This company is growing., I'm not going to keep doing a million things forever", we're bringing on real specialists to do different things, whether that's in engineering, whether that's in sales, whether that's just in engineer activities. The real bones of the come we are starting to grow, that puts everybody in a really exciting place where they see that their hard work has led to the creation of something that's going to be lasting.

It's been a wonderful transformation over the last year. Something that's very exciting for me, is that I saw that as the company started to grow. There are different ways in which the company was slowing down, either in technical capability or technical speed. Now that we've figured out how to be a company at this next size, everything is speeding back up again, so technical progress it's actually accelerating.

We're hiring lots of engineers, we're hiring lots of people across the board and the company is just moving faster and faster.

What we're delivering today in terms of robotics is not the only thing we're going to be doing, there's a lot of other things that we're beginning to really focus on with having to do with our vision system, or having to do with bigger ideas of how facilities can take advantage of the technology. We're starting to really execute across all of these different directions. I think the growth enables continuous development of technology. It's exciting for me personally and everybody across the company.

[00:18:05] Liz: That's awesome. Can you talk about any of those enhancements or the way that you will be allowing customers to use their data? Or is that something we'll see down the road in your talk about it?

[00:18:18] Matanya: There are a lot of things that we'll see down the road, but- we collect a tremendous amount of data from these systems so that they continue to get better and better over time. The main focus for a long time was, how do we get the decision that the system makes to be more accurate?

I want to make sure the natural HDPE I pick is 99% pure or 99.9% pure, or it was about expanding into new domains like construction and demolition material, or electronic waste. But now, we have a sufficient amount of data, literally, millions of examples of different things where we can start to become more specific about what the system is able to identify. We've talked about it a lot in the past of this future capability, but now we're really ramping up to the capability of identifying individual SKUs of material.

For a lot of recyclers, there won't be this immediate clarity on how that's going to benefit them. Do they really care if they're going to pick up a PET bottle when it's Pepsi versus Coke? But the capability allows you to do other things where you can say, "Oh, I can identify not only a piece of paper, but I can identify if a piece of paper is dirty or not", or, "I can identify if a plastic bottle is full of liquid or not." We can give this really fine grain level of control about what a facility wants to sort, and that translates to, of course, new sorting capabilities by these robotic systems.

Also, a finer level of waste characterization that we can provide from our vision system. Not only saying "Hey, on your fiber line we're seeing 99 pieces of paper and one piece of cardboard, but that one piece of cardboard maybe was a piece of box and has pits inside of it." You start to have a very sophisticated knowledge of what's being delivered down the back and to the end markets, as well as what's coming in.

We also have a really successful project in Toronto with our partners at Canada Fibers and Sidewalk Labs where we're identifying material on the front end of the system, basically doing a waste characterization. It's been a fantastic project where we've been able to show these vision systems cannot start to automate in a pretty wide-scale knowledge of materials coming into the facility.

That begins to bring all sorts of interesting questions of, "Oh, if I know the contamination level of what's coming in, or I know there's a higher concentration of plastics or whatnot, what am I going to do with the facility to adapt to that input material stream?" We're starting to really actually execute it on these interesting questions, in where the broader engineering team we're beginning to move quite fast in building out technology solutions around that.

[00:21:12] Liz: That's fascinating. I can't wait to hear more about that as you build that out even more. I'm thinking about the industry as a whole, and I know that you have your financial partners and you're watching this closely. Do you see more financial investment in this sector as a whole, as it relates to some of your investors, the Closed Loop? Do you think they're more confident in what this industry can do from a technology perspective?

[00:21:43] Matanya: Absolutely. We were fortunate at the end of last year to receive a Series A investment from a great group of investors including the Closed Loop partnership, this group, Sidewalk Labs, which is an affiliate- Excuse me, I don't think it's quite technically an affiliate, but it's associated with Alphabet and Google, as well as several other investors interested in cleantech and in artificial intelligence. As well as Sequoia, which is a very successful venture capital firm that's invested in other very well-known companies like Google. It was an amazing experience raising funds from these investors.

It's funny. When you go out to pitch an equipment company in the recycling industry, a lot of investors are actually fairly skeptical. They know that the recycling world is a tough one to be in, the environment is tough on equipment, you have to really convince your customers that you're providing value and they're going to be skeptical as well. But what we found was that there were investors like Sequoia, Sidewalk, and like all of our investor syndicate, who really believe that this technology can help improve the economics of the recycling process.

If we're successful in doing that, the recycling industry could be much bigger than what it is today. That was an exciting thing for me to see, that that message was resonating with these types of investors. What I see is there is a very broad appetite for investors, at least those that I deal with in the venture community, to invest in the recycling space because they believe that there is something bigger going on, whether is technology, whether it's robotics artificial intelligence, whether it's other things like optical sorters, are creating a new environment for recycling where the processing cost can be low enough that the industry starts to grow significantly.

I think the key there is that, just like we have to identify good business opportunities that not only help creates businesses, and help with their growth, the recycling industry overall. We believe the robots are doing that. As long as we're able to show that, I think there's actually a very broad appetite for that.

What I've heard from other investors at Silicon Valley is that robotics and automation are also providing a significant boost in other industries outside of recycling where the pandemic has created labor issues. There's a bit of a broad trend around automation in the face of these macro shocks to the system, where the benefits to automation are really being appreciated and they're helping accelerate the growth of groups like AMP. Which, in turn, creates good investment opportunities.

[00:24:57] Liz: Definitely. Are you watching anything in DC around policy along with the same line, bigger picture within the sector?

[00:25:05] Matanya: Yes, we are, actually. It's something that AMP doesn't have too much experience about itself, but there's a number of interesting policy initiatives happening across the board, whether it was the federal legislation, as well as some pretty strong legislation coming out of California. We're, in general, pretty excited about a lot of this, excited about the interest from lawmakers, as well as the fact that a lot of these legislative initiatives require some type of measurement of the waste stream to be effective. We believe our Neuron vision system platform can help provide a lot of the information and the data that can help these policy initiatives.

For us, we think we have an important role to play as both, federal and state governments, look to expand or look to grow the recycling industry, and we think that's going to accelerate. In our conversations and the knowledge we have with policymakers, we've seen that there is a real appreciation for what the recycling industry is doing around fiber and its conservation of materials within the nation. I think as that message starts to become stronger and stronger, policymakers are seeing that recycling isn't just this-- I don't know how to say it, just this good thing to do that just a certain fraction of the population is interested in, but it's all really a sham or whatever, the public criticism of the day is for recycling.

They're starting to understand that this really is a very important industry, it creates a tremendous number of jobs and it keeps resources domestically. Although today it's an interest in paper and fibers, tomorrow it may be an interest in the conservation of metals, and then another day it may be plastics. I think that's going to put some real wind in the sails of these different policy initiatives to help support the recycling industry in different ways. Hopefully, we'll take a part through our vision system and our technology.

[00:27:20] Liz: That's great. Speaking of other materials, do you think that there's any application for your technology in textile recycling?

[00:27:27] Matanya: That's an interesting question. For some reason, this week I've gotten inquiries several times, so something big must be happening in textiles. The technology is able to sort textiles in certain ways, so the gripping actually ends up not being the real challenge there, it ends up being the vision problem. Our technology can visually identify material roughly as well as a person can. If you look at a piece of clothing and you know, let's say, that it's jeans, that it's white or that it's a t-shirt, our system will be able to tell those things as well.

However, what we found in the textile industry is they're generally most interested in the separation of textiles based on the material being used. It's wool? Is it synthetic? Is it a blend? Is it cotton? We can't directly tell those things. There are other technologies we've seen that can, that use hyperspectral systems. We've been looking to find an application that would be interesting to separate purely visually. We do anticipate adding sensors necessary in the future, infrared and others to be able to distinguish these materials, but we're not doing it today.

We haven't quite found that good fit. If somebody you just want to separate out white t-shirts, jeans, or something like that, we could absolutely do it, but that doesn't map perfectly to the existing categories that the industry cares about most.

[00:29:02] Liz: Okay, got you. It might be something to watch, I could talk to you in two years [laughs] and you could go down that road too.

[00:29:09] Matanya: Absolutely, within two years I think it's hard to imagine. I don't know, the technology always takes longer to develop I think, but I'd like to say we're going to go after it, absolutely, everything within two years. Two years just seems so far away. [laughs]

[00:29:25] Liz: [laughs] It does, it definitely does. Matanya, I know this pandemic has been a trying time for everyone and we all applaud our social workers. You guys have been doing such a great job adjusting to this, making the most of it and really helping the industry, but is there anything that you've learned from this pandemic that you hope that as humans and an industry we remember after we come out of it?

[00:29:53] Matanya: Yes, that's an interesting question. I hope people might take away the same lesson that I've taken away, which is that rare events happen all the time [laughs]. Over a long enough time period it's inevitable that something big happens, and you have to be prepared for it. When I was seeing the pandemic play out, I was really surprised myself, I felt this was a problem from a different century and that there was no way that this could happen in America. It felt like something coming out of the 1920s.

Reflecting on that, as our technology becomes better, we are defended against more and more of these types of events. Our economic models, our protective equipment, everything is built on a great deal of experience and it sure feels like there should be fewer and fewer things that we don't anticipate over time but, nonetheless, these surprising events happen. When we come out of this, I'll always have a little bit more conservativeness in how I plan it for the company, I'll always be trying to anticipate whether something really big could get in our way.

Although we do help facilities get through the pandemic, it certainly has been very disruptive for us. We've had to do a lot of work to replan the direction of the company, make sure everybody is taken care of, and to deal with different logistical challenges. Our ability to navigate those things in the future will always be top of mind, and I think for the industry knowing that things like this could happen in the future, things like China's National Sword could happen in the future. Who knows what's next in five or 10 years?

Keeping that top of mind, of course, I think automation presents a wide variety of defenses to these different types of shocks to the system, but whether or not, people think robots are the solution to these things, I think the industry has to always be prepared because it's too important for the industry to really take too big of a hit on these things.

[00:32:17] Liz: Definitely. With all that has gone on lately, has your vision or goals for the company changed?

[00:32:23] Matanya: No, I wouldn't say so. This is always true for me, but I always wish the company was that the next stage of growth, because I always see [unintelligible 00:32:33] it's just around the corner before we're going to have some new suite of technologies or some new tools that let us scale or deploy technology faster.

I wish we'd been a little bit bigger and a little bit further along, we could have -I think- served industry demand even more quickly in health facilities, navigate the crisis even better. But no, I'll say this pandemic has only reinforced the direction of the company and really speaks to why we're even here. We're providing solutions for the recycling industry to help them become more efficient. I am overusing this word resilient, but be resilient, this pandemic just underlines that.

[00:33:15] Liz: Definitely. To your point, the industry has always been resilient. This is a trying time, but it will continue to be that way. Now, Matanya is there anything else you want to share that I didn't ask you about?

[00:33:29] Matanya: I would just say that AMP is going to be continuing to grow and solve major pain points within the recycling industry, even those that are unrelated to the pandemic, we're really excited about what the next year holds for us as the vision system gets more capable and identifies items down.

At the SKU level, we think it's going to open up all sorts of optionality for recycling facilities, and where we have some great things for the robot themselves, in terms of throughput increases and other things that we're really excited to share for the industry. For anybody in the industry that's involved in sorting, I hope they stay tuned to what AMP is doing.

[00:34:05] Liz: That's great, I hope so too. You know we will. Thank you so much for your time, Matanya, it was so nice to catch up with you. Please stay well and keep us posted as you continue to grow and help the industry move forward.

[00:34:19] Matanya: Likewise, Liz. Please take care.

[00:34:21] Liz: Right. Thanks, Matanya, talk soon.

[music]