let's get it started so what's electronic 2030 where where are we what are we doing and i think that for the rest of the future a lot of manual work physical work inside the restaurant will be done by robots and if we go to even pop culture right the robot is more often than not the bad guy and the protagonist is the human i want to bring some physical robotics in the discussion as well but let's keep it under a table for some time i think you hit on one of the key tenants here and somewhat ironic in a robot business it's all about the people if a developer that i employ builds 100 bots will all the money come to me you wouldn't you wouldn't even take a sip from this flow i said yes he said what a stupid idea it's a funny conversation that comes up a lot and you hear it as much as i do welcome everyone hello my name is dmitry karpov i'm a co-founder and chief innovation officer hi my name is keith abramson and i'm the vp of global sales for electronic so welcome everyone uh to our new video to our fireside chat that will be about the future of automation and the future of work so i was really excited to have this conversation it's been a whirlwind seven months and i remember like it was yesterday and startup time seven months is what about 14 years so i remember like it was yesterday about eight months ago we were speaking and plotting and planning as to how to make this go and how to make rpa a household name fast forward eight months and it's remarkable all of a sudden rpa seems like it's on the tip of everyone's tongue it's all that the world seems to be speaking about is the rise of automation and the future of robots and what does it all mean and i was excited to pause for a moment amidst our whirlwind seven months we were trying to even figure this thing out eight months ago and now all of a sudden we're we broke 100 employees we had our big funding round and it's nice to stop for a second and actually think about what this all means and how this relates to the wide world because even though we've been manic it feels like we're just scratching the surface of something that is going to become omnipresent and ubiquitous in a really short time frame and i was really interested to hear what you think about where this is and where it's going and what it all means and i know i've certainly got some thoughts here it's surprisingly we are like five or six years into this silent revolution of bots coming to the office to to complement to augment the work we do and what's five or six years for technology it usually means hype is over and it becomes very practical but we see very different things i think that rpa robotic process automation is just getting momentum coming outside of enterprise and it faces challenges um leaving these big enterprise walls where there's big companies experts very experienced developers and they come sometimes even to pop and bump shops i think we've seen that and they're agents of change they're other entrepreneurs who help uh businesses to automate um and become more efficient there's a very interesting class like emerging class of entrepreneurs automation entrepreneurs and the last eight months essentially really discovered that world for me really pointed out that technology is important people are important but what unites them um entrepreneurship people create jobs to automate other jobs to make the future of work happen to accelerate it and it's so glad to be connected with these entrepreneurs it makes the business much more enjoyable moment so i think there's an interesting pause though and it's certainly not a lull i mean nothing progress has not stopped there's been this almost meteoric ascension of automation in the vernacular and in the collective unconscious everything is to be automated now whether it's full self driving in your tesla or anything everything is pushing to automation and it's becoming ubiquitous in everyday life but it almost feels like we're at a little bit of a stall point in that there's not widespread acceptance of this yet and if we go to even pop culture right the robot is more often than not the bad guy and the protagonist is the human why do you think so it's a really interesting point i mean you have the likes of not to harp on tesla but you have the likes of elon musk fear tweeting that the robot revolution is the worst thing that's ever going to happen and that's an existential threat to humanity and yet at the same time elon is on the forefront of ai with his artificial driving capability in teslas so it's this really interesting conundrum there is that automation is viewed as the antagonist to humanity when meanwhile i i still think and i'd love to hear what you do but artificial intelligence is not wholly correct yet it's not replicating intelligence this is solely designed to augment humanity and i think the underlying fear is one that every human has is of obsolescence i myself am going to become obsolete and that's an innate human fear now that is made overt when there is a construct that could potentially do the same things you can more efficiently better and faster and it plays into every revolution cycle and i think humans put simply are afraid of being replaced and being left behind and i think that's what's driving potentially this pause is potentially a lack of understanding this is still nascent technology no one really understands yet and i know that flashback eight months ago i mentioned rpa to nine people out of ten and it's a technology space i personally have been following for the past five or six years but nine people out of ten had never even heard of rpa but take a moment to explain the practical application thereof everyone knows what a chatbot is everyone has worked with the chat but at this point what is a chatbot but rpa so for for me i think it's this innate fear and this is something that needs to be overcome with rpa is that this is not technology to make you the human obsolete this is technology to subsume all those mundane tasks that it makes no sense to have a human do when we should be leveraging our higher order thinking and higher order processes that as of this point a computer simply cannot do we we can't be replaced i want to dig deeper a bit on why why people fear automation that much and i think it comes to the point when when you're a young person you're making a bet on your career you acquire certain skills that you think will be relevant in the future and it's one of the biggest bets we make in our life it's like buying real estate you think what will be around this city will it be easy to commute in the future will the work be remote and many considerations you make an investment that is essentially a bet and with your own career if you understand if you feel that some some knowledge you acquire now may be not relevant in the future you fear that and i think pretty much automation is the major driver of in in the change in the future of work and in redefining the future of work and because of that all of us i think it's it's pretty natural should fear automation to certain extent but that fear should not make us struggle or puzzle it should make us make better decisions on the skills require for instance adaptivity is very important here if we acknowledge that whatever bet we make on our career now will be not the right bet 20 years from today then adaptivity becomes very important and kind of mental mental control over over this adaptivity and i think i recently came from a big accounting conference and i think it's the overall consensus in the room that 20 years from now accounting will be a very different profession and rpa artificial intelligence other technologies will play a defining role in into how they shape the future of accounting but at the same time no one thinks that accountants would not be relevant no they will be but the structure of business structure of accounting firm structure of the industry likely will be different and accounting is an easy example to point out there's so many routine processes and you can easily kind of associate that accountants they have a lot of routine that could be automated so they will do something else they will have 100 of time to do what historically took 20 of their time but if you look at any profession really anything from running a startup and running big team uh to managing to managing any process we will face the the change we will be um we will be dealing with this change and and we do overlap infrastructure sometimes define how we work like what crm you use what what erp systems you use where you log every day to do your work at infrastructure now changes every five years in big companies not 10 years or seven years so even even your daily routine changes now quicker than historically before historically before [Music] the automation was so embraced but still to your point long way to go so how much do you yourself think given your experience you were on the forefront of automation when it first launched and when it had its first practical application there of in big business but it was reductive to a certain sense and in the boardroom automation became distilled down to a cost saving measure and this was moving figures from one column into another and the column got moved into had a less of a cost basis therefore this was an easy decision to approve did automation indelibly become associated with job losses because of those early big sweeping moves that happened it did and i i witnessed how automation and rpa came to the board rooms is an important topic to discuss i worked with many fortune 500 companies on this and i think the conversation was very similar to offshoring or or using business process outsourcing i haven't beaten this that i've been too young for for that but it came to the point where we are optimizing our processes on cost of process and there were historical ways to do that offshoring outsourcing now is a better way automation so automation in the first place was positioned as alternative to bpo or to offshoring and for that too the major driver was cost reduction right so inevitably automation fall in the bucket of cost reduction initiatives while the same time we all acknowledge that sometimes cost of mistake and execution of the process that automation tries to prevent um is more important than just reducing the hours done i was always more fascinated by how automation can redefine a job completely for instance audit a lot of manual hours you do it every year maybe 20 to 40 000 hours for the big company it doesn't that's how much it takes to conduct an audit for for a big multinational bank what if you can do owed it in one hour using only robots to do that it's not possible now but let's imagine you can do that let's take one day not one hour then you can do audit every day and if you own it every day it becomes a very different thing instead of finding in the end of the year where someone screwed up you can practically tell that no something is not correct here fix it today you don't need to fix it in the end of the year and many companies would be willing to pay much more money for having such service delivered to them than they currently pay at the end of the year for the audit so we didn't change the procedure we didn't change the process we just accelerated that with automation and it became a completely different good for the humankind so where does that narrative get controlled by is it our mission to shape that narrative with the ultimate end user or how do we actually control this because as it were we're now part of the machine as a player in the rpa space is this our actual responsibility to reshape this narrative and usher in this new era of work it is our mutual responsibility with our agents of change those who provide automation services because they're on the front line of pretty much seeding this idea that automation is not here to to reduce the to reduce the head count but to make the everyone's life better and to provide very tangible financial benefits for their clients we talked yesterday with our co-founder about what are the values that we want our partners to share with the values of the company that we translate and we want to be well received by by our audience and commitment to automation and responsibility for how this automation actually is implemented in in in their clients is something that's very important for us because if i if you're a client and i approach you and say you can lay off 50 of the people you have replace them with robots your business will be running as smoothly as it runs throughout today that's not a responsible approach it's actually very bad approach because you likely not creating the value but you're destroying the value change management is so important with this regard even if you're automating 100 of someone's job we've rarely really seen people let it go unless someone sold the project of automation in a way that you will reduce this head count that's how you're going to pay for the technology so this really does usher in the most fundamental reinvention of the entire corporate structure since the industrial revolution it's a fundamental reimagining of every single task done in the corporate and this division between what can be accomplished by non-human workers and human workers and i see this as a shift to again i think it's the exact opposite of this narrative that's gotten popularized as the evil robot it is the re-allocation of the mundane to the robot worker who doesn't have feelings who doesn't mind doing the same task in iterating through literally the same exact task 24 hours a day 7 days a week 365 days a year whereas the human should actually be able to apply the grave matter and make strategic decisions and i think the the rise of our of ai is much wanted but by the same token ai is still an algorithm at the end of the day and machine learning is still based on something that a human has coded in and even if we're talking about true machine learning it's a machine creating its own algorithm even neural networks it's the creation of its own algorithm so i do think that this then leads to an almost whole cloth reinvention of what work is and who's doing it and how things are accomplished from the corporate structure level and that's incredibly captivating and i think we're just scratching the surface because we're still at this point where companies are architected around humans as the asset and the doer and what does that look like when a company gets reinvented with the ability to leverage robots as workers so let's talk about this um kind of company of the future let's say i'm um i'm about to start the restaurant chain and it's 20 20 no 2035 let's say that so i'm about to start the restaurant chain and i have a business plan in my vision of the future in this business plan very important portion will be related to how actually i'm going to automate the restaurant business whom i actually need in the restaurant uh in person whom i don't need whom i can put let's say on the on some remote machine to control the bots or robots and i think that for the rest of the future a lot of manual work physical work inside the restaurant will be done by robots and i will need to plan where i buy the robots uh who is going to set them up who is going to maintain them what if a robot faces a challenge and cannot find electric plug because i know someone put the box next to that electric plug how do i run it i think that aspect of business will be very important and i feel that that restaurant owner of the future would not be able to get through all these questions him or herself they will need help they will need someone to come and be that provider of automations for their business and that person will be very important that that company that they will decide to work with is it one company or many companies that provide different services that will be an important choice one of the bets that entrepreneurs will make when they when they start their business currently if i stand the restaurant they still have a lot of questions on what point of sale to use what payroll system to use how pain point of sale connects to payroll because if they're not integrated well that means menu lovers for me and my accounting team what kind of solutions for managing electric sup like electricity and and the power load i'm going to use what kind of it infrastructure uh will i how am going to organize the ordering process uh for for my clients will they be traditional hostess and menu or something else in the future the list of the questions will be 10 times longer and the point i want to make that not necessarily that restaurant owner needs to know all of that not even his management maybe there will be class of people who will be responsible for all this infrastructure and they will be not a trusted advisor but someone who essentially supplies all of that as a service and pretty much for the business then it's how you can organize the work between your people and the service providers so everything runs smoothly and the way you want yeah i i think that ai and rpa are just force multipliers and for whatever reason it's gotten cordoned off to this idea of all forms of robots are subsuming humanity and it's a bad thing but really this is just another software category and what it is is it's a software category where instead of a developer building a single program it's a developer solving for tasks with a framework that can actually make everyone more efficient and it's a dramatic force multiplier and yet for whatever reason the narrative hasn't really picked up on that idea that this is not a discrete category this is just another form of software for devs to build but it's one in which the impact is exponentially greater because of the capability afforded by the technology and i i view it as incumbent upon us to own that narrative i do i i think we actually need to as a provider of solutions like this we we need to be the one spearheading this narrative that and this is something we hear all the time in the zeitgeist is the robots are coming for your jaw for your job and this is still a common narrative in many of the mass media articles about rpa the robots are coming for you i think the economy in a very good way is still a zero-sum game as you mentioned in that jobs aren't going to be lost they're going to be shifted and it's new forms of specialization that are going to take their place and it's going to become higher order and greater sophistication for humans and i really believe that and i think this technology is not a detractor to the human i think it's an amazing enabler if i'm an accountant and i no longer have to do the thing that took me eight hours of drudgery what can i do how much more can i grow my business what can i advance what can i create and i think this technology is creating blue sky and for me that's a remarkable proposition i think that's amazing every day especially in our day-to-day as we're speaking with these entrepreneurs you mentioned we're enabling blue sky that's fantastic so let's talk about the people we interface on a daily basis who decided to to join this automation business who pretty much share the vision of automation as a service playing very important role in the future from your own experience what's the typical portrait of that entrepreneurs that we talked to sure so these are a little bit of risk taker because they're facing down the great unknown they're they're staring down this incredible opportunity to be on the forefront of something that yes is going to prove incredibly profitable but is changing lives and i found that as this deep entrenched motivation in all of the business owners that we're speaking with are they're incredibly passionate about making work better and sure it's a little bit of a risky proposition but they're taking on and owning this risk because they're the ones making it better themselves and as our place in the world we're providing a set of paint brushes and maybe some paint they're creating the canvas they're they're the artist there and i find that to be really inspiring so there is this sense of artistry in everyone that we're dealing with every day and they know that they're out there every day creating and they're seeking to then of course profit because in a capitalistic society profit is a motivator and that's the recompense for building a business and contributing back to society the more you contribute the more you get paid but i find that that is co-equal with this desire to actually advance society and advance their constituents ability to perform their roles so it's this really neat multi-threaded chain that happens from technology provider simply providing a framework to service provider actually painting within that framework to then advance the mission of the ultimate end user who now has their own ability to innovate and recreate their own job so i find there's this really neat ecosystem that's springing up here and the ultimate motivation of these service providers that we're working with is they're as passionate about enabling this new economy as we are i think they take a lot of pride in what they do and for for many of their own clients they are pretty much the first people to explain them how that works and how it fits their future business current and future business needs um i went to a conference recently with our not recently like a year ago in north suffolk in uk um with a couple of our partners who presented rpa to their local entrepreneurial community and i think it was the first time someone came that north there to to share that that's not something only for big corporations in london or in new york and it's something that can benefit the local community as much as it benefits multinational companies i felt that they were really proud of being that agents of change in their local communities and i was thinking right now that if small businesses and it's not if it's like when small businesses will drive greater adoption of automation technologies what will be that market of service providers will be a lot of small companies serving other small companies in their communities will there be bigger players how the market will be structured i would say we don't know at this moment but it feels to me especially when we work with our smaller partners that many of them will grow up to their like beyond their regions it's just i think overall what what's in the head of this automation entrepreneurs is i hire people who are capable to develop this who are capable to deal with this relatively complex technologies to create tangible goods for others people i find clients for my business i make money to pretty much hire more people to scale it up to have more client projects i don't think that any of our partners they they think about okay how much i can stash this year it's more about how many people i can hire for the next year absolutely to grow my business and i i think you hit on one of the key tenants here and somewhat ironic in a robot business it's all about the people it is i think with any other with any complex technology and that's something that maybe is hard to understand for industry outsiders but let's take cyber security for instance all companies of all sizes they need cyber security but for majority of people having a dedicated team member or employee who is all in cyber security has no sense so they will work with other entrepreneurs on on finding the solution essentially using cyber security as a service but none of the cyber security solutions are like turnkey and they work and you benefit from them they complicated things they need a human operator a developer or an admin to run them correctly in a lot of well you will come from the person how they react to different threats detected for instance and an rpa is the same a good bot a good bot is built by a good developer bad developers they usually build bad bots and that's the tool but at the end of the day it's a constructor to build to build stuff and um human skill there is super super important and and you to your point it's human business in the end of the day to win a project in automation space you need to develop good human client relationships to deliver project you need to have great developers on board good developers on board you need to invest in the training you need to invest in their upskilling um for the automations to work and to the to work at full extent at client side those who interface with them should be trained should be trained well and we recently looked up at what electronic functions are the most used among our clients when they build bots and we found that a group of functions called human on the loop that's essentially where bot brings a human for confirmation or for any kind of action when needed is very common it's maybe around ten percent of all functions used so ten percent of the of all bots they at least have some kind of human interaction in the execution of automation process so it's all about human so automation is a human business and not so not so many outsiders understand it but i think for everyone who starts the business they quickly realize that technology is just you know a foundation so you raised and you touched on a sub point there that i'd like to unpack on because it's really interesting and it's been beaten to death but i think we should talk about it anyway which is everything as a service and i think that extends to potentially one of the areas that we're enabling which is service providers as a service and in the traditional model as that we all know the var and the isv and bpo ecosystem is largely founded on the back of someone else's software and someone provides a service on top of it but there's really this multi-tiered pass-through arrangement of i'm going to facilitate your purchase of software and then i'm going to help you implement and help you deploy and help you create and manage and of course there's an entire ecosystem built on this of billions of dollars of throughput in transaction volume but that has paused rpa and i i think and i really do believe that some of these commercial models are causing some hesitancy we've spoken about the the social hesitancy the robot is bad once we get past that okay i can accept a robot is good but how can i adopt enterprise technology if it's cost prohibitive and i think there's some new ways of thinking here that we've just begun to scratch the surface ourselves on of we can potentially enable robots as a service and they've been failed forays of course rpa as a service never really worked for a number of reasons but i'm really interested in this enablement and the the end user loves as a service because it's lower commitment it hedges a risk it's much easier to pull the plug on something that you didn't deploy that is simply there on other person's servers that's easy and therefore it's easier to adopt and it's a lower barrier to entry and i find this a compelling area when we're out speaking with the entrepreneurs we're working with fostering this ability to them and imparting this ability for them to provide services as a service is immediately resonant because it resonates with their client base they want services it does i recently met one of rpa entrepreneurs who have moved even forward with how to sell that as a service and he told me that he comes to client and and wonders if the client has any open positions that duplicates existing roles and if it's the case he asks why and apparently because existing number of personnel number a number of employees cannot do the same volume cannon do that increased volume of work that that happened due to the business growth and they need to hire someone else to help and they do the assessment and they find that a lot of that work can be automated so instead of hiring additional personnel they can implement rpa to make existing team members more effective and to let them do more and then he says okay instead of hiring that person for the half of that cost we will implement bots for you and you will be just paying that as an ongoing salary to your virtual digital employees but you will pay that for me and i will dedicate this digital workforce to help your employees and it's an interesting way of thinking that you know you are entrepreneur you have your own team let me augment some of their work with my virtual team and you will essentially pay me a portion of what you will pay otherwise to to scale yours and between two entrepreneurs that makes perfect sense and that will be very different conversation if he says okay i can supercharge your team for that you need to buy the software from a software vendor hire me to work on that software when software pay me upfront implementation fee and you probably if you need some maintenance you may call that's too complicated especially for small business owners that's that that's a completely deal killer for for small businesses not only because of the capital but just kind of peace of mind i don't need to understand the underlying technology i recently read an article on wired magazine about physical robots and their operators in some restaurants sophisticated machines that clean tables for instance they sometimes stuck and they need a human operator to connect to the machine take control over cameras all the motion and kind of move it and solve the problem will this operator be employed by a restaurant chain no way it's completely different skill set you need to know these robots really well and bmp troubleshooter and so on um what would it make sense to a restaurant to buy a robot itself maybe in some instances but if someone will offer that robot by subscription including all the human costs human operations needed to make it efficient that's a different conversation it simply becomes a cleaning service that's it it's not a robot service and i think that's the really interesting part about this industry that we're in is we're supplanting some of the ways and means but they're still not the elimination of the underlying job itself cleaning jobs aren't going away they're just becoming different jobs now the cleaning job becomes a robot tech and that's cool and that's really interesting and it's these tasks that does anyone go to work in the day and say that i have a deep desire to do manual labor no so these tasks that people aren't intrinsically or extrinsically motivated for are what's getting replaced but in this zero-sum paradigm that job skill just changes and it becomes more sophisticated and this is where i see the accretion of benefit on the human side is okay i can take my understanding of the job at hand and now i can enable exponential applicability of my knowledge of this job and scale and growth happens via this paradigm of artificial intelligence and rpa and i find that fascinating and i i think we still do need to overcome the fear and trepidation there that says i'm getting replaced now you're not getting replaced sure you are but it's the job you don't want to do anyway that's getting replaced and yes you'll need to grow and you'll need to augment a skill set but human expertise still is at the core of every single thing we do and every single company we work with is human expertise just pieces are getting shifted around the board and scale is enabled and i think that's the most interesting part and that's happening in every facet of every area where we're working with where rpa tech enables rpa entrepreneurs to scale up their business much more rapidly and of course the underlying tech allows the ultimate end user to scale their business more rapidly for less expenditure by not having to dedicate capital and time and resources to tasks that a human a doesn't want to do and b is inevitably going to mistakes make mistakes at when you ask a human to do a manual and repetitive task over and over and over again so it's this entirely new ecosystem and i think the entrepreneurs we're working with are on the forefront of spearheading that message out to the ultimate end user of the technology it is and i think it's important for for anyone doesn't matter what's your profession to understand that automation itself will not separate winners from laggards it's combination of talent and automation that will and which means that talent becomes in fact more valuable for enterprises exactly and let's take an accounting for instance yes we may have less accountants needed in the future but i bet that the competition for good accountants will be greater because giving everything equal everything automated we just you know empowered someone to do 100 x more so their talent is multiplied by 100 x times so it means that entrepreneurs would be willing to pay more for that talent so what's our role in your vision in this transformation the world needs more automation entrepreneurs and i see our role is enabling that growth of the industry of being an automation entrepreneur our role is not to help someone win it's really entrepreneurship that separates winners from losers there but our role is to enable more people starting that business so some of them will become successful in creating jobs to automate other jobs and lay out that foundation for the future economy for the future of work so what's electronic 2030 where where are we what are we doing i want to bring some physical robotics in the discussion as well but let's keep it under the table for some time but we want to make automation i think through this entrepreneurship movement as affordable as it should be for businesses of all sizes and it doesn't mean that enterprises will live in their own world of very expensive sophisticated technologies that would not be bubble even in a big company that adopted automation and rpa to very big extent still a lot of manual cognitive labor is happening the world bank estimates that doesn't matter if it's a developed economy or emerging markets 60 to 80 percent of all labor is a routine half of that is physical routine that's boston dynamics and others field of play half of that is cognitive routine that's our field of play it's a field of play where we need to enable more entrepreneurs to be successful what's your guidance to someone that likes this on paper to say an msp that's offering any form of technology and they're highly interested in everything we've been speaking about and they simply don't even know where to start i would say take a look at robotic process automation market the rpe market itself it's something that is very obvious on on this in this space right now we're very confident that while the world needs more intelligent automation to automate decision making to bring capabilities that never existed in the business there is still so much routine rule-based tasks about copy-pasting about double entry that just automating that portion of work for the next three to five to ten years probably ten will be two to big horizon here is a green field is blue ocean opportunities opportunity and it really doesn't matter where in the world you are and what kind of business you envision do you envision being in latin america and automating work in the states or you want to be an australian company that works in domestic market only i bet that around you the business community doesn't know about this opportunity maybe there's some awareness but practically just a few out of 100 entrepreneurs made steps toward automation you can come to them and in a short matter of time identify what to automate this time wouldn't last forever we we know that because a lot of people are knocking our door and just trying to wrap the head around where to start entrepreneurs who made a lot of money on erp implementations on prem in the past on crm implementations like how many big msp ecosystems emerged last year over the last decade around salesforce for instance how many msps started it infrastructure slash backup slash uh cyber security business with companies like data okay or connectwise they are not an automation space yet but they do have capabilities to quickly enter the race and grab as much as you can over the next two years doesn't matter really what tools and technologies you use of course you want you to work with us because we think be offered the better way to serve your clients but this is something that would not last forever i don't want to create a fear of missing out but that's how i think people should be thinking at this moment well it's not often that you know what the next big thing is going to be too often you only realize it once it's already passed you by and i think that automation and the rise thereof and this pause that we've been speaking about where the mass market has not yet adopted this holistically is affording some incredible opportunity that is not often there often the barriers become too high to get in often there's simply not enough market share to grab by the time companies and the public and the zeitgeist realizes there is an opportunity and i think that's one of the most exciting parts about rpa is this is not to be too thanos about it but it is inevitable it's coming and even by the gartner numbers what is it 97 of companies are going to be adopting rpa technology within the next five to 10 years and where are we now in terms of that same stat we've barely begun to scratch the surface sure the enterprises have adopted but for all of these reasons that we've been discussing the everyday businesses the smbs the mid-market firms have not yet really dove in with both feet they haven't yet so i i do believe there's a unique opportunity here where there's a lot of room to growth and you can dive in and it's very feasible to both live this philosophically and be on the forefront of providing really innovative technology to your end users but there's certainly some capital opportunities here yes and i actually want to talk about the mid-market yet because kind of idea that mom and pop shops don't have rpa yet it's kind of obvious you don't need to to be in the field to see that but mid market um let's take for instance uh financial services industry it's one of the first adopters of rpa last year around 20 percent of ppp loans uh were issued in states using rpa and majority of that came from bing banks and pbp loans are very interesting they are distributed in a first-come first-served basis so when you as a business apply for a loan you'd like your application to be processed quickly so you get ahead of your competitors and for all financial institutions in this business it was very important to offer this kind of differentiated service of we can do that quicker like you give us all the docs we run them to ocr we complete all the forms for you uh your application will be in the queue tomorrow morning with community bank it could be three to four days because big team will be doing all that work manually and community banks realize that okay in order to compete even for this relatively homogeneous service that we usually it to our community we need to get to the same competitive patch with technology as big banks already did we need the same benefits of the technology at lower price point because of their size and they're running in the market now try to acquire solutions that will help them to be on par the stake insurance companies they understand at this moment that the level of service that you can provide when you have everything processed very quickly is very different from the way where you interact with this club with the prospect every three four days providing providing them uh quotes or when you need to manage a claim for four weeks and they sometimes that's what i hear from our partners are willing to pay premium to acquire these technologies because they understand that they are catching up they need to catch up quickly and if a service provider can offer them automation deployed at rapid scale they will be willing even to pay more than enterprises paid for the same type of automations it's a mid market we will see how the wave goes through the mid market and comes to really small businesses legal firms i think majority of them indeed independent of their size adopted certain kind of automation whether it's rpa or api a lot of accounting firms small accounting firms i was very surprised to learn how hands-on some of their ceos and founders there aren't in technology because when they founded their companies 10 15 years ago they understood that in order to be competitive in order to provide differentiated services you need to embrace automation so i'm interested in speaking about what you see this for how you see this for our current clients because i think and we we haven't announced or publicized it yet but this upcoming release we have coming i think is really our first one that has really built upon this crystallization and realization of purpose that we have and we've now started to lean in ourselves and this has been a fairly recent realization as to our place in the world and i think it's come from and it's been engendered from what we're hearing from our clients which is of course influencing our perspective and belief but i'm feeling surety in terms of what we're up to and what we're enabling because we're seeing the ultimate end result in business growth of our constituency and the widespread adoption of their work product out there so bring that down to the practical what does that mean i i think this is our first release where we're really leaning in and providing features to very overtly help our constituency grow their business and i think there's some there that bear mentioning yeah i would say maybe it sounds too ambitious but you know we're in capitalism i'm co-founder of the company elite global sales we want to drive greater financial results for our company and for those of you who don't know our business model pretty tight tightly related to the revenue that our partners make in the market uh building and selling automations as a service and i think the first time we come to the point where we focus on the features that would not maybe increase our existing client base but will make the business of our client base more successful so we're in the market for a while but by this moment more than 100 msps built a lot of bots and we actually have no idea what companies that bots are running sometimes an enterprise a lot in small business and they need better tools to manage all these bots because you know you have maybe at this moment some of our msps have 20 25 clients that use electronic on a daily basis you as a service provider needs to keep an eye on all of them and you want to make it a manageable and effective process so majority of the features that we put up front that we invested the most of our engineering power they come not to building bots but to managing already built bots it's central deployment that's multi-tenancy in orchestrator and the client dashboard that no one in rp space thought about coming up because of the other businesses model in our case business of msp is what we care about the most so we infuse more features that are making this business run better it's a funny conversation that comes up a lot and you hear it as much as i do but it's a really funny one where when we're speaking with a prospective new partner and the partner is almost perplexed when they hear that we're not going to exploit every penny of revenue from them and it's a very funny conversation when a partner is almost overtly asking why aren't you exploiting me everybody else is yeah i i had a conversation with one of innovation leaders at big4 recently and he asked me so if a developer that i employ builds 100 bots uh will all the money come to me you wouldn't you wouldn't even take a sip from this flow i said yes he said what a stupid idea and i said i bet that if a developer employed by our partner builds 100 bots successfully his boss will be knocking on our door asking for more developer seats because that's so successful business it goes so well that there is no reason not to scale up and for us it solves that the dilemma of kind of missing the revenue but uh if we recess company our goal is turn our partners into sas companies themselves and if they are successful as a sas businesses on top of ourselves business the money come that's another really interesting point and this is a new one and frankly would have never occurred to me that some of our partners are now starting to reap some of the benefits of that sas paradigm and there there's a few cases of late where our partners have been able to leverage this exponential revenue growth into operating in paradigms that only software companies had raising venture capital expanding globally rapidly that's incredibly exciting and it ties right back into i think what is our new corporate mission here which is we're enabling entrepreneurs to grow their business but that's incredibly exciting where do you see that going what's the next logical step there so let's get back to that overall life cycle of automation business hire people build automation we hire people win work build automations access capital get more employees when you operate on subscription based revenue excessive capital becomes let's say much more easier because it's more certainty in your business and from all financial modeling perspective the business has higher shareholder value and we haven't designed for that and a great thing we work with very ambitious entrepreneurs and some of them they take the portfolio of their clients for whom they develop bots and who pay them on a monthly basis a subscription for that bots men pretty much take it to investors who are currently looking for opportunity to strengthen more innovative businesses and doesn't matter it doesn't mean it doesn't mean that these are investors from silicon valley no these are like real estate investors for instance i think in the particular case and because that's recurrent revenue it was much easier to raise funding on the venture capital terms which means that our partner restructured his companies deliver corp and start to scale up really aggressively using venture capital funding we're that's very interesting case um and you ask look where where it's all heading i think you should just look we should be looking holistically at this cycle of hiring people being in work delivering work hiring more people what can be done better at every single step we should be doing better let's take for example hiring and how it is related to our new release many of our partners i wouldn't say they struggle to hire electronic developers but we have around 4000 developers trained to this day and none of them was in the market they all employed by other partners or or sometimes end users of automation and which means that from technology perspective we need to invest in this area to make the hiring and onboarding process easier and with this regard we increase our take on no code low code tools because more no code local you use easier it is to upskill a junior developer into a professional rpa developer because they will be able to build more time more bots in less time when it comes to using programming languages we are finally bringing python the largest developer community in the world so you can easily tap into this community for talent plus if someone worked on some legacy rp tools that use python as a language they will be comfortable using that at electronic when it gets when it comes to you know we need more work that's pretty much our commitment to zero cost of licenses so you can win the work on your own terms again our business model we're giving you the tools to your developers that's what you pay for whatever they produce in these tools it's your intellectual property it's up for sale let's unpack that a little bit more because i i suspect that many of the people watching this video haven't worked in this space before and this may very well be some of the research materials to get into this business and i think that this very topic has been one of the stop points and it's been one of the barriers of entry preventing firms from getting into this business and the this overall market of rpa as we've spoken about it's in the enterprise 97 of the fortune 500 has rpa and a fortune 500 as we all know can very easily deploy capital to solve for a problem it's very easy to save money if you can spend money to save money and that cycle gets repeated ad nauseum at a fortune 500. if i can spend 500 to save a million sure i'll spend 500 no problem easy but those same opportunities to save by spending don't exist in the wide market and i think this is one of the key barriers to entry has been if we approach our hypothetical and i'm an msp and i approach a hypothetical end user just this proposition of having to invest a significant amount of capital to save long-term capital is a barrier to entry unto itself the same paradigm no longer works so i'd love to hear a little bit more about that story as to how we developed that idea and obviously we know where it is in the present day but i think it'll be really interesting to chart that path and talk about it a little bit from once it comes and how we thought about that license model so let's let's roll back like three four years from from from today to the time when the first entrepreneurs tried to bring the enterprise rpa into into other businesses um i've seen that my with my eyes and uh the co-founders of the company pretty much all came from the space so that the pain point is something that we felt very very deeply um so as you mentioned before for big company it's usually really easy to point out to the area where you can invest significant funds in automation and get pretty good roi do you let people go or you relocate to the other departments doesn't really matter you eliminating the job you're fully automating that let's say accounts payable is very good place to start work for many companies big and small and then you run this business you have some enterprise client you see how the area becomes more and more competitive so we think about what other client base i can i can dig into and many msps they offer different types of i.t services to to smaller companies mid-market and smb and awareness about this technology specifically in mid-market went up and some companies start to approach msps and ask them to can i get the same rpe implementation i want to automate my accounts payable or some other type of work and we all set the time of course we're happy to help let's let's put together an sow for this work and in the best case there was positive roi on investment of course less than an enterprise but that roi was that our client potential client really wanted to pay less for this because i wouldn't start a project if return an investment is like 110 i want 200 i want something like that and it pushed our fees down so we kind of figure out that we work in the price sensitive segment so we cannot really lower down the rpe software cost that's expensive that's enterprise but it's inevitably needed to make that happen so where we'll go down we'll go down on our own margin okay let's do that we start a project we think okay maybe we eat some costs in the first phase we will deliver this first five bots we'll demonstrate them to a client we win more work and that will be higher margin for us but it didn't happen we got our implementation fees which were not so great and then the client figure out wow that really works i can actually do it on my own i don't want to pay this fees anymore i can actually hire someone internally maybe even hire someone of these smart msp developers to work for me and stand it up and they thought that once if they seen one implementation they will be successful in scaling up rp internally they pick it up on their own they they started implementing then they started to question the return investment they hire full-time analysts to measure that and it's at the moment they figure out they pay more for the technology than they have gains from automation and they kind of shut it down in other cases the project went well and i'm winning more work but i see that given that my fees now are lower majority of money always goes to vendor and i'm thinking i want this account i own the relationships i do all the work to maintain this relationship client is willing to pay some good money for the automation the majority of this money just goes through my pockets i am pass it to vendor vendor is very grateful they all they offer me 10 to 20 of the commission it's recurring so the next year i will get 10 of this revenue without doing anything uh that's really really small tiny portion of what your client is willing to pay for automation and think back about this 30 to 40 percent of all labor being repetitive routine the world has so much money to spend on automation but in order for you to be successful in this business you should take all that money on your own at least majority of them not a software vendor that provides you with tools or infrastructure for that so when we started electronic we wanted to shift the paradigm they thought like it's a service it's your intellectual property of msp you create 80 of value why 60 of value goes to the vendor it should go to you and because of that we said that there will be zerobot licenses model in the first place we thought it will benefit enterprises the most because it's unlimited scalability zero marginal automation cost but we found that even the biggest enterprise in the world has finite number of processes to automate ages the nature there are corporate borders unlike that managed service providers they work with any number of clients if they're successful they can work with hundreds of clients they don't have any logical limit on the number of automations they develop so they return an investment in acquiring automation tools is by default much higher than for any enterprise or end user in the end of the day well this goes back to that same paradigm which is it's almost unbelievable how often we have to defend this concept of not exploiting someone and this is to the people that are exploited there there's just abject disbelief that we're not going to try to soak them dry that's true we received these questions about like is it like a marketing promo all the time specifically from the end users who come to us and say i want to get rpa they understand that it's a technology that requires software it requires people and then they say i'd like to work with one of the msps in your network and you tell them perfect then you don't need to pay for the software at all say like i don't get it wait a second everyone else i need to pay for the software how in the in the end of the day you're getting this for free to me you tell them it's not free you're acquiring intellectual property developed by one of our partners but you pay them for the intellectual property for their labor not for the software and this is a fundamental difference so this seems pretty obvious right to you and i sitting here there's this incredible market opportunity it'll be driven by service providers due to all the benefits we've touted why has there been hesitancy even from the service providers to dive in here this question why it's in a year for a while and you can take a look at pretty much any it type of services i.t services type and you will find that the market is dominated by msps specifically when it comes to serving smaller clients i've read that smbs in the states increase their spending on 90 services by 15 last year there's a dramatic growth for the industry that's already very mature take cyber security takes crm any kind of i.t service
msps are in the market rpa not very tiny share let's unpack why that happened in enterprise a lot of sales of rpe were driven by big consultant firms and i was part of that movement and when you are a channel you think about how we can get the most of the money from the end user and we came up with this concept that there are digital workers and essentially you not amplify your existing workforce you replace your workforce with digital workforce and when you do that you need to pay a salary two digital workers an analogy of this digital salary is an rpa bot license whenever you need to run an automation you need to turn on the license and these licenses specifically in early days were very expensive now the price went down but not to the extent where this price is not visible for the end user no it's a big portion of any automation project budget with with and often a stopping point and quite often what we're hearing from both prospective end users as well as prospective msps is that these projects stop dead in their tracks when someone hears that okay even before i implement and build i'm at 30 40 50 60 000 of software cost just to acquire some tooling that i don't even necessarily need yep so whatever worked for enterprise doesn't work for smaller companies just because the case for automation is very different to our early conversation it's not about replacing humans it's about amplifying and providing the automation gains or avoiding mistakes where it's needed and businesses are willing to pay good money we've even seen smb spend around 50 000 a year on rpa but it's not a one process it's usually many different smaller processes that makes total sense to automate from a logical perspective if someone has a skill and a tool to do that but doesn't make sense to automate when every running way every each runtime of automation depends on employing a comp expensive bot license uh people sometimes gets very creative how they optimize and bought licenses i never thought that that business model can affect a code structure but that's something that we witnessed this year once we pretty much bring this innovation to brought this innovation to the industry of removing the bot licensing costs our partners and clients start to build smaller bots many many smaller bots to connect them in bigger bots makes perfect sense because you can easily reuse components you can easily isolate where the issue is if it happens easier to maintain an admin but if you look at github for instance or gitlab you wouldn't find that that many other pa mods there because they usually don't have a right structure to be shared because one bot was built to do five things a time to optimize and about license costs and it's interesting to see how many intellectual horsepower of people across the world is going towards optimizing software spending and subverting an entire commercial structure which is the first sign that it's wrong and we're not going to make friends with big rpa by highlighting this but that commercial structure is virtually exploitative for the smaller business owner yeah and if for instance a business is willing to spend fifty thousand dollars on rpa and it's the maximum cap for that business it's less attractive for entrepreneurs to come to them if they know that half of that money or two thirds of that money will go towards software licenses it doesn't make sense it's not the lucrative opportunity for the business and that's why msps are a bit behind the overall enterprise automation movement and that's why there's so big opportunity ahead in the next coming years so i think it might be interesting to some of the audience on this video to talk about the practical applicability of this tech and we've spoken about the philosophy behind it and why this should be done and why it's beneficial to both society and companies cool we've spoken about the commercial model and how this can actually be translated in a more nimble way into both benefits and profits for everyone on the chain cool okay what does that actually mean in terms of what i'm building and how i'm making this actually benefit someone through the usage of the software sure let's start with a few simple examples from from from the field um accounting is a big space where people use systems in different competing companies systems are different there's an accounting system there's a tax system there's an erp system and there are many digital documents that have the right inputs for all these systems and they need to be entered let's say you automate a data entry into one system but how the data goes from your accounting system to your tax system in the end of the day there are two alternatives to rpa one of them is manuality integration which is a great way to connect all the data flows together but has two major disadvantages it takes too long time to build because you need to code and also if anything changes you need to change the you need to record the connection so let's say in the end of the year or months you need to take data from accounting system to tag system if they're not integrated the only one alternative is manual labor but we all don't love that much and that's an example where if not rpa then a human will literally key all the data from one system into another one we do have an end user in massachusetts it's a healthcare manufacturing company and each time a detail is produced on the floor a worker should type in the some info about this detail in two systems into erp and supply chain system why they are not integrated too complex to integrate it seems so miserable that someone instead of working on a second detail spends time keying the same information into two different computers on the same factory floor a lot
2021-08-26