“This crisis has presented an opportunity because it gives the power back to policy makers to change the status quo for their city streets, specifically around transportation.”
This second installment of the SALT Talks: Pandemic Venture Investment Series, presented in partnership with OurCrowd, includes a look at the mobility sector in the current COVID-climate, how top entrepreneurs and their mobility start-ups are navigating the unprecedented business challenges and opportunities in our era, and what we can expect for the future mobility revolution. Moderated by Yakir Machluf, Mobility Lead, OurCrowd.
The pandemic has brought to light many of the unrealistic timelines associated with the adoption and rollout of autonomous vehicles. We’re seeing more companies readjust their business plans to reflect this reality and implement more incremental technologies like advanced driver-assistance (ADA) systems. Growth has instead been seen around other sectors like micro-mobility. Open-air intra-city movement patterns have increased as a result of the pandemic with bikes and scooters seeing a particular jump. “A lot of the usage we see on our vehicles, specifically e-scooters are a mile-and-a-half to two miles. This is a 50 to 100% increase from pre-pandemic.”
With the increased implementation of technology within vehicles, the need for vehicle cybersecurity has become essential. It’s an industry that has long relied on in-person demonstrations and onboarding. The pandemic has increased the adoption of remote training and virtual demonstrations that work in tandem with clients’ on-site systems, a more digital approach that will drive down costs long-term.
LISTEN AND SUBSCRIBE
SPEAKERS
Michael Dick
Chief Executive Officer
C2A
Graham Gullans
Vice President, Business & Corporate Development
Superpedestrian
Adi Pinhas
Chief Executive Officer
Brodmann17
EPISODE TRANSCRIPT
Joe Eletto: (00:13)
Hello everyone, welcome back to SALT Talks. My name is Joe Elleto, and I'm the production manager of SALT, which is a global thought leadership program and networking platform encompassing finance, technology, and geopolitics. SALT Talk is a series of digital interviews with the world's foremost investors, creators and thinkers, and just as we do at our global SALT conferences, we aim to both empower big important ideas, and provide our audience into a window into the minds of subject matter experts. And thank you for joining us if you're in joining us in the United States, a day after the election which is still ongoing.
Joe Eletto: (00:49)
This will be obviously something that continues throughout the week, but we appreciate you waking up early and joining us. We're thrilled to welcome you to the second installment of our pandemic venture investment series, where top entrepreneurs, investors, and business leaders dive deep into the challenges and opportunities arising from the pandemic crisis, and discuss breakthrough technologies, address issues from the coronavirus prevention and cure, to social distancing and food supply. This series is presented in partnership with OurCrowd, which is a leading global venture investment platform.
Joe Eletto: (01:24)
Today's episode, Next-Generation Mobility in a Post-Pandemic World features Michael Dick, chief executive officer of C2A, Graham Gullans, vice president of Business and Corporate Development of Superpedestrian, and Adi Pinhas, chief executive officer of Brodmann17. Moderated by OurCrowds mobility lead Yakir Machluf. If you have any questions during today's talk, please enter them at the Q&A box at the bottom of your video screen. And now I will turn it over to Yakir to conduct today's interview.
Yakir Machluf: (01:55)
Thank you, Joe. And thank you for that kind intro, and I of course, thankfull for the opportunity to be part of SALT Talks. To our audience today, just reiterating what Joe mentioned, welcome to our discussion today about Next-Generation Mobility in a Post-Pandemic World. This is of course a part of a complete series of SALT, in partnership with OurCrowd. So the mobility sector is among the hardest hit due to COVID-19, with automotive manufacturing ground to a halt, ride hailing down 75%, and public transportation usage rates down, sorry, seeing one of the greatest declines in history with a very slow recovery rate.
Yakir Machluf: (02:37)
We have three great speakers joining us today to discuss the challenges and opportunities that the pandemic brought to the mobility sectors. Our first speaker as Joe mentioned, is Adi Pinhas, co-founder and CEO of Brodmann17. Brodmann17 is actually Adi's third company founded by him, in the computer vision space. Preceded by Vigilant Technologies in '98, JustVisual in 2006, and Brodmann17 founded in 2016. Adi, thank you for joining us today. Can you share a few words to our audience about Brodmann17?
Adi Pinhas: (03:10)
All right. Thank you very much for inviting us today. In Brodmann17, we're developing advanced driving assistance systems for vehicles. So features like automatic emergency brake, adaptive cruise control, self-parking vehicles, and so on. This is the functions and technology that we're developing with the mission of taking these advanced technologies from the premium vehicles, from the premium models to the mass market, in order to improve safety, comfort, and so on.
Yakir Machluf: (03:47)
Thank you Adi. Our second speaker is Graham Gullans. Graham is the VP of business and corporate development at Superpedestrian. Graham has built and invested in multimodal transportation companies for the past five years, and he sits on the board at Zoomcar, India's largest shared car rental company. Previously, he was also the co-founder and COO of LiftMetrix that was sold to Hootsuite. Graham, great having you on board with us today. Maybe a few words about Superpedestrian to our audience.
Graham Gullans: (04:15)
Sure. Thanks, Yakir. Nice to meet everyone. Superpedestrian is first and foremost, a technology and engineering company. The company got its start having spun out of MIT seven years ago, and we're based in Boston. We focused on the core technology that we call vehicle intelligence, which is an autonomous maintenance system that lives inside micro-electric vehicles. So anything that touches the electronics or mechanical system of small vehicles, such as e-bikes and e-scooters, our technology allows the system to measure, detect, prevent the most common challenges from happening. In the context of mobility that improves the safety of these vehicles and lowers the costs operating. So specifically, we find ourself in the micromobility space where those are the two biggest challenges in the industry, addressing the core safety needs for cities and riders in micromobility, addressing the core cost side and challenges of making this business sustainable into the future.
Yakir Machluf: (05:17)
Sorry, thanks, Graham. We'll definitely touch upon some of those points later on in the discussion. Last but not least we have Michael Dick joining us. Michael is the co-founder and CEO of C2A. Michael has 25 years of senior level leadership experience, previously co-founding NDS, which was acquired by Cisco for $5 billion back at 2012. Michael served as the VP of service delivery for five years, and is regarded as a pioneer in embedded network and content security. He has global experience working on large scale systems that protected billions of dollars of content for customers including BSkyB, Foxtel, Star TV, Sky Italia, Direct TV and others. Michael, thanks for joining today. Can you briefly introduce our audience to C2A and what is it that you do?
Micheal Dick: (06:02)
Thanks Yakir. Nice to be here. So C2A does in-vehicle cyber security. And as the previous speakers have described, vehicles are becoming more and more connected, and are offering all types of autonomous services, whether it's a desk type systems or automatic parking, et cetera. So imagine on the one hand, you have computers in the vehicle that are controlling the safety systems like the steering wheel and the brakes. And on the other hand, you have these cars that are connected to the internet, offering all types of services, online services, vehicle-to-vehicle, vehicle-to-infrastructure, et cetera.
Micheal Dick: (06:47)
So you can imagine that the threat of outsider attack into these vehicles is very high. And that's what C2A is here to try and prevent. From the various different attack surfaces in the vehicle, we have developed products to be able to protect those vehicles against attack, and not only prevent attacks but also to monitor and to manage the in-vehicle cyber security lifecycle, over the 10 to 15 years that the car has to be on the road, on an ongoing basis. So that's basically in a nutshell what we do.
Yakir Machluf: (07:29)
Thanks for that, Michael. So with no further ado, let's get right into it and talk about mobility and COVID-19. Starting with when we're usually thinking about the future of mobility autonomous cars come to mind, and the past 12 to 16 months have really not been easy for AV development worldwide to say the least. We've seen AV timelines and launch dates being pushed back by several years, less capital directed towards the development of new AVs and an overall conservative tone sounded from Car manufacturers in regards to AV deployment. Adi, I'll start with you. As I know you had more than a few discussions about this topic with OEMs and Tier Ones. Can you take us through what goes on behind the scenes of AV development, and how did COVID-19 play a role in that?
Adi Pinhas: (08:15)
So I think in the case of the autonomous vehicles what happened is that, like in many other cases, COVID accelerated decisions that should have been made a lot before. For couple of years the industry understood that autonomous vehicle is going to be a huge challenge bigger than initially anticipated. It's going to be more expensive than originally budget. And we saw that even Waymo by Google raised a capital in order to make happen. They also realized that it's very complex and we saw for a long time, every other week, two companies announcing on a new alliance in order to work together and be able to do that, impossible alliances in some cases.
Adi Pinhas: (09:14)
But then COVID happened, and it forced everyone to look into reality and see that we need to push the timelines. We need to think about it again, and today what we see more, I think, solid plans. Even from a business plan perspective, you will see that most of the thinking in the work today is about trucks, where you have very clear ROI, less about robotaxi, definitely less about passenger vehicles. And so, everyone or many are regrouping, creating better more solid plans, and we'll continue with that work.
Yakir Machluf: (09:56)
Thanks for that Adi. Now I'm sure for a startup working in the space much like Brodmann17, that could prove challenging. Can you elaborate on some of the challenges from a startup perspective, and possibly share even some of the opportunities that you recognized during this period?
Adi Pinhas: (10:13)
Yeah. So earlier this year, of course, COVID created, the outbreak created a big confusion in the market, especially for some of the OEMs and the Tier One suppliers. They had bigger issues in front of them from a supply chains to sales, manufacturing challenges, and so on. But then exactly as we said, because of autonomous vehicle is going to be delayed, now they are focusing again on the ADA's, on the advanced driving-assistant systems. What we are frequently calling the level one to level three systems. So now that they are not going to be anytime soon autonomous vehicle, they realized that we need to take care of the driver. To create systems that are going to make the car more efficient, more comfortable, safer of course. And that's not only in the integrated solutions, this is beyond integrated solutions.
Adi Pinhas: (11:12)
What we see now is that a fleet management are looking to add these technologies as an aftermarket or after sale by adding these type of technologies to monitor professional drivers. Some insurance companies are talking about regular, a passenger, a driver, but definitely for the professional drivers, adding these systems to monitor the drivers, and to create better training plans, to create better safety scores for insurance purposes. So few of the OEMs and the Tier Ones, actually realized that they put aside for too long this ADA's technologies then now they have a gap to close. So they are working with us to start and deploying the level one to level three solutions, until the level four, level five will eventually reach perhaps in a decade or so.
Yakir Machluf: (12:13)
Got it. Thank you, Adi. Of course, not only autonomous cars have been affected by COVID-19 and as people were forced to either stay at home or follow strict social distancing limitations, the entire way in which people and goods move around has changed. Some would say that they changed for good. Graham, moving on to you, can you share some thoughts on these changes and how will urban mobility change in the coming years?
Graham Gullans: (12:43)
Sure, thanks Yakir. There's an adage that you never want to let a crisis go wasted. So with cities and public policy, things are typically difficult to change, they take time. But this crisis has presented an opportunity because it gives the power back to policy makers to change the status quo for their city streets, specifically around transportation. And that's starting to happen quite rapidly now. So there's really two major impacts from a city policy perspective that is been accelerated by COVID. Number one, the ability to change the policy, right? Typically, it's been hard to change policy, the time it takes to influence it can be years. But now, we're specifically seeing cities accelerate those timelines on how they allocate street space and manage traffic. So across the US and Europe, primarily there's a real willingness to change streets. Some examples are, there's a lot more open air dining and retailers moving into the streets.
Graham Gullans: (13:41)
New York is a good example of this, cities and retailers are given space now on the streets replacing either lanes or car parking. In the UK, there's been a huge appetite for infrastructure spending on bike lanes. They're committing to invest £250 million on bike lanes to support micro mobility. And then when there was temporary bike lanes put up in place for the pandemic, they're now becoming permanent. People are seeing the revalue, and cities are appreciating that long-term stability. And then one more soundbite is Paris actually is taking an aggressive stance. They're taking back half of the parking spaces from cars in the city, which is around 70,000 spaces. So it's an incredible amount of city land that's being dedicated back to better mobility options than the car and other transportation options. And this appears to be sticking because policy is pushing towards making those permanent changes, and that's the accelerating factor that COVID has had on mobility.
Graham Gullans: (14:43)
The second of the two major ways in which it's having impact is travel patterns has changed. You alluded to it in your introduction Yakir, but everyone knows public transit is down massively. And they're having to cut budgets because of the shortfalls even more so than they can. So cities need to promote other alternative options. Ride hailing is unfortunately not necessarily the solution because there's still that other person in the car with you, and we've seen that down as well.
Graham Gullans: (15:15)
The two best mobility options in a pandemic world are driving your own personal car because it's perceived to be safer. However, cars have been in a 10-year fight against personal cars because of the traffic and safety reasons. And so cities are really promoting more options for mobility, specifically micromobility because micromobility is preferable when you're in the open air environment and you don't face the public health challenges of public transit with people being close to each other, and then driving of course is pollution. So micromobility specifically, immobility has been accelerated by way of the... by COVID.
Yakir Machluf: (15:54)
So you just alluded to micro mobility and challenges. So I would like to ask you about specific challenges for micromobility due to COVID. What did you experience during that period?
Graham Gullans: (16:10)
Sure. Well, there's always short-term challenges, but also open opportunities. So I'll talk about kind of what immediately happened following COVID, and it presented, well, opportunities and challenges and then we'll look at kind of what challenges exist long-term. When COVID forced folks to a lockdown, it actually caused people who had not experienced bikes in a long time or scooters for the first time to try those new options. So specifically medical professionals were used to taking the bus, train or driving and carpooling, we're now experiencing the efficiencies and advantages of micromobility. But that same constituency now also saw the dangers of car dominated streets.
Graham Gullans: (16:53)
So what you're seeing is the pandemic has caused new people to experience it, promote it and then that's also suggesting a path away from car dominated streets. Within micro mobility in the short-term, there's a lot of positives and then I'll express the challenges as well. Positives, number one, there's longer trips. Meaning a lot of the usage we see on our vehicles specifically e-scooters are a mile and a half to two miles. This is a 50 to 100% increase than pre-pandemic. Number two is that people are using them for a broader array of purposes. It's not just recreation or tourism, they're using it in their day-to-day. Again, away from the public transportation. And there's a much more diverse set of demographics and trip purposes being used.
Graham Gullans: (17:41)
So that's the tailwinds that the pandemic has provided micromobility. The challenges for micromobility, specifically, are to making sure these changes stick. So building resiliency into transportation, so we don't go back to the monoculture of cars. So that's number one, cities do need to work on their public policy. But they're getting the support of businesses and restaurants who see the advantages of people riding bikes to a restaurant. So in New York, actually, restaurants used to not like bike racks in front of the restaurants, they'd prefer car spots.
Graham Gullans: (18:18)
Now they actually promote bike racks because it will bring more people in then [inaudible 00:18:22] parking spots. So we had to make sure these changes stick. Another challenge is that we need to make sure these transportation options serve a broader diversity of travelers. Scooters and e-bikes fit a large audience, but not all audiences. There will be transportation options into the future that I think will stick long-term, that we've not seen on the road today. And that's what we need to focus on.
Yakir Machluf: (18:45)
Thank you, Graham. Michael, moving on to you. Automotive cybersecurity and COVID-19, tell us what's the connection? Michael, oh, perfect.
Micheal Dick: (19:01)
Yeah. Sorry. Yeah. So even earlier on this year before COVID, February timeline. ISO published the 21434 specifications with regard to in-vehicle cybersecurity and also lifecycle management. And so, also the UNECE WP.29 was published and is going to become legislated at the end of the year for those countries that belong to that organization. Which means that if somebody wants type approval for a vehicle in the country, they're going to have to be compliant with the UNECE WP.29 specification. Now, this all happened before COVID, and the fact of the matter is that that's continuing. In other words, whatever happens after COVID, any car that is manufactured from 2020 to 2023 is going to have to be compliant with these specifications.
Micheal Dick: (20:04)
Which means that the car manufacturers and the Tier Ones all in the whole industry has to move towards cybersecurity and lifecycle management. So I think there was a bit of a panic in the beginning of COVID, how are we going to do this with COVID? But we found that especially with C2A seeing that most of our systems that supply solutions to cybersecurity and lifecycle management are cloud-based, we can offer it as a service to our customers. And they've learned now over time that they can be completely independent and they can implement whatever they need to implement on a remote basis. Whereas in the past, this used to use up a lot of manpower, you need a lot of services to do these investigations, et cetera.
Micheal Dick: (21:06)
We can now do it automatically on through a system that is cloud-based for them. So for us it's been interesting because it hasn't really affected the investigation of the Tier Ones and the OEMs into these new technologies and doing proof of concepts or something like that. We can continue doing that remotely. We don't have to be, yeah, and they don't have to be actually... They can do it remotely as well. So from that perspective it's been easier for us. It is difficult working without meeting people for the first time sometimes over Zoom, et cetera. But I think the world is getting used to it and-
Yakir Machluf: (21:54)
Yeah. I think we all need to get used to this new normal. Yeah. So I think actually, this was actually very insightful thought to think that most of us usually think that due to COVID the entire automotive industry stopped, but actually understanding that cybersecurity and the cyber threats are still eminent and are progressing although the majority of the industry kind of put to a halt, it's an interesting thought and just makes it that much more imminent in comparison to maybe autonomous cars and all of that. Now can you tell us more about the new regulation and what do they actually mean from an automotive manufacturer perspective?
Micheal Dick: (22:40)
... So it's actually quite interesting, if you speak to a car manufacturer today, and you say to them let's say, "There's been a vulnerability published." Does that vulnerability affect you in any of the models that you have on the road? And if it does affect you, what can you do about it and which models are affected, et cetera. All the OEMs, car manufacturers, they don't really know the answer to that question. When a vulnerability becomes available they have to go do research, they have to investigate. They have to try and find all the development teams around the world, all their suppliers. It's a very complicated supply chain, Tier Ones, Tier Twos, Tier Threes all supplying into the same vehicle.
Micheal Dick: (23:35)
And it takes them weeks actually, to know if they are affected or not. We actually... we had a market survey about six weeks ago that came up with this, that it takes them weeks. We spoke to many OEMs and Tier Ones. It takes them weeks to actually do that investigation, which is obviously not acceptable. Especially as you get more connected and there's more software in the vehicle. There's going to be dozens of vulnerabilities on an ongoing basis. And this is for the 10 to 15 years that the car is on the road. And it's now become compulsory for the car manufacturers to actually run that in-vehicle cybersecurity lifecycle management in an organized and automated way.
Micheal Dick: (24:23)
And because of the complication of the number of partners involved and how they all communicate with each other, et cetera. So this becomes a difficult thing to implement. And in our survey that we ran, our market research, one of the complaints was also that there're no tools available to allow them to be able to do this type of lifecycle management. And so that's what we... Luckily, we've been investing the last three years in trying to develop this product, that is now become compulsory for[inaudible 00:25:01]. So we're seeing a lot of traction and a lot of interest on an ongoing basis since we launched this a few weeks ago. And as I mentioned before, they won't able to get a car manufacturer from 2022 in some countries and 2023 in others. Will not be able to get type approval unless they can show that they're compliant with these regulations.
Yakir Machluf: (25:27)
So you've actually alluded to several interesting points here. And I think the most interesting one is your ability to actually cut the need for resources, cut times, actually make manufacturers and the suppliers more independent. So this actually brings me maybe to the next point, and I would love to open up the discussion at this point. And talk about more about cost efficiency and open up the discussion to Adi and Graham as well. Can you maybe kind of talk us a bit about cost effectiveness aspects in your verticals? Adi, how is Brodmman17 solution could address maybe cost effectiveness solution in fleets and Graham for micromobility. I would love to hear your thoughts on that.
Adi Pinhas: (26:16)
Yeah, cost is a big issue. Most of the features that I mentioned, they are not hard to sell. A self-parking vehicle, of course, everyone want's it. The big issue is the gap between how much it cost and how much people are willing to pay for it, same for the insights from the fleets. Cost is not only the amount of dollar, it's also the power consumption of these systems, the heat that they generate, the size, and so on. So we are trying to work on all these dimensions. Other forces are also important here. So regulation, for example, the moment that regulator decided in Europe and then in Japan, that all new models needs to have automatic emergency brake. So now the automakers once that is a regulation, they need to find a mass market pricing for that, it's no longer an advance, a premium feature.
Adi Pinhas: (27:27)
So we have the drivers that like the features very much, we have the regulations as another strong force that is driving the market forward. And the third one is ANCAP, ANCAP are publishing new safety standards every year. So if an automaker would like to maintain his four, five safety stars, and ANCAP are now stating that automatic emergency brake as a part of the reverse camera is a must. Then again, they need to find solutions, they need to find cost effective solutions in order to implement it. So here, in order to achieve that, we are taking a completely new approach into this system. Taking a softer approach, working with commodity hardware, creating [AJI 00:28:25] architectures in order to create a bottom line, a system that is complying with the regulation in ANCAP, but still has a fraction of the cost of what it is today.
Yakir Machluf: (28:43)
Thanks, Adi, Graham.
Graham Gullans: (28:45)
Sure. So micromobility, specifically costs is very important. But actually, there's two groups of micromobility, and it's more important in the shared case. So micromobility as a personal consumer vehicle type has been around for 100 plus years with the bike, and then Kick scooters, which you see a lot of kids on these days. So micromobility on the personal side has not been impacted by costs in the last decades, a couple decades, because the cost of owning a bike is relatively low, the cost of maintaining a bike is relatively low. And that has not been a challenge because the cost of keeping that vehicle on road is internalized by user and the consumer itself.
Graham Gullans: (29:27)
When shared mobility, specifically in micromobility became such a hot trend. With the introduction of bike sharing across the world, but also electrification of e-scooters and e-bikes costs became everything, right? And the industry is still at its infancy, where it could be a make or break for the industry. If you don't figure out the cost side of running a micromobility fleet, then micromobility is going to be more challenging to have long term sustainable life unless it's subsidized. Which is not the goal of Cities necessarily. And the reason why shared micromobility is so different than personal bike or scooter ownership is because those costs now borne by the shared fleet. And you now have significant costs for labor, you have higher use and abuse of vehicle, so the cost of the vehicle lifetime becomes challenged.
Graham Gullans: (30:20)
And so, when you can't internalize those costs to a single consumer, and they get spread out over fleet, it makes the business hard to run. And so that's what we focused on for the seven years that Superpedestrian has been in business, which is lowering the cost side of running fleets, specifically to micromobility. If you think about the two biggest costs, it's labor of keeping your fleets on road, service maintained and generating revenue, and two is vehicle lifetime. Those are the two things that have challenged the industry. So that's what our core system has been developed to address, which is to lower the cost of labor for keeping the vehicles on road, and safe, and repaired and maintained. You should address that through technology, right?
Graham Gullans: (31:02)
Technology is scalable, the technology is inside the vehicle as well. And so, the vehicle is able to do things that a human would otherwise do. Inspect whether or not the brakes are safe to ride on, make sure the core electronics in the system will overheat or fry, because they've been left out in the rain or been going up and down hills. If technology can do that. Now the costs of running your fleet get lowered because labor is now cut in half or more. So you don't need to staff up teams to go in and visually inspect. Plus technology can do a better job than a human can do, because they can look inside the hood without a human going in with a scope.
Graham Gullans: (31:39)
And so, technology addresses the labor costs of running micromobility fleets. And it also is able to extend the lifetime of vehicles because it's able to detect when failures can happen in the first place. It knows when... That you may run into the end of a life, or a battery pack, or a motor, it can autonomously, our autonomous maintenance layer can alert us to that before it happens in the first place. Again, going back to safety and cost side of things. So technology addresses the core costs of running micromobility. And we're at the forefront of that for a relatively new industry that's trying to navigate being a sustainable option for citizens in cities.
Yakir Machluf: (32:18)
Maybe you can expand on that because I think that we have a lot of investors or potential investors in micromobility and mobility as a whole tuning in. And they're probably all familiar with Bird and Lime. And since their inception, we've seen a lot of venture capital money flowing into those companies. Now they have initially maybe worked with off the shelf scooters, but they have since evolved to introducing new models, where would be... So they're also claiming for cost efficiency and of course, enhanced operational optimization. So maybe you could contribute your thoughts on that. In regards to Superpedestrian, where is the actual value coming from?
Graham Gullans: (33:02)
Sure. So the space is super exciting from an investment perspective, and from a city perspective, because of the demand for micromobility. When vehicles were electrified, specifically e-scooter and now we're seeing more e-bikes on the fleet side, the demand was a multiples higher than bike sharing schemes. Once you lost the dock, and once you powered these vehicles with electronics, the demand was much higher. So the shared scooter has been one of the vehicles of choice, you're seeing cities across the globe, there's two to five trips for that single vehicle type, which is pretty impressive in terms of demand and revenue generation relative to the asset value. The asset value is hundreds of dollars, not thousands of dollars, again, cheaper than e-bike, which also makes it more sustainable. That's why the venture investors poured money into the spaces because the demand was like this faster adoption than ride hailing. The revenue growth was off the charts. You put scooters on the road, you'll get rides that day. And you'll be at full demand within a couple of weeks.
Graham Gullans: (34:07)
So it was an incredible promise. But the cost side challenges of running the business lagged the revenue growth, and that's where we've been for the last year or year and a half, which is all micromobility operators need to focus on the cost side because you've proved that this business can be sustainable before you can keep growing top line. The land grab strategy doesn't necessarily work unless you're running a business model that's sustainable. Specific to Superpedestrian, while the industry was scaling, going to land grab as strategy, we spent our time focusing on a vehicle that could operate at 50% or lower costs than what all our other fleets. Is taking our core embedded patented technology and stick it into the vehicle type of this shared scooter. So we emerged as a second mover with better technology and the advantages are safety which you know helps us win city permits and partner with cities, but also lower costs of operations, right? And that is the fundamental difference.
Graham Gullans: (35:04)
When you can lower your costs by that amount or more, as we've done across our deployments, your market and the promise becomes so much bigger for micromobility. What it really started at was thousands of cities around the world down to even towns will have micromobility. Where it's been constrained to is only large cities can support micromobility because large cities have the demand, but small cities can't support it. We've now proven that our cost side of the fleet can operate in a much bigger [team 00:35:33] because you can go into markets with less demand and less density, you can go more distributed population. You're still serving the needs of micromobility, but you're now serving thousands of cities rather than the top 25 cities of the world which have that high demand. So that's the difference in lowering costs.
Yakir Machluf: (35:52)
Thank you, Graham. I want to again maybe kind of allude back to a point that we made before. So we have here three leaders of three different startups. Two of you based in Israel, one in Boston, how did COVID-19 and the outbreak and all the lockdowns and the ban on flights and all of that affect your ongoing and your relationships with clients abroad? Open style, everyone, as you went there, Michael, Adi, Graham, take it away.
Graham Gullans: (36:21)
I'll jump in real quick. I'll answer a slightly different like you Yakir, which is the biggest difference I've seen is that are hiring folks, so our company is doubled in size in terms of headcount. I think we're closer to 100 now, in the last six months. So the pandemic accelerated our ability to hire. The interesting point here is that we've not specifically required people to be located in Boston. And prior to COVID, we were much more focused on that finance teams, Ops teams, HQ, centralized in Boston. Now, when we've gone out and hired from the industry and other talent, we ask people where they live, but it's not necessarily a requirement. So it means the talent pool for us is much larger, right? We can go international, we can go East Coast, West Coast, Central. And so, it's now an afterthought, into the third conversation you have in hiring of where you're located. And we don't necessarily ask people to move into where we are. So I think that's been great because it opens up the talent pool.
Yakir Machluf: (37:22)
Amazing. Adi, if you want to tackle both, either relationship, or operational point of the effects of COVID.
Adi Pinhas: (37:30)
I think, was something that helped us very much to scale is the ability to do remote demos. So before COVID, it was unheard of that if the customer wants to see a demo, you need to go to the customer and show how it works. After all, it's a very large OEM, or Tier One. But now they can't meet us, even if you will go there a cooperate regulations are not allowing them. So what we worked back in March and April is to create a bulletproof DIY demos and showcases. So today, every other week, we are sending a demo kit to New Zealand, to Australia, to Korea, the customer on the other side is assembling it and it works. And so from that perspective, a lot easier to scale now.
Graham Gullans: (38:29)
Just to comment briefly on that, I think it's fascinating you use the word bulletproof because demos naturally go wrong, right? They go wrong, not when you're testing it in your office, but when it's in someone else's hands. So I think that's super important. I like that.
Adi Pinhas: (38:43)
It's a lot more convincing also to the customer, because it's not like a magic show. If he puts the assembly by himself driving, then it works, then it's creating even better confidence toward the demo.
Yakir Machluf: (38:57)
Michael, your thoughts on that?
Micheal Dick: (38:59)
Yeah. So with us, when we do a demo, for example, remote demo, it's not really a demo. It's not like a demo kit, it's the real thing. We are actually have an instance of AutoSec, which is the... in vehicle lifecycle management system. And the customer actually sees a live implementation of the system. This is what he's going to get. It's not a demo, it's the real thing. And we keep on updating that on an ongoing basis. So he sees the latest and greatest, and he can play with it, and he can see all the features by himself. And he can very soon... Until now, until COVID, it's been common in automotive industry, for many companies all over the world to offer services.
Micheal Dick: (39:53)
They said they'll put a whole lot of people on site and you'll be able to [inaudible 00:39:56] investigations, to do integration [inaudible 00:40:00], for example, in cybersecurity, the most two important things are visibility and traceability. So you know what you have and the [chief 00:40:09], if something is published, you can trace it to see where it affects you, where it doesn't affect you. This has been offered traditionally to the market by having lots of people doing this work for the car manufacturers, which is not relevant anymore. It's not practical anymore, because you can't be flying around the world anymore. And everyone's trying to save money, you can't have these loads of people trying to, do these investigations, et cetera.
Micheal Dick: (40:38)
So once you can have a real life system on remotely, or on cloud, or on premise that they can use. So they see, firstly, that they can be independent, and they don't have to be dependent on multiple companies to give them the visibility and traceability. So it's practical, and also saving them money. So let's say it's an interesting development.
Yakir Machluf: (41:05)
Thank you for that. So maybe as an ending note, before we move on to the Q&A questions, and I see that we have a few. What is the biggest trend that our audience and investors in the space generally should be aware of in regards to your vertical? Michael, let's start from you.
Micheal Dick: (41:22)
Yeah. So as I mentioned before, I think that 2020 is the year of cybersecurity for automotive. There's been a lot of talk for many years already, maybe 10 years, people have been talking about cybersecurity for automotive, from the hacking, there were hacks demonstrated, how important it is, and everyone said how important it is, et cetera. But there haven't been any implementations of advanced cyber security on the production lines. And the market was getting a little bit nervous. Everyone's talking about it, why is it not happening? So finally, we've arrived at the time where it started to happen, and that's the year of 2020. And that's because of legislation. Number one, because the timing is now with both ISO and the UNECE publications, which are now going to become compulsory for the OEMs, and Tier Ones for the industry to implement. So that's the first thing.
Micheal Dick: (42:24)
And the second thing is that issue of the way that we approached, the different approach that is going to be, that is different now, in the sense that, now it's more important to be able to work remotely, to be able to work independently, and to be able to save money. So I think that we start, we're actually starting to see it happen. Many of the OEMs that are putting out requests for quotes, for new systems, for new vehicles, with new production. Start of production in the next couple of years, are now including, large quantities of cyber security requirements as part of that RFQ. And we're seeing them coming out now one after another. RFQs that include all the cybersecurity requirements, and lifecycle management requirements. So there's a big change, 2020 is the going vehicle cybersecurity.
Yakir Machluf: (43:30)
Thank you for those insights. Adi, can you contribute a trend for our audience?
Adi Pinhas: (43:36)
I think, earlier this year, I met a few worried people that asked me if this is the end of [inaudible 00:43:43]. This is the end of software in vehicle and so on, and they couldn't be more wrong. There is no way back, vehicles are becoming a software platform. And especially the automakers, they are looking on the great product that Tesla are developing. And they're writing their own software. And in most of their cases, they are getting the software from companies like us for the Tier Ones, which means they get it in three years delay, and they understand the gap. They are starting to think about the vehicle as a software platform to see how they can work with companies like us that are developing AI and software and improve their products significantly from what they are today. So there is no way back, vehicles are going to become smarter and better.
Yakir Machluf: (44:33)
Thanks, Adi. Graham, a trend in micromobility?
Graham Gullans: (44:37)
Perfect transition because 2021 is all about the year of software for micromobility. So firmware on the vehicle, on the boards itself, and then cloud maintenance, right? The software that doesn't have to happen in real time on the vehicle but can be a little bit more persistent on the cloud. That's not something that has ever been part of micromobility. That's been... Micromobility is vehicles that are left on the street and need human maintenance and touch and care. The time to lower the cost is now, the land grab strategy was going away at the end of 2019. And the impact from COVID accelerated that transition away from scale at all costs down to lower cost of operations. And the way you do that is through software and connected smart vehicles.
Yakir Machluf: (45:26)
Thank you. So I do see here a question. And I do urge our audience, if you want to have your questions answered live, please do submit them in the QA box. But I'll address one of those. We have a question here. Will the cost of the pandemic make it harder for countries to fund major mobility project? And if yes, how will this affect VC mobility plays? Open mic.
Adi Pinhas: (45:57)
So I think what we see that especially the Big Five, Japan, Korea, China, the automakers countries, Germany, US, they consider the automotive industry to be a national treasure. And they protect them very much, there is a lot of knowledge, a lot of money over there. And they are going to protect it, they are going to find ways. They monitor very closely this industry, and they are going to make it work for them.
Micheal Dick: (46:30)
Yeah, that's true. It's also... We're getting into, as Adi mentioned, there is no way back. I mean, this is, in order to compete, the car manufacturers are going to have to put in their investment in the tier Ones are going to have to put in that investment in order to be able to compete, otherwise, someone else will eat their lunch. So I think from that perspective, it's going to become even more important for them in order to be able to compete and keep up their... They've been through a serious knock for last few months, in order to be able to recover, they need [inaudible 00:47:09] I know this is going to be their... this is the only way forward for them.
Graham Gullans: (47:13)
Lastly, I'll add that in my micromobility, it's much more set by the specific city rather than the country. So what you're seeing is the city's budgets for mobility is constrained. And typically, there's not an ability to fund projects such as micromobility. So from an investor's perspective, and from a micromobility operators perspective, it's again, allowing private companies to be sustainable so that it's... Can be on streets long term rather than necessarily tapping public funding.
Yakir Machluf: (47:47)
Great, thanks for those really insightful replies. And I think we've discussed some really interesting nuanced points today. And I want to thank again, our three speakers from Brodband17, Superpedestrian and C2A. Make sure to join us for the next installment of pandemic venture investment series by SALT, in partnership with OurCrowd, taking place next Thursday. Today, we heard from just three of over 200 companies in our portfolio. I welcome you all, to log on to ourcrowd.com, that's O-U-R-C-R-O-W-D .com, where you can see more technology startups and investment opportunities in both mobility and many other sectors. I want to thank again to our partners from SALT.