He exited for $200M— then bootstrapped his next startup to $100M in revenue. | Alex Hawkinson, Founder of BrightAI

Alex sold his last IoT startup for over $200M to Samsung. He felt the needed to build something much bigger, so he started BrightAI. The goal was to use AI and IoT to solve big problems for enterprises.

A few years later, he bootstrapped to $100M in revenue across just 7 customers.  Last quarter, he raised $15M in venture funding. He shares how he closed million-dollar enterprise projects before building a product, why he refuses to go after just one vertical, and some of the biggest lessons he's learned after years building startups.

Why you should listen:

• Why impact is the biggest driver for starting startups. 
• How to find champions and get enterprise design partners.
• How AI and IoT can combine  to solve real-world issues.
• How to make sure you don't get stuck in a niche forever.
• How to tell if you're on to something in less than 18 months since launching. 

Keywords
SmartThings, Bright, IoT, critical infrastructure, pest control, AI, technology, innovation, entrepreneurship, product development, AI, pest control, multimodal AI, revenue streams, platform scaling, product-market fit, early-stage founders, entrepreneurship, sustainability, critical infrastructure

Chapters

• 2:16 Selling his company for $200M
• 7:22 The V1 of Smart Things
• 9:20 Why being an outsider can help
• 17:58 First time vs Repeat Founders
• 20:40 First Use Cases
• 29:19 How to build a horizontal platform
• 38:47 Finding Product Market Fit
• 40:12 One Piece of Advice

Transcript

Alex Hawkinson (00:00):

There was this moment, it was funny, but my wife came down in the middle of the night, you know, and I had a smart app for lighting. I was always experimenting with crap in our house. and she came down in her underwear and all the outside lights and all the inside ones turned on like party mode. And just like, this is stupid. Like who needs smart lighting? No one. It definitely took me a while to recognize what types of problems are worth solving. What I mean by “you should know in 18 months” is you should see it. if the pattern is not starting to emerge, it’s probably doing the boulder up the hill thing, and that payoff's not there. This opportunity to make the world go from sort of deaf, dumb and blind to sort of awakened in a sense, you know, and all the positive and negative implications of that. But where you can bring intelligence into these physical spaces. And in the case of Bright, you know, all the critical infrastructure that Western Civilization relies on.

Previous Guests (00:47):

That's product market fit, product market fit, product market fit. I call that the product market fit question, product market fit, product market fit, product market fit product market fit. I mean, the name of the show is product Market Fit.

Pablo Srugo (00:58):

Listen, if you don't want the show to like move up the rankings, you don't want it to get better guests, totally get it. You know what? Don't leave a review, just don't do it. Why would you? But if you wanna help out, if you want better and better guests, if you wanna help the show move up the rankings, then take literally five seconds and hit five stars. Thank you. 

Alex, welcome to the show.

Alex Hawkinson (01:16):

Hey, thanks for having me, Pablo. Great to be here.

Pablo Srugo (01:19):

Well, it's great to have you, man. I mean, you've had such a long history with startups. You started I think seven different startups. And the last one, the one before BrightAI, which you're working on today, Smart Things, was acquired for a rumored- I won't put you on the spot to confirm or deny, but for a rumored, you know, $200 million or so, it was definitely, you know, huge, huge aquisition. Very huge success. And you know, in the internet of things, kind of space no less, which, you know, hardware is notoriously hard. I say that with firsthand experience because my startup was in the hardware space in the IOT space. And we took a beating man, we <laugh>, we took a beating. So you know, I am happy to share that story as we chat, but I guess let's start there. You know, like we'd love to learn a bit about what was Smart Things, how did you get into that space? And I know that was part of the origins for BrightAI, so, we will kind of weave into that later. 

Alex Hawkinson (02:16):

Yeah, cool. Yeah, no, it definitely led to it- I'm sure everybody's like this, but I love learning. And so my life has been sort of this series of lessons and you sort of try to get better in each one and, you know, along the way. But as you said, I've built a bunch of different businesses over time and been lucky to have some really, really positive outcomes without going through all the metrics, but you know, highly scaled outcomes that you dream about and learned a ton along the way. And now in a place where I love not just building businesses still, but helping other entrepreneurs and so on too. So I was really excited about the chance to have a conversation with you because of your, your network and audience and things.

Alex Hawkinson (02:57):

So yeah, so SmartThings. You know, I had built a number of sort of cloud and SaaS companies before that and honestly just got, I was getting sort of bored with the niche I was in, like all of the entrepreneurial signals would be to you know, keep going in the vein where I had this existing experience and track record and I'd never done anything in hardware before and I'd had some other outcomes. And so I was in a space looking for what's become a really big life learning for me. Like you should solve- you gotta have a great team and all these other things, but like, you know, you should solve the biggest problems you can go after. And I was yearning for bigger problems to solve. So Smart things was born. I have a- part of my extended family has a place in Colorado up in the mountains and arrived one year to see it really damaged by a freezing and flooding event and have this sort of, what the hell moment?

Alex Hawkinson (03:50):

'Cause you know, at that point in 2012, we had a Kindle that could download a book over the air, you know, the kids were like watching some, you know, Dora the Explorer, on some sort of device in the car. It was like, how is this physical space offline? And you know, I just started tinkering. I hadn't been in the hardware space, but on the side I was like, certainly ADT and some of those services weren't available up in the mountains. So that was like, the advantage of my situation there was kind of really, really remote. What year was this? 2012. But I did have cellular signal out there and I started tinkering and building a kind of connected sensor hub that I could put in the house just to have eyes on the house. And realized this sort of big aha moment for me was I had come from not a hardware background.

Alex Hawkinson (04:35):

And I think it's sometimes very useful to have, you know, come from an outside space and look at something fresh. So having been in software developments,  I was like, how do I build a firmware for this thing is crazy, okay, if everybody's building connected devices and IOT is maturing, there's gotta be, - with your smartphone, you saw a couple years where it was just a phone and then the app store emerged and people were building apps and now I barely use my phone as a phone anymore. It was like, these connected spaces are gonna be similar. And so the idea with SmartThings was, you know, there's gotta be a, a, a platform for physical applications and most people don’t know this, but the company was actually born as the Physical Graph Corporation, it was the name of the company.

Alex Hawkinson (05:19):

And super dorky, I think cool. But you know, the idea was like, if the knowledge graph happened with Google and that way indexing the world's information, these are outdated now, but you know, the social graph was emerging because of platforms like Facebook, you know, there's gonna be a physical graph where IOT enables the world to sort of be connected and then software to be written to make the world smarter. And you get the idea in Bright later, you know, in this, but we had to solve a problem, and tell people what we're doing and you know, my neighbor's not gonna sign up for Physical Graph Corporation, you know, so we invented the brand Smart things, you know, put out a Kickstarter campaign about this open platform, fun to go back and look at it sometimes now. And, and we just hit all the right things at the right time and you know, became a really big platform.

Alex Hawkinson (06:05):

So ramped it up. It's become, you know, today it's 350 million households, it's 88 countries, you know, more than a million events per second flow through the platform now. It's just a mind boggling sort of scale. And there was an incredible learning experience that I can chat all day about, but, you know, it was ultimately acquired by Samsung. There was a horse race with Google Bot Nests, and a lot of the tech titans were like, okay, this IOT and smart home thing is gonna happen. We should have a play in it. And a a lot of things went right, and then I stayed on for a few years to run it. You know, just learning inside of Samsung is fascinating and making sure that the platform sort of fulfilled the vision that I'd had for it. And that led to Bright, which I can get into, but great experience, incredible team, you know, worldwide problem and all of that. So I'm very thankful for it.

Pablo Srugo (07:02):

with SmartThings. My question is, as an outsider, I get the idea of building a product, of building a platform and allowing others to kind of build apps on top. I get that high level, but what was like the V1 product? You mentioned a Kickstarter, is this something built on top of like a raspberry pi? or Like where do you fitinto the stack?

Alex Hawkinson (07:23):

My first one, I've actually got it over there. I could go grab it if you want. It's like an arduino, like an unholy Arduino based fencer hub. I've got it in some glass back there. And then once we did the Kickstarter, we recognized, pretty early on, that there's nothing off the shelf we could build that was for purpose. Everybody was trying to make their money off the hardware and it was like expensive and not open, so we ended up building a hub and then we thought, oh, there surely will be a bunch of you know, devices that will wanna integrate with us right away. But of course, I ended up having to build five sensor products, things that are common today, like a smart plug for turning something on and off, and a bunch of different types of sensors so that you could put basic applications together. And then it sort of stimulated the world so that we sold these Kickstarter kits, which were- if you're a homeowner, you can buy these things and make your home smart, you know of the, there's motion here, turn on the light over there. 

Pablo Srugo (08:23):

So it was a direct consumer play. It was like a multi-product approach for consumers to automate different parts of-

Alex Hawkinson (08:28):

Yeah. And then a developer toolkit, which came with a hub, but then a thingshield, we called it, it was like a custom Arduino shield they call 'em, you can put on top of Arduino and get whatever sensors and stuff you wanted to do. So we had this nice combo of kind of regular geeky homeowners you know, buying it. And then we had thousands of developers that signed up to hack on the platform. And that was that,  we were open from the beginning in that sense that of course that has a lot of challenges with it, but it also made our kind of the spirit come alive for the platform. 

Pablo Srugo (09:03):

And so, you know, this obviously turns into a huge success. You get acquired, you go to Samsung. Why do you decide to leave and do something that at least from the outside seems very similar or at least like in the same space? Like what was kind of left maybe unfulfilled, that pulled you back in?

Alex Hawkinson (09:20):

I think as you get older, for me anyway- I, one is I love building you know, creating products and companies and teams, but you’re also out for impact too. And there was this experience, during SmartThings, I think as good as it was getting, it's a great platform, great outcome, love the team that keep, keep building it, but we was sort of trapped in the smart home space, and it felt like, you know, there's this moment, it was funny, but my wife came down in the middle of night, you know, and I had a smart app for lighting. I was always experimenting with crap in our house. and she came down in her underwear and all the outside lights, <laugh> turned on like a party mode. And she was on display, even though- there's that movie The Watch, or something. this year there was a horror film where one way mirrored glass and you're being watched from the outside. she sort of pictured herself this way even though nobody's watching, but she's like, this is stupid. Like, who needs smart lighting? No one. you know? And I was like, well, some people really like it, you know, et cetera. But that's emblematic. it sort of struck me as, are these smart home applications really life or death? A few of them are right. But a lot of the things are-

Pablo Srugo (10:28):

It's so funny. It's so funny you say that, literally the last podcast that I recorded similar, and it's funny how you need sometimes people from the outside, whether it's a partner or a friend that are just not so deep in to just kind of pull you out and be like, you know, are you sure this is it? Right? In this case, a company called Infinitus and born out of- if you remember 2018, there was that first voice AI example from Google where you could reserve something at a spa, right? Like it would automatically call a restaurant or a spa for you. and it was similar, somebody from this team, his wife was like “you have that tech and what you're gonna do is help people book restaurants without having to call <laugh> really?! like I'm in healthcare”. Like there's a lot of things. And so anyways, you ended up building this AI ,voice, AI for healthcare. Infinitus went on to raise a hundred million dollars plus, but kind of, you know, more in a similar vein, which is like somebody pulling you out and, and maybe helping you see a little bit, I dunno if it's bigger picture or at least like from a non-hyper tech person's perspective, like maybe more of the real world,

Alex Hawkinson (11:29):

Right? Yeah, totally. I mean, and we did in the platform for SmartThings, we saw people struggle to do stuff. They were in the home, there were more meaningful problems and then some outside. But you know, I was always struck, there's this moment where in the developer platform, somebody had built- a group of parents with quadriplegic kids had built a set of smart apps to help their kids control stuff in the house more. And you're like, okay, that's meaningful. That, that's a niche, but it's super meaningful. And we had this yearning for bigger problem sets. And so somewhere along the line sort of that unfulfilled physical graph more broadly, you know, SmartThings. companies grow a life of their own and they get into a dynamic with investors and customers and other things where they occupy a space and if they're successful, they can dominate a space, but it was clear that SmartThings had its identity and there was a lot of unfulfilled challenge in the world.

Alex Hawkinson (12:25):

And so, you know, somewhere along there you know, Bright didn't start as focused as it is now, but, there's a whole journey there of just saying it's, we know it's not in the home. Like a lot of these critical problems, things that Western civilization relies on, they are outside the home. Even if you rely on 'em inside and, and there's a whole journey there that so you know. I retired from SmartThings in 2018 started Bright in 2019. And we're definitely one of those overnight success stories now that we're coming out of stealth that sort of had, it had its big buildup, but it really does go back to, you know, just following your nose down the rabbit hole with even a space you don't have experience with. Like, that was the SmartThings origin. And this bigger picture, which is I think this opportunity to make the world go from sort of deaf, dumb and blind to, you know, sort of awakened in a sense, you know, and all the positive and negative implications of that, but where you can bring intelligence into these physical spaces. And in the case of Bright, you know, all the critical infrastructure that Western Civilization relies on. But that's how it sort of emerged.

Pablo Srugo (13:32):

And I know you've gone on and like you said, you, you came out of stealth now. you've done a hundred million dollars in revenue with no funding, which is absolutely incredible. But take me back to that early time. You said it was kind of a journey to figure out the real use cases. What are the specifics that are like, when you leave in 2019, what do you do first?

Alex Hawkinson (13:49):

For a while it was just the close network of co-founders sort of thinking about what are the modern technologies that, if we were doing something like this again, what would we build it on, et cetera. And then it was- I'm a big believer that you take venture dollars once you know what the pattern really is. And you know, there was a sense that I knew it was gonna be these critical services, but I didn't know the structure of how those are even run, like I wasn't a guy that was from power distribution, the water supply or like these critical- like, these things. I just knew about these underlying technologies. So in the beginning, we just went out and talked to people.

Alex Hawkinson (14:30):

Really, it sounds crazy, but you know, in my case we looked at who services critical infrastructure, you know, and it was often-  found this niche in private equity channels. I'd never done anything related to private equity. I just went venture backed, bootstrapped all the way to exited to public companies that were post private equity, had no idea about it. But it's this incredible part of the capital chain that privately owns massive entities that are things that you rely on every day that you've never heard of before. So it turns out a lot of the critical infrastructure service to buy private equity owned enterprises. So like even-

Pablo Srugo (15:06):

You're talking about electricity, water, utilities?

Alex Hawkinson (15:10):

Yeah, yeah. Like, an example of a customer now would be Azuria,which is a great customer and partner of Bright AI. They are a company you've never heard of, but you're certainly a customer of like all of the water pipelines for fresh water and sewage like across the US Azuria- when those water pipelines need maintenance or inspection, which happens a lot, they're owned by the municipalities, but the service company that actually services all those, Azuria is the market leader in doing that. And can talk all day about how that works, which is so fun to learn about these industries that I had no idea about. But you know, they are out there and they're owned by a private equity sponsor. It's a multi-billion dollar company. They do 60% of the water pipeline rehabilitation in the country, and you've never heard of 'em.

Alex Hawkinson (16:01):

And they do something super essential for all of us. So we, I went through and found some of these companies and found a forward-leaning management team where I was like, look, you're not a technology company in the way that I think about it. You know, you, they'll call themselves a technology company, but I mean in terms of a modern tech platform company. and a really interesting thing that's happening now is, why is the world accelerating? Well, it's not just one piece of the tech stack. There's no-, you can't go to them with a mobile app. It's like IOT and robotics and cloud. And-

Pablo Srugo (16:33):

But did you go with them with that kind of an idea or were you very open about, Hey, I just wanna do something in IOT. Tell me about your world, your problems. Do you know what I mean?

Alex Hawkinson (16:44):

It was very clear to me that the reason the world is accelerating technology is the stacking of these multiple tech layers together. So it was- I'd always been passionate about AI back in school and other things, and it was clear that the age of AI was coming and we can chat more about that. And so we had this thesis about, you know, you can unlock a real time view of the world that makes you go from reactive kinda the way the Romans managed infrastructure. And we could go into that, and that's kind of still the case today to this post Roman empire way of managing infrastructure, like it's time. So we had that idea, but we didn't know what would that mean for water pipelines? 'cause I had no idea about water pipelines. So what does that mean about pest control? I had no idea about pest control. So we would collaborate with the e level of these companies and their ownership and say, we have the capability to build like next gen this post Roman era solution and you know about your industry, let's have a baby.  basically.

Pablo Srugo (17:40):

by the way, just to interrupt you. Do you think you could have done this without your background? Like sometimes I think, you know, your first business has to be something, not simple, but  where the value prop is just kinda like right there. But for your second or third one, you can go after these big bigger ideas. You think that's true?

Alex Hawkinson (17:58):

I do. I think you can get lucky early on and, you know, then you aggregate. if you're good at surrounding yourself with the people that then can take you into the space, a more complex space. But for me, it just definitely took me a while to recognize what types of problems are worth solving, you know, what makes a good business, you know, what makes a good team. And then how the world can just beat the crap out of you, if you're naive about certain things. And so I had you know, really experienced failure too. I mean, there were times when SmartThings, days where you'd start to hit things- people started to depend on it. And we'd have days where we would add, I'm not kidding, more devices would join the network on that day than the history of the company in the two years before, you know, where you'd just be like, we were like, oh my god. You know,, and then there's times where it was slowing down and it was like, it kind of going down on its own weight and we didn't know the way out. And it was - I certainly lost a lot of biological years of my life, you know, solving those problems. But you do get sort of hardened by the world, and I think what we're solving is an actual really hard problem.

Pablo Srugo (19:02):

And there's also a credibility piece, getting into the room. I can't imagine, you know, getting into that room with the CSO and getting the time and attention that, you know, that they're giving you.

Alex Hawkinson (19:11):

Yeah, it was definitely built on fate the first time. It's like, trust me, I can do this. Let's pair up. And you know, the model was: we didn't have the pattern figured out yet, but it was basically we will, we'll conceive of this thing together. You'll have this for you,  you'll have the advantage in your particular industry and we will see what the common building blocks are on the other side of it, and we can apply those to other industries. Also importantly, it's not like we're just gonna toss this over the fence, 'cause you would know what to do with it. We will operate this for you on an ongoing basis. It's gonna be a platform and you need that and here's why. And so we, that sort of bootstrap model, is partnering with big companies that believe in you, believe in the space you're trying to solve.

Alex Hawkinson (19:53):

You have to sacrifice some market advantage or IP or some other things and different cases to sort of navigate through that well. but the flip side is you have product market fit, and coming out of that, it doesn't mean it's a good business model or a good platform yet, but you know, you're talking to customers. You're not just building it for nothing. Like you see it front and center like, okay, here is, here's the solution that will solve the problems in this particular industry. though for us, then the big challenge is abstracting that to, okay, how do we build it as a repeatable pattern? And that's its own whole journey. 

Pablo Srugo (20:24):

And even before that,, I'd love to go deep on at least just one of these, which company was one of the first to be, yeah, you know what, let's do something together. And then what was the use case and how do you figure it out? And how do you kind of work your way towards a product? Like, just going really deep on that I think would be super helpful.

Alex Hawkinson (20:40):

A good example might be- we'll take, I mean each of these are, are pretty good. But as we get to the platform at some point, I'll tell you there's different facets of types of solutions that we see and so on too. But pest control is a pretty good example of this. I suppose it's an industry that everybody can understand, but especially during the pandemic, it became really important that, say a food distribution warehouse doesn't have, you know, pest vectors, disease vectors coming into it. We all got sensitized to that. Everybody had their own personal journey around covid, but, you know, but that's one thing that moved up in, in the world's consciousness. So there, we went out and we had a private equity based company that called Pelsis that I'd never heard of before. Again, that's sort of the largest distributor of pest control products in the world. Met with our leadership team, talked about our capability set, and ultimately landed on an initial product that we would build together kind of hand in hand. And that sounds really idiosyncratic, but it's a connected AI insect, light trap, <laugh>. So he'd been in- these seem really specific, but you know, we hatched this idea for products with them

Pablo Srugo (21:56):

And I love that. So, yeah, like how does that work?I know nothing about pest control, where does this slide go? Like what does it do? 

Alex Hawkinson (22:01):

At a warehouse or a restaurant where there's one of those FLYlights that has a blue light or something and there's a blue board behind it where flying insects get stuck on it. So it turns out a business I knew nothing about, but they were the biggest manufacturer of these products in the world. it's in the food distribution warehouse, it really matters. Like if a certain type of bug shows up, you shut things down. 

Pablo Srugo (22:21):

Oh, interesting, interesting. Because what they just, they reproduce or they're dangerous or?

Alex Hawkinson (22:25):

Yeah, they're the carriers of disease, you know?

Pablo Srugo (22:28):

 I see, Okay,

Alex Hawkinson (22:28):

Now we're doing all pest types, but this one was one where, okay, you guys have a right to win. And the problem was they would walk through it like, okay, where do you not have the labor or the capital's too costly or you have a big sustainability problem? These are three levers we talked about. And they're like, you know, minimum wage workers, it sucks. They go to food distribution work, whereas they have to climb up a ladder to pull the glue board off and look at it once every X weeks. Right? And then if there's something there, it's usually already been a problem -

Pablo Srugo (22:58):

Even so they were pulling it out and looking the bugs that died and being like, wow, this one here, danger,

Alex Hawkinson (23:03):

There's a problem. Let me report on that.

Pablo Srugo (23:05):

Incredible.

Alex Hawkinson (23:06):

And it's usually long after, there's already a bigger problem because you didn't see it, you saw it once every 30 days, you didn't see it when it was happening. 

Pablo Srugo (23:11):

Who would've thought, right? Like this is just so, you said idiosyncratic, but I love it, right? Because it's just like- you know, but it's a massive problem.

Alex Hawkinson (23:18):

The answers are in the details. I mean, I would say we're building a general platform, but the values and the depth, you can't- this is not surface level. You have to go all the way down to the specific on the ground reality of what is actually the problem. And you know, in this one, so we built, now, you know, hence, we have uses our full platform and end, but it's equipped with modernized sensors and multimodal AI in this light that you would never think otherwise of. But in real time it can do AI driven recognition of species and-

Pablo Srugo (23:52):

using like a camera or something else?

Alex Hawkinson (23:54):

Multiple sensors of different types. And 'cause there's another thing about multimodal AI we can dork out on if you want to, but often it's not one sensor type that gives you the answer. It's multiple at the same time. That's why we have eyes and ears and feel and touch, smell and you know, like other stuff, if, if eyes were good enough, like one eye were good enough, we would've just evolved with one eyeball, you know? But we didn't.

Pablo Srugo (24:15):

No, that's true. Although, intuitively, and I'm a tech person but not an engineer by any means. So like quickly I get outta my depth. But you would think to know what type of insect it is, you would just need eyes. But I guess not

Alex Hawkinson (24:27):

Visuals eye, but it might not be the visual spectrum. As an example, like two, they may fluoresce in different light wavelengths of light differently, where some physically, a bug looks exactly the same, but it's not, or huh, or other pest types are different in terms of smell and sound and other things too. But all these domains, but the point is, it's a multimodal ai, thing that sits inside this light. It tells the operators these things in real time, you know, how bad their problem is and they can be much more surgical in what to do about it in real time. It goes from this reactive time-based inspection way the Romans did it to hyper modernized, AI driven. You can predict if the problem's gonna be a big one based on how fast bugs are being sort of seen by this thing.

Alex Hawkinson (25:11):

And everything changes. So you get this massive labor savings. You have, you don't have the damage from these infestations, which has a huge capital cost. And of course you don't have to use the same amount of pesticides and stuff for sustainability, because you're not carpet bombing proactively because you don't need to. Most of the time you just do it right when you need to, right where you need to, that kind of thing. And that's sort of a proposition that's emblematic of both an early customer journey. Like you gotta get that all the way built. It was a pain in the booty,  and it's there, but then you have to unlock that. And of course then there's, there's that pattern, you know, underneath that that has emerged into our platform that, you know, is why we raised the venture finally now. And we do see the pattern that we're launching. But that's sort a good example of like-

Pablo Srugo (25:54):

Yeah, I think that's a great one. And, did it also enable a different revenue stream for- 'cause normally you would just sell a light and you're done. Is there now, a recurring revenue stream as a result of this AI kind of item ID?

Alex Hawkinson (26:06):

Oh Yeah, totally. I mean, in all these areas of critical infrastructure, it's amazing. you can use the word, it's not a zero sum game or I like to use the phrase whack-a-mole. I don't know if you know that game from a carnival where you whack one thing and another thing pops up and add another hole and stuff. Like, there's a lot of businesses that are like whack-a-mole where like if you do something here to like, say decrease cost, like the quality of the service goes down. So it creates another problem. Otherwise, the beauty of this sort of modern AI plus IOT platform that we're building is like, it's awesome for everybody. So like for the company that produces it, it goes from one time to a recurring revenue stream. It's way more profitable in that sense.

Alex Hawkinson (26:48):

It's a much higher value to the end customer, which might be a food distribution company or a brand that you've heard of or something that produces products you buy every day in a grocery store. For them, it's like they don't have the factory shutdowns. They can verify for insurance and other things that they don't have a problem. They can, you know, do all those things. Of course for consumers, it's like less parts per million of pest things, pests in your food <laugh> and also less toxins, you know, for the whole earth. Everybody wins. So it's like, it's great. And then finally things like fewer truck rolls because you don't go when you don't need to and you know, all those things that happen. So it's like creating a new revenue stream, but it also has all these other benefits.

Pablo Srugo (27:30):

That's right. Well I think it's interesting. Like I find, when I think about this and I put myself in the position, imagine you were pitching me this, let's say, right? Or somebody was pitching this, I'd be like the value prop, super clear, right? Like it's just a no brainer. I would think about- and you mentioned the platform, so I think we can get into that now. Like it just seems so hard to do at scale. Like, okay, yeah, you build one of these lights, got it, right? Like how do you build a hundred, a thousand? And then how do you move from that to all the other use cases that you probably have in your mind that you wanna solve? I guess that's where the platform comes in. But yeah, we'd love to learn, learn more about that part of the journey.

Alex Hawkinson (28:05):

That is an entrepreneurial just hard learned lesson, 'cause I'm sure there's many founders that you talk to or that listen to your show, you know, that you can end up in a niche, like SmartThings I was telling you I never intended it to be a smart home company. Even then it just ended up being a prison of smart home stuff. You know, if from a negative standpoint it was only doing that and that's where its right to win was, the brand was, consumers aligned, good investors, everything else. Like you have to have the discipline to take a step back and say, I'm not after becoming the pest light company. Because if I just went down that niche and blew that out, the vision was always that there's a bigger impact on the world to be had.

Alex Hawkinson (28:45):

So we were also looking at our first few customers: what's the commonality and how do we let go of certain things that can exist outside of Bright and what is the core of what we're gonna do? And there's - I would say there's a discipline and experience that leads you to that type of thing, but there's no magic formula for it. But  it's the key to whether you become sort of a one hit wonder or really narrow in a space to- the biggest companies in the world end up being horizontal platforms like period. And in terms of value, but-

Pablo Srugo (29:19):

It's kind of ballsy, right? Because the most natural thing to do would be, you found a way to deliver some value. We'll just go find more of those things here. Go find more pest control companies, just do it 10 times, a hundred times.. But to be like, no, no, we're gonna go out. It's tough at the beginning, obviously if you get it right, it's massive, but  it's kind of high risk, high reward.

Alex Hawkinson (29:35):

Yeah. So certainly lots of fights, you know, internally about that. 'cause Definitely lots of people think exactly like that. 'cause It's what staring you in the face is, let's do, like, let's blow the doors off on that one, one vertical. And it definitely takes some sort of conviction to say, that's not what we're here to do. like, yes, we can grow in that branch, but you know, the focus is, and the the mission right, is to awaken critical infrastructure broadly, you know, to go, from this era of reactive based management of these, these critical services to a place where we're the ones, guys , we are the change we wanna see in the world. We're gonna be the ones that usher in this post roman era and, you know, unlock productivity and sustainability and capital efficiency and all that. 

Pablo Srugo (30:19):

so you think it helped that you weren't venture backed to be able to make those decisions?

Alex Hawkinson (30:24):

For sure. Yeah. too early, you know, we could have gotten- 'cause often if you take venture too early, you end up in the trap at some level. If you got professional investors around the table and you have to deliver a non-linear scale business out of those investment dollars. And if you don't see that pattern early, then the pressure arises to find that space. And it really took some years here, we had to build some projects, we had to have some pickup, we had to have a few of these under our belt at that level of depth that I was just describing to sort of see the common pattern. So I think that's right. That is that the difficulty then is in popping out when you see the chance to accelerate, you know, often people will stay in that bootstrap mode and all this becomes like a pride, you know, like we don't need it. We can get there another step. But once you see the pattern, you know, humans aren't that smart, probably others will too. You better get on it, and magnify it, you know, once

Pablo Srugo (31:19):

I think,]you make a good point, looking at VC, like the tool that it is versus, because you have people on both sides. Like one is like, I wanna raise VC 'cause I wanna be able to say I raised $20 million or a hundred million dollars. That's not good. Then you have the other spectrum's, I never wanna touch VC 'cause I don't like them. I wanna be bootstrapped. again, not great. if you think of it as a tool, you're like, if I need it, I'll raise it. If I don't, I won't. Like, depending then I think that's the best balanced approach. And just to add to what you were saying, I think another thing is having too many stakeholders can be negative in the early days, in my opinion. Because, you know, you need to have that kind of highly opinionated say vision. And frankly, there's so much risk early on, so many unknowns that if you have too many people almost doubting you abiding on it, I don't know, it can get noisy. 

Alex Hawkinson (32:07):

Yeah, Totally. Absolutely. So, you know, you get that time, those quiet moments in your soul as a founder where you can just be like, why am I really here? And what are we doing? and you're not accountable, you know, you push accountable to your customers and your employees and things, but  you're still - the steering wheel is yours, you know? Totally. So I don't take it lightly from past experiences of when we did do it. So we saw this pattern and you know, it was time for bright to do it. But I think that general learning of being the goal isn't-  you hear this over and over, the goal isn't the round. I mean, just to raise for its own sake is very dangerous and risky from the standpoint of just being good to the other side of the equation too.

Alex Hawkinson (32:47):

Like on the other hand, I mean, VCs, the best ones are more than money. They have great experience on the patterns in building great businesses and stuff. So it's like, you gotta pick that moment of, I'd say it's when you really see the pattern, you know, and you can see this repeatability where you should build an advance of customer need. you know this requisite set of products because you just know that there's going to be a ton that we need the specifics of what you're building. Once you have that feeling, then you'll get a lot of benefit, not just from the capital, but from a great investor that can help you magnify,, and pace that out so that you, you get more of the spoils than you otherwise would've, you know, if you were doing it all on your own. 

Pablo Srugo (33:31):

So the other- so maybe going back to kinda the main storyline,, the thing I really wanna understand is what do you do to make sure you build out a platform? I assume one part of it is making sure you're doing multiple different types of implementations, you know, concurrently, so you're not just pest control, but then if that's the case, how do you not drown? You know, because you've gotta worry about so many use cases, products, sensors, how do you just set that up?

Alex Hawkinson (33:57):

It's a tough one. I mean, I think that our biggest risk is we've gone through chapters of, it's hard to deliver, you know, a diverse set of things like this. Exactly. Getting into that. Like, it's gonna be hard, you know, but what are you gonna do? 'cause it's true that the learnings come from those multiple spaces. So there's great businesses to be built in specific niches all over the place and like a lot of people, you know, can have a very productive outcome in that regard. For me, life is short and, you know, you only get so many swings at the plate and why the f** would you do something small if you can go for it, you know, you might as well, it's what -

Alex Hawkinson (34:41):

And so it's hard. But you just, there's really no substitute for just being relentless is one of the values, you know, like to say in every company I've ever built, it's like, be curious, be passionate for impact. Be empathetic to all the people that don't have the same things we do in terms of knowledge, skillset, otherwise, and be relentless in getting it built. So,, you have to- I think you're right, you asked the question on the platform, you do have to make sure it's applicable to the multitude of spaces that you're sort of imagining it can go to and challenge yourself with those implementations. Not in all cases. I mean, I didn't think we needed- , we have seven verticals, we have seven customers, you know, today. 

Pablo Srugo (35:21):

But specifically even on that, do you have different teams, one for each customer? Do you make sure everything you build can be used by everyone? Like what specific things are you doing to make it manageable?

Alex Hawkinson (35:30):

We -so we've evolved that over time. So of course, there's no one organizational design that makes sense, but in our case, we started with just one project. We didn't take on more than one. As we started to have a gut sense on the building blocks, we took on a second and had, you know, the teams that are responsible for those common building blocks kind of separated from the clients and watch that tension emerge as you had client-specific teams and then the underlying platform team, you know, as the platform doing what it's needed for each each client. How do you make sure the client is served well, it doesn't get slowed down because you're trying to genericize this platform underneath. And there's a tug and pull for a couple years where it was a, a dystopian nightmare of, of work, but we got- you get there eventually and if you keep at it.

Alex Hawkinson (36:20):

So that's what we did. Today we're emerging much more where, you know, a much higher percentage is now in this, in this centralized platform team. And it looks more like field deployed vertical specific teams that are based on the economics of that vertical. You know, those should be self-sustaining. Our platform team and the products we're building, we're no longer looking to individual customers to fund that. That's why you bring in venture dollars. We're building those reusable building blocks when it comes to the specifics, the application for the customers. Mostly we look at those to basically be bootstrapped in a sense, you know there's been a couple examples where I've had enough conviction we just did it, but hope what I'm saying makes sense in a sense- 

Pablo Srugo (37:02):

It does. And so just to make sure, I mean, seven customers, a hundred million in revenue, I mean, these are massive, these are massive enterprise contracts. 

Alex Hawkinson (37:08):

Yeah, they're big. And it speaks to that being a pretty experienced entrepreneurial team. You know, I'd like to say my CTO who's just amazing, Kiran Bharwani, you know, he was head of all autonomy at Rivian, you know, before this and head of all autonomy at Caterpillar before that, huge industrial life or death things. like he drives a car every day that he wrote the code for that his children ride in. And it's like, it's real, it's real on the road. <Laugh>, that's cool, but it's also not a toy, you know, it's life or death, real things. And so we had, you know, similar things in SmartThings where you have to have a team that's, got that hardcore aspect to it, but that's how you get those larger deals done too. You can go and say, I know how to do this.

Alex Hawkinson (37:49):

You can rely on me. And the outsize value, the positives is that sort of made it so, our initial targets couldn't be a little mom and pop, you know, localized infrastructure maintenance companies. We had to go after the big ones that had enough, they have enough earnings and financial power that they can absorb an investment of the size that we're doing. And now the challenge is, you know, how do we make this thing that has this huge value and takes a couple years to implement for these these previous customers, How do we make that available for the two person business in a local niche somewhere someday that they could actually have the benefits of this awakened world in the same way that we've talked about, but we're kind of graduating down where it's like trying to make it more accessible in a sense. Yeah.

Pablo Srugo (38:33):

Perfect. Well Alex, let's stop it there and I'll ask you the two questions we always end on. The first one is, and it's interesting actually for this one, like, when did you feel like Bright AI had true product market fit? 

Alex Hawkinson (38:47):

Oh, when we saw in multiple customers in totally different industries, the level of value that was emerging from the toolset that we had built, we had this, in building the platform, we've got this kind of, this idea of site of massive visibility, like real time understanding what's going on in the world at any time. These tools for the human workers you send in an environment and then robotics toolkits for autonomous, you know, autonomous maintenance and operations and inspection and things too. And I think it was when, you know, it's not just one application. When we see two totally different industries, like, my gosh, you see a customer getting, doubling their labor efficiency, meaning they can do twice as much work with the same team doubling capital efficiency. Like the things are higher quality last, longer less waste, you know, et cetera. And then the sustainability goals, it varies in terms of people's mentality about that, but certainly it's high in my mind . You could see that it's using less resources, less truck rolls, less chemicals, less all that. And you're like, you knew it. You're like, if we can do that across two totally disparate industries, we're onto something here. And so that's where we're going now. Like how do you go from, you know, these seven to certainly hundreds this year to thousands, you know, in the coming years.

Pablo Srugo (40:00):

Perfect. And then last question, and I know you've obviously been through a lot of startups, but also you work with a lot of founders. What are some of the most common pieces of advice that, that you find yourself giving, especially to early stage founders?

Alex Hawkinson (40:12):

I mean, there's a bunch over time. So I'll just unscripted give you a few that are up for me. I think to give you an example for me, calibrating, I feel not to be mean to previous companies and I'm certain they're not including SmartThings in this, 'cause I'd had this realization by then, but don't solve a dumb problem. Like, it may seem easier and more accessible to you, but the best people and the best capital don't wanna, don't wanna do it, you might as well colonize Mars, right? It's like in some ways easier than if I told you i grew up on a lake in Minnesota and you know, if I was like with an eye dropper, I wanna remove every bit of water out of this lake, one eye dropper at a time, that's totally doable, but it's a terrible, useless mission <laugh>, nobody would wanna get on a huge human effort, but in some ways it's like easier to go for the massive, meaningful, you know, business.

Alex Hawkinson (41:02):

So, you know, really be thoughtful because a great team, if you're a good team builder, you need a great team, but a great team working on a dumb problem is a super dangerous thing because they can push the boulder up the hill and kind of make it work, but you're just wasting your potential and the potential of the world and everything else. So the importance of the problem really matters. Another one for me, and this is sort of related to that, is sort of timescales, you know if you're gonna be an entrepreneur, a lot of people just don't do it until it's almost too late. You know, you see these, there's lots of older founders like me, but they tend to have started founding things earlier. You know, if you're, there's a time when you gotta get on with it, you know, and you have an inclination to do it or not.

Alex Hawkinson (41:45):

But I think that once you get into the learnings of this mantra, it takes three to five years to build anything great and you should know in 18 months. And what I mean by that is that you have to give it time. things don't just flash into existence. It doesn't mean it's over in three to five years. It just means to build authentic, repeatable, massive value. It takes something like that. What I mean by you should know in 18 months is that you should see it. Like if the pattern is not starting to emerge, like you're not getting positive feedback loop from customers and your own gut and everything else, like you're probably instead of chasing that boulder- you're probably doing the boulder up the hill thing and that payoff's not there. So like, it's this combination of being relentless, but also being like using your time to like focus in on the right problem and switch gears when you need to stuff. So that's a couple of 'em. There's a bunch. I mean, there's no one-

Pablo Srugo (42:37):

That's perfect. Perfect. Well, Alex, thanks so much for jumping on the show.

Alex Hawkinson (42:40):

All right, Pablo, I really appreciate it and lots of, lots of future conversations I look forward to as well. So thank you.

Pablo Srugo (42:46):

Listen, when you go to a restaurant, you eat a nice, you know, meal. Maybe a fancy one, maybe not. Do you leave a tip? I assume you probably leave a tip. You probably leave a tip 100% of the time. Well guess what? A review is just like a tip and I know you haven't been leaving one. So just like the waiter that doesn't get a tip after hours of great service, I'm getting a little frustrated. So take your phone out and leave a review. It helps the show move up rankings, it helps us get better guests. It doesn't just help me, it helps weigh more founders. Thank you.