Technology up, costs down: capturing the market’s sweet spot

By Paul Pescatore, Black-I Robotics CFO

I’ve run the finance operation of a number of companies since I returned to the States many years ago after my service to Uncle Sam in Germany. My philosophy — perhaps honed in that country — has always been to optimize the resources I had. Sometimes I had plenty of resources. Sometimes little. Sometimes I wondered where I’d find the next nickel. Whatever, I always focused on spending money wisely.

I earned an “advanced degree” about making products cost effective as CFO of a multi plant manufacturer. It’s been great training for Black-I Robotics, both in helping run the business and ensuring our products are cost-competitive.  The government was our most important customer when we founded the business in 2008. In truth, our only customer. Despite its reputation for reckless spending, when it came to us, Midas seemed to be calling the shots for the Defense Department. Things became a bit easier when we began working with universities, Raytheon, and others in the defense and automation industries. But not by much.

However, much to our delight, about five years ago, the high-tech devices going into our robots began to drop in price. Significantly. At the same time, technology became better. It was “Moore’s Law” in operation, which states that we can expect the speed and capabilities of computers and computer-based products to increase exponentially every two years.

That was no surprise to us. The core of our team here at Black-I made up the founding members of the team that developed a computer-based system for Advanced Drug Distribution Systems (ADDS), an Autonomous system that dispenses legal drugs at small, rural, short-staffed Veterans Administration facilities. We took advantage of declining component pricing back then, years ago, as we developed that system, which we eventually sold to AmerisourceBergen, one of the country’s largest pharmaceutical sourcing and distribution services companies.

Given our experience at ADDS, particularly our ability to develop economical products that enable companies to replace scarce workers with automation, we jumped on the opportunity to enhance the DARPA arm to sell into the commercial market. There’s no doubt in my mind that five or six years ago, we couldn’t have produced an arm that would be economical in the commercial workplace. Today, our arm can replace multiple workers, cut worker compensation claims, eliminate costs associated with fixed “dumb” robots and enable AMR manufacturers to offer their customers additional valuable applications. The fact is, our arm’s ROI can be measured in months, not years. It wasn’t an easy ride, but we’re pleased that we can offer our customers an innovative, economical system to help them resolve a range of problems that have plagued the warehousing and manufacturing industries for years.

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