The Evolution of Miso Robotics and Flippy: A Discussion with Alana Abbott and Rich Hull

Alana Abbott, the head of product at Miso Robotics, welcomes everyone to the investor webinar along with Rich Hull, the CEO. They will be addressing questions from the audience.

Rich Hull, the CEO of Miso Robotics, shares his journey of joining the company about 10 to 11 months ago. He was an early investor in Miso and was brought in by the board and Ecolab investors. Rich has a background in operating growth stage technology-focused companies for over 25 years, including founding the largest Spanish language streaming service, VIX, which was later sold to Univision.

Rich Hull spent two years at Univision after selling VIX, where he oversaw significant growth of the service, making it the largest Spanish language media company in the world. Univision owned about 92 soundstages in Mexico, produced 7,000 hours of live content, and received Apple's TD of the year award. Rich left Univision about a year ago to pursue new opportunities.

Rich Hull joined Miso Robotics because he was impressed by the founders and early leadership who successfully created Flippy from scratch. He recognized the challenge of scaling a product from early stage to commercialization and believed his skill set could contribute to Miso's growth.

The speaker was brought in by the board to leverage their experience as a growth company operator. They highlight their previous business, which involved a technology stack for streaming video at scale, innovative distribution deals for Spanish-language content, and data gathering for generative AI training. The speaker emphasizes the importance of data in making strategic decisions and revenue generation.

The speaker discusses the dual sales channels at Miso, including direct sales to customers and a strategic partnership with investor Ecolab. Ecolab, a major seller of cleaning solutions to restaurants, provides access to 6,000 sales reps to accelerate Miso's sales. The speaker highlights the significance of these sales channels for Miso's distribution.

The speaker delves into the evolution of Miso's product, Flippy, from a burger-flipping robot to automating fry stations. They emphasize the significant revenue opportunity in automating fry stations, estimating it to be about a three and a half billion dollar opportunity for Miso alone. Flippy's transition to the fry station and its brand recognition as a first mover in food tech are highlighted.

The speaker discusses Miso's first mover advantage in the food tech space and the challenges of being a pioneer. They mention competitors entering the frying space as validation of the opportunity but note that they are steps behind Miso. The speaker acknowledges the benefits of learning from mistakes as a first mover and emphasizes the importance of data and product iteration for staying ahead.

The speaker emphasizes the importance of continuous product iteration for Miso, highlighting current deployments with partners like Jack in the Box and White Castle. They mention a full pipeline of sales demand and the excitement surrounding Miso's progress in the market. The speaker underscores the need for ongoing improvement and adaptation in the competitive landscape.

The next generation of Flippy, based on data from previous years, is set to be released around August and September. The new version aims to meet the high sales demand and be highly commercializable. The engineering team, a mix of original MISO experience and new talent from renowned companies, is working efficiently to architect this new Flippy.

MISO's primary focus is on Flippy, their signature product, with 85% of their attention directed towards its development. The decision to streamline products and concentrate on Flippy draws inspiration from Steve Jobs' strategy at Apple. The Innovation Lab serves as a platform for experimental projects, with the majority of resources dedicated to scaling Flippy.

The current market scenario highlights challenges in hiring for the restaurant industry, particularly in the back of the house. With a significant shortage of labor and escalating minimum wages in states like California, restaurants are facing economic turmoil. Flippy's automation technology aims to alleviate the burden on labor-intensive tasks, allowing redeployment of staff to more valuable roles and improving overall quality of life.

Escalating minimum wage impacts margins, making it tough to operate. Automating jobs with AI and robots saves jobs in the restaurant business. Motivation stems from saving jobs and improving lives, tackling world problems, and inspiring innovation.

Market conditions have led to increased demand. Startups often struggle to reach buyers in the growth stage, but the company faces the challenge of meeting demand with an innovative product. Creating the next generation of 'flippy' to address incoming demand and scale the business.

Investing in tech support, customer service, and nationwide technicians. Providing 24-7 technical support in English and Spanish. Fixing 80-90% of issues remotely with computer vision. Decreasing monthly burn rate by 40% to operate responsibly and increase shareholder value.

The next generation of flippy will be a game-changing product, twice as fast, and half the size. It will unlock tens of thousands of locations, decrease manufacturing costs substantially, and drive revenues to profitability. Filing a large amount of new patents to innovate and build valuable IP assets.

The $20 hour wage rate increase in California for restaurant workers has accelerated sales and the commercialization strategy for Flippy. This increase has generated a groundswell of interest, leading to more incoming inquiries. Flippy has attracted interest from major household names for deploying across multiple locations, with each location bringing a positive impact of around $20,000 per month to the restaurant's gross margin. Scaling this impact across 100 or 200 locations can create billions of dollars of enterprise value for big restaurant brands.

The delay in launching more Flippy units is primarily due to waiting for the next version of Flippy, which offers higher ROI for customers and the company, closer paths to profitability, faster deployment, smaller size, and lower cost. The next version of Flippy is designed to be easier to retrofit into existing restaurants, reducing overhead costs and making it a more attractive option for businesses.

Miso's approach with Flippy involves integrating it into existing commercial kitchens by retrofitting over fryers and under the hood, allowing it to work with existing infrastructure without requiring custom builds or engineering solutions. Flippy's unique value proposition lies in its ability to reduce overhead costs for restaurants by avoiding the need to replace expensive fryers, which can cost up to $50,000 to $60,000 each. This approach has been refined over seven years of research to ensure minimal disruption and maximum efficiency in kitchen operations.

Flippy's ability to fit onto existing fryers reduces failure points and operational challenges for restaurants, especially franchisees operating on thin margins. This feature makes Flippy more consumer-friendly and cost-effective, as it eliminates the need for purchasing new fryers.

Flippy's design as an AI-powered robot in a contained ecosystem sets it apart from competitors offering cobots. The safety features of Flippy, such as automatic stopping if a human enters its workspace, comply with stringent regulations for human-technology interaction.

Competitors offering cobots face durability and speed issues when scaling. Cobot's constant interaction with humans leads to durability issues due to frequent hits and impacts, while the need to operate at slower speeds in human spaces hinders efficiency, making them unsuitable for high-volume operations like restaurants.

The company's experience and data have led to a customer-focused product development strategy. By avoiding cobots and prioritizing customer feedback, the company aims to provide efficient solutions that align with customer needs and preferences.

The company opened an innovation showroom in Los Angeles to showcase its technology, including Flippy, to potential investors and customers. The showroom offers a hands-on experience with robots and food technology, creating a futuristic and interactive environment for visitors.

All employees are required to work with Flippy in the live commercial kitchen environment at the innovation showroom. This hands-on experience allows engineers to gather insights for better decision-making in engineering and product development, emphasizing the company's commitment to continuous improvement and innovation.

The food technology industry is young, with Miso being a catalyst in the space for the past six years. Innovation is crucial in this industry, but it is a messy and challenging process. Many big food brands have struggled with innovation and are now looking to partner with companies like Miso for more efficient and scalable solutions.

Miso holds over 20 patents, which create a competitive advantage and act as a defensive moat. Patents are a valuable asset that require significant investment and effort to defend. As the industry evolves, patents become more crucial in protecting intellectual property and deterring competitors.

Patents have fluctuated in value over the years, initially being highly valuable, then decreasing due to patent trolls, and now resurging in value. In the current tech-facing environment, patents are more valuable than ever, serving as a barrier for competitors and enhancing the overall worth of a company's intellectual property.

Miso has been developing AI technology for five to six years, predating the current AI trend. By leveraging their existing patents and industry-specific AI tools, Miso aims to create a new generation of Flippy with advanced AI capabilities. The focus is on deepening AI applications for specific industries, moving beyond broad functionalities to tailored, unique solutions.

NISO is actively utilizing open source tools to create unique restaurant use cases, leveraging AI and machine learning to enhance Flippi's capabilities. The focus is on developing patents and AI assets to stay at the forefront of innovation in the AI market.

The company is considering various exit options, including going public, getting acquired by financial or strategic investors, or exploring different liquidity events. The decision to go public will be carefully evaluated to ensure it aligns with the company's growth and shareholder value objectives.

Ecolab has been a significant strategic partner for the company, with a strong focus on distribution, sales, and product development. The partnership involves tapping into Ecolab's extensive sales channel of over six thousand professionals and co-developing products based on customer feedback. Ecolab's investment and collaboration have been instrumental in the company's growth and success.

The company is working closely with Ecolab on product development, leveraging Ecolab's customer insights to co-create new products. While specific details about Ecolab products are not yet disclosed, the collaboration with Ecolab has provided a unique advantage in terms of real-time feedback and trust in the development process.

The company has established partnerships with tech giants like NVIDIA, gaining access to cutting-edge technology for product integration. These collaborations with industry leaders offer valuable opportunities for innovation and product enhancement, showcasing the benefits of working with established companies on the forefront of technology.

The MISO Innovation Lab, located within the company's robot lab in Los Angeles, serves as a hub for groundbreaking ideas and experimentation. Projects like 'Sippy' and 'Chippy' demonstrate the lab's commitment to innovation, with learnings from past experiments influencing the development of future products. The lab's focus on cutting-edge technology and unique concepts drives the company's forward-thinking approach to product development.

The company's experimentation with 'Chippy' in collaboration with Chipotle yielded valuable insights, leading to the decision to integrate the learnings into the next generation 'Flippy' product. The experience highlighted the importance of efficient cleaning processes in robotic operations, showcasing the company's commitment to continuous improvement and innovation based on real-world feedback.

The company serves as a destination for customers and potential customers to seek guidance on innovation, helping them understand how to approach innovation and explore new ideas. Products and initiatives are developed through the innovation lab, showcasing the company's commitment to early engagement in the innovation process.

The distinction between the innovation lab and the restaurant, Cali Express by Flippy, is clarified. The restaurant near the campus operates as a real kitchen, providing a hands-on experience for customers to witness kitchen operations, ask questions, and understand cleaning procedures. The innovation showroom and lab are interconnected components, allowing for experimentation, education, and public engagement.

Cali Express by Flippy is located in Pasadena, California, and is open to the public. Visitors can observe engineers and staff working with Flippy behind the counter, gaining insights into food technology. The experience at Cali Express has been enriching for employees, fostering a deeper understanding of the company's innovative solutions.

Two original Flippy robotic arms at Cali Express perform a synchronized dance to background music, attracting visitors to capture Instagram videos. The unintended creative display adds a fun element to the showroom, showcasing the innovative spirit of the company and engaging customers in unique ways.

The importance of investor communication and shareholder engagement is emphasized, with a focus on storytelling and narrative building. The company actively communicates with shareholders through emails, Q&A videos, and fireside chats featuring key team members. Shareholders are encouraged to sign up for the mailing list on misorobotics.com to stay informed about market trends and company updates.

Sweetgreen has introduced robots into two of their kitchens, resulting in a 28% increase in margins. This move was made after acquiring a company and has been beneficial for the publicly traded company, which is required to report such data publicly.

The speaker has been actively communicating market data, company announcements, and detailed information to shareholders. This includes sending out long, detailed emails, public SEC filings, and maintaining transparency as an equity crowdfunding company. The goal is to maintain regular communication and provide full transparency to investors.

Investors can find further investment opportunities and detailed filings by visiting invest.metorobotics.com. Specific questions about shares can be directed to invest@metorobotics.com, with efforts made to respond promptly. The company has invested in customer support and investor relations to enhance communication and responsiveness to shareholders.

The company has invested in improving investor relations support to respond thoughtfully and in detail to shareholder inquiries. New teams have been hired to ensure that shareholders feel heard and valued, with a focus on incorporating investor ideas to enhance products and business operations.

The company values investor ideas and encourages communication to improve products and business operations. With over 30,000 investors, the company benefits from a diverse pool of ideas and feedback, creating a competitive advantage. Investors are urged to share their ideas for consideration and prompt response.

The speaker expresses gratitude for the community's thoughtful questions, insights, and ideas. The company values the active participation of investors and looks forward to continued engagement in future interactions. The speaker acknowledges the community's role in providing feedback and ideas for improvement.