Podcast #235 Painting the Future

TRANSCRIPT

Ken: Good day, and welcome to episode 235 of our Momenta Industrial Impact podcast. Today, I'm pleased to host Petr Jahn, CEO and co-founder of SprayVision, the first AI platform for industrial coating operations. Momenta led the Series A round for SprayVision, our 56th portfolio company. Petr's passion is applying his mechanical engineering, ingenuity, and new business development expertise to create innovative solutions for the coating industry. With over ten years of work experience, he has led and supported multiple coating technologies, sales management, and applied mechanics projects, working with diverse and international teams and clients. He is passionate about improving the quality, efficiency, and sustainability of coating processes and products and empowering customers with data-driven insights and tools. Before founding SprayVision, Petr Jahn was a general manager at Coating Technologies. He holds a master's degree in mechanical engineering from VSB, the Technical University of Ostrava. Petr, welcome to our Industrial Impact podcast.

[00:01:47]

Petr: Thank you for having me, Ken.

[00:01:49]

Ken: It certainly is a pleasure, and we are excited to officially announce that you're our newest portfolio company backed by our Fund Four, which Rockwell Automation supports. We're thrilled to have you as part of this. As you know, we always start with a defining question about one's digital thread. What would you consider to be your digital thread? In other words, what are the defining interests and experiences that brought you to this point in life?

[00:02:19]

Petr: Yeah. I'll expand a bit because there's a story connected to my education. I've always been interested in technology and business, so I chose to study at the Technical University. After my second year, I had the opportunity to apply for Erasmus, a student exchange program. Since my field was applied mechanics and the same courses were available at the University of Oulu in Finland, it was an obvious choice.

Applied mechanics involves structural analysis and fluid flow, such as the flow of air, which relates to coating technologies. During my studies in Finland, I met an Italian friend, and we spent almost a year together on Erasmus. After we returned, he contacted me about distributing Italian technology for coating lines, mainly in the automotive sector.

I was always eager to combine my technical background with entrepreneurship, so I agreed. Together, we established a local company in the Czech Republic. 

[00:03:43]

Ken: One might say you were destined for SprayVision. When I look at your background—mechanical and coating—and this deep focus that you've had on them, at least since university, what ideally attracted you to this coating space? 

[00:03:58]

Petr: I have never liked the easy path or the easy way. I also chose the most challenging field of study possible at the university, which was in the Faculty of Mechanical Engineering, specializing in applied mechanics. The coating sector is similar; it's quite a multi-physical process. When you apply paints, there is fluid dynamics. The paint is a chemical component, which is a little unstable, followed by the curing process, etc.

Moreover, all this occurs in the explosive zone of the coating cabin, which is why I like it. Our field is very complicated and complex, but that is the most attractive aspect for me. Additionally, a paint shop is one of the most expensive operations in the company, and that's why we have incredible potential to optimize costs and make all possible improvements.

[00:04:57]

Ken: I'd add to that list. It also has an environmental impact, especially as you become more efficient, spraying fewer materials. All the way around, it's good- I'll call it an industrial impact company, and thus, part of the reason for our investment in you. Tell us, what would you consider to be the origin story of SprayVision? In other words, how did you guys create the company? What's your crucial focus now?

[00:05:26]

Petr: Sure. We have distributed Italian coating products and technologies because Italy technically supports them. Sooner or later, we must find a local technical team in the Czech Republic. Luckily, I met my current co-founder, Vojtěch Roul, who worked at that time in a coating line production company in their development center. He was in charge of the settings, processes, applications, etc. After several projects, we decided that Vojtěch would join our distribution business. Then, we worked together for a couple of years, completing European projects.

During these projects, we observed all the negative aspects of the current coating processes. There was a very long wait time for the results from the cast measurement. There was no objectivity since everyone had opinions, but no data existed. Additionally, there were many other problems and challenges the industry was facing. This was the moment the idea of SprayVision was born. We started with small steps to understand if measurement based on light transmission could work if all the physics fit if it was technologically possible, and so on. At the end of this observation and exploration, we discovered that all aspects could be solved somehow, and we began working on the prototype of the technology and software. Once we confirmed it, we decided to introduce the technology at the Paint Expo in Germany, one of Europe's biggest coating trade fairs, to understand customer feedback. Due to very positive reactions and the fact that we received almost 40 contacts from major global companies, we began working intensively on our first production version of the hardware and software. From that moment, it took us almost one year to deliver to our first customers. Fortunately, our initial contacts were very patient and helped us design and develop functions that were missing, making the product even more useful. At the end of 2019 and the beginning of 2020, we delivered the first production-ready products, including the software, to customer sites.

[00:08:10]

Ken: Now, you've won several awards for your work already. Can you tell us a bit about this recognition?

[00:08:18]

Petr: Especially in the beginning, it was very important for team motivation and to confirm that what we were doing made sense to apply for, say, technical competitions. We started in 2020 when we applied to Vodafone Idea of the Year in the Czech Republic. From among many projects, we won. It was very friendly and motivating for the team to continue on this path. I will mention that that year was quite challenging since we had a product ready. We were planning a global campaign to introduce ourselves to the market and apply for all trade shows, but that was the year when COVID-19 fully hit Europe, and everything was canceled. We focused on local projects and development activities for the technology. However, from a business development perspective, it was very complicated. Things of this character were very important during that period to confirm that what we were doing made sense.

Another exciting achievement in 2022 was winning an international startup competition called Paint the Future, organized by AkzoNobel, one of the leading producers of paints. 260 startups from all over the world applied, and the final round took place in Amsterdam. We were chosen as one of the three winners. There was no ranking of 1st, 2nd, or 3rd place; instead, they chose three winners, and SprayVision was one of them. It was a lovely moment and a very nice competition. Again, it confirmed that what we do makes sense and brings disruption and innovation to the market. Those were the most exciting competitions. There are also a couple of local competitions, but Paint the Future is the most interesting.

[00:10:31]

Ken: Excellent. I like the name "Paint the Future." That's a great title. I'm going to rename the podcast for this episode because it fits. Let's change gears. Let's talk a bit about your commercial wins. How have you helped your clients and customers?

[00:10:50]

Petr: Definitely. We were lucky to start cooperating with a couple of global companies. Although it was a bit of luck initially, they had centralized decision processes and purchases, which was very welcome because it secured our growth and scaling through their global presence. I will not name them, but there were some customers like this, mostly from the bumper production sector. One of our first clients needed to be also a producer of coating equipment and paint. With that, we were able to build a fantastic group of customers, which, especially in the beginning, helped us to finalize and improve the functions of the technology. They supported us with their orders, which was the start of scaling our presence and growing our business. Without them, SprayVision probably would not be where it is now. Big thanks to all of them.

[00:12:08]

Ken: How do your clients find and engage you?

[00:12:13]

Petr: I know you like Switzerland, Ken, so I'll use an analogy from my co-founder, Vojtěch, who often says that SprayVision is like a Swiss Army knife. We are the multifunctional solution that customers can use for daily tasks such as process control, which leads to decreasing scrap and measuring thickness even at that stage, so they don't need to wait hours to know the information and what is happening in the process. They can analyze the quality of the paint, solve daily problems on the coating line, and so on.

But aside from that, they can also use our products for long-term goals such as paint consumption reduction, making it a more sustainable process with fewer emissions of VOC and CO2. Additionally, based on neural networks with our newest product, the Spray Brush, they can set up the parameters based on the data and simulate the coating distribution, which almost perfectly correlates with reality—something that did not exist on the market before.

The process setup was always closely linked to experts or those with long-term experience in coating. However, with our product, it's possible to optimize processes and understand them even for people who are just graduating from university but have an analytical mindset and some technical background. They can achieve fantastic results, leading to a significant decrease in paint usage and other benefits we bring to the industry.

[00:14:03]

Ken: How do you know when an organization is ready to adopt your SprayVision solution? What best practices have you seen in organizations that are realizing their value? 

[00:14:17]

Petr: To implement our technology, we have a few basic conditions, which are quite simple. First, the customer must have a robotic line, although we also support a few manual applications. Second, the customer should spend a minimum of €1 million on paints annually to achieve a payback period of under one year. Finally, the customer must be focused on and committed to the quality of their products. These three parameters are essential for installing SprayVision and ensuring it delivers great value and economic benefits to its operations.

[00:15:00]

Ken: Momenta has invested in industrial optimization for over a decade. Indeed, we've seen a lot of recent upticks in anything related to AI, reinforcement learning, machine learning, etc., mainly as applied to industrial applications. I'm curious. What are your clients' current key motivators, considering your coating solution?

[00:15:26]

Petr: There are a few key drivers in our sector. One of the latest, which was first deeply discussed at a conference four years ago, is sustainability, specifically VOC and CO2 emissions. Many of our customers actively address these issues and strive to improve. Additionally, we see a shortage of experts in our field. To excel in coating and process settings, individuals often need around ten years of experience because it has always been somewhat of a black box due to its multifaceted nature involving chemistry and other complexities.

Significant pressure to optimize and reduce costs is also a constant driver in our industry. Furthermore, product quality expectations have risen dramatically in recent years. Nowadays, even a single drop of dust in the paint can be seen as a defect by customers. These four factors—sustainability, expertise shortage, cost optimization, and heightened quality standards—push industrialization and optimization to the forefront in our sector.

[00:16:55]

Ken: Very good. Certainly, optimization is a broad term in this context, but you are one of the few applying it effectively in the coating space. That's why we were so interested in investing in your company. Now, this is one of our first investments in the Czech Republic. How do you find the startup ecosystem there? How supportive are the government and the overall ecosystem in developing startups?

[00:17:27]

Petr: There were some bad experiences in the past regarding the relationship between venture capital and startups. However, this is probably forgotten now, and the companies currently receiving venture capital in the Czech Republic are mostly in very good hands. They are working with partners who are ready to help and, aside from the financial investment, also provide valuable mentoring and advice. Overall, the ecosystem is growing. We also see that the number of startups and established companies is increasing.

We still lack some big exits, but those will likely come from one of the evaluated unicorns. This could significantly boost the ecosystem and improve the Czech Republic's image globally. We are still waiting for this.

When it comes to the government, we do face some challenges. It might be unbelievable to you, Ken, but we are still waiting for legislation on ESOP (Employee Stock Ownership Plans). It should be approved this summer, but we don't have clear, legislation-based ESOP plans. We must create them through virtual agreements, and lawyers must figure out how. This is something we are missing.

As a country, we are already meeting European standards, and Czech founders are technically educated. However, we can improve our skills in selling ourselves and our products.

[00:19:36]

Ken: It's one of the things because you guys stood out for us. I often joke that many of our European founders show their TAM, SAM, and SOM chart as in my local region, which is sometimes defined by the language, the regions around it that speak the local language, Europe. Then there's the rest of the world, which is many times, including the US, right? You were one of the few we saw who had already identified the US as a core market that you will go after and, certainly, European-wide. I wouldn't accuse you of thinking too local, as in the Czech Republic. That's what we certainly like about your ambition. I hope we see that in other founders in the country when we invest. Finally, as we wrap up, I always ask how you maintain your leadership edge. Any recommendations you'd like to highlight for the audience?

[00:20:29]

Petr: Definitely, I’d be happy to share. I should probably read more books, but I'm not great at it. However, I read a very insightful one: "The Hard Thing About Hard Things" by Ben Horowitz. For personal and time management improvement, I enjoyed "Atomic Habits." Currently, I'm reading "The Talent War" because focusing on hiring new talents and growing our organization is a priority for us.

Additionally, I listen to podcasts from the US, such as Lex Freidman’s, where he interviews fascinating people like Jeff Bezos, Sam Altman, and Elon Musk. This is an excellent source of inspiration. Leadership experts like Simon Sinek also provide fantastic insights.

I also listen to Czech podcasts and follow the founders of current unicorns to understand how they built their companies in the Czech Republic, the steps they took, and so on. This combination helps me stay effective as a leader in our organization.

[00:22:04]

Ken: Very good. I recently re-listened to "The Hard Thing About Hard Things" as an audiobook during a long drive, and wow. It is a great book. Despite being out for a while, it remains incredibly timely. I highly recommend it to our listening audience.

Peter, thank you for spending this time and sharing these insights with us today.

[00:22:27]

Petr: Thank you, too. It was very nice to be here.  

[00:22:30]

Ken: It is great to have you as well. This has been Petr Jahn, CEO and co-founder of SprayVision. Thank you for listening, and please join us for the next episode of our Industrial Impact podcast. We wish you an impactful day. You've been listening to the Momenta Digital Thread podcast series. We hope you've enjoyed the discussion, and as always, we welcome your comments and suggestions. Please check our website at momenta.one for archived versions of podcasts, as well as resources to help with your digital industry journey. Thank you for listening.

[The End]