How Can Data Decarbonize Factories? (with Lauren Dunford @ Guidewheel)

Welcome to the Climate Capital podcast where we interview founders who are solving the most difficult and important decarbonization problems. Climate Capital across our funds and our syndicate is one of the most active funders of early stage climate tech globally. This episode is led by me, Vijay Arajendran of Climate Capital Syndicate team and today we're interviewing Lauren who is co founder and CEO of Godwill. Guidewheel's AI powered factory ops platform helps manufacturers unlock both productivity and net zero at scale across their factory operations. Factory teams typically clip on guide wheel sensors in just hours and improve productivity by 20% and energy efficiency by 10 to 15% within months. Loren founded Guideweel out of Stanford University. Inspired by experiences within manufacturing and climate change, the company is growing fast with backings from top investors including Climate Capital, Greycroft and Breakthrough Energy Ventures. Please join me in welcoming Lauren to the podcast. Full disclosure, Climate Capital is, as I said, an investor in Guidewill. Ccpod is not investment advice and is intended for informational and entertainment purposes only. Lauren, welcome.

Thanks so much. Glad to be here.

Lauren, tell me where are you located today and tell us a little bit about where you grew up.

Yeah, definitely. I'm located out of the outer sunset of San Francisco, as close to the waves as possible. My husband is a surfer and I actually am a Bay Area native. I was born in Sacramento and then grew up in the East Bay, so near San Francisco as well.

Fantastic. And in addition to being a Bay Area native, tell us, how do you introduce yourself at parties or at a conference?

Well, let's see. Let's go conference. Because I'm definitely not cool enough to go to too many parties. So in terms of conference, usually what I say is we're Guidewheel. We do AI powered factory ops, helping manufacturers drive productivity and net zero across their operations. And then I wait for someone to ask more and if they do, then I describe that what we do is essentially like a smartwatch for any machine. We've basically got a clip on sensor that clips around the electrical heartbeat of the equipment that power draw and then we can do incredible things with that. We turn that electrical heartbeat into of course tracking every moment of downtime. If the machine is starting to have a problem, we can actually even tell using the AI that we've built what product is running from that electrical signature. So it can deliver huge results in terms of improving productivity, but also of course builds in from the start the tools that manufacturers need to reach net zero. So by then hopefully they're still talking to me.

I'm sure they're still talking to you. What's something unexpected or special about you that people might not know or guess?

Ooh, fun. This one is not at all work related, but I love to dance so most weekends will find me dancing like crazy. Not very well, but with a ton of enthusiasm.

Oh that's awesome. That's great. Thanks for sharing that. Now I'd love to dive in to the origin of Guide Wheel. Tell us about how things started, how you met your co founder and how you decided to work in building this company.

This is one where climate is really part of that story as well. My co founder Weston and I actually met when we were undergrads at Stanford far too many years ago. I won't reveal the dates, but we were each heading up competing climate groups on campus. I was the co president of Students for Sustainable Stanford. Weston led Energy Crossroads, the main energy group. We were competing for the hearts and minds of Stanford Sustainability interested students Way back before climate was cool, we got together to work together many years after that, but originally started when I was at Stanford doing my mba. My path post undergrad had been really to dive into this world of operational efficiency and supply chain. So I'd gotten hooked on operational efficiency actually while working with students for a Sustainable Stanford, got a Fulbright to study supply chain and then was lucky enough to spend five years at a company called Revolution Foods where I was in charge of 65 million of our west coast partnerships, but had to physically walk through our production floor to get to my desk. So I got to see what manufacturing was like on the ground, see that it was really hard for midsize manufacturers to get access to good solutions, and then headed back and focused every single second of the MBA back at Stanford on how do we solve this problem in an elegant and scalable way that can be profitable and really make a big impact on the climate challenge at the same time.

And at the time, was this something that most MBA students were thinking about.

Working on climate writ large or our specific climate within manufacturing?

Manufacturing?

Oh no. Yeah. No. I think I focused 13 or 14 different classes during the MBA on this particular challenge and I would always be the crazy one recruiting people to join my group to focus on manufacturing and climate. So yeah, it wasn't the most common topic, but certainly, certainly was distinct and got the opportunity to get to know my classmates in a really wonderful way and certainly learn a ton while we also pivoted and learned and made a bunch of mistakes in that very nice learning environment of Stanford as well.

Right. So fast forwarding past Your MBA program about the journey from there.

Yeah. And we originally launched in Nairobi, Kenya. My husband is Kenyan. We wanted to spend some time living with his parents. And so we actually launched with this small group of factories in Kenya that were just amazing design partners with us. And many of them are still beloved customers. And we originally launched what essentially was an energy management solution for them and had the opportunity to, especially given how important it was that people be driving immediate cost savings, to realize pretty quickly that that energy app on its own was actually not going to be the most powerful way to drive a climate impact. So we sold in first with that. Customers told us they wanted it, they said, you know, energy is a really important priority for us. But then we hit this point at which we looked at the usage data across our customers and we saw folks logging in once a week or once a month and that just isn't enough to build a Super Sticky Great SaaS product. So at that point we looked at the data and we also saw some bright spots of some folks that were using Guide wheel all day, every day. And we saw that what was different with that, that group of people was that we had sold into the production team instead of selling into a separate engineering, maintenance or energy team. And what we did then was just go, go out to those factories. So I spent a bunch of time learning from them how were they using this product. And I really credit those customers with showing us that they had taken that electrical heartbeat that we were giving them and they were achieving huge productivity gains. I think one of them had improved his productivity 20% by managing his shifts and his production really closely, using the electrical data from the equipment to show what it was doing, showing every late start, every changeover, every problem it was going to have, every area where it could be improved in its operating efficiency as well as its energy efficiency. And he'd also achieved a bunch of energy gains. But we realized at that moment, hey, we need to pivot and sell to production. They can get far more kind of pain solving value from this right away. And then we can layer in the energy side to something the team is already using. So embarked on another design. Sprint mocked up stuff on paper, got their feedback, and then eventually built it into the product. And that was really the unlock, selling into a team. That is really the reason the factory is there. It's there to make product, it's not there just to save energy. And then also a big unlock in terms of the sheer economic value that it delivers for factories to solve that productivity problem.

How do you usually communicate or illustrate what that value looks like.

Yeah, so there's, I mean the simple value of produce more with your existing assets. Usually examples are the best. So I'll give an example of a factory that I heard about last month where they clipped on Guide Wheel and you can do that in under 24 hours. But I think for them it was a couple of days they clipped the system on, they started using it and within a month they had been able to use that information and make it part of their operating rhythm so that they had doubled the production from their same team and same machines. 2x the total production.

Oh my God. I mean, it's just stunning. Yeah. And we don't ever promise 2x because we don't know exactly how much room there is to improve. But I was hearing another one on Friday where he was describing achieving a 30% improvement within a couple of weeks. And that would be fairly typical. 20 to 30% is usually what we can expect. And 20% is what for anyone going from manual tracking to using Guide wheel for the first time should be very doable. But yeah, it was fun to see that kind of impact and just continue to see all of those success stories. So it's such a, a concrete value and also so important for the bottom line in an environment where, and if you're not doubling the production from the entire factory, you can double the production per shift maybe and then you can cut costs with, with the inputs that you don't need to have. So anyway, whichever way you're, you're cutting it, the, the ROI is just massive from being able to get that visibility, take action and drive improvement. I will add, of course the tool isn't automatically controlling the equipment, so a human needs to take action on the data. So where we see the best examples are where the teams just grab it and run with it and integrate it into their operating rhythms. And of course we look for those kinds of folks in terms of the manufacturers that we approach.

Right. So this seems like a no brainer, but what would surprise people about the status quo when it comes to implementing a solution like this?

So I think the first thing that some folks are surprised by, and I will say whenever I talk with people in manufacturing, they are not surprised. So I'm going to say people not in manufacturing are sometimes surprised that when you look at, you know, even the world's largest manufacturers, it is rare for a company to have more than 10% of their assets, their machines connected to the cloud right now in real time. So within manufacturing though, that's that's not a surprise. The next question would be, well, how, why, why the heck is that true? And, and that's where it then becomes not surprising. So if you look at any manufacturer, I'll take for example a kind of mid market, maybe 10, 15 plants grown by acquisition over time. So they might have a bunch of different plants that have, have, you know, been bolted onto the company. And then within every one of those plants, what a manufacturer of course is doing is turning raw material into a product that's ready to sell. And so they'll often have many different kinds of machines involved in that process. And all those different kinds of machines will often come from different manufacturers and be different ages, different models. Because often, well, when you think about putting yourself in a factory, you're not going to just toss out all of the equipment in that factory one day and replace it with brand new equipment. That makes no sense whatsoever. These are big and expensive machines. So they're often buying a new machine if it breaks, or buying a new machine if they need to add capacity in a certain area. And what that means is, especially given that they're often buying second or third hand because that makes financial sense. You look around any one factory and you see a mix of different ages makes, models of equipment, many of which are very old. The average age of equipment in the US is 20 plus years and increasing. So it's not going to connect anytime soon to our cloud, let alone in an easy way. And then you've also got all of the different plants that have grown by acquisition. M and A is a big thing. So looking at the actual environment within these plants, it becomes suddenly not very surprising, especially given that the only solutions in the past have been really heavyweight and expensive and cumbersome. That so few assets are connected in.

Real time, that's fascinating. And when you have this potpourri of different equipment of various ages and configurations and types across all those possible industries and sectors, yeah, that's going to be a long term process of connecting. But wow, will the results pay off? I guess realizing that scale, I'm sure there have been some challenges you've encountered as an operator. Is there a story that comes to mind as a significant problem or challenge the company has faced and something you learned from it?

Yeah, definitely. And also just back to that challenge of all the different makes, models and ages of equipment. That's why what we've built is so powerful and why it is such a game changing thing. To be able to use that real time sensor data and especially apply AI and Make it even more useful because boy, all of those machines use power so we can clip around that electrical heartbeat. We can bring the oldest machine, the newest machine, all the different makes, models and ages all into the cloud in minutes from clipping, clipping what is essentially a smartwatch ish around that power draw. So that's kind of. It has been very slow historically, but the game has changed now in terms of it being a total no brainer to connect those assets. And you know, heading into your next question, of course, you know, it feeling like a no brainer does not mean that things have never been hard. So there are so many examples. Maybe one I'll go back to that was just super memorable was, you know, thinking back to where each of us was during COVID that kind of March 2020 when, when the Bay Area shut down. Where I was was actually at the Nairobi airport. My husband and I had managed to catch one of the last planes out because the whole world felt like it was. It was shutting down. We were about to launch Guide Wheel in Monterrey, Mexico. We were in such a hurry because it felt like the world was an uncertain place at that time. That I remember we got to the airport and we had kind of thrown everything into our bags and we didn't find a trolley immediately when we got out of the car. And so my husband said, leave half the bags, son. Let's just go in. And so it was this moment of trying to figure out what is this new world that we're living in. And it all seems so scary and uncertain. And we landed in San Francisco, did not take the connecting flight that I had to Monterey, Mexico to launch there, because we landed on March 17, the day the Bay Area shut down. And at that point we tried to figure out, what are we going to do? So Weston and I started brainstorming. How can we quickly figure out the right product market fit in a world that has changed dramatically. And we started by running some quick and dirty marketing tests. We thought, okay, well, when we first built the solution, we thought emerging markets was an opportunity to leapfrog. Let's run some tests in Indonesia and Nigeria and East Africa and Mexico and Brazil and U.S. and. And kind of run them, including the U.S. you know, a little bit, without knowing how that was going to be. But what we saw in those tests was the US Actually had just as much appetite as those other places to solve the challenge we were going after of, you know, really improving productivity within the factory.

What was it about the US that told you that?

Oh, we ran some tests so we were putting out basically at this point ads and trying to see what is the click through rate on these different challenges, kind of different opportunities. And the US had just as high of a clip through rate as the markets that we knew we could serve well or knew that we had a fit from the research we had already done. And at that point we said, okay, well let's, let's test the U.S. let's see if we can actually sell here. That required, and this goes to hard things, it required a big sprint of let's figure out how Guidewheel can be remotely installed so that the maintenance person on site can clip it in themselves because we won't be able to send a teammate in this time. And of course manufacturers were essential businesses, so they were continuing, but there were a lot of regulations around entering the factories, et cetera. We pivoted as well to having our website be a lot better and allow the customer to gather more information versus us being there live to tell them. Previously all our sales had been in person. And then we started seeing if we could sell via Microsoft Teams and Zoom. And it was at this point when that became possible all of a sudden. Because I think prior to Covid it would not have, you know, we would have had to go in person and selling via teams would have felt strange. But because of all of those challenges and iteration and then finally, of course, we kind of cracked it and we were able to solve those challenges and see manufacturers get started with Guide Wheel, expand with Guide Wheel. And that was very exciting. But it was, it was the amount of hard work that went into it that also helped us have a much more sustainable and scalable model for the future.

So Covid was a dramatic pivot in terms of a new market, a new go to market, different type of product experience and customer success. But it sounds like a business model that just took off.

Yes, exactly. And thankfully we had gone through an iteration on the problem we were solving earlier, the one I mentioned around productivity and then energy. And so we were selling in something that already had that pull. And you're right, it was then just a pivot in terms of geography and go to market and all of that versus also a pivot on the problem. The problem remained very consistent throughout.

A big pivot for Guide Wheel. And then for you as a leader, what pivoted and what was that change in direction like?

I mean, I think there are so many things I'm learning every day as a leader that it wasn't that that was necessarily, you know, a different pace of Learning. I think it's high pace of learning even when we're not pivoting as well. I think one of the big things for me was thinking about how to be a good leader for a remote first team and how important communication guidelines and operating cadence and meeting structure become in that environment. I think those things are all important as well in in person environments. But there's, there's kind of a certain amount you can get by without them. And all of those things became very important for me as a leader to get right after Covid.

Certainly that communication, the quality of communication and how you show up seems like it's just gotta be dialed in, right?

Yes, completely.

Is there anything controversial or counterintuitive about what you do now?

I mean, I think manufacturing is one of the issues that really brings folks together across partisan lines. So helping manufacturers, who are the backbone of the economy, I would hope is not controversial. I just feel so honored to get to support our customers. In terms of really the controversy, I think it more comes from this argument that if this space hasn't been digitized yet, we. What makes you believe that guide wheel can change that? And that's where I just feel so excited. I mean, the really big and meaningful things in the world are hard for a reason and haven't been done for a reason. And so to get to do something that hasn't yet been done, there's never been a scalable approach to this space. And we've got the unlock of coming in with the right wedge with a product that can land and expand and truly scale, and a product that has increasing returns to scale. The more more people use it, the more valuable it gets for everyone. So I feel very strong conviction and the time has come for someone to do this and there's no one better placed than us. But I would say the controversial thing is this hasn't changed yet. What makes us believe it's going to change in the future?

In the future? How does the world change if you succeed?

I mean, the impact on climate from helping manufacturers become even 10 or 15% more efficient is just massive. So manufacturing is the source of almost a third of the world's emissions. A bunch of folks did, did a bunch of research on what we do and said, you know, if we can do this at scale, that's 0.7 gigatons of emissions reduction, which certainly gets me up in the morning. So let's make this happen.

Yeah.

And then I think the thing that's even more exciting is, you know, there's the benefit for the planet. We're a public benefit corporation. It's great to have that built in. But also just the benefit for our customers is so powerful and so motivating. I was hearing from a customer who shared he was able to get started with Guide Wheel, align his entire team around, you know, how excited they would be to improve productivity of their shifts so they wouldn't have to work on Saturdays and they could spend them with their kids. And the byproduct they worked together, they made a huge difference. They improved their productivity and they improved it so much that they not only could spend their Saturdays with their kids, but they were also able to increase base wages for everyone in the factory. And that type of story of seeing the impact for not just the champions who use Guide Wheel and achieve tremendous business results, but also the day to day I can come in and I can see am I winning or am I losing and come out knowing the impact I had on the business. A lot of what we do makes transparent the impact of each person and at different levels across the manufacturing team and is really powerful and wonderful that certainly, I mean we continue to iterate and build new features and align around what's going to make this a positive business impact, a positive planetary impact, positive impact for each of the users that use it. And then of course as a leader, just so inspiring to see the team impact and all the teammates that grow with Guide Wheel and are building their careers and taking on challenges and helping us become just so much better. So anyway, now I'm talking to. Talking too much. But it's, it's just, it's one of those things where yes, it's hard but boy, if we can succeed, the impact is huge. So we better get to work.

In that vein, are there new industries or sectors of the economy, the manufacturing space that you want to go after next?

We've been lucky enough to have good case studies kind of across the board with different industries. We focused a lot on plastics and packaging to start for, you know, don't want to boil the ocean and to focus our outreach. But had some inbounds come that took us into different sectors and had the opportunity to prove out nicely. I think one that, well, you know, there are lots that get me excited. I don't know, food and Bev and building materials get me really excited. Just because I've seen such phenomenal success stories in those industries as well. But yeah, across the board.

Yeah, and a lot of carbon emissions there.

Yes, huge.

Totally thinking about your experience as a founder and as a leader has There been any advice you've received that's been especially valuable and helpful to you that you can share with our audience?

Yeah, I love that. The example I'm actually going to share is advice not necessarily directed at me, but from my father in law who has a saying that I'm sure other people have as well, but I just love it from him is if you don't go, you won't know. And I think that sums up so many nuances of the founder journey. The first being kind of that lesson that we learned of people can tell you something is important but you should watch for what they do, see what they do, don't believe what they say necessarily. You'll learn more from watching actions. I think the other thing that if you don't go, you won't know sums up for me is there's this quote from Rumi, if you walk on the way, the way appears and there's going to be so many things that you couldn't possibly have known will come and be the best possible thing to have happened and people who will help and just getting to have the honor of being on this journey, working towards something meaningful that makes a difference for the planet and for lots of folks. If we can do it. I think that that lesson of just get out there and do it, you know, the Richard Branson quote of if your dreams don't scare you, they're not big enough, just get out and do it. It's a little repetitive, but if you don't go, you won't know.

I think that's a three for, for us, you know, three beautiful quotes from three inspirational places that, that illustrate, you know, you got to, as you said, get out and do it.

Yep. And especially in climate, this is an urgent challenge. We have such amazing talent coming into this space. There is no better time to come in and make a difference in this fight.

We are all on team planet Earth 100% in that regard. What can our audience do to help and support you? Or if they want to get in touch, how can they do that?

Yeah, email is always great. So. Laurenidewheel.com and in terms of help, I guess you know, first, as always, if you know manufacturers that want to improve productivity or reduce their emissions, let us know or connect them with us. And then the second thing would be, you know, being able to build together with top talent is such a joy. We have an incredible team and if you know people who are incredibly talented in your network and whose eyes might light up at this combination of, you know, deeply concrete roi, manufacturing climate, whatever role they might be in. I'd love to connect sooner rather than later. We we love working with the most phenomenal folks.

That's exciting, and I'm sure a lot of phenomenal folks will want to partner and work with you.

Thank you.

Thank you to everyone for listening to our conversation today with Lauren Dunford about her journey with Guide Wheel. If you'd like to learn more about Guide Wheel or get involved with the work Climate Capital is doing, you can check out our website, ClimateCapital co. Thanks again for listening and thank you to Lauren for being our guest today. We'll catch you next time.