What It's Like Getting Sued by Caterpillar | Dick Zhang, CEO of Bluelight Machines

There's some tension with Blueleg and Caterpillar, the enterprise. Like, there's no hiding that. I think the tension has existed for at least a couple of years.

I understand that there's been a lawsuit.

Caterpillar has filed in federal patent court a complaint that we are infringing on 5 of the patents in their portfolio. On a merits basis, we think there are no merits to the accusation.

It's a little bit of a David versus Goliath.

It's like 13 of us. It's like David versus a whole city of Goliaths.

Welcome to The Edge Podcast. My name is Tristan Wilson. I'm really excited to have my friend Dick Zhang on the podcast. Dick is the CEO and co-founder of Blue Light Machines, which is an autonomous equipment company that's doing incredible things in the heavy civil construction space with equipment autonomy and just overall having a really big impact, I would say, in our space with helping operators out in the field actually get more work done. So Dick, really excited to have you on. Welcome to the podcast.

Yeah, thanks for having us. It's good to see you. It's a long time coming. I'm excited to get into this.

Me too. Me too. So one thing I just kind of wanted to maybe ask you is like, what is blue light? What is this thing everybody keeps hearing about blue light?

Yeah, that's a good question. In a word, it's autonomy. Attempting to be precise in a sentence, we're trying to be accessible autonomy, uh, for the everyday contractor, everyday job site. Uh, and so to, you know, to us, like accessible, um, a few measurable ways we can make something accessible for a contractor. It's gotta be $20,000, $40,000, $50,000 to get into it. Um, so price is, is very accessible. Um, you know, let's say you want to do it at least on a roller. It's about 2 hours. We show up to a machine you already have, and it's about 2 hours to take this thing, install it on your machine. All of a sudden it's autonomous. And so accessible via install time. And then accessible in a third metric is it's got to be easy to learn. This is TikTok society. This is the iPhone society. And so we got the install done in 2 hours. And so it's got to be 3, 4, 5 minutes on your iPhone. Let's get swiping and let's get this thing rolling autonomously. So accessible autonomy is what we're about. And like a little bit of the size and scope of, you know, where we come from, where we're at now, we're about 3 years old, a little over 3 years old. We, I'm proud to say now we have in the hundreds of kits. We're deployed on 5 continents. We help contractors primarily with their rollers and compactors., and their articulated trucks.

Gotcha. Could you talk a little bit more about like the tech, the technology, and just like basically how the, how the system works and maybe how it's different from, um, some of the like other, you know, systems that are, that are out there?

Yeah. How does it work? Um, or our approach even, um, to put those two together. Um, I mean, technology is exciting, don't get me wrong, but I think there's actually been a lot of great autonomous technology in the world for 30 years. This is nothing new. Taking it and making it accessible was— that was the hard jump for us and making it work for an operator on an actual job site who's taking, you know, putting out 7 different fires at the same time, you know, a dozer operator taking trucks, you know, material from 15 different trucks at the same time in one fill. Um, and so, um, if I'm completely honest, most of our technology stack is open source technology. I, uh, and I'm happy to dive into this, but I come from before this 10 years, 11 years, um, in the drone world. Um, and so our very first roller, we literally just took a drone chip, drone code, drone software, drone everything, and plugged it up into a roller. And, uh, we said it looks kind of similar. This roller doing this on a pad looks kind of similar to a drone doing topo, you know, above the job site. And so anyways, long-winded answer, most of our technology stack, it's either open source, you know, drone navigation technologies. We use a lot of open source on the, on like the safety and detection side. It's actually a completely open source, like if you did a 101 on AI, we use the same model for safety detections of the roller. It just happens to be trained on a really rich construction dataset, which is why it shines in a construction environment. And then like even the app and the iPhone stuff, like that's all, you know, open source might not be the right word, but it's all technologies that have been in play or accessible to technologists for 15, 20 years.

So why hasn't it actually worked previously? It's been available, like if, because what you're basically, what you're saying is like this, this technology is not all that good. So, so why, why hasn't it, like, what, what's been the gap, like, in, in, in the past as you've kind of, like, studied this? Yeah.

Um, there's probably two, two major forces, you know, bringing us to, like, right now. Um, I'll say timing is one. Um, so, so yes, these drone technologies have existed for, like, this open-source drone navigation. It's been around for 15, 20 years. Uh, but the early days it was kind of clunky, not very reliable, didn't work very well, right? And then over time, right, it got much better, became much more widely available. Even, even technologies as simple like as a, as an AI to detect like an apple, you know, in a camera, uh, like a picture. It's been available for 10, 15 years. It was clunky. These, these means and methods used to take a dozen, two dozen, like very sophisticated engineers to deploy this kind of technology. And just in the, in the wave of the last 5, 8 years, you know, like ChatGPT took really amazing technology, made it accessible for the everyday person. Um, it just, the technology was ready. And so 5, 10, 15 years ago, it was just too early, in my opinion, to take these technologies and try and apply them to, to, um, to heavy equipment. Another good example, by the way, many of the chips we use inside of our little blue light box are actually off-the-shelf chips from inside drones. And so like, if you know drones, you know DJIs. You know, 10 years ago, DJI was still new. They were learning how to make these chips at quantity and at high quality, right? Now, 10 years later, you can get these parts for dollars. And so we've come down the curve, the maturity curve here. And so it's widely available. It's very mature, very affordable. So that's one driving force. And then I think the other driving force is, and this is where I'll tout Blue Light a little bit, is, you know, slapping together a whiz-bang gizmo thing. Okay, we can do that. It's not necessarily easy, but we can do it, right? Um, what's really hard is you gotta slap together this whiz-bang thing and then you yourself gotta show up to the job site and you yourself gotta watch it fail and you yourself got, gotta, you know, like you gotta feel the pain of it failing and then you gotta iterate on it quickly and you gotta make it work for the operator who's trying to make it work that, you know, taking their precious time and energy to try and use your thing. If it ain't working, you can leave. You gotta make the thing work. And so I think one of the things that Blue Light's done that's very unique is we all live on the job site. Like, I'm taking this call from a pickup truck. We're headed from one job site in Chicago to another job site, you know, in upstate Wisconsin. This is just how Blue Light lives.

And, uh, and so, uh, from there, as, as a firsthand witness, I would, uh, I would agree. I mean, we've randomly met up When I happen to be in Virginia launching on site with a new, with, with a new client, and then they said, oh, Dick's on site right now. You want to go hang out with us? Sure.

Sure. Yeah.

Yeah.

It just, it just, uh, it's, it's, um, yeah, it's just easy to get caught up and think, you know, whatever you're doing in a, in an office somewhere is, is impactful. And sometimes office tasks are important, but like trying to make something work on a job site, you gotta be on the job site. It's gotta be 3/4 of your week is be on the job site and make it work. In that environment.

Why do you think it's— why do you think most founders don't do that?

It's scary. So from a founder— yeah, from a founder perspective, um, forget construction, even from a founder perspective, it's a very scary thing 99 times out of 100 to admit to yourself and admit to the world, the thing I'm working on just doesn't matter. It just doesn't matter. It ain't good enough. We didn't really solve any kind of meaningful problem for somebody.. And so, but the faster you are honest about that and the faster you start working towards something productive and something positive. And, and so here it's even more extreme. It's like, even if you're working on something so important, like autonomy for, for, for construction, it's just, it's a very scary thing to show up to a job site, you know, and, and like the operator personality, the superintendent, the foreman personality, it's a no patience, no frills. We don't sugarcoat it. They will tell you to your face, this thing sucks. Leave. Okay. And so you can't leave. You have to make it work. And so it's a, yeah, it's just, it's a hard thing to do for a founder doing a new thing. And then it's especially hard in a very high pressure, like pressure cooker production environment.

Yeah. I want you to, I want you to talk about, I've heard you mention this called the pressures of of production. And I think if I recall, there was a very specific story that you had about a trako operator, and maybe you can tell that story.

Chuki, yeah. Oh yeah. Forever Chuki's laser beams burning into my soul. I can close my eyes and just visualize him. So, Early days, Blue Light. Okay. We know a little bit of construction, but it's early days. And, uh, and we're, we're prototyping our, uh, our autonomous, um, uh, like articulated haul truck kit. It was a 745. And, uh, uh, let me set the scene here. Uh, we, we thought we had a, we had a, we had a decent kit, you know, prototyped and, and slapped together. Um, ordered in a gravel lot off the job site. We said it's time to put it into, let's put it into play. We need to push this thing. So now set the scene, this job site, you got a 1250. Okay, big track hoe, right? You got a 1250. This particular contractor, they put a short stick on it and an oversized bucket. So like doubly productive track hoe. And, uh, and it's a data center job. And so it's like, we need to produce and, and there's penalties if you don't produce. It just is like very high pressure environment. Okay. So, so Chucky is the operator in this 1250. He's up on his big, beautiful bench, you know, you know, hogging material. It's probably some something like 8 articulated trucks, you know, 6 or 8 articulated trucks, some 45s, so they might be top-loading pans too. Anyways, um, we say, okay, let's go, let's, let's put this blue 745 in the hall. I'm sitting in the autonomous one, the, the blue 745 I call it, and, uh, and I'm not really doing anything, but I'm just as a safety rider as part of our testing. We pull— I pull up in the— the truck pulls me up into the load spot. With, uh, with Chuuki. And, uh, all of a sudden we get a, uh, uh, an alert. He's loading me. It's 2.5 scoops, by the way, and a 45-ton truck is fully loaded. It's like seconds. Okay. I'm getting, I'm getting loaded. And, uh, all of a sudden, uh, we get this alert. Uh, the thing is bugging out and we got to restart. You know, my, uh, so one of my, my co-founders, Justin, he's on the phone in the lead truck. He's got the tablet. Hey, I'm not quite sure what's going on. It's all very benign. It's a normal software development thing. Except it's Chucky loading you. And we're like, it's a, it's a, it's like a, like a flagship job. And we're in the midst of production. So anyways, not even 30 seconds go by. I'm loaded. Chucky's honking on the horn and freaking out what's going on. And then, uh, uh, Justin's like, ah, I need to restart the truck. Dude, you gotta restart the truck. We gotta restart the app. Restarting apps and restarting trucks. It does not take a long time. But when you, when you're in, when you are in the load spot and you are in the pinch point of the entire haul, it's a long time.

Okay.

So I'm out here restarting the truck, doing our little calibration thing. And literally in the, in the, in the 60 seconds, 90 seconds it took us to do all of this, 5 other 745s have looped up behind us waiting their turn to get loaded. And so here we're out here toying around with our stupid blue truck and we've held up the entire job site. You can see Chukey is like staring laser beams into my soul. And anyways, it has taken us years to earn his trust back from that incident. But it's like, until you feel that moment, it's like real money and you can tally it up. Each one of these 745, $20-some thousand to rent them every month. So you can break it down to the hour. You can break it down to the 3 minutes, the rental fee, the fuel, the operator time, the lost production. It's like, Until you appreciate that, you cannot effectively build something for construction, I guess is my, my take on it.

Yeah. Well, and, and I'm also, this is the, I love this story, you know, too. Like I, I've heard you talk about like these, uh, I think you've referred to them as like techie tech people who think that they can, you know, like come onto a job site and basically, uh, tell people that have been, you know, the 30-plus-year like veterans,, you know, how to do their work. I'm wondering like, how do you, how do you, have you best dealt with that overcoming like, you know, doubt and people who maybe aren't that excited to see you roll up on a job site?

You just keep going. I mean, it's, anybody in business, anybody on a job site, there's always problems. There's always problems. There's always friction. There's always catastrophic things, always fires to put out. In this particular instance, like what you're talking about. Yeah, we roll up, you know, Chucky for a year and a half, he sees, he sees us roll up. He's like, them MFing guys are back. Shit. And, uh, they don't give up. Yeah. They just don't give up. And, uh, um, yeah, he just got to keep showing up and like, we've done it. We've, we've, we've burned through patience on a job site and we got to go to another job site or we burned through patience with the contractor and we got to go through another contractor. And, and in those instances, it's like my personal mission to come back at a later date. And demonstrate something beautiful for them and start to claw back trust.

Yeah, I, I think this is such an important point. And I, because I've kind of felt some of this too, where, you know, maybe if something didn't go really good the first go around, it's, it's, it's, it's this weird mental feeling that I've had where I'm like, oh, they just think we're complete idiots. They never want to see us again. Like the bridge has been burned. Or even like with, you, you can even have this with like, you know, people who, that you've gotten through like a deal cycle with and they've decided, you know, not to move forward. But I can tell you there's so many, like on the other side of that, and Sean, I'm sure you've felt this, there's, that's like the, those are some of the sweetest victories when you get a boomerang and they come back and you're ready and they're ready and then you get to walk down, you know, the journey together and things have really evolved in between the last time that you chatted. And this time it feels so, what, what a, it's very rewarding, uh, that you didn't, and then it's just, you don't, you didn't give up, right? You did not, you did not give up. Um, so, and that's one of the things that I, that I admire about you is that you like very relentless, right? You just don't, you, you, you're not, you're not gonna throw the, throw the towel in. Um, one of the things I wanted to ask you was about like your past and like the, you know, you, you were. You know, you had kind of an interesting like journey through college and then, you know, starting a company and, you know, you all, you know, had raised a bunch of money and had a bunch of growth and then went through a bunch of like struggles as well through that kind of journey. Like you're a second-time founder, so what do you wish you'd known the first time?

What do I wish I had known the first time? Well, that's a really good question. You have probably heard me say this relentlessly and to the point where it's just flat out annoying, but it's maybe two things. I think the first is like, you know, in the startup world, they call it product market fit, PMF. It's basically, are you doing the thing for somebody and do they care? Are they grateful that, you know, you're out doing the thing for them, you know, and you got something to help them., but the bar is exceptionally high. Like even 3 years later, most days I don't feel like we're there yet. And, uh, and, and, and so this, this fit of like, are we actually doing something really, really wonderful for somebody such that if we disappeared tomorrow, it would be catastrophic for them. Like that is the bar. But, but like what I wish in my, you know, what I wish the first time was like, not just the words, like that's the bar. Like you feel it in your gut.— you know it in your gut when you're not there and you know it in your gut when you are there. And, um, yeah, it just makes my heart so happy. I mean, if I'm really intellectually honest, you know, of our fleet of customers and machines, it's a very small percentage that we're like at that nirvana with them. Uh, but, but this is not unusual. You know, it's like whatever the 1 or 5 or 10 of those winning cases are, just like zero in on it and go do it, you know, go do it 2 more times, 3 more times, 10 more times. And, and that it just, That's how you build it up really slow, one by one. Um, so that feeling of like, this is it, or that feeling of this ain't it, like having experienced it a second time, um, you know, would have been helpful to know the first time. And then the other thing is, we, we have already talked a little bit about this. If it ain't it, that's okay. But say it, say it out loud, say it to the team, say it to your customers, say it everywhere. It ain't it yet, but we're gonna, today we're gonna do something and move it a little bit forward. We're gonna make a bet on how to spend the next 8, 10, 12 hours. And you put out 1,000 of these bets and eventually you're gonna get there. Uh, and, and it's just constantly like, let's just keep trying that relentless, like, let's just keep trying. It might not be today, it might not be tomorrow. Eventually we're gonna do something really wonderful for somebody.

How, how do you, how do you get that, like build that culture with the team, with the daily bets as opposed to Well, let's go take a month and really go build this thing. Just, man, really, I want it shiny. Like whatever it is that we're building, like how do you, how do you all attack that temptation?

How do we attack that temptation? I'm borderline an asshole to my team about it. Yeah, I'm borderline obsessive, neurotic, annoying about it. Like it even boils down to, we were just having a conversation with our social media and content It's like post every day. And sometimes there is, there is an intellectually honest reason not to do it in a day. And we just had that conversation in the, in the content world. But I mean, usually it's pretty uncomfortable to say it, but usually like, you know, okay, I can honestly take a month and do something or I could take 2 and a half days and we can do 75% of it. And, uh, but if we can get most of it done in 2 days, we can at least start to iterate and get some opinions on whether or not this was worthwhile to even pursue at all. And it's just this relentless culture. It's, yeah, love it or hate it. This is how I was raised, was like this insanely relentless culture is just go, go, go.

In your last startup, you were sleeping in the office and you were significantly, you didn't have the same like health and fitness approach. That, that you do now.

Like, what did your, what did the bottom look like to you?

Like, what is your day-to-day, uh, and what kept you in it, um, in the last go-around?

I, uh, if my wife is listening, love you to death. Love the life that we live.

She, she better be listening.

Yeah. Okay. So, okay. However, I will say that last business, like I'll paint you a picture. I was 19. I quit college after a year. I got no responsibilities, no ties, no, not just this business, Identified, you know? So I was like all in on Identified. We moved into this 5,000 square foot warehouse and, um, we moved into this warehouse and there was this corner loft. And so I literally just bought some plywood, a 2x4, like made myself a wall. And, uh, we bought a pop-up shower from Home Depot, plumbed in a hot water heater up there. And I just lived there. And I think it was like 3, 4 years, just lived at the office. And it was my, it was my, like literally on my driver's license, that was the address, you know, my official mailing address for me as a person. It was amazing. It was really, in many ways, it was a highlight of a learning experience, we'll say. You know, it's a 12-second commute to work. What's not to love? But to your, to your point, I'll paint you the other side of the picture is never really, you know, emphasized health for health and sport for sport growing up. And then you get into this, this startup thing and I'm sort of like in my own little world, never learned to cook for myself, take care of myself, eat well, all these things. I was always like kind of a chubby kid, but like I went from 200 pounds to 307 pounds or something over the course of 2 or 3 years. And I had my own price at the Domino's Pizza, you know, nearby. They knew my name, owner loved, you know, we had a great relationship. That, that's how bad it got.

Okay.

Uh, and, uh, yeah, it was, it was, um, it was a difficult time. You know, I was only 24. So like, if there was an age to try and be 300 pounds, that's the age to be 300 pounds. I, I don't think I could do it now, 10 years later, definitely not 20, 30 years later. Um,. And, uh, yeah, it was stressful. It was stressful because there was a lot of fundamental things in that business that were not going right and not progressing. And to tie back to the last talking point, things were not progressing and, and were not great, which is okay, but I was not saying it out loud. I w— I was not being honest with myself, my team, our customers. And so then it was just, it's just like stress, you know? Sort of, I'm in this stress spiral by myself. And so that's, that's, that's how you gain 100 pounds in, in 2 and a half years. And, um, uh, I actually have this guy Andrew to thank. He was, um, uh, he was, you know, you could think of him as like an office manager, um, at the time. It's a funny guy. He comes up to me one day, he's like, Dick, you look terrible.

So he says, uh, in a very Pittsburgh accent. Yeah.

Yeah. Terrible, Dick. And, um, And, uh, uh, so he says, why don't I buy, why don't I cook for us? Like, stop eating the Domino's and the takeout. And, uh, he goes, why don't I cook for us? You buy the groceries and, and I'll cook. And, uh, yeah, that's, that started it. It was, uh, it was, I probably lost 25 pounds just eating, you know, cooked food instead of takeout. Happened to get, get into swimming with a buddy, lost 25 pounds swimming, was too big to run or bike, but then, you know, was able to get on the indoor trainer, lost 25 pounds on the bike, then able to finally run. And so then lost 25 pounds running. And then my spin coach, uh, at the LA Fitness, she was like, Dick, you're already doing all 3. Why not come join me for, for an Ironman? Like a triathlon. And then, uh, that started up, um, uh, quite an intense, it's been like a 5-year chapter, 6-year chapter of, uh, Ironman, uh, triathlons. And, um, I mean, if I can toot my own horn for a second, I never got into the full distance. I got into the, you know, the half, half Ironman distance, 74, 70-mile race. I'm a very, very decent, highly decent weekend Ironman, half Ironman athlete. And, you know, this time around doing Blue Light, it takes time. Your body's tired, you know, from the training. But I show up to these job sites and I just feel like I can go forever. And I think a big part of that is like, I just physically fit, physically strong, strength-weight ratio, very high, eating clean foods. I'm just gonna outwork my competition. Uh, I feel very strongly about that. And, uh, sitting in a 745, like a healthy 30, 40-year-old sitting in a 745, already a tall order, but then to have to do it, type it on a computer, talking to your team, doing a FaceTime, oh, look at this error. Like it's a very demanding, you know, demanding task. Um, and so yeah, I just feel like, I just feel strong. I feel, I feel like I could go forever. I feel like anybody that wants to compete, I'm just going to outwork you.

Another question I wanted to ask you is like, you raised a lot of capital in your last business. I think you raised venture. And I'm curious, like your approach with Blue Light, like why not go that route or, you know, follow that same path? I think like revenue-funded hardware is pretty contrarian. Like how do you fund hardware without it?

Yeah, that's a great question. Well, let's be precise. Let's not talk it up. Like in the world of venture, we didn't raise that much venture in the first business, but yeah, we raised, I want to say probably $8 million, $10 million, something like that. And, but it was like a very classic, you know, VC-style money, very classic investors. To compare and contrast this time around, actually capital in is quite substantial in this business. It's just we don't spend a lot of it. That's a big difference, or we lose less of it, you know, relatively speaking. But I'd say This time around, one of the core operating differences is like, ah, I just, I spent so many cycles last business explaining to a financial first person why quantities and topo are important on a job site. I mean, if you come from contracting, this is like common sense. And I just spent so many cycles explaining this. And so this time around, probably half our capital in is from customers, like contractors, build job sites, own equipment, operate equipment. Probably a third, a little more than a third of our capital is actually from heavy equipment dealers. And they know equipment, they know, you know, the market, they can understand why something like this would be valuable. And then honestly, the final bit, we have some new-ish investors to, you know, to Blue Light, but A big chunk of our remaining investors were backers from the last business that wanted to, you know, play ball in this business. Anyways, it's been spectacular. In some way, everybody on this team, this investment team is adding value to the business. And, you know, you made the statement, why go this way, not venture? We may one day go venture, just the needs of the business don't really dictate, you know, we don't need it right now. And I'm a little bit unusual too in this, like you're talking about revenue-funded hardware and positive gross margins, I'll call it. What a shocking thing, you know, in the venture world. I'm a pretty big believer, like many of my founder friends are like, oh, you know, we want to scale quickly. We need more people. We want to do this. We want to do that. I actually think it's sloppy and it's lazy to think like that. I think actually if you thought really, really deeply, there's one, maybe two things that you really need to go all in on at any given time to unlock the biggest bottleneck in your business or unlock the biggest bottleneck for your customers. It's hard work, by the way, it's honest work to, to really come up with what is that one bottleneck that I need to work on? Uh, but most founders don't do it. And, uh, and so then we just throw the whole kitchen. What's the expression? Throw the whole kitchen sink at it or whatever, right? Throw everything at it. And, uh, So then we need a lot of money to fund throwing everything at it. And then, you know, we're this big cruise ship of people and we're still trying to be nimble and we're trying to turn a cruise ship every day. It's just like, it's impossible. And so actually an example I go to that is very inspiring for me. Now I'm no Elon fanboy. Okay. But like people confuse me for an Elon fanboy and for, you know, for, I respect excellence. Okay. And the story that gets me is They're— Tesla is ramping the Model 3 factory. Uh, and so you go from making 100 cars a week to 5,000 cars a week. No American manufacturer has done anything like it for 100 years. And so they're in this Model 3 ramp at their, you know, at this, at this big facility, um, in, in California. The man himself literally goes to wherever the next biggest bottleneck is in the production line. And just sleeps there. We work there and we sleep there until this bottleneck is unbottlenecked and uncorked. And then once this particular step in production is, is uncorked, some other step in production becomes your new bottleneck. And physically we go there and then physically we spend every waking hour uncorking that bottleneck and we sleep there so that when we wake up, We are right there at the bottleneck and we can, we can address it. Anyways, all that to say, it's like, it is hard work to be very intentional and very honest with yourself about what the next biggest bottleneck in your business is. Turns out it's not 17 different bottlenecks at once. We don't need a team of 75 people that we need to hire to get it all done. This is, this is not, that's not critical thinking. It's not honest thinking.

Yeah. I think the intellectual honesty part is probably, and in my mind is probably the hardest part of really telling yourself the truth of like, this is what is This is what's fucked up right now. Yeah. And, and it's not working. And like, this is the biggest problem. And there's, there's 10 other things that I could do to like make myself feel productive, but really I just gotta tackle this one thing. And that thing could be like a problem with the product. I think it'd also be, be a lot of different things. I mean, it could be, it could also be a, a, a personnel change. It'd be somebody that needs to. You see a fire. Often, often it is like a people thing. You know, I'm curious on that. Like, what's the hardest, what's the hardest, like, firing that you've ever done?

Actually, not in this business. It was in the last business. To loop all these, you know, these stories together. I'm young, I'm dumb. I've not made painful mistakes in my life yet in business. We raised this, this, just some venture money. Revenue was looking good when we raised this money. So we went from like 10 people to 50-some people well within a year, probably like 6 or 9 months. And then, you know, we're, you know, a few dozen people here, right? And then, and then all of a sudden we start losing contracts. We stopped getting renewals. We're burning cash like crazy. And, and, we basically were on a path to death, an urgent, like a quick path to death unless we did something. And, uh, and so we had to go from probably like 50-some, 60 people. We, we basically, um, over the course of 6 months shrunk it down to 5. It was like our core team. We have to cover, you know, it was just, just, we had just enough customers to cover costs. Um, anyways, if somebody sucks or is not doing the role, to say, sorry, this is not working out. I mean, that's a painful experience. Don't get me wrong. What's really painful is you're actually doing great work. I mismanaged and made a huge mistake. Sorry. And, uh, and then to have to do that 4 dozen times, that's, that was really painful. It felt like very sickening. And, and so, um, I have taken that, that set of experiences and lessons over to, to Blue Light. It's like, it's like, unless Unless what we're talking about, the candidate we're talking to is excellent, it ain't even worth the conversation. It's just, it's not worth it for them. It's not worth it for us. It's just a very high operating bar that we hold ourselves to. And so far anyways, I think at Blue Light, it's been serving us well.

Cool. All right. Well, let's shift gears and talk about something that I've been excited to learn kind of more about, to hear from you. I understand that there's a, that there's been a lawsuit. Tell me more. Tell me more about that.

Yeah, happy to. This is going to be a long-winded set of talking points. To be very precise, you know, lawsuits kind of this like budgie budgie media, you know, term. To be very precise, what, as of today of the recording, this could change, right? By the time this gets released. But as of today, right now, um, Caterpillar has filed in federal patent court, um, a complaint, uh, that we are infringing on 5, uh, 5 of the, the patents in their portfolio, uh, and are asking for, you know, basically a cease and desist, stop, stop selling the stuff, um, in, in federal court. So this, this has been filed federally. It's public knowledge. Um, The second half of actually suing somebody that has not happened yet is you have to literally take the papers and serve your counterparty. We have not been served yet. That's a bit unusual. So I like to be precise, half of a loss, half of the actions necessary to be sued have been completed. You know, my take on all of this is I was surprised. Now, there's some, there's some tension with, with Blue Light and Caterpillar, uh, the enterprise. Like, there's no hiding that. I think the tension has, has existed for at least a couple of years. Um, the, the tension is, um, their dealers are selling Blue Light. I think that's an obvious tension. Uh, the other tension is early on, because our early customers had old Cat rollers lying around for us, those, that was the make and model that we became compatible on. Okay. So building a business, we said, let's go find more of this make and model and let's try and get some revenue in so we stop burning cash. Anyways, all that to say, our early fleet of machines was all Cat machines. Not because there's anything, you know, unique about, like, there's no technology advantage to a Cat machine. It just happened to be the first old beat-up roller that this guy Mike, you know, happened to set aside for us. Um, but yeah, any autonomous machine rolling around on Blue Light's behalf, pretty good chance there was a Cat logo on the side of the thing. So I can appreciate that tension. Um, but I, I think what's surprising is, um, well, two things surprising. One, they've— Caterpillar, the enterprise, has known about us and our activities for two years now. Why wait till now? You could have sued a long time ago. And, and, you know, this would have been way different two years ago. Um, so that, that timing of it was surprising to me. Um, the other thing that's surprising to me is the world of self-driving anything. It's such a rich technology space and IP space. There is no— in my eyes, there is nothing novel about a self-driving roller. I mean, you can literally YouTube self-driving autonomous compactor. You'll see probably 9 different OEMs, 9 different companies that have put some kind of autonomous kit on a compactor. Ain't nothing novel about it. And, uh, and like, you know, hammering on this novel thing, it's like, Actually, we've already talked about it. Our approach was take a, take an open source drone piece of software and put it on this piece of equipment. And so, um, actually all of our technology, like the only reason we didn't think to file patents or look for prior art is because we're using open source stuff that's been around for like 18 years. Um, and so especially from that perspective, there's, to me anyways, there's, there is nothing, you know, novel about, about what we're doing. Um, so anyways, that's, that's probably my first set of responses. Um, I think, uh, I think important messaging, um, that I've been, you know, I've been getting out to our, to our customers is, um, you know, we hired IP counsel and of course we pay their checks. So, so it's no surprise there. Uh, the conclusion from the initial analysis is like on a merits basis, we think there, there are no merits to, to the accusation. Um, um, but like we feel very strongly about that. And of course now, you know, the history of how Blue Light came to be, we feel very, very strongly, you know, about, about about a no merits case here. I think in terms of how we view the law, like it is very important to me that we are clean and straight in the eyes of the law. And so with no hesitation, we are happy to go through this process here in court, whatever claims construction, whatever documentation, whatever we need to produce so that a judge and a jury have all the information necessary to make an informed decision. We will happily go through that process. Now, this can be a 2-year, 3-year process to go, you know, go through and get, get, get some kind of decision on the case. But we are eager to do it. I don't want to do it, but like, I want to be clear, you know, straight in the eyes of the law. So the other good news is because of, again, very supportive customers and investors. And then also now, you know, my operating philosophy on burn and spend, we're actually extremely overcapitalized. And so we are very well funded over the next few years to take on the defense process with Council. So I hope that puts customers at rest. And I think the last message I've already told many of our customers, it's like, this is a risk business. Contracting is a risk management business. And if this new information adjust your calculus and you think that it's just no longer worthwhile, the juice is not worth the squeeze, this blue light thing, zero questions asked, you tell me what I can do to make it right with you, we will make it right with you immediately. I think the good news is we've already made the rounds with many of our customers and they know like the founding story of Blue Light and how we quote unquote invented this whole thing. And so you've been very, very supportive. There has been no hesitation or no second thinking their business with Blue Light has been the sentiment so far.

What do you, what do you, I'm just curious, like with a big company like Caterpillar, why do you, and any thoughts on why they would take this approach with a like up and coming young startup that seems to be having like success in the space?, but it's business.

It's business. There's probably some emotion behind it, some ego behind it, but, but it's business. Uh, uh, and so, uh, what do I want to say here on this podcast? Uh, I think it's no secret Caterpillar, um, has been working on, um, various like autonomous, uh, uh, roller, uh, you know, sort of product suite. Um, I think that we've probably inspired them to accelerate a little bit on, on their development. Um, I think This, you know, sort of the legal and litigation strategy is just one, you know, it's one fork of a go-to-market strategy here. So they're thinking about a broader, you know, how do we get market share on our autonomous, you know, kit that to my knowledge right now is not on the market, but, you know, I would assume they're going to bring something to market and make available to their customers. Some, you know, some of my opinions, like just, In business, it is very early in the autonomous, you know, sort of the maturity of the autonomous space here to be for IP lawsuits to be flying. It's like, in a way, it's flattering, I think, to Blue Light to be zeroed in or called out like this. Yeah, I think it's exceptionally early. I think there are just actually, if anybody from Caterpillar Inc. is listening to this, I think there are a ton of exceptional examples of, of, you know, great player that's been around for 100 years and small new startup. It's just so risky coexisting. And like the two examples I can quickly think of are many people don't know, Mercedes was actually one of the largest shareholders of Tesla for many of Tesla's early years. And then another great example in more recent time is Microsoft is actually one of the most important shareholders at OpenAI, ChatGPT. But which, by the way, Microsoft has their own competitive Copilot AI product and they're still one of the largest shareholders of OpenAI that made ChatGPT. And I think it's been well proven, like in MBA 101, it's like this market is so early. There's lots of execution risk, there's lots of safety risk, liability risk, there's lots of market risk. It usually is not in the interests of the established player to sort of take the approach, you know, the litigation approach, but it, like, I get it. It's all part of Caterpillar's go-to-market strategy. I obviously don't like it. I don't agree with it, but I get it.

Yeah. Well, I appreciate you sharing all that. And I imagine it's navigating that while also still trying to like, you know, build this important product that you're bringing to the market that's going to, I think, impact, you know, the heavy civil construction industry and beyond is that's a lot, right? To be able to kind of, you know, manage all of that at one time. So yeah, I'm excited to see, you know, what happens here. And I think it's a little bit of a David versus Goliath is kind of how I see it.

So It's like 13 of us. It's like, yeah, like David versus a whole city of Goliaths.

Uh, well, good. Well, one thing, one, what I wanted to, um, kind of close on was, um, you, you chose to do, you chose to do rollers and, and articulated trucks first. What, tell me more like about that that thought process? Like, what, why did you, what, why did you go that route?

I cannot even take credit for this. There's, there's a fella, Mike in South Carolina. I was spitballing with, he's a contractor and I was spitballing with him, you know, oh, I want to do this autonomous thing. He actually also came to me and said, you know, Dick, we need, we need a lot of help with like running equipment, go autonomous, help us go autonomous. And he was a big proponent. I wanted to do excavator, skid steer, you know, all these things. It's like the natural place to go if you're a technologist or an engineer. And he helped beat it into me. It's like, you need something easy, you need something constrained, you need something like, you need like a step one for a contractor to go through before really getting into the meat of autonomy. And it's basically set the entire course of our business. And what I, you know, how I explain it, because Even contractors ask me like, Dick, where's your autonomous excavator? I'm like, look, I give you two websites, you go call them. Like, we're not doing that. And, uh, um, you know what, what I, what I go around the country, really now the world preaching is if you look at a job site, forget the technology for a second. If you look at a job site, um, excavator, dozer, some trucks, rollers, water truck, all that, uh, your excavator operator and your dozer operator, like, yes, they're operating equipment., but, but actually, I mean, they're QB1, QB2 of, of the job site and, and making a lot of big decisions, like every minute making a lot of big decisions. And so this is where, like, I have to set aside the, the technologist in me, the techie techie in me, assume the tech work today for all of them. Actually, the, the, the trackhoe and the dozer are the very last place that I want, would want to start with autonomy. And so, um, yeah, Mike was right. You need to find something that's repetitive. It's often its own little world. It's an easy stepping stone for contractors to get into autonomy, build trust with the field and operators. Um, and it was an easy place for us, easier place for us to get started with autonomy and, um, you know, technology and building a business, all these things. And so, yeah, so we say with contractors, um, start with the rollers, get familiar, and then we graduate them to, um, the articulated trucks. And we basically, we want to keep QB1, QB2 as, as busy as humanly possible.

So this is one thing that I think a lot of people are concerned about. Sometimes they talk about it, sometimes they don't. But there's fear, right, that autonomous equipment is going to take over the job site and that there are not going to be jobs in the future for operators. What are you seeing in your day-to-day and what's your kind of perspective on that in the future?

I mean, if you would read the comments on TikTok or Instagram, it's like we've done the worst thing since, you know, since all of history here, taking jobs, right? The existence of blue light. But actually, if you go to these job sites and you talk to, like, talk to the actual, like, folks operating the equipment, it's a very emotional thing at first, rightfully so. Okay. You've made a career in running equipment and operating equipment.. And suddenly this rando Asian dude shows up and says, get out of that thing. And then all of a sudden the thing's rolling by itself. Like, I get it. This is a very jarring experience. But actually after that initial jarring experience, we all come to realize nobody wanted to sit in that roller and do this all day anyways. And people would much rather sit in a pickup truck with the iPad on the dash and be supervising 3 rollers. Nobody wants to run that roller. Like, let's, let's say a very classic scene I see, I, I witness is we're, we're hauling material with trucks all day. We got weather coming tonight. We gotta seal the, the open material. So what do they do? They take a 745, they park it, take the driver out of the 745, and they go run the roller to seal up. And so now all of a sudden you're, you're down one truck and then your, your excavator and dozer operators are at a suboptimal efficiency all because we had to seal up, you know, seal up the site. And so anyways, people are starting to realize after getting some exposure to it, it offers a different way to allocate resources, equipment resources, human resources. It's just a different way to slice and dice production. And the person that used to be running the roller, now some folks sometimes are just not high quality and they're gone, but that had nothing to do with the autonomous dimension of the roller. But the folks that were high quality, and, and were running the roller have actually found wonderful opportunity, uh, filling in on other parts of the site, hop in a skid steer cleanup, sit in the pickup or the buggy and manage 3 rollers. Some are even graduating to like what we're seeing is like an autonomous forming kind of role. So you got 3 blue trucks and 3 rollers, and now they just all of a sudden became one of the most important people on the entire job because they gave it a chance to learn this tablet thing and they're running 6 pieces. It's a whole different, different role inside the company. It's a whole different pay scale inside the company. They all of a sudden are given purpose in their day-to-day, a new challenge. They all of a sudden are given clout on the job site and respect and moving up, you know, sort of on the job site. It's been a wonderful thing. And so we're now seeing it a handful of times. It's like autonomous foreman almost, or autonomous operator kind of role. So it's, it's upskilling, it's upleveling, and it goes back to You know, you said it, I think in your first sentence, like our objective the whole time was take a really great operator and help them get more done, help multiply what they can do. So run a dozer, get your companion roller, run a truck, get your companion truck, whatever it is, help you get more done.

And, uh, I think the other thing that, that was also so exciting to me is like the cost of construction has gone up, up and up and up and up. And I think this is, this is an area where I think that if we take like a fixed mindset where we're like, or scarcity mindset, oh, there's not going to, you know, there's not going to be jobs, you know, or work's going to get done cheaper, so there's going to be less work. You know, I actually have a totally different perspective. I think, and history shows us this too, is that when the cost, you know, of things go down, there's actually more of it. So if you're able to move dirt for $1.50, right, a yard, and you're able to move 15,000 yards in a day instead of 7,000 for $3, there's going to be more work available on the market because jobs that weren't fundable 5 years ago, now all of a sudden, boom, we can, we can build this, right? And there's so much infrastructure in the world and especially, you know, in the United States that needs to get rebuilt. And this is an incredible opportunity for us to drive that cost down. And the people who are doing it, their value goes up if they could do more. And it's scary when we look at things like this on the surface and because we can't really predict the future, we don't know, nobody really knows exactly however, you know, how things are workout. But when it's foreign and it's different, I think we tend to take a more fear-based approach. But there's actually a lot of abundance out there. And how cool would it be, or will it be, when we can do work for less and then be able to do more? Yep.

That scarcity mindset. And it's not a fixed output world. And your example is perfect. If moving dirt goes from $3 to $1.50, all of a sudden that job that was previously not feasible just became feasible. And so number of jobs blows up, more opportunity.

So, well, great. I think that's a, that's a perfect place for us to, for us to, for us to end it and, and, and land it. Dick, really, really appreciate you taking the time. Great to, great to catch up. This guy's always out on job sites, so he's— I'm sure he and his team are heading to the next site to make sure that stuff actually works for real contractors in the field. Um, super, super, super encouraging. Um, and, uh, yeah, really appreciate you, uh, really appreciate you taking the time. Excited, and it's been fun to be a part and, you know, to follow the Blue Light journey. Um, so if people want to get in touch with you or they want to learn, uh, more about Blue Light, what's, what's the best place for them to, for them to do that?

You want to follow along the, the company story, like, we're on, we're on probably LinkedIn Instagram, maybe TikTok now, or the social where we are most active. I have recently started a newsletter personally, sort of trying to open and honest. What's it like doing blue light? Where's it working? Where is it not? And as part of that culture of being intellectually honest openly. So if you find me on LinkedIn and find that newsletter, you'll get the good and the bad. And then honestly, if you want to get in touch, As ridiculous as this is, on our website, just bluelightmachines.com, if you go to the bottom and request a demo, I see all of them. So, so I, uh, uh, yeah, in general, I try, you know, try to be in touch with contractors and, and be in touch with, uh, be in touch with the market. So those are the best ways.

Real, real, real learning happens outside the building.

So anyways, it was, yeah, great, great being on. Thanks for having me.

Yeah, man. Appreciate it. Thanks for, thanks for taking the time.