Blaine: Joining me today is Raj Raheja, CEO and Co-Founder of Heartwood, a truly innovative company that provides virtual 3D interactive simulations and guides for operations and maintenance personnel. Now, some of you might recall our earlier interview with Jordan Mayerson, the CEO of Hoplite. So, this is the second in our series of interviews with entrepreneurs who are bringing truly transformative solutions to the market.
Speaking of entrepreneurs, Raj has received numerous Entrepreneur of the Year awards including recognition by the California State Assembly as one of the finest entrepreneurs in the San Francisco Bay Area. Now that’s saying something! Well Raj, I’m glad to have you on today.
Raj: Thanks Blaine! It couldn’t have been done better. The $10 I paid you before was totally worth it. [Laughter].
In all seriousness, I’m in my 40s now and I know that sometimes these awards are more distraction than anything else. I’ve noticed my best and most fruitful work was when I put my head down, do some great things, and get great results. That feeling no award can buy.
I appreciate the recognition. I don’t want this to be like a humble brag, we love all that, but having said that, the real work is the real work, so let’s get into it.
Blaine: Absolutely. Well, let’s get into it. That’s right. I definitely want to spend a lot of time talking about Heartwood’s solution because I really think it is transformative and very core to many of the topics we cover on VANTIQ TV.
But before we do that, maybe back up a little more and tell us how you got to where you are. How did you get to the point where you realized Heartwood was the way to go?
Raj: Steve Jobs once said, dots are super easy to connect going backwards. A lot of that happened to me on my journey of being an artist. When I was really young, I really loved art. I was an artist by heart. I went into architecture, actually, my first love. So, I absolutely adored anything that was visually extravagant. I thought architecture was the perfect balance between science and art. It really honed the left brain/right brain skill.
As an example, one class would be to calculate the dead load on certain building forces yet figure out the dead load column. The next class would be like sketching people in charcoal. That would really amaze me. I love that mix of art and science. That’s where I started. In the process of architecture, I actually discovered 3D graphics because this was in the 90s/mid 90s and really cad/cam 3D graphics. This is the first time in the history of computers that they were actually able to play on regular desktops, not some big machine.
I was fascinated that in architecture school, we could walk through a building before even building it. We were like the first generation to do that. I looked at all of that and said, “This is not the end of it. This is a start of it.” If we could walk though a building before it is built, imagine what else we can do with 3D graphics.
So, my journey into 3D graphics as an entrepreneur began when I was about 20 years old. I got into that, started something while I was in college. I’ve done something in the 3D world ever since.
Starting from an animation company doing visual effects, I started Heartwood with Neil, my co-founder and we went from animations to simulations which pretty much, in layman’s terms, is saying we went from movies to games. So, instead of seeing something that plays 50 times the same way, we love the fact that simulation or games, if you will, is very unique to the user. I think for us, that was euphoric and we said, “This is a whole new world about to open up: the world of interactivity, the world of using gaming technology, even if it wasn’t for games.” The fact that you could be immersed in this environment is phenomenal.
I think our first journey as Heartwood first started, we started doing almost any kind of simulation and then we got focused into the operation and maintenance space. I think for us, it was pretty euphoric that we could bring such new school technology into an old school industry. We’ll go into industries that sometimes the equipment is 40 years, when you talk about railroad, manufacturing, or energy. And then, we’ll bring our technology.
It’s actually more intuitive to learn this way because that’s the way real life. Real life exists in 3D, not in 2D. So for us, that transition was very normal. We’re trying to bring that transformation into the workplace in these industries.
Blaine: Well, thank you for that and thank you for that background. I was also sort of like you. Part of that original PC revolution when graphics went off SGI machines and intergraphics workstations and onto the PC. It truly was a revolution. And now, you’ve taken this obviously to another level.
Now, I’m going to do something that I’ve actually never done before on VANTIQ TV. But, if you happen to be at a PC and you’re watching or listening to this, I’m going to tell you to pause this interview, go to hwd3d.com, and check out the video on the home page. I guarantee, since the technology is about 3-D graphics/visualization, if you can see this run, you will be actually quite amazed and the rest of the conversation will really click for you. If you can’t do that for some reason, no worry. I’m going to get Raj to explain the solution right now and then after it’s over, you can go to their website and check it out.
So Raj, tell us a little more fundamentally what is heartwood about? What is the value proposition?
Raj: I think the best way to start is, even before the value prop, let’s tell you why we exist. What’s our mission, really? The way we see it, the simpler we can state our mission, the more likely that we’ll reach it. Clarity is super important at these stages of growing the company.
For us, that clarity of mission is we truly believe that critical, complex information should be easy to learn following master. What we mean by that is, if you actually go out in the world today and you have anything that’s really complex, mission critical, it probably has a stack of stuff around it: procedures, isometrics, autographics, very schematic, engineering-based documentation.
But, the people actually performing those procedures are sometimes not exactly that. They are either blue collar workers picking up vocational training or some kind of hard skill. Or, there are technical technicians, if you will, but they are in a hurry because they always are trying to get the task done. What we’re trying to do is say that if information in real life is not presented the way it’s presented in those manuals, then that’s not the way they are going to learn.
How can we solve that? How can we go from a hands on training, which is great in real life. In real life, if someone were to just take you and say, “Let me just show you this.” The classic putting together Ikea furniture example, let me bring that cliche up, if I were to teach you that and show you and you were just following me, you’d just do it. But, the problem is I’m not there with you all the time. It’s just too prohibitive in many ways to have someone just follow you around and tell you what to do.
So, the other way is to just have them practice in real life. But, the problem with that is that there’s not that much equipment available. It’s too far to travel. The training sessions are expensive. On the other hand, what we have done in the last 10 years, so-called “the first wave of digital transmission” was putting everything we have, all these manuals, online. Now, what that does is it doesn’t solve the real problem. It just puts all of that complex information online. It’s accessible anywhere, but it’s not the way people learn.
There is this massive gap in the middle. That’s what Heartwood solves. The three pillars important to our technology are that it must be visual, interactive, and portable.
Visual, because without showing something, there’s no point. If I just tell you what it is, you don’t know what it really looks like, especially when talking about hard skills and complex machinery. It has to be visual.
The second thing is it has to be interactive. This is where videos fail and we succeed because if you see a video of someone performing a 252-step procedure, it is by no means a guarantee that you have learned anything. But, if I make you actually do all of those steps, you’ll learn. A great example is the flight simulator. That’s why they built it. We’re bringing that whole interaction down to an everyday level.
The last part is portable. That’s what flight simulators cannot do. They are not portable because they are designed for something else.
We’re attacking functions in operation maintenance and training where being visual, interactive, and portable can bring all these three together onto a simple camera, think about an iPad or iPhone, in the hands of a worker who’s anywhere in the world. He can access this information. He can actually do all the steps and [the system] will say, “Hey hold on, Blaine. You missed step 6 or you step six wrong. Go back. Do it in this order.” So, even before he gets there, he can practice it. When he exits out of that situation and a year later he needs to recertify for some certification, he can do it again there. There’s so many reasons why learn by doing to rock to a digital canvas is just transformational.
Blaine: So, it sounds like to enable these use cases, you have to build or somebody has to build, effectively, a digital twin of the mechanical system that you’re going to be trained on, or whatever the system is, and then you do your training on that virtual twin of the actual physical system. Is that correct?
Raj: Yeah! And actually, the name digital twin is the exact name you want to give it in digital transformation. Obviously, you’ve done your homework. The digital twin will have a lifecycle even beyond just training because training is just learning the job, but that’s just not the end of it.
I remember once hearing this guy who has climbed Everest seven times. He was speaking to a crowd. He said, “When I’m climbing Everest, what do you think my goal is?” He said, “Most of you would say ‘It is to reach the top'”. And he said. “It’s not. My goal is coming down alive because it doesn’t matter if I don’t make it down.” That’s where the goal of the goal really matters.
A lot of training organizations would think that the goal is to deliver better training, but that’s not the goal. The goal of the goal, really, is to have the task done better, faster, and without errors. If you can reach all those three conclusions, that would be great. The goal is to make the task be done faster, without errors, all that.
It’s not just training for us. We think training is just learning the job and then there’s doing the job. The digital twin strategy can move all the way from a training classroom – this could be on PCs, iPads, or even virtual reality like you’ve been hearing about – to on the job. This could be on their phone.
We are preparing for that world where the transformation or rather the movement of this content or knowledge from learning to job to doing the job is seamless. That’s really the essence of what I was trying to explain in that sense. It’s the entire digital twin all the way to the last point of access which is right when they do the job.
I have a saying that I sometimes say internally in the company and to customers that come inside: “Training exists in many places. They exist in the classroom. It exists on the plant floor, like a factory floor. It exists between job sites.” For example, PG&E, the costumer of ours, some of their technicians in between job sites in a pickup truck, pull out their iPad and actually do some procedures because they know in 40 minutes they’re going to get to a job site. So sometime training happens in a pickup truck between job sites and sometimes in a trench two minutes before the task itself.
That’s all what training is. It’s not just one thing. I think, for us, it’s super important to explain to customers when they read about AR/VR on their own, or any such technology that it’s not really about the technology. It’s about the user. In this case, the user is that technician. We got to follow his life and see that we’re really covering every inch of his journey. That will be true transformation.
Blaine: You talked about examples of where the training happens even in a classroom, well ahead of time but then also the example where somebody is in a trench and they’re looking at some device or whatever it in real time. Are you seeing more of this happen in real time as opposed to training well before the fact or what are the trends you’re seeing in terms of the more real time applications of this technology?
Raj: I think you will really like this answer because it wasn’t the answer we were first looking for. That’s one of the dangers of entrepreneurs. You are looking for answers, not looking for the answers that will come naturally.
To us, the answer that we were looking for is from the merit point of view. We were trying to convince companies that having everything available real time is the proper way to have it done to prevent errors. Well, that’s all good. Really, what ends up happening is the reason they think real-time information is great and valuable for the company is that if you just build content for the classroom and it’s not available real time, the ROI is probably one tenth.
You can save training time for 100 people or 200 people a year. That’s good. You may get your return, but once you go into operational efficiency- the way to explain it is you can train for low volume high complexity or you can go for high volume even marginal gains. Marginal gains made over 15000 employees in the field in real time have a completely different ROI than just doing something in a training class, no matter how good it is and no matter how immersive it is so.
That’s why the journey to real time is going to be a two-fold one. One is on pure merit that must have information available real time for accuracy if information for having the task done well, but also for getting a value for all of this because digital transformation is expensive. That’s the problem: it is so massive of a task, people don’t know how to attack it. But, if we can walk them the ROI conversation, they’ll walk much faster on that journey. For us, the real-time conversation is also of dollars one. It’s not just for the efficacy of it.
Blaine: Do you foresee the continuation of that trend where even thinking about it as “training” is probably the wrong lense to use on it?– where literally you’ve got your virtual, digital twin that’s overlaid on top of the real machine which you’re fixing, and it is helping you and directing you to do it? Yeah, you’re learning while you’re doing it. Maybe you won’t need the digital twin next time around because you’ll have done it. You’ll have done it a few times. But, as you were saying a second ago, when we get to the place where AR glasses come out of the lab and are more used by general industry, I wonder if even thinking about it as training is almost too restrictive.
Raj: Absolutely. You’ve hit a very topical nerve right now because everyone is talking about it. Most articles you read about the immersive technology or interactive technology, approach it from the view of training or they’ll say it’s either training or field service as it were two separate things. That’s just not the way anyone thought of it in their organization. When they think about training it’s training for someone to finally go through the task, and for them, it’s that same worker. It hasn’t suddenly, magically changed to someone else.
Yes, I think the gateway conversation can be training, but very soon, we extend the conversation to learning the job, doing the job, and retraining for the job. It’s all of it. And that’s how you get operational efficiency. That marginal gains over huge volume, the numbers are always in the millions and millions of dollars. We have hardly done any business case where it’s a couple hundred thousand. Once you’re talking about 15,000 employees, saving three minutes out a 10-minute task, but that 10-minute task is done every two hours – So, I am giving an example, any routine maintenance that needs to be done every two hours, many procedures exist, we have 15,000 employees. Do the math on even 3 minutes saving, that’s huge for that skill.
Blaine: Yeah. Do you have a favorite example of a customer, and you don’t necessarily have to say the name, but where they implemented the solution and it truly did transform their operations in some fundamental way?
Raj: I think the one that I already mentioned, PG&E. They actually won an award for the application that we deploy for them because they got a 62 percent saving in just the task itself and a 37 percent reduction in rework and what they call “overpressure events”. So, they overpressure a valve, the valve is not built properly. The gas has an overpressure.
But the one I like to bring up is Norfolk Southern. Norfolk Southern is a premier brand in the railway industry. Because of federal guidelines, they have to test and evaluate whether someone can do something called the airbrake. You have to test for how the air brakes work in a real car. This is literally done every time the train stops and has to move again like terminal points. You have to do this air brake test. The frequency of it is a lot and it’s horizontal, company-wide. Mechanics have to do it. conductors have to do it. Locomotive engineers have to do it. So, it’s very horizontal and multiple times in a week or a day or whatnot, any time a train comes to a terminal point.
What they’ve done is that, before this, someone had to literally walk out with another person and that person had to do the test. This person would just watch them do it, record the information, and then they would get certified whether they can perform the brake test or not. What they’re doing now is they’re applying to get a waiver that instead of doing it in real life, we can have them in simulation and actually gather far more information than we could do before.
I think that’s really important in the journey of digital transformation. A lot of companies think that journey is to bring what was analogue into the digital space. It’s not just taking real life into digital, it’s to do things we couldn’t do before. In this case, when someone goes and does all this in the simulation, we can actually introduce faults that are randomized. It’s not a cookie-cutter test. Every time they do it is dynamic and you can collect information or they can collect information. Now, they are doing things they could not do real life. I think that is the real journey of digital information. Norfolk Southern is just starting on that journey with us.
We are building a whole set of suite of simulations to replace real-life evaluation and save tons of money as well as really test these people. This is not just some test out in the field, this is randomized simulation testing.
Blaine: Very interesting and a great example. I have to ask: I attend, I think like you, we attend a lot of events for manufacturing and field service and related industries and I speak to a lot of folks at these events. One thing that I hear over and over again is when companies are trying to implement some of these new, transformative technologies, there’s resistance from especially the older workers, the ones that have been on the job for 20, 30, 40 years in some sense. And just giving them a virtual reality goggle and saying “go for it” isn’t well-received by many of those folks. Have you sort of run into that or run across that and how do you think companies can overcome that?
Raj: I think it’s a very valid point and think it’s not something you shy away from. Technology on its own is not intimidating. It’s intimidating when it’s brand new to them. You will see that the 70+ and under ten years old humans are actually more inclined to use touch technology than anyone in between in the sense that in leu of what else is available.
For example, if you give someone in between those ages of desktop and complicated drop down menus, they will navigate through it. But, if you give a 70+ plus year old and an under 10 year old a touch device and they’re gone. They don’t even need you. They are on the move. They’re off to the races. The reason is that technology is less intimidating, not more. The question isn’t really about new technology, it’s about is that technology intimidating on its own?
When you talk about VR goggles or AR headsets, absolutely. They are new things. This is where our road map to our customers is. First, let’s figure out the touch points in the device uses that they are already accustomed to. They are already using something. Tell us what they’re using. Are they using a computer, phone, a tablet? The first phase of digital transformation is just to deliver on these three. Forget AR. Forget about VR. That’s not your concern right now. The first thing is to get operational efficiencies on the devices they already operate on.
A great example of this is imagine a world where Uber released their app for the first time and no one had a smartphone. Imagine the job. Oh my god. That would be a journey that would have no end. Right. That’s almost where AR/VR is today. I think it’s in the order in which we release technology. Sometimes it’s important. It’s not just technology on its own.
For example, if you go to our website and see any one of these apps and you see fingers going across an iPad and people actually doing that. It’s amazingly intuitive. It’s sometimes more intuitive than dealing with your folders in your e-mail because it just touching buttons. It’s just doing things you would in real life except you’re catching them on the screen instead of there. In that whole connotation of putting on your headset with the goggles and all, that’s one version of the technology that’s not what we’re seeing here. We are doing many different things and VR/AR, all that promised land, is one version of it, one way to experience it. That’s not what we suggest going in at all.
Blaine: Interesting. Well, it makes me also think a little bit about gamification. You talked earlier about how many of the technologies that you use were based or come from the video game industry or similar to that. Have you had any examples or any experience with clients literally trying to gamify their solutions? So, there are some maybe built in rewards systems into the training or something that was purposely meant to make the training engaging and fun and in some way like that?
Raj: I think gamification is going to be very useful in areas of training where I think more soft skills are involved. Any time you want to change behavior per se, I think it’s going to be really critical to incorporate some kind of gamification. It doesn’t need to be frivolous badges and whatnot.
But however, since our focus is really on hard skill training – we go talk to technicians, we did many pilots we had some good gamification techniques and what we realized is these guys are really smart if they don’t have multiple degrees, technicians have worked with their hands/wrenches since they were young. They are actually really good at knowing how to do something. They just don’t know when to do it. So, in 252 steps, if you tell how to turn a wrench, they know how to turn a wrench, they just need to know when to turn it.
When they’re involved in the critical task, they don’t have the patience for gamification. It doesn’t work very well for them. They actually just need the information, the supercritical information, and they need to get their task done. One of the learnings for us was using gaming technology is amazing, but gamifying it is a whole different ball game that is overkill.
That’s what creates a disconnect where they’re now playing a game and they really just want to get that job done. A lot of them are paid hourly and whatnot. They actually have metrics around how fast they do the task. So, we really didn’t to approach gamification in that order. We stayed with gaming technology and kept is as that.
Blaine: Makes perfect sense.
This has been really interesting. I guess one final question before we get to the end here. Have you been giving some thought to how maybe the advent of AI or machine learning technologies may play into what you’re doing or is that still maybe a little far off?
Raj: It depends what hat I wear. If I’m wearing the sales pipeline hat, then yeah, it’s get far off because that first job is to just get people used to a digital world where everything they learn is visual, interactive, and portable. The next phase though, like the other hat I have to wear is like the classic, where the puck is going hat. I think a lot of people know where the puck is going. I think the phrase is incomplete. It’s not just where the puck is going but how fast it’s going and how fast you’re willing to move to match that puck. Sometimes, you can let it go away and there’s another one coming right behind it. It’s not all that important to match the pace of the puck.
I think, for us, I think machine learning, if you say five years from now, and then we are already looking into a lot of plugins and whatnot within our app. For example, if 100 people take the training and every one of them gets step six wrong, then machine learning should be able to identify step 6, bring it up with an instructor and say, “Hey I think you’re teaching steps 6 wrong if 100 people are getting it wrong out of 150.” Whereas. if one person is getting it wrong, then the problem could be the person.
I think that’s where the machine learning and AI can start delivering a lot of analytics that are useful. Companies don’t have bandwidth for that story right now. They don’t know what to do with it. I think that time will come, but moving too fast where the puck is moving too slow will just be a disconnect and they will not be ready for it. They will be intimidated by the noise.
Right. Right. Makes perfect sense. So, this is one of my favorite parts in the conversation where I get to ask gusts what part of conventional wisdom they’d like to call BS on.Is there anything that comes to mind in that regard?
The one thing I like to say is that if you pick up any report, any industry report on AR/VR, and they will always say the lowest hanging fruit is the use case around training, field services, or something like that. Then, what we see is a bunch of companies opening up saying, “I am AR for field service.” And another company says, “Actually that’s good, but I am VR for training.” All of these fragmented things when I look at all of that, I call BS on that because all of these are technology-led use cases. Instead, they should be problem-led.
This is the difference between a solution seller and a problem solver. A solution seller, the mindset should be solutions, they would say, “I do AR, so let me sell something in VR”. Whereas a problem solver will say, “What is a problem and what are the best ways to solve this problem?” For us, the problem is really learning and doing the task faster, better, with less errors. To do that, you’re going to need everything. It’s not just AR/VR. It’s going to be all of the above. It’s going to be a whole lifecycle.
Any one report that talks about AR/VR as one thing, to me, baffles me because it has to be additive in the whole lifecycle. It cannot be any one thing on its own. It’s almost like – imagine if I said, “I have this amazing thing called email. You’ve never heard of e-mail and I’m going to release it. It’s amazing. But, to view e-mail, you’re going to have to buy a separate, single-use device that just does email. And that’s all you do. Anytime you need e-mail, you are going to have to have put that over your eyes and you’re going to see e-mail and then you will put it down and say “E-mail’s over guys. I’m not going to e-mail anymore.” You have to put it on and then take it off.
And then some point once the pilots and the science projects are over, someone in the organization like a CEO will call BS on it on it. I would have called BS on it. That’s just not the way it happens. If that e-mail/that training content cannot move all the life cycle: someone is in a classroom, someone’s in a trench, and someone doesn’t have all the AR/VR, whatever variable, it is just not going to be the there.
We are at the time right now where everyone doesn’t have a smartphone and you are trying to release Uber saying it’s the next best thing. On what? I don’t have it in my pocket. I don’t have GPS. I don’t know how to call Uber. We need to get there before we get there and fake it till you make it is not going to cut it because you’re going to get companies to give 100/200 grand pilots and they’re going to get super disappointed with the process and discard this entire technology instead of just discarding the way they approach the technology, they may discard it altogether and that would be such a shame on the whole transformation because it’s not about that.
Blaine: Yeah. Makes perfect sense. That’s a great one. Any technology or business predictions for 2019 or beyond?
I have never liked that question and I will tell you why. I think in relationships, friendships, stock, health, almost anything else worth having in life, it’s never worth going short. It’s all always what’s going long. If you’re dating someone, the question isn’t, “What is the third date going to be like?” The real question is, “Do I see myself value and behavior point of view, spending many years with this person.” I’m very confident predicting what’s out there for five, six, seven years. And we are going to get there.
In between, I’m going to build multiple hedges for me to be wrong and that’s going to be fine. I don’t need exit to realize my loss/gain using the stock analogy as long as I’m going long. If I’m predicting this whole training AR/VR/everything, I am predicting the overall lifestyle. If I miss a couple of trends in between, I’m just absolutely fine with it. If you know of Jason Fried from base camp, he has a great word. He says, “The opposite of FOMO is JOMO: the joy of missing out.” I do have the joy of missing out on a few trends. You just need to get the medium ones right, and you’ll be good.
Blaine: All right! Well give us a longer-term trend, then, Raj. That’s good. I totally buy your theme.
Raj: So, longer term trend, I think in five to seven years we’ll see digital transmission in all school industries, like I mentioned, be very cohesive. It will be one thing. We are going to see a very fragmented five to seven years. Some companies will be just right on it and others will be slower. We are going to have to have a lot of patience in their journey to accommodate all of these moving parts. I think, in general, AR/VR is, as a company-wide, complete deployment, it’s still five years out. That’s my overall prediction.
In terms of everyone using it every day, I think there will be these niches our business unit problems to solved what will have ROI on their own. Businesses can start solving that right away. They don’t have to wait for 5-7 years to do that. I think beyond that, anything else I say would be just very super specific of our or industry. So, I am just going to keep it at that. I think that, for any leader both in companies like ours as well as our customers, patience is a big thing. But again, a ship is not meant to be in harbor. That’s not what it’s built for.
You’ve got to get into it and be willing to get into the waves. In the 60s and 70s, they were building a think tank on rockets trying to go to Mars and whatnot, starting with just the moon and then later on thinking about interplanetary expeditions for humankind. One of the biggest problems faced that no one had an answer is for Earth and any rocket that they built a rocket today, it would cross the first rocket in six months.
Raj: What you do? Do you not start? The flip side is you cannot build the rocket if you don’t build the one that’s six months out. So, you actually have to build the one with orphans. You build the rocket. You send it with all the best intentions you have. Then, in two years, you orphan that rocket because your new rocket built, in six months, will cross the one that you built two years ago. That’s just the nature of innovation. Companies that are not willing to do that in digital transformation will just sit on Earth and watch others do it. The first one will sound like they are doing something silly. Those are the guys that are going to build the next rocket. It was just such a great framework to look at a problem.
Blaine: That is a great analogy and a framework. That’s fantastic. Right on. Have you written a blog around that one? You should’ve.
Raj: I love that analogy. I guess it does give me more homework to do.
Blaine: There you go. Well, on that note, those interested in hearing more of Raj’s thoughts can follow him on LinkedIn and definitely check out his really interesting blogging that he does at Heartwood website, which again is hwd3d.com. Raj, it was really a great conversation today. Appreciate the time.
Raj: Thank you Blaine. It was as fun for you as it was for me. I felt like this is my way of talking to myself. I appreciate it. Thanks.
Blaine: Absolutely. And of course, the folks up there can reach out to me anytime at real time and VANTIQ dot com.