I met cioplenu COO Daniel Grobe in 2018. My partner and I had already looked at some approaches to transforming the heart of companies: production and its workflows. Talking to Daniel, I immediately sensed how meticulously his co-founder Benjamin Brockmann and he had worked their way into these landscapes: into unstructured documentation and historically overgrown processes. They had really used their insight into the machine rooms of large industrial concerns and small medium-sized businesses. Instead of building a solution for a single application, the team developed a completely new format for the nervous system of industrial production. What fascinates me is not only that they bundle the complexity of ERP system and co in a single software platform, but also the user experience and global orientation of their product. My talk with Daniel is part of the Close-up series, with which we want to give founders and interested parties an insight into entrepreneurial personalities from our portfolio, their milestones, their thinking, their learnings.
Thomas Wilke: Could you start by briefly outlining where you currently stand and what your next steps are?
Daniel Grobe: We have chosen a somewhat atypical path. After we had our first customers very early on, we decided not to simply enter the market with the status quo at that time, but to put a lot of work into development. Today, our software platform is structured in such a way that companies of every industry and every size can use it, from small businesses with 20 employees to corporations with 400,000 employees like Bosch. Our approach was to develop a product that works across the organization and around the world. We didn’t want to build a solution that had to be individually customized and would require service. This has enabled us to acquire new customers relatively quickly and we are now at the point where we want to distribute our product on a broad basis. Therefore, we have initiated the current funding round with you and Cherry Ventures.
Benjamin and you both have a Master’s degree in Science, Business and Technology as well as experience in industry, auditing and management consulting. You have also done research. What motivated you to redesign the topic of work instructions, checklists and protocols for production processes from scratch?
Benjamin and I studied together, and it was clear to us at the time that we wanted to build something of our own. We experienced and investigated the problem regarding our product in companies and research projects ourselves. Production, the heart of a company, has so far, quite in contrast to other areas, remained largely untouched by networking and intelligent applications. Here decades of unchanged processes and analogue documentation collide with ever increasing demands for agility and quality. Today, companies have to be able to react to completely different market shifts, and production employees have to work in close cycles. This is a daily stress test for staff. They have to insert their work instructions, checklists and protocols into outdated Excel spreadsheets and train new employees for up to three years. In process documentation, for example, employees record everything that their colleagues in the next shift, need to know. Fast and complex communication is not possible with conventional text processing programs.
You have turned a jumble of office documents into an intelligent system, with the convenience known from B2C applications such as iCloud, GoogleDocs and plug-and-play systems. What is your approach to product development?
Benjamin and I have complementary perspectives. He looks deep into technology, while I look into the processes of companies. From the very beginning we didn’t want to develop an academic project, but a solution for the market. We always compare our application with the development of homepages. In the past, you had to be able to program to build a website. Today you get a toolbox and off you go. For example, we have built in elements for the user experience or operation that are learned in many age groups, e.g. through services such as Netflix or Amazon, or even pizza ordering via tablet or smartphone. A production manager once told us: ‘This is totally crazy, so the documentation is really fun and I’m really gaining time’. In addition, many companies are urgently looking for skilled workers and our platform allows them to integrate non-specialist employees and employees with a migration background into their workforce much better and faster.
Tell us how you were able to move your MVP forward. Your users within a company range from the workers in machine rooms and production lines to the management. How did you approach this heterogeneous user group?
After we had worked on our first prototype for three weeks, we were given the chance to present it to the Executive Board of the Fraunhofer-Gesellschaft as well as to Fraunhofer President Prof. Reimund Neugebauer, and the feedback was very positive. We were given the opportunity to present our other prototypes to production managers, managing directors and board members, which came through our former colleagues from the Fraunhofer Institute and our former chair at the TU Munich. Although some of our discussion partners were twice our age and experienced accordingly, they met us at eye level from the very beginning and took us seriously. These contacts with companies were very valuable because they helped us decisively in the validation of our product theses. Quite apart from that, it motivates you as a founder incredibly when you feel the enthusiasm of the users. We have always paid great attention to the right tone and to who stands before us. This went from the worker to the CEO, because our product affects the core of the company. Each of these stakeholders has a different view of the same problem and therefore a different objective. You have to be able to make this change of perspective in order to translate input into the product in a meaningful way.
“The pressure to change in companies is usually driven bottom up.”
How did you win your first customers and how do they use your product?
Apart from the contacts we made through the Fraunhofer-Gesellschaft, we attended many conferences on the subject of Industry 4.0. Once I asked just one question in a workshop on business planning and briefly outlined what cioplenu does. By chance, a member of the business development department of an international medium-sized company was sitting in the audience. A short time later this company was our customer. A striking example from the application is, for example, the repair of a machine. Here the employee is under particular time pressure. The precise documentation of a shift is also commonplace, e.g. during three shifts in machine operation. Checklists in Excel offer no added value because I cannot show what happened outside the checkpoints. But if I can integrate images that show where certain deviations occured, that’s something completely different. It is also important that I can easily extend checklists. We’ve heard so many times ‘I can’t update this because it’s so complicated and has to go through an elaborate approval process’.
What is changing your product in terms of efficiency and who is driving the change in the company?
The pressure to change in companies usually comes from the grassroots, i.e. from those who work close to the process. The decision-making process in larger companies is of course longer, since we attach to the central system of their production and deliver a completely new format, an operating system that is used across disciplines, that involves many stakeholders. But our numbers are strong. The time savings and the leap from the current standard through intelligent and flexible documentation are immense. By using description options, e.g. via video, employees save around 80 percent of the time needed for task. Changes and entries are automatically applied to all documents. These are critical mass savings. Transaction times are also eliminated. Change requests can be processed in real time — without printing — through digital approval. The pen brand Stabilo was able to reduce the training time of new employees in production by 40 percent with our software. In addition, the master craftsmen responsible for training are relieved and have more time for operational activities. Basically, one of the biggest benefits is the fact that the latest information reaches the employee without detours and is available at all times.
“The most important thing is that our product remains scalable, that we don’t obstruct it.”
How do you integrate customer feedback into your development, e.g. for new product features?
We regularly collect customer feedback on several levels. Actually, we use our own tool for customer surveys. On one hand, we use it to ask for feedback from workers in maintenance, assembly or quality control. The feedback we receive is very real, very honest. On the other hand, we pay attention to the overall picture and talk continuously with the responsible managers from IT and production. We listen, prioritize and bundle the feedback so that product development does not get jammed up. It is important that our product remains scalable, that we do not obstruct it. At the same time we must not get bogged down, i.e. in contrary, we must also say “no” to certain feature requests.
Your market is huge. Can you give us a brief overview of who is positioning themselves there so far and how you want to implement your USP, also internationally?
Basically, the global competitive situation can be divided into two camps. In the USA and Australia there are start-ups that have been on the market for a little longer but have a different product approach that has less depth. In Europe there are some exciting approaches. Especially in Germany, the market is more conservative than, for example, in the USA. Companies here react less to marketing. We recently won three global tenders from large corporations, which is very encouraging. What is increasingly becoming an important factor is the versatile applicability of a tool across locations and business units. Companies want to reduce their software landscape, not fan it out. This is also what our approach is designed for.
What is your answer to the famous question: What if a major IT player wants to enter the market?
Of course, there is no absolute protection. We have had discussions with leading providers. For the big players it is more difficult to build something like cioplenu than you might think. In addition to the technology, our application involves a great deal of research, complex logic and processes that require niche knowledge. That was part of our strategy in terms of defensibility. Catching up on the vertical lead is difficult.
How will your market change, e.g. through artificial intelligence, robots and human machine interaction?
The long term scenario is the ‘dark factory’, without human labour. This will certainly become reality in some places, but not a comprehensive model. And even there, the robots and intelligent machines have to be analyzed, maintained and repaired. No matter whether data is collected humanely or artificially: data only provides value when it is centrally available and can be evaluated in a meaningful way. For us, the human being remains at the center, whether he works with or without machines, reads or interprets data — we are concerned with the Connected Worker. We want to enable them and the management to recognize and understand where a process stops and why. We will use artificial intelligence for this purpose. However, we are looking very closely at which connections are important and how we can use AI in a transparent and comprehensible way.
How important were and are institutions like the TU Munich and the Fraunhofer-Gesellschaft in this context?
Very important. For us, on one hand, the research opportunities and contacts to companies that we received from the Fraunhofer-Gesellschaft. On the other hand, for developments like ours, the proximity to other scientists, e.g. students at universities like the TU Munich, is valuable — even after market entry. We have various demonstrator terminals on which we test. We consistently get other scientists’ views on our software. However, when it comes to cooperation with universities and institutes, I hope that the German bureaucracy, which is sometimes incomprehensible, will improve even more.
What is your personal driving force and vision for your own company?
A big driving force for Benjamin and me was the frustration about not being able to use our own skills in companies. Our goal at cioplenu is to create and maintain structures that allow this. We have a highly motivated team that loves to tackle complex issues — it’s incredibly fun. Personally, it also motivates me to build an organization. It may sound crazy, but when we pay tax or social security contributions, I’m always a little proud because we contribute to the whole, provide jobs.
You founded in Augsburg, what are your next steps at cioplenu?
We are now stepping on the gas in marketing, we are building up a sales team and have recently opened a second office in Frankfurt am Main. We will probably more than double our team size within the next few months.
How do you choose your employees? It is not easy to find the right mindset for very ambitious projects.
For us, it is important that employees can immediately integrate well — both professionally and personally. That’s why we approach people who have already worked in a dynamic environment. At cioplenu we are working on a joint journey, a vision ‘Made in Germany’. To achieve this, we are looking for employees whose focus is not on themselves but on the team. What benefits us is that we have a growing product that is very attractive for talented people to work on. In addition, as an employer, we take care to create an environment in which employees are not left to themselves, but also have very good opportunities for personal growth.