20VC Why SelfDriving Is Still UnderHyped in The Medium To Long Term, What Will The Ownership Mechanism Be Both In Physical Assets & Data and How To Assemble A World Class Exec Team As A Young Founder with Alex Rodrigues, Founder & CEO @ Embark

In this installment of "20 Minutes VC," Harry Stebbings interviews Alex Rodriguez, the founder and CEO of Embark, a leading developer in autonomous trucking technology. Rodriguez shares his journey from winning a world robotics championship in middle school to dropping out of the University of Waterloo, becoming a Thiel Fellow, and eventually spearheading the creation of Embark. With over $47 million in funding from Sequoia, Data Collective, SV Angel, and Y Combinator, among others, Embark is revolutionizing the trucking industry by operating the world's longest automated freight route and addressing the current driver shortage with a combination of self-driving trucks and local drivers. Rodriguez emphasizes the potential of self-driving technology to unlock massive value by saving time, reducing accidents, and transforming transportation into a service. He also discusses the importance of adaptability, learning, and setting clear, data-driven milestones in the frontier tech industry.

• "Founders Friday" is a segment on the 20 Minute VC podcast hosted by Harry Stebbings.
• Harry Stebbings invites listeners to follow him on Instagram for behind-the-scenes content.
• The episode features Alex Rodriguez, founder and CEO of Embark, a leading developer of self-driving trucks.
• Embark boasts the longest automated freight route in the world.
• Alex Rodriguez has raised over $47 million in funding from notable investors including Sequoia and Data Collective.
• Alex's background includes winning a world robotics championship in middle school and working as a software engineer at Nuance Communications and Khan Academy.

This is founders Friday on the 20 minutes vc with me, Harry Stebings and it'd be awesome to welcome you behind the scenes here. And the best way to do that is to head over to Instagram and follow at htebings 1996 with two b's. But to our episode today and I really like to have synchronicity between episodes. And if you listen to our fantastic discussion with Pat Grady on Monday at Sequoia, he discussed his latest investment and I couldn't be more excited to have them on the show today. So with that in mind, joining me in the hot seat, I'm very, very excited to have Alex Rodriguez, founder and CEO at Embark, the world's leading developer of self driving trucks.

The quote introduces the "Founders Friday" segment and the episode's guest, Alex Rodriguez, highlighting his company Embark and its achievements in the self-driving truck industry.

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• Alex Rodriguez's passion for robotics started without a long-term plan but led to the founding of Embark.
• His background in competitive robotics and team management laid the groundwork for his future company.
• The transition from the University of Waterloo to Embark was a series of steps, including building a self-driving vehicle and participating in Y Combinator.

Things sort of fell into place where for close to a decade before we started embark, I'd been building competitive robots. And not just building robots, but running teams of 20 to 40 people that were working on time constrained, budget constrained, outcome oriented robotics project.

The quote highlights Alex's extensive experience in robotics and team management, which naturally progressed into the founding of Embark.

• FIRST Robotics provided essential preparation for running Embark.
• Alex's unique experience in FIRST Robotics involved founding and managing teams without adult mentors.
• The program taught him practical engineering skills and team management, which were directly applicable to his role at Embark.

Yeah, I stand by that 100%. I think FiRST robotics was by far the most useful preparation for running embark and to understand why, I guess you can understand particularly what my experience in first was, which was even a little bit unique.

The quote emphasizes the significant impact FIRST Robotics had on Alex's development and his eventual success with Embark.

• Alex Rodriguez recommends FIRST Robotics as a superior program for engaging children in STEM.
• The program's hands-on approach and competitive nature appeal to children who enjoy learning by doing.
• FIRST Robotics allows students to undertake high-level engineering work, which can be more engaging than early post-school experiences.

So I think it's an amazing program. I think if it's something that your kid has an interest in, I very strongly recommend doing whatever it takes to make it possible for them to participate.

Alex advises parents to encourage their children's participation in FIRST Robotics if they show an interest in STEM, highlighting the program's benefits for hands-on learning and engagement.

• Embark is positioned as a global leader in semi-autonomous trucking.
• The company's progress and milestones reflect Alex Rodriguez's experiences and the skills he developed through FIRST Robotics and his academic journey.

The theme is implied through the conversation, recognizing Embark's influence in the semi-autonomous trucking industry and its connection to Alex's background. No direct quote is provided for this theme.## Self-Driving Technology and Its Underestimation

• Alex Rodriguez believes self-driving technology is underhyped in the medium to long term due to disagreements on short-term details.
• Discussions often focus on specific short-term predictions, such as the timeline for self-driving deployment and the types of vehicles involved.
• Intelligent public market investors prioritize long-term value creation over short-term stock jitters.
• The key is to envision a future where self-driving technology creates substantial value.
• Conservative estimates agree on the widespread deployment of self-driving vehicles within ten to fifteen years.
• Back-of-the-envelope calculations suggest massive enterprise value creation through self-driving technology in trucking, time savings, and accident reduction.

"I think this is a super interesting conversation because there's been all sorts of disagreement in the short term about the details."

This quote introduces the theme of disagreements in the short-term outlook of self-driving technology, emphasizing the importance of focusing on the bigger picture.

"But at the end of the day, it's about, if you look out into the future, do you see be a world where this is creating a lot of value?"

This quote stresses the significance of long-term value creation in the evaluation of self-driving technology's potential impact.

"Ten to 15 years, we'll see widely deployed self-driving vehicles."

Alex Rodriguez agrees with conservative estimates on the timeline for widespread self-driving vehicle deployment, setting a realistic expectation for the technology's maturation.

"We're talking about $6 trillion of enterprise value, $8 trillion of people's time, $4 trillion of accidents and damage."

The speaker provides a rough estimate of the potential value created by self-driving technology, highlighting its significance in various sectors.

• Alex Rodriguez argues that self-driving technology will create new value rather than merely transferring it from incumbents to new players.
• Self-driving technology can unlock previously inaccessible value, such as time spent driving and lives lost to car accidents.
• The technology is expected to create value by saving time and reducing accidents, which is not just a transfer of existing value.

"So this is new value that is being unlocked, where the average American spends five to 10% of their waking life driving."

This quote highlights the creation of new value by returning significant amounts of time to individuals that was previously spent driving.

"We're giving those people back their lives."

The speaker points out the human aspect of value creation through self-driving technology by emphasizing the potential to save lives from traffic accidents.

• The conversation shifts to the future ownership structures of semi-autonomous and autonomous vehicles.
• Alex Rodriguez agrees with the idea that autonomous vehicles will become a public utility in the medium to long term.
• The shift in ownership is expected to change behavior, reducing the use of private cars.
• Autonomous vehicle fleets will offer flexibility and efficiency, suggesting a service-based model for vehicle access.

"The people who will own this will be fleets and they'll be available sort of at the push of a button of whatever kind of vehicle you want."

This quote suggests a future where autonomous vehicle fleets are owned by service providers and accessed on-demand by users, indicating a shift from private ownership to a service model.

"So much flexibility this enables and so much more efficiency that it enables that it just makes sense to have it be a service that's available at a push of a button instead of having it sit parked in each individual house or each individual parking spot by the office."

The speaker envisions a future where the efficiency and flexibility of autonomous vehicle services outweigh the need for individual car ownership, leading to a more efficient use of resources.

• The discussion touches on the potential convergence of markets between companies like Uber and Tesla.
• Alex Rodriguez sees a future where fleet ownership and maintenance merge with public access to vehicles.
• The success of traditional OEMs in adapting to new roles in this landscape remains uncertain.

"I guess I wouldn't say that Uber is really moving into Tesla. I guess maybe insofar as they're going to own more of the vehicles."

The speaker clarifies that Uber's move towards vehicle ownership aligns with Tesla's market, indicating a blending of service provision and vehicle manufacturing.

• The conversation addresses the data generated by self-driving vehicles and concerns about privacy.
• Alex Rodriguez believes the industry is positioned to offer more privacy, as the primary value of self-driving does not rely on personal data.
• The focus will be on private data ownership with some data used to improve safety features.

"I think that we're in a nice spot. As an industry where self-driving generates a huge amount of value, that's got nothing to do with spying on you."

This quote reflects the speaker's view that the inherent value of self-driving technology is independent of data privacy issues, suggesting a future with greater respect for personal data.

"The overall bent will be towards private data ownership and a lot more privacy."

Alex Rodriguez predicts a trend towards protecting individual privacy in the context of self-driving technology, contrasting with other industries that heavily monetize personal data.## Driver Shortage in America

• America is currently facing a significant driver shortage.
• Younger generations are not entering the trucking industry due to the requirement of being away from home for extended periods.
• The demand for trucking is increasing alongside economic and manufacturing growth.
• The number of new truckers is at a historical low in proportion to the demand.

"America has a huge driver shortage right now... younger people aren't getting into trucking because they don't want to spend weeks away from home."

This quote highlights the core issue of the driver shortage, emphasizing the lifestyle challenges that deter new entrants into the trucking industry, contributing to the shortage.

• Embark aims to alleviate the driver shortage by introducing driverless trucks for long-haul routes.
• Driverless trucks would handle intercity driving without a person inside the vehicle.
• Transfer hubs outside cities would allow local drivers to complete the last mile, handling urban driving and customer interaction.
• This model creates new trucking jobs that are more attractive to the next generation, as they allow for regular home time.
• The transition to driverless trucks is expected to face disruptions but is seen as a move towards a sustainable trucking industry.

"What we can do, we can help solve this in two ways... you're actually creating the kind of job that will attract the next generation of trucker."

Alex Rodriguez explains how Embark's technology not only fills existing gaps but also restructures trucking jobs to be more appealing, potentially reversing the declining trend of new drivers entering the industry.

• The transition to driverless trucks may not be smooth due to the potential resistance and concern from those within the industry.
• The average age of truckers today is 55, suggesting that many may retire before significant industry changes occur.
• Embark's approach is to fill roles that are currently vacant rather than displacing current truckers.
• Education and managing perceptions are critical to easing the transition and aligning it with industry needs.

"The big challenge is going to be that there will certainly be people who are worried... we have to be sort of constantly on the lookout to make sure that what we're doing is thoughtful about how it's impacting existing truckers."

Alex Rodriguez acknowledges the importance of considering the human element and the need for strategic communication to address concerns during the industry's evolution.

• Embark approaches goal setting by acknowledging the unknowns in the frontier tech industry.
• They set long-term, specific goals to maintain a clear vision for the entire team.
• Short-term goals are set as mini milestones based on current data and challenges.
• This dual approach to goal setting helps maintain focus and adaptability.

"The key here, realizing that you don't know what you don't know... we have one big long term goal... and then the second thing is realizing that you can't actually prioritize against that in the short term."

Alex Rodriguez discusses the unique challenges of goal setting in an industry where there are no precedents to follow, emphasizing the importance of balancing long-term vision with short-term, data-driven milestones.

• Mistakes often attributed to young founders can also be made by more experienced founders if they lack maturity.
• Success requires continuous learning and challenging one's assumptions.
• Immaturity can manifest as naivete in young founders or as complacency in experienced founders.
• Young founders often struggle with hiring and firing practices.

"I think that the actual thing in my mind is really a question of what are the mistakes that immature founders make?"

Alex Rodriguez reframes the discussion about young founders' mistakes, suggesting that maturity, rather than age, is the key factor in avoiding common entrepreneurial pitfalls.## Hiring Lessons from Assembling a Star Talent Team

• Hiring world-class experts often means recruiting individuals significantly older and more experienced.
• Demonstrating a competent leadership team is crucial to attract experienced talent.
• Acknowledging one's own limitations in expertise and showing the value and strategy behind the company's technology is key.
• Providing tangible proof of the company's achievements, such as allowing candidates to experience the product firsthand, can be a decisive factor.
• Looking for candidates with both exceptional skills and the humility to learn is important.
• The hiring process can be self-selecting, with those too arrogant to learn often not engaging in the interview process.

"One is being able to provide evidence through what we've built that we're a competent leadership team."

This quote highlights the importance of demonstrating to potential hires that the leadership team is capable and has a track record of success.

"We always, for example, when people come and do on sites with embark, they will always get the opportunity to actually ride in our self-driving truck."

This quote illustrates the company's approach to making the technology tangible for candidates, which serves as a proof of concept and a trust-building measure.

"And then the second thing is finding people who have the right combination of amazing skill in a certain area, but also humility and willingness to continue learning in other areas."

This quote emphasizes the value placed on both expertise and the capacity for growth and learning in potential team members.

• Alex Rodriguez recommends "High Output Management" by Andy Grove for its concise and practical insights.
• He also recommends "Game of Thrones" for its rich and realistic world-building compared to other fantasy literature.

"I'd pick high output management by Andy Grove because he put a bunch of work into putting a ton of good ideas, but in a very, very short form."

This quote explains why Alex values Andy Grove's book—it offers valuable ideas without wasting the reader's time, catering to those who need to implement them practically.

"But otherwise, I would pick Game of Thrones, because the world that George R. Martin has built is just so much more rich and so much more real than the vast majority of fantasy you get to read these days."

This quote shows Alex's appreciation for the complexity and depth of the world created by George R. Martin in his "Game of Thrones" series.

• Alex Rodriguez believes immigration reform could greatly benefit Silicon Valley by allowing it to tap into a broader pool of global talent.
• He has personally experienced the challenges of hiring international talent due to restrictive immigration policies.

"I think if Silicon Valley was to be far more successful, the one biggest change would just be to allow the best of the world's talent... to just come here and help build these amazing companies."

This quote identifies immigration policy as a significant barrier to Silicon Valley's success and advocates for more open policies to attract global talent.

• Alex Rodriguez sees potential for autonomous technology to be applied in home robotics.
• He anticipates that localization and perception advancements will lead to innovative home applications in the next 10-20 years.

"I think you'll see some really, really cool applications of that not in the next ten years, but in the ten years after where we start to see robots coming into the home."

This quote predicts the future integration of autonomous technology in domestic settings, suggesting a timeline for when these advancements might become commonplace.

• Knowing that young people can build world-class companies might have been reassuring but could also diminish the drive that comes from uncertainty.
• Alex Rodriguez reflects on whether awareness of potential success would have changed his motivation levels.

"It would have been amazingly reassuring to know as past me that it's actually possible to build world class companies as somebody who's pretty young and that there isn't like a ceiling anywhere in Silicon Valley."

This quote expresses the realization that youth is not a barrier to success in Silicon Valley, which could have provided comfort to his younger self.

• Alex Rodriguez cites his father as his biggest mentor, observing his journey of building a business from the ground up.
• Learning that businesses are started by regular people, not through magic, gave Alex a significant advantage.

"I think sort of maybe the single biggest takeaway was... just regular people. And I think that was a huge advantage to realize it wasn't like magic. It was just regular people."

This quote underscores the lesson Alex learned from his father—that businesses are created through the efforts of ordinary individuals, demystifying the process of entrepreneurship.

• Alex Rodriguez suggests detaching oneself from the situation to analyze problems more objectively.
• He recommends considering what advice one would give to a friend in the same predicament.

"What would I respond? And it's much easier when you step outside of your tide to the situation to just know what's the right thing to do here."

This quote reveals Alex's strategy for dealing with crises by distancing himself emotionally and adopting a third-person perspective to determine the best course of action.

• Alex Rodriguez aims to see Embark's technology implemented in the world's first self-driving trucking fleets within the next five years.
• He is excited about achieving something unprecedented in human history.

"The next five years, I want to see our technology powering the first self-driving trucking fleets in the world."

This quote outlines Alex's vision for Embark's technology and sets a timeline for achieving this milestone.