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Logos LP – Everything is FUBAR

Logos LP – Everything is F*cked

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This article was originally published by ValueWalk.

COVID 19 Hope
Logos LP commentary for the month of September 2020, titled, “Everything is F*cked”, discussing the COVID-19 evolution, vaccines, hope and hopelessness, hysteria, volatility, startups, education in america, generational divides, China post USA, remote work, and longevity.

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U.S. stocks rose on Friday, recovering some of their losses for the week, as tech shares clawed back some of their big September declines. Nevertheless, despite Friday’s rally both the Dow and S&P 500 posted four-week losing streaks, their longest slides since August 2019. The major averages have had a tough month, with the S&P 500 falling 5.8% in September. The Dow has dropped 4.4% over that time period and the Nasdaq is down 7.3% month to date.

Our Take

It is important to remember that there are always two ways to view the stock market at any given time. From an optimistic perspective, there is the potential for favorable results from the Phase III clinical trials as early as the end of October, the elections could be decided in an orderly manner, large institutions and investors could put their record cash piles to work, earnings growth could take off as governments and central bankers continue to support the economy and holiday shopping could be impressive with limited disruption from COVID-19. From a pessimistic perspective, one could say that all of those developments above are unlikely. No vaccine at all, the election results could be delayed and contested thus resulting in complete turmoil, as a second wave of COVID-19 prompts further economic shutdowns leading to economic collapse. Whatever camp you fall into, it is important not to get swallowed by emotion as the reality will likely lay somewhere in between. Absent additional full economic shutdowns by governments in response to a second wave of COVID-19 (if this happens again all bets are off as the damage would likely be irreversible) we believe the recovery will continue albeit extraordinarily unevenly across industries and countries. The Economist recently revisited their “90% economy” prediction and found that economies certainly have begun to recover, yet the world is still a long way from normal. Governments continue to enforce social-distancing measures to keep the virus at bay. These reduce output—by allowing fewer diners in restaurants at a time, say, or banning spectators from sports arenas. People remain nervous about being infected. Economic uncertainty among both consumers and firms is near record highs—and this very probably explains companies’ reluctance to invest. Calculations by Goldman Sachs, suggest that social-distancing measures continue to reduce global GDP by 7-8% and such measures are set to continue in most countries. Yet The Economist found that although the global economy is operating at about nine-tenths capacity, there is a lot of variation between industries and countries. Some are doing relatively—and surprisingly—well, others dreadfully. When considering the respective performance of goods and services, goods have bounced back fast while services activity is a lot further below its pre-pandemic level. This is understandable as services require person to person interaction and thus when confidence is lacking, consumption of services wanes. Additionally, the magazine found that the huge gap between countries’ economic recovery can be attributed to: 1) industrial composition (countries which rely on retail and hospitality and laggards) 2) confidence (countries who had good leadership under lockdown) and 3) stimulus (countries that put in place large rescue package ie. America may still not be able to agree on a new one, yet still has ALREADY enacted the world’s largest package relative to the size of its economy). In light of the above, and the fact that most developed countries seem to be hovering around a “90% economy”, should we opt for the pessimistic view of markets or the optimistic view? In our view, absent further draconian lockdowns, we believe that a 90% economy - one which could trend towards 95% if countries can better calibrate social-distancing measures without jeopardizing output - is certainly not a good enough reason for the patient long-term investor to significantly reduce equity exposure and move to cash or gold. There will be scars to the economy and the recovery will take time, there will be more short term volatility in markets as political headlines and a record amount of derivatives trading foster instability, yet we remain hopeful and confident that holding quality businesses with unique secular tailwinds for the long-term, remains the right strategy. Membership to Exclusive Daily Newsletter We have launched an exclusive daily newsletter including actionable daily insights for DIY investors from Logos LP
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Musings

Over the course of the month of September it has struck me how emotional the last 6 months have been for most. How difficult it has been to wake up 6 months into the pandemic and read a variety of news headlines which are basically the same as those featured 5 months ago, 4 months ago 3 months ago etc.: The mood is sombre. Hope appears to be slipping away as pandemic fatigue sets in and this is precisely what we as a society need to combat: hopelessness. Flirting which such feelings myself over the last six months, I picked up a book this month with a title that unsurprisingly caught my attention: “Everything is Fucked: A Book About Hope” by Mark Manson (ironically written pre-Covid-19) While the book covers a lot of ground, what resonated with me was his explanation that “the human psyche needs hope to survive the way a fish needs water.” He furthers that: Hope is the fuel for our mental engine. It’s the butter on our biscuit. It’s a lot of cheesy metaphors. Without hope, your whole mental apparatus will stall out or starve. If we don’t believe there’s any hope that the future will be better than the present, that our lives will improve in some way, then we spiritually die. After all, if there’s no hope of things ever being better, then why live- why do anything?” Without hope for the future one sinks into indifference and nihilism- the sense that there is no point, no broader “why?”. Without hope for the future, without a hope narrative that gives us a sense of purpose, we pursue the pure indulgence of desire. Success for the sake of success. Pleasure for the sake of pleasure. Power for the sake of power. Protest for the sake of protests. Shut downs for the sake of shut downs. Hysteria for the sake of hysteria. Manson reminds us that, hopelessness is the root of anxiety, mental illness and depression. It is the source of all misery and the cause of all addiction. Chronic anxiety is a crisis of hope. It is the fear of a failed future. Depression is a crisis of hope. It is the belief in a meaningless future. Should we be surprised that such mental illnesses are on an eighty year upswing among young people and a twenty year upswing among the adult population?

Covid-19 Has Exacerbated The Crisis Of Hope

The problem with COVID-19 six months in, is that it has exacerbated the crisis of hope which was plaguing the rich developed world well before the pandemic struck. Although a serious public health issue, we now have nothing short of a COVID-19 national hysteria. We’ve allowed the virus to take over our economy, our small businesses, our schools, our social lives, our quality of life and most importantly our hope for the future. This irrational sense of hopelessness is growing and those in power should carefully consider its effects when they set out to combat a second wave of COVID-19 and put policies in place to aid in the recovery. The human mind/human nature is the most powerful force on earth. Left misunderstood by those in power as well as by those acutely suffering from a lack of hope themselves, any recovery will be challenged. The rich developed world has made incredible progress in health, safety, material wealth and quality of life yet those are facts about the past, not the future. Hope doesn’t care about these things. Hope only cares about the problems that still need to be solved. Hope must be found in our visions for the future. We as individuals and as a society need to find our “why” again. Our personal hope narratives which give us a reason to believe that our tomorrows will be better than our todays. Our inspirational vision which gives us purpose. Which makes us smile, grounds us, helps us stay on course, joyful in the face of adversity and suffering. Somewhere along the way as we argue about whether everything is “rigged”, or whether we will “accept” to leave office, or what we are entitled to by virtue of our birth, or about how much we wish to take from others who have earned it to give to ourselves, or as we continue to surrender our economies and our lives to the virus, we’ve become lost. My hope is that we succeed in finding hope again. That will be the true recovery.

Charts of the Month

COVID 19 hope Where is hope trending? COVID 19 hope COVID 19 hope In Canada, the Covid-19 mortality rate is 0.024% and the chance of not dying from Covid-19 is 99.975% yet in a survey conducted on behalf of Global News, Ipsos found that 75% of respondents would approve of quickly shutting down non-essential businesses in the event of a second wave??? Why isn’t the media talking about this? That’s also what TIS Group asks in the USA, citing revised Centers for Disease Control statistics that say Covid-19 is only directly responsible for 6% of the reported Covid deaths in the U.S., or around 10-11,000 people. The rest of deaths reflect Covid as a contributing factor to existing illnesses, particularly among the elderly... COVID 19 hope COVID 19 hope A sign of the times... Logos LP August 2020 Performance August 2020 Return: -0.71% 2020 YTD (August) Return: 50.36% Trailing Twelve Month Return: 57.65% Compound Annual Growth Rate (CAGR) since inception March 26, 2014: +21.46%

Thought of the Month

"Fearlessness is not the absence of fear, but the willingness to walk into it. When I walk into my fear, practice there, sit upright in the middle of it, completely open to the experience, with no expectation of the outcome. Anything is possible. When our circumstances look impossible or terrifying, there is a way. -Judith Randall

Articles and Ideas of Interest

  • Interactive Brokers braces for election volatility by telling clients to put up more cash. Market action around the election is expected to be so volatile that Interactive Brokers is forcing clients to put up more money in order to trade using leverage. The retail broker is increasing margin requirements — how much money an investor using leverage and derivatives has in their brokerage account after a stock purchase — heading into the November presidential election, according to a clients letter obtained by CNBC.
  • Is Covid to blame for business closures or is it helping new startups? The answer may be both. A report found that more than 100,000 restaurants have closed this year, but another says new business applications are up by 19%. Everyone has their narrative about the plight of small business because it’s a political issue. The right wants to make it out that small businesses are suffering and state governments need to relax the shutdowns. The left says that not only small businesses, but their employees, are feeling pain and therefore significant stimulus is still needed. Both sides agree on some form of a more targeted round of the Paycheck Protection Program. Everyone’s right. Everyone’s wrong. The fact is that no one really knows for sure about the effects Covid has had on small businesses ... yet. We won’t know until this whole thing is over and researchers can comb through the data and that’s going to take a few years. I’m sure they’ll find that many businesses did close permanently because of the pandemic. But then again, how many of these businesses would have closed anyway? And how many were previously buoyed by a strong economy until that facade disappeared?
  • America divided by education. The gulf between the party identification of white voters with college degrees and those without is growing rapidly. Trump is widening it. One of the most striking patterns in yesterday’s election was years in the making: a major partisan divide between white voters with a college degree and those without one. According to exit polls, 61 percent of non-college-educated white voters cast their ballots for Republicans while just 45 percent of college-educated white voters did so. Meanwhile 53 percent of college-educated white voters cast their votes for Democrats compared with 37 percent of those without a degree. The diploma divide, as it’s often called, is not occurring across the electorate; it is primarily a phenomenon among white voters. It’s an unprecedented divide, and is in fact a complete departure from the diploma divide of the past. Non-college-educated white voters used to solidly belong to Democrats, and college-educated white voters to Republicans.
  • Covid grows less deadly as doctors gain practice, drugs improve. For those who develop dangerous cases of the infection, advances in medical care and the growing experience of doctors are improving the chances of survival. Since the first case arrived in the U.S. at the start of the year, medical professionals have gone from fumbling in the dark to better understanding which drugs work -- such as steroids and blood thinners, and the antiviral medicine remdesivir. Allocation of intensive medical resources have improved. And doctors have learned to hold off on the use of ventilators for some patients, unlike with many other severe respiratory illnesses. Governments are also learning lessons from Europe’s lockdowns and finding that they simply can’t lock down again.
  • Why we shouldn’t have unrealistic expectations regarding COVID-19 vaccines. Among pharmaceutical, medicinal and drug products, vaccines are by far the most complex. They are also life-saving. In times of devastating disease outbreaks such as the COVID-19 pandemic, it is not uncommon to foster hopes that an effective vaccine, a magic bullet, could somehow be quickly made and administered to people. Unfortunately, reality can be very different because vaccines can take a long time to be developed (4-5 years typically), longer than most pharmaceutical, medicinal or drug products. Bottom line: there may never be a magic bullet. We need to get better living with the virus. Furthermore trust in Covid-19 vaccines could turn on a knife edge. The race to remove regulatory and legal roadblocks to secure a vaccine could blow the whole vaccine hope wide open. Will you line up to take a vaccine which has been rushed through development without large scale patient trials from a vaccine maker that has been given full legal immunity from personal injury lawsuits?
  • 52% of young adults are living with their parents. That's higher than any prior measure on record, even surpassing the Great Depression's peak. Millennials will likely continue to pay the price for their parents’ luck and self-indulgence. According to a new report by Deutsche Bank the consequences of this dynamic will be so severe this widening generational divide should be a key source of alarm for investors, financial markets and society as a whole. “Investors can expect an abrupt, and significant upheaval in housing and asset markets, tax systems, climate policy, and many other areas,” Allen wrote. “This scenario becomes more likely towards the end of this decade as Millennial and younger voters start to exceed those in older generations.” (This year millennials have surpassed baby boomers as the country’s largest adult population.)
  • How China is preparing its economy for a future where the U.S. isn’t the center of global demand. In a world rocked by the coronavirus pandemic and tensions with the U.S., the Chinese government is stepping up focus on the domestic market with the pronouncement of a “dual circulation” policy. Increased public discussion in the last few weeks has helped crystallize some of the implications for global trade. “The ‘dual circulation’ policy demonstrates China’s recognition that it won’t be able to rely on trade as much for the next two decades, as it did for the previous two,” Stephen Olson, research fellow at the nonprofit Hinrich Foundation, said in an email this week. China is focused squarely on a post U.S.centric world in which China leads in technology innovation.
  • Remote work is killing the hidden trillion dollar office economy. From airlines to Starbucks, a massive part of our economy hinges on white-collar workers returning to the office. As companies in cities across the U.S. postpone and even scrap plans to reopen their offices, they have transformed once-teeming city business districts into commercial ghost towns comprised of essentially vacant skyscrapers and upscale complexes. A result has been the paralysis of the rarely remarked-upon business ecosystem centering on white-collar workers, who, when you include the enterprises reliant on them, account for a pre-pandemic labor force approaching 100 million workers.
  • Japanese doctor who lived to 105-his spartan diet, views on retirement, and other rare longevity tips. 1) Don’t retire. But if you must, do so a lot later than age 65, 2) Take the stairs (and keep your weight in check). 3) Find a purpose that keeps you busy. 4) Rules are stressful; try to relax them. 5) Remember that doctors can’t cure everything. 6) Find inspiration, joy and peace in art.
Missed a Post? Here's the Last 5: Forwarded This Message? Sign Up Here Our best wishes for a month filled with discovery and contentment, Logos LP Interdisciplinary Value Investing. www.logoslp.com/
 
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Asking the right dumb questions

You’ll have to forgive the truncated newsletter this week. Turns out I brought more back from Chicago than a couple of robot stress balls (the one piece…

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You’ll have to forgive the truncated newsletter this week. Turns out I brought more back from Chicago than a couple of robot stress balls (the one piece of swag I will gladly accept). I was telling someone ahead of the ProMat trip that I’ve returned to 2019 travel levels this year. One bit I’d forgotten was the frequency and severity of convention colds — “con crud,” as my comics friends used to call it.

I’ve been mostly housebound for the last few days, dealing with this special brand of Chicago-style deep-dish viral infection. The past three years have no doubt hobbled my immune system, but after catching COVID-19 three times, it’s frankly refreshing to have a classic, good old-fashioned head cold. Sometimes you want the band you see live to play the hits, you know? I’m rediscovering the transformative properties of honey in a cup of tea.

The good news for me is that (and, hopefully, you) is I’ve got a trio of interviews from ProMat that I’ve been wanting to share in Actuator. As I said last week, the trip was really insightful. At one of the after-show events, someone asked me how one gets into tech journalism. It’s something I’ve been asked from time to time, and I always have the same answer. There are two paths in. One is as a technologist; the other is as a journalist.

It’s obvious on the face of it. But the point is that people tend to enter the field in one of two distinct ways. Either they love writing or they’re really into tech. I was the former. I moved to New York City to write about music. It’s something I still do, but it’s never fully paid the bills. The good news for me is I sincerely believe it’s easier to learn about technology than it is to learn how to be a good writer.

I suspect the world of robotics startups is similarly bifurcated. You enter as either a robotics expert or someone with a deep knowledge of the field that’s being automated. I often think about the time iRobot CEO Colin Angle told me that, in order to become a successful roboticist, he first had to become a vacuum salesman. He and his fellow co-founders got into the world through the robotics side. And then there’s Locus robotics, which began as a logistics company that started building robots out of necessity.

Both approaches are valid, and I’m not entirely sure one is better than the other, assuming you’re willing to surround yourself with assertive people who possess deep knowledge in areas where you fall short. I don’t know if I entirely buy the old adage that there’s no such thing as a dumb question, but I do believe that dumb questions are necessary, and you need to get comfortable asking them. You also need to find a group of people you’re comfortable asking. Smart people know the right dumb questions to ask.

Covering robotics has been a similar journey for me. I learned as much about supply chain/logistics as the robots that serve them at last week’s event. That’s been an extremely edifying aspect of writing about the space. In robotics, no one really gets to be a pure roboticist anymore.

Q&A with Rick Faulk

Image Credits: Locus Robotics

I’m gonna kick things off this week with highlights from a trio of ProMat interviews. First up is Locus Robotics CEO, Rick Faulk. The full interview is here.

TC: You potentially have the foundation to automate the entire process.

RF: We absolutely do that today. It’s not a dream.

Lights out?

It’s not lights out. Lights out might happen 10 years from now, but the ROI is not there to do it today. It may be there down the road. We’ve got advanced product groups working on some things that are looking at how to get more labor out of the equation. Our strategy is to minimize labor over time. We’re doing integrations with Berkshire Grey and others to minimize labor. To get to a dark building is going to be years away.

Have you explored front-of-house — retail or restaurants?

We have a lot of calls about restaurants. Our strategy is to focus. There are 135,000 warehouses out there that have to be automated. Less than 5% are automated today. I was in Japan recently, and my meal was filled by a robot. I look around and say, “Hey, we could do that.” But it’s a different market.

What is the safety protocol? If a robot and I are walking toward each other on the floor, will it stop first?

It will stop or they’ll navigate around. It’s unbelievably smart. If you saw what happened on the back end — it’s dynamically planning paths in real time. Each robot is talking to other robots. This robot will tell this robot over here, “You can’t get through here, so go around.” If there’s an accident, we’ll go around it.

They’re all creating a large, cloud-based map together in real time.

That’s exactly what it is.

When was the company founded?

[In] 2014. We actually spun out of a company called Quiet Logistics. It was a 3PL. We were fully automated with Kiva. Amazon bought Kiva in 2012, and said, “We’re going to take the product off the market.” We looked for another robot and couldn’t find one, so we decided to build one.

The form factors are similar.

Their form factor is basically the bottom. It goes under a shelf and brings the shelf back to the station to do a pick. The great thing about our solution is we can go into a brownfield building. They’re great and they work, but it will also take four times the number of robots to do the same work our robots do.

Amazon keeps coming up in my conversations in the space as a motivator for warehouses to adopt technologies to remain competitive. But there’s an even deeper connection here.

Amazon is actually our best marketing organization. They’re setting the bar for SLAs (service-level agreements). Every single one of these 3PLs walking around here [has] to do same- or next-day delivery, because that’s what’s being demanded by their clients.

Do the systems’ style require in-person deployment?

The interesting thing during COVID is we actually deployed a site over FaceTime.

Someone walked around the warehouse with a phone?

Yeah. It’s not our preferred method. They probably actually did a better job than we did. It was terrific.

As far as efficiency, that could make a lot of sense, moving forward.

Yeah. It does still require humans to go in, do the installation and training — that sort of thing. I think it will be a while before we get away from that. But it’s not hard to do. We take folks off the street, train them and in a month they know how to deploy.

Where are they manufactured?

We manufacture them in Boston, believe it or not. We have contract manufacturers manufacturing some components, like the base and the mast. And then we integrate them together in Boston. We do the final assembly and then do all the shipments.

As you expand sales globally, are there plans to open additional manufacturing sites?

We will eventually. Right now we’re doing some assemblies in Amsterdam. We’re doing all refurbishments for Europe in Amsterdam. […] There’s a big sustainability story, too. Sustainability is really important to big clients like DHL. Ours is an inherently green model. We have over 12,000 robots in the field. You can count the number of robots we’ve scrapped on two hands. Everything gets recycled to the field. A robot will come back after three or four years and we’ll rewrap it. We may have to swap out a camera, a light or something. And then it goes back into service under a RaaS model.

What happened in the cases where they had to be scrapped?

They got hit by forklifts and they were unrepairable. I mean crushed.

Any additional fundraising on the horizon?

We’ve raised about $430 million, went through our Series F. Next leg in our financing will be an IPO. Probably. We have the numbers to do it now. The market conditions are not right to do it, for all the reasons you know.

Do you have a rough timeline?

It will be next year, but the markets have got to recover. We don’t control that.

Q&A with Jerome Dubois

Image Credits: 6 River Systems

Next up, fittingly, is Jerome Dubois, the co-founder of Locus’ chief competitor, 6 River Systems (now a part of Shopify). Full interview here.

TC: Why was [the Shopify acquisition] the right move? Had you considered IPO’ing or moving in a different direction?

JD: In 2019, when we were raising money, we were doing well. But Shopify presents itself and says, “Hey, we’re interested in investing in the space. We want to build out a logistics network. We need technology like yours to make it happen. We’ve got the right team; you know about the space. Let’s see if this works out.”

What we’ve been able to do is leverage a tremendous amount of investment from Shopify to grow the company. We were about 120 employees at 30 sites. We’re at 420 employees now and over 110 sites globally.

Amazon buys Kiva and cuts off third-party access to their robots. That must have been a discussion you had with Shopify.

Up front. “If that’s what the plan is, we’re not interested.” We had a strong positive trajectory; we had strong investors. Everyone was really bullish on it. That’s not what it’s been. It’s been the opposite. We’ve been run independently from Shopify. We continue to invest and grow the business.

From a business perspective, I understand Amazon’s decision to cut off access and give itself a leg up. What’s in it for Shopify if anyone can still deploy your robots?

Shopify’s mantra is very different from Amazon. I’m responsible for Shopify’s logistics. Shopify is the brand behind the brand, so they have a relationship with merchants and the customers. They want to own a relationship with the merchant. It’s about building the right tools and making it easier for the merchant to succeed. Supply chain is a huge issue for lots of merchants. To sell the first thing, they have to fulfill the first thing, so Shopify is making it easier for them to print off a shipping label.

Now, if you’ve got to do 100 shipping letters a day, you’re not going to do that by yourself. You want us to fulfill it for you, and Shopify built out a fulfillment network using a lot of third parties, and our technology is the backbone of the warehouse.

Watching you — Locus or Fetch — you’re more or less maintaining a form factor. Obviously, Amazon is diversifying. For many of these customers, I imagine the ideal robot is something that’s not only mobile and autonomous, but also actually does the picking itself. Is this something you’re exploring?

Most of the AMR (autonomous mobile robot) scene has gotten to a point where the hardware is commoditized. The robots are generally pretty reliable. Some are maybe higher quality than others, but what matters the most is the workflows that are being enacted by these robots. The big thing that’s differentiating Locus and us is, we actually come in with predefined workflows that do a specific kind of work. It’s not just a generic robot that comes in and does stuff. So you can integrate it into your workflow very quickly, because it knows you want to do a batch pick and sortation. It knows that you want to do discreet order picking. Those are all workflows that have been predefined and prefilled in the solution.

With respect to the solving of the grabbing and picking, I’ve been on the record for a long time saying it’s a really hard problem. I’m not sure picking in e-comm or out of the bin is the right place for that solution. If you think about the infrastructure that’s required to solve going into an aisle and grabbing a pink shirt versus a blue shirt in a dark aisle using robots, it doesn’t work very well, currently. That’s why goods-to-person makes more sense in that environment. If you try to use arms, a Kiva-like solution or a shuttle-type solution, where the inventory is being brought to a station and the lighting is there, then I think arms are going to be effective there.

Are these the kinds of problems you invest R&D in?

Not the picking side. In the world of total addressable market — the industry as a whole, between Locus, us, Fetch and others — is at maybe 5% penetration. I think there’s plenty of opportunity for us to go and implement a lot of our technology in other places. I also think the logical expansion is around the case and pallet operations.

Interoperability is an interesting conversation. No one makes robots for every use case. If you want to get near full autonomous, you’re going to have a lot of different robots.

We are not going to be a fit for 100% of the picks in the building. For the 20% that we’re not doing, you still leverage all the goodness of our management consoles, our training and that kind of stuff, and you can extend out with [the mobile fulfillment application]. And it’s not just picking. It’s receiving, it’s put away and whatever else. It’s the first step for us, in terms of proving wall-to-wall capabilities.

What does interoperability look like beyond that?

We do system interoperability today. We interface with automation systems all the time out in the field. That’s an important part of interoperability. We’re passing important messages on how big a box we need to build and in what sequence it needs to be built.

When you’re independent, you’re focused on getting to portability. Does that pressure change when you’re acquired by a Shopify?

I think the difference with Shopify is, it allows us to think more long-term in terms of doing the right thing without having the pressure of investors. That was one of the benefits. We are delivering lots of longer-term software bets.

Q&A with Peter Chen

Covariant

Image Credits: Covariant

Lastly, since I’ve chatted with co-founder Pieter Abbeel a number of times over the years, it felt right to have a formal conversation with Covariant CEO Peter Chen. Full interview here.

TC: A lot of researchers are taking a lot of different approaches to learning. What’s different about yours?

PC: A lot of the founding team was from OpenAI — like three of the four co-founders. If you look at what OpenAI has done in the last three to four years to the language space, it’s basically taking a foundation model approach to language. Before the recent ChatGPT, there were a lot of natural language processing AIs out there. Search, translate, sentiment detection, spam detection — there were loads of natural language AIs out there. The approach before GPT is, for each use case, you train a specific AI to it, using a smaller subset of data. Look at the results now, and GPT basically abolishes the field of translation, and it’s not even trained to translation. The foundation model approach is basically, instead of using small amounts of data that’s specific to one situation or train a model that’s specific to one circumstance, let’s train a large foundation-generalized model on a lot more data, so the AI is more generalized.

You’re focused on picking and placing, but are you also laying the foundation for future applications?

Definitely. The grasping capability or pick and place capability is definitely the first general capability that we’re giving the robots. But if you look behind the scenes, there’s a lot of 3D understanding or object understanding. There are a lot of cognitive primitives that are generalizable to future robotic applications. That being said, grasping or picking is such a vast space we can work on this for a while.

You go after picking and placing first because there’s a clear need for it.

There’s clear need, and there’s also a clear lack of technology for it. The interesting thing is, if you came by this show 10 years ago, you would have been able to find picking robots. They just wouldn’t work. The industry has struggled with this for a very long time. People said this couldn’t work without AI, so people tried niche AI and off-the-shelf AI, and they didn’t work.

Your systems are feeding into a central database and every pick is informing machines how to pick in the future.

Yeah. The funny thing is that almost every item we touch passes through a warehouse at some point. It’s almost a central clearing place of everything in the physical world. When you start by building AI for warehouses, it’s a great foundation for AI that goes out of warehouses. Say you take an apple out of the field and bring it to an agricultural plant — it’s seen an apple before. It’s seen strawberries before.

That’s a one-to-one. I pick an apple in a fulfillment center, so I can pick an apple in a field. More abstractly, how can these learnings be applied to other facets of life?

If we want to take a step back from Covariant specifically, and think about where the technology trend is going, we’re seeing an interesting convergence of AI, software and mechatronics. Traditionally, these three fields are somewhat separate from each other. Mechatronics is what you’ll find when you come to this show. It’s about repeatable movement. If you talk to the salespeople, they tell you about reliability, how this machine can do the same thing over and over again.

The really amazing evolution we have seen from Silicon Valley in the last 15 to 20 years is in software. People have cracked the code on how to build really complex and highly intelligent looking software. All of these apps we’re using [are] really people harnessing the capabilities of software. Now we are at the front seat of AI, with all of the amazing advances. When you ask me what’s beyond warehouses, where I see this really going is the convergence of these three trends to build highly autonomous physical machines in the world. You need the convergence of all of the technologies.

You mentioned ChatGPT coming in and blindsiding people making translation software. That’s something that happens in technology. Are you afraid of a GPT coming in and effectively blindsiding the work that Covariant is doing?

That’s a good question for a lot of people, but I think we had an unfair advantage in that we started with pretty much the same belief that OpenAI had with building foundational models. General AI is a better approach than building niche AI. That’s what we have been doing for the last five years. I would say that we are in a very good position, and we are very glad OpenAI demonstrated that this philosophy works really well. We’re very excited to do that in the world of robotics.

News of the week

Image Credits: Berkshire Grey

The big news of the week quietly slipped out the day after ProMat drew to a close. Berkshire Grey, which had a strong presence at the event, announced on Friday a merger agreement that finds SoftBank Group acquiring all outstanding capital stock it didn’t already own. The all-cash deal is valued at around $375 million.

The post-SPAC life hasn’t been easy for the company, in spite of a generally booming market for logistics automation. Locus CEO Rick Faulk told me above that the company plans to IPO next year, after the market settles down. The category is still a young one, and there remains an open question around how many big players will be able to support themselves. For example, 6 River Systems and Fetch have both been acquired, by Shopify and Zebra, respectively.

“After a thoughtful review of value creation opportunities available to Berkshire Grey, we are pleased to have reached this agreement with SoftBank, which we believe offers significant value to our stockholders,” CEO Tom Wagner said in a release. “SoftBank is a great partner and this merger will strengthen our ability to serve customers with our disruptive AI robotics technology as they seek to become more efficient in their operations and maintain a competitive edge.”

Unlike the Kiva deal that set much of this category in motion a decade ago, SoftBank maintains that it’s bullish about offering BG’s product to existing and new customers. Says managing partner, Vikas J. Parekh:

As a long-time partner and investor in Berkshire Grey, we have a shared vision for robotics and automation. Berkshire Grey is a pioneer in transformative, AI-enabled robotic technologies that address use cases in retail, eCommerce, grocery, 3PL, and package handling companies. We look forward to partnering with Berkshire Grey to accelerate their growth and deliver ongoing excellence for customers.

Container ships at dock

Image Credits: John Lamb / Getty Images

A healthy Series A this week from Venti Technologies. The Singapore/U.S. firm, whose name translates to “large Starbucks cup,” raised $28.8 million, led by LG Technology Ventures. The startup is building autonomous systems for warehouses, ports and the like.

“If you have a big logistics facility where you run vehicles, the largest cost is human capital: drivers,” co-founder and CEO Heidi Wyle tells TechCrunch. “Our customers are telling us that they expect to save over 50% of their operations costs with self-driving vehicles. Think they will have huge savings.”

Neubility

Image Credits: Neubility / Neubility

This week in fun pivots, Neubility is making the shift from adorable last-mile delivery robots to security bots. This isn’t the company’s first pivot, either. Kate notes that it’s now done so five times since its founding. Fifth time’s the charm, right?

Neubility currently has 50 robots out in the world, a number it plans to raise significantly, with as many as 400 by year’s end. That will be helped along by the $2.6 million recently tacked onto its existing $26 million Series A.

Model-Prime emerged out of stealth this week with a $2.3 million seed round, bringing its total raise to $3.3 million. The funding was led by Eniac Ventures and featured Endeavors and Quiet Capital. The small Pittsburgh-based firm was founded by veterans of the self-driving world, Arun Venkatadri and Jeanine Gritzer, who were seeking a way to create reusable data logs for robotics companies.

The startup says its tech, “handles important tasks like pulling the metadata, automated tagging, and making logs searchable. The vision is to make the robotics industry more like web apps, or mobile apps, where it now seems silly to build your own data solution when you could just use Datadog or Snowflake instead.”

Image Credits: Saildrone

Saildrone, meanwhile, is showcasing Voyager, a 33-foot uncrewed water vehicle. The system sports cameras, radar and an acoustic system designed to map a body of water down to 900 feet. The company has been testing the boat out in the world since last February and is set to begin full-scale production at a rate of a boat a week.

Image Credits: MIT

Finally, some research out of MIT. Robust MADER is a new version of MADER, which the team introduced in 2020 to help drones avoid in-air collisions.

“MADER worked great in simulations, but it hadn’t been tested in hardware. So, we built a bunch of drones and started flying them,” says grad student Kota Kondo. “The drones need to talk to each other to share trajectories, but once you start flying, you realize pretty quickly that there are always communication delays that introduce some failures.”

The new version adds in a delay before setting out on a new trajectory. That added time will allow it to receive and process information from fellow drones and adjust as needed. Kondo adds, “If you want to fly safer, you have to be careful, so it is reasonable that if you don’t want to collide with an obstacle, it will take you more time to get to your destination. If you collide with something, no matter how fast you go, it doesn’t really matter because you won’t reach your destination.”

Fair enough.

Image Credits: Bryce Durbin/TechCrunch

 

Here you go, way too fast. Don’t slow down, you’re gonna crash. Na-na-na-na-na-na-na-na-na. (Subscribe to Actuator!)

 

 

Asking the right dumb questions by Brian Heater originally published on TechCrunch

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Waymo retires its self-driving Chrysler Pacifica minivan

More than five years ago, a newly minted Waymo took the wraps off of what would become its first commercialized autonomous vehicle: a Chrysler Pacifica…

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More than five years ago, a newly minted Waymo took the wraps off of what would become its first commercialized autonomous vehicle: a Chrysler Pacifica Hybrid minivan loaded with sensors and software.

Now, the minivan, a symbol of the early and hypey AV days, is headed for retirement as Waymo transitions its fleet to the all-electric Jaguar I-Pace vehicles equipped with its fifth-generation self-driving system.

When the Chrysler Pacifica Hybrid AV was first revealed, it might not have been what people expected from the former Google self-driving project turned Alphabet-owned business. The design wasn’t ripped from the pages of a graphic sci-fi novel and it was hardly flashy. But the white minivan — highlighted with the same blue and green accent colors found on the Waymo logo — embodied the company’s aim. Waymo wanted a friendly looking vehicle people would feel comfortable using.

The partnership with established manufacturer Fiat Chrysler — now Stellantis — also derisked an already risky frontier tech pursuit. Under the deal, Fiat Chrysler would handle the manufacturing and provide Waymo with minivans that built in redundancies designed for autonomous driving.

Waymo never got close to the 62,000-minivan order it agreed to in 2018 as part of an expanded partnership with Fiat Chrysler. But the minivan did become a critical part of its commercialization plan and over its lifespan the fleet provided tens of thousands of rides to the public, according to the company. (Waymo has never revealed detailed figures of its minivan fleet beyond that its total global fleet is somewhere around 700 vehicles.)

“It’s bittersweet to see it go,” Chris Ludwick, product management director at Waymo who has been at the company since 2012, told TechCrunch. “But I’m also happy for this next chapter.”

A bit of history

Waymo revealed the Chrysler Pacifica Hybrid in December 2016 and then provided more technical and business model details a month later at the 2017 North American International Auto Show. The first look at the minivan in December came just five days after Google’s self-driving project officially announced that it was a business with a new name and slightly tweaked mission.

At the time, little was known about what the Google self-driving project — also known as Chauffeur — intended to do beyond a stated goal to commercialize self-driving cars. The Google self-driving project had developed a custom low-speed vehicle without a steering wheel called the Firefly, but that cute gumdrop-shaped car never made it to commercial robotaxi status.

Waymo Firefly and Chrysler Pacifica autonomous vehicles. Image Credits: Waymo

The lowly minivan seemed to represent a more grounded realistic vision toward the goal. By spring 2017, the company had launched an early rider program that let real people in the Phoenix area (who had been vetted and signed an NDA) use an app to hail a self-driving Chrysler Pacifica minivan with a human safety operator behind the wheel.

Waymo eventually opened up the service to the public — no NDA required — and grew its service area to Phoenix suburbs Chandler, Tempe, Ahwatukee and Mesa. Waymo repeated that process as it took the important step of removing the human safety operator from behind the wheel, launching driverless rides in 2019 and eventually a driverless robotaxi service in 2020 that was open to the public.

Minivan proving ground

Image Credits: Waymo

The minivan’s initial reveal represented the moment when “Chauffeur” became Waymo and less of a science project, he noted. But there was still considerable work to be done.

The Chrysler Pacifica was the ultimate commercial proving ground, according to anecdotes from Ludwick, who recounted the progress of moving from autonomous driving 10 miles in one day, then 100 miles, and then a 100 miles everyday.

For instance, the company discovered that families were far more enthusiastic to use the minivan than it assumed. The minivan also helped develop the company’s AV operations playbook, including how to park vehicles in between rides and where to locate depots for maintenance and charging.

The minivan also became a testbed for how to operate a driverless fleet during the COVID-19 pandemic. Prior to COVID, the fleet in Phoenix was a mix of driverless vehicles and those with human safety operators behind the wheel.

“In three months we turned it fully driverless and figured out how to disinfect the vehicles between each ride,” he said.

All-electric chapter

Waymo jaguar ipace autonomous vehicle

Image Credits: Waymo

The next chapter for Waymo is focused on its all-electric Jaguar I-Pace vehicles, which will be pulled into the service area in the Phoenix suburbs of Chandler and Tempe that the minivan covered. The Jaguar I-Pace is currently the go-to driverless vehicle for robotaxi rides in downtown Phoenix and to the Phoenix International Sky Harbor Airport. The 24/7 service runs on a five-mile stretch between downtown Phoenix and an airport shuttle stop, specifically, the 44th Street Sky Train station.

On Thursday, the White House gave a shout-out to Waymo (along with other companies) for its commitment to an all-electric fleet as part of the White House EV Acceleration Challenge.

Waymo intends to deploy the all-electric Jaguar I-Pace across all of its ride-hailing service territories this spring now that the minivan has been retired. The nod to Waymo was part of a larger announcement from the Biden administration around public and private sector investments into EVs as part of its goal of having 50% of all new vehicle sales be electric by 2030.

The next task for Waymo may be its most challenging: The company has to figure out how to grow the service, charge its all-electric fleet efficiently and eventually turn a profit.

But Ludwick believes the company is well positioned thanks, in part, to the Chrysler Pacifica.

“When I look at what the Pacifica got us, it’s a lot,” he said, noting that the vehicle had to travel at higher speeds and make unprotected left turns.

Waymo retires its self-driving Chrysler Pacifica minivan by Kirsten Korosec originally published on TechCrunch

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FDA approval of over-the-counter Narcan is an important step in the effort to combat the US opioid crisis

The Food and Drug Administration’s approval of Narcan will make the lifesaving drug more widely available, especially to those who might be likely to…

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The use of naloxone administered by nasal spray can be a lifesaving drug with minimal side effects. TG23/iStock via Getty Images Plus

On March 29, 2023, the U.S. Food and Drug Administration approved Narcan for over-the-counter sale. Narcan is the 4-milligram nasal spray version of naloxone, a medication that can quickly counteract an opioid overdose.

The FDA’s greenlighting of over-the-counter naloxone means that it will be available for purchase without a prescription at more than 60,000 pharmacies nationwide. That means that, for 90% of Americans, naloxone nasal spray will be accessible at a pharmacy within 5 miles from home. It will also likely be available at gas stations, supermarkets and convenience stores. The transition from prescription to over-the-counter status is expected to take a few months.

We are pharmacists and public health experts who seek to increase public acceptance of and access to naloxone.

We think that making naloxone available over the counter is an essential step in reducing deaths due to overdose and destigmatizing opioid use disorder. Over-the-counter access to naloxone will permit more people to carry and administer it to help others who are overdosing. Moreover, increasing naloxone’s over-the-counter availability will convey the message that risks associated with substance use disorder warrant a pervasive intervention much as with other illnesses.

Deaths from opioid overdoses across the U.S. have increased nearly threefold since 2015. Between October 2021 and October 2022, approximately 77,000 people died from opioid overdoses in the U.S. Since 2016, the synthetic opioid fentanyl has been responsible for most of the drug-involved overdose deaths in America.

Naloxone can be a lifesaving intervention from opioids and other drugs that are laced with the synthetic opioid fentanyl.

What is naloxone?

Naloxone reverses overdose from prescription opioids like fentanyl, oxycodone and hydrocodone and recreational opioids like heroin. Naloxone works by competitively binding to the same receptors in the central nervous system that opioids bind to for euphoric effects. When naloxone is administered and reaches these receptors, it can block the euphoric effects of opioids and reverse respiratory depression when opioid overdose occurs.

There are two common ways to administer naloxone. One is through the prepackaged nasal sprays, such as Narcan and Kloxxado or generic versions of the drug. The other method is via auto-injectors, like ZIMHI, which deliver naloxone through injection, similar to the way epinephrine is delivered by an EpiPen as an emergency treatment for life-threatening allergic reactions.

The FDA will review a second over-the-counter application for naloxone auto-injectors at a later date. Although no interaction with a health care provider will be needed to purchase over-the-counter naloxone, when naloxone is purchased at a pharmacy, a knowledgeable pharmacist will be able to help people choose a product and explain instructions for use.

Research shows that when people who are likely to witness or respond to opioid overdoses have naloxone, they can save patients’ lives. This also includes bystanders as well as first responders like police officers and paramedics.

But until now, people in those situations could intervene only if they were carrying prescription naloxone or knew where to retrieve it quickly. Friends and family of people who use opioids are often given prescriptions for naloxone for emergency use. Over-the-counter naloxone will help make the drug more accessible to members of the general public.

Naloxone works on a variety of opioids, including fentanyl.

Reducing stigma and saving lives

Naloxone is a safe medication with minimal side effects. It works only for those with opioids in their system, and it’s unlikely to cause harm if given by mistake to someone who’s not actively overdosing on opioids.

Since approximately 40% of overdoses occur in the presence of someone else, we believe public access to naloxone is extremely important. People may wish to have naloxone on hand if someone they know is at an increased risk for opioid overdose, including people who have opioid use disorder or people who take high amounts of prescribed opioid medications.

Community centers and recreational facilities may also keep naloxone on hand, similar to the placement of automated external defibrillators in public spaces for emergency use when someone has a heart attack.

There’s a long-held public stigma that suggests addiction is a moral failing rather than a chronic yet treatable health condition. Those who request naloxone or who have an opioid use disorder experience stigma and often aren’t comfortable disclosing their drug use to others, or seeking medical treatment. Removing naloxone’s prescription requirements by making it over the counter could decrease the stigma experienced by individuals since they no longer must request it from a health care provider or behind the pharmacy counter.

In addition, we encourage health care providers and members of the general public to use less stigmatizing language when discussing addiction.

Questionable accessibility

Often, medications switched from prescription to over the counter are not covered by insurance. It remains unclear if this will be the case with Narcan. If so, the costs will shift to the patient, highlighting the reason continued support of programs that offer naloxone free of charge remains important.

What’s more, over-the-counter access could paradoxically cause a decrease in the drug’s availability. A rise in purchases could make it harder to buy naloxone if manufacturer supply does not keep up with increased consumer demand. The U.S. experienced such shortages of over-the-counter drugs in late 2022 during the nationwide surges in flu, respiratory syncytial virus and COVID-19.

Federal and state governments could lessen these potential barriers by subsidizing the cost of over-the-counter naloxone and working with drug manufacturers to provide production incentives to meet public demand.

The effects of nationwide access to over-the-counter naloxone on opioid-related deaths remain to be seen, but making this medication more widely available is an important next step in our nation’s response to the opioid crisis.

Lucas Berenbrok is part owner of the consulting company, Embarx, LLC.

Janice L. Pringle is affiliated with C4 Recovery.

Joni Carroll receives grant funding from the Centers for Disease Control and Prevention Overdose Data to Action.

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