By Eric Peterson | Nov 29, 2021
Pick-to-light cloud display devices
Originally from South Africa, Blumenau went to high school in Dallas studying electrical engineering at the University of Texas at Austin, followed by a fellowship at University of California, Berkeley.
Then he changed directions and started out in Internet advertising analytics. After Nielsen Media Research acquired his startup, Pacific Web, he worked for Nielsen for 13 years. "I decided I was going to start a company," says Blumenau, who reached back to his college studies in electrical engineering. "I was sick of being in management. I had to get my hands on a soldering iron, which was sort of my natural position. I really love building stuff and making things work."
That company is Voodoo Robotics. Blumenau describes the pain point that led to the company: "When you're in the warehouse, the biggest problem that you have and the biggest cost that you have is finding things. You're paying to have employees run around like chickens with their heads cut off looking for numbers around the warehouse."
Because of high employee turnover, he adds, "These pickers don't know where products are generally stored, or maybe there was some guy who hid something way in the back and didn't tell anybody. It's really a bit of a nightmare finding things in a warehouse."
"The second biggest thing you have in a warehouse is finding the wrong thing -- you get an order for something that costs $500 and you ship something that costs $5,000," says Blumenau "Those are big drivers of cost."
Voodoo Robotics' pick-to-light devices help solve these problems. "It's a display, it runs on two batteries, it's got a button on it and a speaker, and it's connected to the Internet," says Blumenau. "From a technology perspective, you go, 'Great, that's nothing revolutionary,' but when you look at some of the problems that you find out in industry -- in particular, in the supply chain -- it can be a very, very, very powerful tool."
The company released its Classic device in 2017, followed by the Modern in late 2019. "[The Classic] also did very, very well, but I think that the graphics and the arrows and the economics of the newer one make much more sense to the customer," says Blumenau.
The pitch: "If [a picker] picks up an order from a customer and it's got five lines in the order, five things he's got to ship to that customer, and he scans the barcode on that order, there should be five lights that light up in the warehouse that say, 'Hey, over here! Take three of these and take two of these.' And it might even address him by name: 'Hey Fred! Take four of these.' Or it might be that there are multiple pickers and they have different colored lights they are keying on . . . so that Fred can use the green lights and Martha can use the red lights."
"Anybody who has a warehouse can benefit from this technology -- in particular, people who have valuable stuff in their warehouse," says Blumenau, citing the direct-to-consumer movement as a catalyst. "They used to ship whole pallets of goods and now they're shipping onesies and twosies -- and that's much more complicated."
He highlights a relevant customer: Cartier, with watches that can sport a price tag as high as $100,000 that might be right next to a $5,000 in the warehouse.
Beyond warehouses, Voodoo Robotics is also finding a fertile market with manufacturers. "We have more than 10 customers in the manufacturing space," says Blumenau. "They use our products in a lot of interesting ways that are specific to manufacturing. For example, we have one company that is doing kitting using our devices, so they are very focused on picking the right piece out of inventory first, because that piece is the basis for assembly of the next piece."
He describes Voodoo Robotics business model as "fairly simple: We sell the Modern devices, then we sell Turbos, which are essentially the routers which connect these modern devices. You typically need one Turbo for 100 devices."
The data is transmitted to the cloud, but larger customers often install a server to manage it onsite. The system can integrate with an Excel spreadsheet or a sophisticated ERP system. "I think that's probably the biggest driver of our sales," says Blumenau. "With a lot of these other companies, the engineering and the work to keep the stuff updated and integrated and waiting for all these features to come out, it's like a nightmare."
He pegs Voodoo Robotics' devices on the other end of the spectrum: "It's dirt simple to light up a device and have it display whatever you want it to display, and play whatever tune you want, and whatever color."
Voodoo Robotics' offices are on the campus of the University of North Texas, and the company contracts with Nimbletronics in Plano for manufacturing. "Our devices are made here in North Texas," says Blumenau, noting that the company's supply chain stretches from Dallas to Norway, Japan, and Singapore. "It's solely patriotism. I want to do stuff in America."
Noting that Voodoo Robotics has a number of clients in the upper echelon of the Fortune 500, Blumenau says the warehouse is often the last place to see IT upgrades. "A lot of our customers have technology from the '70s and '80s," he notes.
Growth accelerated in 2021, says Blumenau. "These devices are really catching on very quickly. I think people are beginning to see the value we provide. Particularly in the chaos of the supply chain right now, it's a very useful device to a lot of companies."
Challenges: Supply chain. "It's almost like a minute-by-minute thing," says Blumenau. "I would put parts into my basket on Digi-Key, and by the time for me to check out, those parts are already sold."
Beyond disruptions in the supply chain and workforce, the prime challenge is getting potential customers to "rethink their operations," he adds. "That is a real trick. There's a lot of people who can benefit from this technology, but they might not automatically be aware of just how useful it can be to them. When we talk to a customer, we have to really challenge them to think creatively about how they can deploy these sorts of systems in their operations."
Opportunities: "I feel this is a completely untapped market," says Blumenau. "How many warehouses or manufacturing floors are actually deploying pick-to-light today? Almost none, and so many can benefit from it. I'd say at least 80 percent of them can benefit from this technology in one way or another."
Needs: More employees. Blumenau says he's looking for talent in marketing communications, engineering, customer support, and operations. "In a startup environment when you're small, you may hire somebody you didn't anticipate hiring just because that person has a variety of skills and can do a bunch of different things," he adds. "We all wear multiple hats in the company."
An infusion of capital could accelerate growth, but Blumenau says he's hesitant: "Without our customers, we would be nowhere. Having your customers invest in you is a far better way than going to Silicon Valley or Sand Hill Road as far as I'm concerned."