The control layer for every package

/ Search transcript control is what our buyers actually care about. It's not easy to create a new three-letter acronym.

Yeah.

Uh in our space, your audience is going to be supply chain folks. Um it is

and my wife.

And your wife. Okay.

Exactly. My mom might be my mom.

Number one.

She doesn't speak English, but she still watched the videos. So,

they just they want something where they can tweak it, fix it, and then move on. It's like they don't they don't want something too complicated that's going to make their lives harder.

They want something that's going to take away fires that they would otherwise have to put out.

Go ahead, James. Go ahead. Give us some bombs here. Give us some uh

Sure. That was a horrible uh misadventure, but good learning experience. We've crossed over 1 billion uh orders optimized um through our our platform. Yeah. and it's a a really exciting uh milestone um when we crossed it. If I could go back 5 10 years, I would tell myself it doesn't matter if you can help their customers. You have to help them either increase sales or increase the effectiveness of their solution. Nothing else matters. How do you do this? Have you ever been in a fulfillment center when something breaks? There was a a influencer who did a a post about a badly packed box and so his post went viral and the CEO saw it and went ballistic. Like the amount of chaos this isn't like oh if something goes wrong if a machine breaks it puts the entire business in jeopardy. If you have the data there's no like learning or guessing required. It becomes a really expensive way of making a decision actually be wrong. Yeah. Welcome to the supply chain technology podcast for our second episode. I'm super happy to be here with James Malley from Paccurate, the CEO and founder of Paccurate. James, welcome. How are you doing?

I'm doing great. Thanks for having me.

Yes. Amazing. Amazing. So James and I, we know each other for I would say maybe two years maybe now at this point. So uh we've I've seen the company evolve and uh also involved with the company. So great to see you. It's great to share this space with you. Um let's jump right into it, James. So um tell us about you and tell us what uh what Paccurate does for the people that don't know.

Sure. Um so I'm I'm one of the co-founders at Paccurate. Um co-founded it uh depends who you ask. uh kind of started as a hobby uh over a decade ago, a little side passion project and then um common common story the pandemic uh hit and turn it into a real kind of growing business. Um and yeah, Pacurate Paccurate helps shippers optimize their packaging. Um that's like a very high level. I think we we've branched out considerably since uh the inception.

That's great. Yeah, we'll talk about the the evolution of the company from packaging to other areas in uh in in the episode. Um how do you how do you end up um you know I think you you did theater school and uh how do you end up into like a you said it was a project like a side project but like how do you end up wanting to solve something like that that is really not common?

I knew you were going to mention theater school within the first 20 seconds.

Right. I mean maybe we might have some acting today or something. Yeah. Uh yeah. Um I yeah went to art school was kind of actually rebelling against uh to a certain extent rebelling against a technology household that I grew up in.

Um and uh

rebellion.

That's good.

Yeah. Went into the arts and then while I was in school, I mean I loved it, but I ended up um spending a lot of my time like building apps and websites and and things like that. I built a lot of websites for theater companies here in New York for beer money and stuff. And so by the time I graduated, I was like, you know what, like this is actually this is actually what I get excited about. And so yeah, my my co-founder who I've known since middle school called him up after we graduated and I said, "Hey, you want to you want to build some build some stuff?"

Uh and yeah, so we we had a first startup attempt right after school. Um that was u a horrible uh misadventure but good learning experience. Um and uh yeah eventually you know took a gig. There's a little bit of nepotism. My my dad has been in supply chain tech for a long time and he said hey guys you know this one of our partner companies has a project and um you guys should should come like bid on it and see if you can you can build it. So that was the first um entrance into uh shipping tech.

That's great.

Yeah. And Pat, the co-founder of Paccurate, also has a background that is also like not uh not that traditional. No,

he started in mechanical engineering. Um but like a lot of uh mechanical engineers pivoted to software.

Okay.

Um I think the the anecdote he tells is in school they went to visit like the Polaroid factory or something some something where there's just like you know aging aging technology at the time and he's like you know what u maybe software is the future. Um, and but we we were in plays together in high school. So that but he left it he left it there. He didn't pursue the the theater thing like I did.

Okay. No, that's great. That's great. Yeah. So yeah, it's it's definitely like a a journey but uh it has it has evolved right now. So um the company definitely has uh has grown and has uh has expanded. So that's that's really good. what what is the um motivation today for you as to you know um because you're solving something that has a sustainability dimension into it has also a cost dimension into it um but it's not an obvious technology also yet for many companies. So how do you how do you break through and how do you create you know um almost like a new category here um you know in supply chain we we have this very classified or or segmented type of technologies transportation management systems TMS warehouse management software WMS or the management stuff you have like all these which pretty much all of them have like three letters how do you how do you break through and you come in and almost you create something that that doesn't really exist I at scale it's it's not really there's some intent but it's not really like a a standalone software. How do you do that?

Yeah, I I think the challenges early on were much different than they are like now

like early on we were we built this cartonization engine. The friction was very smart people experienced people in the space would look at it and be like I understand what this is. We have cartonization. Thank you. Thank you for coming in sir.

Uh and getting the opportunity to like explain that we were doing something different that we because of our background in transportation like you know actual shipping execution we had a different spin on the problem. It's really about optimizing for and reconciling costs. Mhm.

Um the the empty space in the box is kind of like a symptom of costs not being grappled with correctly in uh in an execution context. That's why we didn't think it was a business when we first started because there was a lot of uh haters going to hate, you know, not getting the opportunity to like actually explain how this thing works differently. Now it's different where because our software has kind of broadened in scope and affects things like automation and labor and all this. It's not easy to create a new three-letter

acronym.

Yeah.

Uh in our space. Um I almost kind of wish that we uh took the tact of being like, "No, no, no. We're a we're a WMS. We just don't do any of that stuff. We only do this stuff." Cuz at least there'd be like a mental model. Mhm.

Um so I think as a result it's really interesting adoption is either like very passionate for people that have leaned in and like understood like the difference in the you know the scope of what we're doing or we already have cartonization

like or that's a solved problem or you know so so market education is like it is a it's something you have to be really committed to over a long time horizon to get done.

Yeah. And I I mean I think um you talk about mental model of course in the industry I mean people are used to what they are used to especially when you go down the operators and the people running the warehouses. Maybe let's let's just like deep dive I think would be really um valuable for the audience actually. I think everybody can understand you know and we all experience this that um you get a a package um at your home where you know it's a box that is you know this size and the product inside is like this. I think we all have experienced this from

uh even from the leading companies and and it happens less and less but it still happens right. So explain to the audience how do you do this actually like what does actually the software do and and um you know in a try to do it maybe in a simple way so that everybody in the audience can can really like grasp but how does this work and so that will help also for later in the conversation around how do you think about the use case applications beyond putting a one or or a couple of items into a box.

Sure. Um, so I I mean your audience is going to be supply chain folks. Um, I will say it is

and my wife

and your wife. Okay.

Exactly. Might be my mom.

Number one.

She doesn't speak English, but she still watched the video. So,

uh, it it's interesting because this problem set is actually among those that's kind of easiest to explain to non-supply chain people because everybody can relate to that. Getting a tiny item in a big box. My kids love when it happens because they get to build forts and and stuff. Um, WMS's historically have been responsible for instructing packers at the pack stations what packaging to use for any given shipment. And whether the math is simple or, you know, complex, um, that's where it lived. Um, where Paccurate comes in is incorporating all of the disparate costs that affect that decision. So, empty space, yes, we want to kind of eliminate it, but that's almost a side effect of specifically optimizing for cost. So, as an example, um, when you're a shipper, you have a contract with, you know, UPS, FedEx, or DHL. And uh at least in the US, it has the the contract will always have incentives to pack a certain way. And those incentives might change depending on how far you're shipping something or what service type. They may they may incentivize uh more smaller boxes or or fewer larger boxes um depending on capacity, etc. And so what Pacurate's really good at is taking those complex cost structures and including things like labor. So yes, like maybe UPS says for this shipment this should be 10 boxes or something. Uh but you have labor costs too. So for you know for every additional box there's this much labor cost

and then material etc. So we're we're taking all of those costs and we're coming up with like the perfect way of packing any given order. Okay.

So that is the targeted kind of use case for Paccurate.

Yeah. And and um you already have like I think you you you posted um recently um was it 1 billion 1 billion uh packed uh shipment. Tell us about this and tell us you you talked a bit about the origin um story of uh how you came up with the idea and and with Pat and but from there to today from zero to 1 billion. tell us a bit that journey and and and the story there.

Yeah. Um fits and starts. Uh I would say we

is 1 billion correct first is now it's probably more. No, because this was couple of maybe couple of weeks maybe next

we've crossed over 1 billion uh orders optimized um through our our platform. Yeah. And it's a a really exciting uh milestone um when we crossed it.

It's massive, right? I mean many companies many e-commerce companies will never cross that line even as a business right

yeah um you know most of them

it's uh it's a function of uh it's kind of paro principle like 20% of our users are driving like 80% of the uh the the shipping volume through the platform but yeah I mean you know fits and starts uh you know the the early customers when we were treating this more as like a side hustle were small um you know very low volume shippers. Lionol Trains was our first customer um model train company that uh in my experience either you know really well if you're a model train person or or don't know at all. Um but they're they're uh an awesome company and they were the first to like understand it. They were like, "Oh, I get it. Like we're we're shipping a lot of multi-item orders. There's something here to be optimized." And so we were able to save them a lot of money and um they've been using it for over a decade at this point. Uh and then you know after the pandemic that's when some of the larger shippers who

traditionally hadn't really looked at packaging as a strategy they had kind of looked at it as this just something that has to happen after all the messy you know picking and processing stuff upstream.

Yeah. How so you touched on COVID right? Obviously COVID um in the US and globally was a huge um accelerator for e-commerce growth. How has that impacted the trajectory of the company? um because for sure there is um there's a benefit into that because there is more packages and there is more focus on e-commerce which is I think good but at the same time we saw it during one or two years most of the merchants were really really focused on topline and they didn't put so much attention to other things than sell as much as you can ship as much as you can you know it's okay shipping costs okay you know the most important is to sell and to fulfill orders so there's probably also a a story there that is a balanced story around how do you break through in customers? No.

Yeah. At least in e-commerce, what we saw was people coming in because they had a whole new audience. People that hadn't traditionally shopped online. um which I think is easy to forget just like how much of the e-commerce consumer base was recruited for the first time during co

and um you know suddenly folks were complaining about what what is this like why why did you ship this to me um I'm I'm a consumer I'm no longer having this instore experience where there's somebody there smiling at me and I you know pay in a well-lit environment It's like, no, this brand, the only physical experience I have with it is the box or boxes showing up in my house. So, if it seems like they don't care, that's a that's a real churn issue. Um, so we had I mean, our first big customer, it was a cartonization emergency. There was a a influencer who did a a post about a badly packed box with a brand, fairly large one, that has a sustainability kind of aspect to to their brand.

And so this post went viral and the CEO saw it and went ballistic.

And so started like yelling at these poor like packaging engineers internally who had never heard from anybody in the C-suite, let alone the CEO before. And they very quickly plugged in Paccurate to try to solve the problem. So that that's the e-commerce side. I would say anytime there's disruption, you know, uh in the space now I mean I'm seeing the same amount of uh velocity of of um companies trying to fix packaging right now as we saw during the pandemic. anytime there's there's disruption, I think ops people are in a position to like step back and do some kind of first principles thinking of like what haven't we fixed lately. Um, and packaging is always the one that they're like, "Oh yeah, we should probably

get on that now that I have like all these robots running around picking stuff."

Of course. How do you think about like because I think for many people the packaging aspect is not something they they think about but it is part of the experience and particularly like unboxing is a big deal right like you go you go on social media there are people that have built entire channels I know you guys do Chelsea does a great job at um doing some of these experiences and you know people will tag you and tell you like this these crazy stories but also as an experience as a consumer the unboxing experience which is really tied to the packaging experience is is a big deal for many brands. I mean, you think about like Apple, you think about like a lot of the beauty and cosmetic brands, put a lot of efforts into that because they know ultimately when you receive that product and you open it, if especially if it's something that has inspirational tie or or a product that you really want to elevate the emotional relationship with the consumer, it matters a lot. How do you think about like does this help um to really also improve that overall experience? Because you know if you have a box into a box a and you open that box even if the the direct product you're buying is really well packaged but then the first impression is bad how does this impact the you know the brand you talked about the CEO that went ballistic on the situation

but people post that stuff right I mean if you don't have this under control people will post this and depending who post it might have zero impact or it could go viral right

yeah by the way if you wanted to parlay this podcast into like a unboxing video channel, I would absolutely subscribe and watch Nibil open uh random products. Uh, yeah, I think what's interesting is the kind of hot, like DTC brands um that are kind of have a native understanding of the unboxing kind of presentation. Um, it was, you know, the big retailers were kind of like laggards in adopting this kind of thinking. And so we have customers where their main like flagship products they have custom packaging where there's like like our place is a one of our favorite favorite customers. They make these really beautiful pots and pans and kitchenware, and so they have this flagship product called the always pan. Mhm.

I I am a user, a customer. Um, but it shows up in this box that is like got a perfect cutout for it and there's like, you know, very subtle designs around it. It feels good to open that up and see it like right there. And so they don't need help with that from us, but they have a lot of accessories. So like even if we even if we can't have this like perfect presentation for all the all these accessories that are you know people are buying you know three or more at a time they should at least be packed in as efficiently as possible so we can have some some continuity. I think what non supply chain folks don't understand is how hard it is to to pick the right packaging for any given shipment. Um, I think uh folks, you know, whether you run an unboxing uh YouTube channel or not, it's it's hard to look at a huge box with a tiny item in it and understand why. They just assume, oh, this person didn't care. But there's a lot—there's a lot that goes into that. Maybe they're out of the, you know, box box boxes. Maybe something was non-conveyable. So we try to bridge that gap is just say yes there may be reasons but this is important enough that you should do everything you can to optimize the end state of that package. I think you know we live in this space right like we live and we understand and you know with we are the weird people that look at labels to see which shipping companies are sending the stuff or if you return an item. Yeah. I mean most of the consumers might not really really care realize but the topic of I think of space is a topic that you know also for a consumer you know if you live in New York or you know if you don't have so much space you have these huge boxes and it's a pain also for everybody right so I think there's there's a that's one of the thing that logistically I think people realize but they probably you're 100% right they they might not they might think it's just a mistake

and often times there is different reasons as you mentioned we um so we talked a bit about the you know the journey and and you know the evolution of the of the company but tell us tell us more about um so you have this software you've built this software um that helps the companies to optimize packaging what else can you do with it and what is maybe uh possibilities here because obviously the day-to-day as a consumer we understand okay you optimize the packaging you help the companies to to to do that better. So it cost less it costs them less money but also has a sustainability aspect and has also an operational um improvement aspect. But um where can you take this you know either the data or the or can you optimize trucks? Can you optimize other uh spaces where there is in supply chain a lot of um empty space?

Yeah. Um, there are two kinds of roads that we have always gone down in parallel. One is yes there are other three-dimensional spaces that can be further optimized. So um you know we do projects optimizing ASRS grids to make them a little bit uh more efficient or reduce the number of bins uh required um pallets, trucks. We even had a private space company use it to optimize astronaut cargo. Um, and so the, you know, one of the challenges with this kind of business is there's so many shiny things. There's so many things you you could go after that have this like spatial optimization need. But I think what you know the other path that we've always walked which is arguably the more important one is where else in the fulfillment process can packaging intelligence make a big impact. And so you know where we started was kind of a point solution that kind of just tucked in and made a smart smarter decision about this. Um we're more upstream now where we're actually affecting how automation in the building works.

Um our software decides what uh packaging automation or it decides okay now I have to optimize for AMR or goods to person shelf space um which is just an an an additional cost to kind of layer into the mix. So that that's the one that I I think I'm I'm most excited about is just finding the like high leverage points where just having some awareness of packaging uh makes a big impact on the rest of the operation. Um and to your point as a result the data that we accumulate is pretty substantial because we're in these automation cells. We're you know bringing automation and packaging together. We know a lot for every given shipment. We know here's how it was packed. We also know here's how it could have been packed.

Uh if if all the conditions were perfect and so that gives us a really interesting view into by by industry vertical, what is the headroom for efficiency?

Yeah.

Um so I can tell you houseware wares is like you know fairly good. Um but there are other uh industries like auto parts uh where they there's a long a long road to walk to get better with packaging efficiency. Yeah. No, I can I can imagine I think for you know I think if anybody is listening to this an executive or somebody in supply chain they probably think um this is a no-brainer right to implement. That's what I say. Right. Right. Exactly. Right. So, so it's um it should be something that is pretty uh embedded into any business right like uh so tell us a bit your experience around that like um it is it is relatively new um you know not as a concept I think as a concept you know understanding that you have to optimize packaging and so on has existed for decades, but it was done in a very different way just using dimensional data and and and then using a certain number of packaging, you know, that is not very dynamic. You do it once once in a while. What's the experience of building a technology like this that is newer, done in a different way, and how do you get this rolled out and how do you get this adoption? talked about the importance of lobbying or evangelizing or you know educating you know whatever you want to call it but ultimately you have to get people comfortable with the idea that it's another technology that comes and that helps you to do something either in a different way or better than what you have um how do you do that and what are the main challenges there for adoption

yeah um I think like one of the hardest things is and I mean you know sometimes we joke. It's like we could have picked anything else. We could have we could have like rifted on an existing category and our lives would be a lot simpler. But um I think one of the biggest challenges is coming up with ways of talking about it.

Mhm.

Um you know without without it sounding like nonsense. So like you know packaging intelligence it's like okay yes but like what does that what does that actually mean? Everything is intelligent.

Everything's intelligent.

You know, spatial decision layer. It's really it's it's hard to invent terminology

um and have it not sound like marketing speak. And we've gone through several uh iterations of today we call it the packing control system because we've discovered through you know working with many brands and and you know on in many verticals that control is what our buyers actually care about. They just they want something where they can tweak it, fix it, and then move on. It's like they don't they don't want something too complicated that's going to make their lives harder.

They want something that's going to take away fires that they would otherwise have to put out. So yeah, we've gone through several iterations of how to describe, you know, the whole platform, various parts of it. Um much to the chagrin of our brilliant head of marketing, Chelsea, who you mentioned earlier.

Yes. No, absolutely. um you um you sell the technology in different ways, right? You you sell it with uh you have direct relationship with customers. Um you sell it via partners. You talked about um some of the of the ASRS models as an example. um what's the strategy there and how difficult is it to manage different channels and how do you decide how much money, time and effort you invest into one channel versus the other um to get basically you know a market dominant position here.

Yeah. Um there are three

That's a hard one. No,

it's a hard one. There are three different kinds of partnership in my mind. One is uh ones that just seem like they should work. So you sign an agreement that says we're friends now and you write a joint blog post, pat each other on the back and that's it.

Mhm. um which we engaged in uh quite frequently in the early days uh with lots of like TMS companies who um their customers would always ask like can you help us with packing decision

and um so we're like yeah let's you know let's partner with all these all these shipping systems. This is where we—these are our people. Yeah, uh, but cartonization and you know packaging you know optimization needs to happen upstream of that so these these partnerships were great for awareness but um I wouldn't say super productive in terms of uh creating business. Um the second kind is uh maybe just integration enablement. So like this is a partnership with like a WMS for example where you just have to have it because eventually you're going to get customers that need to use our stuff with them. So it's like a you could think of it almost like infrastructure just to you know hasten the the sales and and implementation. Um I think the third kind and this is really where I spend most of my time is companies that have such a complementary solution that their sellers tell their management you need to get Paccurate. We need to get Paccurate in here. Um, and so that only happens if our technology somehow creates more efficiency in their solution um or enables them to somehow sell it faster.

So we have a you know simulation component to our platform. And so if you're able to use our simulation tool to simulate their solution um in a compelling way, that's when we've we've seen uh a lot of excitement. But it's got to be driven by sales. It's got to be driven by the sellers at the partner organization. Um it will never be a productive partner. I have no no hate for uh you know VPs of partnerships of the world but uh in my experience these things don't ever become actually productive for both parties

of course

unless the sellers are the ones that are driving it. Yeah, I mean it needs it does absolutely needs to be a win-win, right? I mean, if there's no if there's no clear win-win on both sides as to a for the partner, it gives you a differentiation and helps you to sell more, be more effective into your solution. And on your side, it's like, well, I'm going to partner with these people because they can get me into the door of customers and they just can become a also extension of Salesforce. Yeah. It's not going to it's not going to work. There's no incentives for the companies to to do that, right?

Yeah. And and and by the way, this doesn't this is not just automation. Um we have some amazing just traditional packaging uh partners that sell boxes. Any that you want to mention like I mean some that are public maybe like uh maybe you give us an example of a very bad TMS partnership.

No, not very good ones.

I'm not going to get into trouble there.

Okay. Uh

okay. Or maybe just the good ones then.

Yeah. No. Um we have done a lot of great work with uh Lynden Meyer Monroe. It's a a pretty um you know kind of premier uh packaging distributor. IPG tape polymer group uh Atlantic Packaging.

Um these are folks that uh have really leaned into being partners with their customers. Mhm.

Um, they will often win RFQs not by racing to the bottom on price, but saying like look, let's let's have a relationship here. We're going to help you with XYZ and we're going to be thought partners and and how to you know solve the challenges that you're facing. And so that's where you know we can slot in really effectively because we're one tool in their tool belt to help their customers.

Mhm. Yeah. But there are also some other ones big ones right like other automation partners also that you work with.

Sure. Um, yeah, Kardex. We do a lot of work with their AutoStore division, and, you know, Packsize, uh, when we

when we first started out actually no when we first raised money because um you know we're venturebacked uh uh the

that's okay that's okay like many people

uh the first investors I pitched um said well what are you going to do about pack size. I was like, "What do you mean? What are we going to do about Packsize size? We're a we're a software company. They're a hardware company." Um, and they, you know, they have software uh as well. Um, but so early days it was like we don't know, like, should we differentiate ourselves from Packsize somehow? Are we friends? Are we like are they going to tolerate these like whippers snappers coming into the space and having the same mission effectively? Um and they've been around for much much longer. Um and as our platform grew and became more relevant to them uh with the simulation with the you know kind of no code rule management uh pieces that it has. We we became like very close. Of course, it was the Packsize sales team that said, "Paccurate let's let's do this let's do this together. Um and so that's been a it's just been a great partnership. I mean very very likeminded uh solution-oriented. Um, they take a similar approach that we do when we go on site which is not to say all right show me the show me the boxes. We say all right if you could wave a magic wand forget I'm here from a packaging technology. if you could wave a magic wand at anything in the warehouse, what would you fix? And that's where we start. And they start very in a very similar way.

Yeah. Yeah. No, I think um I mean these are like massive companies too, right? Like like uh so there is a but it's interesting what you said about the the VC question because obviously in the context of like partnerships, you could also think about like well is this something that actually adds value to the company in an absolute way or not? because that's an entirely different dimension than sales, right? Can this become a partner that eventually becomes, you know, a a potential acquirer. So there's a lot of there's a lot of questions like this I can imagine. No, this does this come through your mind also as you you are playing also the the chess game of like partnerships and strategic um alliances.

It does. I mean I don't I don't know how common this is in other verticals um but particularly with Kardex and Packsize and a couple others, um, we have to get like really embedded.

Mhm.

Um because the projects we work on are very complicated. So you end up kind of like in the trenches like solving specific problems together and collaborating very closely. And so there is a I I think about it sometimes more in in the context of like cultural fit.

Um could I could I see myself and my team living here you know inside this company? Um, and so I I would say from our side that like accelerates how much we want to lean into a partner, how much commitment we're willing to to put, how much work we're willing to put in. Um, because it just, you know, it means that there's a future here if the teams are effective and and get along really well. Very good. Yeah. No, I think um I think for many of the founders maybe or many of the people are thinking about this, I think uh um your path towards partnerships and attacking both channels, direct relationships and and also partnerships I think is a very it's a very good a very good strategy in the sense of um there is an application where you can actually go faster by yourself but in the long run also these partners could be critical um to be really like to be the dominant technology in in the space right. Um, tell us a bit about So,

wait, can I say one more thing on that?

Yeah, go ahead. Yeah, absolutely. Absolutely.

If I could go back five, 10 years, uh, I would I would tell myself, my younger self with less gray in my beard.

Yeah. When looking at a partnership ecosystem, it doesn't matter if you can help your, you know, the part the company you want to partner with, it doesn't matter if you can help their customers. Okay.

Okay. Okay. Go ahead.

You have to help them

either increase sales or increase the effectiveness of their solution. nothing else matters because there's tons of there's tons of companies out there where we can help their customers.

Um but that's not enough. Like there has to be such a such a tight alignment on go to market competitive advantage or um you know kind of advancing the the benefit that their product provides.

Yeah. It it is not like it's not worth sleepless nights trying to partner with a company just because you have the same target customer.

Yeah. So that this a it's a great point because you would think that actually if I have a software that creates a lot of value for the final customer, it's it's a no-brainer. But what you're saying is no, absolutely not. it's good but if I cannot find how do I actually help this partner achieve their own objectives right whatever these objectives might be obviously sales will always be and revenue will be and profit will always be a topic but the objectives of the moment of that company then I'm not going to get the same level of interest and momentum and I think this is a very good insight

it's not that the companies don't care about their customers and you know making sure that they're doing well but It's they don't have time. They don't have time like they they only have time to run their business and unless you plug into that that's not worth it.

Yeah. And I think I mean I think you're spot on because for you to get up into the list of priorities than any of these executives or any of the people have you have to help them to deliver their objectives. And of course everybody talks about customer centricity and so on. But the reality is in many companies you go in and when you see the conversations they are about their own business

right

they spend 80% talking about their business and 20% talk about their customers. Um and and that is the reality of most of the companies that also have interact. So I think it's a great point. I think I love that. I think it's a great point. Let's switch a bit gears and and uh let's talk a bit about um we haven't um we're like what like maybe 30 35 minutes into the conversation. We haven't talked about AI yet.

Oh, I was enjoying our conversation so much at this point. So let's talk about like um what's your view on really the potential here and and and you also have you know, obviously, into Paccurate's view, but also, you know, there's a lot of fluff there's a lot of BS out there there's a lot of you know people just changing their domain and then you know talking about AI but um I know you're not like that um I work with you on on you know multiple multiple interactions so I know you're like that. What's your view? Where is the potential? Where is there's real potential here?

Yeah. Um supply chain typically kind of slow and cautious to adopt uh you know brand spanking new technology and I you know I think we probably uh experience that that u kind of caution uh in our own journey. Um, I would say I don't want to get into trouble.

It's okay. It's okay. It's uh it's nonfiltered here. So, that's the idea.

Um,

go ahead, James. Go ahead. Give us some bombs here. Give us some uh

Sure. I I would say there there are natural applications of AI um around planning, around, you know, insight generation that would be kind of impossible. Um because insights in our space change. They have an expiration date

and so human beings um on their own um have a really difficult time finding truth uh and finding um things that are deeply hidden in the data to inform decision- making. They have a hard time doing that fast enough. So there's a lot in supply chain where I think AI we've barely scratched the surface. Um I will say there's a lot of like rhetoric about AI coming into mission-critical fulfillment context that I think is just absolute nonsense.

Mhm. Um, a lot of not not to piss anybody off, but you know, I think there there are also some investors too that get taken in by the AI, how AI is transforming all you know, fintech and like all all these applications that are a little bit more tolerant of imprecision.

Mhm. Um, you have you ever been in a fulfillment center when something breaks? Like the amount of chaos? This isn't like, oh, you know, the AI got it wrong, I guess we'll just try again tomorrow. Like, if if something goes wrong, if a machine breaks, um, it's a emergency. It is a it puts the entire business in jeopardy. So mission-critical for a lot of companies that using AI for execution I just don't think I don't think we ever will I think the model for

you don't think we will ever will for execution for actions for agentics to take actions

no interesting I think I will disagree with that but

okay I'll tell you why when it gets smart enough to execute it'll be too expensive I I I'll give you I'll give you the example on the cartonization side So we we tested Claude and some others um and got it to try to simulate what we do um and said, "Hey Claude, given these given this item in this these set of boxes, can you figure out the best box to choose?" And it was able to pick the right box given the constraints we gave it. And it's like great. It took, you know, a long time, but it did it. Um, but if you give it any amount of complexity, it has like an immediate drop off in quality and is 1,800 times more expensive. Now, you can make

from a a token perspective, from a data processing

compared Yes. compared to a deterministic algorithm.

Yeah. Mhm.

Where if you have the data, there's no like learning or guessing required.

Yeah. it becomes a really expensive way of of making a decision actually be wrong.

Yeah.

Whereas I I think there will always be a role for deterministic uh

Oh yeah, I agree with I I I agree with that. But don't you think that the the balance of you know is is the 80/20 in supply chain most use cases end up to be 80 or 90% deterministic and 10 20% probabilistic in these cases and then you can actually build

I think that's right agents that

no we're probably we're probably more more aligned on that. I think I was just speculating the other day that you know new new supply chain tech you know software specifically will have a common pattern of deterministic center

you know deterministic tasty nougat center with AI kind of chocolate around it to do all the all the other things monitor settings you know adjust settings but

you don't want something that can hallucinate being responsible for actually making the decision.

Yeah. No, I think on that front I'm I'm fully with you. But I think you know like I think it is why you know I think in our industry in supply chain but not only in supply chain I think there will be others maybe just I'm less familiar but in supply chain for sure I mean business requirement business rules um logics a lot of these things exist. They don't exist in a in an agentic way on on an easy way to but you know you'll have like 100 pages SOPs and you'll have you know in packaging you'll go into a old school run warehouse and you have hey the if you have x amount of items you have stuff printed on paper so I think there's like a that is where you can actually push into hey this is all deterministic this is all rules based and if this happen this is what you do

sure

but then there is other scenarios maybe which are edge scenarios or of a situation where maybe then you rely on the model to to help. So it will be interesting. We'll see we'll see that. But I I I do think I do think we'll see we'll see agents taking actually actions. I would say probably in the next two years. I haven't seen it yet like taking like meaningful actions, not not doing a call or sending an SMS. I'm talking about like taking a business action.

Sure. uh but I I will think that people will will give it a try next two years on non-critical first processes and decisions and then over time go into into more I think if we can it's not possible but I think if we can keep the hype at the door

and just keep iterating too late it's too late for that it's it's there's too much noise too much noise

but in a in a perfect world we wouldn't have any of that hype and we would be finding the points where AI and determinism kind of come together and like fit really well together. I mean, robotics is a great example: robots coming out.

They're really good at or they're getting really good at what's in front of them.

It's like, "Oh, I dropped that thing I was packing. Let me pick that up without hitting the table or falling over. Let me put it." So that's that's in the moment AI, but you're not going to have that thing be responsible for these are fragile items, so it needs this much dunnage. It's also going express, so I need this, that, and the other.

So did you see the video of um the live stream of figure with the humanoids? You saw that?

That's pretty impressive. Could you imagine Paccurate being embedded into the machine vision system of figure and uh

absolutely

I think the robot to

uh if you're watching figure give me a call. Yeah. No, absolutely.

Well, that's great. That's a great that's a great place to uh so let's let's uh let's wrap this up James. Now, thanks so much for all this insights and yeah, figure if you're listening to the podcast, James is here. You can find him on LinkedIn doing some good jokes um on regular basis, right, and on the paccurate.io website, of course. Um, James to wrap this up um give us your view as to you know what do you think happen the next couple of years going to be important for founders in technology in supply chain you say hey leave the AI stuff at the door for example what is what is important today in all this noise for a founder that is building supply chain technology in 2026 to be successful

yeah it's a good question I I think uh to the extent that you can ignore hype in your mental model um might make it easy to get funded uh if you lean into all the, you know, theses around AI specifically, but if you treat everything like a tool that should be applied in certain cases um you're probably more likely to build a durable business. Um, and I would say get in person. Um, you know, just because your solution or your idea m might have a massive impact on the industry, it doesn't mean anything if you can't connect it with your buyer.

Yeah.

If it doesn't solve a problem that your buyer cares about. M

um sometimes your buyer may not care as much about your solution even if it saves them more money.

Yeah.

They're trying to make their lives easier. We're all we all are like that's the human the human condition we're in

You know, the hierarchy of needs. We're all trying to think of, like,

or trying to filter out anything that doesn't make our lives a little bit better. So to the extent that you can develop a solution that connects with something on a primal level um you will have a much easier time bringing it to market. That's great. Well, um, fantastic closing and I think, um, staying out of the noise, um, trying to leave the hype and focus the mental model into what actually customers really need and what's going to make them more successful, I think is a great is a great advice because there's so much focus on the technology itself that we almost forget about, you know, business outcomes and business strategies, which is the defining factor of any type of technology adoption is what am I trying to achieve here in the business that define the technology that's going to help me to do that. Not the other way around, right? Where I think today so many people are trying to flip the model. It just doesn't work at at least enterprise level. It doesn't work for investors. Works, but not for not for not for actually getting customers, at least in my experience. So, if you receive a package at your home and that the box is half empty or half full, depending on how you look at it, James, Chelsea, and the entire team of Paccurate will be the people to tag. So put it somewhere online and then reach out to the team and if not that type of experience if you want to reach out to James. James where do people find you and and the team there.

Yeah, anytime, you can send us a message at [email protected]. I'm also really active on LinkedIn so you can find me on there.

Fantastic. Well thank you so much for joining us for this episode James. Great conversation. Thank you for coming. It was great to see you and look forward to uh continue the conversation on AI and other topics. Thanks Nil. Thank