Haven Allen is CEO and co-founder of mHUB, a leading hardtech and manufacturing innovation center, and is a managing partner of mHUB’s $15M Seed-stage product impact fund. Allen is an entrepreneur and technology strategist who most recently concentrated on growing the manufacturing industry and strengthening its community throughout the greater Chicago area. Allen recently spoke with Thomas Wilk about how companies are using digitalization to stay competitive and what organizations like mHUB are doing to attract the next generation of workers.
PS: Several inflection points have come together in the past year. First you've got the COVID pandemic, and then you've got people who are rethinking energy plans in the wake of a new administration who very likely will rejoin the Paris Global Warming Accords. And then, there’s the Industry 4.0 transformation in general. What are your thoughts on how industry handles all these inflection points at the same time?
HA: (First,) a general realignment of supply chains is going to happen globally because of COVID. I’ve witnessed the manufacturing industry be very resilient, and they've had to be for the last 20 years. Industry 4.0 isn't anything new, and machine-to-machine communication, robotics, and automation have been going on for 20 to 30 years.
It's just now, I think, price points are starting to come down which will lead to a higher level of adoption by manufacturers. From some of the startups that are at mHUB, they're creating plug and play solutions to incorporate sensors that enable predictive analytics, so you no longer have to completely reconfigure your lines. Manufacturers can take an existing infrastructure and use plug and play solutions, like Amper Technologies for example, and immediately be Industry 4.0. It's a battle for productivity as it always has been, and I think the manufacturers that are going to win out are the ones that have continued to invest in continuous improvement in order to guard their trade secrets and create new ones.
PS: Do you see these kinds of solutions, the new plug and play solutions which enable quick reconfiguration, as helping industry tackle more than one problem at a time? Such as easing the issue of tight resourcing from sickouts at the same time as they're enabling digital transformation, because you've got technology that can streamline the workload and also help make work more efficient?
HA: In some instances, absolutely. But I think there's a lot of new startup innovation going on in the Industry 4.0 like energy sustainability, the connected worker, the connected worksite. Standard protocols are being created, and when you consider cybersecurity or the way these devices are communicating with each other, there are things that need to play out. As they do, ultimately, you’ll see more integration. But right now, you can piece-meal things together, and every day, every year provides people with more access to data, and it becomes easier and cheaper to use more of the data being generated.
PS: If I could turn toward MRO, there's been a lot of challenges in this sector, especially with making up for a lot of the boomer generation who are retiring right now. When I started with Plant Services six years ago, retirements were just on the horizon, and now we're in full blown retirement mode where people are trying to figure out what to do to fill open positions. What are some of the things that you've seen mHUB and its partners doing to target the next generation of workers and pull them into this side of the industry?
HA: mHUB was set up as a space that provides people with access to equipment, talent, technical training, and business training in order to give people the access they need to launch new hardtech and manufacturing companies. I think before there was a place like mHUB, you went to university, you went to your technical training program, and then the only way you'd have access to very capital-intensive equipment would be through your employer.
Now, mHUB and centers like mHUB are providing very capital intensive, very technical equipment to people so that they can innovate, they can create, they can optimize their products. And, I think that's going to launch a whole new wave of hardtech and manufacturing companies. It's also becoming an attraction in itself for young kids to come and see the latest and greatest 3D printers and robotics. I think there's a reinvigoration going on right now where people are excited about hardtech, STEM, and the hard sciences. On top of that, we host interns through a local high school system to attract young people and inspire them to want to be hardtech innovators. You’ve heard “you can't be what you can't see”? We want to make sure that everybody can see what's happening now in manufacturing, both on the creation and the making side of things.
The last two years, we've been focusing on removing financial barriers of entry for entrepreneurs and people that want to launch manufacturing companies, and we've done that initially from two different lenses. One, with mHUB, we have 270 startups active today. There are over 600 engineers in our talent pool and many of them need supplemental income in order to be able to go after their entrepreneurial pursuit, their small business pursuit.
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Over the last two years, we’ve contracted our pool of engineers out to small- and medium-sized manufacturers for short term R&D projects. It's not production work, but we're sending teams out into the field to do all sorts of automation, incorporate co-robotics centers into existing lines, to developing whole new products that are quickly scaling up through some of our manufacturing partners. And it's a great win-win because the manufacturers get access to this deep talent pool, but for the startups, we're pushing about $80,000 to $100,000 a month in contracting work into our community and we think that that can grow twofold by the end of this year. So, you could join the community, get paid, but then also work on creating your new manufacturing business at the same time.
The other priority for us is creating access to risk capital for hardtech entrepreneurs. mHUB just did a first closing on an early-stage, pre-seed fund, targeting innovators who are spinning out new technologies, typically coming out of the universities or even from their garages at home. Through the fund, we're going to invest $75,000 cash into 10 startups this spring, providing about $56,000 worth of engineering design support, fabrication support, and program support to both build their product and their supply chain, then also have some of our manufacturing partners set up piloting of select technologies.
Also, we’re very focused on building up business and leadership capacity through everything from assigning mentors to taking people through our education curriculum. Ultimately the fund will invest in 60 startups over the next three and a half years, and our first vertical is in the industrial internet of things space.. In May, we'll open up the next cohort focused on novel medical technologies, and from there, we’re in conversations with some of our partners right now for cohorts focused on smart mobility and smart cities, and one on smart energy and sustainability. Every six months, we'll be investing in 10 teams and building their products, going hand-in-hand and to help them build sustainable businesses. This type of hands-on support I think is new from a manufacturing and hardtech space. This type of early-stage startup activity has existed for the last two decades in software and digital technology, and it's just beginning to spur up particularly here in the Midwest, so hopefully this attracts a lot more people into industry.
Going back to workforce, I had the pleasure of being nominated by the mayor of Chicago to serve on the Chicago / Cook County Workforce Investment Board. From a partner label, we have about $70 million a year to invest in training programs and incumbent worker training, dislocated worker training, and manufacturing's definitely one of those high areas for us. When you talk about maintenance and repair, that’s where we're seeing a lot of growth in the industry. For example, as things become more automated and more robotics-driven, there are very technical high paying jobs that are going to be created to keep the machines running and not necessarily about making the things. And I think that's all just starting to really play out in the system and it will continue to accelerate as more automation is adopted.
PS: One of the things that we've noticed in talking to our readers is that some plants are either delaying going digital or they're not sure where to start. And there's simultaneous trend where a lot of OEMs are embedding wireless technologies and network technologies into the machine so they can collect data on performance, simply to keep up with competition. What are your thoughts on plants who are delaying this sort of thing? Can they stay competitive over the next 5-10 years? Or is the market making the decision for them, and before too long it's just going to be certain standard turnkey items where either your assets are networked or you don't get them.
HA: Yeah, it's tough because I think the big OEMs want broad visibility into the Tier 1, Tier 2, Tier 3 suppliers, and a lot of manufacturing becomes just-in-time. Having that visibility is essential for them to do the integration that they do. I think it ultimately depends on who the manufacturer is contracting and doing work with. For example, look at the national network of advanced manufacturing institutes and specifically MxD, which is in Chicago (www.mxdusa.org). The Department of Defense has put in (at least) $100 million to create that digital manufacturing center, digital twins, cybersecurity (research), and it's being driven by the DoD and by OEMs, and then getting pushed through the supply chain.
So, I wouldn't say it’s fine if they're not adopting right now. Five years from now, they definitely should be aware of the technologies that are emerging and how it fits into their operations. Ten years from now, it's just going to be required by industry to have some sort of visualization and access to the analytics. Machines are becoming pretty amazing in producing the data, so if you know how to use it, you can unlock a whole lot of value.
(And when it comes to cost,) three or four years ago, it would have cost $10,000 to $20,000 to do basic predictive analytics on a single CNC machine. Now you can buy a $100 sensor that plugs right in and is wireless and has a $10/month service fee. That has immediately dropped the price for everybody.
It's an exciting time though. We always look at the price of components, the price of battery storage, the ability to store and compete in the cloud, all the technology that was developed around the cellphones. 5G is now coming online, creating more access than ever before, so more people can engage in this innovation. Over the last 13 years, technology costs have been driven down, the access has been made more profuse, and it's enabling the creation of simple devices that you couldn't even imagine creating because they would have been cost-prohibitive 10 years ago.