Interviews, STARTUPS

With pinpoint accuracy

Having unmanned vehicles autonomously navigate the roads in Russia or any other country requires very accurate mapping. Denis Gusev, chief executive at Remontista LLC, shared with Invest Foresight business magazine his vision of a data ecosystem that would promote unmanned transport in the future, as well as give current road users some additional benefits, including financial bonuses.

Spot the difference

– Autonomous cars’ popularity is growing rapidly today. There are multiple development projects, with driving prototypes available with a variety of characteristics, varying quality and prices, etc. How is your technology different from them all?

– I would not focus on technology now, because we are obviously unlikely to compete, say, with BMW or Audi, but I would rather underscore that we are giving our customers an infrastructure and an ecosystem. Moreover, without them, as well as without a customer base, technology is worth practically nothing.

I will cite my favorite example of Blackberry or Nokia: these producers have been making cool hardware – smartphones – but running on their own closed systems. When Android and IOS gave people cool ecosystems, those companies lost their users and were forced to switch to Android. So I would rather not claim we have some super-technology or tell you a super-engineering story. Essentially, we are providing drone developers with their own kind of Android. We do have our own hardware projects, too, but with our ecosystem, we will give both customers and infrastructure to all developers.

Will our technology be used in their projects? It would be great if it is. But if not, if some external technology is used, it would be just as great. So we should not be regarded as competitors to engineering companies. I would prefer to be seen as local analogues of Yandex in each country, which have customers, but not the technology or expertise in servicing vehicles.

– What constitutes the ecosystem?

– We actually give the drone a chance to be fully autonomous. You know how it happens now at most car repairs – the client drives in, the assistant gets into their car and drives it into the shop, and often the client gets deceived because they don’t know if those parts indeed needed to be replaced along the way, because they don’t participate in the process. As for drones, no one has any client history from B2C or B2B, so when B2B clients are ready to use drones – we will provide customers, early followers or corporate clients who already know how to work with us, and we will provide the infrastructure from the car service. So the most important things we have are the clients and the system.

– So you are saying that the clients of the car repair shops from your project are potential clients for the new geolocation technology and, later, for unmanned vehicles?

– Yes. First, there are two types of customers – B2C, B2G… Or rather three: B2C, B2B and B2G. B2C implies people who are the first to join any startups, the so-called “early followers.” And drones are certainly an innovation not everyone is going to embrace at once. I already expect battles between different people, who would probably try to demonize it or deny it.

There will be tons of questions; therefore, gaining a critical number of users who will launch this service into the market is only possible through early followers. Yes, we will have them because our staff will include mechanics for driverless car buy & try who will be working on B2C personal car maintenance. Even now, our clients are profiting from Big Data as part of our loyalty program.

As for B2B, it is the most interesting example in AV. In this case, it won’t be just an individual driving his “Volga” to a bakery but, say DHL and Uber will use these developments. There are commercial segments that could use this. They are the main goal of all self-drive developers. They could already do this now.  

— Is this your ultimate goal as well?

— Our goal is to find one such client that would be willing to work with us right from the start. We know how to work with conventional fleets. Everything is digital now. All they need to do now is to say: “Okay, you can fully handle our technology. You know how to work with us. Now we are moving to the next level of trust, the next level of communication.” That’s all.

How does it work?

— Here is a technical question. As far as I understand, your system boasts a highly accurate positioning, down to two centimeters. Due to this factor, could your development be qualified as a dual-purpose technology? And could this create problems for the service users and other respondents in the future?

— There is one big reason why we are better in terms of quality than, say, Yandex or Google. Those who follow Yandex’s stock performance know that a lot of things happening to this IT company is affected by legislative initiatives or some Interfax reports. For Google, it is US President’s Twitter activity. Our company is independent from geography. It is not bound to or associated with any government or any major vertically integrated group with significant assets and significant interests involved. Could this accuracy be of interest to the military, the government or anybody else? Right now I’m not ready to make predictions about the future of Russia, Germany, Italy or anywhere else. If it happens in one specific country, we always have a choice – we can move to another market. We can expand to the rest of the world.

Also, it is a big illusion that nobody is watching you and nobody knows about you. Even we, thanks to our apps, know almost everything it is legal to know about you. If somebody needs to get certain data on you, it is already out there. If you have nothing to hide, it doesn’t matter if we can pinpoint you down to two millimeters or two centimeters.

— I see. Are we talking about a fourth-generation and fifth-generation AV?

— Right now we are building infrastructure for self-driving vehicles. Once we manage that, we will be dealing with the autonomous device itself. It will cost something between $3K and $4K. The horizon for this project is about 12 to 18 months.

— So, by purchasing this technology, any car owner can basically become a land surveyor who participates in creating high-resolution maps?

— Or, more simply, he will become a data provider.

— How can a vehicle be autonomous if in winter all road markings are covered in snow and traffic signs are sometimes placed incorrectly?

 — We plan to install some 5K devices in an area of the size of Moscow. In one day, these devices will analyze all sections of all roads in any corner of the city. In a week, they will detect hundreds, maybe thousands of cars coming and going on the same roads, and we will see that, say, there is no right turn, or no left turn there. We will then see these dozens of tracks and use big data to process them. All other trajectories will be averaged out. Thus, we will receive a certain ideal route and see where there us a u-turn, the possibility to change lanes, a 60 km/h speed limit sign, a no parking sign, a left-turn arrow, where a left turn without an arrow is and where the driver has to wait, and so on. All this information is in fact a high-resolution map. If we have that, we do not really care about the weather or the road marking because we will have a route to simply stick to.

Then we are speaking about SLAM, simultaneous localization and mapping. So we need to go a certain route. At the same time we understand that there could be children, dogs or moose crossing the road, there could be excavators, or maybe the road is under repair. This is the moment when the sensors and actuators installed in the car come into play. This self-drive system can detect obstacles without changing the route.

Invest in technology

— Let us imagine a concrete person, an individual who wants to install this technology on their car. How much will it cost? How can they do it and what advantages will they have?

— What advantages? Saving money. Now, when you install something, the application offers you whether you want to see their ads or not. Everybody knows that if the adblock is off, some of the functionality will be free. The same thing is used here. It could be some lump sum payments or discounts from our insurance agencies. It is not a problem to motivate people to install geolocation devices.

How much are they? If you order it from Alibaba, say, about $300-$500. If we launch a mass production then the prices will drop. This box itself, which detects the coordinates of the car while it moves and draws tracks for high-resolution maps, will cost practically nothing.

— As for potential investors who have money and are ready to invest it in your project. Is there a minimum threshold, and when will they see returns? And how soon can such an investment pay off? Say, $100K?

— We are not scammers, we do not collect money and disappear. We are completely regulated company with an international legal entity. We have legal opinion in each country of presence, so we act in strict accordance with the law.

We cannot guarantee, like any venture, the capital recovery and gains, but the infrastructure we have created to raise money ensures that we will make every effort to provide recovery of the capital. As to legislation, this will be protected from any unclear actions by the team or company. We cannot have control over market risks and guarantee success as this is not a bank deposit, but we will ensure maximum capital transparency and protection.

As for the minimum threshold, we work with qualified investors who are aware of all risks and realize that this is a risky investment. Even the Russian legislation has certain criteria for an investor. The legal restriction is $100,000.

Speaking of capital recovery, according to our business model, we are planning to begin receiving dividends in a four-year period or sell our venture to a strategist. There are actually two exit strategies for us. The first one is about investors, cash flows and our company receiving dividends, and the second one implies selling our company to a large customer to provide it with the missing link.

This all would seem appealing for the public transport sector, wouldn’t it?

As regards public transport and the government, I reckon that attracting such high-caliber clients would require a large number of approvals. We are looking to enter the mass market – that is, to offer a comprehensive and scalable solution that would work everywhere rather than to capture Moscow’s transit bus market and operate there for years. Two separate directions we work in involve developing the self-driving system and building the data box.   

Chance for success

With one or two self-driving cars on a road, how sure can we be that others will obey traffic regulations the way autonomous vehicles do?

We reduce this risk. Our unmanned vehicle can be traveling next to a human-driven car, or another self-driving car. Our data box installed in a car allows predicting its trajectory in advance. But if some other car is driven by a drunk driver, there is not much we can do – and neither can any other vehicle or a driver.

If you receive an offer you cannot refuse, what will your response depend on?

There are two aspects. First, there is investments recovery. Just like any other startup or venture – call it whatever you will – we are aiming at tenfold capital recovery. If an investor puts $100,000, he will receive at least $1 mio within a reasonable period of time. Second, we are basically building a company that costs much more than $100-$200 mio. We are building a global company and would very much like all its members to eventually be involved in top-end exit deals worth billions of dollars.

Is there any chance?

— We have proven durable; we boast a team of fully trained professionals and have outlived our competitors in Russia, except for those not quite relevant in this field. We are a unique company that operates in the entire market and our activities do not depend on certain persons in the team. We have developed our business processes and turning a profit in Russia’s highly difficult market. So the chances are definitely high – but speaking a subtle juridical language, nothing is guaranteed.

By Taras Fomchenkov

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