Erik: Francesco, thank you for joining us on the podcast today.

Francesco: My pleasure.

Erik: So, I'll tell you. I've been doing a lot of very technology-oriented podcasts lately — companies that are building cloud infrastructure, even very specific tools for developers. I'm really looking forward to this one because it's a completely different business, right? You are oriented around not a technology, not an industry vertical, but maybe a use case or a problem to solve — in this case, the problem of safety. So, Francesco, I'm really looking forward to this podcast. But before we get into that topic, I'd love to just learn a little bit more about yourself. Where are you coming from, and how did you find yourself in this field of safety?

Francesco: I am senior consultant here at AME Advanced Microwaves here in Florence. I've been here for two and a half years. But before that, my experience, almost 30 years in the small electric kind of industry for Italian companies both based here in Italy and in the UK. I joined here because it is a more exciting world than the one I've always belonged to. I'm quite excited to be part of this new adventure into what we call 'active safety.'

Erik: Well, tell me what is exciting here? I mean, I can imagine. If you look at a construction site, there were probably things that people were doing 30 years ago as normal business, that today nobody would even think about doing in terms of safety, right? I guess there's been some change here. But for you, what are the big changes? What's exciting about the world of safety today?

Francesco: It's the complete change of approach and attitude. The safety has always been a cost to companies. How much do I have to spend for — I don't know — more protection equipment, safety shoes, high visibility vest, the unit? Safety has always been considered a cost, a must-have and a pain, let me say, for all companies. What we are trying to do here is to turn it into an investment. That's why we call it 'active safety.' Cost is the passive safety. Meaning, the equipment that you use to reduce the damage. Basically that. Active safety, well, move into prevention. Okay? Avoid the damage to happen. Anticipate that.

Erik: So, passive safety would be saying let's make sure people have the right shoes and the right goggles and so forth, and they can survive the damage that they're going to face. And active is saying, okay, let's create environments where we avoid this situation entirely by sensing the world and managing our operations. Is that kind of a reasonable way to think about it?

Francesco: Absolutely correct. It seems to provide all elements of the environment, to the workplace environment. Pedestrians on one side, operators on one side, vehicles and their drivers on the other end, the device and equipment that is making them — at least, one of them — visible to the others, so that you know exactly where all the other elements are and avoid any possible damage and/or incident. Again, it's a question of anticipating the risk and evaluating the risk at the same time.

Erik: We'll get into the technology later. I'm quite interested in the solutions. But before we go into the technology — because that's certainly a big change. A lot of these things just weren't technically feasible 20 years ago, and they are today. But I think there's probably some other things here. There's topics like just the mindset of management. Maybe there's topics for, financially, how do people think about the cost of safety? There's probably been a lot of regulatory change. So, if you look at the topic of safety, aside from the technology, what else is driving companies to rethink how they address this topic?

Francesco: Look, all major and big conglomerates, they have safety as part of their mission. That was not the case 20 or maybe even 15 years ago. Why is this so? Because safety is one of the leverages in the new world of social media of complete and continuous interactions. Safety is one of the topics that can make the headlines. So, it is important that you provide a safety environment for your employees. In terms of mindset, this has been making a great change. Meaning, a great change for lots of companies — not only the big conglomerates but even the small and medium companies as well, as part of the well-being of the employees.

Erik: If we look at this globally, how do you see this? Because I guess Europe is — I would consider Europe to be the center of the world in terms of actually caring about your employee, well-being. I'm here in China. And to some extent, the government actually does care a lot and has certain protections around employees. But then, you also sometimes see people welding, and they'll just put a piece of paper in front of their face to ward off the sparks, and so forth. So, it's certainly not a European environment in a lot of ways. If you look at the world, would you say that this is a global trend or it's a trend that is first being pushed by certain regions, in certain industries, and maybe it's catching on slowly in other areas?

Francesco: The last thing you said there is most probably the best way to draw the picture or the actual picture. It is something that is growing gradually and slowly throughout all regions. But we see, of course, many differences between them. From our point of view, even to U.S., it now has developed some consciousness regarding the safety issues or the awareness of the tools that are available. Not as Europe. But they're all coming onboard.

Most of all, the fact that these conglomerates are present everywhere around the world, of course, they need and want to have the same kind of policies no matter where they are. So, it could be Latin America, China, Southeast Asia, or Europe. It doesn't make any difference. So, that is helping. This is what helped us developed our business in the past — working with these big names all across industries — that would help us, let me say, spread the word regarding these new tools that can help you increase not only safety, but also the efficiency of your operations.

Erik: Yeah, that's a good point. Corporate conglomerates, they do have more global standards. I think a lot more are also pushing their suppliers to adhere to certain standards as well. So, I suppose that starts to really impact every corner of the world. Let's talk, Francesco, a bit more about your customers then. Maybe, first, from the vertical perspective, what are the major industries for AME?

Francesco: AME space is in Florence, Italy and just next door or around the corner here towards the coast. That's one of the major European districts of the paper. By chance, we started with that. What worked for us was the word of mouth. So, we started with one. AME actually won a local award for technological innovation. From that moment on, the phone kept ringing. All the others wanted to join us, let me say. So, the paper industry was the first one. We adopted our systems, and we grew it from there. From paper, we went on to food and beverage, to cosmetics, to automotive, just to name a few.

Erik: Okay. Got you. I guess this is a very horizontal problem, right? It's a problem that anybody who's operating heavy equipment and so forth is going to address.

Francesco: Absolutely transversal. When I met the entrepreneurs, the two founders of the company here, Claudio and Filippo are actually former professors at Florence University, professors of electronics there. When they started the company, they understood that there will be a lot of potential in developing the products that are part of our portfolio today.

When I met myself two and a half years ago, coming from a world where you knew exactly where the shelf was starting. For smaller, for anytime, most of the problems, you know exactly what space you have in any single market. Well, here, vice versa. The market is absolutely liquid. Because you can really apply these kinds of safety, active safety solutions, to any kind of industry/environment — from intralogistics to tunnels, to construction for terminals. Really, there's no limit to it. It's just a question of making people aware that there are such solutions available.

Erik: Yeah, it makes sense. I'm interested. I was looking at the history of the company. So, it's about 23, 24 years old right now. The name is, I guess, the traditional name or still the legal name is Advanced Microwave Engineering. And now it's branded as AME. This gives me, as an outsider, the feeling that two professors, they founded it. They're coming from an engineering background. So, they founded it probably around a specific set of technologies that they had developed.

Francesco: Correct.

Erik: And now the business has evolved from a company that's oriented around a couple of specific technologies towards a business that's oriented around a problem to solve, where there's a lot of different technologies. Now you have a very complex tech stack. That's everything from sensors up to the cloud.

Francesco: Correct.

Erik: So, interesting kind of business philosophy of the evolution. Because you see a lot of other companies that might have said, "Let's just build sensors, and then we'll figure out all the potential use cases for our sensors and take that more technology-oriented." Do you have any insight into why they chose that business philosophy oriented around a problem?

Francesco: Every single company starts from an idea. The idea was, again, guarding sensors talking to each other. So, the product was the core, and still is in a way that we do own our own technologies and trademarks, et cetera. What made the difference for Claudio and Filippo was that they would listen to people they were talking to, their clients, listen to their requirements. They're not trying to impose their own jargon but just to try and really wear their shoes, the other shoes, and translate our products into solutions for those specific requirements.

So, this is why the approach now is so broad. It's not just one, two sensors, one, two whatever softwares. It's wider. It's more omni-comprehensive, because of always changing the correct answer to the specific question that the clients may pose.

Erik: Okay. It makes sense. Very customer-centric. I think that's a great way to run a business. It's not necessarily the way that a lot of tech companies run their business, but it's a good approach. One more question just around the business side before we get into the solution. I understand the industries you're working in. Who are the decision makers in those? Because, I guess, you have operating teams. You might have a maintenance team. But you're also touching base with the IT teams who might be actually working with you on deployment. So, who would you typically be working with?

Francesco: Our first point of contact or port of call would be HSE managers, health and safety managers. Because those guys are the ones that we know that speak the same language or understand more about safety. Through that, Erik, most of the times, many times, the health and safety managers — counselors, let me say, to their own business or their businesses — what our challenge always is to make those guys, the health and safety managers, our ambassadors within their own organizations in order to take on board those other managers needed to high-level managers that have the budget to spend. That could be, on a local level, site managers, plant managers, operation managers, as well as, of course, the board managers at a higher level. But the first port of call would be really the health and safety manager.

Erik: Okay. Clear. Well, let's get into the solutions now. If I look at the high level, I understand that you have solutions that are oriented around specific problems like traffic management, anti-crashing. Then you have a service. It looks like a service platform. You also have a cloud data management platform. Help us think through. How would you think through the portfolio of AME?

Francesco: We have different solutions to respond to specific different needs. We ran across two different technologies that are both radio-faced. The aim is to connect, as I said earlier, different elements of the environment in order for them to talk to each other, signal their presence to each other in order to make more potentially dangerous elements of the matrix — that is normally machinery, vehicles, truck, you name it — aware of the presence of others around them, and change their behavior correspondingly. This is the starting point.

Then what we have developed is a full analysis of these interactions and events, and the calculation of the actual level or risk of this single interaction. Why doing that? Because we can learn from experience. Thanks to the machine learning, we can then build a database of actual facts that can help managers take decisions in order to increase the safety levels that, at the same time, helping increasing the level of the standards of efficiency of their operations. So, we always have a real-time one-to-one connection between the different elements in this environment. Then elaborate and analyze data coming from these interactions in order to really evaluate the actual level of risk of those interactions.

Physically, you have a transponder. You, Erik, would have a transponder. Me, Francesco, driving a vehicle, I would have a system installed on my vehicle that would see exactly where you are at any given time — not only how far you are from me but evaluate your speed relative to my own speed, and the direction of travel of you, Erik, against or compared to the direction of travel of my truck. This would tell or evaluate the actual level of risk of that encounter. If you are walking towards me, and I'm driving at 10 miles an hour towards you, well, we definitely have a serious level of danger and risk. But if I'm driving away from you or if you are moving away from me, then the level of risk here is much lower. This is what the new system, Amesphere, does.

Erik: If I look at your solutions, you have these solutions that are oriented around use cases. I guess that the sensor and the configuration is designed for different environments.

Francesco: Correct.

Erik: Then Amesphere is the back-end analytics platform for making decisions based on the data, and then putting them through some kind of user interface or automating a control feature on a forklift or a device. Is that the connection?

Francesco: Yes, it is. Amesphere, in particular, is starting again from what people are telling us. We needed to provide — the mantra is: the more sophisticated the solution, the easier must be the translation into operation. What I mean by this, we are storing and analyzing in real-time all these interactions and events. But then, to make them proper tools to improve safety and efficiency levels, you have to make them as easy as possible to read. This is why we have created an index, so that people in one number can see whether things are going right or wrong. It's called ESI — Efficiency and Safety Index. It is literally one number that would appear on your dashboard. So, in one second, you would understand whether things are going well or not.

We have in mind — what do you have on dashboards, typical of the apps, the health apps or the apps that you would use for your exercise like cycling or running or whatever. Of course, they would be full of different performance indicators. But at the same time, they would provide a proper, very quick and easy-to-read snapshot of the status of your health or training or whatever. Right? This is what we're trying to do, what we are doing with ESI, as we call it in Italian — ESI, Efficiency and Safety Index. Trying to help manage it.

By the way, sorry, Erik. Sorry. But this is important. We have to be realistic. Safety, it is as important as one of the number one, of course, things managers have to take care of. So, we need to keep it easy and immediate for managers to understand where they are with it. Because otherwise they would not use it, because you convoluted or too difficult to then export or pass on to the other managers inside the company.

Erik: Yeah, I like that philosophy. The more complicated something is under the hood, the simpler it needs to be upfront, right? I think that applies to a lot of different solutions. I get the technology stack or the solution now. Maybe we can make it a bit more concrete by looking at one or two customer examples. Are there a couple of use cases you could walk us through?

Francesco: Yeah, I would just ask you not to mention the names. For example, very recently, we installed our products at L'Oréal, their major distribution center in Germany — where on one site, we provide them with the anti-collision devices and systems that they onboard every one, every single one of the tracks they use in their warehouse, and the adoption of a tag, a personal tag transponder, for every single one of their operators so that the tracks always know where the operators are. And as they get closer to operators, the speed reduction is automatically triggered. This is one thing.

At the same time, on the same proxy, we have adopted our zoning class system for automatically to talk to the infrastructure and automatically open gate roller shutters or whatever as they come closer, close to them, or to add in shape those moves that potentially are at those areas inside the warehouse, like pedestrian crossings or blank corners and, again, automatically trigger a speed reduction of the vehicles on one side and the switching on of alarm light or flashing light for the pedestrians in that same area.

Erik: Okay. Clear. It seems very practical.

Francesco: Oh, yeah, it is practical. I could really see where it could — this is the way to define it. We could go on for hours talking about the technology. But the important thing is to see it in practice. If you make your potentially dangerous vehicles to smoothly decrease their speed as they get closer to, again, a specific zone inside the warehouse or working environment for other operators, then that allows the driver to focus on their own proper job. Because the system would do for them on one side. On the other, this would mean and translate into more kilometers made, more miles made per shift, the more kilometers you make per shift, the more jobs you can deploy. That is where the increase of efficiency.

Erik: Yeah, I can see you're really thinking carefully through the user journey or the specific tasks that somebody is doing. I'm curious. As a business, are you typically trying to have a direct relationship with the customer, or you have people on the ground walking through the site and understanding the process with them? Or is there often a system integrator who might be doing that job and then identifying you as a technology provider to solve a certain problem?

Francesco: Ideally, we always wanted to be in direct contact with the end user, so-called end user. Because we don't sell a product. We sell consultancy. We sell a service. We need to and we want to understand their peculiar requirements. Through that, between us and the end user, then the manufacturers or the providers of machinery or forklifts, trucks, vehicles, in general. So, there are a lot of stakeholder and logistic partners as well. So, there are a lot of stakeholders. While having a panic, they'll always be trying to keep a direct contact with the end user. We need to get on board also the other stakeholders for them to understand how we can help improve their own service to the end user.

Erik: Okay. Understood. Usually, you're selling an integrated solution, which means upfront consulting to help them define the requirements and the right solution. Then you also have your own hardware with your own IP, and then the cloud integration, et cetera. So, end to end. I have another question. Just looking at some of your use cases there, some of them are related to putting sensors on workers and then tracking location. Obviously, that's very useful for safety.

Francesco: Absolutely.

Erik: I know that Europe also has very stiff privacy requirements around PII. So, I'm curious. How do you address that, as a company, to make sure that you can solve the problem while adhering to privacy?

Francesco: Again, this is part of the direct contact and the good cooperation and collaboration with the end users. Because every single device we provide carries its own serial number. These are what we're dealing with: numbers or serials. Then it's to the end user to give a name to those serial numbers, to pair the personal tag to the single operator, for the serial number of this vehicle system to the driver on that specific ship.

Of course, we do not name them. But we only have numbers. Of course, all these information are kept because of the sensitivity of those information, are kept absolutely. Well, it is the end user who keep them. Because it is, again, in their own interest to see and check what the status and the performances are. But it's absolute privacy because, of course, it's paramount important that data are kept for what they are. Even when we do talk about case stories or we normally never mention specific big, peculiar cases because of the sensitivity of those information.

Erik: Yeah, clear. Okay. So, you make sure that, from a system perspective, it's anonymized. Then it's up to the customer to decide how do they want to frame their system.

Francesco: Absolutely.

Erik: Okay. There might be a couple other things that you want to also touch on. But, Francesco, the last thing that I had on my agenda here was to understand more technology innovation over the next 12 months, 24 months. What's in the pipeline? It looks like this Amesphere solution is relatively new. It looks like that's a big direction you're moving in. But what are you excited about over the next couple of years in terms of new technology development?

Francesco: It's opening the door to a new dimension of safety, from our point of view. We're going to launch it in the next roadmap, next week in Chicago, for the US market. Then looking after in Germany in end of April for Europe. Why I'm saying so? Because safety, I already mentioned that we're talking about active safety compared or opposite to passive safety. We are now with MSD are moving active safety into the proper dimension. Because the future in providing not just data but actual facts to users of our systems in order to help them after their decision process. Okay. So, this is where the future is.

Based on the experience we have of interactions and events, I do not just count them, but I proper evaluate the level of risk of every single one of them. Then it's making me aware of where the problems are, of what the problems are at any given time. So, providing me actual information to base my next decision on. The future is on the anti-collision per se, but making anti-collision as a proper constructed tool to increase not only safety standard but, in fact, efficiency of your operation.

Erik: Okay. Understood. So, moving much more into analytics layer into platform across, and not just two devices interacting with each other but a system of moving parts within a factory.

Francesco: Correct. We're always keeping the watermark kind of approach. We are always starting from the single effective relation between that vehicle and that other vehicle or operator at that specific time in order to make it safer, that real-time is proper real-time, and the reaction. And so, the prevention of the damage, let me say, is always there. Then you grow it from there and build on the analysis of the thousands, if not millions, of interactions you may have in any given period of time — provided the information, the actual information. Not just data. Rather factual information for people to make their own decision.

Erik: It looks like there might be a bit of extension here as well. If I'm looking at your core solutions, it looks like pretty much the whole tech stack is provided by AME, right? So, you're providing the sensors. With Amesphere, I'm assuming that you're also ingesting data from third-party devices, et cetera. Is that the case, or is everything typically coming from AME device?

Francesco: No, it's coming from AME device. We all store data on our platform. Of course, we give access to the platform to our clients so that, at the end of the day, we'll have this dashboard with all the key performance indicators, as well as the index, the ESI index I was telling you about. But it's based on our own interactions. Because, of course, we're talking about the devices that are talking, let me say, speaking the same language. So, they communicate to each other constantly.

Erik: I'm curious. How much is this a challenge in industry? Because in industry, you often have — things grow organically, right? It's like you buy three devices now. Then next year, you buy another five. Then you deploy system A, and then next year you deploy system B. And so, you end up having this proliferation of sensors from different companies and forklifts from different companies. Is that a challenge to actually get a customer oriented around a particular tech stack?

Francesco: It can be a challenge. But at the same time, we are ready to face that challenge. Because another part of our business is the role of system integrator. For example, we've done in the industry where we have quite a big experience of big projects handled and managed throughout the globe, not only in terms of the collision and tracking of operator working in such environments, but also providing different as a system.

Look, the advantage we have is that we own the technology. We have a very strong team of software specialists, as well as R&D engineers, can be integrated in different systems together all their life within the company. This is an important thing. Again, we have to be realistic and understand from our customers what their priorities are. But then, we are there able to tailor our solutions around their needs. Because, of course, we cannot have the trucks tomorrow with 7 different displays and 10 different sensors. So, we dare to take on this challenge to furthermore integrate the systems, having in mind that the mission of increasing, again, not only safety but efficiency of operations.

Erik: Yeah, great. Well, Francesco, I told you upfront that my goal for the podcast was to make sure that, by the end, I understood the business. I feel like I'm getting pretty close there. Are there any details that we haven't touched on that you think are important for folks to understand?

Francesco: No. One thing I can mention is that we are growing very fast. Why growing? We opened a subsidiary two years ago in Germany. Now we're opening a subsidiary in the U.S. as well. We do that because we understand how important it is to be present. This is one of the things that really winning for me. The fact that people have a great entrepreneurial spirit on one side, and on the other fully understand that no matter how technological our solutions may be, you must be with your clients where they need you.

Because our great, let me say, challenge or greatest challenge: for them to understand that what we are talking about. This is something new, so we need to be there to actually demonstrate actually what we mean when we talk about active safety and active prevention after that. That is something I would highlight as being one of our unique selling propositions. Okay?

Erik: Yeah, perfect. Well, a lot of our listeners are actually based in the U.S., in Germany. So, that's great to know that you have a presence on the ground now. And for the folks that are listening, the website is ameol.it. Francesco, really, thank you for taking the time to speak with me today.

Francesco: Thank you. Thank you.