Episode 1: Tarun Nimmagadda, CEO at Ruckit

Summary

In this episode, Clue CEO, Oded Ran interviews Tarun Nimmagadda, CEO of Ruckit, a trucking management software for heavy construction assets. Oded and Tarun discuss Ruckit’s product offerings and future of e-ticketing and fleet telematics.

Links

GoRuckit website
Tarun on LinkedIn

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Read a Transcript of the Episode

Oded Ran (Clue) (00:01):

Hello, and welcome to another episode of the full scoop. My name is Oded Ran, and I'm co founder and CEO of Clue, the hosts of this show. And today we have with us Tarun Nimmagadda from Ruckit. Tarun, how are you? So please tell us more about Ruckiit about the company and about yourself.

Tarun Nimmagadda (Ruckit): (01:12):

Yeah, so Ruckit is a construction technology business. We're focused primarily on the civil construction industry, roads, bridges, and highways. And what we do is we've created a transportation management software, which really helps manage the process of moving heavy bulk materials from the quarry or the asphalt plant to the job site and all of the business processes that go along with that, which is scheduling the trucks, dispatching them, keeping track of their time, paying them correctly, doing, and then job costing and accounting. So we really connect the operations of that business. We digitize the operations of the business and then connect that into their accounting systems so that they have that full digitization from the field back into their accounting system.

Oded Ran (Clue) (01:23):

That's amazing. So it sounds like the world before you invented Ruckit was fairly pen and paper and non-connected.

Tarun Nimmagadda (Ruckit): (01:30):

Yeah, absolutely. So, I mean, in, in some ways the norm for the construction industry and moving heavy bulk materials, hasn't changed in, in probably 50 plus years. And every time a truck driver pulls up to a plant or quarry to pick up some material, they get issued a paper ticket and that says, okay, you need to deliver this material to this place. And then when they deliver that material, there's multiple copies. They get signatures, they keep a copy, they give a copy. And then an invoice gets sent over with a copy of all of these tickets and the person receiving the invoice has to match up all of the line items on the invoice with the tickets that they have receipts for. And it's always been a very manual process. And then,uin terms of coordinating the trucks has been a very manual process. You know, it's a phone call or an SMS and it works okay. But what we end up missing is the ability to use, you know, the power of technology to really optimize these business processes, if they're not digital to begin with. So when, when we entered the construction industry, we saw that this was going to be a decades long journey for us in terms of first step is really digitizing those business processes so that we can bring in that next level of technology and the advancements around artificial intelligence to optimize the structure and digitize the paper and everything that kind of, we know that other industries have gone through this transformation, but in order for the construction industry to go through it, we have to digitize it. So we're, we're sort of in phase we're in the, we're just kind of completing the first phase, which is to digitize the workflows. And now we're starting to get into the second phase, which is really optimizing

Oded Ran (Clue) (03:24):

Well. And so how many years ago did you start the company? When was it started?

New Speaker (03:28):

It's about four years ago now.

Oded Ran (Clue) (03:29):

Wow. So tell, tell, tell me about the first few days, were you working in a garage, building the company? Tell us a bit more about the first few days, first few years, I should say right. Building the company.

Tarun Nimmagadda (Ruckit): (03:40):

So my, my co-founders on the, in the business, Kyle and Alison and I, we when we first started, it was probably in, in our apartments, which we were living at the same place at the time. All three of us were just like, you know, 28th floor, 19th floor, 16th floor, you know? And so it was pretty easy for us to just meet up and talk about the business. And then our first office was on the East side of Austin, which is nobody was there back then. And now it's like become a cool gentrified spot. Now we took a, what used to be a old lock and key type of place. And it was abandoned and we remodeled the top half of the space. And that was our first office. It was pretty cool actually. Now we've got the original team together, you know, Diego for product management and, and we built out the very first version of the product and probably within about, you know, about six to eight weeks, we had an app on a driver's phone and starting to track the loads and the trucks and getting feedback as to what the business process was.

Oded Ran (Clue) (04:54):

And how did you then develop the product? How did you know what the customers you're targeting really wanted? Tell us a bit more about that process, how did you find even the first truck drivers to tell you I'm willing to join and please help me improve something that's for 50 years, I have not changed?

Tarun Nimmagadda (Ruckit): (05:14):

I really have to give them a ton of credit because they really did take a chance on us. They saw something and one of our first customers as a company called Old Castle, and they're actually the biggest construction company in the country. And they were one of the only companies that had a division called performance management, which was really about how do you optimize the trucks and the, the leader of that of that group, you know, really took a chance on us at the time when we were, you know, still really early in the process. And so we signed a contract them, and we started working with just one of their companies here in Texas that called Texas Materials, one of the largest material suppliers in Texas. And they helped us work through all of these rough edges of the product that, that just didn't make sense. We, you know, we took a guess and it was, you know, some things were riding, but it was not all the way. Right. And so honestly, it's the customers that help us build the product, right? I mean, we're building it for them.

Oded Ran (Clue) (06:30):

How did you get to that first customer? How do you even start the conversation, telling them three guys are building a piece of software for something you've never optimized?

Tarun Nimmagadda (Ruckit): (06:39):

I think at the end of the day, there's like an element where I think, you know, the product was great or whatever, but in reality, people buy from people. So I, you know, my co-founders did an amazing job of like building a personal relationship which created a lot of trust that actually what they were buying was not the product, but they were buying is a team that was going to do what they said they were going to do and, and to make the changes that needed to be made. And that's really been, you know, that we just continued to build on that, like the problems that we used to solve for them in the beginning versus the problems that we solve for them now are much broader. And it's because there's a trust there. So when, when, when when our customer has a problem, they think to call us and say, Hey, how can I solve this problem? And it's it's, it's an honor. And it's, and I think it's a credit to the fact that we built a great team and some great technology that we can say, Oh yeah, that's not a problem we've solved before, but you know what? We have the right mindset and the capabilities to go solve that problem for you.

Oded Ran (Clue) (07:49):

So when you go today to speak with customers, you know, many people would say construction industry is very slow to implement new technologies. And like you said, things are staying the way they are for many, many years. What is the secret sauce that you think works for you in terms of making and, you know, changing the way people have worked before?

Tarun Nimmagadda (Ruckit): (08:08):

Well, I think first there's probably a couple of things that come to mind. One is that, you know, business as a business, we need to be really aligned with our customer and what matters to them. And obviously this is a low margin industry construction. It's not like the finance industry or the tech industry in terms of these super high margins. So I don't think you have a business really, unless you're helping improve margins for your customers. So that's something that we think a lot about is how do you improve margins for your customers? And, you know, we're proud to say that most of our customers now where we're saving them, you know, 30 to $50,000 a month in cost savings, and that creates some urgency because if they don't roll out Ruckit today and they just wasted, you know, 30 to $50,000, and then the next month after that, they wasted 30 to $50,000.

Tarun Nimmagadda (Ruckit): (09:07):

So, you know, you're, you're definitely better off rolling out our technology today rather than tomorrow, because you're leaving so much money on the table. The second thing is really, there are things that people don't like to do that they have to do. I think, you know, human beings typing the information on a document into a computer is probably not a job that anyone really loves doing. And if you free them up from having to do some job like that, then they can use that time and their intelligence to really solve for really important problems and move that company forward in meaningful ways, rather than just doing this mundane iterative task. That, we're basically at a point where technology that you can automate. So even though we've automated these processes, what we find is that the companies, it's not like they have to fire anybody, they end up saying, you know what, now I can use my brain to figure out how to grow my business and how to make my company more profitable. And so that's, that's really our, our, our tactic is number one, just make sure that we're always aligned with our customer in terms of optimizing their margins. And then, and then second is take the work, take the work off of their plate, that they that's just monotonic and not accretive to creating enterprise value.

Oded Ran (Clue) (10:34):

So can you share with us one of the success stories or case studies you've done and by the company, how do they get to save money and get there?

Tarun Nimmagadda (Ruckit): (10:42):

Yeah. So one of our customers is a company called PJ Keating. They're one of the largest materials producers up in the Northeast, in the Boston area. And they, and they really surprised us, honestly, initially in terms of the way that they were using our system, because they had so many trucks that were running on our system, that they had to coordinate every single day. And what we found is that they were doing a couple of things that were really interesting, that we knew we didn't really know about until they started using our system in this way. The first thing was that they were scheduling these trucks in a staggered manner. So rather than all the trucks showing up to the plant at 9:00 AM or 6:00 AM in the morning, they would get truck. Number one to show up at 6:00 AM, truck, number two, to show up at six Oh five truck number three, to show up at six, 10, and so on.

Tarun Nimmagadda (Ruckit): (11:38):

Now, if you didn't do that, what was happening? And it happens every day. If you go look at a plant or a quarry or dirt pit is 10 trucks show up and the tenth truck is waiting for an hour to get loaded because the trucks are taking time. Now these trucks are being paid, you know, a hundred dollars an hour. So you just wasted a hundred dollars on that truck, $90 in the next truck, $80 on the next truck. And you wasted all that money before the day even got started, right? So that's thousands of dollars a day that that company was, was wasting. So now PJ Keating kind of showed us that if you were actually able to schedule those trucks more precisely, then it could make a big effect, but it needs to be, but that's not enough because the pair that you need to pair all of that with a time sheet, which is to figure out when did that truck actually, maybe I told that truck to show up at nine 10, when did he actually show up?

Tarun Nimmagadda (Ruckit): (12:39):

And I want to pay him based on when he actually showed up. So then we had to combine this with a time tracking system where you can actually now use the GPS information, the information about when the truck got loaded and create a time tracking system that works for these construction trucks, so that we can schedule them and pay them precisely to the minute the effect of those two changes was so tremendous. I mean, we were saving this company 50 grand a month and it is, and it's an over time. We've now built on that success. And we found all these other optimizations that we could do. And we're really honestly just scratching the surface because whether it's for this company or any other company, if you look at the, if you just zoom out and look at the construction industry as a whole, like if you looked at it from a satellite or a plane, right, you got these trucks that are just moving back and forth.

Tarun Nimmagadda (Ruckit): (13:40):

Most of the trucks were just moving back and forth and they're loaded, empty, loaded, empty, which means that more than 50% of the time, if you're factoring the waiting, they're not actually productive. So there is a massive opportunity in my mind, as a computer scientist and you know, with a computer science and a mathematics background, I look at that and I, so well, if we solve this problem, you could then decrease the cost of trucking by 20, 30% by solving this problem. And there's micro optimizations that you can do within a single company, or you can do it across multiple companies. And the opportunity is just absolutely tremendous. And that, that, that gets me excited because, you know, I think there's rare opportunities in business where there's a true win, win for everybody where the truck driver in order for the company. Usually people think in order for me to make my trucking costs cheaper, I need to pay my truck driver less money.

Tarun Nimmagadda (Ruckit): (14:51):

Well, that's not true. If you actually made it more efficient, you can pay the truck driver more money and still have a much lower trucking costs. So everybody wins. Your customer is able to buy material for cheaper. You're able to sell material for cheaper, you get more customers and your truck drivers make more money. So everyone wants to work for you now. And so that's really, I think it's a beautiful thing when you create this kind of value alignment across that value chain, that all the players that are participating end up doing better because you've eliminated, you know, waste. And at the end of the day, I mean, who's paying for these roads, bridges and highways. It's it's you and I as tax and American infrastructure is rated C minus and a D. We built all our roads and bridges and highways in this country.

Tarun Nimmagadda (Ruckit): (15:43):

We built them after World War II. So it's been over a hundred years, almost, almost a hundred years since we built these things. And we have to rebuild that. And we're talking about trillions of dollars of infrastructure spending that has to happen in this country over the course of the next few years. And if with COVID-19, some of those investments are going to be accelerated. So I think we're about to enter a one in a hundred year cycle with regards to infrastructure investment in, in the United States. And, and I think we're, as, as Ruckit, we have a an obligation to figure out how to make all of that infrastructure spending more efficient. So we can build, you know, 15 bridges instead of 10 bridges, right. And you know, more roads and, you know, pay more surfaces so that the infrastructure for this country, and everybody talks about digital infrastructure all the time, but there's still, we still live in a physical world and China and other countries are moving farther ahead, you know, in terms of the physical infrastructure and it's time for America to like really catch back up and surpass them. And I think now is the time to do that. And I feel pretty proud that we're building a company to help move the country forward.

Oded Ran (Clue) (16:59):

That's awesome. And, and one of the things you touched upon in terms of efficiencies is how you get these efficiencies between multiple companies. And it sounded to me a bit like a, some sort of an on demand, Uberized model of of, of trucking. Is that where you think potentially the market could go in the next five to 10 years?

Tarun Nimmagadda (Ruckit): (17:19):

Yeah, eventually I think I don't like to use the word Uberized or Uber for trucking, because actually that's, I, I think that that really makes sense in a consumer context, in a business context, I think it's a, it would work slightly differently, but in effect it would have the same type of effect. Right. Which is what's really interesting about Uber is not necessarily not just the on-demand component, right? That's one of the interesting things. The other interesting thing is that they have this liquidity and supply the supply demand optimization, which just happens organically in a, in a business like Uber it's much harder to do in construction, but the end result of what Uber has achieved is that because a driver in a car is able to drop somebody off and then instead of driving empty for 30, 40 minutes, he's able to pick somebody else up, you know, a few minutes later.

Tarun Nimmagadda (Ruckit): (18:25):

And that means that the truck, that, that car driver on Uber is able to be busy for longer than the average taxi cab. And that's what allows the cost of an Uber to decrease over time. And if the cost of maneuver decreases enough, more people want to take Uber. And then that creates this loop. Right. Right. Now, I think in Iowa, in the construction industry, I don't think just because you make trucking cheaper, you're, you're suddenly going to have, you know, more, more demand for it. I don't think it's works quite that way, but it's a, or, or more supply for it, even because people have to go and buy a truck. Whereas in an Uber you could just use any car as a, as an Uber car, right? So the, the Uber analogy, it works in some ways, it really doesn't work in other ways, but I think the end result is the same, which is that Uber made transportation more efficient and in the same way, Ruckit is making the construction transportation or bulk materials much more efficient. So ultimately I think that's the kind of end state or the vision is that a truck driver is really not driving empty 50% of the time because there's better ways for the industry to operate. Great.

Oded Ran (Clue) (19:50):

Let's switch to talk a bit about regulation. You know, e-ticketing is still being discussed. You know, it may happen, I'm guessing will have a massive impact on Ruckit. And I'm intrigued when you, when you started the company, were you, did you think regulation will be one of these things that helps you achieve your goals as well?

Tarun Nimmagadda (Ruckit): (20:07):

Yeah, it is great question. So, you know, there have been many, many companies now, even in the trucking industry at large, that have overnight built really big companies because they've, they've had a regulatory wave like in our industry. I think it's the ELD mandate that drove a lot of adoption of technology. And several companies, several large companies were built helping these companies navigate this regulatory way. What ended up happening is with that regularation is that people found that once you have this kind of technology, you can use it for more than just regulation. You know, you can use it to really do maintenance, the truck and decrease downtime. And then the use cases just started to grow. So a lot of people think regulation is just bad and, and as a fairly let's call it a libertarian leading person myself. I, I I'm, I'm, I'm sort of naturally suspicious of some of those regulations, but sometimes I think it's proven that regulation can be really good for business.

Tarun Nimmagadda (Ruckit): (21:10):

And the ELD mandate, I think, is a good example of that. So E-ticketing is the new potential regulation that's coming. One of the ways that it's happening is that it's happening at a local level, at a state level with the DOTs not at the federal level just yet. So that means there's a patchwork of regulation. Whereas this ELD, which is a national regulation and e-ticketing has been thought about for the last 10 years, different DOTs have operated with different speeds. And then what's happening recently is a COVID-19 has accelerated a lot of these ticketing plans that these DOTs have already had, but now they want to get it done in, in, you know, by next year, instead of waiting three, four or five years. So that's a really exciting thing because as we built our business to totally enable the ticketing, you know, use case, I mean, that's, this, that's just like five to 10% of what we do, but it helps because we now offer our customers a very cheap entry level configuration of the rocket experience that just solves for e-ticketing.

Tarun Nimmagadda (Ruckit): (22:15):

But then they realize, okay, now that we've digitized these workloads, it's like, okay, look, what else we can do with this kind of technology. So it's a great way for people to get introduced to Ruckit is to solve a problem that they have in complying with the changing regulations. Right. And you mentioned COVID-19, how did that impact the business? Well, in a lot of different ways, I mean, obviously we started working from home. Everybody was a little bit worried for a while, but, but it turns out COVID-19 ended up being really, really of a positive thing for, for rocket as a business. Number one, none of our customers canceled any contracts with us. Many of our existing customers grew their business with us, and we started signing up new customers at a very rapid rate. So we've, we've nearly tripled the size of the company since the beginning of the year through COVID-19.

Tarun Nimmagadda (Ruckit): (23:09):

And I think it sort of validates that when you are focused on margins and help like doing the right things, that this is not like a gimmick, it's not like some shiny object that we're trying to sell here, that we were actually creating enough value that companies, when they kind of got down to basics and said, you know, who's helping us make the business more profitable. Like rocket is definitely one of those companies. And on top of that, I think there's more and more concern around handing off these pieces of paper and the risk of infection with, and that's kind of created also a level of interest in digitizing these workflows that hadn't been changed. So we feel really grateful for how we were, I don't want to say it was, it was anybody being smart. Right. You know, because nobody knew that COVID-19 was going to come.

Tarun Nimmagadda (Ruckit): (24:02):

So we just feel like it was, you know, it was grace that made it happen. And we we've also spent a lot of time thinking through, well, how do we give back? Because we're in a position, unlike many other companies that were in a much tougher situation. So how do we take the fact that we've been treated better by just luck and use that good fortune to help others? So many of us have spent countless hours like volunteering, donating technology, doing what we can to help with the crisis not, not sort of patting ourselves on the back and saying, look, how look, how smart we are.

Oded Ran (Clue) (24:44):

That's amazing and really, really inspiring. And it's interesting because quite a lot of the similarities between what Ruckit is basically doing in the trucking industry and trying to optimize and streamline things that were not streamlined before, we see it from our end at Clue, when we try to help companies track their employees and assets, wherever they are. Have you seen much commingling and work together with telematics related companies or companies that help company their, you know, their operations be streamlined by tracking where everything is leading inspection, maintenance and so on?

Tarun Nimmagadda (Ruckit): (25:20):

Yeah. We're definitely seeing a little bit more of that because Ruckit was primarily used to manage third party trucks that you don't own. And it doesn't make sense to have telematics hardware based telematics on a truck that you don't know obviously, cause you don't own it, but increasingly companies are using Ruckit on the trucks that they own as well, because we can optimize those trucks just as well as those third party trucks. And in those trucks that the companies own, it certainly makes sense for them to have a hardware based telematics solution. And there's great ROI against that, just on the maintenance side and downtime, uptime, all that stuff. And so we're being asked more and more, how do we, how does Ruckit integrate with the telematics solution? So that rather than the driver opening an app the Ruckit app, you know, we can get the GPS of the truck right from the telematic system. So we've been integrating with telematics vendors based on the customer's request. So they say, Hey, you know, we've got hundreds of trucks running on this telematics systems. Can you integrate no, we built an API that can allow us to push and pull that data to through the telematics. And I think that that's been going well.

Oded Ran (Clue) (26:34):

That's fantastic. Great. So we'll finish with a couple of questions. So first, if you could now have a fun day operating any type of construction that your customers, anyone else have, what would be the fun day, which equipment would you choose to to play with and operate?

New Speaker (26:52):

I mean, I think I would definitely want to demolish something. So I would, I mean, I would want like maybe one of those excavators that, you know, have like a big crane and, and like smash that into, into like a brick wall or, or maybe like smashed like an old car with it. And I feel like that's just, that's like having a superpower, like like like I feel like Hulk or something!

Oded Ran (Clue) (27:26):

Ha ha! Good, so for anyone listening and wondering what to get you for your birthday. That's a good birthday surprise gift! Now, any of our listeners, people watching want to learn more about Ruckit or connect with you personally, what's the best way to do so online?

Tarun Nimmagadda (Ruckit): (27:41):

Our website is www.goruckit.com and you can find me on LinkedIn or Twitter or Instagram or wherever.

Oded Ran (Clue) (27:50):

Fantastic. So it's a really, was such a pleasure having you on the show and as always anyone watching andlistening, you can find in the resources section all the links and information about Ruckit and about Tarun specifically. Thanks so much for being with us. And I look forward to catching up, to see how Ruckit continues to grow! Thank you so much for joining us!

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