Kirk Byles, FreeWave Technologies PostedTuesday, March 16, 2021 Q How do you describe to lay people what you do? A Well, what I do is lead from a remote office in the mountains. But what FreeWave does is interesting really. We’ve got a 27-year history of working in the industrial markets, particularly in oil and gas, utilities, water wastewater, and we do quite a bit on the military side where we work with the robotics teams and drones and such. Traditionally, we’ve been just that robust narrowband communications link. And when I say narrowband, I’m assuming people understand that, but very, very small bits of data going back and forth, often working with SCADA systems or command-and-control systems. And that served us very well for 25 years. Great little company, different variations of ownership along the way, and when I came on board, about four years ago, running sales, the idea was to start pivoting the company more toward IIoT in the edge. And we were developing a piece of hardware, again radio hardware in the narrowband world that would allow us to do some compute on the edge. And it was interesting, as a radio company, we didn’t quite understand what we were getting into at the time. Q Do you specialize in any industry or product or discipline? A You know wireless is such a broad-based technology, so, for the narrowband pieces and what we do, we really focused on the long-distance, rugged, outdoor markets. And, early on in our evolution, we got involved with the oil-and-gas vertical and have continued to really shine there. I would say we’re probably the No. 1 vendor in oil and gas for narrowband wireless. But we also made sure we stuck to principles. We understood SCADA systems, and some of the proprietary languages that were out there. So, even though oil and gas on the commercial side made up most of our business early on, we’ve been able to diversify into a number of the other industrial verticals that I mentioned before: utilities, water wastewater, and then certainly we’re doing some pretty cool stuff in the drone world in the past and currently. Q How would you say FreeWave has grown or changed in the past year? And what do you expect for your company in the next 12 to 24 months? A We started out the year 2020 with a bunch of what I would call legacy products and product lines. And they were getting a little bit long in the tooth, meaning we couldn’t find some of the components we needed and so forth. So, we decided that we would do a big uplift of these legacy products and rebuild them from the ground up to be backward compatible with everything else we have out in the marketplace. So, we set out on that late December, and we’re able to finish that off in September, which was fantastic. And what that allowed us to do is take a whole another section of the engineering team and really focus on the edge and what does that mean, how do we make it simple for people to put their applications out on an edge computer in the middle of nowhere and be able to get that data back and forth without having to be a broadband connection. So, we were still talking about 900 megahertz products at that point. Along the way, we decided that we wanted to do an acquisition of a software company that focused on proprietary protocols, maybe had a software suite, some virtual applications. We were able to do that in July, which was fantastic. We brought on a smaller company with a very robust software solution set, been around for about 25 years in many different iterations. And we were able to bring them on and integrate them quickly. So now, our edge computers come native with protocol converters so if you’ve got a Honeywell, an Emerson, Allen-Bradley products out in the field somewhere instead of having to buildup multiple networks, you can now pull all into one of our edge computers. We’ll convert whatever proprietary language is being brought in, put it into whatever language you want it to come out in and be able to pull it back into the cloud. So, that was a real big thing for us this year to change FreeWave from more-or-less a widget manufacturer and OEM, to becoming a robust software application company, as well as we have a full SCADA suite that we’re updating right now, as well as what FreeWave offers on the hardware side. Going forward, we are developing and will launch a whole new platform for FreeWave that gets us away from simply a narrowband communications technology to a very modular type of edge computer that will allow just about any communications technology to be onboard, up to three different communications technologies onboard on a single platform as well as do the compute and edge applications. Q What do you see the role of IIoT and data collection playing in the future of industrial automation? A It’s going to be massive. On the manufacturing side, it’s taking off quite a bit and you see a lot of it in the pharmaceutical side. Where we focus -- that outdoor sort of operational technology -- there’s been a lot of tire kickers along the way. And things are getting deployed for sure, but it is not even come close to what is going to happen the next few years with all the various applications coming onboard, the different ways people are handling data at the edge, making those decisions using artificial intelligence, and then just sending it back, just that change, data to the cloud. I’m very excited. Q Tell us what your customers return to you project after project? A Well, that’s really one of the easier questions. We make a great product. We are ISO certified. We build everything in Colorado in our Boulder facility, engineer it all right there. So, when it comes off the line, it is a rock-solid product, and we’ve been building these things to last forever. We still get people calling up on our very first product, DGR, which is over 20 years old, and people are still using it. So, when people find a product that works and works and works, they come back to it. And we also do tech support in-house in Boulder. We have a 24-hour hotline, people call in all the time. We pick up the phone, you’re talking to someone that’s quite literally probably been in the field the day before, helping folks install or troubleshoot. So, there is no, “Hey, this guy doesn’t know what he’s talking about.” So, customer service is a big piece for us, and we continue to invest on that side of the house. It’s a real differentiator. Q What challenges are your customers facing right now? A This COVID thing slowed things down enough that people could really assess new technologies and decide, is this going to help me or make everybody’s life a little bit more difficult? And that slowed things down in such a way that a lot of the smaller startups have struggled a bit, which is too bad. But at the same time, it’s really allowed people to say, “Hey, this is a technology that’s going to rise up and be a part of the IIoT revolution. Where this one is gone to the wayside and it’s not going to make it any further.” And I think that’s helpful for everybody right now. I know for myself, when we’re looking to do acquisitions, I see a few every week, and I can now look at them and go, “OK, that one is not going to make that big a difference in my life or my customers’ lives,” where maybe a year and a half ago I would have said, “Hey, that would’ve been really great.” But in the world of COVID, you know these guys are struggling and you can say, “Oh, I see that you know that a year and a half ago I might have thought about picking up that company. And now I can see, “Hey, that’s not the right thing for people right now.” And it’s really interesting. Q What kinds of trends and challenges are you seeing in industrial automation right now? A The trend is to get away from proprietary protocols -- it’s been happening for a little while but it speeded up 10X over the last year or so I would say. The Ciscos of the world have done a great job making everything standards-based inside the enterprise. And for whatever reason you know the operational technology companies have done a great job locking people into their own equipment and only their equipment. And the pushback now with a younger generation of technology folks coming into the industries and saying, “What is wrong? Why are we doing this?” And I think that’s throwing a huge wrench into a business model that worked very well and continues to be multibillions, I mean don’t get me wrong, none of these guys are going away, but the questions are being asked and doors opening for folks that are willing to make products using open standards and looking at hardware and saying, “Well, we don’t need to do that in hardware, we can do it all in software.” As the enterprise has moved along very rapidly over the last 30 years, OTE’s moved very slowly for all the right reasons since a lot of the stuff we just got to be very careful with. And it also has got a lot of older men and women who are leaving now. These young guys are coming in, ex-military folks who have been playing with very sophisticated equipment and saying, “No, no, there’s a better way. Let’s go look for the better way.” So, I think that’s the trend for the future, who’s going to really disrupt some this stuff. And when it happens, I think everybody is going to have that aha moment. Q What mistake did you make and what did you learn from it? A I made a few but I think one of the bigger mistakes I made as a first-time CEO was, I didn’t shift quick enough. I took probably 8 to 12 months longer than I should have. I knew what I needed to do. I knew how the company needed to pivot and just wasn’t willing to make that sacrifice out of the gate. I also knew that it could cripple us so there was this– a back and forth that happened. But along the way the lesson learned there was move quicker, shore up the legacy business immediately and pivot out of this thing much faster. I don’t think we’ve lost too much along the way other than time, which is important but it certainly – I would have liked to have been a little bit further along than we are today. Q If you could get into a time machine and go back and visit younger Kirk, what advice would you give him? A Plan a little bit further along. I’ve always been a planner but more 3, 6 months type thing. In this role, it’s more 12, 18, 24, 36. And that’s where I am today. I don’t spend a whole lot of time on what happened yesterday or even what’s right in front of me, it’s more along the lines of what are we doing so we can get to where we want to be 60 months out, 36 months out and trying to place that sort of reverse puzzle pieces in play and start thinking that way. Q What makes FreeWave optimistic about the future of the automation industry? A There are a couple things for FreeWave that are unique. One of which is, for most of the past 27 years, we’ve spent the vast majority of our time focused on North America. But the market for us is exponentially larger elsewhere in the world. So specifically, to FreeWave we look at our new platform coming out that will be standards based on many continents, and we’ll be able to play where we’ve never been able to play before. Automation is going to continue to grow, and it’s going to grow in ways we haven’t even thought of yet.