Derick Jose is Co-Founder of Flutura, a verticalized AI company focused on impacting operational outcomes in Energy and Engineering industries. Flutura is among the top 3 vendors globally in the Energy AI app space. Their customers include Henkel – the largest manufacturer of industrial chemicals – and Stewart & Stevenson. You can read Derick Jose’s blog here.
In this exclusive interview, we talk about the importance of fully immersing yourself in your target market:
Etienne Garbugli (EG): Could you tell us about Flutura? What are you guys building? Who are your customers?
Derick Jose (DJ): We have built an industrial AI platform called Cerebra which ingests high-velocity electro-mechanical sensor streams and helps industrial engineers see patterns the human eye missed. Our customers are upstream drillers, downstream petrochemical companies, and heavy equipment manufacturers. For example, Henkel uses Cerebra to ingest sensor streams and predict quality outcomes in 18 countries.
EG: How did your team go about selecting a product-market opportunity initially?
DJ: We immersed ourselves in Houston (which is the Silicon Valley for Energy/Industrial companies) and cast a wide net within Energy and Engineering industries to target a number of problems. We also did a lot of 1/2-day Lunch ‘n Learn workshops, 60-day ‘Show and tell’ pilots and we surrounded ourselves with retired Industrial/Oil and gas SME who shared their “tribal” knowledge with us.
EG: How did you go about validating the opportunity for Flutura?
DJ: Once we found a list of problems worth solving, we filtered and ranked them based on certain weighted criteria including the amount of value unlocked, the intensity of pain, whether the problem is a ‘Vitamin’ or a ‘Painkiller’, whether someone gets a promotion if the problem is solved, whether there was enough sensor data to solve the problem and whether status quo (living with the pain and not solving it) is an option. We immersed in a lot of early quick show and tell pilots delivered in 30-60 days and surrounded ourselves with retired Industrial & Energy subject matter experts.
EG: How did you motivate early adopters to work with Flutura initially?
DJ: The engineering and energy industries value 2 very important attributes in a product offering: Reliability and Tangible $ realized. Towards this, we created business value calculators as a feature of the Cerebra product, stress-tested the product for ruggedized industrial workloads and got their data and made it come alive in our product in just a few days.
EG: What were the main challenges faced by Flutura in the early days of the business?
DJ: During the initial days, we faced 3 challenges: 1. ACCESS: Access to business users/Operational heads who would benefit from Applied AI instead of meeting IT teams 2. TANGIBILITY: The industrial world is used to tangibility; Digital AI solutions are typically very intangible in the electromechanical world 3. $ IMPACT: Creating value calculators which linked AI outputs to Operational Outcomes and resulting $.
EG: How did you know that Flutura had found product/market fit?
DJ: Once we got our first 3 signed orders for Cerebra we knew we were onto something. Our initial definition of product-market fit was getting a paid proof of concept but over a period of time we refined it so that we get recurrent revenue streams in an operating income (Opex) model.
EG: What value did you get from reading Lean B2B?
DJ: The biggest value of the book was its nuts and bolts approach to executing product strategy. The insights were very granular and ultra-specific which helped us execute the same. I had been through multiple books which were all high level. The feel I got from reading Lean B2B was that it was written by a practitioner who had been through the pains from the trenches. So, I loved 2 things: Specificity and Actionability of insights.
EG: How have you been using what you’ve learned from reading the book?
DJ: I remember the following nuggets which we actioned: Meeting people where they meet for pleasure (We did a lot of Thursday evening drink and learn sessions. This was a big hit. We gleaned insights which probably would not have been expressed in a formal controlled setting), being problem-backward, not technology forward (Initially we were seduced by IIoT (The Industrial Internet of Things) and Deep learning nets. But we quickly course-corrected) and not looking at frequency of problems but willingness to pay.
EG: After having been through it yourself, what validation process would you recommend to entrepreneurs starting in B2B?
DJ: Look for a minimum of 3 signed orders/cheques for your product before realizing that your nose is above water.
EG: What advice would you give to new entrepreneurs starting in B2B today?
DJ: Build vertical process specific AI modules into your product. It can be a game-changer in the marketplace.
EG: Thank you for your time.
DJ: Thank you.
⚡⚡ Enjoyed this content? I go into way more detail on this subject in Lean B2B. The book covers the ins and outs of finding traction in the market for B2B products. Check it out »
Download the First 6 Chapters for Free
This sampler covers the differences between B2B and Business-to-Customer (B2C) product-market validation, shows you how to define your vision for success, find early adopters, select market opportunities and assess a venture's risk. Download The First 6 Chapters Today »