Latest / UnDocked: The Maritime Transformation Show / What's the difference between R&D and Innovation? Lomar Labs has the answer
Transcript
- Nick Chubb: everyone and welcome to hello Raal Harris how are you Raal: Hello there, Nick Chubb. How are you? Good, Nick Chubb: Well, thank you and a special hello to Stylianos. Stylianos, good to see you. Stylianos Papageorgiou: Hi Nick, hi Raal, thank you for having me today. Nick Chubb: No, at all. Thank you for coming on. For anyone who doesn't know you and know Lomar Labs, perhaps we could just start with a bit of an intro of ⁓ who are and the of work that you do. ⁓ Stylianos Papageorgiou: Happy to be here. Yeah, sure. So I'm the managing director of Lomar Labs. We're a venture lab that is part of the Lomar group of shipping companies. We're a separate entity entirely dedicated to advancing maritime innovation. And been at it now for three years since we launched Lomar Labs, which ⁓ in March 2023. I can tell you more about how we work. We're based in London. ⁓ Nick Chubb: This episode of Undocked is brought to you by GTT Marine. Today's shipping companies are drowning in data. Performance dashboards, compliance feeds, voyage tools, emissions reports, and yet, when the time comes to make a real commercial call, teams still fall back on gut feel. Why? Because more data hasn't meant better decisions. The Great Integration is a new report from Danalek and the team at Thetius. It looks at why fragmented systems are quietly eroding, decision quality, and what ship owners can do about it. Stylianos Papageorgiou: And Lomar as a group has ship management offices in London, and Bremen with ships worldwide. Raal: think it's a good place to start because there's a lot to unpack today around how you're working in that innovation space. it is good to get that foundation with Lomar. But tell us a little bit to start with about Lomar itself. Nick Chubb: It. It's a practical read for anyone who centers their tools should be doing more. And if you'd like to learn more, head over to gtttmarine.fr. Stylianos Papageorgiou: Well, Lomar is a privately owned ship owner and ship manager that's been around for 50 years as of this year. So we're celebrating big birthday. It excels at owning ⁓ managing but riding the waves of through its history. multiple times, I forget how many now, but at least four, five, has changed fleet entirely and it was able to kind of positions at the peak the market and re-enter during ⁓ downturns. So been this very well for a very long time part of it was also sort of spirit of entrepreneurship and new opportunities develop and moving into them. So can imagine that when we were ⁓ given the light to start Lomar it did feel like is the right time to be more involved with innovation in the maritime space. Nick Chubb: And start dedicated or dedicated accelerator? Because there's lots of independent accelerators that exist that ship owners are into. There's lots of maritime focused funds that that ship owners are brought into as strategic investors. And obviously the decision within LOMAR was not do that, but instead create something from scratch. So where did that come ⁓ Stylianos Papageorgiou: Yeah, well, I've had a keen interest in innovation and entrepreneurship a very long time because ⁓ a shipping man. I got into the industry from young age as an engineer working mostly on the technical side. And I was technical director with Lomar Shipping for at least ⁓ eight years before starting Lomar But somewhere earlier in I studied innovation management as an sort of master's degree. I've been looking ways to bring this into the shipping industry. At the time, I was of things from the Silicon Valley side of world about VC and startups. And it all seemed extremely alien to what was ⁓ experiencing in the industry. And I've been for ways to ⁓ reach that gap. within Lomar, I found a spirit from the owning family and also the management that was more open-minded towards this. we started exploring, like, how can we possibly do that? But took a while. It was also because of conditions, but also in terms of maturing. And actually, when we started Labs, had already spent a year hands-on. researching how do we do this? we become a corporate venture capital funds? There's a of them around, not just with but larger corporates. Do we put our into an accelerator and buy off them what we need? And of all the other like investing your money in a fund and so on. And there's not a size fits all when it comes to innovation you have to understand what the particular company. So ⁓ we up creating is the program that we call the Compass program ⁓ that actually took another two years of working with startups experimenting figuring out how we add value to the process of innovation and also extract value from that process. ⁓ And that's what we created, which is a suitable solution for Lomar, wouldn't necessarily be one for every other ship owner. But answer your question, what does it give us? mean, first of all, we recognize that we're at the doorstep of a big transition in industry, a sort of technological shift that was coming our way. At the time, mostly because of decarbonization pressures, have somehow eased due known geopolitical developments, but there's been pressure and sort of drive for innovation because of progress on the defense or dual use technology. There's energy pressure, there's... obviously AI and robotics that shifting the way we work. At same time, there's massive pressure on the sourcing of crew. So there comes a sort of infliction point, or we could foresee that there's an infliction point coming, where there's going be a big shift in the way we run ships. Because if you think about the ships of today, to large extent, they're pretty much the same ships that we've been operating. since after the second world war welding sort of welded structures ⁓ and engines became the norm. And we've, of course, improved on those designs. We've made bigger and better and more efficient. But it's been the same thesis since then. But that doesn't mean it's always been this way. If we look further back, there's been shifts. And there are paradigms of of ⁓ shifts in ⁓ fleet composition from which certain shipowners or certain nations of shipowners profited by being forward thinking and change and those that massively out from staying reluctant ⁓ and that past will to the future. I think me the long answer, but ⁓ kind of ⁓ acknowledging all these things that we said, you know, we need to be part of this. We need to be within change and tracking what's happening. And why not drive it, just be on the sidelines, but actually have a chance to influence it. We can't, of course, steer things we want to be, but we can actively help. then we identified problems. And one of the problems we found that there were all these startups with great that had amazing technology, they were to test it on ships and prove its worth. and no one was giving them access to their ships because everyone's thinking in the sort of normal shipping way that you know what's my risk here, how do I deal with adding this new technology and carry new I don't want the trouble, I don't want the extra hassle and what we've created the Compass program is a method, a structured process for managing that risk. So we kind of opened our doors to startups to come in on our ships and test things. But at the same time, we remain diligent and prudent in how we do this so that if things go wrong, they only go wrong within a contained testing environment don't affect the operations of the ship. At time, we need to think about the day day of ⁓ how the works or the ship management business works. ⁓ And you also don't want to interrupt disturb people from doing their job looking after the day-to-day management of ship. ⁓ creating a separate entity, dedicated team, we able to kind of help the startups ⁓ interfering with day-to-day Of course, that takes and it's not something that every ship owner can do. I can't imagine that for smaller... companies, you know, it's, they just wouldn't have resource to dedicate to this. But were able to this. So that works for us. Raal: I think might be worth just reflecting at that point. We started talking about LOMA a little bit. it right to say it varies a little bit, but around 30 to 40 vessels, ⁓ Stylianos Papageorgiou: Well, no, because the fleet changes dramatically over time. When I joined Lomar in 2015, we were approaching 100 vessels and this was mostly a container fleet, which at the time was being accumulated on the expectation that there would be a very large market upward shift in the container segment. especially smaller feeder containers because we could see this was an underbuilt segment and did out to be right and so we sold of that fleet a few years ago so the fleet is ever-changing at Lomar Raal: Yeah, yeah. But what I was trying to get at was that sweet spot of being big enough and complex enough to be able to road test some of the things that you're talking about. there's lot of things you've said so far, which I think ⁓ we'll back to and need to unpick. But I think I ⁓ to in ⁓ on the of fairly, what seems to me to be a fairly unique problem that you're solving in that you've created a a means of the sort of startups and innovators that you mentioned being able to access a big enough operation, but also as well so that it's not their solution in isolation, as it were. And that's part of the problem, I think, that we see in this sort of fragmentation of technology solutions that typically a vendor is dealing with one, a customer with a very limited set of information that they're prepared to share with them and they haven't got the full picture. And it seems to me that's part of the USP of what you're doing is you're sort of opening up your operations to work in a much more collaborative way with a combination of ⁓ potentially. that right? ⁓ Stylianos Papageorgiou: Exactly, absolutely. So the way we invest is that we're actually investing our time and our energy and our reputation in helping those companies. we did this because aligns our interests ⁓ with company and then it makes the collaboration a lot easier and fruitful. So by acquiring ⁓ an equity in the company that we support, then our support actually drives the value our stake. We frame all this ⁓ in agreement that also protects IP and confidentiality so that we're all comfortable with what sharing both ways. But we've also removed a lot of the burdens that typically or face founders that are engaging with larger corporates, things like wanting exclusivity on the product or discounted pricing for the first units, or co-owning the IP, like all the stuff that typically a big corporate would swing their muscle kind of squeezing out the startup. We felt that that's not helpful to creating a good collaboration. So yeah, we've removed all that. We've our doors and then we help them make progress. spent, so ⁓ program runs for 12 months. We with three months of help at no and no commitment. So it's on our risk and that also for us as a period of diligence where we establish whether worth our time. ⁓ further this company. don't request of them any commitments beyond agreeing to framework of collaboration. And then past that we will take the equity position in the company and continue helping them for a minimum of nine months, which is really there as a for us to... not commit further if we see that progress is but in majority of cases if not all of them we didn't helping anyone beyond those let's say 12 months ⁓ this company is now our portfolio that we've been helping for three years and we will continue helping for as long as they're progress and develop. Of course how much we can later diminishes as well because this ⁓ an area where our expertise is useful, which is more in the earlier stages building a company. But always something we can do for our basically, we're building and a relationship with founders that know they can come to us and seek help with all sorts problems. Raal: Do you come at it that your sort of primary or your starting point is, would I be a customer of this? Is that kind of like an important criteria when you're looking at it from an innovation point of view? Is it got to be something that's useful to Lomar's fleet? Stylianos Papageorgiou: No, so it doesn't have to be. I think the of gut feeling criterion when I first look at something ⁓ is, this solving some problem that is well known to me to be worth solving? Even if the solution they're proposing sounds completely ridiculous and crazy, given time, that can evolve into something that's viable. And my role then becomes how do I help these people arrive a viable solution experimentation, providing feedback, giving them access so that they put their ideas to the test on a ship in the world. But if they're actually right and that they can solve this which I know to be a big one, then it's worth investing in this because the solution will have returns. So I think that's the main And through my operating experience fleets for 20 years, can also judge slightly if this is ridiculous or somewhat feasible. I think that's the sort first check. And something I didn't clarify is we're predominantly investing our time dealing with startups, of companies equipment for ships as opposed to software for managing ships. We are doing some of that as well because with AI, the sort of of ⁓ software and hardware beginning to shift, when we think around physical AI or robotics, this becoming interconnected. Raal: think we'll probably come back to that. sounds very very interesting. Stylianos Papageorgiou: Happy to, yeah. Nick Chubb: Well, did you land on this model? I right in assuming you didn't out with this ⁓ program of you've learned as you've gone. are some of the lessons you learned early? ⁓ Or what was wrong the model you were using when you first launched? ⁓ Stylianos Papageorgiou: It's a journey of entrepreneurship, very like an entrepreneur would go on a journey of discovering product market fit. And I like to think back to my innovation training when we were talking about the difference between managing things or innovating as an entrepreneur, it's the refrigerator model. So as a As a manager, would think of what it is you're trying to achieve. What's the recipe? ingredients do you need? You'll make a budget for this. You'll approval and you'll go buy them make your recipe. As an entrepreneur, open your fridge, you look at what's in it and you start creatively thinking through what can you make with what you have. And I've taken that approach to working with Lomar and creating Lomar Labs looking at what's in our fridge, can we make with this and that's how we've started creating product that we then to the market and by that I mean we just had interviews with entrepreneurs so our earlier with we're also looking what do these people need, how can help them, know, is this working and we just tested and tested and tested and tested so we've like our first seven agreements, maybe 10, were different between them. And then saw what works and what doesn't, both for them for us. And we kind of arrived at something that low friction and useful. Nick Chubb: mentioned IP being one, but what are the sorts of things that don't work? I'm curious because there are lots of innovation departments around industry trying to do this sort of thing. Probably not as structured a way ⁓ as Lomar is doing, but... can see that potentially a lot of mistakes that could be made that you might be able to shortcut here. ⁓ Stylianos Papageorgiou: Well, don't profess to have all the answers or to have found the perfect solution, but we ⁓ something that works for us and the it has problems we can deal with and live with. one other thing we did a lot in our research was to speak to people that have run CVCs or accelerators for other corporates. and gave us what worked and what didn't work. there's sorts of considerations. I think... One problem I've seen a lot is wouldn't call it a problem. ⁓ a misunderstanding between R &D, innovation and innovation procurement. These three distinct stages in the life of a company and the maturity of a technology and a business. these things distinct. And so your strategy in terms of doing one or the other should also be conscious that if you're dealing with &D, very, there was a nice quote that R &D is the practice of turning money into knowledge, whereas innovation is the practice of turning that knowledge back into money. And the more you think about this, you start to realize that yes, the purpose of R &D is to learn things. The purpose of innovation is to start businesses that become successful and make money. the purpose of R &D is to learn things. The purpose of innovation is to start businesses that become successful and make money. So which one are you doing? And I've met proclaiming to be doing innovation who are actually doing R &D. There's also people in R &D that start businesses and continue doing R &D. And they money to continue their R &D project. That's not going to anywhere. So which one are you doing? And I've met proclaiming to be doing innovation who are actually doing R &D. ⁓ There's also people in R &D that start businesses and continue doing R &D. And raise money to continue their R &D project. That's not going lead anywhere. Nick Chubb: Right. Raal: Yeah. ⁓ Nick Chubb: think we have a big problem in the UK with that, the kind of government funding is very, good at funding R &D to your definition, very poor at innovation. And I think we end up with this weird gap between ⁓ there's lots of good academic research that goes and a lot of generation but turning that into... scalable commercial solutions that could be adopted a fleet of ships. I like there's a massive gap in that. Stylianos Papageorgiou: Yeah, because it then becomes about the customer and not the technology. know, you can have a kind middle-of-the-way technology that is not necessarily the best solution for the problem but the entrepreneur has understood the needs of the customer and provides a or a product that is overall much better fitted for the customer ⁓ than absolute best technology. So yeah. Raal: So presumably that's something that's kind of inherent in what you've designed with the Compass programme, I'm guessing. So maybe you could talk about the specifics of it a little bit just give us the the structure of the programme how it work? Stylianos Papageorgiou: Yeah, so one thing we wanted to make, to answer another of Nick's questions earlier, one thing we realized that we don't want to do is ⁓ we don't want create a cookie cutter accelerator program that offers specific things. So what we are is a completely bespoke model for every startup that hinges on certain constants. So I'll focus on those constants, but then the experience of each startup going through the program can be wildly different these things come in a different ⁓ or sequence. The pillars we work on is the technical de-risking and maturity of product. So the TRL scale, we typically start with that are around the TRL floor, which basically means they have a some kind of a prototype that works a laboratory environment or on shore. And through the work with them, we encourage them to take this on board as quickly as possible. We fast track work with class flag with whom we have agreements and have found formulas collaboration. Not seeking full and final approval, but rather an interim kind of this is good enough, safe enough, let's put it on board and test it. And through that work, the startups realize everything that's wrong with their idea or everything can be improved with their And we invite them to go back to the drawing board and sort of iterate on the and come back with something better adapted and suitable. And also what we found was really valuable is that they're spending time on board, speaking to the crew, with the ship while they're testing the technology also educates about the user and the particularities of the operations and all So ⁓ that's the pillar, say, okay, technical de-risking we're trying to get from a TRL four to something like a TRL seven or eight where the technology more mature. At the same time, looking at the commercial readiness level. ⁓ which only really begins once you have a TRL four five, you can then start talking to people about a product. But how you make progress with that? How do you go from a general interest to signed inked contract for multiple sales? How do you with, the needs of your customers, understanding the customer landscape. I've seen a lot of entrepreneurs who come from outside of shipping, thinking that shipping is this $1 trillion market. It's one block and you're just going to get 10 % of it. It's like, yeah, good luck with that. You know, it's like you have to think through, you know, the sort of Asian market, the European market and European is not just one thing. It's like Northern European, the Scandinavian, the Mediterranean and so on. And then aside of the national division or segregation, then have to look at segments by ship Not owners are the same, tanker owners, bulker owners, container owners. So is actually your customer? That's a sort of work we And then we figure out who's the customer, what's the value proposition, how much these people would be willing to pay for a solution to this problem, the problem worth to them and do get to them, who would be selling the product to these There's plenty of companies out there selling technology to shipowners already so for a rather than creating its own sales network scratch ⁓ they can just into all these people, but someone needs to point them as to who's the best match them. So that's sort of commercial strategy and that's the second pillar of work. And the third is actually funding the startup because they need to raise money to continue their progress until break or become that's with access either to grants and non-dilutive funding, venture capital, leasing or lending and project finance depending the type or some of advanced purchase where you get some in advance for future deliveries. So yeah, that's the sort of of the ways in which we engage and help them. Nick Chubb: And do you, part of the kind of equity take, you provide direct funding or are you effectively providing service, this as a to the startup? Stylianos Papageorgiou: Well, it's not a service because we're investing the time that it costs us to produce all of this work. We're that into the startup. We then, ⁓ as we piloting, we then have been investing cash in kind to facilitate the pilots. And we're also open to writing checks. then that comes at a later stage once we see further and further traction. So yeah for us it's a derisking pipeline that gets us more comfortable with the technologies but also the teams building those businesses. Raal: it be helpful maybe at the moment as well just to kind of talk about the portfolio because you're building up a whole kind of range of different solutions. So do you want to talk us through in the portfolio today? Stylianos Papageorgiou: Yeah. happy to discuss everything that's been announced. Mainly our portfolio is built through our interest in the future work at we think about future work, it's what would it like to work on a ship tomorrow? Would anybody be on board ship? What would their jobs look like? What kind of systems be added? Let's imagine how that future will be and find companies that building things and solutions that are part that. future. we'll support that. That can be through training or supporting of seafarers, can through robotics, automation, artificial intelligence the more sense, but you know, we're looking at autonomous navigation. So that's one sphere and you'll find in our portfolio some companies are addressing these problems. The second pillar is more around energy security and the climate security and how do we our operations? How do we remain sustainable as an industry or as a ship owner in the face of all these changes? So we're at predominantly energy efficiency measures because we think the cleanest energy is one you never consume. So the more we can find on that. the better but of course it all has to make sense financially and can talk more about that in a minute. Part of is then looking at the alternative fuels or alternative energy sources which can go from you know nuclear ⁓ and and the more benign biofuels everything in between. then we're looking at sort of mitigating emissions or mitigating impact more broadly which is challenging without a cost to those emissions so without a carbon it's you know it's hard to this but you know within the youth is already a for emissions ⁓ and we've seen companies make progress there and they have a lot of interest from shipowners trading within the European Union and possibly in the future there'll be a carbon tax globally that will generate more interest in that segment. that's of what brings to our or makes things to blink our radar. Raal: But you've talked about three areas there, the sort of emissions reduction, energy efficiency and future of work. And I think we should explore all of those. with those three at the moment, is that the three areas that you're looking to kind of expand within or do you see other areas being added into the mix as well? Stylianos Papageorgiou: I mean, these are, you know, in thinking around the energy that a ship consumes, it's either been wasted or it's dirty and expensive. So that's it. It's sort of the envelope is of finite. So how can move goods A to B? ⁓ ⁓ lower cost and ever lower impact to the environment. Now that there's plenty of solutions and so will keep supporting companies that come with a different approach to solving same problem. We don't like to support two companies that are solving the same problem with the same approach because that creates a conflict and it's very hard for us to remain objective and also to contain information from one side and the other. But as long as they approach the same problem in a substantially different way, we're happy to support more than one solution. And this point, we're supporting two companies doing carbon capture, C-Bound and Calcarea, because they're going it in a very different way, which will likely end up them serving completely different customer bases. So we're seeing more of a synergy than a competition there. And ⁓ we're doing same wing systems and cargo kites that are sort of approaching propulsion very, very different ways. Nick Chubb: practical terms, it comes to actually testing stuff in the fleet, So how do you make sure you don't overwhelm the shipping business with all of these POC's pilots? that's a huge amount of work. Stylianos Papageorgiou: Well, a lot of things in that. Those POCs, we them so sort of coming at a steady state as far as the shipping company is concerned that they can handle it. Also within the shipping company, a project team that is there to handle all these projects. So again, they don't overwhelm the superintendents that are dealing with the day-to-day stuff. And also developed on of our vessels that we now call a floating laboratory, a platform on the aft of the ship that permits modular technology be brought on board, tested and shipped back ashore without a major on the ship. So it's more of a serviced area where technology can be on the vessel. And then this sort of power supply, this water supply, exhaust supply, and you can just to what you want to test, run tests, and then take your container and go home back to your lab and iterate what you've learned from that testing. It's not always that simple, but ⁓ we try and of make it as streamlined we can. Raal: You talked to... kind of makes me think. Nick Chubb: be a fun ship to be on. Raal: Yeah, well, that's where I was thinking about going with this next question really, because you mentioned there about one of the benefits to the startup having access to that user base and being able to take on board the reactions and what they learn from the crew and so forth. But Nick mentioned there that there's obviously there is an overhead for the crew, something new to think about But you also mentioned one of the key areas there being about future of work. So I'm thinking like from a seafarers perspective, what kind of feedback do you get from seafarers? How of the process of getting Lomar Labs started has involved kind of engaging with the seafarer cohort and getting them to welcome this kind of approach. Stylianos Papageorgiou: We've actually seen an increase in motivation from seafarers that are part of these tests. They an interest in what's because they realize that it's potentially coming and could be part of their work tomorrow. they more often than not we see a sort of positive response. course, we also provide them with additional training to make sure they can cope. But to a large extent also, we don't ask them to drive the and testing. So the teams, the teams, they come on board themselves they're responsible for running the not our crew. Our crew is there look after the and ⁓ run the ship as they normally do. And course there is some interaction between the two. The lab is not 100 % hermetically contained in its own environment, so it still operates on the ship. But yeah, there's been a good match there. On the crewing side in terms of the future of work, the technologies that are affecting the crew, we make small teams ⁓ crew that are volunteering or interested in participating in those experiments. And obviously everyone in the crew pool would be the same. There's always, you know, if you think about technology adoption, there's a normal distribution amongst the population. with a small percentage on the left keen to adopt new technology, your and early adopters. Then you've your early and late majority and the laggards. So we'll try and within our. full of crew, those innovators step forward and say, we want to engage with project ⁓ and either through conferences or within the onboard crew. Raal: That sounds fascinating. Nick Chubb: curious to know, obviously you've got clearly identified problem ⁓ that ⁓ working but outside the specific domain, what is the between really good pitch and a bad pitch that you get coming in? what are the specific things you for from a startup that makes you think, regardless of the problem, this is a to back? Stylianos Papageorgiou: There's a long list we've kind of ⁓ so it now comes as a second nature and of it is kind of standard VC training in terms of what you for but at the very top the human element because you are investing whether you invest in cash or in kind or your time investing in a that's Nick Chubb: You've got a long time. Stylianos Papageorgiou: that's setting out on an ambitious journey to start a business. that's going to be a tough journey. And a ton of things outside their control. So who's that person? And how clarity do they have about what they're setting out to do? Are they focused? there's so many things to juggle as an entrepreneur. I'm sure Raal can speak better than I about this. So is that person likely to that chaos and arrive at something and stay the course? Raal: There's a tendency with a lot of founders to kind of be Superman and do everything and be involved in every aspect of it. But in my experience, investors get quite nervous about that. They like to see a bench. They like to see a contingency and a future leaders in the as well. what would you say to that? Stylianos Papageorgiou: Well, of course there's validity in this and I've seen investors raise this rounds that, what if the founder gets hit by a bus or wakes up remembering anything. We've just lost a few million dollars that we've given that person. And that's fair. because we engage with early companies, usually what we meet is a very small team with very few people, And you can't expect them to have the resources to hire people and set up place. At that stage, I think what's important is to move relatively quickly from that in the brain of the founder stage to a more institutionalized situation kind of throttle the amount of money that's been given to the company with the of institutionalizing the knowledge. But what you also don't to do is to institutionalize things too early because then you're crystallizing something that's incomplete, insufficiently tested and not worth crystallizing. And I can say that from ⁓ my experience building Lomar Labs. I was a being a systems man. I've been head safety and processes previously in my career. I was quite keen to establish processes and written procedures document knowledge. I realized that it's not worth doing it, not ⁓ at early because before I had finished it, I had already changed how I was thinking about And ⁓ I was convinced it was longer the right approach. So ⁓ why bother to some Raal: You Nick Chubb: Thank Raal: Yeah. But I then in those pillars that you talked about earlier where you're looking at how you support businesses, that's something that you look at is it how you can kind of augment their team with people in your own organization or within your network that you can help get to build out what the company needs at when it needs it. Stylianos Papageorgiou: Yeah, we can certainly support them with lot of these questions. if we can't, we know someone who can't. that's then, just make those introductions and let them help yeah. Nick Chubb: point about introductions, what does the kind of network look like? Once you've got something working and know kind of running within the fleet, you've made a work, what's the of next step for portfolio companies in terms of how they commercialise and what advice would you give to start-ups who are trying to commercialise in this sector? ⁓ Stylianos Papageorgiou: Well, it depends on the product, but I said it earlier that we're making introductions to people we think can sell the particular product. So we will not go out there ourselves as Lomar Labs and sell. We're not a technology broker or a technology company. We're here to sort of catalyze innovation and let the people who are best at what they do. help also those startups with doing same thing and selling the technology. I mentioned earlier, understanding the colourfulness of market or the sort of granularity that exists within it, that Like you have to understand the different, nuances of the different customer groups. And then pricing. I hear people coming with assumptions about pricing and much money shipowners are willing to pay. And we need not forget that the shipping industry is a service to the global economy that is almost a tax on the global economy because the moment increase how much you charge for transportation sort of de-centrifies act of transporting anything. So have to remain cost competitive and we afford to just raise our price. And a lot of founders forget They come and say, you know, what I'm building is so valuable. I'm going to able to charge thousands of dollars per day. It's like, no, we're going to pay for this. So keep it cheap, keep frugal ⁓ solve what matters. Raal: we talk about willingness to pay there, I think one of the things you alluded to earlier about like in shipping, we have a well-defined problem out the transition that we're going through there. But you mentioned, it's a big of what you're doing on the energy efficiency side. And you mentioned new fuels as well. That landscape is very volatile at moment based on the regulatory landscape, right? ⁓ And the difficulty in what's going to happen there seen innovation before this, a lot of it is about timing, about getting it ⁓ at the market needs. But we're in a very volatile state. We're also in a state in that we're starting to see different rules in Europe and so on. So how are you thinking about how best to the uncertainty that's there from a regulatory perspective? Stylianos Papageorgiou: I sympathize regulators because how do you regulate something that you don't understand or ⁓ you've very limited experience working with? if think about rules, especially classification rules, they were empirically You would build a ship a way, that ship would fare well and not sink or end up in... some kind of and you would make a rule out of that way in which you've built the ship and then rinse and repeat and we arrived at a comprehensive rule book which no one wanted to deviate from. Now we're no comfortable with losing ships and people and harming the environment as we may have back then. So we try and predict things before they happen but there needs to be ⁓ a sort of process of... between trying, learning and regulating. And in our work we work very closely with certain flag states and certain classification groups and they have a keen interest in working with us exactly because that helps them figure out what regulate and how to regulate it. So just have to all collaborate ⁓ figure out together. Now don't have a crystal ball, so I can't tell you what fuel is going to be the fuel of the future. So ⁓ my approach has been that we're just going to have to on everything and then figure what's tends to progress faster and seems to be And the more I've spent time working this, I'm also seeing that not every fuel is going to be suitable for every ship type. For very vessels, it's unlikely that alternative fuels be sufficiently available in sufficient quantities make economic sense. Would we go nuclear on those ships? Maybe. It sounds plausible. Would you go nuclear on a smaller vessel that does kind of day trips? Doesn't make sense. At the same time, have to think about, apart from alternative fuel sources, we have to think about electricity and the electrification of everything that's taking place on land. Raal: You Stylianos Papageorgiou: and what that is doing to the price of components, batteries, and electronics. And with pricing being driven aggressively inevitably we're going to to a stage where it makes a lot of sense to use much of that ⁓ on ships, which comes certain advantages as well in terms of maintenance and reliability and ⁓ forth. I think it's a complex place and this is why I would like having a sort of collaborating startup in as many of these areas as we can because then we're collecting that or creating more complete view of the world. But yeah, I don't think ⁓ we can continue to have a single fuel industry in the future. And that's not to say we're not going to have any oil in that industry in the future. there's a place for oil as well. I mean, it's still a resource. It's still economically It comes certain problems which we can mitigate. And I haven't seen something else that comes with no problems. So it's a big or kind of scenario. Raal: Yeah, I mean, you mentioned there that you know, working closely with regulators and that sort of collaboration, which I'm guessing again, something that you're bringing that a lot of a lot of people won't be able to bring to the party in terms of working with startups. But do you actively actually look at some of the, you know, some of what's going on and and take your best educated guess about where things will land and timing of things ⁓ Where I'm going with this is that, when you talk about that go to market, particularly when it comes to hardware, you've got to lay out, manufacturing costs. it's not like you can wait for the regulation to drop and then get it out. know, timing is everything in these situations. So I'm guessing you just have to, you have to watch carefully and make the best guesses you can, right? Stylianos Papageorgiou: Yeah, but that's a treacherous path because if you think about the past, had the water convention being discussed at some point, yeah? And so companies were created ⁓ at the of that discussion to create ballast systems. And how many of are still around today? Very few. The ones that survived did not have the best technology, potentially didn't even have the best know, what did they have? They just timed their expenditure and they're sort of gearing up to when the market was actually open and then they were able to also capture the market the opened. Because it's thing, shipping once a comes into most people try and delay, delay, delay, delay their expenditure until they can't delay any further. then within the gap of one or two years, you'll have a sort of mass adoption of a certain technology. So how can you go from having zero production to serving the whole industry in the space of a few months and then scale down once you've sold to everybody? You know, that's a hard problem to solve. And I don't necessarily have the formula, but it's definitely something I can warn founders of and not let them... Raal: Yeah. Nick Chubb: Thank Raal: Yeah. Yeah. Yeah. Stylianos Papageorgiou: fall into traps they should be building a factory 10 years before anyone needs to buy anything. Nick Chubb: It's also like a survivability as well, right, is that some of these technology might need to survive a decade the future without exiting the market for regulatory inflection to into play. because often they take longer than you're expecting for these to come in and ⁓ start be enforced. know, making that you're able to stay in the for eight, nine, ten years with relatively small sales that you can capture the wave when it comes. I think it's probably quite a hard thing to do. ⁓ Stylianos Papageorgiou: That's one approach but I'm also not too keen on technologies that only work if regulation is applied these the technologies that nobody wants to buy. They just them because have to. And then what would you buy? Well you buy the cheapest thing that just ticks the box and you're compliant and then done. But if you can build something actually a offering value to the industry and the ship owner, you don't need to wait for that regulatory inflection point. You don't need to wait for owners be forced to buy your technology. And if what you're adds value through fuel savings or other forms of improving operations and gets benefit from a regulation that may or may not come, then even better because then if that regulation comes happy days if it doesn't business as usual ⁓ still in business Raal: Let's push the timeline slightly ahead, because I'm keen to talk about this future of work idea. one of the things that I see quite a lot is, you know, that there's... there's a lot of second and third order effects to some of the things that are going on that may mean that life very different in the way that we work in the future. And that the idea that really will be transformative is one that we can't even maybe most of us envisage right now. So ⁓ Judge, when you look ⁓ things, you've got this at the moment, Future of Work, you've got three businesses that you're working within space. This is about like the future of navigation, future of, seafares, the way we train people, the way there's a lot of different pieces in there. But have you got in your own mind a view of what you think the ship of 2035 to 2040 is going to look like and what the profession of seafaring might look like by Stylianos Papageorgiou: reluctant to share it also because it's shifting very rapidly at the same rate as things are shifting with all the innovation that we're seeing. think a bigger philosophical question here as to what's the place for in an world that may not need anymore, but then what's the point of having that world if humans are not in I don't want to go down discussion because I think it's very broad and maybe something to talk over a beer. Raal: Yeah. Stylianos Papageorgiou: you know, with the shipping industry itself, like if we assume humans will continue to be relevant and be part of it, the trends ⁓ have been of can we transport more cargo involving less humans ⁓ in loop, whether they are on board or operating cranes or mooring ships ⁓ or and that's been going on for decades. it's reasonable assume it's going to continue. whether it's going to pick up accelerate because of advancements robotics and AI. You your guess is as good as mine, we're seeing a of things. then, you know, recently there was news around the internet AI is now more expensive than humans. So this is actually, you know, let's back the analysts. so, yeah, there's probably... ⁓ Raal: compute. Yeah. Nick Chubb: Thank Stylianos Papageorgiou: a price point where it makes sense to automate and beyond that, it still makes sense to keep humans the loop. Now, what are the jobs of those humans going to be? They're going to be very different from what they been the same way that an engineer on board ship today is having a very different job a sailor 150 years ago. And think the same thing will happen on the shore side. There will be ⁓ changes in the kind of work we do ashore managing those ships. But add to that the sort of energy discussion we had earlier where different energy types might be suitable for different trades and different sizes of ships. can imagine different things for different segments. Raal: Yeah, think the I guess the two things looking at your portfolio that can maybe push you on a little bit further. One being that you've got mythos AI, AI navigation and where that fits. ⁓ I sometimes people assume that means we're not going to have seafarers. And then at other ends, it's more kind of how is the navigator assisted must clearly be looking at that as an area that is likely to be transformed. Stylianos Papageorgiou: Of course those systems value today even if they don't take command of the ship. For think about the amount of alarms that are now on board ships. this is becoming a serious issue now. On modern there's so many alarms going that it's actually becoming ⁓ stressful detrimental to the safety of the ship. That's what happened in Chernobyl. The operators back then overwhelmed by the number of alarms and lost situational awareness essentially. can expert systems or these intelligent systems help humans maintain control by ingesting all these signals are coming an increasing amount of systems on board we add a layer of intelligence blend things merge signals and give the operator a bit more clarity as to you what this is what you need to be paying attention to. You know that can be on the bridge, that can be in the engine room, it can also be in the office because people are confused in offices as much as they are in onboard ships. Raal: Yeah. Yeah, I mean, that teased me up nicely for my follow up questions. On the one hand, you've got all that information that exists and bringing that to the person that's making the decisions. The other one that I see with Signal Fusion, one of the things that you're working on there is perhaps slightly different. It's saying taking what's happening at the individual level, the individual, how they're talking about what they're doing You're using it for... systematic behavioral screening sort of elements Now, one of the things that pricked my attention around that voice activated thing is I've been looking at recently about how we can capture more experiential data. There are things happening at a VDR level now where people are looking get diagnostics from that. So this is more like how the systems can pull more. real time, real world data and inform us more about how work is actually being performed and so on from risk perspective. Is that another area that you see as a frontier? Stylianos Papageorgiou: Yeah. turning the sort of ⁓ ⁓ ⁓ let's say, the assessment of the state of a human being with an job on board into something that measurable and trackable has merits. It also some concerns. Do you exclusively rely on that number that's now what you've got on your screen? Or you maintain a ⁓ human with that person? So how use that, it's of course up you. But what Signal Fusion is to do is to help us and ship owners assess the that things that are being decided ashore or things are happening on board. have on the people operating the vessel and then can start seeing a play between if we change that then this happens people and we get a direct kind of feedback loop then we can improve what we to ⁓ ensure that humans on board operate their best but then what do with the tool is up to you so Raal: Yeah, a Hobbesian dilemma, I think, between how much we benefit from more a kind of digital surveillance, let's say, and ⁓ identifying and helping people versus how much of that is intrusive, I think will be one of the key debates that we'll be having as an industry over the next five or 10 years. Nick Chubb: stuff I've heard anecdotally over the last few years is that actually seafarers seem to welcome more audit trails and less requirement for them to ⁓ create an audit trail. But I guess there a question of how far you take that and sort of where you draw the line. conscious of on recording that we probably should about wrapping up. If Lom ar Labs is successful in the next five, ten years, what will look like? What's your kind of bigger vision for where this could end up? Stylianos Papageorgiou: There's a lot of things we're working on beyond what we've done so far. We advancing maritime innovation, that's for sure. We're still part of a ship-owning group and ship group, and see opportunities. for shipping but also across other verticals our group and that adds a lot of value to our owners. So, yeah. I think future is interesting and also quite uncertain. Raal: But if you were to think about it is you would like achieve as a business, would you be looking to have any of these solutions go mainstream? Would you like a ⁓ bigger of things in portfolio growth? mean, what's the key metrics for you? Stylianos Papageorgiou: Well, we will continue to support startups with our program, the Compass program that is now sort of institutionalized and we want to see more and more companies coming through that and potentially new ⁓ areas interest emerge, we'll bringing companies from those segments as well. And of course, we want them to succeed. We don't expect all of them to succeed. It will be unrealistic to do that. But to have a fair number of them succeed that would be great. But a long-term bet so it will take time to show Nick Chubb: to your mind, a startup succeeding, is that going some kind of successful exit ⁓ or it? Stylianos Papageorgiou: Well, I think commercial success can be them either getting acquired, ⁓ or just becoming a profitable business and not acquired continuing and issuing dividends. I think that these are the sort of ways ⁓ of success. We would love to see ⁓ dollar IPOs in US stock market, but I don't the maritime tech space has produced anything of that kind as of yet. There's people hoping some of it will come. Cheers to that, but yeah. ⁓ Nick Chubb: Ha Raal: question perhaps a little bit more broadly is for the industry itself to really support innovation. Like said, we've an industry with lots of problems to solve. What do we can do as an industry ⁓ to really foster innovation? Stylianos Papageorgiou: I think being a bit more open to collaboration and working with the founders, working with, and not just startups that produce innovation, of course, you know, this corporate innovation, at least from the ship owner side, but also from the sort of wider network. One thing I see that does pose a barrier to is the need for certainty that comes from already dealing with a lot of risk managing a lot of risk so you don't want to take on board more how can find solutions ⁓ like the we found at Lomar Labs to sort of risk acceptable and enable experimentation because we can't possibly experiment only at Lomar Labs like others need to do this as well. in the same way that and classifications need to experiment and be a bit more open. But it's also understanding that when you're dealing with an early stage company as a potential customer, for instance, you're dealing a very fragile, incomplete being that you can't squeeze it way you would love squeeze it as a sort of rich ship owner that so much over its suppliers. You know, and just because you've run a pilot and you're happy with it doesn't mean they can deliver a hundred percent for your entire fleet the next month because you've now decided this meets your criteria. You have grant them time to build up and scale up. And I think people tend to forget this. Raal: Yeah, that's a really good point. think collaboration is one thing, but also understanding and supporting and kind of putting yourself in the shoes of the people on both sides that working with. think it's really very sound advice, Nick Chubb: I think these things tend to longer than anyone estimates. Even the most optimistic estimates ⁓ are off. But the impact that be had if you've got the patience to see it through, I think is enormous. ⁓ Stylianos Papageorgiou: Yeah. Raal: think Bill Dobie have said, no said something interesting when we interviewed him, Nick, which was stuck in my mind, which he said, just write them a check, you know, even if it's a small check, just a commitment that you're actually in this and you're interested you want to foster that innovation. So, yeah. Nick Chubb: Yeah. Yeah, yeah, yeah, yeah. Stylianos Papageorgiou: Yeah, that certainly helps as well. Nick Chubb: where should either startups or shipping companies who are interested in partnering you, to be honest, where should they go? Stylianos Papageorgiou: reach out on LinkedIn or through our email, through our website. There's a hello at Lomar Labs is the sort of default email that people can reach at and we take from there. So, yeah. Nick Chubb: Awesome. Raal: And please do keep informed of what you're doing so that we can about it on the Because this is a real spot for us, the combination of a ship owner and an innovation incubator is pretty much, you can't get more undocked than that. So we'll be watching closely. Nick Chubb: Yeah. Stylianos Papageorgiou: Excellent. Well, thank you very much for ⁓ having me on the show and I'll be happy to keep the conversation going future developments. Nick Chubb: Awesome. Thanks City House. Appreciate it. Have a great day. Bye. Raal: for it. Stylianos Papageorgiou: Likewise, take care. Bye. Raal: Thank you, bye.