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Automating the Future of Retail: Interview with Steve Gu

“One needs to understand the real pain points to start a successful business.” – Steve Gu

Listen in to Christopher Rathbun’s conversation with Steve Gu, CEO of AiFi, on how he is using AI to automate stores around the world. All proceeds from this interview were donated to Evidence Action – Deworm the World Initiative, an Effective Altruism recommended organization that has shown through research to deworm a child in India for $0.35 per child, and in Kenya, for $0.66 per child, vastly improving their quality of life. Learn more about Deworm the World Initiative here: https://www.evidenceaction.org/dewormtheworld/.

Steve Gu is the co-founder and CEO of AiFi, Inc., a company that uses AI and cutting-edge technology to automate and enable scalable checkout-free solutions for stores ranging from mom and pop shops to large-scale retail businesses. Steve obtained his bachelor’s degree in Computer Science from Tsinghua University before earning his PhD from Duke University, where he specialized in computer vision, signal processing, and multimedia systems. Prior to leading AiFi, Steve worked at Apple and Google where his notable projects included the iPhone 3D touch and Google Glass. The Penn Innovators in Business team asked him to share some of the lessons he learned from launching his own startup and transitioning from academia to business and entrepreneurship.  

You came from an academic background, worked at Apple and Google, and then went on to create your own startup. How was that process for you? 

“When I was doing my PhD, I just focused on one particular problem and found the best solution to it. This applied to even when I was at Apple and Google. I could propose crazy ideas without worrying about the cost, human capital, etc.. But the entrepreneurial mindset had always been very attractive to me. The Google Glass project didn’t go well in the end, so a lot of team members laughed at the project and moved on. Others left and started their own companies. I think it was a great opportunity for me because I was always thinking about how to apply my expertise to some specialty and verticals to really make an impact. We knew some angel investors who got really excited about some of our initial projects, so we decided to just do it.”

What was something you realized when you started working at your startup?

Once you are in a startup company, you realize that the problem solving or technology per se is just a small part of the whole equation. There are a million variables that then need to be set right in order for the company to be successful. At AiFi, we realized that there were a lot of things that we needed to take care of, whether it be people dynamics and management or how to motivate and coordinate the team to ensure the utmost productivity. Identifying the right direction and focusing on that direction is very important. They don’t teach you this in school and you probably have to experience that yourself in order to understand the subtleties and difficulty of all of it.” 

What is AiFi and the technology behind it?

“At AiFi we are guiding the future towards automation in retail stores. We have developed very advanced computer vision and sensing technologies to monitor who is grabbing what in real time inside a real shopping environment. Even though it’s only in the inception stage, it’s already grabbing a lot of attention from the media and shoppers. We actually launched in almost ten stores last year; we have one store in Silicon Valley, one in the Netherlands, and another in Shanghai. Unlike expensive alternatives like Amazon Go, AiFi’s  mission is to make AI as widely accessible as WiFi is, hence the name AiFi. We try to make this solution available at a very low cost, making it easy to deploy and friendly to use. Today, our customers range from very large retailers in Europe, US, and Asia. We’re also working with  mom and pop shops to empower their stores to run 24/7.”

If there is a bag of 80g chips and a bag of 120g chips, how do you differentiate which one the customer ends up picking?

“In broader terms, we call that technology sensor fusion. It’s composed of cameras and sensors placed into the shelves and is a combination of ambient sensing and computer vision to understand who is grabbing what, and to be able to discern which product is which. Imagine that these two items are placed adjacent to each other. They might have a similar appearance, but they have different locations and even different weights. We use the combination of those attributes to distinguish the items. We also have advanced technology that is able to track hundreds of thousands of people shopping simultaneously in a given environment.”

In March, Amazon discussed their plans in selling their automated checkout service to individual retailers. What was your response to this news and why do you think AiFi is different from what Amazon is proposing?

“First of all, the general trend is that the whole world is moving towards automation. Think of self-driving cars and smart homes. There’s lots of positive reviews about Amazon Go, but I find that we are actually pursuing quite different tasks. We work with retailers to begin with so we really understand what the retailers want, whether it be inventory management or how to run the store most efficiently without disruption. Retrofitting an existing store to make it automated is completely different than launching a brand new store where you can do whatever you want to make it automated. We are working with constraints and bounds. Secondly, we are not competing with any retailers because we are a technology firm by heart. Our unique strengths are in the algorithms, sensors, and cameras we use, and not in store operations or retail. Compare that to Amazon Go which has a very large online commerce platform in the sense that they are also competing with retailers. I think that in the long run, most major retailers will be very reluctant to work with Amazon, and that will give us more opportunities to work with them.”

If we go into a retail store 30 years ago, what do you envision the customer experience to be?

“It goes back to the root of AiFi. Just like how WiFi is permeating through the physical space, we hope that one day AiFi will be just as pervasive as WiFi is. That connectivity is very important to everyone. If you look at this architecture that we’re joining it may sound very daunting because you will see a fleet of cameras and sensors almost everywhere when you walk into a store. But take the example of WiFi; it has become essentially invisible. You don’t really care where the router is, and we envision that in the future the infrastructure for AI will also become invisible. Cameras and sensors will become ambient and essentially dissolved into the environment, in the sense that the environment itself is AI. In thirty years from now, going into retail shops will just look like any shop you would have today, but fully digital. And maybe the technology will be used in broader contexts like shopping centers, university campuses, your home, and more.”

What impact has COVID-19 had on AiFi Inc.? How have you handled those challenges? 

“Everyone’s now working from home, so it has shifted the culture. We’re not losing productivity, but it’s been very challenging regarding the client engagement, because most of our clients are retailers who have suffered a lot from COVID-19. One of our clients in the UK was originally planning on opening fifty stores across various airports and transit hubs, but now all stores are being placed on lockdown. On the other hand, some of our other clients are thriving and have seen a surge in demand, especially for essential goods like groceries and personal protective equipment. You can imagine that autonomous shopping will enable people to shop without even interacting with anyone in the store. ”

What is your advice for undergraduates and graduates, especially now going into post COVID-19?

“Focus is very important. We learned this lesson the hard way when we launched our start-up, and I think it’s something that people should spend more time looking into. Sometimes it’s easier to start with a grand vision, but without understanding the real pain points, it will be very hard to start a real business. With COVID-19, I also think that there will be some new and unique opportunities to come. I encourage everyone to look into the unique characteristics of the post COVID-19 world and see how we can innovate and create new and exciting things out of it.”  

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