231 - How Robots Are Saving America's Nursing Crisis with Matthew Chang

0:00We beat Uber to the autonomous game, dude, as a bunch of ragtag city people in Jacksonville. And that's been the theme of like our company and my career. I want the thing that no one else has done before. That's why I bought built sub zero EVs because no one wanted to go build. That's why I wanted to do the first autonomous hospital because several big name companies tried and failed. We felt every versatile life. We're like, we're not going to win unless we get so far outside the box. And so that's why I'm going to give your audience my free biz dev strategy.

0:34All right, we have a freaking great episode today. I've got Matthew Chang. You are the founder of Chang Robotics, and you're also the general partner of a$50 million Chang Robotics fund. And we're going to talk about what that means, but you're playing in an incredibly cool space right now. You've led some of the largest teams with respect to autonomous vehicle deployments and manufacturing in the United States. And you are credited with launching the country's first autonomous hospital initiative. I can't wait to talk to you about skilled nursing facilities because that's my background. You've also been mentioned in Fast Company and Inc.

1:04You're a 2025 Entrepreneur of the Year finalist for Ernst & Young, which for those who don't know is actually a very prestigious entrepreneurial award around the country. Give me just a high level of what your company does. We design and install robotic systems for the workforce. If they could do their job better or safer or cheaper using robotics, then we do that. And that means we have to custom tailor the system design for the operation. So you mentioned hospitals in the intro. That's obviously a nursing tailored system where the point of the robots is to make the nurses' lives better. The primary goal is not to save the hospital money.

1:42It's a side benefit. It's not to improve patient care. It's so the nurses will like. Okay. So I'm on your website right now. There looks to be a bunch of boxes on these autonomous robots. Yep. So this was one of the first autonomous factories ever built in North America. And super early, just picture like Waymo or Tesla self-driving like pre-COVID. You know, that's where we were. And what this system did is it let an existing factory produce about 20 % more product with no new labor. So that was just like money for our client, right? And it meant they could take bigger contracts with the retailers.

2:22How big is the business today? Top line revenue, number of employees. Top line, we're installing anywhere from 20 million to 50 million a year in robotics. And we're in kind of our growth curve right now. So things are stepping up. Team, we're right around 60 people. How long does it take to go from like idea to it working on the factory floor? If you're super ambitious, then they just say like, we want it all. So that's usually like a three-year process from first meeting to we're all standing there together watching robots on the floor. For easier stuff that we've done before, it's like nine months.

3:00And those were probably easier because you had like plug-and-play solutions, I'm assuming, where it's like, okay, we know what this robot can do. Okay. Yeah, we've already solved all the hard problems, and now we're just making little adjustments. Hospitals, I can have robots running in a hospital six months from first phone call. But the first project took us two years. So what are they doing in that hospital? In the hospital, we're doing automatic transport of all the things a nurse needs to provide care. So as you know, you know, nursing, they all have a tablet or a phone or a scanner with them.

3:35So when they go in the room and they see the patient, they're going to place an order for, you know, OR transport or for a room turnover or for surgery prep, whatever their order is. some of those orders are linked live to my robotic system on the back end. So the nurse doesn't see the interface. They just see that they do the same workflow, but some buttons trigger the robots to start moving. So where are these robots sitting? Are they just like plugged into a unit waiting to be called on? Are they continually monitoring the floors? Every hospital wing that we've seen so far, since we got into the medical business three or four years ago, there's parking spaces on the floor.

4:14Now they're typically like a little alcove and they might stick some extra wheelchairs there, or they might have a couple dialysis machines that they stick over there and they never think about. So we have to reclaim between two and three parking spots per floor. And then we'll put a charger there and we'll actually call it at the floor that says parking spot. So please don't put a hospital bed there. And how big are those machines? We leave about two inches on either side of the door when we pass through it. So it's a big inventory. This is a big robot. It will come up to your, I don't know how tall you are, but I'm 6 '4", and it comes up to like my mid-chest.

4:51And the reason it's so big. I'm like 6 '2". Yeah, so there you go. So it's up at your sternum level. and the reason it's so big is because we want to minimize the times it has to go to the elevator and go down the elevator and go to supply room right so we want to oh that's a good point yeah thank you why we're the first company to do that really so yeah we install a hardware box outside of the elevator controller and the elevator controller does not have an input port Why? Because they don't want you controlling the element. It's supposed to be secure. If you can control it by plugging into it, it's like a Die Hard movie waiting to happen.

5:35Right. Like somebody contacts the building. So those things are designed not to be plugged into. And we worked with them to get the first plug in. So we had to drill a hole in the side of the box and go in and redo some of the wiring. No way. So that is an example of how we do it. The robot just thinks about it. You know, the communication is wireless. We have a server on site that coordinates these things, and it can think about the elevator and command it. It can think about the fire alarm and respond to it. It can think about the security and the door control and open the door. So that robot right there that you saw has a security badge issued by security, and it is a nursing security badge.

6:19And then when it thinks about opening the door, the door's just open. How much does one of these machines cost? installed you know sign seal delivered about 200k piece is that with you helping the whole process to get it like set up really just click yeah you do everything okay yeah we we bring it inside we install it and then we do the training that might sound expensive on average 14 nurses share one robot so the fractional cost per nurse is super low that robotic system saves all nurses about 15 percent of their day. So they get time back. Really? More present with patients. So on an ROI basis, it's smoking hot.

7:02It's like 18 to 20 months ROI. If you have a hospital that has a 10 percent nursing shortage, which is pretty common, and you can eliminate the nursing shortage by giving your existing nurses 15 percent of their day back, then it goes outcomes, patient satisfaction, action, nurses are less physically strained, and you did all that for a few million bucks per hospital. That's like a sweetheart deal. So tell me about the KiwiBot. KiwiBot is super fun. So the robot on the left, that's our pride and joy. We invented that, but it doesn't have a personality. KiwiBot is a point-to-point degree. And we partnered with that company, KiwiBot, and that robot is cute.

7:48it winks at you it makes fun sounds it's a great like kids love it seeing a bunch of kids interact with it i think it's the coolest and so kiwi bought is a point to point so it's like hey i'm at the pharmacy or i'm at the supply room and i have a hot delivery right and i've got to make this delivery because a nurse said she needs it in 10 minutes and it's gonna go traverse it can go exterior so it can go traverse the campus go inside you know get on the elevator and make a single delivery. Look at this little guy winking at you, driving all over the place. Yeah, if you ordered like an emergency meal, for example, for a patient and that thing shows up, you're going to be super pumped.

8:29You're like, oh, here he is. Not only are you bringing food to the patient, you're brightening the patient's day. That's it. Can they transport patients? None of those can. Little fun fact for you. We just submitted a patent on the autonomous hospital bed. which would be the first active robotics that we would have installed. And so the point of that is, is going back to workforce, the hospital beds can be 500 pounds, right? You have a couple hundred pounds for the bed and you have a couple hundred pounds for the patient. And your average nurse is five foot four. So you and I have the benefit of being large males.

9:08That's insane. Would be fine. But for a smaller workforce, it's like really tough. And one of the top workers comp claims from nurses is they're pushing a bed and it ran into a railing or they try to stop it and they pull their back. So we want to put autonomous drive on the beds to where it's like power assist and the nurse just works with it. So it's designed to be escorted, not like we're rolling patients around with no provision. But that way the nurse is only touching it if they need to disengage and navigate a door entry or an elevator entry. So I don't think we're going to get on the elevators automatically because we want to know that the nurse is with the patient.

9:52Okay. How did you get into this? It goes against everything that I preach about entrepreneurship. Let me tee it up for you. So everything I preach about entrepreneurship is like something that's low capex, something that's high cash flow or high cash conversion. So you're getting paid, you know, really quickly, something that has large tailwinds, which this does have large tailwinds. But like from my perspective, robotics is not something that's widely adopted. So it's, you know, you're kind of creating new markets that you're operating in. It's high capex. You've got to have these relationships that are international relationships in order to source the machines.

10:25And then you've got to have the specialty of being an engineer in order to work through all the permitting process, but then also the customization. Like, it sounds like a freaking nightmare, not one I would want to get into. How the freak did you get into this? Well, I am that engineer. So, you know, I can't change that, right? You know, so my background, you know, I was originally supposed to be a naval officer and do engineering for the Navy. and I got kicked out before I got commissioned when they shrank the Navy. And this was right as the global war on terror was kicking off. So the Pentagon hadn't caught up that, hey, we need more officers.

11:03They were still operating under the sequester where they were shrinking the military. They just shrank my Navy scholarship class and I was one of the ones that got cut out. Okay. So then I said, all right, lead into it, go the professional engineering route. and I joined a company where I could, what ended up happening was I traveled the world and built super high-end manufacturing plants all over the world. And for American companies that were obviously globalizing. And so I built them in the US, I built them in the Middle East and all across Asia, Southeast Asia. When you say high-end manufacturing, are you talking about like cars, technology?

11:39You're not talking about like furniture or clothing. I have no idea. I'm just trying to understand what that means, high-end. Yeah, advanced manufacturing, All it means is that you have a really well-planned out manufacturing process. It's high throughput. So like Lean, Six Sigma, Toyota Way, like all that type of stuff. And then you have to have a high degree of automation for it to be advanced manufacturing. So an example, I built the Airbus A350 factory. So if you've flown on the new Delta flagship, that plane is made of carbon fiber. I built the first dry-reless paper factory in the country for Jordan Pacific.

12:16So a paper factory, which makes like tissue paper, bounty, quilted Northern, like all that type of stuff that only has driverless robotics inside and no humans. It was a, uh, to dimension 450 ,000 square feet packed with driverless forklifts that have laser vision, Waymo vision, 17 guys in a control room, just watching it. The typical employment for a plane. No way. Guys should be like 500 people. Right. but this was totally robotic lights out so the joke joke is if you had toilet paper during covid i know it wasn't easy to find but you're welcome because we had a humanless paper factory that was producing paper towels yes i mean wild stuff so at what point was there the aha moment of like i think this could be business right i like i'm doing it for these large companies i think i could actually kind of do this for other companies i did intrapreneurship before work entrepreneurship.

13:15I did the Delta million miler. I was like, you know, on the plane for like three weeks out of the month at least. And then I met my wife and I was like, I got to be here. You know, like I can't be out there. I got to be here. And so I had two interesting job offers. One was Amazon asked me to build, to be in charge of their CapEx. And that was super cool. That was 2014 Amazon. So Nick, if I took that stock option, I wouldn't be on with you right now. Yeah. No, you'd be on a beach somewhere. I had another construction company that said, hey, we want a new design build. So I took that job because I thought it would be so cool to build an engineering team within a huge international construction team.

13:56That went really well until we got fired. My whole team. They closed their hall for someone one day. So we were killing it. And then HR lady shows up and then she gave us folders. And that was the end. Leave immediately. She took the keys and we were out. so i was homeless no why and uh so i started my company the next day and thought i guess if i'm gonna try i'm gonna try it now and just one of my former clients called me matt what are you doing like i'm sitting on the couch in my pajamas on my laptop why are you doing that i'm like because you don't have a job and she goes why didn't you appear next week.

14:36So she goes, before you come, you need to get a company, get a suit and get a haircut. To be specific, it was May of 2017. She pulls the whole team together. She said, team, this is Matt. He's a manufacturing expert. Matt, this is team. I'll leave you guys to it. I want to know your findings at the end of the week. She just left. I'm like, what? And at the end of the week, she got me, she took me to the accounting department and said, this is Matt. He has a company you do have a company right like yeah yeah i set one up you know get an llc and she's like great get it paid that was it i have one client and you know in my line of work you just need one customer once you have that one customer you are in business and from there that rolled over and we ended up with within 12 months of opening two of the wildest automation and autonomous projects on earth that was just god's favor dude so we got hired to design the driverless bus system for the dot and that was pretty nuts it's in operation today dang you can go ride it where in jacksonville jacksonville we had to compete and win to get sponsored by first term president trump as the first driverless city so he gave us his fat grant 25 million dollar grant for Jacksonville.

15:55Big point of pride. We smoked all our Florida arrivals, Tampa, Miami, Orlando. We smoked Boston, San Francisco, Austin, Texas. The guys that should have won, we beat them. And so Jacksonville today has the only federal driverless bus system in the nation. So that was - No way. That was an early project. We got hired to build the first autonomous factory for major food producer. That is now the largest coffee roastery in North America. So we're like 12 months in, I'm like, oh my gosh, what happened? And at the end of, as those projects started a life cycle out, it was like, I think we're the best autonomous engineering company on earth because we're so early.

16:37And we're the only guys that have done it at scale in multiple use cases. So that's why when we get into healthcare, it's not that hard. E-commerce, not that hard. Our hardest project yet is coming around the corner, which is we're going to be designing the first autonomous port in the nation. It's going to be in Texas. Yep. Yeah. Holy crap. So why did you win the contract in Jacksonville? Like, why would they need your skill set for driverless transportation? Because it sounds like other cities were competing or trying to figure it out as well. What exactly in your skill set was the differentiator?

17:14Just high creativity and adaptability. So each one of those cities were independently trying to figure it out? yeah tampa had a partnership with tesla and they looked like the favorites las vegas had a partnership with some famous company was propped up by the zappos founder the guy that sold that to amazon you know waymo was making a lot of noise at the time and um in phoenix and then in uh san francisco so we had some worthy adversaries uh uber was i think in pittsburgh right so as we looked we felt david versus goliath we're like we're not we're not going to win unless we get so far outside the box and so that's my i'm gonna give your audience my free biz dev strategy lose first or win what i like to do is throw out an offer that's so different that if you're looking for commodity you just throw it out right away so lose first i want a rejection letter 10 minutes before i submit my offer give it because you're like nope we wanted apples and you brought me oranges.

18:19Or they look at it and they're like, huh, these people actually thought of a different way to solve it. I did something that no one else did. I went on, you're not going to believe this, I went on the whitehouse.gov website and I read every white paper that Trump had published for policy. Nice and short, the Trump White House. All caps, nice and short, broad language. Thank you for your attention to this matter. But they're amazingly plain spoken. They're not overly verbose. They're like three to four pages each, nice and concise, and very well communicated. And I just don't think anybody took it seriously at the time.

18:59The whole thing was about, basically, how do you make the boss happy? This plan is going to make the boss happy. And I think that's what they went with. They thought it was outside the box. It actually had a shot at making Trump happy. Hey, I don't know if you remember this, but when we started this podcast, we entered into a social contract. I would spend time, energy, and money producing this podcast, interviewing these individuals, and giving you insights into how to build, buy, start, grow your business. And you would like, subscribe, and leave me five-star review. Now, out of that, we both get to talk to really cool people and hear really cool insights.

19:34We both get a ton of value. But I just want to help you keep your word. So would you do me a favor? Will you go leave a five-star review for me on Apple or Spotify? It would really help. And if you want, even share this with a friend. I think Secretary Duffy was just here in Jacksonville riding our system. So clearly it did. It was resonating. Yeah. Yeah. The point is, it worked. We beat Uber to the autonomous game, dude, as a bunch of ragtag city people in Jacksonville. And that's been the theme of our company and my career is we just beat everybody. We have an electric vehicle project. We just built an EV six times more powerful than the Tesla Semi.

20:15from the first drawing till close of production on the first vehicle was three years. Elon has been playing around with that Tesla Semi for a decade and it's still not out there in the wild, right? It's in these kind of forever pilots and it's not commercialized yet. And it's not that his is more complicated than ours. Ours is designed for the FAA. So it's designed to the FAA requirements to clear the snow from runways in airports, freezing cold temperatures to blow snow. That's why it has so much power to it because it has to mechanically blow the snow off the runway. From idea to production, three years.

20:54Is it in production right now? Yeah. And we produce it in Detroit. Yeah. Is it any or any off the line? Any of them working? We did our unveiling at the FAA trade show in April. We drove it in under self-power and it's going to two airport pilots this coming snow season bro you okay however much money you're raising you need to dedicate like 10 of it just to marketing how do i not know this crap man seriously you're like oh yeah we won the grant how many people won the grant for the for the dot yeah just us you're the only one you're the only one out of 700 plus applicants you're the only one that won the grant.

21:35And then those other companies said, we're still going to compete. We're going to try it at the same time as them. That's insane. That's incredible. I'm still trying to figure out like, okay, well, what is your business? Because like, yeah, we, yes, we do make robotics, but then also we get contracted with all these. Here's what I love to do. This is what my whole team loves to do. And this is most engineers, by the way. We want to work for great clients that appreciate our work. we want to design cool things that we can be proud of that if we're driving by it with our family and kids we can point to that and say mommy or daddy may help to make that right and we just want to have people respect the work that we do we want to know that it's safe for the public you know that's the number one thing in engineering is safety for the public that's it right we're very simple in that regards and my personal passion is i want the thing that no one else has done before.

22:29That's why I built Sub-Zero EVs, because no one wanted to go build them. That's a very tough use case. That's why I wanted to do the first autonomous hospital, because several big-name companies tried and failed. And then our other passion project that you'll start to see early next year on store shelves, we're rolling up high-performance food packaging with no PFAS. So that's the like for the moms product. Okay. I don't know what that means. When you have these microplastics in food, it's coming from the food packaging. So what we want to do is we want to have good for you food packaging. We went to Northwestern University, their chemistry department.

23:15They had a breakthrough in material science called graphene oxide. So we partnered with them. We took the global license for graphene oxide research, patented all the applications. And now we're going into commercial production with two Fortune 500 companies so that some of the food product you see on the store shelf is in organic paper, but the paper has been strengthened with graphene oxide so that it can actually hold up to like wet meats or to vegetables or things like that that would normally make it soggy and fail. Was that a product that you incubated and thought of and said, hey, we're going to go create, we're going to go talk to Northwestern and get that.

23:53Or did a Fortune 500 company come to you and say, solve this problem for us, and then you went out. No, we incubated that. One of my mentors, who's a brilliant PhD of engineering, he works at my company. And he said, I want you to take a gamble on it. He said, I think it's going to work. I want you to take a gamble. One of my mentors works at my company? Am I talking to Genghis Khan or Alexander the Great? Jeez. Yeah, two of my mentors work at my company. holy that's amazing we have a dean of engineering and he's the one that came up with this idea of using organic chemistry to solve food packaging and then we have a dean of business uh both of which were mentors of mine and they both work at the company now so have you ever heard of bell labs yeah or palo alto research center like a lot of the google has you know their moonshot part of the business.

24:47Anyways, you're like your own independent Bell Labs. Yeah, we're a much poorer version of that. Well, that's what I was going to say. You incubated this idea. Most of those companies have lots of funding that they're throwing at these moonshot ideas from Google. That's where for your audience, the customer-funded model is core to what we do. So we have relationships to Fortune 500 food retailers and producers, and we asked them, would it be useful if we could solve this problem? Right. And from there, they both gave us our initial research contracts. So far, one of them is in production right now.

25:25And the other one is, I think, you know, hopefully we'll be getting into production soon. Is where we were solving a industry problem. Right. This wasn't like product market fit. It's like I live in factories. I know this is a problem. I'm also a consumer. I buy the product at the store. so I know it's a problem and we just want to fix that problem. Is that part of the reason you went and raised or you're raising this fund, this$50 million fund, so you can work on projects that you want to work on without having to go to a corporate sponsor? So quick start about chain robotics. We have spun out three product companies that I talked about, paper science, hospital robotics, and sub-zero electric vehicles.

26:05Those are independent companies that have diversified cap tables and private investors and they're they have their own ceos of each business and we just sponsored them get them to launch right say those three again go eco is organic high performance food packaging robotics is the hospital automation that we talked about for a while on this call kodiak tech are the faa rated electric vehicles so that was the that was the peak innovation we could do for productization. Like we were stretched for resources. At the same time, we're very active investing in chain robotics. So we hold currently 12 companies, startup stock on our balance sheet.

26:54So every time I can, if I'm working with a cool company or cool idea, I say, Hey, can we invest? We've invested in a few of our customers, a bunch of our friends. And so we're sponsoring companies and we were just getting demand that I couldn't handle from the profit that we make to keep investing and spinning out companies. So we looked for a way to scale that and that's where we ended up launching a VC. So from the Chang Robotics Fund, we said, now we can onboard many more companies and provide much more support. So we brought on a team of GPs that were really good at venture. we have so far invested in nine companies.

27:34And for the fund one, we're going to 15 to 17, depending on how it shakes out. We're a little more than halfway done with bringing the port codes on. Is the plan just to invest in them or is the plan like, hey, I'm not only investing in them, but we're also bringing in the full force of chain robotics to help them. We're going to give you scaled engineering and technical expertise as you grow in complexity for product. So what it saves founders from doing, so first off, you can't be in the fund unless you need engineering, right? Because that's the whole value prop. But it saves companies when you watch SpaceX, when you watch Tesla, when you watch Andrew Real, what they're doing is amazing.