Ocado's robotics, Crypto's rise and Skype's demise

0:05do you remember using skype danny you know skype actually was vital in the formation of my relationship oh how come well because my wife and i met on a plane to africa as one does and then we kind of went back to our respective cities so then we've started sending facebook messages back and forth it's very sweet where you like work really hard to be witty and interesting on a you know little text and then my wife was finally like let's actually talk and so then we started doing Skype dates. And then, yeah, a year later, she moved to London and we got engaged and the rest is history. But yeah, Facebook, Messenger and Skype.

0:53This might date you even more. Did you did you do them at home or did you go to a Skype cafe? God, I'm not that old. I don't know. Hi, Danny. Hello, Katie. And hello to you. Yes, you, dear listener, you've clicked on the Times Tech Podcast. And for that, we thank you. I am Danny Fortson, Danny in the Valley, Silicon Valley. And I'm Katie Prescott, Katie in the city, the city of London. And today, Danny, the future of shopping, the past of video conferencing, and the present of money. I love that. That was very literary. I didn't write that. It sums it up. Yes, later. So we'll be hearing from the boss of Okado, then bid a very tearful, tearful farewell to Skype.

1:47But first, Bitcoin is back. Bitcoin is big. And then it's super small again. And then it's a little bit big. And the US is supposedly going to be the quote unquote crypto capital of the world. I think you need to say it like the crypto capital of the world. according to President Trump. Why is that then? Yeah, so Trump has said that he wants a US strategic reserve of digital assets that include Bitcoin as well as lesser traded tokens like a Fort Knox for gold. So when people say Fort Knox, I've actually never known this. When people say Fort Knox, it's like Fort Knox. That's what they mean. Yeah, yeah, yeah.

2:26It's this high security government facility in Kentucky where a large portion of the country's gold reserves are stored. It's basically like a giant vault filled with gold bars, like, you know, like Scrooge McDuck style. Dive in and throw the coins over your head and scream. And a strategic reserve in general is like a backup stash of cash. So countries have one on hand for rainy days. So by saying this about crypto, it's giving it this sort of Fort Knox-like legitimacy, essentially. Yeah, which is a big change, right? from the Biden administration, which was, I think it's fair to say, not very pro-crypto.

3:07But the idea is it's kind of lending this patina of legitimacy to this thing that started back in 2008 with the Bitcoin white paper, which was like, you know, for years and years and years was like the outpost of kind of techno libertarians and weirdos and money launderers. And now it's become this thing that, you know, Wall Street offers funds, you can invest. It's taken on a lot more legitimacy it's grown from literally zero to as of recording i think it's in the 80 thousands it's gone up to over 100 000 so it's kind of a another kind of step along this way along the way of kind of cryptos growing up and it's not just bitcoin as well is it he's decided that there'll be five currencies five cryptocurrencies in the pot in the in the footnotes scrooge mcduck gold crypto reserve.

3:56So Bitcoin, Ethereum, XRP, Solana and Cardano. And as you said, that's led to this little bounce because we had the inauguration, crypto soared. And then in that very crypto-esque way, it went down again. And now it's had a little, another little Trump bump. Yep. The other kind of part of this arc, you know, if you go back to the pandemic, Bitcoin, along with everything else, along with basically every other asset soared. And then you had this massive collapse. You had Sam Bankman freed and FTX collapse. You had two trillion dollars with a T vaporized in, you know, maybe six months. A bunch of kind of these high flying crypto guys all of a sudden had to go on the run all over the world.

4:41It was just this big disaster. A lot of people lost money for the anti crypto crowd. They're like, yeah, see, told you. It was a bunch of just scammers and bad guys. That's exactly right because it was more than just a fool. It was actually because of fraud. And you had the two big crypto barons of the time, or two of them. I guess you could say maybe there were three, Brian Armstrong of Coinbase. But then CZ of Binance was sent to prison for four months. And then, of course, you had Sam Bankman-Fried and the FTX debacle. Who's still in prison. Who's still in prison. So it was more than just a coin collapse.

5:17It totally lent, as you say, credence to all of the people who've been saying, well, hang on a second. This is all about people who are money laundering, isn't it? And there are absolutely no checks and balances. And boom, you had these two explosions, which just proved it. It's almost like everyone's forgotten that happened. Yeah, I know. And I think what's really interesting now that Trump has taken over, the crypto industry was the biggest political donor in the last election cycle after Elon Musk. So they created this thing called Fair Shake, raised$250 million. They put a bunch of money behind 58 candidates, including Donald Trump, who are all pro-crypto, 50 to 1.

5:56So it has been a real, like, again, the power of money in politics. They really got a whole new slate of crypto-friendly regulators, a crypto-friendly president who used to say crypto is based on thin air, but now says he's going to make America the crypto capital of the world. And you have 52 new Congress people who are also all pro-crypto. So again, I think that's why there's so much, even though the price is going up and down like crazy, I think there's this like real sense of optimism. And everyone in the crypto industry here is watching very closely what's happening in the US because under Rishi Sunak, there was a huge amount of focus on crypto, talking similarly about making London the crypto capital.

6:37and that seems to have died away. And you've got companies like Andreessen Horowitz that opened a branch in London a couple of years ago. It's already shut it. Andreessen Horowitz focusing on crypto in London because they're focusing on crypto in the US. Fascinating. Which is really interesting. So there are lots of crypto businesses here that are wondering whether really London is the place they want to be based. Right. Or whether actually because of the landscape changing in the US, it's actually more lucrative to move over there. Yeah, so I think we're going to do more like do a full crypto episode, hopefully next week, if all goes well.

7:13But teeing that up, there's another thing happening this week, which will give us much to talk about next week. Yeah, on Friday, President Trump's going to be hosting a crypto conference at the White House. So we might have a bit of a clearer picture, do you think? Yeah, well, I think if nothing else, there'll be a photo op a bit like his inauguration, you know, where he had all the tech billionaires lined up behind him there. there's going to be all the crypto billionaires are going to be at the White House standing shoulder to shoulder with the president talking about all the wonderful things they're going to do, strategic reserve, etc.

7:47And again, I think it's that kind of, you know, Trump is very conscious of image and what things look like. And I think if you have all of these people welcomed into the White House, and it's all positive, I think, again, it's that turning of a page of like, oh, actually, let's figure out a way to make this more legit, more grown up. and one can hope actually some proper regulation. So we avoid the last time when, you know, when$2 trillion went poof, lots of people lost money. I talked to people who were like pensioners who were lured in by these, you know, online ads and all of a sudden their retirement was gone.

8:25People were talking about suicide. I mean, it was really, really terrible. So it'll be interesting to see how it all plays out. Well, when he's there with his crypto bros and crypto barren friends, he might need a translator. Because you know how they've got their own way of saying things, their own language. They do. In fact, Annie. Are we going to do crypto jeopardy before we get to talk about groceries? I'm going to test your crypto language skills. I'm ready. I've been given three phrases. You've been given three phrases all to do with crypto. Let's take it in turns to quiz. And this is all to help President Trump in his meeting on Friday.

9:03So, Danny, what does get wrecked mean? R-E-K-T. R-E-K-T, of course. That is when you, perhaps not surprisingly, watch your crypto go from like, call it$100 to$1, you know, where the thing just kind of collapses. Yeah, yeah. All right, how about Wagme? I always read this, but I never know if that's actually how you're supposed to say it. W-A-G-M-I. I know this one. Do you? We are all going to make it. There you go. Because crypto is all about feeling. It's about faith in a new thing, right? faith in the new thing and believe it and you know you've got to live it and wag me is like it's going to be fine guys we're going to get through this there might be a dip it's dropped again but you know there'll be a high there's a high around the corner ding rug pull what's a rug pull oh yeah rug pulls well that's like speaking of the two trillion dollars that was and then it wasn't a lot of those are rug pulls where the thing about crypto is any like you and I could launch a times tech coin.

10:04Maybe we should. We probably should. So you can write a white paper, be like, we are launching this new coin. It's going to help us fund this new media venture that we're starting up. Please give us a hundred million dollars and in exchange, we'll give you some new times tech coin. And then people are like, oh my God, this is great. Here's a hundred million dollars, people all over the world kind of buying into this idea. and then that's when you and I take all the money and then we leave the country and disappear with all these people money. And they maybe get a coin, maybe they don't. If they do get the coin, it's completely worthless.

10:40But there were many, many, many, many rug pulls where people were just greed writ large. Oh, it sounds like our pension plan right there. It's all sorted. Let's do a rug pull. What about this? When Lambo. I love this one so much. This is one of my favorites. It means when are you going to be able to get a Lamborghini? Because in crypto land, the aim is to get rich and buy a Lamborghini. For our listeners at home, can you use it in a sentence? Can you use it in a sentence?

11:19How are your investments going, Danny? When Lambo? Does that work? How's your crypto portfolio? When Lambo? Yeah, it's actually hard to use in a sentence. I've got to be honest. Right, I've got my last one for you. Flippening. What is flippening? I've seen this so many times. Is this when we finally all decide that crypto is actually legit? No, that's a really, really good explanation. It maybe should mean that. No, it means when Ethereum overtakes Bitcoin as the biggest cryptocurrency. so when when there's flipping when lambo i can lambo all right last one aping oh god that's really hard um is it something to do with creating tokens with apes on them like big you know the eight pictures no that is incorrect what's the answer let's see it's it's diving two feet, all feet, whole body in to a new coin without doing any due diligence.

12:27Like aping leads to rug pulling, for example. So you go, I'm going to buy 200 times tech tokens. Yeah, yeah. I'm aping times tech token. And then we pull the rug. And then you have diamond hands. Yeah, exactly. So we should also, after we should just send this to whitehouse.go, whatever the email is for the White House, just as like a cheat sheet. exactly you can mug up before friday yeah okay so we got two each and so we've our producer calum has sent us a question on the group a tiebreaker question yes this is this is okay which of these is not a real cryptocurrency dog whiff hat fart coin bonk meow therium go ahead which of these is not a real i was gonna what the hell okay bonk uh i definitely know fart coin is real it's gotta be real it's too stupid to be like dog with hat um i'm gonna say meowetherium is not real okay and the answer is meowetherium you won yes what do i win do i win just your pride 100 fart coin no you can producer callum send me 100 fart coin immediately

13:49Now that we have dispatched with important crypto meme coins, I have a question. Weekly groceries out here, crazy expensive, which is quite disappointing because the cost of eggs and bacon and everything was supposed to go down with the new regime. They have not. But how do you shop in the UK? Do you go down to your local or you do it on the interwebs? I do it on the interwebs. It's so wonderful. I don't have to go and do a heavy weekly shop. And, you know, with kids, it just makes life easy. And you? A little bit of both. A little bit of both. But I understand from our very helpful outline that you actually brought on Tim Steiner.

14:35Yeah, so Tim Steiner, the boss of Ocado, the online grocer, which started during the dot-com boom. Kind of started the whole thing, right? Exactly, because the idea was rather than when you do your shopping online, having someone go around a supermarket with a trolley for you, fill a basket and then send it off to you. Ocado was building whole new warehouses from scratch with robots that would pick and pack the shopping. The idea being to make the whole thing far more efficient. So here we are, 20 odd years later since they were founded, the company still isn't turning a profit. it. But it's one of those interesting businesses where it sits between being a retailer and a tech business because it not only sells groceries, but it also sells the robotics that power its warehouses to other retailers.

15:28It is an amazing service. I use it. My grandma, who's 101, uses it and finds it really easy to use. Your shopping comes incredibly quickly. It's clearly more efficient than someone pick packing in a supermarket. So I started asking Tim about what the tech at the heart of the company is.

15:48For listeners then, what does Ocado's technology look like? What does one of your warehouses look like? Sure. Look, before I explain that, maybe it's just to kind of go up a level and say, what is it that they need to do? So what is it that a grocery retailer online offering an amazing proposition does like Ocado Retail here in the UK and the way we help power these other global retailers around the world. Ocado Retail has maybe 45 or 50 ,000 different products available to its customers, but all from one building because we need to be able to consolidate an order. And an average order is about 44 or 45 items, some of which have come, you know, are ambient, some of which are chilled and need to be kept at kind of four degrees C and some of which are frozen and need to be delivered at less than minus 18 degrees.

16:33Otherwise the ice cream will effectively start to melt and then you get that, you know, kind of icy stuff on the top of it and it's no good. So you need to be able to receive products from suppliers to receive it, put it away, store it. Then you need to be able to pick it and consolidate these 45 items for each customer on average. And then you need to be able to consolidate those with another 21 other customers to get it on a van in a very tight window, like a three, four, five minute window at a dock door to get it on the right van to go out to the right customer so you can deliver it. And when we arrive at that customer, we have picked and packed those 45 items into specific bags so that we don't put bleach and biscuits in the same bag, so that we don't put a can of peaches on top of an actual peach and all this kind of stuff.

17:19All has to be taken into account. so it's a very very complex challenge and the real challenge is that the grocery industry kind of taught the shopper or the user to become a shopper and it taught them to leave their home go to the store walk the aisles themselves pick the items themselves and run them through the erp system i.e the tills so they could work out how much to charge and then load their vehicle and drive them home and unpack them themselves and now the customers and the shoppers want us to do that for them, but they don't want to pay for it. You know, the delivery fees are a token of the amount of extra effort it requires.

17:56And so the challenge is grocery has always been a cost domination business, a very, very aggressive economic model business. So how do you add all this extra work in that we as a retailer are going to do and not end up with a huge extra cost? And so that's what the automation and the warehouses are about. They're about stripping out costs that are incurred, even in the models that the amazing like Sam Waltons invented at Walmart or, you know, the amazing Jack Cohens invented for Tesco's and the families that started Carrefour and Metro in these places. We have to work out how to strip out most of their costs to then be able to reinvest in the extra activities of the picking, packing, dispatching and driving and unloading in a customer's house and be able to do all of that for the cost of running a Tesco's hypermarket, a car full hypermarket.

18:48And so the automation is about driving people minutes. And what I mean by people minutes, I'm talking about our personal shoppers that are there in the warehouses. It's like, how much time do they have to use to go from a supplier's truck with pallets of product on them to a van leaving the door with a picked grocery order on it? Now, when we look at what we consider to be best in class globally for someone doing online grocery, but running it through traditional, what they call RDCs, regional distribution centres, distributing that to stores, putting it away on the shelves in the stores, then running around, picking it in the stores and then loading a vehicle.

19:26We've historically estimated somewhere around 70, 72 minutes of human endeavour in that entire process to go from the pallets to the customer order. In our newest warehouse, just outside London in Luton with sub 10 minutes today. Productivity, it's about driving immense improvements in productivity, driving immense improvements in lowering food waste so that we can reinvest that money in delivering it to the customer's doorstep also extremely efficiently and therefore give them a service that they couldn't have historically been able to support or want to pay for, if you say what I mean. Let's talk about the robots that you've got whizzing around in your warehouses.

20:10How do you describe them to people? They are probably roughly the size of a washing machine. OK. OK. But they're hollow in their underbelly, little kind of James Bond like. To make them light. Not to make them light, actually. It's an engineering challenge to have them hollow in their underbelly whilst they still only sit on the space of one of these grid squares. And so they are literally have a very thin wall and they are kind of they are hollow. So the reason is, is so that they can drop a plate down and pick up a box and bring it into its underbelly and then move around with that box. So picture those boxes with products stored in them.

20:46So you brought products in and they've ended up, we'll talk about how they end up, but they've ended up in those in those boxes. They might have 250 ,000 of these boxes in a building, for example, average building. The boxes may be sitting up to 21 high stacked on top of each other. They're not supported by the grid, but there is a grid around them to support robots on the top. The robots are moving around the top and then they can go down and take the top one off any stack and they can move it somewhere else. That's sending down the plate from their hollow underbelly. Exactly. They send down a plate from their hollow underbelly.

21:17They grip onto the tote at the top of the stack. They move it into their underbelly and then they can move it somewhere else. If it's the tote that they want because they want to take it to a pick station, they'll go over to a pick station and then they'll lower it into the pick station. If it's a tote that's got a completed customer order in it, they can lower it into a machine. That's where we do the dispatch from. Every single time they pick up a box, an algorithm is running saying, given the 250 ,000 boxes I've got in here, how full each stack is, where there are empty locations, what I know I'm going to do, what I predict I'm going to have to do in the next 12, 24, 48 hours, which one of the 25 ,000 stacks shall I drop you in so that I can minimize my amount of moves going forward.

22:00And so the robots are moving them around. So when you go on the top, it's mesmerizing to watch, but you don't actually know what they're doing. You can just see these robots moving around, stopping, pausing for a few seconds and then moving around. And when they're pausing, they're either picking something up or dropping something off. It's just quite extraordinary. The whole aim is just productivity. And it's what this country needs, both in the, you know, public and private sector. But that's what it's all about, driving human levels of productivity. Robotic picking in grocery is super complex.

22:30I was going to ask, what's the hardest thing for a robotic arm to pick? The challenge, just to explain it though, is you've been able to go to kind of trade fairs around the world for automation, see things picking stuff for quite a few years now. But picking something up is, well, first of all, when you used to see that, they would come on a tray very neatly presented. So they would be very neatly laid out for the robot to know exactly where it needed to go to get a single item. And obviously in the real world in groceries with the volume of stuff and the way it gets presented and the totes moving around, it's all much more dynamic and random.

23:05You know, you just kind of, it's all been shaken, you know, moved around and then you've got to go in and I've got to pick a single toothbrush or something like that. I've got to pick a small box or a small tin or a jar or whatever it might be. That's hard. Now increasing the level of complexity is, but I now need to place it into the customer's bag, not damage any other products. And importantly, I can't end up with more bags than when a human did it. Because if I end up with more bags than when a human did it, whilst I save financial costs for having less humans picking or the humans that are picking, you know, having to pick less type of thing, if I create more bags, I end up with an inefficiency in delivery.

23:44I may end up with more vans on the roads, bad for the environment, and it's bad for the cost structure. The delivery is so much more expensive than the picking because we made the whole warehouse so efficient that if we created five or 10 % more bags as a result of having robots pack them than humans pack them, completely wasted project. If the error rate of the robots was 1 % worse than the error rate of the humans, totally negated the benefit of doing it. So we've got to do it as accurately and with as dense packing capabilities. And that's much more complex than just picking something up. But I've been in the site before and the team obviously constantly making progress.

24:23I'm not a part of the team doing it. And suddenly I look over and I see it picking a melon and you're like, wow, it's picking a, not a packaged melon, a melon. And then you look over and it was picking a string bag with lemons and limes in it. And you're thinking, whoa, those are products I would have thought would take us a while to be, you know, So picking a cereal box, okay, it's got a flat surface. It's very identifiable. It's generic in shape. Every one is exactly the same. But you start picking loose string bags with lemons and limes in it, it's quite a feat. And a melon, which you could damage, I guess, as well.

25:00You're going to damage less than if, you know, obviously you have to damage it less than a human. And we monitor all of those stats. If the robot damaged it more than the humans, we wouldn't pick it that way.

25:18so what's the next step in robotics for you that would would allow you to automate things even more um it's actually just a a constant process there's not a single thing that we need somebody to invent i mean the single biggest thing that somebody could invent which we are starting to see that whether their capability will get enough would obviously be the humanoid that could do the delivery at the very last, not the last mile, it's really the last few metres. Because when we can have driverless vans, and I know you've spoken about the Waymos in California in some of your sessions, I was in those in the summer, they are very impressive.

25:54We're an investor in Wave, the other company you were speaking about. So at some point, the vans will drive to the customers' homes without the driver needing to intervene. But we still need someone to jump out and deliver the customers groceries. And you see that being a potentially humanoid robot. Well, I'm saying at the moment that's a human. If you said to me, what was the single biggest thing that could change the economics of our business, of our clients' businesses, it would be something to do that. Because otherwise the driverless van is interesting, but from a cost structure, it will hopefully lower the amount of damage that happens in vehicles.

26:26But it's not going to lower our costs because we still need someone in the van. Getting that person out, that is the single biggest cost after the actual cost of the goods themselves. That's the thing that would be a real... Wearing in a cardio jacket. Yeah, yeah, exactly. A humanoid in a cardio jacket. But I think we're quite a way off that. Tell me about your investment in Wave then, which is the British driverless car company, driverless car, driverless vehicle. When did you make the investment and how much of the company do you own? Offhand, I can't remember exactly when we made it. It was two, three years ago or something like that from memory, but I would need to check the date.

27:02Again, I need to check exactly, but I think we've got between 2 % and 3 % of the business. Why did we invest? Just because we obviously driverless vehicles would be a game changer for our business. We wanted to be involved. And whilst we vertically integrated in so many different areas, we did not think that we ought to be trying to develop our own driverless stack. So we actually have investments in more than one business that building software hardware to do driverless deliveries. with a view that one day, you know, we just want to be involved. So we don't want to like one day just discover these vans exist and not be involved, not have experimented, not have understood what's going on type of thing.

27:43And are you, is it right that you're sending data to them? I mean, do you film things from your vans? We've done stuff with them. I think the other thing just to understand is if you think about, just as a layman, and it's not my field, but just as a layman, the kind of the two challenges of driverless vehicles and their long-term adoption and why they're in a city like San Fran and yet you don't drive between LA and San Fran in one. The energy in a vehicle is obviously exponential as the speed increases. It's not linear as the speed increases, it's exponential. So if you're travelling at 70, you've got five times the energy if you're travelling at 30.

28:19So if, and the stopping distances therefore are dramatically longer because you're already starting at a higher speed and you can't de-accelerate at the same pace. So the punchline of that is when you think about what a robot needs to do and it needs or the software needs to do and it needs to look at what could happen in that stopping distance. Can little Johnny run out with his ball and, you know, what do I do to avoid it type of thing? It's therefore much easier to get something going that is speed limited. So if you speed limited your automated vehicle to 40 miles an hour, it would be easier.

28:52The second challenge is that one of when a human's driving, if they are faced with a split second decision of I'm either going to have to drive into a wall and kill myself or my passenger, or I'm going to run over the kid that's just run in front of me. That is something that the car manufacturers are very concerned about, kind of being on the far end of the litigation. If you're not driving a passenger around, then you can always kill the car. If you're just driving the shopping around, you can kill the car. So what we're aware of is we think that grocery delivery should be an earlier, capable of being an earlier adopter of that technology.

29:25because your groceries won't get frustrated if they're getting overtaken. Or if they end up going around in circles like that poor bloke in a Waymo the other day. So the groceries could be in a vehicle that's designed for pedestrian safety. The groceries could be in a vehicle that is speed limited. And so we hope that working with people at Alex, we can see automated vehicles for us happening possibly before you see them in general use cases and they're driving you around the UK. Have you got a date in your head? No, no, I think, you know, it's not tomorrow, if you say what I mean. But as you say, you've been in WAVE, you've been in Waymos, it's definitely coming.

30:12How does it feel being a British business operating in America today? Look, I mean, I'm yet to see a change, obviously. And so, you know, we're wary of, I think the president said, yesterday that his fate you know his favorite word after religion love and something else i can't remember and it was tariffs right and so tariffs is a word that he he likes to throw around a lot we produce some of the hardware globally we produce most of the software in the uk and and also globally um we're obviously a business that is a uk-based business listed on the london stock exchange. And we obviously would, you know, the US is one of, it's our second largest client, our partner in the US, Kroger.

30:57We want to sell them a lot of facilities in the future. And obviously we don't want to be burdened by tariffs, but we have no idea yet. So we have no idea if that means that we're going to have to react in some way and manufacture more or write more or do something. We don't know. I don't think anybody does yet how that might influence how we have to operate our business. Otherwise, just generally being a UK company, selling robots and software to the United States, to Japan, to Korea, it feels great. It feels great that you can build a business in the UK and you can write software in the UK and you can design and build robots in the UK and that they are globally best in class and that retailers in countries that are more widely thought of as innovation, you know, countries and have a longer history in things like software and robotics want to buy our made in Britain solutions.

31:55So, you know, generally it feels great. But a bit of a wait and see on what the Trump administration really means. Absolutely. One of the other big changes we've seen recently is the rapid delivery partners, the likes of Deliveroo, the likes of Just Eat selling groceries. How much of a challenge is that to you? And how are you seeing customer behaviour change because of that? Sure. Look, I've been talking about this sector from when we weren't talking about Deliveroo and Just Eat and we were talking about Get Here and Gorillaz and stuff. And I think there were people at times saying the entire grocery market was going to go that way.

32:25And what I always try and do is take the analogy back to bricks and mortar stores and where they sit today. And today of bricks and mortar stores, you've got kind of petrol forecourts and corner shops. You've got high street convenience. You've got high street supermarkets. You've got hypermarkets. And they tend on the whole to serve different missions. If you urgently need a pot of cream, you don't drive to a hypermarket. But if you want to stock up your fridge with a week's worth of shopping, you don't go to petrol forecourt. And generally the way it works is that the ultra convenience is a smaller range at a noticeably higher price, which compensates for the extra costs of running multiple stores, small ranges, you know, more expensive locations, et cetera, et cetera.

33:09And so when you look online, it is significantly more expensive to buy the same amount of, the same items of groceries through one of those services than it is to buy them at a hypermarket or it is to buy them on, you know, ocado.com. And therefore what they are, you know, who are they cannibalizing? The likes of Just Eat or Deliveroo are cannibalizing corner shops, petrol forecourts, small convenience stores. They're not cannibalizing hypermarkets. They're not cannibalizing full service, full range, cheap online grocery services like Ocado.com. What I would expect to see, though, in the coming years is we've got new technology that we're just rolling out now with one of our global clients.

33:55Early days, hope to have some influence here in the UK markets. in the next year or so where we can do more shorter lead time deliveries from the big warehouses using the big vans still with the levels of efficiency that can drive but today the majority of our customers are shopping today for tomorrow and i think in five years time the majority of our customers will be shopping today for today not half an hour half an hour is an immediacy need that you'll always pay a premium for it will always be a point-to-points type delivery and we are in that business as well we have a few sites around london we have a service called zoom we're onwardly developing that technology so that we will be able to provide to our global partners the most efficient, the biggest, to allow them to have offers with the biggest ranges and have the lowest economics in serving that ultra immediacy market.

34:44I just always thought it was a bit of a tortoise and a hare the way it was going. There were people throwing billions of dollars of VC money at it with no real differentiator other than the amount of money they had raised. And they've all left the field now. There you go, Danny. So you might get a humanoid robot coming out of a van walking from the shop little lccardo vest well it's funny i was thinking about that as he was talking humanoids are kind of having a moment because you have nvidia they've announced this whole roadmap to try to get kind of humanoid robots create the operating system that they could all use you have a couple big startups out here one called figure they're trying to raise money at a 38 billion dollar valuation they're four years old and you have I mean, other companies like One X who are, you know, putting robots in homes for the first time this year.

35:33And so like the humanoid aspect of things is, you know, it's definitely one of these areas that all of a sudden is getting a lot of investment and a lot of attention. And of course, you have Elon Musk with Optimus saying it's going to his humanoid Optimus robots can be bigger than the car business. So they're all running quite hard on that. But they have to be for such specific tasks, don't they? because when Tim was talking there about what his warehouses look like, and he's right, they're mesmerizing. When you see these little boxes scooching over, well, the hollow boxes scooching over big towers of boxes, dropping things in and out, actually having a humanoid robot in that environment is really, really inefficient.

36:11So you can see where humanoids fit into certain jobs, as you described being a delivery driver and walking into someone's home, perhaps where someone expects you to look like a human. But if you're building like a pick-pack system, maybe doesn't work for that yeah well i mean he's obviously building like a whole like warehouse size machine dedicated solely to like these these certain types of robots so humanoids don't work there but i think just on the economics of it it's just like you know he was talking about oh how gorillas and just eat and all these other people have like left the field in terms of grocery delivery because he's like well you know they're just way more expensive but it gets to the question of like well you're still not making money you are doing what uber did for years which is subsidizing your service because otherwise people wouldn't pay for it and so again it gets this idea of like how do you get to a point barring like replacing all human drivers with humanoids to where you can actually make money or or kind of double your charge your delivery charges to a point where you can actually make money or whatever is required but it's it's totally fascinating because just like listening to him describe the complexity of doing this in a fully automated way i mean it kind of made my head hurt and i was just like is If he's to really charge what it costs to build what they have built, how many people would still use it?

37:43His argument is, I guess, you build more of them, then the technology becomes cheaper. And crucially, then you start selling that technology to other people. And that is what all of the investors in Ocado are really watching for. It's not the money that they're making selling groceries. Yeah. The real money is coming from, like you said, the partnerships that they're making with other retailers. And I think that's the thing. But again, it gets to that unity economics of just like, does the system they're selling wash its face financially? It's interesting, the Uber point. I remember so well when their IPO happened and their prospectus was published.

38:21And it was in one of the risks that we may never be profitable. I remember reporting that at the time. I was sitting next to John Humphreys in the Today Program studio. doing. He went, what do you mean they might never become profitable? It's like, well, that's, that's the risk. Yeah. To that point around Uber goes public. They're like, oh, we made everybody profitable. And they've had a kind of a rough ride up and down, but they're doing really well now as a public company. And again, there was a willingness of Wall Street to be like, you know what, this is a transformational technology. We have faith that this company is going to, this executive team is going to figure it out, jack up prices, you know, reduce what they pay to drivers, whatever they need to do to become a profitable business.

39:04And so they have, but it just reflects this willingness of, you know, there's a difference between the U S market and the UK market because Okada, if you look at its share price, it's down 95 % since 2021. And obviously 2021, it was a pandemic. Things were crazy, but that's a dramatic drop. And there are very few publicly traded tech companies in the UK. You know, Okada fancies itself a tech company. It's not classified as a tech company. It's classified as a retailer. There are only three companies classified as software businesses. So basically on the FTSE 100, the list of top 100 listed companies in the UK, we just don't have many technology companies at all.

39:49Or at least there are plenty of companies which think of themselves as tech companies, but they're not classified as such. And the argument that people like Tim Steiner, tech entrepreneurs in the UK always make, is that investors in the city just don't understand tech companies. When you're looking at the top 100 listed businesses in the UK, they like oil and gas businesses. They're supermarkets. They're very, very stable. They provide, well, yeah, and you'd know all about those from your previous roles. Or professional services. Yeah, or professional services. And they provide stable dividends, stable returns for investors.

40:22And so they don't know what to do with a company that takes a lot longer to get off the ground. And analysts here keep calling Ocado the jam tomorrow stock. As you said, it was riding high during the pandemic. Even before that, I think it was 2019. It was the best performer in the FTSE 100. Now it's dropped out of the list of top 100 companies. It's now a FTSE 250 business. And its shares dropped about 19 % the other day when its results came out because it said it thought it was going to sell less technology than it had done before. I should say, though, Danny, I'm sorry, we did do that interview a month ago, so we didn't discuss his recent results.

41:03But yes, they had quite an impact on the share price, which took a bit of a battering. It'll be interesting to see how it goes, but I know it's been a kind of constant point of tension between Okado and Tim Steiner in particular with City Analysts have like, to your point, hey man you guys just don't get it be interesting as well though i think to see what generative ai does to the company whether that changes it at all whether advances in robotics change it i mean they've just said they're cutting jobs uh in their tech teams research and engineering departments i don't know maybe that's incredibly marginal to your point about when it needs such enormous investment in in a capital expenditure but maybe i guess the tim steiner argument is you scale the tech gets cheaper you sell more of it retailers who are traditional bricks and mortar retailers are looking for companies like ocado to build their infrastructure for them because if you're a walmart shop type thing it is as you said more expensive and it takes longer to pick back than you if you've got a bespoke service well that's the that's the thing yeah there's a saying out here and they're not exactly they're not building hardware per se but they're building things in atoms not bits but that's saying out here is hardware is hard you know software is hard to build but then once it's built then it's you know you sell it and it's a it's you just that that becomes kind of a money printing machine if it sells well whereas this is just it's yeah it's just a classic example of like trying to put technology out into the world in a physical way is just a completely different level of difficulty especially when you're talking about economics.

42:45And you're just like, man, 20 years is a long time to lose money. And I know Amazon famously lost money for years and years and years and years, and they figured it out. And it just seems like it's not at all clear that Al-Qaeda will. Well, he says it's around the corner. I thought it was very interesting what he said about Trump and tariffs, because that must be terrifying if you're selling hardware into America at the moment. Just wondering about the impact of that. And there's a lot of nervousness over here about how that's going to shake down. And obviously, Ocado, people might not think about it fitting into that box because they see them as a grocer.

43:21But really, they are selling robots. Yeah. Because, you know, special relationship is how special is it? Who knows what's happening, what's going to happen tomorrow with the Trump administration. but as he said if one of his big bets is on america we all know um the long tortured history of british companies trying to quote unquote make it in america and that's in a i would say you know more predictable times so you know will he be tariffed will that relationship be kind of healthy and fine or will it take a left turn who knows it just feels like it's another challenge or another potential kind of like, you know, unknown for a company that has facing a lot of unknowns.

44:06Yeah. And one which an unknown, if you're investing that much in infrastructure is pretty tricky. Yeah.

44:17Quickly, before we go, we should pay tribute to Skype, Estonia's most famous export, which in May will be retired, quote unquote, according to its latest owner, Microsoft. Oh, it's a sad moment, isn't it? What, 22 years after it was founded and it was so, so life changing at its time. It was, it was. So it's going, it's very sad. What do we think went wrong? So you asked earlier about like when was the last time I used it? And I think that's what's so interesting because now we have WhatsApp and we have FaceTime And we have all these ways to like basically do what Skype did. And it's just, I think it's a lesson.

45:00It reminds me of Facebook. You know, a large part of Facebook's campus is in the old Sun Microsystems corporate campus. And Sun Microsystems, if you recall during the dot-com boom, they're like, we're the dot dot-com. And it was like this, the, one of the big tech companies. And then it just got completely overtaken. It's died. and Mark Zuckerberg would like, has left up the sun sign on the campus as a reminder that like nothing is assured, especially in technology. Don't get complacent. Correct. And it's like this, like Skype just seemed to, you know, it was also like a strange trajectory and that it was bought by eBay.

45:49They wrote it down, didn't they? They had a massive write down on it. Yeah. And then it was bought by some private equity guys and then Microsoft bought it. And it was kind of this like it became this kind of tech orphan getting passed around as kind of all these basically services that were better than Skype popped up. Now it's irrelevant, you know. But it was completely revolutionary in its day. Totally. And I have to say, it had a massive impact on the European tech ecosystem as well. Because as you have so often in Silicon Valley, when a company gets sold and a load of money goes into the hands of entrepreneurs and then they start new businesses, that's what happened with Skype.

46:29So when the two founders sold it for$2.6 billion to eBay, suddenly there was a huge amount of cash in the system. Niklas Zennstrom started a fund here called Atomico to invest in European tech. And they put out some stats recently saying that former Skype staff has started 225 companies since leaving Skype, including Peloton, Bolt, and Wise. Wow. And so you don't get those sorts of massive exits in Europe are quite rare. Yeah. So I think it's left its legacy, even if its dulcet tones haven't survived. Yeah, and I think that's the lesson and also the kind of, I guess it makes it a bit of a cautionary tale insofar as that like man if you had seven or eight or nine or ten skypes in Europe and there's you know obviously ingenuity and smarts is not the issue I think it's regulation I think it's mindset and there's a bunch of reasons why it's not happening but like you saw 200 companies from one big success but anyway yeah so it's just like it's kind of like it's an amazing story and it's also just shows you what's possible if you just have like you know if you hit a few more home runs it becomes this virtuous cycle but you need to hit some more home runs i'm sorry not to use a baseball analogy i don't even know i get it i get it it makes sense um thank you for translating um you know we're on a we're on a new version of Skype today.

48:01It's allowing us to chat. Well, you know, like I said, if not for Skype, I would probably not be married to my wife and have my children and live out here on the West Coast. Why don't we play the podcast out with the Skype ringtone? Let's do that.