ESG initiatives should be mandated for MSMEs in India: Bert Labs

Bangalore-based start-up Bert Labs is working on deploying AI and IoT to help companies to make their processes greener and to reduce their carbon footprints


“I needed new challenges and that got me started on my journey as an entrepreneur. I wanted to focus on solving complex real-world problems through innovation. Bert Labs was conceptualised with this objective,” says Rohit Kochar, Founder, Executive Chairman & CEO of Bert Labs, a company which uses AI and IoT solutions to make companies more responsible towards climate change.

Lately, energy efficiency has taken centre stage for Indian companies, especially for the manufacturing one’s. This is due to several reasons—climate change, sustainability, tech upgradation and money saving goals in the long run.

So, there has been a surge in the demand for affordable, energy efficient solutions and Bert Labs is helping to do the same for many organisations.

One problem at a time

They started off with commercial buildings, as most manufacturing processes are energy guzzlers, and Bert Labs solved this problem using their ingenuity and innovation to make HVAC systems more efficient. Bert Labs have helped FMCG brand Unilever to reduce its carbon footprint by 52 per cent.

“I felt that I needed to address the energy side of the problem. Choosing a problem statement which does not have a glass ceiling was very critical. Energy and healthcare were two such problem statements. And I was very clear on what needs to be done in both these areas,” Kochar avers.

Kochar felt that within the 3 areas in the energy sector—energy generation, distribution and consumption, the low hanging fruit was energy consumption. He wanted to aid the manufacturing plants, the commercial buildings and the large enterprises globally in meeting their energy efficiency goals. That became the focus for him. “And I started working on ideas and solutions in stealth mode with Dice Automations. Later, it was incorporated as Bert Labs in early 2017,” he tells us.

Tech stack to the rescue

Bert Labs has a suite of various solutions that are AI and IoT powered and are 360 degree fully automated and integrated control solutions in which the Bert Nova, the Bert Optimus, the Bert Maximus, and the Bert Qrious work seamlessly with each other.

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“In the five years of our journey, we have developed a comprehensive set of solutions,” Kochar informs us.

The Bert Maximus is a suite of 7 IoT devices. The Bert Qrious is an IoT powered wireless sensor network. The Bert Nova is a distributed computing platform. The Bert Optimus is an AI platform which is the brain of the solution, and the Bert Geminus is its Digital Twin. There is a closed loop for these sub-platforms to execute the controls for energy efficiency improvement, for production efficiency improvement and for supply chain efficiency improvement.

“We also have the Bert Titan and the Bert Aksh, two edge computing devices which can run AI models. The Bert Aksh can capture digital and thermal images and computer vision algorithms. The Bert Titan is an edge computing device that can run AI models while also acting as a base station for our wireless sensor network,” he adds.

Kochar, a fan of the movie Transformers, named the entire tech stack after the movie. “The names were very organic and came from various people working in this organisation, as Bert Labs is truly inclusive in terms of how everyone works. We are trademarking these names. Because the name ‘Transformer’ is obviously not available on its own, using Bert as a prefix made logical sense,” he further adds.


Mindset behind becoming an entrepreneur

Rohit Kochar has had a 25-year-old illustrious corporate career, building high growth, highly profitable and high valuation global companies such as the American Express Bank, GE, the Hays PLC Group and Apollo Global among others. When he made up his mind to become an entrepreneur, the IT industry was going through a phase of consolidation.

“The Infosyss, Accentures and IBMs of the world were very active. Second tier companies like Mindtree were unlikely to survive unless their offerings were highly specialised. Consolidation was the need of the hour. And that was my theme as an entrepreneur. I would have evaluated about 25 – 30 companies in the US, Europe and Asia including India for the buy and build-strategy, but we were not able to consummate a deal, for some reason or the other,” Kochar reminisces.

Towards the end of 2016, Kochar pivoted as an entrepreneur. He started to do angel investing.

“I invested in a few American and Indian businesses, but the objective was to start my own company. This period allowed me to evaluate what kinds of problems I would like to solve; what tech product platform did I want to build, etc. I was clear that I did not want to do anything which I had previously done. As an entrepreneur, I wanted to focus on solving complex real-world problems through innovation. The IT industry has obviously done phenomenally well, and I have been blessed to contribute towards this growth in my own small way. However, we did not innovate enough,” he says.

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According to Kochar, the actual seed of entrepreneurship was planted in his brain during an interview. This was around the time when he was leaving Macmillan as CEO and was looking for his next big challenge.

“During an interview process, the panel of three IT industry stalwarts told me that this is the first time that we are not hiring the best candidate, because you are better suited to be an entrepreneur. That stuck with me and helped to germinate the idea of becoming an entrepreneur within me,” he says.

Challenges at work

Kochar single handily built Bert Labs. “I don’t come with a serial entrepreneurial mindset, rather I come with an institution building mindset,” says Kochar. However, he also experienced challenges at various levels—pertaining to technology, people and clients.

“We pursue a problem led approach rather than a product led approach. During this process, we had to deal with lots of issues to seek a comprehensible solution. For example, HVAC is the number one energy guzzler, and our next step was to identify the gaps in the solutions for this problem that were being provided by the existing solution providers,” he adds.

He realised that solving complex problems and making manufacturing greener by using AI solutions was quite difficult. “We had to thoroughly understand equipment to do so. Because the more efficiently the equipment runs, the more efficiently the entire plant runs and the energy consumption is reduced as well,” he continues.

Then there are the product related challenges.

“Hardware is a major challenge, in terms of the ecosystem and in terms of finding the right manufacturers. Then there is the integration between hardware and software, how do we make it seamless from the perspective of upstream data flow and downstream data flow because that is the fundamental requirement for our solution to work and deliver,” Kochar adds.

Furthermore, the automated solution for factories is being studied in silos. They are implementing various tech solutions from various tech companies to achieve very specific application-related goals in their manufacturing plants. This is also a challenge.

“Our role often ends up as being that of a consultant. Where over the next 2 to 10 years, we prepare them for the future. But still, only a few companies actually think of digital transformation strategies. Another challenge is changing the mindsets of the people working in the manufacturing plants – that’s where the conflict between AI and human starts,” he says.


There is a skill gap

AI can solve many problems. But finding the right talent with the right skill set is another challenge. To write an original piece of code that solves a problem with no reference point is a skill that requires a lot of training.

“We operate in a niche segment, and we still do not have enough people with the right skillsets for neural network Reinforcement Learning (RL). When we get to hiring RL talent, they are almost non-existent in the marketplace,” Kochar points out.

“Whether they are from the IITs, the BITs or the IIMs, engineers have very little industry readiness. All that they learn are their engineering skills, technology stack, the scripting languages and the frameworks. A lot of work needs to be done within these institutions to teach their students to solve real-world problems and to inculcate the right attitudes within them,” he adds.

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Also, the ability to retain people has become a major challenge. “This is because nowadays in the tech field, there are opportunities galore and for a few lakhs, the employees move on quickly. This is very rampant,” he elaborates.

ESG should be mandated for MSMEs

According to Kochar, on the policy front, India still does not have a stringent policy which mandates ESG goals across sectors. “Sustainability goals are mandatory in the US, UK, and Europe. Unilever’s global CEO is driven by his sustainability goals around energy and decarbonisation by 2025 or 2030, as is the case for most companies in the developed markets. From WRT to Unilever, we started in India. But I feel that India lacks a policy that mandates ESG goals for businesses of all sizes. It is happening gradually, but not as a formal policy that must be followed by all businesses,” he avers.

Kochar urges the government to make it mandatory for the MSMEs. “All companies, including the small and medium enterprises and the large companies should be mandated to have sustainability and ESG related goals. Also, awareness about energy efficiency improvement and decarbonisation should be propagated amongst them,” he says.

Kochar adds that the AI ecosystem needs to be strengthened, as there are no policies which govern IoT, AI or data. “The policies are not updated and are not in line with the requirements of AI-IoT as of today,” he says.

The company’s focus ahead

For the first three years, Bert Labs was bootstrapped.

Kochar, not being a VC culture fan, avoided funding rounds.

“At Bert Labs, the investment philosophy is that we will rely on our own revenues and profits. We only look for outside investment in three areas–innovation, global expansion, and people, from ultra HNIs and family offices, who bring in the strong credentials which we need for Bert Labs. With this temperament, we are building this company. From that perspective, yes, we have brought in investment but very diligently,” he explains.

Currently, the company is making approximately Rs 100 crores in revenue. It is working with around 50 clients and has signed up with another 20+ clients. While the team is in the process of signing up around 30+ more clients. Their focus is to work with more MSMEs, as they work closely with them as partners at various levels.

“In terms of revenue, our target is to achieve Rs 500 crores by March’23 and then in 23-24, grow at 500 per cent to about Rs 2,500 crores. This expansion will be global in nature, as we begin to work with customers in the Middle East, the US and Europe. With these clients we will be growing as we sign tenure contractual agreements of 15 years with them. We will be 150 people by March’23 and will become 3,000 plus people by FY 26, globally,” Kochar tells us.

Finally, Kochar feels that there is still a lot that he needs to achieve, especially in IP creation and on innovating new solutions to drive sustainability with the help of AI.

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