- Jeff Ralston, YC's president, interviews Alex and Brandon from Embark Trucks.
- Embark Trucks went through YC 5 years ago and is working on commercializing self-driving trucks.
- They started as undergraduate students at the University of Waterloo and dropped out to pursue their self-driving golf cart project.
- Embark now has 200 employees and operates trucks across the US Sunbelt.
- Their vision is to have their first commercial freight operation without a driver in 2023.
- They plan to expand their operations across the Sun Belt and eventually tackle more complex areas like snow.
- The founders initially had a passion for robotics and building technology, which eventually led to the founding of Embark Trucks.
- They applied to YC with the idea of building an electric campus shuttle using their self-driving technology.
- The founders acknowledge the tension between the complex technical problem of self-driving and the need to build a viable business.

- The company built a second vehicle in a short amount of time during YC.
- The trucks took longer to build, but were more effective.
- The company learned important lessons from university campuses about the complexity of technology solutions and the need to focus on specific problems.
- The company realized that there wasn't a desperate need for self-driving shuttles on campuses.
- The company transitioned from self-driving shuttles to self-driving trucks after receiving interest and funding from a mining company in Australia.
- The decision was made to finish executing the shuttle project and then evaluate the business case for self-driving trucks.
- The YC interview was quick and unclear, but the founders felt comforted by Silicon Valley's acceptance of young founders.

- The founders of Embark prepared extensively for their interview, but felt that they were not asked any new questions.
- Demo day went well for Embark, as they had recently acquired Cruise, a self-driving car company, which impressed investors.
- Embark raised $2 million in their seed round at a valuation of less than $10 million.
- The transformative aspects of YC for Embark were: gaining market experience, accessing a valuable network, and receiving validation and belief from YC.
- After YC, Embark shifted their focus to the trucking industry due to its simple problem and great business potential.
- Embark plans to use a hub-to-hub model for trucking, with automated trucks handling the long-range middle mile.

- The company focuses on solving the middle mile problem rather than city street driving
- The trucking industry is under pressure with a shortage of truck drivers and logistics problems
- The industry is a massive opportunity for innovation
- The company had a clear vision from the beginning and has been able to focus on it for 6 years
- Hiring experienced employees was a challenge, but the company was able to attract top talent by showing them the product and sharing similar values
- The company went through low moments but was able to overcome them and adapt

- The speaker discusses the challenges of picking a new business and the structured process they went through to make a decision.
- The culture at Embark is described as having a high degree of ownership and pride in the work, with experts in various fields working together.
- Embark is going through a SPAC merger, which will result in the company becoming public and receiving up to $600 million.
- The founders emphasize the importance of questioning why something won't work and taking incremental steps towards success.
- The speaker expresses gratitude for the opportunity to work with Embark and wishes them luck in the future.

- Embark Trucks, a company that commercializes self-driving trucks, was interviewed by Jeff Ralston, YC's president.
- The founders started as undergraduate students and dropped out to pursue their self-driving golf cart project.
- Embark now has 200 employees and operates trucks across the US Sunbelt.
- Their vision is to have their first commercial freight operation without a driver in 2023.
- They plan to expand their operations across the Sun Belt and eventually tackle more complex areas like snow.
- The company transitioned from self-driving shuttles to self-driving trucks after receiving interest and funding from a mining company in Australia.
- Embark raised $2 million in their seed round at a valuation of less than $10 million.
- The transformative aspects of YC for Embark were: gaining market experience, accessing a valuable network, and receiving validation and belief from YC.
- Embark plans to use a hub-to-hub model for trucking, focusing on the middle mile problem rather than city street driving.
- The trucking industry is under pressure with a shortage of truck drivers and logistics problems, presenting a massive opportunity for innovation.
- The company has faced challenges but has been able to overcome them and adapt.
- Embark is going through a SPAC merger, which will result in the company becoming public and receiving up to $600 million.

In this episode, the founders of Embark Trucks (YC W16), Alex Rodrigues and Brandon Moak, catch up with YC President Geoff Ralston. Alex and Brandon share their evolution from Varden Labs, building self-driving shuttles for use on campuses, to building self-driving semi trucks with Embark Trucks. They also reflect on their time at YC, their learnings building a publicly-traded, multi-billion dollar, hard-tech company, and share their advice for new founders.

Chapters
00:00:00 Intro
00:02:36 Embark Trucks' Vision
00:04:38 The Founding Story
00:08:43 Going Through Y Combinator with Varden Labs
00:11:12 Learnings from YC
00:14:26 Transition from Varden Labs to Embark Trucks
00:18:22 Their YC Interview
00:21:01 YC Demo Day
00:24:21 Reflecting on the Most Transformative Things for Embark from YC
00:28:33 How Embark Trucks Came to Be
00:34:38 How they Hired a World Class Team 
00:39:32 The Lows and Dealing with Adversity
00:41:12 Culture and Working at Embark
00:43:37 Looking to the Future and Going Public
00:46:49 Advice for Future Founders

Hey everyone, I'm Jeff Ralston, YC's president, and I'm thrilled to be here with my friends Alex and Brandon from Embark Trucks.

Now Embark went through YC 5 years ago in the winter of 2016, and they've been through an incredible journey from, directly from their undergraduate days at the University of Waterloo, they have a few days there, to meet the founders of Embark.

So Alex, Brandon, welcome, and maybe we can just start off with you guys introducing yourselves and your company.

Sure, So I'm Brandon, I'm the CTO and co-founder of Embark, and we're working on commercializing the first self-driving trucks.

Maybe I'll give a little bit of background on us since Brandon decided to be somewhat vague.

Yeah, and maybe like, like, that's like, we're commercializing self-driving trucks.

My gosh, like maybe dig in, like, give us a little color on that because that sounds pretty huge.

Yeah, so we're, Brandon and I met, as you mentioned, we both went to Waterloo.

We met studying mechatronics engineering together.

We did a little over 2 years of Waterloo before we dropped out and came down to San Francisco, well to Los Altos at the time to do YC, and to take the self-driving golf cart that we'd built, that was the first self-driving vehicle in Canada.

We had a video of this golf cart that we submitted to you guys as part of the initial package.

And people, I've shown it to a few people and they ask like, why is the video quality so terrible?

Because it's like, it's bouncing around and you can't really see anything.

And I'm like, Well, see, imagine that we were 3 college students and there wasn't a company, there was just a golf cart and a bunch of software and then we had to fake a video.

We came down, we did YC, Embark is now 200 people, a little bit over.

Maybe I'll let Brandon kind of tell a little bit about what the vision is and the product that we're gonna bring out.

Yeah, and so looking forward from here, Embark is 200 engineers, and we're looking to our very first commercial freight operation without a driver in 2023.

Obviously, we still have a ton of work to do to get to that point.

Everything from safety engineering, electrical engineering, mechanical engineering, and robotics engineering.

But I think in 2023 The way I'm thinking about it is this will be the inflection point for the business.

This will be, honest to God, the very first time that we'll have our trucks moving freight in a real commercial application.

And it'll just be the first step in a long journey for what the company will become.

So 2023 is the very first freight run we'll do.

2024 we start looking to commercialize and that's expansion across the Sun Belt and eventually up north from where we're from in Canada to tackle interesting scenarios like snow and more of the complex areas.

So I have so many questions to ask about self-driving and the current status of the company and where you're going to elaborate on some of those things.

I remember taking a drive in your truck a few years ago, sitting back with all, it seemed like there were 4000000 blinking lights and 27 computers back there in the back of the cab of the truck.

But Maybe we can roll back just a little bit.

Alex kind of threw in that you guys were studying mechatronics engineering, which I guess is a fancy couple of Canadian words for robotics.

So you guys were like, okay, so you're like 19 and 20 years old or something like that.

And, and you're studying robotics and like, tell us how did the, what's the founding story of Varden Labs, which is what you were called back then, right?

And maybe we can roll forward from there.

I was going to say, maybe before we even dive into some of the story there, I think a lot of this for us was driven out of a passion of just robotics in general.

Alex and I had met at the University of Waterloo in our robotics program and I think we came together through a love of just building technology, robotics, spinning LED displays.

Our friendship I think was built upon that And I think the journey that we were about to embark on, pun intended, was just a natural evolution of how we acted and interacted in the earliest days.

Did you guys know you were going to start a company?

I love the fact, I always tell kids at school, what do I do?

I say build stuff and I love the fact that you guys resonated around building stuff.

You built a freaking self-driving golf cart.

So, but how did like this passion for building stuff evolve into let's start a company, which is an interesting leap.

Well, I'll let you in on a bit of a secret here, Jeff, which is that we didn't really intend to try to start a company at first.

We built like, you hear some of the early stuff, you'd be like, yeah, there's no commercial application for these products.

We had a N64 controller that we were really irritated about because the little joystick was too much backlash.

So we replaced the joystick with an Xbox 360 joystick, but still inside the N64 controller.

And it did help me win a lot of games of Super Smash Bros.

Brandon and I worked on that together with our friend Mike.

And then we built a, Brandon mentioned, like a spinning LED screen.

You put it on a motor, you spin it really fast, and you change the LEDs fast enough, and it's kind of like a 2D screen.

So you could show like stuff on this as long as you spun it really fast, it was kind of cool.

And then kind of the next thing that happened was this golf cart.

And it was a golf cart that drove itself.

And we kind of had some idea of how it might be a business, but really I think we were working on the technology because we thought it was incredibly interesting.

And so I almost think the first 2 years or so of our relationship and of, you know, what would eventually become Barden Labs was really us and our friends in Velocity, Velocity being Waterloo's entrepreneurship residence.

Basically, it was like us and our friends building fun engineering stuff and having some vague idea that we wanted it to be useful to people.

But it wasn't like we were trying to build a business.

We were trying to build stuff that we thought was cool, that we thought was interesting, we thought might someday be useful.

And then once we get into YC, you really start to hear more of the transition to actually turning it into a business.

Yeah, I even remember joking back then, in the earliest days, that we were sort of fooling the world in that we were telling them that we were going to build a business out of this so we could win pitch competitions and get the like pre-seed funding we needed to build our cool projects.

wasn't until we honestly got into YC where we were like, okay, well, we've got to make something real here because Jeff has some expectations.

I do have to say, so, but you, so you guys were like in the entrepreneurial residence anyway, so you guys were thinking entrepreneurship, startup companies, you made the leap to apply to YC with an idea for a company.

So you must have kind of been thinking, yeah, maybe there's, maybe there's potential for something here and you guys, let's actually go back to that.

How is it that you apply to YC and why don't you, you know, recall for everyone what exactly the idea was with which you applied?

Because it wasn't really embarked trucks or it wasn't trucks at all really, right?

So the original YC pitch was we were going to take the self-driving golf cart and we were going to build an electric, sort of bigger electric version of it that could shuttle people around campuses.

And so it was going to be this campus shuttle for universities and for military bases and for other sort of closed areas.

And you can kind of see this, this is like the first attempt of us really struggling with the, I think the inherent tension that defines Embark, which is that on the 1 hand, we're doing this really, really, really hard technical problem and building self-driving.

And we would like, as much as possible, to narrow the focus of that problem to something that can be done in an attractable way.

At the same time, we need to build a business that can actually be useful to somebody.

As you can see this sort of tension, we're like, well, in a private campus, it could be really simple to drive and maybe people would use it.

And that was kind of the original thesis that we sort of applied to YC with.

And actually what we did all through YC was go through, we built a second vehicle, we built it in a ridiculous amount of time.

It was like 6 weeks or something that we, from like getting the vehicle to, maybe it was 8 weeks to it actually running.

The Trucks are taking a little longer, aren't they?

It's just not quite as fast to spin it up these days.

I mean, there was your original idea instead of boiling the ocean was let's find a tractable problem where there's sort of limited traffic, where it's really constrained.

There's a constrained solution that will help the student.

I remember even, you know, from the very beginning, you guys had the idea in mind, let's actually build something that people really want and can use early on, as opposed to in, you know, forever.

And I think that sort of that idea infused, embark in all of its predecessors as you guys went along.

And then I think even through YC, there was a lot of really important learnings, at least on my side on the technical front.

I think YSEE's mentality of just get it in the hands of users and see what sticks, I think we tried to follow that as best as we could as a hardware company, building hardware, putting it in the hands of university campuses.

And I think that the 2 key takeaways ended up being 2 of the most important values that ended up refining our business strategy moving forward.

The first was, as we went to different university campuses throughout California, we really got slapped in the face with just what what these places look like from a technology solutions perspective.

So we'd go to Sacramento State and if you've ever been there they pride themselves in having like 1 of every species of tree in the world roughly and our localization system was heavily based on GPS at the time and so there's these massive overhangs over the The walkways and all of a sudden our localization system didn't work But we'd go to Fresno State and they'd have clear skies but their paths would have hundreds of students on it and then our planning system wouldn't be able to figure out a path forward.

And very quickly you know going to 6 or 7 of these places you realize like the more complex your domain is the harder it is to solve this problem, which translates to the harder it is to build the technology.

And so to the degree that you can, you want to simplify and focus building your technology solutions.

And the other thing we learned, going to have, We had all of these university campuses essentially do paid pilots.

So we'd shuttle students from engineering buildings to the center of campus.

And the idea was there to, in our seed round, to make YC happy, show that we're building a real product.

And I think to some degree we proved the opposite, which was actually a good thing for us in the long run.

But students were perfectly capable at walking themselves to class.

There wasn't like a desperate infrastructure problem that the universities had that we need to increase students in classrooms and the only way to do it is through efficient automated self-driving technology.

Like that just wasn't the case is what we found, surprisingly.

But I think when we took the next step forward, we knew that we had to find a problem that was well-scoped and a problem that needed to be solved and had a great business case behind it.

What you really found was, you know, it'd kind of be nice to have self-driving shuttles in campuses, but it's not like life or death.

I have to say, though, shout out to Mike Reed, who managed to convince a large number of universities to pay us money to shuttle students around their campus over the course of like the same 8 weeks we were building the shuttle when as Brandon said they really didn't have a problem so it was quite an impressive sales exercise to manage to get all those pilots set up.

You guys were making real progress when when I remember sort of mid-batch we started to talk about construction sites in Australia or something weird where there's going to be self-driving trucks.

I wanted to talk a little bit about your transition from Varden Labs and self-driving college shuttles to embark in self-driving trucks.

It's kind of an interesting story in and of itself.

So this story actually starts early on with the golf cart.

And it was probably a week or 2 after we initially ran the golf cart at Waterloo and there was a bunch of press coverage.

And so this was like the first time that a driverless truck had run in Canada, or sorry, a driverless vehicle had run in Canada.

And there was tons of press, people thought it was cool.

And I got a cold email from this mine in Australia, and they sent me photos of these road trains, which are basically like 1 truck with 3 or 4 trailers all filled with rock that they were moving around.

Hey, we saw you guys making this self-driving shuttle work.

You think that that technology would work on these vehicles.

And I looked at it and I thought that it would.

That was 1 of the first observations because it was also very limited.

The GPS solution we were using probably would have been good enough with some sort of slam augmentation.

But we had a thing, we were working on it, so we kind of ignored them.

And then as we went through YC, I think I've been talking with them a little bit over the course of the fall.

And then as we started to struggle a little bit with, yeah, we're able to get these pilots, but we're not really sure that that need is gonna be such a strong and compelling need that people are really gonna move mountains for it.

We started to talk to a few more of the sort of similar mining truck places.

And I think the conversation we had with you, Jeff, was 1 of them offered us some amount of money to do a vehicle for them.

Like, we're gonna give you, I don't know at this point, I can go look it up, but it was, you know, some modest, but you know, as a YC company, you know, hundreds of thousands of dollars, something that was exciting to do 1 vehicle, right?

And we're like, oh, this, that's what it looks like when someone really wants your product, right?

They like contact you from across the world about the press release, and they're like offering you hundreds of thousands of dollars with no demo, no nothing, right?

And so our question was, you know, we don't have that right now.

How do we think about this in the context of YC?

And then how do we think about in the context of finding a great use case for the technology?

I think the decision we made on the, I think the decision we made makes a ton of sense.

The 2 decisions were 1 from a YC perspective, people wanna see that we're able to accomplish things.

And so we aren't just gonna like give up on this thing we've been working on for the first 2 thirds of the batch and go do something different.

Because if you did that, you'd come out at the end with nothing to show for it.

So let's finish executing and prove that the tech works, that the team is good, that our sales motion is good.

But afterwards, let's take a real good long hard look at the business case and make sure that if we're gonna spend the next decade of our lives working on something, that it's something that people really desperately want that meets the standard of that guy who reached out from across the world and offered us hundreds of thousands of dollars to build him a truck.

And ultimately, we didn't decide to do mining trucks because I think that was still too small of a business.

But I think that really was the first thing that sort of catalyzed us to start thinking, how can we find somebody who this is going to make a real difference for.

Okay I really want to hear about Domoday but just before we do that I'm just interested do you guys remember your YC interview?

It was a blur I just remember it being really quick just like chop chop chop there wasn't much like feedback it was very just question answer question answer We left the room and we were like, I don't know how that went.

And then we were told that we had to go talk to Sam or another group.

And we were, we didn't know either if that was a good thing or not.

It turns out in retrospect, I think it made sense.

Cause Sam had been really excited about self-driving vehicles.

But then again, it was just another 1 of those.

At least that's what my position was leaving it.

Do you remember being stressed by the interview or was it more of a lark for you guys?

Because what's interesting again, I think if I have this right, I might have the ears a little off, but Alex, you were 19 at the time, and Brandon, you were 20, is that right?

Yeah, so you're undergraduates, you're coming in, you're talking to YC about wanting to join YC and you know, you might figure that a lot of venture capitalists would be a little bit skeptical about a couple of Canadian kids coming in and saying they're going to build self-driving anything.

I think we had the baseline understanding that Silicon Valley culturally accepted the young founder story.

And so I think we had felt comfort from that angle.

But to give you a sense, I think we had done so much prep for the YC interview process.

We looked up all the prep questions on TechCrunch.

We ran through who was going to answer what and when and how and spent hours on that.

you guys asked us anything that we hadn't been asked before via the prep material.

So to say we were stressed and nervous, probably, but I don't know if, at least in my mind, the young founder story really played into that.

And So you go through the batch, you make progress on your shuttle, Mike gets you some sales, you're the third partner, third founder at the time, and you come into demo day and I think Alex, you said you chose to focus not on these opportunities that were sitting out there in the ether, in Australia, wherever, but on the focus that you'd made and the progress you'd made on self-driving shuttles.

Yeah, so demo day went, I would say it went really well.

And it was certainly helped along by the fact that crews got acquired maybe 14 days before demo day.

So I remember waking up and this is the beginning of something that would happen to me lots of times throughout the history of Embark.

I feel like I wait every 6 months I'll wake up and I'll look at like the news and I'm like oh my god I didn't expect that right and this was the first 1 was when 1 cruise got acquired and we're like Cruise got acquired for a billion dollars.

And so that really blew me away and we didn't expect it, but it really helped us because where, 1 day before self-driving was, there's no clear way to make money, like how could these companies be valuable?

Now Cruise was, I think at the time, the biggest acquisition in the history of YC.

And conveniently, a lot of the people at Demo Day had invested in Cruise.

And so there were a lot of people who saw Embark and were, I think, much more excited to invest in Embark because now they had the taste of how this could actually work.

And I think we actually share investors with Cruise for that reason.

And I'll just say for the sake of listeners, Cruise was, as Alex said, a YC company that was also building self-driving vehicles, self-driving cars, which was purchased by General Motors in 2016.

And if you recall, Jeff, and I don't know if this was on purpose, but we were second to present and to open Demo Day, you guys had played Cruise's Demo Day pitch from 2 years prior.

So it was Cruise, they got acquired, another company, and then Embark.

And so I think you really teed it up for us there.

I actually don't remember if we were thinking, oh, this is going to get those Embark guys.

We're sort of like, oh, wow, this just happened.

But certainly that was a happy timing for you guys.

Yeah, we found, so I would say coming out of demo day, the seed round was pretty straightforward to raise.

It was, I don't know, probably a couple of weeks and we'd already closed the seed round and It was at a price.

We were like super excited about back then today It would be considered horribly low because that's how the venture ecosystem has evolved.

But What you raised that and how much you raised You don't have to if you don't want to.

We raised like $2 million and I would say the bulk of it came in at less than a $10 million valuation.

Especially in the broad scope of things where people used to raise it $2 or $3 million.

And valuations have come up as they seem to always do as there's more cash and more competition.

But it seemed like it was a really successful trajectory for you guys to be on.

Yeah, we were certainly excited about it.

Before we move on to life post-YC, if you guys reflect, and Brandon did a little bit of this reflecting on what happened during YC.

What do you guys think was, were the 1 or 2 or 3 things that were most transformative for Barden Labs and to embark and for the company as you went through the batch program?

For me personally, I think it would be, maybe I'll pick 3, right?

So I think 1 of them was really forcing us out into the market and forcing us to actually have the experience of trying to sell this product to somebody and see what do they think and would they pay for it.

And I think, you know, as a hard tech company we were very different than our batch mates, but we still learned a lot, even though we had to go out with a much earlier product, 1 that couldn't have been sold at scale, but we still doing that same exercise to learn from users was very, very useful for us.

The second 1 was, I think there was a huge amount of value to us from getting access to a network.

People ask, what are the big value props for YC?

And I think for us, the biggest 1 was, we were coming from Canada, we were 2 university kids, we didn't know anybody in the valley, and yet we were able to access this whole network of people, many of whom are still big allies of the company, people that invested in the seed round and embark are still people that I'll call up and ask questions to.

And so getting access to that network and being able to raise money when we had no prior reputation was really powerful.

And I think the third thing was it was really powerful for me to have people believe in us.

I think it's sort of implausible when I look back on it right that we would be able to build this into a huge company.

We're like 2 kids who didn't know anything.

We didn't know enough to know that it was implausible.

And so I think the fact that YC as certainly sitting from Canada reading Y Combinator news, we would feel that this is like the pinnacle of the valley.

And so just having somebody who we knew had seen companies succeed, who had you know backed Cruise, who had backed Instacart, who'd backed like great companies before us, that was really validating.

And I think gave gave us some of the confidence to be able to keep pushing forward when you know, self driving is obviously hard and the the it's not a foregone conclusion when you're a team of 4, that this was a reasonable challenge to be tackling?

Yeah, like 1 of the things I believe strongly about YC and about 1 of the most important things that we can do for a company is to help a company actually believe really deeply, truly believe that the implausible, and it's always somewhat implausible.

Maybe it was more for you guys and more implausible than, than your runner with a mill implausibility that You'd build a gigantic company out of your two-person startup, but it's always implausible.

And getting that extra, you know, just core strong belief that you guys might just be the ones that do it, that build the next whatever, the next Instacart, Coinbase, Airbnb, now of course Embark, is actually a key exit value for YC as you go off into the crazy world of actually getting to the next step and building your product and delivering it to customers.

So you guys, you're dangerous in that you have a couple million dollars in the bank and you have the Australians probably calling you up from time to time saying, where's our truck?

And you have some college campuses on the hook now.

What happened to create the version of Embark that, or what was the genesis of the version of Embark that we see today after you finished YC?

So yeah, exiting YC, to set the stage again, I think We had a little bit of a sour taste in our mouth after the entire campus program.

We knew that we had built something really awesome, but we knew that nobody wanted it.

See all Y Combinator transcripts on Youtube

Embark Trucks' Alex Rodrigues and Brandon Moak Chat with YC President Geoff Ralston