#176 Matthew Kleiman, Co-founder & CEO of Cumulus

Matthew Kleiman is the co-founder and CEO of Cumulus. Prior to co-founding Cumulus, he was the Program Director at Shell TechWorks, Shell’s Skunk Works-style technology center in Cambridge, Massachusetts, focused on developing and deploying new technologies for Shell’s capital projects and operating facilities. Before joining Shell, Matt held various commercial positions in the biomedical and aerospace industries. When he isn’t working, you can find him enjoying time with his family, skiing, and scuba diving.

Bigger Than Us #176

This transcript has been lightly edited.

Host Raj Daniels 01:09

Matt, how are you doing today?

Matthew Kleiman 01:21

Thank you, Raj. It’s great to be here.

Host Raj Daniels 01:23

Matt, I’d like to start with your writing books about space.

Matthew Kleiman 01:29

Sure. So I have had a pretty varied career. But one thing I’ve always been fascinated with, since I was a kid was space. I actually went to space camp when I was in elementary and middle school down in Huntsville, Alabama. It’s just been a fascination of mine. So early in my career — I actually started my career as a corporate lawyer — I was working for an aerospace company, up here in the Boston area. And I found out that there’s a whole field of law called space law that was pretty nascent at the time — this is more than 10 years ago — and I got really interested in it. 

I ended up teaching a class at Boston University, and I saw that there was no book on space law that was less than about 20 years old because the last time this field was popular was during the Cold War, and the issues between the United States and the Soviet Union. But now that no more Cold War, but certainly a lot of issues in space, especially as you have a lot more commercial space. So I wrote a textbook myself. And then I was asked by my publisher to write a more layperson, general audience version of that. And so I wrote a book called The Little Book of Space Law, that just tells all kinds of interesting stories about legal issues in outer space.

Host Raj Daniels 02:53

So can you share maybe two or three things, that the general public might not know about space law, that might be interesting?

Matthew Kleiman 02:59

Sure. So there are a couple of things. One of the most common questions I get is, “Who owns different parts of outer space?” So, who owns the moon, for example, if you had a company were to go up there and try to mine the moon? The law is actually not clear on it because most laws about space were written during the Cold War, when ownership of resources wasn’t the major issue, it was preventing nuclear war in outer space. 

But there’s been a lot of effort in the United States and other countries to clarify that law. One of the most fun things I think, is about your legal jurisdiction, is on the International Space Station. There are different modules that are were built by different countries: the US, Russia, the European Union, the Japanese Space Agency. Each of those modules operate under the law of that country. So you could float through the space station, which is about the size of a football field. 

And you can go from US jurisdiction to Russian jurisdiction to Japanese jurisdiction. And if you commit a crime, you are subject to the laws of that jurisdiction, depending on where you are. And there’s a whole agreement between the parties to the space station, about how those issues would be resolved. Thankfully, there have not been any crimes in space that we’re aware of, and that hasn’t been tested. But those are the types of things you have to think about.

Host Raj Daniels 04:28

So who does on the moon?

Matthew Kleiman 04:30

So the space treaties say that the moon is the providence of all mankind, that’s the the 1960s are a term that was used. So nobody owns the moon by international law, but US law was recently changed a few years ago, to say that if somebody extracts resources from a moon, so you take a moonrock for example, that company has the right to effectively own it and get the economic benefit of that resource. But that’s just US law. That is not agreed international law yet. That’s to be tested.

Host Raj Daniels 05:06

It sounds like a very slippery road.

Matthew Kleiman 05:08

It can be. And there’s actually a great show on Apple TV called “For All Mankind.” And it’s an alternate history of what happens if the Russians beat the US to the moon in the late 1960s. And they actually start to deal with these questions in a really interesting way, about who owns resources and how that will lead to conflict, just like it did in prior years of exploration, when you have private and commercial interests driving way ahead of where the law is because it takes a while to catch up, very often.

Host Raj Daniels 05:45

Speaking of Russian, did you read the news recently about their anti-satellite missile?

Matthew Kleiman 05:49

Yes, that was very disappointing. The Chinese did something similar back in 2007, where they, in a missile test, blew up one of their own defunct satellites. And that increased the amount of debris in space by about 25%. And right at the altitude of the International Space Station, where it’s common for human-occupied spacecraft to operate. And everybody assumed that the major space powers had learned their lesson from that event in 2007, that people didn’t realize how bad it would be. 

But now everybody does. And to imagine that the Russians did that, again, knowing that history, knowing that their own people are on the space station — they’re our partner there, there are cosmonauts on the space station all the time. And to put them in harm’s way like they did is pretty unbelievable.

Host Raj Daniels 06:42

And not to continue talking about space. But I’m just curious, what do you think about the recent, I’m going to call it a race, between Blue Origin, Virgin Galactic and SpaceX?

Matthew Kleiman 06:52

I think, ultimately, it’s good for society. So I am obviously a proponent of space exploration, I think it benefits humanity to have activity in space. And there are a few reasons, not only economic, but just inspiring younger generations to go into science, math, and engineering fields, whether they work in space or not. And just to explore. I think it’s part of human nature to want to go further, to extend our boundaries. 

So I think it’s really good. And for a while, around the time of the space shuttle and a little bit after, the development of space technology really stagnated. We kind of became stuck in low Earth orbit, it was incredibly expensive to get equipment, cargo, payloads, human and otherwise, into space, and you only had the ultra-wealthy who would pay something like $20 million to go to the space station. But with the space race, you know, there’s an element of it. That is, this is kind of ridiculous, these billionaires just playing with their toys, but they are really doing a lot to drive down the cost of getting into space and the safe, the safety, making it more and more safe to get into space. And I think that’s generally a good thing. 

And I think what especially Elon Musk and SpaceX have done to completely transformed the launch industry with low-cost, reliable access to space for both human and satellites is good for humanity. And I’m just really excited about it.

Host Raj Daniels 08:31

And perhaps a more broader question, and more grounded in beliefs. Do you think we are the only beings out here?

Matthew Kleiman 08:43

I don’t. I have no idea whether we have been visited by aliens or not. But given the sheer number of solar systems and galaxies and the number of planets that we are finding all the time in those solar systems and galaxies? I think it would be pretty arrogant to believe, to think that there’s no other intelligent life out there, that the only time it has evolved is here on Earth, given the billions of years and then millions of opportunities life has had to evolve. Now whether it’s intelligent life, like we have on Earth for humans, I don’t know. But I would not want to believe, and I find it hard to believe, that we are alone.

Host Raj Daniels 09:38

I share your belief for all the same reasons. So, coming back to Earth. Fast forward from your days studying space writing about space to Cumulus, yes. Can you share with the audience or give the audience an overview of Cumulus and your role at your organization?

Matthew Kleiman 09:54

Sure. So I am the co-founder and CEO of Cumulus the story of Cumulus, it’s worth spending just — I’ll go through it very quickly — is that…

Host Raj Daniels 10:05

You can take your time.

Matthew Kleiman 10:06

Okay. Sure. Thanks. So, as I mentioned, I was working in an aerospace company called Draper Laboratory in the early 2010s. Shortly after the Deepwater Horizon disaster, a number of oil and gas companies came to Draper and said, “We want to learn from aerospace how to build safe and reliable systems that operate in hostile environments,” which, the aerospace world, despite some very high-profile disasters, has gotten very, very good at over the last several decades. So we started working with these companies on different projects. 

And eventually, one of our customers, which was Shell, said to my partner and I who were leading this effort, “This is great what we’re doing. But to really affect change, we need people to come in-house and start a center in-house that could help us really change the way we design and think about large capital projects and think about safety, both for people and the environment.” And so one thing led to another, and we were hired to start what’s now called Shell TechWorks here in Boston, with that mission, which is to bring external expertise to the oil and gas industry, such as from aerospace, into the oil and gas industry and help it improve safety and quality and reliability of these systems. 

So we did that. And then around 2016, we really started to focus on what eventually became Cumulus, which was this challenge with work that was high-volume, mission-critical, manual work activity. And we saw that across the industry, these types of activities were responsible for a disproportionate amount of downtime of accidents of rework on job sites, largely because of issues of quality control, the work was being done the same way. If you went back in time, 30, 40 years, this type of work was not done very differently. Very paper-based silo systems. 

So, we started working on this in Shell and we specifically focused on bolted joint assembly. So a typical oil and gas facility has tens, or even hundreds of thousands of bolted joints. In the industry, more than 20% of leaks are because of human error with the assembly and maintenance of these bolted joints. In this day and age, it’s not that it’s a physics problem. We know from an engineering perspective, how to maintain and assemble a bolted joint, but it’s just people are people, and people mess up for different reasons. And the systems weren’t in place to catch these errors before the work was done. 

So we developed the first product called the Smart Torque System, which used a wrench that was sensorized, communicated with a mobile app, and the data went to the cloud that gave a real time view into who was doing the work, how long it was taking them to do it, and how well it was done. Basically, the term we now use is, it acted like a digital foreman, looking over the shoulder of the work to just make sure it’s done properly. And that had, when we first deployed it, it had just this immediate impact on drastically reducing the number of leaks at these facilities. And so in 2018, with the support of Shell, we spun out, we said, “This has to be its own company to really grow and thrive and raise capital.” So we spun out in 2018 and have been building the Cumulus platform, first starting with bolted joints. 

But now we’ve recently expanded it to cover all kinds of mission-critical manual activities, like welding, inspection, pressure testing. And our goal is that we will eventually get to the point in the world where human error is no longer a cause of accidents at industrial jobs.

Host Raj Daniels 14:00

So I have several questions. But I’m going to start with the top. Why the name Cumulus?

Matthew Kleiman 14:04

The name Cumulus because we looked at it, and it has several different meanings. It was actually the internal name of the project that just stuck as we began the company. But it was the idea is to have a cumulative view of all the work activities being done on these job sites. So you imagine building a new plant, or just maintaining a plant. You have hundreds or thousands of workers doing all sorts of different things. 

And that’s one of the hardest jobs of an owner, operator, or general contractor is just keeping track of who’s doing what. And so our view was that we want this to be the cumulative data, the cumulative view into everything that’s going on at a site. And of course, the data is based in the cloud. So it alludes to a cumulus cloud. And then that name just kind of stuck, and naming things is one of the hardest things you do, whether in startup, product development. And often names that are just used without a whole lot of deep thought or market research end up just sticking because they develop, they take on a life of their own.

Host Raj Daniels 15:12

And you mentioned Smart Torque. Is that a tool? Like, in my mind, I’m imagining a wrench with sensors on it. But can you expand on that?

Matthew Kleiman 15:21

Sure. The Smart Torque is a system. So there are three components to the system, one of which is the tool. The tools are actually commercially available. All of the major tool manufacturers are now putting connectivity into their devices. You can go to Home Depot, or Lowe’s, just to be fair to both. And you can buy a tool, and the tool manufacturer will give you an iPhone or Android app that will talk to your tool. 

Now for a homeowner, that ends up being a gimmick; you’d maybe use it to for some interesting measurements, or for security or inventory management. But our idea was take this data coming off the tools, and rather than a one-to-one relationship aggregated all together to give that view of the job site. So the tools are one piece of it. But we’re not a hardware company. We have partners who are the tool manufacturers that build these tools. What we make is the other parts of the system. 

One is the mobile app that the workers and inspectors use in the field. And that’s for iOS and Android; it’s available in both app stores. And then we make the control center where all the data comes in, and we provide analytics and reporting around the work activity based on the data we’re getting from the field.

Host Raj Daniels 16:41

Now, when you and I were speaking offline, we kind of both shared the idea that what you’re doing is extremely needed. But in some sense, and I don’t mean this in a negative sense, but it’s boring, meaning then the idea of torquing joints, inspecting welding, or pressure testing, it’s not bright and shiny, it’s not the next drone. So knowing that, how have you seen customers either accept or perhaps even pushback regarding these?

Matthew Kleiman 17:11

Great question. And you’re exactly right, as we were talking about offline, there is a huge amount of attention in technology circles around leak detection at oil and gas facilities, but there’s less focus on the boring part of actually preventing the leaks from happening in the first place. And that’s where we come in. 

So the reception that we get, once you get in front of a customer. And they have this aha moment of, “Hey, this is something that I’ve been doing with paper, or with a spreadsheet before, and wow, this can save me a huge amount of time and really improve the work we’re doing.” That’s about our goal to get to, and that we’ve gotten very good at getting there with potential customers once we can see them. You do have some traditional resistance to change in these more established industries that are not used to digitizing the work that they’re doing. 

And so we do see that, we do encounter that. There’s just cultural resistance. “We’ve been doing it this way for 30 years, why should we change how we’re doing it?” We definitely see that. One thing we were always concerned about is resistance among the workers themselves. And that actually doesn’t happen all that much. And there’s a few reasons for that. 

One, we’ve done a lot in the design of the system to make it actually help the workers do what they do better. And we’re very transparent about the data that we’re collecting from these tools and from the mobile app. We make it available to the workers just as we make it available to our customers. So it’s transparent, it doesn’t have the feel of sensors we’re putting on people’s bodies or anything like that. 

And then most people, no matter where they are in the world, are generally used to using smartphones in their daily lives today. So using a smartphone in their job is not the same leap. It might have been a decade ago, the resistance to change more comes from managers, or people whose job it is to enforce quality. By using our system, they’re necessarily either directly or indirectly saying that what we’re doing today is not good enough. And therefore we need to change, and that’s where human nature can make people resist that change.

Host Raj Daniels 19:47

And just for the audience, can you give an overview or perhaps a high level of the magnitude of this problem that you’re addressing?

Matthew Kleiman 19:54

Sure. So if you just think about leaks from bolted joints in oil and gas, and a bolted joint would be — imagine a refinery or a chemical plant and you have all the piping. Wherever different piping comes together, that’s typically a bolted joint. You have some that are welded, but more typically a bolted joint. Leaks from these bolted joints each year release the same amount of greenhouse gas emissions as about 36 million cars on the road. That’s about 1/5 of the cars in the United States. 

The same amount of greenhouse gases are released just from leaking bolted joints. And again, the joints leak not because from an engineering perspective, like, “We don’t know how to build them,” but because there’s a mistake that’s made when these are put together as human error. So that’s the scale. Another way to think about it is that a typical facility loses about $1.8 million a year, just in downtime — that just disappears in dollars and cents on it — downtime when they have to shut the system down because there’s a leak. 

And that doesn’t calculate the impact or the cost of safety or environmental impact. That’s just the cost to the operator of having to shut down that facility for a few hours or maybe a day or two to fix it. Stopping these leaks is absolutely a tool that society can use in our drive to reduce greenhouse gas emissions and to comply with the methane reduction targets that governments are setting, but also as a way for our customers to save money.

Host Raj Daniels 21:39

You know, I was going to mention that too. Cop26 Just finished last week, I believe. And I think there was a global pledge to reduce methane by 30% from 2020 levels. So I see what you’re doing, going hand in hand with that pledge.

Matthew Kleiman 21:57

Absolutely. If we could stop all these leaks, it’s the equivalent of converting a fifth of the cars, as I mentioned, the statistic in the United States from internal combustion engines to electric vehicles, and we have to do all the above. But this has to be part of it. As we’ve talked about before, it’s not sexy, it’s boring and in the weeds of work, but it’s just as important as other things that we do to combat climate change.

Host Raj Daniels 22:28

So you know, we both mentioned it being kind of boring work, foundational. You mentioned writing books about space earlier in your career. What’s the why? Why is this important to you?

Matthew Kleiman 22:41

So it’s important to me because when I was working in aerospace, and we first started to get to know folks in the energy industry, there were a lot of stereotypes that people have about the industry, and whether the industry wants to improve or not. 

And my experience is that it very much wants to improve from an environmental impact and safety impact perspective. And people are trying, and these companies are trying very hard to do it. But I would see, and especially as I got inside the industry more, everybody was focused on the sexy, the “let’s make everything augmented reality,” “let’s let’s bring all these sensors onto the sites.” And I looked around and my co-founders as well. And we looked around and said, you have to walk before you can run. You can’t bring in AR, VR, and all these other really exciting things people want to do without getting the basics right. 

And going back to first principles of how we as an industry are doing work. And it’s not, as you can see, using the space analogy, it’s not rocket science, what we’re doing. It’s very hard from a cultural change perspective, there’s a lot of issues we have about working in old facilities that are basically giant Faraday cages that make communication hard, and a lot of things we’ve had to solve there. But the industry has to get back to first principles and make sure that we’re using the best available technology to do the jobs right in the first place. Before we can start to do these much more advanced things around data analytics, and AR and VR. 

I mean, we saw so many times that companies, large and small, would come to us and say, “We have this great data analytics solution. All you have to do is give us all your data and we’re going to generate huge amounts of value for you,” by whatever analytics engine or AI engine that they had. And the problem is there was no data there. 

These are older facilities, and there’s very often not even — there is not models. There’s no activity. Record keeping can be very poor. And we saw that the way the industry was going when it was talking about digitalization was, it was looking at the sexy stuff. It was looking at the stuff that if the world was perfect, and connectivity was perfect, and everything else, yes, you can do it. But we really saw this opportunity to get back to first principles and have a huge impact on quality, safety and environmental performance. And that’s why we’re doing what we’re doing.

Host Raj Daniels 25:29

Why is environmental performance important to you?

Matthew Kleiman 25:32

One is, as just a human and a member of society, I very much believe in climate change and the science of climate change. And we have to be doing, as a society, everything we can to stop it. And part of it is converting to electric vehicles and things like that. But other things are preventing these mundane emission sources that add up. They may seem small, individually, but they add up because they’re happening all over the world. 

So that’s part of it. But to safety, it’s not just about releasing methane and other gases into the atmosphere. It’s the safety of workers, and I have seen incidents where you have a leak, you have a fire at a plant, and people get hurt. These are all avoidable accidents. It’s not something that has to happen, it’s not something that is just a danger that’s associated with the job. 

And if we can, in our way, make the work safer and make sure people go home without injuries at the end of each day so that they can go be with their families, that’s really meaningful. And we just didn’t see. When we were inside, we just didn’t see the industry in the supply chain focusing on these boring problems enough, and in a way that will actually make them better. And that’s what we’re trying to do.

Host Raj Daniels 27:10

Now, earlier, you mentioned walking before running. What have you learned on your journey at Cumulus?

Matthew Kleiman 27:16

So a lot. I learn something new every day. On a personal level, before starting Cumulus, I never held a sales role before, and now I’m selling all the time, whether it’s to customers, investors, or job candidates — I’m even selling right now. So that’s from a personal growth perspective. I had managed people before, but doing this job with a startup is been a huge learning experience for me. 

And then from a business perspective, I think learning how to design a system that makes workers not only accept the technology, but be eager to use it, and helping them do their job better has been a learning journey for us. Most people assume that workers are going to resist new technology. And the reason for that is that most enterprise technology is actually pretty poorly designed and makes the job of these workers in the field more difficult rather than less difficult. And so learning how to build products that, that appeal to workers and makes their jobs better has been a journey over the last few years.

Host Raj Daniels 28:37

What have you learned about selling that you didn’t know before?

Matthew Kleiman 28:40

Pretty much everything, but a lot of it is how to how to position products, how to listen more than I talk. I know, on a podcast environment, my job is to talk and tell our story and have the conversation with you. But in a sales role, so many people go in with whatever their pitch is, and this is whether you’re selling to a customer or an investor in a company, or your job candidate, all those categories, learning how to listen and be an active listener for what whoever you’re selling to wants. 

And using that to better either create, be able to position your solution for them, or sometimes say look, I don’t think this is the right fit based on what you want. And be able to say that, and be comfortable saying it. It doesn’t do anybody any good if you just push somebody something on somebody and have some magic that gets them to say yes, and then it doesn’t actually help them at the end of the day.

Host Raj Daniels 29:42

I had a mentor many years ago tell me that selling is about listening, and marketing is about talking. Yeah, exactly.

Matthew Kleiman 29:50

That’s exactly right. So you know, podcasts like this. This is for marketing from my perspective, but this isn’t selling and I think your mentor is 100% correct. And that’s a very valuable lesson that I would have liked to learn earlier and have a mentor that helped. But it’s something I’ve learned over time.

Host Raj Daniels 30:10

So let’s move into the future. It’s 2030. If Newsweek, Fortune, pick your publication, where to write a headline about Cumulus, what would you like it to read?

Matthew Kleiman 30:24

Oh, that’s a good question. I would like it to — I don’t know if I could have a pithy headline — but what I would like the article to be about is how we played an instrumental role in making it so that human mistakes no longer cause accidents that harm people in the environment, and that large industrial facilities have become safer and cleaner because of the work we’ve done and because of the technology we’ve developed.

Host Raj Daniels 30:55

I really liked that sentiment, because I feel like often, companies like yours are the unsung heroes. We go through life on a daily basis. Everything’s just seems to work until it doesn’t. And earlier in our conversation, you did mention the Deepwater Horizon. I’m just personally curious, what was the reason for that accident back in 2010?

Matthew Kleiman 31:17

There were a number of different failures. So when you have major accidents like that, whether it’s oil and gas, or an aircraft, an airline crash, or something, it’s usually not just one thing that causes it. It’s error compounded on error. Usually some sort of mechanical failure combined with humans not reacting to that failure in the right way. There is actually a great government commission that put out a report about the Deepwater Horizon that I would recommend people look at. 

You could Google the US government Deepwater Horizon accident report that was written in a very readable way. And it’s really interesting. But basically, that’s what happened. They had what’s called a pressure kick, which happens sometimes when you’re drilling wells and oil and gas. And then there was just a series of bad decisions that were made by a number of different people and different companies that were involved. Ultimately, it’s known as the BP disaster because it was a BP rig. But there were contractors involved in the cementing, in doing the drilling, and reacting to it, that one bad decision compounded on another bad decision. And the technology wasn’t there to help counteract the human error. And that’s why you had the problem.

Host Raj Daniels 32:49

I appreciate you sharing that. Now, my last question, and this could be professional or personal. But if you could share some advice, words of wisdom or recommendations with the audience, what would it be?

Matthew Kleiman 33:00

So one of my favorite posters that I’ve had on my wall since college is a picture of fighter jets in formation. And the motto on the poster is “Lead, follow, or get out of the way.” And I’ve always tried to keep that in mind, in any organization that I’ve been part of, sometimes we need to be leaders, sometimes it’s better to let other people lead and just be a supportive follower. Sometimes being a leader means saying you’re disagreeing with what’s happening at the organization, it doesn’t mean just be a lemming, but don’t be the person who only gets in the way of change. The world is changing incredibly fast. And we all have our part to play in adapting to that change. Be a leader, be a supportive follower, but you just don’t want to be the person who gets in the way. And that’s the advice that I that I’ve always taken for myself, and that I impart to my team as well. And my expectations for the team at Cumulus and every other organization I’ve been privileged to lead.

Host Raj Daniels 34:14

Well, Matt, I appreciate that. And I think “lead, follow, or get out of the way” is a great place to end. Appreciate your time today. I look forward to watching the continued growth of Cumulus and catching up with you again soon.

Matthew Kleiman 34:24

Thank you, Raj. This was a great conversation. Thank you again for having me, and I look forward to catching up again.

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