Samsara’s CEO and co-founder Sanjit Biswas believes that the driving force behind the company’s rapid growth is the compelling idea that technology can change the physical world. “I think the driving factor for our employees is the impact that we have in the real world,” he explains. “Our customers in physical operations are the ones who keep the plants running and the supply chains moving. For folks in IT, sales, marketing, or even finance to be a part of that is really fulfilling—we help to make the world safer, more efficient, and more sustainable.”
Essentially, Samsara connects the world of physical operations to the cloud. Samsara’s AI-powered platform collects and analyzes data across all of a company’s physical assets and operations, helping it to save money, improve safety, and reduce emissions. Biswas describes this as a system of record—a single, central command center for a company’s operations. Samsara counts some of the world’s largest transport, logistics, construction, and utilities companies as customers.
The company is eight years old, and Biswas is pacing the business for scale. “We’ve seen incredible market traction and a very high growth rate,” he says. “Moving forward, we will continue to fulfill the opportunity that we’re focused on: Digitizing the world of physical operations.”
In this installment of Logistics Disruptors, Biswas speaks with McKinsey’s Mike Thompson about the nonstop world of logistics, spending time with customers, and how to rapidly scale while focusing on the long term. The following is an edited transcript of their conversation.
McKinsey: You’ve talked about Samsara building the system of record for physical operations. Could you say more about that?
Sanjit Biswas: A system of record is a single place where all the data that represents your operations lives. This means that you have greater visibility across locations. You can see when people have gone on and off a shift. You can understand the risk and safety profile of your different operations. You can also see everything that happened over the course of a day and connect it to various other systems like payroll, insurance, and ERP systems. Customers have saved thousands, even millions, of dollars in one year based on the insights they’ve uncovered.
Once an organization starts connecting data across its operations, an infinite number of use cases present themselves. That’s what I find so exciting about the future. There is so much potential for what this data can do.
McKinsey: Tell me more about Samsara. How are you making life easier for your customers?
Sanjit Biswas: We make it easy to connect physical operations to the cloud. Traditionally, if you wanted to get operations data into the cloud, you’d have to start with a bunch of puzzle pieces—sensors, databases, internet connectivity—and cobble it all together. For most operations customers, this was outside of scope in terms of time or budget. The biggest differentiator is the plug-and-play nature of our platform. We’ve made it easy for customers to start seeing all the data, get business value from it, and take action.
McKinsey: Customer demands are changing rapidly. What key things are your customers asking for today that you would not have expected a couple of years ago—and how is that evolving your value proposition?
Sanjit Biswas: Ever since the pandemic began, labor has been a front-of-mind issue. Folks are trying to make sure they have enough staff to perform the duties they need in their operations—and they want to hang on to that labor. Another theme is operating safely and efficiently. This has become really important as there are so many people entering the workforce who may not be used to operating heavy machines and heavy assets that are part of physical operations. Most of the focus for our customers today is around people and ensuring a people-first digital transformation. And that’s exciting because it’s an opportunity for new technology to really change the game and improve the worker experience.
Most of the focus for our customers today is around people and ensuring a people-first digital transformation. And that’s exciting because it’s an opportunity for new technology to really change the game and improve the worker experience.
McKinsey: Are there certain use cases where it makes the most sense to gain greater visibility into operations? How can customers weigh up the benefits of using your solution versus the initial investment, and what’s the typical ROI payback period?
Sanjit Biswas: We see a few different use cases for Samsara. They’re not mutually exclusive but work well together. The most common is safety: Reducing risk out in the field. In the world of physical operations, there are vehicles, forklifts, excavators, bulldozers, all kinds of big heavy assets that unfortunately can place workers in harm’s way. It’s possible to coach away some behaviors that create risk (such as using mobile phones or being distracted while driving) and reduce the likelihood of accidents. The ROI payback period on a risk-reduction program like that could be five or six months. We also see customers using data to operate more efficiently. They can re-plan their routes, or reduce engine idling, which reduces fuel consumption. That turns into cost savings which can have an ROI payback period of a few months. Last but not least, there is a use case for sustainability initiatives. Larger companies with sustainability goals are trying to hit their targets. We can total up all the carbon emissions, of their fleet for instance, and make sure they’re making progress toward emission-reduction targets. That’s a different form of ROI payback.
McKinsey: What new technology tailwinds will reshape the business?
Sanjit Biswas: AI is the biggest tailwind in terms of the ability to process the massive amounts of information and data generated by operations. We’re processing billions of minutes of video footage every single day. And about six trillion data points a year. The only way to make that happen is with AI models that find insights in that data so companies can take action, reduce risk, and change behavior. The second technology tailwind is simply the idea of having an open platform where you can take this data and plumb it into a bunch of other systems to get more value from it. Those two are very powerful forces. The third is around technology adoption. We’re seeing a generational change where folks in the workforce, on the frontline, are comfortable using tablets and smartphones and generating reports in the cloud. And in fact, they’ve come to expect it. That’s the user experience they want. People are asking the question: “How do we truly modernize; how do we completely change the worker experience here?”
AI is the biggest tailwind in terms of the ability to process the massive amounts of information and data generated by operations.
McKinsey: What are your ambitions for Samsara’s growth, and how will you accomplish that in the next five years?
Sanjit Biswas: It isn’t going to happen overnight. This is a journey that will take decades. And so we’re pacing ourselves and making sure we’re listening to our customers, trying to figure out what real-world challenges we can solve for them, and then making it as easy as possible for that transformation to happen.
McKinsey: Are there any industries or fields that you think are likely to boom over the next five years?
Sanjit Biswas: Right now we are seeing a wave of digital transformation across industries. And in fact, there are a lot of similarities across industries and sectors. Samsara started out serving the world of transportation logistics, such as food and beverage distributors and so on. We realized that a lot of the challenges these companies face also occur in industries like construction and mining. And those same challenges show up in agriculture, local governments, and energy utilities. There are a lot of commonalities across the board in physical operations. And that’s exciting because it means you can take a common technology platform and have a broad-based impact.
There are a lot of commonalities across the board in physical operations. And that’s exciting because it means you can take a common technology platform and have a broad-based impact.
McKinsey: Samsara isn’t your first success. You previously co-founded, built, and sold Meraki, a cloud networking business. What have you learned by building a company for the second time?
Sanjit Biswas: No two companies are the same. The experience of the first company has definitely helped us as we’ve continued to build and scale. But the industries we serve are a little bit different, and the time that we operate in is different. When we started the previous company, the iPhone had not been announced yet! Even though this was only 15 or 16 years ago, it felt like a different time in the world. So, what we’ve learned is the importance of being dynamic and listening to customers. We ask a lot of questions about their businesses, how they operate, and how they want to use technology to embrace data. That’s the biggest takeaway: Running a customer feedback loop and embedding that in the company culture. And it’s not just the two founders that are doing it, but the 2,000-plus people within the company, too.
McKinsey: What’s been most surprising for you in the logistics industry?
Sanjit Biswas: I think the biggest surprise about logistics is how nonstop it is. This is really part of the world that never takes a break. We’re talking about eight, ten, or 12-hour shifts by workers every single day, in all kinds of weather conditions. Logistics doesn’t stop. The idea that all of us are dependent on logistics running smoothly, on the supply chain working end to end, it’s really quite incredible to think about. I did not understand the scale or depth of the supply chain until we got this close to it.
McKinsey: Speaking of being close to it, we heard you spend two days a week with your customers—which is not easy to do as a CEO. Why did you make that choice?
Sanjit Biswas: The decision to spend two days a week with customers was driven by the idea of running a feedback loop. The only way to do that is to get some of that frontline knowledge yourself. I can’t be everywhere; we have tens of thousands of customers at this point. But I do get to sample what’s going on out there. When new challenges appear—like supply chain issues that make it hard to get equipment, labor shortages, or issues with technology adoption—you hear about it very quickly if you spend time with customers. So twice a week is a really big treat for me. I learn something new every single week.
The decision to spend two days a week with customers was driven by the idea of running a feedback loop. The only way to do that is to get some of that frontline knowledge yourself.
McKinsey: What are the biggest challenges that keep you up at night?
Sanjit Biswas: Trying to scale at the rate that the company needs. We have grown very quickly. We serve a tremendous number of companies across industries. And we want to make sure we’re doing a great job for all of them and staying focused on that long-term opportunity. That requires a lot of discipline and balance to make sure that we’re serving that growth, but also investing in new technologies, running those feedback loops, and building a strong business for the long term.