Selling AI to Skeptics: Fero Labs’ Strategy for Breaking Into Conservative Industries

When Fero Labs launched in 2015, manufacturing executives weren’t just skeptical of AI – many believed it would never work in their industry. In a recent episode of Category Visionaries, CEO Berk Birand revealed how they transformed this resistance into opportunity.

The Wall of Skepticism “Back in the day, in 2015, we definitely interacted with people, executives industrial world and executives and engineers alike, that didn’t think AI would find its place in the industrial world,” Berk recalled. The common response? “No, no, we’re doing our own thing here. AI is for the tech sector. Let the googles and the facebooks of the world use AI. This will never work in my factory.”

Building Trust Through Transparency Instead of fighting this skepticism head-on, Fero Labs made it their strength. Their approach focused on three key elements:

1. Explainable AI “Most of our customers are not data scientists,” Berk noted. “They might have data science internally, but they’re not data science organizations.” The solution? Make AI decisions transparent and understandable. “Our software also tells them why these predictions, what recommendations are made. And as a result, there was this human in the loop aspect that actually reduced the off chance of something going wrong.”
2. Profitable Sustainability Rather than leading with technology, they focused on business outcomes. “Initially our pitch to our customers was, well, using this, you’ll waste less raw materials, you’ll waste less processing time, and as a result you’ll become more profitable,” Berk explained. The sustainability benefit was an added bonus that became increasingly important over time.
3. Humble Partnership “Being very upfront, being very humble since day one, very clear that we don’t know anything about steel,” Berk shared. “Our value add here is not steel production. It’s not chemicals production. What we bring in is the data science part, and you guys are the experts.”

The ChatGPT Effect Interestingly, recent AI advances have actually helped overcome industrial skepticism. “One of the best things that chat GPT has done is to show users, non technical users, what AI could do,” Berk noted. After years of disappointing AI pilots that were “just basically advanced excel functions,” ChatGPT showed executives that AI could deliver real value.

“What chat GPT showed people is that, well, wait a second, I can type something and then I can see the results in a world that I understand,” Berk explained. “But if AI can do this with recipes, then it probably can also do the same thing for my factory.”

Proving Impact at Scale The results speak for themselves. At one customer’s steel plant alone, following Fero Labs’ AI recommendations saved a million pounds of raw materials in just one year. This tangible impact has positioned them to pursue an even bigger vision.

“The industrial sector is very much like an organism,” Berk shared. “Where you have factories that produce one thing in one side and then send it to the other. And I really believe that we can go from optimizing a single factory to optimizing the entire organism using AI.”

The Path Forward For founders targeting conservative industries, Fero Labs’ experience offers valuable lessons:

• Make your technology transparent and explainable
• Focus on business outcomes first, with technical sophistication as the enabler
• Respect domain expertise while being clear about your unique value
• Use broader technology trends to validate your specific solution

The key is patience and conviction. As Berk predicts, “I believe that in 5-10 years, AI machine learning will be a core part of every factory in the world.” By making AI trustworthy and focusing on concrete business value, they’re helping make that future a reality.