🎧 From a YC Rejection to a $500M Valuation

👨‍💻 Episode: I spoke with Pablo Palafox, CEO and co-founder of Happy Robot, the AI agents startup that’s automating logistics and supply chain.

Pablo studied industrial engineering and pursued a Ph.D. in computer vision in Munich. Alongside his brother Javier Palafox (COO) and Luis Paarup (CTO), they were part of Y Combinator’s in 2023, where they pivoted from their initial idea to what Happy Robot is today.

Recently, Happy Robot raised $44M in its Series B, led by funds like Base10 and a16z. Their “Forward Deployed Engineering” approach allowed them to grow their revenue 20x since their Series A. Today, they work with over 100 clients, including the largest freight brokerage firms in the U.S.

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Today, Pablo and I talked about:

• Why implementation is more important than technology.

• How to get your clients to see you as an “AI partner” instead of just a vendor.

• How the “Forward Deployed Engineering” model drove their 20x growth.

• How they went from being a “threat” to a “strength” for their clients.

• Why building a blame-free culture is essential when working with imperfect technology.

🤯 Key Insight: The key to automating traditional industries lies in proper implementation.

While most AI startups sell demos over Zoom, Pablo understood that to transform a traditional industry, the solution couldn’t be 100% remote.

His bet was Forward Deployed Engineering (FDE). This partner-implementer model solves the biggest barrier to adoption: the human factor. By working from the inside, AI stops being perceived as an external “threat” and becomes an internal “strength,” validated by the team itself. This approach helped them grow 20x since their Series A.

⭐ Favorite Quote: “The truth is, customers don’t want an AI vendor; they want an AI partner. Someone who is willing to go the extra mile to understand their use case and make it work.

It’s fascinating to see how they go from viewing us as a threat in their SWOT analysis to considering us a strategic opportunity in just one year. It’s not just about implementing technology; it’s about guiding them through the transformation of how they work.”

🤔 Fun Fact: Before founding Happy Robot, Pablo dedicated 19 years of his life to the piano, reaching a near-professional level. His teacher wanted him to pursue a musical career, but despite his talent, he chose to study industrial engineering.

Interestingly, this musical discipline taught him about perseverance and commitment, qualities he now applies as the CEO of his startup. He admits he would probably repeat the same approach with his own children because of the valuable lessons it taught him.

I learned a lot from Pablo. Follow him on LinkedIn for more ideas and advice.