Thank you guys for another episode of the Cutting Edge podcast. My guest today has, I guess, something that maybe doesn't appear too often on business cards, which is two titles, right? Chief Technology Officer, Chief Marketing Officer at NOV, which is the company that builds the machinery that we, you know, the world drills with. And then there's the third thing that you do, which I could say has nothing to do with any of it, but I think by the end we may see how it all ties together. But David Reid, welcome.
Yeah, thank you. Thanks for having me.
Thanks for coming out, man. But, well, before we go anywhere near a drilling rig, I've done some research and I figured, or I may be wrong here, but you were a musician before.
Oh, yeah. Still am. Yeah.
Oh, yeah. Before you were an engineer. And what was that like? What instrument? Are you doing anything at this point with it?
I played bass the other day for my daughter. My family are all musicians and writers and my daughter and I for my wife's birthday did a whole set, but I was playing bass, which I enjoy. I play guitar. I played in a band, played keyboards.
In the 80s though, so it was a few days ago.
Okay. Okay. Well, is there anything that transitioned from obviously being an engineer or to your career now from music, anything creative or anything?
Sure. I found that everyone in the industry who the most leaders and most people who invent are artists and musicians and so I've always had that in common. So I paint also.
So but I found that yeah most people do that and at major events for many years we've set up music jams with everybody and so yeah.
It's a big part of people who lead.
I used to play the violin. Well, I would, you know, grew up in not grew up, but I was born in Russia and lived there in Siberia. Born in Moscow, I lived in Siberia. Moved here when we was 10. But I always tennis and violin. Tennis and violin. I was actually pretty decent. My parents say I don't believe them. But that I was better at the violin at some point than I was at tennis. But, you know, going into high school, I had to give one up. And then being, you know, ranked top in the state in one of them knowingly, I kind of chose tennis. you know. Okay. But but but I love instruments. My kids play it. So, but you know before that let's say the origin story way back when obviously you didn't start in a boardroom in Houston right? It was in a shop in Scotland right? Yeah. Yeah. Tell me about that.
Little repair shop. I actually was doing architecture weirdly enough. I was designing buildings in California and Scotland. We just got back to Scotland. My daughter had been born in California. My wife's from California. So we were back and forth. So we had arrived and I worked on a design of a nightclub in an old church which they didn't like my designs so they let me go.
For now this was you were already in California or this was?
In Scotland in Scotland. We just arrived for Christmas and decided to stay and I got a job for a few weeks and worked on a design and they just said no.
No thanks. And then someone offered me a job in Baker Hughes for a year attempt and then someone offered me a job in a repair shop. Mostly cuz this was an American running a Scottish crew.
And he was struggling with understanding how do you do that? How do you motivate people was not the same.
So he hired me to kind of come in and help him with the repair shop.
And so growing up in your early life or let's say going to school or university what was that like? Can you maybe run through some of that?
Well it was all Scotland and England. I mean I went to college in England. But the, yeah, it was very different. I think it wasn't until I got to California that I got any input on who I was or how I who I could be. Everything else was just get a job and be glad to have a job. So, I wasn't really, I didn't think much of myself or what I could do, which is very normal normal British mindset. You just do your job and, you know, you don't think a lot about where you could go. that would be a way of thinking that wasn't you know encouraged or thought about and just kind of put your head down and yeah just work and be glad you have a job that was the kind of communication that you would get so it wasn't until I started I actually in Monros I went to do to go and inspect a rig and measure it for equipment and I didn't like the equipment design for the rig so I came up with a different design found someone to build it and started bidding it without asking anyone. And and I called my boss on a Sunday and just said, "Hey, by the way, price is getting tight. This is what my plans are. This is what I'm doing." And he's like, "What are you doing? You weren't going there to do that. You were going to measure for existing equipment we build in California." So, I was working for a Californian company. And the management team happened to be in in the next day coming in and he said, "Go talk to one of them." So, I showed one of them what I was thinking and within a week they moved me to California. I was doing bike paneling.
Wow. And so would you say that was kind of the first idea that you had being an engineer or inventor that that kind of made someone stop and look?
Yeah. I didn't even For me I I didn't think it was different. I just thought that was what people did and it's it made sense to me. They saw something in it very quickly. I got a lot of time with senior leaders after that and they saw things in me that I'd never thought of as being valuable or interesting or so. Yeah. So they it was it took me a long time to learn that that this is part of how I'm made but very different to most people. So it didn't quite fit in that environment. Although in the repair shop we'd we'd done a some really good work developing value. So I had good business head which I didn't really know either. Never thought of myself as a business person but because your degree is in engineering.
Because your degree is in engineering.
Yeah. In in architecture. So you do a little bit you do a little bit of everything in architecture. I guess building right. Yeah, exactly. So you just you Yeah, you just you get such a wide range. So you understand structures, you understand materials, cement, like there's things that became valuable in oil and gas, but you also think of things differently than most engineers. So you're taught to think more holistically at everything, right? Which is why I got on a rig and we were nobody was questioning that there was a new law in Norway that was causing everyone to build certain machines.
And so it was obvious to me that the problem was bigger than the small pipe. But the law was everything under 20 inch you had to handle with pipe handling. But you could see on this semi the riser was an extremely dangerous situation when you were pulling the riser. And so I designed a system that could handle riser and pipe which nobody had really kind of thought of that as a solution.
People on the rig loved it. We didn't get the job in the end, but the idea came immediately to the Gulf of Mexico and was added to the to the Shell TLPs being built.
So, so they like the concept anyway. So, so you didn't get the job, but somehow the idea translated it to now. And did you get any credit for that or?
No. And and it didn't matter. I the CEO of the company at the time was a very inventive engineer. And at the time, we were not patenting anything. We were just going fast. Just invent invent. And so, for me, I loved it. I love that environment. But the head of engineering had seen the presentation in Norway when I presented it to the management team and he took it immediately and thought this is a perfect application. So applied it and by the time I got there it was being built which I was like wow.
I even remember way back when well maybe I don't know a year or so back when we we were talking I think it was in Fort Worth or something you said something that stuck with me that I remember to this day because I you know I was telling you about our stuff and patents and everything. you said, "Well, you know, maybe sometimes you don't need a patent, you know, and and I think I heard Jeff Bezos say this and I'm like, man, that's probably how I operate." He was like, "Man, sometimes it's just better to just go." I mean, don't be crazy, but like just make a decision and go, right? And then if you make a mistake, turn around, fix it, and keep going rather than just like paralysis by analysis, whatever that phrase is.
It's like driving a car. Like you don't sit there and try and steer a car and decide which way you're going. You move, right? And you can always steer once you're moving, but you can't. It's pointless when you're sitting still.
I tell my wife that when we're riding bicycles. So like you're turning, but you got to like work your legs, too. You know, same same idea. But man, that's really interesting. Early early on. So, okay. 1992 Varco. Most people change, you know, six companies in the time you've been there, but you've just changed like six states and countries.
Jobs inside 35 years. What kept you? It was always interesting because of that early engagement. The leadership was I mean I think they were ahead of even where people are now in how they thought about people. Why it happened was California at the time there was no way to have a manufacturing plant and not have unions and unions made you go slow and broke between the the management and the employees. And so they were working very hard to fix that. So the unions never took hold inside of their shop, but they became very innovative and connected across all of the people. So their their management style was very attractive to me and I just always had fun. Literally I would feel like I got something done, I would move. I used to think the company moved people and then I realized I was just moving myself. I would it was never loved when you move, you know, especially if you're successful in one area because I I learned I was really good at the beginning part of anything. And so once it's once it's got trajectory, I was like, I'm good, you know? I don't need to.
Not fun anymore, right? You already Yeah. Yeah. It's interesting the way you talk about it. Sounds like California was doing a lot better back then than they are now these days.
Yeah. Yeah. Well, we closed that plant, but that plant became our lowest cost plant. It was beating Poland and China in cost.
But that's cuz no one wanted to leave. So we were very focused on process and managing cost. So it was it was an interesting experiment. But you're right, California, we ended up having to leave it.
Which is a shame. A lot of those people still work in the company in different plants. But no, there's great people in California. I always say that. I just think it's leadership sometimes. But well, here's we've got some of your quotes up too from just studying some of your prior, you know, previous interviews and stuff. So you've always said nothing has been easy. So, or nothing has been easy. What would you say the hardest stretch that you never talked about publicly, if you're comfortable sharing maybe something different?
I thought California was hard. But the hardest was coming here and moving into the blowup preventer group and the history, they had deep history. They had who they were. I was an outsider and and I was going against the grain in all fronts. I was pretty unhappy but the the management kept asking how am I doing from California? They'd say how's it going?
Is at this point has this become NOV?
Yeah. No, no, it was Varco. We'd bought Schaefer. We we had we had about five major brands back then.
Schaefer was the last one. But most of the brands we bought were number one. Schaefer was we used to call them number four of three. You know, they were just not last. And so they they hadn't done much development. They all their assets had been stripped. We had a small machine shop. We bought them for around 30 million. Within 3 years they were worth 300 million. But their costs were about 400 million.
So that was that was part of the problem was there was a system that was broken and a culture that was broken and money in money out.
Yeah. It was they were survival. They so like a lot of Houston facilities they they they see management change and they see cycles. So they would protect themselves but they wouldn't deliver to the company. So we actually brought in outside engineers from California into Houston and started working on a new design of BOP and that that eventually became a great story but the journey was rough.
Yeah, I can relate. Maybe not all the way to that, but just, you know, having our little bit company now for two and a half years and battling all the giants and truly having a better technology and and being able to prove it, right? We have more runs and more data and still just facing the just a very conservative space that is oil and gas.
Well, BOPs were the same. Nobody had done anything in 20 years. So, a new design, everyone was nervous. Nobody wanted it, right? No one wanted risk in that space. So, very similar. We had a lot of lot of resistance.
And not just with you know potential investors or or even you know maybe a competitor coming in and saying hey we'll partner with you and implementing your technology or licensing it but but even with customers you know like some of the operator I mean it's one of the hardest things and for me like coming being an outsider you know I come from the world of sports tennis I played tennis played professional tennis was that was my life then I was teaching and then sort of went into entrepreneurial world and my first business was my tennis academy that we still have and but so so I was told two and a half three years ago when we started Cool Edge you're a tennis player you'll never get a drill bit in the hole you know and that first purchase order I slammed it on that same guy's desk when we got our first couple runs but but it's been interesting you know it's been really interesting it is fun.
I mean I've watched that all along because most of what I've done is had vision of where we need to go and then the barrier is no one wants to go there because it's changed and it's different and I've had to sit in a lot of situations where people thought I was crazy and I was wrong wrong wrong wrong until suddenly you're right and they're like well of course that's how you do it. They all they were all on board all of a sudden. So when I left California they they like I remember it was like maybe three months before I left and I was doing these column rackers and they said no one's buying these and they told me to stop. Please stop doing what you're doing because it's it's just a waste of company money.
What position were you at this time?
Oh I was a director of marketing I think maybe. I mean, but in those days there's no marketing. You're doing I had I had a design team. So, we were designing drilling rigs every day, but we were doing tons of designs and I was meeting with all these drilling contractors. They believed they would never spend this money and within a month we had 70 machines sold at high margin. And so, that suddenly everyone was on board. I love that. And then I left which really shocked them. I moved to Houston, you know, to the hard part of the business, but still with the same the same different branch of the same.
Yeah. Yeah. So, I'm I mean internally that's like leaving.
Yeah. Right. I mean, my boss and everyone was like, "This is no one's ever done this what you've done." You know, you've got this business from nowhere. We didn't believe in it. The whole management team was against you. And now we're all on your side and we're building a new plant just to to deliver. You know, and that happened almost every time. So, integrated packages. because I told the world, "This is what we're going to do, standardizing rigs, cuz the '9s have been so painful with these machines." It had to be standardized. And we also had just gone through Y2K, so I knew digital. So, I I'm I'm pitching it. Same thing happened. I was I finally come to the second of three standard packages with Kele Fells. And my boss called me in the middle of the night and said, "Stop selling packages." And I was like, "No, because you're wrong." Wow. And he became president after that that conversation a month later. But it was wildly successful. In fact, NOV happened because the leadership were so concerned about all these packages I had of integrated systems because the first one had had been a failure and they assumed all next 10 were going to take the company out of business. And so they sold it quickly to National. And within the year of the due diligence, we became bigger than National.
And then you teamed up, right?
Yeah. I mean the teaming up we we were so when the two came together all of the national packages were at a loss ours at high margin because we'd worked on standardization and that's basically what then happened. No one could afford not to buy us because we were on time on budget. Everyone else was late because they were customizing.
So gosh that sounds scary to me talking to your boss like that. So So did you have I've had a lot of those conversations. Did you have points in your career where maybe a higher up where you feel like man that didn't go well? Maybe I'm not secure here with my job or or or your success may be over.
I had really good coaches early and they told me you don't need to be afraid of anything here. You will be valuable in any corporation. We need you more than you need us. And it caused me plus back when in the architecture game when I got let go I you know I basically fired. We became homeless. You know we were living in government housing eventually. Like it was bad really. and and everything worked out and so I think after that I came away going I don't care you can't hurt me because you've been to the lowest of the g and you survived you work out that you survived so what's the worst they can do so nothing was worth compromise so I kept going down the road some I mean my boss early on I always had kind of access to the board but my boss took me aside the first time and said did you think we're bad people and I was like no not really and he goes you're acting like you think we're bad people really you have a lot of angst. It's not helpful in these meetings.
I feel the same. Like I still battle with that, you know, and even though it's like I'm the founder. This is my company. We started with my dad. It's a family business, but now we've we just closed our seed round and raised the money that we need and we have all this man. I've got two billionaires on my board out of five, you know, and it's my dad, myself, and then Rahm. You probably know Rahm Shenoi. And it's been but but now it's like you know I answer to the board and the shareholders and I'm always and I'm still feel like oh man but I wish I had maybe a mentor early like you had to say man people might probably need you more than you you know what I mean like that's that mindset because he I was also quite shy so I came out of there's two kinds of Scottish people very loud and very quiet I was very quiet and so I didn't want to speak up so I'd be in meetings we'd leave and I would talk to them like oh this is what happened And he'd be like, "Why didn't you say that in the meeting?" Well, they're all smarter than me. They know more. I don't know anything. And he'd say, "Yeah, but you're young. You can be wrong. They they're terrified of being wrong, but you can be wrong all day." And they're just going to go, "Well, he's young." So he got me to speak. And so these guys after retirement told I mean he he eventually couldn't remember stuff. So he came his last conversation with him he was like I can't really have conversations cuz dementia and all that stuff's going on and the chairman talked to me till a week before he'd died like he would call me there's these people are retired calling me right checking in and so they were that kind of mentors. I laughed cuz my old boss I was in Orange Square with him having a outdoor meal and I remember saying I love telling people that you were a great mentor and he was like what a horrible word. who taught you that word? And I because they didn't say mentor. They were very careful in all their language inside the company really. And he they wouldn't allow boss. They wouldn't allow superior was like the worst thing you could ever say really because it was just bad language for human beings. They were always like we're all good people doing our job. That's interesting. So they were very very like you couldn't have a desk as an executive that someone sat on the other side of. They didn't believe in it because of what it means. And so they would always have a desk on so that you were open conversation. no they didn't believe in the hierarchy and they were really like this is we're we're a unit all together really big on shop floor feeling equal to to office and there's a lot of those kind of philosophies that's really cool I love that I love to hear that and so now now that you are in I guess the latter stages of your career now you're on the other side how did you use some of the early lessons that you learned in dealing with your mentors we'll say and now you see young people maybe like myself or folks that work for you in your company and that also have some drive and some push and speak out or don't or are quiet like how do you how do you navigate dealing with them?
I just help them all the time. So I I have an open door all the time. People are really bad at following up. So because I know I've had people helping me with my schedule going, you can't just say yes to everyone. I said you can, right? Most of them don't follow up. Like the you know I've I open door you can have time. I can do feedback sessions with people. But I I learned in my nonprofit I did a I think two years ago I was like at Christmas time let's do a review.
Everyone came in nervous and I realized I'd had this great experience early where reviews were always a positive conversation about what do you dream of? What are you hoping for? What do you hate doing? Let's do less of that. Let's do more of this.
What is your what is your you got to do it because you know you just need to do it but it annoys you and what's the right percentage. So really healthy conversations. Sounds like it. Everyone coming in was really nervous and I'm like, "Do you get reviews where people are just using it to tell you what's wrong?" They're like, "Yeah, like that is so dysfunctional." That's what I always thought a review was like terrible, critical, critical. I'm like, "Why don't you have a normal conversation?" Anyway, it was it was an interest. It taught me that I've always had this. And so, same with mentoring and how you are with people. It's an ongoing conversation all year about I I today obsess more on people than I do on technology.
Oh, I always say that I I love to invest in people more than anything. Maybe for me it's a little bit of growing up with a Russian father, you know, a tough mad rocket scientist and just always expecting, you know, I'd go win the biggest tournament in Texas and, you know, beat my friend from Dallas or something in the finals and this 4hour grueling match and be full body cramp, can't even shake his hand and be driving down, you know, come home. I was with my coaches and tell my dad, you know, I'm number one in the state. I won this tournament. He was like, what was the score? And I'm like, it was a tough third set. You know, we split sets. He's like, last time you beat him in two sets, even in straight sets. I'm like, Jesus, nothing's Well, I've had to learn because I'm like I'm like that inside. Like I have that perfectionism problem.
But maybe a decade ago, they introduced me to some new people and they said, "This is David." now you just need to know when he says that's not horrible that means it's okay to go and I was like do I say that like that's all you say you never say it's good and I well it isn't because I can tell you what what else needs to be done right so I had to change my language so I let people know if you want to know more like I can go on for a long time about what's wrong but you're also not celebrating when things are good and letting people enjoy the journey so I've learned to always be celebrating people and let them know and then also If you're if you're an obsessive and you want to like strive hard towards beating everything, then we can talk. But if if you if you just need the encouragement, then I can be encouraging. So, I have to do that. It's not natural, but I've learned. I've learned a lot of my own personal weaknesses so that I can help people, you know, really grow.
Yeah, man. That's very interesting. very refreshing to hear because you know I've just dealt with so many partners or co-workers that just have such a different mindset and it's about how you grew up like whoever whatever you live that's what you're going to tell people.
Yeah. So I think when we merged the Varco people were all mentored is the word and and the national people were saying we're trying to build this mentoring program. It's not been going that well. I'm like go talk to anybody. They don't know the word mentor. But it was funny that I said it because I mean later my boss said it to my old boss said it to me. But but he but that was true. They've all been they've all had people in their lives coaching them all along. And so if you've been coached, you're going to coach. If you've been coached well, you'll coach really well. You know, if you if all you've known is hard knocks, which is most of the oil field is the hard knocks. If you can't survive, you don't belong. Then you don't get the best of people. you know, you just get people who are like you and then you get this oil field that looks identical all the time. So, you miss this array of talent. So, I I have I have a lot of people kind of in the millennial world who have stuck with me over 15 years and that's just not normal for their generation. But Ben, my buddy, Mr. Ben is is one of ours. I've known Ben since middle school, damn near.
But, so just quick, I mean, not really switching gears, but back into some technology. You've said before that putting robots into dangerous jobs doesn't feel the same, but sometimes it feels better. Where did you learn the lesson the hard way and how do you sell that to a crew of folks that you know whose fathers basically did the the job by hand? Right.
I don't think it's been easy. I think I think progressive minds are what you need. You can't really take people who resist technology and add new technology. It doesn't work. In fact, HMP did a brilliant job with our the all of our rackers originally were in the UK sector or Norway, couple outside of that, but generally were very unsuccessful. People had really bad stories.
And then HMP had such a different mindset on how they engaged people. We had zero problems when when we started running machines in the Gulf of Mexico with HMP. And so I I was really interested in why. And what they did was they took as they were building the rig they just tested with people to see who fits these systems better and they handpicked people and it tended to be younger people because we were using joysticks albeit Atari joysticks which we still are but people who are being in gaming systems were very comfortable with it.
And the traditional person who pulled hard on the brake would rip a joystick out. You know that happened all the time in the early days. But if your natural response is to to be a gamer and to to work the system that way, you're going to do better. So, it really was always that. And every time we've taken technology to the field, you get the leaders to do it. Everyone will come along. So, once everyone's doing it, everyone starts to learn to do it. They don't complain about it. It's I don't like the way these new things work. They go, I I want to stay employed.
So, it's understanding where to place things. I was obsessive on going to the field with every machine to hear the truth because you never hear the truth. You know, you just hear the office version of that's working or isn't.
Yeah. I used to have to take engineers. We have we have a real problem with engineers who don't go to rigs. And early on in the ST80 development, we someone was telling me, well, the Thailand rig is doing really well. And I said, what does that mean? They've never had never called us. All the other rigs call us. And I went, go visit. Let me let me get you a flight.
He called me and he goes, "They threw it off the rig." I went, "Of course they did. That's what silence is. The new product, silence is always turn it off or don't use it."
Pain means they're using it. You know,
That's so important, man, to just have and then like I told you my story, just being, you know, boots on the ground from running this business from the ground up. It's so important to visit the rigs and be there and bring those Yeah. and bring those guys some steaks every now and then and go look at the shakers and I mean just like those guys really enjoy someone that comes down from the you know what I mean to to really be connect cuz I mean that's like the boots on the ground those are the folks getting their boots and hats and really putting their lives in danger.
You can sell through the business into the rig you know you can do that but it's not the same it's not the viral kind of response that you get from the rig saying I love.
Yeah, they can advise, but truly I found that our number one target is really the drilling engineer. You know, I have such a great connection thanks to my tennis life with some I mean just top top execs, you know, CEOs, CFOs of these big companies, operators. But a lot of times those guys are like finance bros, you know, and they hire these great drilling engineers who have to be a master's or bachelor's degree, not just in drill bits, but in rigs and motors and reavers and liquids and fluids and and it's just so and those guys and and then there's 200 people a day sending them an email. I've got this great thing. I've got the but they're really like the middle, right? You've got your top guys that are the bosses and running the money in the company, whatever. You got your guys on the ground in the field that we talked about doing the job, but the drilling engineer is like the offensive coordinator. They're calling the play.
And if you know how to be on a rig, and a lot of people don't know how to be on a rig, you know, if you if you know how to manage that space, you're going to be all right.
But there's people who don't do well in that space. You know, if you're going to be upset or offended, they're going to eat you alive. It's a it's a schoolyard of an environment, you know. So, you have to you have to know what's valuable and, you know, what what they're going to care for. like you say, bringing them stakes, stickers for hats, like there's things that matter on the rig, power games, you know,
And really too, I'm a big family person. I have five kids and four dogs. We got a big family and our dogs like our kids. So, so a lot of times, you know, just not even talking, drilling or bits or anything. Just getting into like, man, who are you? How are you? You know, how's your f like having those and genuinely having those conversations.
And they can smell it on you, you know, they work it out. They'll tell they might test a little bit, but they understand. I I've I've learned so much about my products by going in the early days and hearing the truth, you know, because there's a rigs work like islands, you know, they're they're they protect themselves and the outside is the outside. And so getting the truth out is quite hard.
Especially if someone did something wrong as opposed to your machine did something wrong. Oh, operating. That's a hard hard to hard to get that truth unless you get there and have conversations and you show you're into it. Like you're everyone, you know, can relate to that.
Yeah, you're right. It's a human thing. It is. And all around the world is different. You know, different rigs are different types. I love that what you said. I got to use that rigs are like islands, but it's true. Even if it's like the same company,
I mean, psychologically, you have to understand what you're dealing with. They're not they're not going to tell you. You're not going to get the truth. But you have to go there.
