Every innovator has that a-ha moment, that key point in their story when their passion and experience meet an idea. It’s that moment when it all just clicks and the hustle begins.
For Steve Reinharz, who moved his tech company from California to Detroit in early 2021, that a-ha moment is at the heart of his journey: a journey of dreams and risks; a journey of success and pain. That moment follows years of building and then ultimately losing one business. It came at a time when he was job-hopping and opportunity-seeking, always open to the next big idea. When he happened upon it, it would drive him to bootstrap and grow what’s now a part of the next-generation mobility tech scene in Detroit.
“I knew someone was going to create this business and I could not let it go; it was going to be us,” said Reinharz, CEO of Artificial Intelligence Technology Solutions (AITX). “That’s where I drew my strength from.
“I feel that my entire life and upbringing was to support this venture.”
Steve Reinharz, CEO of Artificial Intelligence Technology Solutions (AITX) and Robotic Assistance Devices (RAD), which moved to Ferndale in 2021.
An entrepreneur gets his start
Reinharz grew up in a working class family in Toronto. As a school kid in the 1980s, he attended Junior Achievement events wearing a business suit and carrying a briefcase full of financial statements. His dreams were clear right from the start: he wanted to build and grow companies.
His dad, an accountant, introduced him to computers, first bringing home a Commodore VIC-20 and then its successor, a Commodore 64. Reinharz learned all he could about the machines, which were among the world’s first personal computers, and recalls “making rinky-dink programs.”
As a high school senior, Reinharz wrote an essay for his Computer Science class on “Artificial Intelligence,” an obscure and experimental topic for the times. That essay would become his first entrepreneurial venture, a self-published book on AI curriculum that he spent the summer after his freshman year at the University of Western Ontario selling to local high schools. “I took out a loan, hit the streets and sold 400 copies,” he recalls.
After graduating from college, Reinharz moved to California, where he built a security integration company characterized as a pioneer in merging technology and security. The company’s mission would be central to his career: to use AI-enabled devices to improve security systems and drive overall security costs down for companies. Reinharz started the business with $10,000 and grew it to 35 employees over about eight years before he was forced to close after a major contract didn’t get paid by one of his customers. He lost everything from that first business venture.
Reinharz knew he had to keep moving forward. He spent the next decade helping others build their businesses and trying to find opportunities that excited him.
A-ha moment
Reinharz was working as a freelance business development consultant in the San Francisco Bay Area when he came across a computer processor that could perform human detection. To Reinharz, this technology built on his previous business venture and lifelong interests in both AI and security. Finding it was “a dream,” in his industry, he said. He knew this technology could revolutionize traditional security solutions.
This was the big idea he had been on the lookout for. He knew he could build a business around it.
But big ideas — especially those based in technology — take patience. They take time. And they take money. Reinharz quickly burned through the funding he had set aside to build a future business. He spent through his 401K. He turned to family and friends, and by the end of the year had raised $500,000. He had not personally taken a paycheck and had no immediate plans to do so. But this still wasn’t enough.
In investigating ways to raise money, Reinharz turned to the OTC Market (Over-the-Counter) that operates directly between two parties and without an exchange or stock broker. In 2017 he completed a reverse merger and the company became Artificial Intelligence Technology Solutions (AITX).
AITX opened an R&D space in Canada. Shortly after the reverse merger, a robot that was in the manufacturing stage had to be dropped from the company’s production line because it wasn’t working properly. Investors reacted badly; the company stock price crumbled.
Reinharz was forced to downsize. He still was not personally taking a paycheck and was performing HR and administrative work in addition to his CEO role to keep costs down. The skeletal staff that remained went on deferred salary. Twice a month, Reinharz would call each employee and ask them how much money they needed.
“I can’t describe how dreadful it was. My ability to keep making these calls made me question my own mental health,” Reinharz said. “I didn’t struggle to keep the employees; the ones who wanted to stay did. The struggle was not to keep them, but to keep a bit of money in their pockets. I had one employee regularly selling plasma to minimize the impact.”
That memory causes Reinharz to choke up.
But it was one of the pivotal moments in his business path that motivated him to keep going.
Reinharz worked the phones, took out loans and made high risk deals. He scraped out a contract here or there to make it through 2018. In 2019, he sold his house, putting that money back into the company. And when the company needed additional finances he was forced to drain his wife’s 401K, which at one point he had declared untouchable.
And through it all Reinharz endured chronic hip pain, a result of his years playing hockey in Canada. The resources simply were not available to get his much-needed hip replacement surgery.
But it always came back to one thing: that idea for the business itself. If Reinharz and AITX didn’t make this product, someone else would. “The odds were certainly against us succeeding, but I couldn’t let go or everyone involved would lose everything.”
The great pivot
The turnaround for Reinharz — like many other businesses, for better or worse — came during the start of the global pandemic in 2020. One of Reinharz’s programmers, who hadn’t been paid in three months, had an idea for an AI-enabled face mask detection system. The idea was fueled by businesses and public spaces attempting to enforce face mask-wearing among patrons and members of the public: an AITX machine would detect whether someone was wearing a mask and alert them to put the mask on or even prevent entry. An engineer on his team suggested the product could have a health screening option as well.
These solutions captured the attention of media. More importantly, they satisfied the appetite of investors. Their money allowed Reinharz to recalibrate debt, bring his team members up to date on their paychecks, add healthcare benefits and distribute bonuses.
With a team of 75 and a solid investor base, AITX is poised for growth again. In the company’s latest quarterly report filed with the Securities and Exchange Commission, AITX reported a 315% increase in revenue over the year prior. One of AITX’s three subsidiaries, Robotic Assistance Devices (RAD) is now the market leader in providing AI-driven security solutions sold into security services and facility management industries where they perform duties previously tasked to human security guards. One may encounter some of the company’s products outside of a convenience store, where they’re deployed to deter instances of trespassing, or at a distribution center assisting in the processing of delivery vehicles as they come and go, or even in a corporate lobby welcoming employees and guests, performing touchless health screening procedures.
Fitting into the AI rust belt
During his years of generating ideas and building businesses on the west coast, Reinharz always planned to get back to his roots in Canada. After opening the R&D office outside of Toronto, he searched for factory space in the region, setting his sights on metro Detroit. He found what he needed in the spring of 2021 in Ferndale.
Today at the company’s Ferndale facility, referred to as the REX (RAD Excellence Center) security robots, both mobile and stationary, are being manufactured.
Reinharz said he has been impressed with the talent his team has been able to attract, mostly from the automobile industry and mostly ending up on his radar by word-of-mouth. The company CFO is based in Detroit; there are 25 employees at the 30,000 square foot facility and Reinharz sees room to grow.
Steve’s original dream looks like an inevitable reality.
“We haven’t maxed out the space yet. What does it look like two or three years down the line? The plan is to build or acquire another structure in Detroit,” he said. “We want to be a part of the AI rust belt story.”
This article originally appeared in Crain’s Detroit Business