Startup Series: Runwise

Hey everyone, Jason here. I am the My Climate Journey Show host. Before we get going, I wanted to take a minute and tell you about the My Climate Journey or MCJ as we call it, membership option. Membership came to be because there were a bunch of people that were listening to the show that weren't just looking for education, but they were longing for a peer group as well. So we set up a Slack community for those people that's now mushroomed into more than 1,300 members. There is an application to become a member. It's not an exclusive thing. There's four criteria we screen for. Determination, it's a problem of climate change. Ambition to work on the most impactful solution areas. Optimism that we can make a dent and we're not wasting our time for trying and a collaborative spirit. Beyond that, the more diversity, the better. There's a bunch of great things that have come out of that community, a number of founding teams that have met in there, a number of nonprofits that have been established, a bunch of hiring that's been done, a bunch of companies that have reached capital in there, a bunch of funds that have gotten limited partners or investors for their funds in there, as well as a bunch of events and programming by members and four members, and some open source projects that are getting actively worked on that hatched in there as well. At any rate, if you want to learn more, you can go to myclimatejerny.co, the website, and click the Become a Member tab at the top. Enjoy the show. Hello, everyone. This is Jason Jacobs and welcome to my climate journey. This show follows my journey to interview a wide range of guests to better understand and make sense of the formidable problem of climate change and try to figure out how people like you and I can help. Today's guest is Lee Hoffman, co-founder and COO of HeatWatch. HeatWatch is the first end-to-end boiler and heating system management platform. The company combines a proprietary heat computer and sensor network, machine learning systems, and a team of trained boiler experts to reduce fuel consumption by an average of 20 to 25% across over 2,000 buildings in New York City. I was excited for this one because building efficiency is such a big problem. And HeatWatch has so much scale and they've done so under the radar. This company started as a side project more than a decade ago. But I think if you haven't heard of them yet, you will be soon because they are having a serious impact and building a serious company. We cover a lot in this episode, including some of the reasons why buildings are such a big source of emissions. We talk about some of the existing tools and some of the incentives and other reasons that contribute to the problem. We talk about the various solutions and why they're insufficient and we talk about the unique nature of HeatWatch's approach. We also just talk about some of the twists and turns of the entrepreneurial journey from the origin story all the way through where the company is today and of course where they're going and how it fits into the bigger picture of overall decarbonization. Lee, welcome to the show. - Thank you, excited to be here Jason. - Excited to have you. And it's funny because HeatWatch is such an amazing company but it's also a company with a ratio of amazingness to visibility is probably bigger than most. So I have a feeling that many listeners are not familiar with HeatWatch and are going to be blown away when they hear about it. - Yeah, we're one of those companies that probably impacts many, many, many people's lives and yet you've never heard of us unless you probably work in the property management industry. - Well, maybe that's a good segue. What is HeatWatch? - Yeah, HeatWatch is really a software and hardware platform for buildings that helps run buildings and building systems better. So the platform really consists of a computer and wireless network and sensors that go into a building. And then we use that data to control the building systems more efficiently, better for tenants, better for owners to cut carbon output. - And what's the origin story of the company? How and when and why did it come about? - Yeah, so HeatWatch is one of those typical 10 year overnight success stories. So I come from the tech startup background. I've been writing codes since I was a little teenager, have a computer science degree. This is my fifth startup. My last one was randomly in the wedding tech industry and sold to the knot. And my co-founder Jeff comes from the real estate side. So really the company started about 10 years ago because Jeff was managing 150 buildings in the city for a single owner and really was just paying the energy bills. And literally just by paying bills could spot that one building might be using 70, 80, 90% more energy whether heating fuel or electricity than another building on a per square foot basis. And this just looked ridiculous to him. So he went to the owner who's worth billions of dollars known as one of the best and most efficient operators in the country. And the guy literally had no clue that his buildings were wasting millions of dollars. And so that was kind of the genesis of there being a problem here. And as we dug into it, what we really figured out was that almost every building in New York and pretty much the entire country is running on control technology that really hasn't changed since the 1950s. So you might go into brand new, lead certified, green glass building and it's has a fancy set of controls that have digital displays. And I can almost bet you that the algorithms on those controls are hard coded and are the same ones that we're running buildings in the 1950s. And so what we really did together over the last 10 years is we built a much smarter, more advanced computer that goes in the buildings and a wireless sensor network. And both are really, really fast and easy to install. There's no wiring. It's not like a 10-day manual design process. It's all standardized. All wireless goes in. We can usually, in even in big buildings, get in and less than a day. And then we use the sensors and the data and software to essentially control the core building systems much, much, much more efficiently. So we started with heating as an example. And last year in the average building we controlled, we were able to reduce the energy usage by 21% while making tenants more comfortable. So the end result is property owners and co-ops and condos can basically save 21% on their heating costs, which could be $50,000 a year in certain buildings. And they'll pay a small fraction of that to us to do it. So it's an incredible investment. And the ROI is usually less than a year. So one of the best investments you can make in real estate. But at the same time, it actually makes the people in the building more comfortable. And as a byproduct, you're cutting carbon output by 20 plus percent. So we've looked at over the thousands of buildings we're now in. The average building will take about 8 to 10 cars worth of carbon output off the road simply by controlling pieces of the building slightly better. We started in heat. Now we're doing it with water. We're going to be rolling out cooling. There are a whole series applications, almost every aspect of buildings are not being run efficiently today. And what he watch does is it uses technology to run buildings better. So how big a source of emissions are buildings in general? How big is the problem? It's really big. So everybody likes to talk about electric cars. And I'm a huge advocate of electric cars. Love Teslas. It's fantastic. But when you look at the carbon output threshold from different industries, almost 30%, like almost a third of all of carbon output in this country is coming from buildings. So literally just by running buildings more efficiently and better, you can have a gigantic impact on carbon output and you can fundamentally change cities. And I think that's really kind of one of the things we've clued into. Simply by operating buildings better, we can make cities substantially more affordable, cleaner, and more sustainable. So it's kind of a win for everybody all at once. And stepping outside of heatwet for a moment, if you just look at that problem of buildings and the significant carbon output that you mentioned, why is that? What are the biggest factors that are creating that excess and waste? A lot of it has to do with where buildings started from. So when you think about electric cars, to fundamentally change how efficient cars are, cars get recycled every 10 years, like 10, 15 years. So you can build a better mouse trap, better car, exactly what Teslas is doing. And you can wait 15 years. And eventually all the cars will be replaced and be efficient and awesome, right? Buildings last hundreds of years. So when you look at a lot of time and energy and thought goes towards new buildings, right? But new buildings are a tiny fraction of the market. And even in 50 years, they're still going to be a tiny fraction of the market. So when you're looking at the carbon output from buildings, you're really looking at the decisions that were made in the early 1900s through the 1950s, when the vast majority of today's building stock was actually constructed. And it's fascinating if you look at the history, particular heating in these buildings, It was really designed around the first Spanish flu in the early 1800s. So just like we're starting to realize today with COVID, having fresh air is a good thing. A lot of buildings and their heat load were designed around having windows open all the time. And oil was incredibly cheap back then. Nobody really knew about the environmental impact. So really these systems were designed to just run 24/7 nonstop. Doesn't matter how much energy you use. The only output is people are in the case of heating warm, can keep their windows open. It really is only in the last, it's going to be shocking, but like 10 years where people have started to think maybe we should be more efficient. And just to put this in scope, I'll walk into buildings that were built in 2005 that have building systems that are insanely inefficient put that were designed in the early 2000s. Because again, even then people were not thinking about efficiency. They were thinking about purely cost, ease of management, those types of things. So there's a huge opportunity that's opened up in the last 15 years. And I think unless you're really coming at it from a software perspective where you can constantly use software and algorithms and sensors to calibrate buildings, you're really not going to be able to solve this problem. And I think that's really where our unique take has been. And we've been very myopically focused on that and that's why we've been able to spread to thousands of buildings in that time period where more than doubling every year and why we can have such a large impact. And you mentioned some of the different systems you work with. He said heat and cooling and water directionally. What are, I mean, just as a building's novice, what are the key systems in a building and how do those breakdown in terms of their contribution to this carbon excess that you're describing? It's different in every building. So I could say heating would be one of the large ones. But if we go to Florida, that's probably not true. So it depends on the type of building, the age, where it's located, what the type is it, a residential building, because it offers building. So it changes in every building. But there are probably a handful of key systems that are using a ton of energy, right? Heating, especially in cold areas, is a gigantic one, right? You know, like you can be spending like a big building, could be spending a half a million or a million dollars a year on heating gas or heating oil, right? Cooling can be a gigantic one, particularly in office settings, like the amount of energy used to cool building is significant. You have your chillers off for even 10 or 15 minutes, people notice it. So that's a gigantic one. And then the one that we're really bullish about, particularly is water. It's one that's been overlooked for a long time. But just to put this in scope, like a running toilet in New York City can cost, you know, like every is familiar with it, right? The toilet just keeps running, running, running. We all kind of like, oh, I should call somebody about it. We leave it. Like average building has a ton of these. And the average running toilet can cost thousands of dollars, single toilet can cost thousands of dollars a year. And there's a tremendous amount of energy that goes into cleaning that water and particularly in areas where you have droughts. It's an even bigger issue, right? It's not even just a financial issue. It's an environmental issue. So, you know, those are the three big ones. And then the last is obviously electric that goes to common, but also to like common systems like elevators, fans, pumps. So those are really the four. And then within each of those you have many different types of systems. And really what we've done is we've looked at what are the common types of little verticals of applications. And we spend a year or two doing it really, really well so that we can guarantee that when we take on this type of heating system, we're going to guarantee to reduce the energy usage by 20% make tenants more comfortable every single time in every situation no matter what goes wrong. And then we'll move to the next type of system. And that's what we've been doing really for 10 years. And the actual software and sensors and hardware that you're describing is it the same providers that are providing this equipment across these different systems in a building or is it a completely different landscape from one to the next. And also within these is it a very fragmented landscape or is it consolidated where there's a handful of dominant players that have a line share of the market? So the easy answer to that question is most buildings have no sensors. So if you were to look at 95% of building in this country, just let's look at heat or cooling alone. The sensors have literally no, there's nothing in the building to tell the system what the temperature is. So most buildings run on what's called an outdoor reset, which is literally a hard coded table of its 40 degrees run 22 minutes inside could be 96 degrees inside and nobody has any clue. And that's how almost every building in the country for heating still runs except for the heat watch building. So there isn't a standard here. In fact, we wanted to use off the shelf sensors and things. We didn't want to build hardware in the beginning. It just didn't work. None of the sensors out there were easy to install at last in 10 years on a single battery charge, which meant when you're in thousands of buildings, you're replacing batteries in every apartment. It just it wasn't tenable. So we had to develop our own custom wireless network that could go through four to six floors without a repeater. It could be installed in minutes last to 10 years. And that allows us to then instead of saying run the heating system randomly for some number of minutes, we can precisely predict using machine learning what the temperature indoor should be and literally minute by minute change the ideal set point based on our machine learning models and precisely keep the building at a temperature that's going to be the most comfortable for tenants, but also minimize fuel usage. And are the bulk of your customers retrofits where you're coming in and adapting to existing systems or do you try to time it when the systems were getting swapped out anyways or if it's new construction. We're primarily retrofit and that's not because of there's anything radically different with new construction. It's primarily just the bulk of buildings around our retrofits, right? If you have there's like 12 million buildings in the United States, you know, you might have a handful of thousand new ones every year by definition and most of your business if you want to have a big business, a big impact is going to be retrofit. So that's where most of our attention goes. But you know, even new buildings really don't run much better than the old ones. So, you know, we can work with pretty much any type of buildings that have central systems. And is it more of an open approach where the different hardware and sensors tend to integrate and talk to each other or are there attempts either by heat watch or others to have more of a vertically integrated approach where there's kind of one system and all the different components that sit under one roof and then don't play nice if you don't use let's say heat watch branded product. It's really funny because for 20 years, there's been a system called Backnet, which is was like the design of Backnet was a beautiful idea, was any type of system can talk this universal language and talk to any other type of system. And it was literally a beautiful idea. Everything would be open, right? What actually ended up happening was because everything could talk to the system, you ended up having an industry built around contractors who made these incredibly complex like wiring designs where it would talk through Backnet, but there only be the one guy who installed it who actually knew how it was it was set up and literally would take weeks and months to design and install and nobody would pay for it because it was too expensive and then you're beholden to this one person and by the way, it actually wasn't very efficient because the systems weren't actually designed and I think what we kind of not because we wanted to just because we had to stumble and do is that I think this is a lot like Apple. We had to go in and we had to vertically integrate and make software that fit with sensors and hardware. They were all tightly coupled so we could get these things installed incredibly quickly, incredibly cheaply and make sure that we could deliver results every single time in every building and that wasn't a business decision. That was purely a necessity decision to do that. Now that we've done that and we're in thousands of buildings, we're now working backwards and saying can we make this open? So we were building APIs to allow other people we work with dozens of parties and other contractors to use our APIs to push data in, pull data out. We're working on ways that potentially third parties could write applications and build a platform on this. We want to make buildings open but it doesn't work. It hasn't worked when it's a distributed way of doing that. It works when somebody really has a vision for how to make a set of systems and a platform that's really easy to install, easy to use and genuinely can deliver results 100% of the time. And are there certain aspects of these systems that you wish you had access to that could be high impact from a cost and carbon or efficiency standpoint that today are walled off or closed or not connected or otherwise not compatible with you watch? I don't think there's anything that's not compatible. I mean there are things we don't take on yet. Like we're not touching elevators, for example, right? Probably there's a substantial amount of waste in the electricity and how the elevators run but we're not going near that right now. I think it's everything we look at is not designed to be integrated with. When we talk to a boiler, that boiler was probably put in 40 years ago or 30 years ago. It's not like it has digital inputs and outputs that are meant to talk to us. It's literally a mechanical boiler and we built technology, mostly wireless technology that will retrofit onto that. However, it's constructed to make it a smart boiler. So we don't really look at it as like walled off that's right. not really an issue, it's more of we have to be really intelligent in how we design our hardware and our software to be able to integrate and deliver results no matter what the system is and how it's designed. And every building is different. I mean, you literally can walk into 10,000 different types of buildings in New York with a thousand different variations of how the eating system is working, often designed by one guy who just decided to wire it up and connected that way. So the software and the hardware have to be standardized but also be incredibly adaptable to real world situations. And are any of these hardware makers, let's say the boilers, for example, are they starting to come out with connected alternatives? Not really. I think it's a lot like you see in, I always use cell phones as the best example, right? You have companies that are really good at making mechanical devices. They are not software companies. And every time you see a shift towards a software industry, it's very hard for people who are like in the business of manufacturing mechanical goods to become software companies, culturally, product-wise. It's just a very big jump. Also, you have to really understand how building's operate and the tenants in them and how property managers operate. And companies that are used to making boilers, for example, don't really understand that market. They build a boiler because they're experts on the mechanical systems of a boiler, not because they're experts on how tenants operate in apartments and how data science work. So we really haven't seen that at all. And I really don't expect much of that either. And what about from your standpoint? Is there any world where you go the other way and you start coming out with connected devices yourself versus the retrofits that you've been doing? Is there any advantage to doing so? Yeah, we're always looking at that. I mean, especially as the company gets bigger and bigger and we have access to more and more capital. Like we look at where can we deploy that capital and have a bigger impact. I think there are a lot of really interesting things going on in the world. Electrification is a big one of them. That requires a whole new infrastructure, both in terms of supplying electricity to buildings, but also in terms of how the systems operate. We're talking about potentially electric boilers, heat pumps, things like that. We're always looking at those things and saying, hey, could we build a better mouse trap? So far, we haven't found an area where we can add a ton of value. We just very clearly see that it doesn't matter what the system is, whether it's running electric or oil or gas. You still need software, hardware that really understands how managers operate, how tenants live and can use smart data science to deliver results consistently every day. And so if I were a building owner, let's say, or a reed or whoever, and I wanted to start saving money and doing what's better for the planet, it seems like there's so many different places to start because what you guys are doing, for example, I mean, that's one area. There's insulation. There's new windows. I mean, there's probably a bunch of other things I'm not even thinking about yet. I mean, what are the key buckets outside of heat watch that buildings can do to clean up their acts and then how does the heat watch solution fit in as a lever for change? Yeah, so we're always trying to, like, we come from a property management background. We always want to think like owners. And I think there are a number of different areas that you can make improvements to your building. I recommend, and this is a little self-serving, but I think it's generally a good principle for making improvements to your building. Start with the highest ROI improvements first, right? Start with the low hanging fruit. If you can make a huge significant improvement in your energy profile with a tiny little investment, do that one first, then work your way up to the much more expensive one. First, you'll see how far you get. That's particularly important with new climate legislation. So in New York City, in almost all the major cities, there's been legislation passed over the last couple of years that are setting carbon caps on buildings. In New York City, that starts in 2024. The cap goes down every single year until 2040. So what we like to recommend is start with the things that are going to deliver significant financial returns to you first and are cheap and easy to install. Then see how far that gets you towards your 2024, 2030 goal. Do that, take on the next project that's slightly larger in capital expenditure and ROI, and then move up and see how far it gets you because there are a ton of things you can do to a building, many of which are incredibly expensive. And you want to know where you are before you dive into them. So I'll give you an example. One of the best things you could possibly do to a building is completely change the shell of the building, right? Make it virtually passive house. Place the entire skin of the building, replace all of the windows, make it literally close to passive house. Now for the average building, that would cost 20, 30, 40 million dollars more than that. So think about that for somebody who owns an apartment. You can get hit with a half a million dollar assessment to do that. That's probably not the first thing you want to do. So the upgrading controls where heat watch fits in is you put in $10,000 to upgrade your control situation. We'll put in heat watch. We'll start controlling your heating, your water, things like that. You'll probably make 20 or 30,000 dollars a year back every single year. So now not only have you potentially reduced your carbon output by 10, 15, 20 percent, but now you have actual positive op-X in your budget, which now you can use to pay for the next thing. Then you might say, okay, all right, maybe you want to look at a boiler replacement project or maybe want to do electrification of the boiler or maybe want to upgrade windows because we have really leaky windows. And you can look at those and you can make do one project at a time, see where you end up and continue to hopefully add cash flow back into the system so you have continued money to pay for more expenditures. Where do things like mandates fit in? How important is policy to what you do? I think it's incredibly important. I think there are two sides to policy. There's advocacy, which even though it's not political, what you do, I think fits in that range, right? Just making people aware of the problem and the impact goes a tremendous distance. And I'll give you an example of that. 10 years ago, when we used to go into the room, I won't mention any names, but like brand name, large operators, we would go in, right, and we'd pitch them and we'd say, hey, we can cut your carbon emissions by 10 or 15% and their eyes would glaze over be like, like, why do I care? That's 10 years ago, it's not even that long. We literally 10 years ago, like I remember going into one of the largest operas in the world and they just didn't care, right? So we always had to deliver incredible return on investment, put $100 into the system, we will give you more than $100 out every single year, ever afterwards. We get a few buildings on, they see the economics and they're like, holy crap, there's no better investment we can make that'll give us a return and they give us the whole portfolio. That's how we've had to always sell. What's shifted is because of people like you and the work you're doing is we'll go into the room right now and we still say, hey, put this in, you'll make the money back in six months and you'll make more than 100% of your money every year. And then in the next breath, we can say, hey, also this is going to substantially reduce your carbon output and they know what that means and they actually care. They care as a company, they care, you know, as a brand, particularly the larger operators. So that's piece one and then the second are the incentives and the government policy, which really are just like tailwinds to, you know, like ships taking off. In the sense that there are huge incentives now, Connet, almost all of the utilities now have seen the numbers and the reduction we can deliver on a per dollar basis and are now offering to pay for up to 100% of our product in most buildings. So now we can go to an owner and say, it's not $100 in and you'll make $100 back every year. It's $0 in and you'll make $100 every year, do you want it, right? So that is certainly accelerated, you know, deployment of technologies like ours. I think it's an immense immense good for the universe. Like it's literally just encouraging people to do the thing they should be doing and would have done, but would have just done a little bit slower. And then you have kind of the more overarching policies like in New York City, local law 97, which is putting carbon caps on buildings. That takes the buildings who are a little bit more conservative. So like co-op and condo boards where you have a board of 10 people, it's kind of not their job. Like if you've ever tried to get a decision out of a group of 10 people where they're not experts on something, it's like, I don't know. Let's talk about it for six months. Let's wait a year. Maybe we'll decide on it next year. Now we can go in and say, look, this is clearly going to save you money. It's clearly going to make your residents more comfortable. Oh, and also, by the way, in two years, if you don't do this, you're going to have $100,000 a year fine from the government. So it just puts a little time, like lighting a fire under people who are a little bit slower on the decision making process, which I think is, again, a really positive thing. So all of this stuff has been great for us. It's been great for a lot of people in the industry. We're big believers in products have to have a value outside of the incentives. If all the incentives went away, we would still be growing pretty quickly every year. based on the economics based on it's a better and easier way around buildings, it makes tenants more comfortable. That has to exist in the first place, but when you pour this extra legasteling on the fire, it certainly helps accelerate the adoption. In whatever metric you're comfortable talking about, give us a sense of where you are at today in terms of scale and traction. Yeah, I mean, we're in over 2000 buildings. We work with almost all the largest operators, I mean, related Blackstone, LeftFrak, Douglas Elliman, First Service, I mean, name all the way down to the small mom and pops. We've been more than doubling every single year. We're opening up nine new cities this year. We started with heating this year. We rolled out water. So, you know, there's a huge impact and, you know, there are literally, even though we've been growing very, very quickly and we're probably one of the largest companies in the space in the world. We're still in a tiny fraction of buildings. There's aren't a few thousand buildings out of 12 million in the United States. So, we're very myopically focused on that and we see a huge potential impact as a result of that. We really do believe like when I, you know, there are everybody who's run a startup knows this. It's brutal at times, especially in the beginning. And like the thing that you have to have something that makes you wake up every day and get excited and like when I can look at we literally take in just all of the energy data from our building. So, we can see literally year over year what the reduction is. And we can see literally counts those eight to ten cars per building. We're taking off the road. The equivalent by just running the buildings better. You see how there's a path to making cities fundamentally more sustainable, healthier and more affordable for everybody that lives in them. And I think that makes us really excited even on the hardest days when you want to pull all your hair out. And where are you bottom that? I mean, it sounds like you're growing really fast, which is great. What's holding you back from growing faster? And specifically, what's holding you back from growing faster that's maybe outside of the scope of your direct control? So, the biggest thing that just holds back is it's really hard to hire onboard and scale, you know, people. Like even in areas that you expect like a sales team, like you have to myself and my co-founder and our head of sales have been doing this for years and like so easy to like we know how to make the sale, we the product is great. And yet you bring in 20 new salespeople and you're like you have to build the system to make sure that each one of them really knows how to talk about the product. Like when there's problems, you're figuring out where they are and like as that gets bigger and bigger and bigger, it's harder and harder and so you have to be great at building systems and processes to basically make it almost like a factory for scaling, right? And that unto itself, it's like you're building a whole new product, which is the factory now. And I've never done it before. This is the first time I've ever gotten to this scale and it's a really hard problem. And I think that is still the biggest bottleneck is building that machine that scales the company and scales our growth. I think the second piece is really how do you get into some of the you know harder to get into institutions? We have yet to break, we're in a ton of municipalities, we're in a ton of high schools, we have yet to be able to break into the college market. And why use the largest owner of property in New York City? Like hi whoever runs that please talk to us. It's very hard to get to them. These are decisions are typically made by committees planned out 10 years in advance. Like it's very difficult. Governments like on the federal level, on the state level, also very difficult. There's a lot of political oriented stuff there. There are again some of the largest property owners. I mean the best I test I always uses in the middle of winter when it's 20 degrees at in a given city, drive around properties and look for where windows are open. Right? And that's a good indicator that that building is not running up. Nationally in fact is wasting probably 30 or 40% of its energy. And you can see this in almost all of the public housing complexes. The windows are just streamed open every window, 22 degrees out, getting into those where it's not just a usually like a single owner or a you know somebody is really like clued in on making changes. It's hard and we're getting better and better but those would be areas that certainly you know would like to get more traction. Well I mean it's clear as you're going through this that the company is having a big impact. I'm curious would you categorize yourselves as being an impact driven company and how important is it that every employee that works at heat watch be impact driven if at all and how do you think about that? I think it's two sides. You have to balance an impact driven culture with a results for our customers driven culture. And then the wonderful thing about our business and one of those rare businesses is that both have the air in the same direction right? So like if we can cut energy by 25% in a building that's not only great for the building it's great for the city it's great for the tenants because they're more comfortable etc. So it's a win-win but you still don't want to get absorbed in the idea of let's just have a giant impact on the world and like you know whatever it doesn't matter like how our products operate if our customers think it's great. You still want to be on the ground. You want to know what they're feeling. You want to make sure that you're delivering something that the customers walk away and say holy crap this is awesome and this is making my life so much better. It makes the building run better and it's always a balance between those two things for delivering culture that really delivers results because if the customers love what you're doing and you're focused on the big picture ultimately the company will grow faster and you'll have more impact. If you could wave your magic wand and change one thing that's outside of the scope of your control that would most accelerate your progress what would you change and how would you change it? Oh man that's a really tough question. I would love to see the thermal shell of every building that's already out there changed to be incredibly resistant to heat and energy transfer. Like we can do an incredible job running the heating systems or cooling systems of buildings substantially better and we'll cut energy usage by 20, 25%, 30%, but like at the end of the day when you go into a building from 1950 and like huge side of the building is just leaking right at it. Leaking heat or cool out like there's only a certain amount you can do and it's really hard and expensive problem and if I could snap my fingers and make every building you know perfectly insulated you know we could have an even bigger impact on the world. So are people working on that and if so what are some of the more promising solutions that you've seen? We talked to a couple of entrepreneurs who are working on it. I have yet to see anything that's really truly solved the problem in an economically viable way. Again incredibly expensive. I've seen a couple of systems come out of Europe that's like a shell that you kind of like put on the outside of the building and then you can run electrical and other things through that outside shell. I haven't seen it done its scale and I haven't seen it done really cost effectively yet but I do think that that's a major potential area for innovation. So anybody that's looking to have a major change on the universe figure that out if you can make it compliant so that you don't have to there's a building code in New York and almost every city has it it's called local law 11 means you have to put people on the side of your building and manually tap every brick and make sure it's not cracking and then you have to patch them. If you could make a shell that is proven to not need to do that or need to do it much less often you would save buildings millions of dollars. You're be worth it for them to spend five or ten million to redo the shell and get all the energy savings. So if somebody wants to spend some time doing that or do it please do I think it would make the world a better place. And I know you guys are commercial focus but how much of this applies in the residential landscape as well. I mean it's the same sport if you look at let's say single-family homes or town homes or things like that or does it need to be one of these high-rise apartment buildings or office buildings. Yeah so just to be clear we're about 75% residential but it's residential commercial buildings meaning like yeah and I realized after I said that I said commercial but then we're talking about a high-rise residential so yeah we just think of it as six units or greater basically you know is it your house is it your brown stone or is it something bigger than that right so or a single family house so I do think all the same things we're doing apply to homes. The only reason we haven't really gone down in that market is that they're vastly simpler and there are different sale and I think there are pretty decent solutions for them right like if you have a home like I would certainly have hope that you have like a nest or something in there that's controlling the boiler and in fact I would tell you to go look at like dandy line and look at geothermal heat pumps like it's much easier you're literally just like there are few zones like turn off you can turn the heating on and off like there's one or two toilets like just don't have them running right like it's a lot easier than when you're in a 100 unit building and you know these 32 apartments are slightly different temperatures in these apartments that you have pipes that are distributing equally and the electric for you know the fan systems and the pumps or you know like not working optimally and you might have 72 toilets and god knows that are running god knows where they are and you're selling it's really a business sale so it's a sales team it's on a consumer product it's just a very different business and there's so much room for us to grow and have an impact on big buildings like one big building uses the energy the same energy is 500 home so you know we're very myopically focused on that but sometimes I say we might not do something there but it's just I think there are other people already doing great things there and we can have a bigger impact on the multi-unit building side. And for anyone listening that's excited about what you're doing, where do you need how Putin want to hear from? Yeah, I mean we're hiring every day. We're looking for great salespeople, we're looking for great engineers, great client services and client success people, HR. I mean, if you're interested in this space and you know you really want to have an impact and you're a hustler and willing to be creative and push the envelope, you reach out to me directly at [email protected] and go to our website, eWatch.com, contact us. Lee, anything I didn't ask that I should have or any parting words for listeners? No, I think what you're doing here is fantastic. I've been listening to the podcast since we met and I've listened to a lot of the back episodes. You're bringing awareness to an industry a lot of people know about. It's really sexy to be into electric cars and things like that but that's actually a very small slice of the problem and the solution and you know we're really excited to be a part of it and really excited that you're bringing awareness to the space and I love that you're doing that and I hope there are a thousand more entrepreneurs that will help solve these problems over the next 10 years. Awesome, well love what you're doing as well, Lee, so thank you so much for taking the time to share it with me and with listeners and best of luck to you and the eWatch team. Awesome Jason, thank you so much. I really appreciate it. Thanks again for joining me on my climate journey. If you'd like to learn more about the journey, you can visit us at myclimatejourney.co. No, that is dot-co. Not.com. Someday we'll get the dot-com but right now got co. You can also find me on Twitter at J Jacobs 22 where I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear and before I let you go if you enjoyed the show please share an episode with a friend or consider leaving a review on iTunes. The lawyers may be say that. Thank you. [Music]