This is a transcript of Pitchwerks #95 with Bob Fields and Jacob Kring of Hibersense.
When we first started, we thought, Okay, we're gonna go out, we're just gonna sell directly to people maybe we'll do a Kickstarter. We're kind of naive...
That wasn't Bob.
Bob did not come up with that strategy.
No Bob was not there yet.
So, that's a tough thing I mean, well, how would you know though?
And you don't... Until you kind of go out there and you fall on your face, and you figure it out.
Hey everybody! It's Scot, it's Wednesday and it's the Pitchwerks Podcast, and I'm very happy to tell you that Hibersense is in the building and I've been waiting to get them in here for a long, long time.
This is one of those things where just everybody wins, they're gonna save a lot of money, they're gonna make it comfortable, they're gonna save the world they're gonna build stuff in America, they're gonna high five. We're gonna drink beer to be awesome. So Jake and Bob are in here to tell you all about how those things are true. I assure you I will return you back to your regular scheduled objectivity next week but this week I'm really happy that these guys are here, before we start the interview, I'm gonna ask you to rate and review Pitchwerks because that's how other people find it and it's super important to me.
So just a one-star, five star, sort of a thing. You've done it before, you can do it again.
Let's talk to Bob and Jake and find out what's going on with Hibersense and why you wanna know this company.
Alright, ladies and gentlemen, it is my great pleasure to introduce the now shipping members of Hibersense sitting directly across from me. I've got CEO Jacob Kring and sitting on the couch between the two of us, Bob Fields, chief revenue officer, who I gotta tell you, you're among friends, right now, you're on the Pitchwerks podcast where its sales marketing and startups you're in the right place.
The first place we have to start is to make sure that the folks that are listening to us know exactly what it is that you're working on and why I am such a an apologetic geek for it, so I'm gonna try something and then I want you to jump in. So Hibersense is, among other things, a control platform for the comfort systems in your house, is that a fair opening statement?
I think that's fairly accurate, yeah.
But it differentiates by actually giving you control in a way that hasn't been seen before. Also true?
Very true. We like to say we empower homeowners over with control of a system that they've never had control over before.
Yeah, I love the demo at Demo Day last year when you guys were showing video of vents opening and closing at the and things like that, but I wanted to make sure that people were seeing why I was excited because sometimes I think you guys are probably, I don't wanna say tired of it, but... Too close to it right where for me, I... This is the kind of stuff I by man, this is what I buy.
You should have seen Bob, earlier today when we're working with some designers and he was just explaining all of the different ways that the software we have built into the product can really kind of revolutionize how you control your space in your home, and understand how you use it when you use it, and the different things you can do with it. So...
Yeah, yeah, I'm right there with you.
Hey listen --
I don't you can't think you're lacking energy.
No, no, no, Hey, look, you can't be a chief revenue officer if you're not excited about the products and services that you offer your clients, right? Because yeah hey we're raising money and if anybody's out there investing in companies we'd love to talk to you. But at the end of the day, nobody makes money till you can sell a product or service over and over again. And what I love about Hibersense is that we solve a problem that nobody has yet to be able to do.
Hibersense is a connected climate control solution for homes with forced air heating and cooling, there's up to 100, million of those homes in the US today.
Yeah, and according to the Department of Energy, there's over 90% of them have one zone one thermostat, which means you're hot in one room your partner's cold in the other room and you go in the hallway and you fight over the thermostat and see who's gonna win.
You may not love the mention of that brand, but I'll tell you, I'll tell you who the perfect person is for you. It's the person who's already bought into, like somebody else blaze the trail. I'll give you another one.
Honeywell owns so many industries. They followed that same a trail that had been placed where people had all these stalls and objections that they put up against the Smart Home and then on any was like, "Oh yeah, we're a giant billion-dollar company. Let's just follow the trail. They got blazed.
On one hand, we really do like what the Nest is done. It's created a lot of awareness and what you can do from an intelligence perspective, and control and your heating and cooling yeah.
But now we get to come in and be that better solution. Another step forward in terms of controlling your comfort.
And I seriously do believe, if you could run the numbers, you'd find that the people that are gonna buy your product or the people that bought that, when it was new, and now they're waiting for their next hit.
Well, so we still get people who have three Nests in their building, and they're sitting there thinking, I'm still uncomfortable, I can't figure it out. I believe that. I'm one of them. And you guys wanna see... Yes, award behind this is... That's no small thing just by the way of educating people. That is the Consumer Electronics Show case, I think this consumer electronic show which the largest trade show in the US, 70 of our closest friends visit their each January and it's really the innovation capital of the globe. People travel a many, many of the attendees I think about a third or more or international attendees as well, so it's really an international showcase of technology. And so we were selected to exhibit in their innovation showcase, which is called Eureka Park.
Oh wow, so and... And so you have to go through a process to be selected to do that. And we also were awarded a it's called the tech hall mark of Excellence Award for energy efficiency Product of the Year.
Yeah, which we love that we got that, but we were in competition with companies like LG Electronics that had three products in the category and we beat them.
And what was interesting is.
That's a good feeling.
That award was given in a reception after in one of the evenings of the show and there was hundreds of people who are target audience that we wanna sell to. Yeah, in the room. And when they were getting ready to make the announcement, they listed all of the logos of the companies on the board and literally when they called out "Hibersense it was kind of the strangest thing, the crowd, it was deafeningly silent because they had no idea who Hibersense was and I had enough time to think, "Oh my gosh, are they gonna clap? And then all a sudden it was like, a rounding, y'know, applause. Because people are like, "Oh my gosh, Hibersense. Then we stayed there for like three hours talking to people after that because they now knew about us.
You've been at those things though where... You got that distinct sense of a pay-to-play or a quid pro quo somewhere in the air. So, I think probably a little bit of it was just a, a legit amazement that maybe the system works. I, I think you hit the nail right on the head there, because there is some play of that. So certainly I would think our friends that LG Electronics may have thought that they were gonna win an award since they had submitted so many into that same category.
Absolutely, that's a multi-billion dollar, multi-national, corporation. I remember them when they were Lucky Goldstar. Yeah, but we don't wanna... They get so mad when you bring that up now and I mean no disrespect to it it's just when people ask me if I know what L-G-is... And I go. I remember one, they were Lucky Goldstar. I literally had a lady berate me at a bus stop, one time and be like, It doesn't stand for that anymore... Like I don't care.
So all right, let's roll it back for a second... People need to understand, also though a... They may not have heard of Hibersense before today's show, but they need to truly appreciate the gravity of that accomplishment, right?
This is not an old company. When did you guys actually decide to become a corporation, and get into this business?
So a little over two years ago now, I think we founded the company we were literally still students at the University of Pittsburgh, we were a week from graduation, and we were still dealing with fine as we were actually driving across the state a competing in a Department of Energy Competition, trying to win that trying to get some funding and we were like, "Oh well, crap. We need to actually be a company for this to work. So we found-
It sounds like a good plan.
Yeah, so when Jake says we, he doesn't mean me.
No. So the original founding team was myself, one of my classmates at University of Pittsburgh Brendan Quay and Daniel Mosse one of the, he's a former Chair of Computer Science at the University of Pittsburgh, he actually stepped down at the time of the founding of the company to take a bigger role in it...
Wow, So that's quite a credential isn't it...
Yeah, yeah, so he leverages the experience in the technology and we come with the youth and the excitement.
Don't let him hear you say that he thinks he brings, at least some youth. I assure you.
He definitely brings excitement.
There it is... You gotta cut the guy a little bit of slack, that's a little harsh there, for a second.
He is Brazilian. He is passionate.
Yeah, yeah, there I mean yeah, 'cause I met him a demo day.
Oh yeah, and that is an intense dude.
You did not forget him.
No, I'm here to tell you, I... So you started right and you've got a... You've got a winner, it just from the pure this is gonna save a ton of energy and therefore it has value, but then it had to occur to you that there's this whole like supply chain between where you're standing and where the consumer is, right? Yeah, how do you go to market? What did you come up with in those two years?
So... And this is one of the reasons we've had Bob join the team when we first started, we thought, Okay, we're gonna go out, we're just gonna sell directly to people maybe we'll do a kickstarter. We're kind of naivnaïve.
Yeah, yeah, yeah.
That wasn't Bob.
Bob did not come up with that strategy.
Bob was not there yet.
So that's a tough thing. I mean, how would you know though?
And you don't... Until you kind of go out there and you fall on your face, and you figure it out.
There it is.
We knew that selling direct to the consumer, it was a challenge, and we had so many different moving pieces as a part of our kind of whole solution that while we were designing it to be nice and easy, it still required some know how to get the job done.
Yeah, just based on the sheer volume of copper connections that people are making. That's pretty pedestrian compared to what you're doing and that there is an obstacle.
So when we met Bob and he was like, Look I could help you set up this installation network can help you work with the right people that are already going into homes.
The people that we try to work with now, are HVAC contractors, Smart Home integrators. And when you're uncomfortable, at your home, you have this expensive piece of equipment, it's probably the most expensive piece of equipment you have in your home sitting in the basement and it's not working the way you want it to.
Yeah, you're not gonna go down there and try to back around and figure out what-
You're gonna call the guy you think is an expert, which is the HVAC contractor absolutely. So what we wanna do is leverage their experience and work with them to actually deliver our product in a way that makes sense and then it works well for them right off the bat.
So how did you two get connected?
So at a time, we were at the time we were a part of the AlphaLab Gear program.
And Ilana Diamond, the managing director, introduced us-
through business. She's been great for us just introducing us. And helping guide us where we need to go and just kind of point out the things that we might need to do in the future.
So you knew Ilana already, Bob?
So you talk about sales, and marketing and PR here. The network is the key. And I would say to anybody listening and beyond it, it doesn't matter what your role is in a company, you build your network, you meet people, you'd be nice to them and you figure out how to help them because that comes back around to you at some point in time. So I hadn't spoken to Ilana in many, many years, but I knew Ilana Diamond through our work at the Consumer Technology Association.
And those are the folks who run the Consumer Electronic Show, and we were both in a leadership member of leadership roles there. And I knew her when she ran her own consumer electronics company, and so as she was watching these guys develop the prototypes, seeing people like wanting to give them money to put these prototypes into their homes, yyou know, so as the director of this program, helping start-ups grow, and become viable companies. She obviously recognized that a couple of really smart guys. They need some business help, right? So she opens up the role back and says, Who can help them. And thankfully, Bob Fields was in that Rolodex, with specific experience that could really help take Hibersense to that next level and help these guys. So Ilana introduced us basically by phone in about February of 20... 17. It feels like a long time now. February 2017, we did a whole bunch of Skype calls back and forth. What's going on, listening to all their hopes and dreams? We definitely grilled him 'cause we were, at that point, looking to change our strategy in terms of going to the market, so...
Oh yeah, this was either a great thing or an existential threat, this hire.
We were pushing him really hard in one direction and he can tell the story...
And even before we get there. So we had these great conversations and again, we're in a market place where everybody understands the need. If you have a forced air heating-cooling system, you have hot rooms and cold rooms, you only get it and you're calling to be comfortable. And so I went down and spent a couple of intense days, with the guys 'cause I'm from Boston. If you can't tell...
I didn't hear it at all!
And to back up a minute. I've been working with start-ups for almost 10 years now.
And I originally come from the automotive electronics after-market, those are of us of a certain age. Grew up with car stereo, what better industry to be involved with cars, music, so... So being part of the association, and I totally recommend people join associations as part of their business but don't join just to be a joiner, join to get involved, to understand what's happening in your industry. And I knew just from my own work that the automotive electronics after-market was a declining market. And I've been trying to get in a long before we talked about the Internet of Things and even had a name for that we knew about sensorization and smart homes and big data and so I've been searching for an opportunity like that. Now I can get really excited about technology. And so I started working and helping some other companies through the network that I had developed, and what I discovered was entrepreneurs don't lie on purpose.
They believe everything that they say because they're passionate about what it is just as I am, when I get involved, so...
But then new data often introduces itself into the situation and then what happens?
You they're, they're in their own virtual reality and it's just not real. So I came to Pittsburgh for a couple of intense days, and as Jake said, we had some very intense conversations about ideas about going to market, and how we developed this and products and all of that and everything was really going quite swimming-ly until about almost 45 minutes before I should have been leaving already. When we were talking about go-to-market strategies and how things would be, and they were really drilling me on people telling us we should do this and I finally said, "Hey look, if you wanna do that, I can help you with your business, I'm a business guy. But you're not gonna be able to be advantage of my network and the opportunities that we have. But that was really a part of the genesis of our working relationship. I love working with these guys, because one, they're super smart, you know, that...
That's really obvious.
Two they're really delivering on their promise of what they can do. But three, they're open-minded. So when I work with start-up I wanna know three things. One is their technology all that... Yeah, in Hibersense is all that. Two, how close to commercialization are they? Because nobody makes money, unless you sell something over and over again. As a start-up out there, trying to raise money, don't be judged on how much money you raise, you're gonna get your product out there and sell it over and over again.
The King of all vanity metrics!
And number three is are they open-minded right? Are they willing to listen? And one of the things that's been really interesting I've worked with a lot of people that just kinda listen to what I have to say because I get a lot of gray hair and I've done a lot of things, but these guys push back and make me answer why they wanna know why I...
Well, let me tell you what I like about what I see when you guys are sitting here at this table together, right? And yes, this includes snap judgments, and it's just gonna have to be okay, right?
I see you Bob as the guy that protects the thinkers and basically gives them the space because you're trusted, I see that trust that Jake has it in turning that stuff over to you. And that's critical, like that is sort of like the seed that becomes a larger version of this little microcosm you're living in right now? Where Bob goes out there and he's your bar room brawler, he goes out there and he's like...
No, your assumptions are wrong. And let me tell you why, and this is why you should love it, right? And that gives you that opportunity to breathe and think. And what's 2.0-3.0-4.0 -gonna yield? What do customers tell me on the back side after they've made the purchase and those kinds of things, it's really nice to be able to delegate something. So mission-critical to someone that you can trust. Does that feel right?
Yeah, yeah, I totally agree with that. I think one of the things that was a challenge for us early on, was just kind of that aspect of it, we had a really good technical team, and we could make things work, right, yeah, I... But having somebody out there pushing around and seeing what is out there and what isn't out there and what we need to know, it's helpful for us, for sure.
Well, I'll tell you this, a lot of times the mistake and it's not a mistake so much, it's the talent that's available to a lot of people that are at the age that Hibersense is at right now is good theoretical good academic talent, but there is... And I'm speaking just from experience in my opinion, not everyone has to agree.
Do you need someone who gets up on their back legs, and fights? You need someone who I understand the mission is not to stay clean in the - Clean as in ethical... Of course, they have to stay clean - Clean as in you're gonna go out there and not everything's gonna be perfect, right? And sometimes you need to completely re-frame a conversation and sometimes you need to reject the premise of a conversation that somebody throws at you, in order to advance your cause.
So how... How do you build out this network? Is this a thing where you are calling people that are doing HVAC stuff or are they starting to come to you?
It's a little bit of both, and... And then also going out and taking part in trade shows, like CES and yeah, there's HVAC focused shows that make sense for us and shows where now people that are there, they do smart home integration, so they're installing those nice custom home theaters, and the nice panels and things like they work with, and so you get out there and you talk to the right people and you sell them that this is something that could really make a big impact for their customers.
There's probably some element of this too, where having the same sort of technological backbone could be useful if it's Bluetooth or Wi-Fi or Zigbee or Z-Wave. I don't know what all technologies you guys are connected to, but I have to believe that's at least part of it, yes?
Yeah. So most of our sensors, our devices are all powered by Bluetooth and they communicate with our central hub, which from there is actually going out to the cloud, giving you the chance to use a mobile app to interact with it. Tell us whether you're hot, you're cold, set your preferences, and then all that stuff that we're aggregating from those Bluetooth devices. It's helping you learn what rooms you use the most. That I had. Room is always too warm, so you go to bed at some time. And we start to learn those patterns. So you can say I want the good night scene so 30 minutes before that comes up, we start to cool it down so that when you walk in, 'cause it's not like a motion light switch when you walk into a room with emotion light switch boom, the light goes on and you have light. If you walk into a hot room, and you kick the AC on it's still hot.
And one of the things that's interesting about that is everybody has kind of adapted. I've been in my house for, I don't know, like a dozen years right? Now you're telling people that their house can kind of be new to them again, right? There's a really interesting value there and you can be happier in the home, it can almost be new to you, once again. So as you talk to people, you already sort of suggested that what they really want is comfort. And then the second thing might be energy savings, but what else are they telling you that they like?
I think the vast amount of information that we gather, kind of helps us empower them and helps them make better decisions about how they're managing the heating and cooling, and it gives us opportunities to kind of help them manage the entirety of their home and how they use it and understand sort of themselves a little bit better.
But basically also we give him the tools to manage it, but at the end of the day we actually don't want them doing it, because we will actually manage it better than they will... By giving them that control to begin with, we build trust with them because now they're able to say... Oh, I did this, I did that. Oh, wait a minute, I'm here, I'm comfortable right now. The longer you actually use our system, the less you actually have to integrate with it, right?
The patterns start to form.
We have the capabilities to provide detailed scheduling and scenes as Jake mentions away and all of that. But at the end of the day, you actually don't even need to use it.
Right, that's the ideal.
Just tell us how comfortable you are on a room-by-room. Basis. So we learn when you come and go, we learn if you don't show up, so we'll have the room ready for you and then we don't keep doing it if you don't show up, and we shut it off when you leave it, so really... We maximize that comfort, so you don't even know it. So, the best thing is, you don't even know.
Again, why would you want to... There's an old design thinking question that you should ask when you're thinking about like what should a user interface be? Right, and it's what would this do if it were magic? And I've always loved that question as a way to sort of approach what a new thing or a new campaign or a new whatever... Website user-interface should be... And if it were a magic it would just be comfortable that the answer to that question, that's what you...
Right and one of our installations, today, this week, excuse me, was a light commercial property, and the manager I was talking to the manager later the supervisor had told the manager that they did not wanna give everybody control of the Hibersense system because we're coming out of a solution where they have the lock thermostat, right?
I love the locked thermostat.
How many of you work in a place where there's a locked thermostat and only the maintenance guy or the boss can come out and do it, right?
And so, the supervisors told the manager. Said hey, look, I don't want everybody to do it, I'll do it, I'll take care of it. And I just said to the manager, I go look, the problem is she's thinking about an old world solution to an old world problem. We're giving you a new world solution to that old world problem, because the other thing that we give is not just the people that the capability for individuals to control it, but... But we're gonna get that supervisor the ability to see what they did. So today, you can't do that in our world. You can see who did what, when and understand, and then if you balance the fact that she likes it three degrees, more than you do at the end of the month when you still save 33%, on your energy bill, who cares?
That's where I was going next. I was wondering whether or not the individual employees have the ability to report their relative comfort. That's a killer.
Yeah. We one of our pilot programs last year we did one floor of a downtown Pittsburgh office building and there was 14 offices, two common areas in the building, on this floor and it was all controlled by one thermostat in on HVAC system that was on one side of the building, so they ran, I think in that facility, four space heaters all year long, summer and winter because depending on - it would flip. So the person in the summer time, who was next to the HVAC was freezing because she was next to it and the people ran fans but then it flipped in the winter time, right? She needed to run a fan, right, and the other one needed to run a space theater.
It was this over at the URA? Because I saw you guys were over there too, and they loved it.
Yeah, we like the URA for sure. Here in Pittsburgh.
Well, I, it has, just because those were pretty big reviews and I can't believe that their space is like a brand new building.
Yeah, we're absolutely made to be retrofit friendly, right?
There's all these buildings exist with all of these problems and we can fix it.
So we were not only we got rid of the space heaters, we learned a lot of lessons to... We used to think we could control the temperature in every space, but you know that person who is next to the 25-year-old picture window, is still gonna have to run a space heater because that window leaks and is cold. And so, now they actually put that on their capital budget plan to replace that window because now they recognize that it's a problem because not only did they see that they got rid of these other space heaters, but we've also given them all the data, for all of the rooms that they can make those decisions on.
You had also is interesting about that is the fact that you've given them an easy entry point into analyzing energy use now, right? Like now, when you're talking about that window, it doesn't feel like you're polishing brass on the Titanic, it you're like, "Yeah of 'course we're leaking energy. Everything about this process is inefficient right.
Yeah, I like seriously. I mean, if you can easily map out exactly where the problems are, you can show them with raw data. Here's the room, here's the difference, you can see it with your own eyes.
That's cool, nice.
And we've also learned some pretty cool things too. We also learn that in two office spaces that the people in the middle are still slightly uncomfortable and we recommended that they just switch offices, because the temperatures would match what they would want them to be, unfortunately because they're using archaic other systems we... Yeah, they're not able to do it but... But because we have the data we're able to make those recommendations. We even found a roommate, that was physically incompatible, with her other roommates because every time she was called all three of her other roommates said that they were hot at first. We're trouble shooting our system to figure out what's wrong with our system. It's not working, and then we're on step back and look at the data says, "Oh oh, sorry. You are physically incompatible with your roommates, you may like them, but you're incompatible.
This sounds like data you wanna sell to Match dot com in just saying, but just be like... No, this one, here's cold-blooded, but this one over here loves it, toasty, one thing that pops up whenever you start getting the channel involved, it you've got this HVAC channel, out there is training like I've seen a bunch of great products do poorly because the representation is poor.
Like they didn't fully understand it, they didn't send enough people to training, they didn't, they thought it was one thing and then they started selling it and then they called you for an assist and you said Wait, you said what?
That's as much of a big a problem at retail though, right?
You have the solution, you put the market, you try and give them all the information. And first of all, what retailer actually has trained people to orange they're buying a slower one. Circuit City was the master of train salespeople and their long gondor. There's probably people listening that like... Oh, Circuit City, yeah right, so that's a problem no matter where you stand. And this is what happens with a lot of startups is they get first of all they wanna see how much money they can raise. It but then all of those investors and we face it, they're pushing them DII di direct to consumer, that's the way to go big market blah, blah, blah the...
I couldn't disagree more and so I... Well, we're all on the same page in this role, but if we're talking to investors that may not be the case. So what we're doing and what we're focused on right now is rolling out our product in a methodical way that ensures that that doesn't happen. So we're literally two and a half years old, right now and we're delivering a third generation product on a very small budget. I mean it's, it's a privilege for me to work it's a privilege for me to work with these super smart guys, who I wanna do it right. We've actually approached this, to build high percent in Pennsylvania, so our sensor which was designed from the ground up in and Pittsburgh, Pennsylvania our circuit boards are made about 20 minutes now, at the hair and our injection molding will happen in are Pennsylvania, so on a the... Not only were we made in the US, but we're made in Pennsylvania.
I bet for that I... And also on our event package it'll be the same component. Try and same thing. So we definitely are on track for Made in America designation. There's no real certification, it's kind of self-reported.
Yeah, I we're making sure that... And especially in the construction world, which we're in and the trades people, it's really important and we think it's important.
We've got 25 plus percent tariff on products that are happening and we don't know when that's gonna stop right now, right at a... You're not a trained as a... No, you're uniquely positioned on that.
Well, and we actually use a thermostat today, as part of our solution which is subjected now to a 25% tariff that affects the price of how we're able to sell our system.
You may very well be the first person to ever sit on that couch, who's having their injection molding dune here.
And we're super excited about it and the fact that the matter is, is we we're an American company, we're based here where Pittsburgh born and bread and we're happy to be able to do this here for selfish and altruistic reasons, as well, we're bringing jobs to the area. A right, we've hired two people so far this year we're on track to hopefully you hire a three or four more within the next 12 months and as our plan goes, we're gonna do that right here in Pittsburgh.
I wish you guys nothing but the best of success.
Bob and Jake from Hibersense, thank for coming in, I think I got thanks for vines.
Alright, that's the end of the ride. Thanks for tuning in and thanks to Bob and Jake again, for coming in, and everybody over at Hibersense Hopefully you are subscribed to this fine program by now if not get onto your phone, and click that button, it will make it much easier for you to receive sales marketing and start-up stuff every single Wednesday morning, subscribers get it first and everybody else has to wait for the website to throw it up. It just doesn't seem like it's a good way to do it.
I hang on next week, Buzzy and I will have another one of these out to you in the mean time, take care of yourself.
The Pitchwerks podcast comes to you from Pittsburgh, Pennsylvania, a production of the Epicast Network and MacTaggart, LLC. Engineering and production by Buzzy Torek and Nick Miller. For more information, feedback and ad sales visit Pitchwerks dot com, that's PITCHWERKS dot com on social media, find and follow the show on Twitter, LinkedIn, Facebook and Instagram, using that same brand name, PITCHWERKS.
Beginning in February 2019, transcripts are being added for selected episodes over time.
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