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Episode 171 is a conversation with Bob French from 75F, Kelle Donohue from Strato Automation, and Mike Bendewald from Mantis Innovation.
Episode 171 features Bob French from 75F, Kelle Donohue from Strato Automation, and Mike Bendewald from Mantis Innovation. In our Vertical Roundup Series, we’ll cover the unique needs and solutions across various sectors. Today, we’re discussing Simple Buildings. Enjoy!
Introduction (0:50)
Intro to Bob (1:54)
Intro to Mike (2:22)
Intro to Kelle (3:28)
What are simple buildings? (5:11)
Why is it so hard for simple buildings to improve? (10:14)
HVAC Control Solutions (20:00)
Alternative Solutions (36:58)
How do people get started? (39:23)
ROI (42:35)
Success stories (48:30)
Recommendations (54:53)
Music credits: There Is A Reality by Common Tiger—licensed under an Music Vine Limited Pro Standard License ID: S662008-16073.
Note: transcript was created using an imperfect machine learning tool and lightly edited by a human (so you can get the gist). Please forgive errors!
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The links are below in the show notes. And now let's go on to the podcast.
Welcome to the Nexus podcast. This episode is part of our, what we're calling a vertical roundup series where we cover the unique needs of specific building owners and specific [00:01:00] types of buildings. So today we're covering what we call simple buildings. So buildings with small footprints like a hundred thousand square feet or less.
Buildings that are just a little bit less sophisticated or a lot less sophisticated sometimes than, uh, other buildings that we talk about on the show quite a bit. Um, and I'd say this is often a forgotten group of buildings when it comes to technology. And we have a white paper on this called the untapped 87%.
And that refers to, um, the fact that 87 percent of commercial buildings don't have any sort of digital systems. And so that, that was, Uh, created a couple of years ago based off of research that we did and research that the government has done here in the U. S. And so we brought in some experts, the people that are out here living this every day, directly creating solutions for that simple buildings market.
And so, um, I'm gonna, I'm gonna bring them on one by one here. So first I have Bob French. Bob, can you introduce yourself, please?
Bob French: Hi, I'm Bob French, Chief Evangelist [00:02:00] with 75F. I've been here for 10 years. I'm one of the first employees. So I've lived through this whole evolution of what we call the IoT BMS, which is the gap filler between a thermostat and a DDC BACnet type system.
So we filled that gap between those two, including the DDC BACnet. Um, for central plan controls.
James Dice: All right, next to have Mike Bindewald. Can you introduce yourself, Mike?
Mike Bendewald: Sure thing. I'm Mike Bindewald with Mantis Innovation. I, um, we're a facilities consultant that really manages risk for our clients, whether they're building owners with tenants or owner occupied facilities.
We focus on financial risk mitigation, so helping with capital planning, helping with budgeting for operational expenses. We work on operational risk as well, so we understand, help you bring visibility to your properties so you can understand. Which ones or which, [00:03:00] which assets within those properties are going to fail so that you can proactively, um, address that.
And then we also work on regulatory risks. So there's a growing number of building performance standards out there that, um, a lot of customers need to be, um, aware of and manage. So we're a consultant that kind of helps from strategy and road mapping all the way through turnkey project development and deployment.
Um, so that's, that's Mantis in a nutshell.
James Dice: Alright, last but not least, I have Kelly Donahue. Kelly, go ahead and introduce yourself, please.
Kelle Donohue: Sure. Uh, my name's Kelly Donahue. I'm the Vice President of Global Sales and Marketing for Strato Automation. Um, we are a HVAC controls, uh, manufacturer of hardware and software platforms.
We're based out of Montreal, Canada, and we really focus on going at the market a little bit upside down. We're kind of going from small to big versus going from big to small. Our thoughts around that is really focused [00:04:00]around the need in that untapped market that's out there. Um, and we think we do small to mid sized buildings extremely well, but we also have the ability to scale larger, but, um, really.
We're really focused on, uh, the market from the bottom up, uh, cause we think that's, um, uh, a strong need in the marketplace.
James Dice: Awesome. And so we have Bob, Bob and Kelly, you guys are focusing on controls. Mike, you guys are more service provider based. You have products that you, that you install, but you're, you're focused on broader than just controls just to give people an idea of kind of where we're coming at this.
Generally though, I think you guys can all agree that when the building doesn't have controls, it's not a good outcome. Compared to, you know, what they're trying to accomplish in those buildings, whether it be, uh, operations and maintenance or sustainability or whatever. Um, so that's the, that's kind of the scope of our discussion today is to talk about that.
Type of building and let's start by defining it. We call it simple buildings [00:05:00] because you know, you could have million square foot warehouse that operates like a small building in that it hasn't have any controls It's not very sophisticated in terms of the systems or the people operating it. So it's not necessarily about the size.
It's really about the sophistication, whether there are simple systems and simple operating processes. How do you guys think about defining what we're talking about today?
Bob French: I would say you're looking at the HVAC equipment. Just to say it succinctly, packaged HVAC systems generally can best solve with packaged controls.
So simple buildings are going to have packaged HVAC systems. These could be rooftops or split systems or other things that are designed to just run without, um, automation from the outside, except for, say, set point or maybe, um, supplier temperature control, that kind of thing.
Kelle Donohue: So, I tend to look at it, uh, you know, along the lines of what you're talking about.
I tend to look at it at [00:06:00] the complexity of the site systems and what the demands are. Um, from those systems. Um, so if you take a, a small square footage building and you put a complex system in it, it, it, um, uh, really would have a need for a building automation system organically. Uh, as you start to move into the simplicity of the systems, um, and it doesn't, it's irrelevant of the square footage, uh, you would, uh, need the need or the common thought around the need of, um, uh, full, full blown building automation controls is less and less.
Um, and that's. Kind of what we're, we're fighting against here to, to get some, um, get some systems into these simple buildings. And so they, they reap some of the rewards, uh, and benefits of having a building automation system into these smaller spaces or less complex spaces.
James Dice: And one of the things that's interesting here is this, this spans verticals, right?
So Mike, I know you guys work with, um, like small retail, [00:07:00] Owners like, um, you had spoke with Dollar General at Nexus Con. How, how do you guys think about the different sectors here? That, cause it could go across, it could go specific. Um, talk about the, the different sectors and verticals in which this, this type of building shows up.
Mike Bendewald: Yeah. I mean, we, uh, we see this in, um, financial services, you know, retail bank branches, retail stores. And then to the point earlier about larger buildings, but still having simple systems, warehouses, distribution facilities. Um, in some cases, even industrial facilities too, can have some pretty simple HVAC.
Um, you know, they're in the context of a much more complex, um, you know, process. But in terms of the ver the, the, the crosscutting kind of property types, that's kind of how we think about it. The one thing I would add is that, um, the ownership structures make a lot of, make a big impact as [00:08:00] well, and, and really who's controlling the HVAC and lighting and that energy using assets.
Is there a split incentive between the landlord and the tenant, um, in terms of, you know, who's getting the benefit from improving those systems? Um, and then, and just making sure you're talking to the right person, because, you know, if it's the tenant or it's the landlord. The, the control of the, the actual controls, you know, can vary, right.
In terms of phones that,
James Dice: and it's not always straightforward. One of the things that we've like, like some box retail is simple. Some is actually very complex. Like if you walk into a Walmart or a target, those aren't exactly simple, even though it has the package rooftop units that Bob was talking about earlier on the roof.
You still have very sophisticated multi zone refrigeration systems and those sorts of things. And so there's a little bit of like system based, like, it can be simple from an HVAC perspective, but doesn't have to be [00:09:00] simple from, say, refrigeration or others. You could have a K12, uh, You know, school district that has some simple buildings and some simple systems and some more complex.
And so, it's really a type of building rather than a specific vertical that we're talking about. Um, let's jump into why it's so hard. So, we cited this research of 87 percent that came from CBEX. They did a big survey. They do it every couple years. Um, It was basically saying that there are no digital systems.
They were saying HVAC, but I think we made the assumption that if they don't have HVAC control, they probably don't have other systems digitized as well. Um, so let's talk about why. Um, You guys are out here doing this every day. Um, Bob, you guys are selling to building owners, but also your channel partners who are the contractors and distributors for controls.
Kelly, I think that's the same with you, Mike, you guys are providing either, either consulting services or [00:10:00] actual projects to deploy technologies. Let's like make a list of all the reasons why it's so hard. So Mike, you, you, you kick this off here. Ownership structures, split incentives. What are the other reasons why this is so difficult?
Mike Bendewald: I think hitting, um, uh, with buildings that are so small and also geographically diverse, it's hard to hit the right project margins. Um, so it's hard to, um, cost effectively deploy,
you know, technologies, I think
just from an installation standpoint.
Bob French: I would jump in and just add that, you know, the first cost of construction, um, is such a big factor here in the U S in terms of, uh, just the way, um, people think and entrepreneurs think about things.
And, uh, so any way that money can be saved in that first cost. It's typically solved that way. And oftentimes, um, the contractors really just want to meet the very minimum [00:11:00] specifications that are on the drawings, or maybe even VE that, um, with the owner to get those costs down. And so. Um, automation is one of the things that is just real easy to get off that list.
And so then you end up with an owner who is suffering from the lack of automation downstream. That's what we see very frequently.
Kelle Donohue: Yeah. And I would say, um, you know, you know, cost is, is a key factor, um, coming out of the gate, that's an initial concern of, of, uh, um, uh, owners when they're building their, their site or their, their facility that they're looking to do, that's an initial cost that they're concerned with.
Um, there's also the level of complexity, especially when you get into, um, new construction and retrofits. Um, they, they want to simplify their building and simplify their understanding of, of their facility because they don't necessarily have the resources to, to manage a building automation system, or at least they think they don't at that point.
Um, and that leads into comprehension. [00:12:00] Do they understand the need for that system and what that system delivers to them and what the benefits are of that. And then one of the key things is, you know, it's, it's getting people to change. Change is uncomfortable. If they're used to just wall thermostats.
That's what they're used to and that's what they're comfortable with and you're asking somebody to change and you know, wrapped up inside of changes fear and fear is, is, is this going to be expensive? Is this going to be a loss of control? Is this another layer that is in the building that I suddenly have to manage?
And do I have the resources to do that? So that, you know, there's a whole sort of organic shift that has to happen within these owners, um, and, and property management groups in order to understand the needs and the benefits of, of those systems, um, and why they should have them.
Mike Bendewald: Just really quick on, on the change management piece.
I think that's a real important point to kind of highlight because you've got, um, status quo, which is to [00:13:00] run the business, right? It's core business stuff that, that the. Store associates or other facility managers have to have to deal with. Um, but I think what's, what's happening in the market is that price of technology is coming down.
There's more capabilities at the same time. Companies are starting to take on sustainability goals. And all of a sudden the kind of prioritization of running your facilities more efficiently with better technology has changed. And so now you have to adapt to that change or think about that change. And, you know, it's, it's, it's a shift in mindset and it's a shift in just the way you run your business.
And so that can take time to get over that hump.
James Dice: Totally. What strikes me here is that when we have a, like, if we just make it binary and we say big, sophisticated buildings, smaller, more simple buildings. The status quo is when the construction project happens and that thing gets built or renovated, there [00:14:00] is a control system.
Yeah. It's the, it's the, it's one of the base building systems. It's a piece of infrastructure that happens when a smaller building happens, whether it's renovated or built new, it's not the status quo, um, always. And so I think that's one interesting piece of this. There's, there's another piece of the status quo to me that is around the staffing.
Can you guys talk about how, like, what's the status quo in terms of how maintenance happens? At one of these facilities
Kelle Donohue: or, or doesn't happen.
Bob French: That's what doesn't happen. That's a good point. Uh, I would say that in simple buildings, um, it's not necessarily a hard and fast rule that you're going to have smaller companies because you certainly could have, you know, a national, uh, type company in, in, in a portfolio of which, um, some portion of that portfolio are simple buildings, but.
Um, in the case where you have any sort of one off, um, the size of the organization is generally not enough to have, [00:15:00] um, a full facilities team. They're generally more like maintenance, uh, engineers and, uh, certainly not going to have a sustainability team. And so those are the kinds of people who really think about the benefits of automation.
And so when they're not there, um, what they're looking for is someone to really take that for them.
James Dice: And that is some sort of service provider, service company, service contractor. They're typically, on a service contract, maintain these buildings, the way I understand it. Is that right?
Bob French: Yeah, and those companies are looking for the kinds of tools that help them.
Execute those agreements most efficiently. So remote access and automation are just some, with fault detection diagnostics. These are all things that make that, um, uh, ability to, um, administer those contracts more efficient. And so that's what they're looking for.
Kelle Donohue: Yeah, I'd say the larger scale facilities are [00:16:00] proactive in their maintenance.
Um, and so they're, they have active, uh, you know, filter changes, belt changes, um, routine maintenance, um, you know, coil cleaning, all the rest of the stuff that goes along with it. Most of the simpler facilities are, are reactive in their maintenance in the sense that they, they wait for something to break or a unit to go down or, you know, some failure at that point, and then they will jump on it because two things, um, they're busy and they, the other thing is they have no insight into that unit or those units or those pieces of equipment that need maintenance or that, that have failed, um, They don't, they don't have any awareness to it, because they don't know when a unit goes down, because it's just a local thermostat.
Um, they don't know, they don't see any trends on it to see what happened before and after. Um, they've got none of that information to make, you know, um, positive impact decisions, uh, on the maintenance side. So, they're in pretty much a reactive mode. Um, you know, they'll [00:17:00] get a phone call. It's cold. It's hot.
There's water coming from the ceiling because, you know, the outdoor air damper's open and the pipes are frozen. So, they're just in a very reactive mode and that's historically what they're, they, they, um, you know, how they're built. And these smaller, um, organizations that run smaller buildings or that own, um, smaller buildings.
James Dice: Absolutely. That's a, yeah, great, great point. When we wrote the white paper, we also Saw this dichotomy happening between simple buildings that were in a portfolio and owned by owned by some sort of enterprise, um, like Mike, you were speaking with Dollar General, that's one example. And then we had simple buildings that, um, were owned, like, by some sort of enterprise.
You know, single building LLC on main street. I'm staring out the window in Boulder and across the street from me, there's a building that's two stories and it's probably owned by some local guy that invests in real estate, right? So there's a difference there [00:18:00] in this sector, especially where it's often really difficult to, for, for an owner that's just really, they just have this one asset, two assets, three assets to really care much.
And I think there's that, um, You know, we talked about there being this sort of new wave of sustainability. So if I'm a corporation and I have a sustainability target and I have corporate energy engineers, and we're thinking about this portfolio, there's an impetus to, to change the status quo. But if I'm a small building owner, and I'm just caring about the one or two assets, and it's like, not really something I spend a whole lot of my time on, I don't have a whole lot of impetus to change until what you just said, Kelly, which is something breaks.
And now I have to think about how to fix this. That's kind of how this market operates. Is that, is that accurate to you guys?
Kelle Donohue: Yeah. And you also have the, um, uh, the way that the, the leases are written, um, to these spaces and who owns the maintenance on, on the units that are associated with that space. So it [00:19:00] depends on, um, if, if the, the, you know, the tenant is responsible for maintenance on these things, they're.
You know, they want to go and they're probably running on a shoestring. So they're going to run a, you know, uh, their maintenance on the shoestring. So it, it depends on who actually owns the HVAC equipment, according to the lease. And the maintenance and upkeep of, of, of those units. So it, it tends to shift or shift around depending upon how these, um, uh, businesses and agreements are structured too.
James Dice: Cool. So that's kind of the, the status quo of the problem. Let's kind of move forward into the solutions and how you guys are sort of serving this market today. Um, let's just start with the controls aspect of this, and then Mike will sort of broaden our, our discussion outside of controls. But. When we think about this, the general problem, it seems like HVAC control of some sort is like generally the first step to walk down, and I'm wondering if you guys agree with that.
I feel like it's because [00:20:00] Generally, these buildings can, you know, save energy and be, you know, remotely monitored with just a few points of automation. Do you guys agree with that? Is that the first step, or do you see a different first step?
Bob French: I think it's the first step now. I mean, LED lighting has sort of run its course over the past 10 15 years.
In the old days, you know, HVAC and lighting, it was pretty much the lion's share of what a typical, say, office building would be. And, uh, but now with all LED lighting retrofits, uh, kind of done, um, except for whatever maintenance might be needed, you know, HVAC automation is the next wave. That's the next big bite, you know, that you can take out of a building.
And so, I think the key for the simple buildings is simplicity. Simplicity of installation, simplicity of use. And, um, affordable and affordability in terms of like, the cost, the first cost of, of putting it in. And so that is, um, the next step that I see most people taking. And [00:21:00] in terms of HVAC, um, I think Mike maybe can speak to this further, but, um, actually replacing HVAC systems with more efficient units is also a trend.
Uh, but a lot more capital is typically needed in those cases. So automation is a quick hit, usually a pretty fast payback, one to three years or so. Um, in these simple buildings and fairly easy for people to pull the trigger.
James Dice: So let's, let's dive in a little bit in more detail. So if I'm listening to this and I'm, um, you know, thinking about the sector.
Can you guys talk specifically about, so 75F Strato Automation, how are you guys going to market in these, to these buildings with a more simple way for them to get controls installed? That's like really, really break it down for them.
Kelle Donohue: So our, our approach, like I said before, is, is small building to large.
And really what we do is you can go down to a standalone building. Um, thermostat that you can configure with a browser or you can connect to it through software. Set that up. Set a schedule in it. Just [00:22:00] let it run. And it could be a stand alone piece of equipment. But it is, it is, um, you know, following ASHRAE guideline 36.
Um, it has the ability to do, um, dry bulb or enthalpy economizer controls. And so it is a, an intelligent thermostat that has the ability then to be expanded into a larger system if you want to interconnect these things. And you don't necessarily have to have a top end or a front end, um, on the system in order for it to maintain its schedule and, you know, do its operation, but what you're not going to get out of that, that, that, um, top layers, you're not going to get trending, you're not going to get alarming, you're not going to get the ability to, you know, um, set, uh, um, you know, exception schedules and a lot of the things that really benefit and fine tune some of your, your savings from an HVAC energy consumption, um, perspective.
Um, Our systems we set up so that, um, one of the focuses is, so I come from a contractor background, so I spent about 17 years, I've been doing controls about 29 [00:23:00] years, I spent about 17 plus years, um, from the contractor perspective. So I dealt with end users and customers a lot and managed projects from, you know, small little churches all the way up to, you know, MLB stadium kind of things.
Um, but we really focus on the contractor perspective and we also focus on the end user perspective in the simplicity. So, um, some of the keys that we focus on are speed of deployment, ease of deployment, um, uh, the tool sets that people need to daily navigate around this and use it as a, uh, as a user interface or that the tool sets that a contractor or service provider or, um, um, you know, um, uh, partner would put into the site.
Um, we try and simplify all of that stuff as, as much as we can. All of our stuff is trended automatically. So the minute you plug in a controller, all that data is harvested. Change of value. So we don't have to set up trends and we don't have to, you know, teach people how to, you know, um, set up trends for points of equipment [00:24:00] because all points are harvested throughout the whole thing.
Um, alarming is, is extremely easy, simple rule sets and allows them to, it has embedded SMS and, and, um, text, you know, email and text notifications so that you can pump those alarms out very easily. You don't have to set up third party services. So we're trying to take. A lot of the lift that is between the point of deploying and configuring your controller.
And then moving it into a system. So we're trying to simplify that chunk there. Um, graphics are automatically built based upon how you set up the units. Um, we don't have fixed IO that you're required to set it up a specific way. You can move things around as much as you want. So we're trying to, you know, it's a, it's a tough nut to crack, but you want to come combine, uh, a, a complex looking front end and the feel and the data and the usage you get out of it with a simple deployment strategy.
And set up and configuration strategy. So it's, you [00:25:00] know, uh, it's not necessarily easy to do, but that, that is our key focus. And we've been, we've been very successful at it from, um, driving it from that end user customer perspective, instead of just dictating, this is the system and this is how it works.
And this is what you get. We're trying to incorporate a different perspective onto the, onto the platform.
James Dice: Yeah, totally. Um, Bob, I'll let you add your perspective and then I want to kind of talk about, um, Kind of how that's different from what Kelly Kelly said, small to big or simple to a complex, there's a lot of solution providers that are going from complex to simple.
And I think that's an interesting thing, but Bob, I want to hear how you guys, um, you know, make it, make it simple.
Bob French: You asked how we go to market. And we also go to market through partners. Uh, most of our partners are mechanical contractors, um, especially attractive to those who. Perhaps have had to subcontract controls in the past, but they want it, you know, to keep that control themselves, you know, literally.
Uh, so we [00:26:00] can, um, set up mechanical contractors to have a controls department so that they can have a holistic relationship with their customers. Um, once a solution is put in, of course, there's the maintenance, uh, agreements and work that goes on, um, after that. And so these mechanical contractors are really set up when they can put a system like this in.
And, um, get those trends and alarms, uh, you know, that Kelly was talking about. Um, it's all built in, uh, to the system. So we did this by ease of installation. Also, um, everything works out of the box. Uh, there isn't any programming. There's no UI to build. There's no network to make. Um, you just put the systems in, configure them to the package equipment you're attached to.
The UI and all the data and alarms are all, you know, they're ready to go. Um, so those contractors are. On easy street, right? They're just putting the system in and reaping the benefits right away. And of course the end users, you know, are key here because the contractors are [00:27:00] seeking to have happy customers.
Happy customers need to be comfortable. They need to be saving energy without it, you know, killing the checkbook. And so when the contractor can come in with a solution like this, they can check all of those boxes. Absolutely.
James Dice: One of the things that strikes me as you guys are talking, especially Kelly talking about, you know, the, the, the easiest thing is to just come in and swap the thermostat out, right?
Um, I'm wondering if, if the wave of, you know, nest thermostats in our homes, how does that translate over into these smaller buildings? Is there a spectrum where as, you know, as IOT thermostats get more and more popular, is that bleeding into the expectation as a building owner and these sorts of buildings to have.
Technology like that. And then does that spectrum continue to get more and more sophisticated? Um, do, do you guys see any sort of bleed over from that?
Kelle Donohue: I've been building automation a long time and I've got a simple Honeywell thermostat at my house. Um, and I, I just, I just don't want that in, in, [00:28:00] you know, my house.
I just want to be able to set this at a point and, you know, I don't. You know, I, I've had it where I can do remote set point and a few other things on it. Um, but I do see it, it, it bleeding over. The, the, the HVAC systems that are in residential homes versus in commercial spaces perform and operate a lot differently.
So the sequence of operation and the demands are, are different and the requirements are different, um, for your solution from a firmware, hardware, um, and, uh, a system perspective. So, but I think that the bleed over is people are expecting now to be able to see information about equipment because they can see it at home, whether they're using Nest or Ecobee or whatever systems they're using, they don't understand why they go to their office or from a office manager perspective, I have this ability to get all this information from my home.
Why don't I have the ability to change a set point, change a schedule, turn the system on or off, or get [00:29:00] told that it's, it's not working properly. Um, from these other spaces. So I think, I think it's, it's not necessarily, um, um, a, uh, demand for that stuff there, but it's a, it's a, it's a curiosity level. Why can't I get.
Yeah, why can't I get that information here if I can get that from going to Home Depot and buying this and put it on my thing and then just logging into a web page and seeing what's going on? Why can't we have that on the commercial level?
Bob French: So I totally agree with what Kelly is saying. People are used to that kind of thing at home and they're expecting it at their offices and people are using Siri and Alexa to give, you know, voice commands to their home.
Um, so we've done that with Saffron AI, uh, because of what you're saying, you know, there's this spillover, there's this expectation that I should just be able to talk into my phone and get my commercial building to do what I want. And so that's the, that's the direction that we're headed. And, uh, it'll be out there for, um, customers to use next month.
James Dice: Yeah, there's, it's so interesting to me to see, like, you go to [00:30:00] Lowe's and all the technology there and there's like a home automation section, right? Or Home Depot, seeing that stop when you get to like a bank or for example, yeah, it's just, it's fascinating to see B2B, B2C and the difference, like the, the delineations between the two, let me circle back on what I said earlier around, I feel like the, we were talking about connected thermostats and making things more simple.
You know, The connected thermostat was around before I even started my career, before I even graduated from college. So that piece, it doesn't feel like has changed a whole lot. And I guess my hypothesis for why this has taken so long to change is that the big controls companies, um, We don't need to name them.
Everyone knows who we're talking about. Generally have gone from, Kelly, you said, you said simple to complex. They have gone from complex to simple and kind of have tried to take their same approach from the complex buildings, which is installing complex systems and having, [00:31:00] you know, um, Very highly trained and very expensive, uh, maintenance and service contracts to maintain those.
I feel like they've tried to take that same model and apply it to the simpler buildings. And it seems like you guys are taking this different approach. How do you guys see that showing up in the market? And why is it sort of taken so long? And do you agree with me
Kelle Donohue: in midsize project? There's a real fatigue.
In, in, in, in the, uh, in the marketplace, just because of the cost, there's a demand for some technology and there's a demand for some controls and some data and, and, and a real way to get your arms around what your, your, your portfolio is doing. But then you go against the traditional, you know, model costs.
And they're expensive short term, they're expensive long term, you know, they've got long term recurring costs. Just that initial price point is a real bite, um, and people tend to back off of it and say, I can't do that, [00:32:00] I can't afford it, I don't see the ROI, I don't see the benefit from spending that, that price point.
So, when we approach it from that, you know, that bottom to up, you know, we really scale. Effectively and efficiently and economically, um, from the, you know, the six devices up to 60, 66 devices kind of thing, you can scale up very effectively and efficiently and still provide all the data that they want to have, the ability to interface with it, the, you know, the user experience.
Um, and we don't go with any long term costs or annual fees or any recurring revenue streams. The only thing that recurs as far as revenue on our platform is, if you're going to engage the SMS and texting, you're going to send a lot of alarms out, you're going to, you know, there's a cost of those services, but there's no annual licensing fee.
And if you want to go to third party SMS or whatever, you can do that as well. We're really focused on, like, free training and trying to get, you know, the price point and the ability for a [00:33:00] consumer of these smart systems that are in that small to mid size range to really be able to, you know, adopt these platforms and see the benefits and reap the benefits of having these systems.
When you go with the big systems, you know, you're like drinking from a fire hose on some of these small sites from, from, uh, from a, uh, an overwhelming architecture. Yeah. And, uh, an overwhelming platform that really you're just looking at picking up three banks and, you know, a headquarters kind of thing. I
Mike Bendewald: think it's really important as part of the go to market for controls providers or consultants is to really understand where the client is at because we, in our experience, you know, we'll work with companies that have hundreds or thousands of properties and they won't even know what kind of assets they have, right?
And there's no way for them to, um, really, you know, track the work orders against these or it's happening on a regional basis. And so there's, [00:34:00]there's some blocking and tackling that needs to happen up front. Around just getting visibility into your facilities today, um, and working on, do I have a best in class frequency driven maintenance program in place, for example, right?
And then once you have that in place, you know what you have, you can then take the next level of connecting to your thermostats, getting more data to then start to improve efficiency through, um, you know, better temperature setbacks or things like that. But really the basics, you know, I would say need to be addressed first.
Get a proactive, you know, preventative maintenance program in place. That's cleaning coils and replacing filters and things like that. If you have refrigeration equipment in your store or something, you know, make sure you have some kind of monitoring in there, right? So you understand what the, when it's about to fail, for example, right?
And so I think there's some basics that you can do upfront before you start to layer in the more advanced, uh, controls, you know, [00:35:00] cloud based portfolio level controls that really improve efficiency. And also improve efficiency from the perspective of energy as well as, uh, from a maintenance perspective and provides that visibility and oversight into what your local contractors are actually doing.
Are they filled? Are they delivering on the promises? Right?
James Dice: Totally. Yeah, because you might have a portfolio, might have a portfolio with different, Providers across the portfolio that you That's right. You might need to maintain and, and there's
Mike Bendewald: no CMMS that, you know, is actually tracking data at the asset level.
And it might just be, you know, facility level. So I think the, the, there's varying levels of sophistication. A lot of those basics. And like back to my, like my home, I have a Nest thermostat. I get an email, I've gotten an email basically every couple years. Now you need to, you need to clean the sensor.
Because it's not meeting sub point, right? And so I'm starting to see that in my own head, and to, to the point [00:36:00] earlier, like, I think there's an opportunity, certainly, to develop a greater awareness and expectation of what these buildings could be doing from a data standpoint.
Bob French: Um, I would say, James, that I agree with your assessment that, uh, there was something wrong with the traditional companies, um, not meeting the needs of the mid market.
Which is, you know, the impetus for forming this company. We asked one of the big, uh, automation companies in the early days, um, you know, God created the world in seven days. Um, why can't you create a simpler system? And the answer from this executive was, well, he didn't have an installed base.
James Dice: Yep. Um, let's zoom a little bit out, um, uh, from controls.
Mike, you, you, besides, besides, like, kind of the portfolio level view you just talked about, can you talk about in these buildings, besides upgrading control systems, what are the other things you look at recommending that these providers do to either, you know, Um, you mentioned [00:37:00] CMMS. So we've talked about controls CMMS.
What are the other things that they should look at doing? And how is that sort of different than the controls mindset?
Mike Bendewald: So, you know, I think just preventative maintenance is a big thing, right? And that can fall under the CMMS category, but just cleaning, cleaning the equipment, right? On a schedule. Um, that, that's a big thing.
And this has to do with O& M and then. On the controls piece, that's when you can start to adjust temperature set points and schedules and things like that. These are all fairly low cost things, um, if you already have a, a system for making those changes. And then outside of that, it just depends on what kind of systems you have in place, right?
And, you know, it could be, one of the things we find as maybe the biggest opportunity for a lot of these facilities is simply proactively planning capital projects. Right now, Kelly was talking about this, you know, a lot of these companies are simply [00:38:00] reacting to things that break, right? It's, it's a run to fail culture.
And if you can be more proactive about your replacement, you can actually go to manufacturers and do bulk purchasing. Proactively plan your replacements of these units that are beyond useful life, so that you're not in these emergency situations, needing to replace things that break, and that can yield a number of different benefits in terms of avoiding emergency cost savings, as well as, um, like emergency replacement costs, cost increases, as well as lead times.
You know, sometimes it takes, uh, uh, uh, weeks, right? Months to get some of this equipment. For more information, visit www. FEMA. gov And so you avoid delays when a tenant comes in and says, you know, Hey, you know what? This thing is past useful life. You need to replace it. You don't have to wait three months to get that tenant in the space.
If you're proactively planning this stuff, then you're able to avoid those situations while also planning a more energy efficient unit as [00:39:00] well. So aligning with replacement cycles in a proactive way is a huge lever. To pull, to increase the nameplate rating efficiency of these, of these systems.
James Dice: And how do people get started?
So can we talk about that? Like, where do I go from here? Given that a lot of times they don't have the attention span, they might not have the budget. Can you guys talk about how people can get unstuck
Bob French: here? Usually the first stop is, um, your trusted, um, mechanical contractor. Um, talk to someone. Uh, and ask them about these things, you know, we're in the industry who live this every day and, uh, more than likely you're going to start getting, you know, some fairly decent answers.
I think that's be the first step is to talk to someone who knows, um, this business.
James Dice: So you're saying like they don't have the staff, but they do have someone that they call upon to Be smart on stuff like this. What about those people? So if I'm a contractor listening to this, what, what do I do?
Bob French: Yeah. If you're a contractor, I think, [00:40:00] um, just a little bit of market research, you know, would really do you well, you want to get into a system that's easy to learn and easy to execute, easy to support.
Um, I know that you've shied away already from the traditional systems because there are not those things. But, uh, there are solutions out there now.
Kelle Donohue: Well, I think, um, one of our, our biggest issues in, in getting to customers and getting them informed about, uh, about the platforms that are available out there is if they do go to their trusted HVAC contractor, that HVAC contractor probably has limited partnerships or limited understanding of controls, um, or they have a understanding of controls, but they have a preferred line that they carry.
And so their, their offering is going to be very, very narrow. Um, I would highly suggest that to owners of buildings and even to mechanical contractors to really start to go out there and investigate what's going to match up with what your customers are asking for. Um, what the needs of your market [00:41:00] are, um, how complex you want to go with systems because it's, it's an investment of time, energy and effort, um, to really learn and understand a complex systems.
But how much time do you have to do that? So it's really gauging the marketplace, um, and doing some, some real research online or attending, you know, trade shows and, and, and, uh, you know, uh, you know, really spend some time doing some deep dive on stuff. Because. You can get a system that's offered to you, and if that's what somebody recommends, because that's a preferred brand that they have, it's not necessarily, um, the right price point.
It's not necessarily the right functionality within that, uh, within your requirements. Um, so you may get a limited exposure to what's really out there. So, um, I would say that, you know, To reach out to, you know, a third party sort of neutral like Nexus and, and, uh, you know, some other third party neutral, um, um, you know, uh, offerings out there that are providing some [00:42:00]research on the, on the industry to really find out what's out there because, um, you know, your, your local expert may not be an expert.
Mike Bendewald: That's well said. I mean, I think that the national level. Companies that kind of understand the best practices across the different regions. You know, if your portfolio is across several regions and you're using local contractors in a regional basis. You're missing out on that, on that kind of intellectual capital that's out there.
James Dice: Absolutely. All right. Two quick questions before we sort of close this off. So let's talk about ROI. So Mike, you talked at the beginning of this about split incentives and the difficulty in finding the ability, like the ability to make the business case to the owner that makes the decisions that pays the bills might be different people.
Can you guys talk about how you approach educating. The ultimate buyer on the ROI. So it could be educating. It sounds like the contractor who's the one selling it. How should the people in this sort of sector be thinking about ROI and how do you guys think about it?
Mike Bendewald: When you base [00:43:00] it exclusively on energy cost savings, I think you kind of fall into a trap.
You paint yourself into a corner. I think you really need to think holistically and really approach it from a business, um, continuous improvement perspective. Like, so you're a business, you're, you're consistently trying to improve your business. Uh, or you should be. And this is just a solution that helps you run your maintenance program better, helps you, um, reduce your energy costs.
And there's, you need to be able to stack these benefits and these values on top of each other and try to quantify them. But really, it's just important to, to stack multiple benefits together, um, and not limit yourself just to the energy costs. There's, um, There could be, um, product that's getting lost.
There could be, um, tenant disruptions. There could be a number of different, uh, downside risks that, uh, you're avoiding as well as values. Yeah. I
Kelle Donohue: think for, for ROI, one of the, um, One of the [00:44:00] things that's overlooked, especially by contractors, because sometimes the difficulty in the process is, is reaching out to your local, regional, or state utilities and finding out what incentives are there for them to go from a non existent system or an old system up to a building automation system, whatever level they need to go to, because there are some real incentives and from a contractor perspective, it's sometimes difficult to navigate that That rebate, um, path.
And so sometimes you have to bring in a third party, or if you've got somebody competent within the organization, they can drive through and make some associations with the utilities to try and drive some money back into the project to make it more affordable. Um, but, uh, it's really, you know, it's, it's, it's scope, um, and, and what your, what your goals are.
Uh, for the project and what you're really trying to attain. And I think you have to get those kind of narrowed down and then see what the cost is. And then you can calculate out a [00:45:00] ROI and then you can adjust as necessary or try and seek some additional rebates or funding, um, from outside of that. Um, but it, it's, it's not a, there's not a magic bullet.
And it's, it's not necessarily a fixed number all the time, and it's, it's also once, once you put that system into play, are they going to utilize it to its full capabilities to drive that ROI as, as hard as they can to really get some payback on it, or are they going to. Docslide and, you know, going to turn everything into manual.
James Dice: Yeah, totally. Bob, when you guys think about, when you guys think about mechanical contractors, you know, I, we have some very sophisticated mechanical contractors in the Nexus community. You go to the conference, you're going to meet them there. What you're not going to meet, though, is like the local small boiler brob that's doing service on the, the small, School boilers in rural Colorado, right?
So I'm thinking of like a lot of contractors out there that just aren't very sophisticated to be able to [00:46:00] educate a buyer on, you know, do this and you're going to save this and your business kind of like go through that analysis that, that Mike and Kelly were just talking about. How do you guys think about educating them as you, you know, as your, your, your main customer?
Bob French: Yeah, honestly, um, that is a real big challenge. Contractors, um, of that size or that mentality have very much of a, give me a project and let me get in there and get out of there as, as, as soon as possible. But as soon as you bring in this service, um, contract or maintenance contract to follow on just a little bit of education with how much more effective they can be at selling and, um, executing those contracts, is generally the point where they start, um, paying closer attention to that.
And, and for any organization of any size, um, companies like Mike's company, um, are a great place to go to help really understand the full breadth of the issue. Um, like Mike said, it's not just, um, financial, um, or [00:47:00] the, uh, the utility savings alone that factors in here. So, uh, organizations like his really excel at that, uh, looking at that, um, that big picture.
Kelle Donohue: You know, I've got some, I've got some contractors out there that actually deploy a building automation system as part of their service maintenance agreement, just so that they have some visibility into the site so that they can, you know, they can determine if they need to roll a truck. On a Saturday, or they can put something in override, um, and so they, they put smaller systems in play, um, based upon those service agreements so that they can, they, they determine that they, when they roll the truck, they're, they're prepared, they understand what they're, what the issue is, and they're going out to service it, um, and, and the, the customer is not paying that premium if they don't have to.
So they see a real cost benefit to start, you know, and that's a change in perspective from a contractor side is to be able to start to get some visibility into a site so that they can serve their customers [00:48:00] better. So they're, they're more effective at what they do. And because they're saving their customers some money, they show more value to that customer.
And then it's a better relationship for them.
James Dice: That just led us into what I was going to end here with, uh, which is we've, we've like, sorted, sort of painted the picture about how complex this problem is to solve, I think. Um, let's give people some success stories to end up with. So I've asked each of you before this to sort of bring a success story to the table.
And talk about how this can be done somewhere. So can you guys, uh, talk about that? Like give people some hope with some real case study level, like, uh, storytelling here. Who wants to go first?
Bob French: Yeah, I'll jump in. Um, I would bring out, uh, a local company here and in, uh, Apple Valley, Minnesota. Um, Apple Valley Commons is an eight story, 60, 000 square foot building, uh, water source heat pump design.
Um, just, uh, 55 water source heat pumps with every [00:49:00] kind of thermostat ever made, uh, over the years installed. Um, scheduling was just a mess and, uh, there was an inexpensive, um, plant control system, uh, installed also. The owner had no idea how to use it. So, um, the hydronic loop was out of whack. The schedules were out of whack.
We just put a system in using a local contractor. He actually came to a 30 percent savings whole building on his utility bill from getting that hydronic loop scheduled and all the thermostats scheduled. And the thermostats or the water source heat pumps are super simple. That is like the lowest hanging fruit there is and there's so many buildings.
Like that. And this was just, uh, an entrepreneur who owned, you know, three local buildings. And, uh, so it's really easy to get done.
James Dice: Yeah. I immediately thought about all the buildings out there, different types of buildings, whether they're hotels or schools with all the little tiny package units spread out doing God [00:50:00] knows what in each of those units in each of those rooms.
Awesome. Uh, who wants to go next?
Kelle Donohue: I can go. Um, so we've got, um, A mechanical contracting client who has a grocery store chain in Wisconsin, and they're an organic grocery store chain, kind of a, you know, Along the lines of, um, you know, the big Whole Foods kind of style. Um, and they had standalone thermostats throughout their facility and, um, they were struggling with, uh, the units failing and then they're not getting any notification on it.
So they decided that they wanted to have a simple system in that was going to monitor the rooftops. And what we found out is, um, they were also having humidity controls, which, uh, humidity control issues, which they did not And they didn't understand and their contractor didn't understand either. So we started implementing some, um, open stats and putting some, um, rooftop unit controls with real economizer and real humidity control on it.
And it made the space much more comfortable. And then [00:51:00] they said, well, this is great. What else can you do? And so we stepped in and started moving into refrigerator and freezer temperature monitoring. So we can monitor if any of their, their, um, Their, uh, refrigeration units were, were falling offline so they could get some notification and alarming on that.
And then they said, well, okay, we gotta, you know, we got a boiler. Can we add that? And so it was a very simple add. So we started with just, let's just take a look at the rooftops that you're having problems with here. And we fixed those and improved the functionality of those. And then they, you know, said, well, what else can we do?
It was like the light bulb went off and they were so happy with what, what went on there. And then they said, okay, let's. Let's roll this up and let's put this in our other stores. So they started piloting, you know, this was kind of a pilot for them to start with, and then they started rolling it out to their other stores.
Um, and it's been a very successful, you know, rollout and, you know, you start from small, you just do a couple of rooftops, but then it starts to grow as they, as they see the need and the benefit. Um, [00:52:00] uh, more information they wanted to get out of that site. It was kind of, it was, it was kind of exciting to watch because you could see them go, okay, I need this.
And then all of a sudden they're, they have an interest in what else can we do? Um, and you see that seed start to grow and, and, and cultivate, uh, throughout their organization. It was, it's a great little, great little success story and a fun project for our team out of Wisconsin.
James Dice: Yeah, I love both of those stories, how they're basically enabling the contractor to sort of be the hero, and it seems like both of you guys are sort of in the background saying, like, Oh, you want to do more?
Okay, here's the next thing you can do. And you're sort of coaching them through that as their technologist and technology provider. Sounds really cool. Um, Mike, you got a story for us? Sure.
Mike Bendewald: So my story really has to do with kind of setting up the basics. Uh, for a multi site, um, financial services company, a couple thousand sites, um, to be able to get them to the next level, to be able to deploy controls.
Um, so they came to us [00:53:00] with some small challenges, um, you know, roof leaks, RTUs failing, which we solved and they didn't have any visibility across their portfolio. And so, um, In terms of what kind of assets they actually have, what's the condition of these assets. And so they hired us to bring that visibility to the portfolio, which then opened up, um, a lot of, we were able to say, solve problems that they're having with their maintenance contracting firm, which was not really providing the level of service that they, you know, said they were.
So, um, we were able to uncover that, get them on a new, uh, maintenance contract, uh, which is now opening up the opportunity to the next level of. Okay. We've got a better maintenance provider in place. Who's actually maintaining these assets. We know what these assets are. We have a capital plan. We assumed we had a whole lot of replacements to make based on the data that our contractor was given us.
Mantis was able to basically say you don't have to spend all that money on replacing your your rooftop [00:54:00] units and your roofing, and instead you can actually save that cash and use it to invest in a more, you know, basically an enhanced controls program. And so I think there's a really nice story of understanding what truly is the problem, and kind of redirecting funds and reorganizing the program itself.
To kind of get to the next level and start to deploy more controls.
James Dice: Absolutely. All right. Cool guys. Uh, I feel hopeful after hearing those stories. I hope everyone does, uh, hearing them as well. Um, we will continue to work with the three of you guys to, you know, develop case studies and tell these stories at the conference and that kind of thing.
For now though, Leave us, each of you leave us with number one recommendation. So if I'm listening to this and I'm a contractor or someone who owns these sorts of buildings, what's your number one recommendation for them to get started here?
Kelle Donohue: So I'll say my number one recommendation is do your research.
Figure out what your, what the demands of your customers are. [00:55:00]Figure out what's a fit, and then figure out what you can actually execute. Um, and then what needs them, uh, meets the needs of the marketplace. Um, is this, is this site going to need to scale up? Is it going to need to get bigger? Do you need to follow, you know, uh, BTL protocols?
And that, that's an important thing to be, uh, following, uh, protocol standards within the industry is, you know, figure out what you need to do. Do your research, find out what's a fit, find out what you can truly execute and deliver for your customers. Um, but, um, you know, due diligence is key.
Mike Bendewald: I think the, you know, building on the, doing the research thing, you know, there's a certain set of best practices out there that apply to certain companies of a certain size and certain portfolio scale.
And I think you need to, if you don't know what those are, you need to understand, you need to come to some kind of understanding of what those are, and then do the gap analysis. Where you're at, [00:56:00] and what's the gap to the best practices, and don't feel like you need to get there in day one, but create that roadmap to get there, right?
So that maybe year one, you're taking your first steps, and then year two, year three. So this is, this is not a overnight process and first understanding what your gap is to the best practices and then developing that roadmap to get there is going to be my, my number one thing.
Bob French: Yeah. Riffing off of that, Mike is close to what I was thinking.
Uh, and I would just say, think holistically, right? You have a customer relationship. It's, it's, uh, they may be in a break, fix mentality, but as soon as you start thinking holistically about what you can do to fix their problem today, but also provide. Agreements and contracts and services that last one, two, three years.
And what are the things that are needed in order for you to provide that holistic service for your customer? And that will cause you to start looking at and doing this research and [00:57:00] focusing in on the things that you need to be that, um, that real partner for your customers, your end users.
James Dice: I'm going to end with a challenge to everyone that listens to this normally.
Um, I can bet that we don't have a bank branch manager from that financial services listening to this, and I would bet that we don't have someone from that Whole Foods esque grocery chain listening to this, but we do have a lot of people that are in touch with these mechanical contractors out there that are listening to this, uh, they're part of your professional networks, et cetera.
So let's, let's, let's send this to them. Uh, I'm going to challenge all of our, our community right now. Um, we are the Smart Buildings Nerds and it's on us to go to that next level in our communities to share this stuff, sorts of stuff with the folks that are sort of just getting started. So that's my challenge and we'll end there.
Thank you, Bob, Kelly, and Mike, uh, for coming on the show.
Rosy Khalife: Okay, friends, thank you for listening to this episode. As [00:58:00] we continue to grow our global community of change makers, we need your help. For the next couple of months, we're challenging our listeners to share a link to their favorite Nexus episode on LinkedIn with a short post about why you listen. It would really, really help us out.
Make sure to tag us in the post so we can see it. Have a good one.
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Episode 171 is a conversation with Bob French from 75F, Kelle Donohue from Strato Automation, and Mike Bendewald from Mantis Innovation.
Episode 171 features Bob French from 75F, Kelle Donohue from Strato Automation, and Mike Bendewald from Mantis Innovation. In our Vertical Roundup Series, we’ll cover the unique needs and solutions across various sectors. Today, we’re discussing Simple Buildings. Enjoy!
Introduction (0:50)
Intro to Bob (1:54)
Intro to Mike (2:22)
Intro to Kelle (3:28)
What are simple buildings? (5:11)
Why is it so hard for simple buildings to improve? (10:14)
HVAC Control Solutions (20:00)
Alternative Solutions (36:58)
How do people get started? (39:23)
ROI (42:35)
Success stories (48:30)
Recommendations (54:53)
Music credits: There Is A Reality by Common Tiger—licensed under an Music Vine Limited Pro Standard License ID: S662008-16073.
Note: transcript was created using an imperfect machine learning tool and lightly edited by a human (so you can get the gist). Please forgive errors!
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Welcome to the Nexus podcast. This episode is part of our, what we're calling a vertical roundup series where we cover the unique needs of specific building owners and specific [00:01:00] types of buildings. So today we're covering what we call simple buildings. So buildings with small footprints like a hundred thousand square feet or less.
Buildings that are just a little bit less sophisticated or a lot less sophisticated sometimes than, uh, other buildings that we talk about on the show quite a bit. Um, and I'd say this is often a forgotten group of buildings when it comes to technology. And we have a white paper on this called the untapped 87%.
And that refers to, um, the fact that 87 percent of commercial buildings don't have any sort of digital systems. And so that, that was, Uh, created a couple of years ago based off of research that we did and research that the government has done here in the U. S. And so we brought in some experts, the people that are out here living this every day, directly creating solutions for that simple buildings market.
And so, um, I'm gonna, I'm gonna bring them on one by one here. So first I have Bob French. Bob, can you introduce yourself, please?
Bob French: Hi, I'm Bob French, Chief Evangelist [00:02:00] with 75F. I've been here for 10 years. I'm one of the first employees. So I've lived through this whole evolution of what we call the IoT BMS, which is the gap filler between a thermostat and a DDC BACnet type system.
So we filled that gap between those two, including the DDC BACnet. Um, for central plan controls.
James Dice: All right, next to have Mike Bindewald. Can you introduce yourself, Mike?
Mike Bendewald: Sure thing. I'm Mike Bindewald with Mantis Innovation. I, um, we're a facilities consultant that really manages risk for our clients, whether they're building owners with tenants or owner occupied facilities.
We focus on financial risk mitigation, so helping with capital planning, helping with budgeting for operational expenses. We work on operational risk as well, so we understand, help you bring visibility to your properties so you can understand. Which ones or which, [00:03:00] which assets within those properties are going to fail so that you can proactively, um, address that.
And then we also work on regulatory risks. So there's a growing number of building performance standards out there that, um, a lot of customers need to be, um, aware of and manage. So we're a consultant that kind of helps from strategy and road mapping all the way through turnkey project development and deployment.
Um, so that's, that's Mantis in a nutshell.
James Dice: Alright, last but not least, I have Kelly Donahue. Kelly, go ahead and introduce yourself, please.
Kelle Donohue: Sure. Uh, my name's Kelly Donahue. I'm the Vice President of Global Sales and Marketing for Strato Automation. Um, we are a HVAC controls, uh, manufacturer of hardware and software platforms.
We're based out of Montreal, Canada, and we really focus on going at the market a little bit upside down. We're kind of going from small to big versus going from big to small. Our thoughts around that is really focused [00:04:00]around the need in that untapped market that's out there. Um, and we think we do small to mid sized buildings extremely well, but we also have the ability to scale larger, but, um, really.
We're really focused on, uh, the market from the bottom up, uh, cause we think that's, um, uh, a strong need in the marketplace.
James Dice: Awesome. And so we have Bob, Bob and Kelly, you guys are focusing on controls. Mike, you guys are more service provider based. You have products that you, that you install, but you're, you're focused on broader than just controls just to give people an idea of kind of where we're coming at this.
Generally though, I think you guys can all agree that when the building doesn't have controls, it's not a good outcome. Compared to, you know, what they're trying to accomplish in those buildings, whether it be, uh, operations and maintenance or sustainability or whatever. Um, so that's the, that's kind of the scope of our discussion today is to talk about that.
Type of building and let's start by defining it. We call it simple buildings [00:05:00] because you know, you could have million square foot warehouse that operates like a small building in that it hasn't have any controls It's not very sophisticated in terms of the systems or the people operating it. So it's not necessarily about the size.
It's really about the sophistication, whether there are simple systems and simple operating processes. How do you guys think about defining what we're talking about today?
Bob French: I would say you're looking at the HVAC equipment. Just to say it succinctly, packaged HVAC systems generally can best solve with packaged controls.
So simple buildings are going to have packaged HVAC systems. These could be rooftops or split systems or other things that are designed to just run without, um, automation from the outside, except for, say, set point or maybe, um, supplier temperature control, that kind of thing.
Kelle Donohue: So, I tend to look at it, uh, you know, along the lines of what you're talking about.
I tend to look at it at [00:06:00] the complexity of the site systems and what the demands are. Um, from those systems. Um, so if you take a, a small square footage building and you put a complex system in it, it, it, um, uh, really would have a need for a building automation system organically. Uh, as you start to move into the simplicity of the systems, um, and it doesn't, it's irrelevant of the square footage, uh, you would, uh, need the need or the common thought around the need of, um, uh, full, full blown building automation controls is less and less.
Um, and that's. Kind of what we're, we're fighting against here to, to get some, um, get some systems into these simple buildings. And so they, they reap some of the rewards, uh, and benefits of having a building automation system into these smaller spaces or less complex spaces.
James Dice: And one of the things that's interesting here is this, this spans verticals, right?
So Mike, I know you guys work with, um, like small retail, [00:07:00] Owners like, um, you had spoke with Dollar General at Nexus Con. How, how do you guys think about the different sectors here? That, cause it could go across, it could go specific. Um, talk about the, the different sectors and verticals in which this, this type of building shows up.
Mike Bendewald: Yeah. I mean, we, uh, we see this in, um, financial services, you know, retail bank branches, retail stores. And then to the point earlier about larger buildings, but still having simple systems, warehouses, distribution facilities. Um, in some cases, even industrial facilities too, can have some pretty simple HVAC.
Um, you know, they're in the context of a much more complex, um, you know, process. But in terms of the ver the, the, the crosscutting kind of property types, that's kind of how we think about it. The one thing I would add is that, um, the ownership structures make a lot of, make a big impact as [00:08:00] well, and, and really who's controlling the HVAC and lighting and that energy using assets.
Is there a split incentive between the landlord and the tenant, um, in terms of, you know, who's getting the benefit from improving those systems? Um, and then, and just making sure you're talking to the right person, because, you know, if it's the tenant or it's the landlord. The, the control of the, the actual controls, you know, can vary, right.
In terms of phones that,
James Dice: and it's not always straightforward. One of the things that we've like, like some box retail is simple. Some is actually very complex. Like if you walk into a Walmart or a target, those aren't exactly simple, even though it has the package rooftop units that Bob was talking about earlier on the roof.
You still have very sophisticated multi zone refrigeration systems and those sorts of things. And so there's a little bit of like system based, like, it can be simple from an HVAC perspective, but doesn't have to be [00:09:00] simple from, say, refrigeration or others. You could have a K12, uh, You know, school district that has some simple buildings and some simple systems and some more complex.
And so, it's really a type of building rather than a specific vertical that we're talking about. Um, let's jump into why it's so hard. So, we cited this research of 87 percent that came from CBEX. They did a big survey. They do it every couple years. Um, It was basically saying that there are no digital systems.
They were saying HVAC, but I think we made the assumption that if they don't have HVAC control, they probably don't have other systems digitized as well. Um, so let's talk about why. Um, You guys are out here doing this every day. Um, Bob, you guys are selling to building owners, but also your channel partners who are the contractors and distributors for controls.
Kelly, I think that's the same with you, Mike, you guys are providing either, either consulting services or [00:10:00] actual projects to deploy technologies. Let's like make a list of all the reasons why it's so hard. So Mike, you, you, you kick this off here. Ownership structures, split incentives. What are the other reasons why this is so difficult?
Mike Bendewald: I think hitting, um, uh, with buildings that are so small and also geographically diverse, it's hard to hit the right project margins. Um, so it's hard to, um, cost effectively deploy,
you know, technologies, I think
just from an installation standpoint.
Bob French: I would jump in and just add that, you know, the first cost of construction, um, is such a big factor here in the U S in terms of, uh, just the way, um, people think and entrepreneurs think about things.
And, uh, so any way that money can be saved in that first cost. It's typically solved that way. And oftentimes, um, the contractors really just want to meet the very minimum [00:11:00] specifications that are on the drawings, or maybe even VE that, um, with the owner to get those costs down. And so. Um, automation is one of the things that is just real easy to get off that list.
And so then you end up with an owner who is suffering from the lack of automation downstream. That's what we see very frequently.
Kelle Donohue: Yeah. And I would say, um, you know, you know, cost is, is a key factor, um, coming out of the gate, that's an initial concern of, of, uh, um, uh, owners when they're building their, their site or their, their facility that they're looking to do, that's an initial cost that they're concerned with.
Um, there's also the level of complexity, especially when you get into, um, new construction and retrofits. Um, they, they want to simplify their building and simplify their understanding of, of their facility because they don't necessarily have the resources to, to manage a building automation system, or at least they think they don't at that point.
Um, and that leads into comprehension. [00:12:00] Do they understand the need for that system and what that system delivers to them and what the benefits are of that. And then one of the key things is, you know, it's, it's getting people to change. Change is uncomfortable. If they're used to just wall thermostats.
That's what they're used to and that's what they're comfortable with and you're asking somebody to change and you know, wrapped up inside of changes fear and fear is, is, is this going to be expensive? Is this going to be a loss of control? Is this another layer that is in the building that I suddenly have to manage?
And do I have the resources to do that? So that, you know, there's a whole sort of organic shift that has to happen within these owners, um, and, and property management groups in order to understand the needs and the benefits of, of those systems, um, and why they should have them.
Mike Bendewald: Just really quick on, on the change management piece.
I think that's a real important point to kind of highlight because you've got, um, status quo, which is to [00:13:00] run the business, right? It's core business stuff that, that the. Store associates or other facility managers have to have to deal with. Um, but I think what's, what's happening in the market is that price of technology is coming down.
There's more capabilities at the same time. Companies are starting to take on sustainability goals. And all of a sudden the kind of prioritization of running your facilities more efficiently with better technology has changed. And so now you have to adapt to that change or think about that change. And, you know, it's, it's, it's a shift in mindset and it's a shift in just the way you run your business.
And so that can take time to get over that hump.
James Dice: Totally. What strikes me here is that when we have a, like, if we just make it binary and we say big, sophisticated buildings, smaller, more simple buildings. The status quo is when the construction project happens and that thing gets built or renovated, there [00:14:00] is a control system.
Yeah. It's the, it's the, it's one of the base building systems. It's a piece of infrastructure that happens when a smaller building happens, whether it's renovated or built new, it's not the status quo, um, always. And so I think that's one interesting piece of this. There's, there's another piece of the status quo to me that is around the staffing.
Can you guys talk about how, like, what's the status quo in terms of how maintenance happens? At one of these facilities
Kelle Donohue: or, or doesn't happen.
Bob French: That's what doesn't happen. That's a good point. Uh, I would say that in simple buildings, um, it's not necessarily a hard and fast rule that you're going to have smaller companies because you certainly could have, you know, a national, uh, type company in, in, in a portfolio of which, um, some portion of that portfolio are simple buildings, but.
Um, in the case where you have any sort of one off, um, the size of the organization is generally not enough to have, [00:15:00] um, a full facilities team. They're generally more like maintenance, uh, engineers and, uh, certainly not going to have a sustainability team. And so those are the kinds of people who really think about the benefits of automation.
And so when they're not there, um, what they're looking for is someone to really take that for them.
James Dice: And that is some sort of service provider, service company, service contractor. They're typically, on a service contract, maintain these buildings, the way I understand it. Is that right?
Bob French: Yeah, and those companies are looking for the kinds of tools that help them.
Execute those agreements most efficiently. So remote access and automation are just some, with fault detection diagnostics. These are all things that make that, um, uh, ability to, um, administer those contracts more efficient. And so that's what they're looking for.
Kelle Donohue: Yeah, I'd say the larger scale facilities are [00:16:00] proactive in their maintenance.
Um, and so they're, they have active, uh, you know, filter changes, belt changes, um, routine maintenance, um, you know, coil cleaning, all the rest of the stuff that goes along with it. Most of the simpler facilities are, are reactive in their maintenance in the sense that they, they wait for something to break or a unit to go down or, you know, some failure at that point, and then they will jump on it because two things, um, they're busy and they, the other thing is they have no insight into that unit or those units or those pieces of equipment that need maintenance or that, that have failed, um, They don't, they don't have any awareness to it, because they don't know when a unit goes down, because it's just a local thermostat.
Um, they don't know, they don't see any trends on it to see what happened before and after. Um, they've got none of that information to make, you know, um, positive impact decisions, uh, on the maintenance side. So, they're in pretty much a reactive mode. Um, you know, they'll [00:17:00] get a phone call. It's cold. It's hot.
There's water coming from the ceiling because, you know, the outdoor air damper's open and the pipes are frozen. So, they're just in a very reactive mode and that's historically what they're, they, they, um, you know, how they're built. And these smaller, um, organizations that run smaller buildings or that own, um, smaller buildings.
James Dice: Absolutely. That's a, yeah, great, great point. When we wrote the white paper, we also Saw this dichotomy happening between simple buildings that were in a portfolio and owned by owned by some sort of enterprise, um, like Mike, you were speaking with Dollar General, that's one example. And then we had simple buildings that, um, were owned, like, by some sort of enterprise.
You know, single building LLC on main street. I'm staring out the window in Boulder and across the street from me, there's a building that's two stories and it's probably owned by some local guy that invests in real estate, right? So there's a difference there [00:18:00] in this sector, especially where it's often really difficult to, for, for an owner that's just really, they just have this one asset, two assets, three assets to really care much.
And I think there's that, um, You know, we talked about there being this sort of new wave of sustainability. So if I'm a corporation and I have a sustainability target and I have corporate energy engineers, and we're thinking about this portfolio, there's an impetus to, to change the status quo. But if I'm a small building owner, and I'm just caring about the one or two assets, and it's like, not really something I spend a whole lot of my time on, I don't have a whole lot of impetus to change until what you just said, Kelly, which is something breaks.
And now I have to think about how to fix this. That's kind of how this market operates. Is that, is that accurate to you guys?
Kelle Donohue: Yeah. And you also have the, um, uh, the way that the, the leases are written, um, to these spaces and who owns the maintenance on, on the units that are associated with that space. So it [00:19:00] depends on, um, if, if the, the, you know, the tenant is responsible for maintenance on these things, they're.
You know, they want to go and they're probably running on a shoestring. So they're going to run a, you know, uh, their maintenance on the shoestring. So it, it depends on who actually owns the HVAC equipment, according to the lease. And the maintenance and upkeep of, of, of those units. So it, it tends to shift or shift around depending upon how these, um, uh, businesses and agreements are structured too.
James Dice: Cool. So that's kind of the, the status quo of the problem. Let's kind of move forward into the solutions and how you guys are sort of serving this market today. Um, let's just start with the controls aspect of this, and then Mike will sort of broaden our, our discussion outside of controls. But. When we think about this, the general problem, it seems like HVAC control of some sort is like generally the first step to walk down, and I'm wondering if you guys agree with that.
I feel like it's because [00:20:00] Generally, these buildings can, you know, save energy and be, you know, remotely monitored with just a few points of automation. Do you guys agree with that? Is that the first step, or do you see a different first step?
Bob French: I think it's the first step now. I mean, LED lighting has sort of run its course over the past 10 15 years.
In the old days, you know, HVAC and lighting, it was pretty much the lion's share of what a typical, say, office building would be. And, uh, but now with all LED lighting retrofits, uh, kind of done, um, except for whatever maintenance might be needed, you know, HVAC automation is the next wave. That's the next big bite, you know, that you can take out of a building.
And so, I think the key for the simple buildings is simplicity. Simplicity of installation, simplicity of use. And, um, affordable and affordability in terms of like, the cost, the first cost of, of putting it in. And so that is, um, the next step that I see most people taking. And [00:21:00] in terms of HVAC, um, I think Mike maybe can speak to this further, but, um, actually replacing HVAC systems with more efficient units is also a trend.
Uh, but a lot more capital is typically needed in those cases. So automation is a quick hit, usually a pretty fast payback, one to three years or so. Um, in these simple buildings and fairly easy for people to pull the trigger.
James Dice: So let's, let's dive in a little bit in more detail. So if I'm listening to this and I'm, um, you know, thinking about the sector.
Can you guys talk specifically about, so 75F Strato Automation, how are you guys going to market in these, to these buildings with a more simple way for them to get controls installed? That's like really, really break it down for them.
Kelle Donohue: So our, our approach, like I said before, is, is small building to large.
And really what we do is you can go down to a standalone building. Um, thermostat that you can configure with a browser or you can connect to it through software. Set that up. Set a schedule in it. Just [00:22:00] let it run. And it could be a stand alone piece of equipment. But it is, it is, um, you know, following ASHRAE guideline 36.
Um, it has the ability to do, um, dry bulb or enthalpy economizer controls. And so it is a, an intelligent thermostat that has the ability then to be expanded into a larger system if you want to interconnect these things. And you don't necessarily have to have a top end or a front end, um, on the system in order for it to maintain its schedule and, you know, do its operation, but what you're not going to get out of that, that, that, um, top layers, you're not going to get trending, you're not going to get alarming, you're not going to get the ability to, you know, um, set, uh, um, you know, exception schedules and a lot of the things that really benefit and fine tune some of your, your savings from an HVAC energy consumption, um, perspective.
Um, Our systems we set up so that, um, one of the focuses is, so I come from a contractor background, so I spent about 17 years, I've been doing controls about 29 [00:23:00] years, I spent about 17 plus years, um, from the contractor perspective. So I dealt with end users and customers a lot and managed projects from, you know, small little churches all the way up to, you know, MLB stadium kind of things.
Um, but we really focus on the contractor perspective and we also focus on the end user perspective in the simplicity. So, um, some of the keys that we focus on are speed of deployment, ease of deployment, um, uh, the tool sets that people need to daily navigate around this and use it as a, uh, as a user interface or that the tool sets that a contractor or service provider or, um, um, you know, um, uh, partner would put into the site.
Um, we try and simplify all of that stuff as, as much as we can. All of our stuff is trended automatically. So the minute you plug in a controller, all that data is harvested. Change of value. So we don't have to set up trends and we don't have to, you know, teach people how to, you know, um, set up trends for points of equipment [00:24:00] because all points are harvested throughout the whole thing.
Um, alarming is, is extremely easy, simple rule sets and allows them to, it has embedded SMS and, and, um, text, you know, email and text notifications so that you can pump those alarms out very easily. You don't have to set up third party services. So we're trying to take. A lot of the lift that is between the point of deploying and configuring your controller.
And then moving it into a system. So we're trying to simplify that chunk there. Um, graphics are automatically built based upon how you set up the units. Um, we don't have fixed IO that you're required to set it up a specific way. You can move things around as much as you want. So we're trying to, you know, it's a, it's a tough nut to crack, but you want to come combine, uh, a, a complex looking front end and the feel and the data and the usage you get out of it with a simple deployment strategy.
And set up and configuration strategy. So it's, you [00:25:00] know, uh, it's not necessarily easy to do, but that, that is our key focus. And we've been, we've been very successful at it from, um, driving it from that end user customer perspective, instead of just dictating, this is the system and this is how it works.
And this is what you get. We're trying to incorporate a different perspective onto the, onto the platform.
James Dice: Yeah, totally. Um, Bob, I'll let you add your perspective and then I want to kind of talk about, um, Kind of how that's different from what Kelly Kelly said, small to big or simple to a complex, there's a lot of solution providers that are going from complex to simple.
And I think that's an interesting thing, but Bob, I want to hear how you guys, um, you know, make it, make it simple.
Bob French: You asked how we go to market. And we also go to market through partners. Uh, most of our partners are mechanical contractors, um, especially attractive to those who. Perhaps have had to subcontract controls in the past, but they want it, you know, to keep that control themselves, you know, literally.
Uh, so we [00:26:00] can, um, set up mechanical contractors to have a controls department so that they can have a holistic relationship with their customers. Um, once a solution is put in, of course, there's the maintenance, uh, agreements and work that goes on, um, after that. And so these mechanical contractors are really set up when they can put a system like this in.
And, um, get those trends and alarms, uh, you know, that Kelly was talking about. Um, it's all built in, uh, to the system. So we did this by ease of installation. Also, um, everything works out of the box. Uh, there isn't any programming. There's no UI to build. There's no network to make. Um, you just put the systems in, configure them to the package equipment you're attached to.
The UI and all the data and alarms are all, you know, they're ready to go. Um, so those contractors are. On easy street, right? They're just putting the system in and reaping the benefits right away. And of course the end users, you know, are key here because the contractors are [00:27:00] seeking to have happy customers.
Happy customers need to be comfortable. They need to be saving energy without it, you know, killing the checkbook. And so when the contractor can come in with a solution like this, they can check all of those boxes. Absolutely.
James Dice: One of the things that strikes me as you guys are talking, especially Kelly talking about, you know, the, the, the easiest thing is to just come in and swap the thermostat out, right?
Um, I'm wondering if, if the wave of, you know, nest thermostats in our homes, how does that translate over into these smaller buildings? Is there a spectrum where as, you know, as IOT thermostats get more and more popular, is that bleeding into the expectation as a building owner and these sorts of buildings to have.
Technology like that. And then does that spectrum continue to get more and more sophisticated? Um, do, do you guys see any sort of bleed over from that?
Kelle Donohue: I've been building automation a long time and I've got a simple Honeywell thermostat at my house. Um, and I, I just, I just don't want that in, in, [00:28:00] you know, my house.
I just want to be able to set this at a point and, you know, I don't. You know, I, I've had it where I can do remote set point and a few other things on it. Um, but I do see it, it, it bleeding over. The, the, the HVAC systems that are in residential homes versus in commercial spaces perform and operate a lot differently.
So the sequence of operation and the demands are, are different and the requirements are different, um, for your solution from a firmware, hardware, um, and, uh, a system perspective. So, but I think that the bleed over is people are expecting now to be able to see information about equipment because they can see it at home, whether they're using Nest or Ecobee or whatever systems they're using, they don't understand why they go to their office or from a office manager perspective, I have this ability to get all this information from my home.
Why don't I have the ability to change a set point, change a schedule, turn the system on or off, or get [00:29:00] told that it's, it's not working properly. Um, from these other spaces. So I think, I think it's, it's not necessarily, um, um, a, uh, demand for that stuff there, but it's a, it's a, it's a curiosity level. Why can't I get.
Yeah, why can't I get that information here if I can get that from going to Home Depot and buying this and put it on my thing and then just logging into a web page and seeing what's going on? Why can't we have that on the commercial level?
Bob French: So I totally agree with what Kelly is saying. People are used to that kind of thing at home and they're expecting it at their offices and people are using Siri and Alexa to give, you know, voice commands to their home.
Um, so we've done that with Saffron AI, uh, because of what you're saying, you know, there's this spillover, there's this expectation that I should just be able to talk into my phone and get my commercial building to do what I want. And so that's the, that's the direction that we're headed. And, uh, it'll be out there for, um, customers to use next month.
James Dice: Yeah, there's, it's so interesting to me to see, like, you go to [00:30:00] Lowe's and all the technology there and there's like a home automation section, right? Or Home Depot, seeing that stop when you get to like a bank or for example, yeah, it's just, it's fascinating to see B2B, B2C and the difference, like the, the delineations between the two, let me circle back on what I said earlier around, I feel like the, we were talking about connected thermostats and making things more simple.
You know, The connected thermostat was around before I even started my career, before I even graduated from college. So that piece, it doesn't feel like has changed a whole lot. And I guess my hypothesis for why this has taken so long to change is that the big controls companies, um, We don't need to name them.
Everyone knows who we're talking about. Generally have gone from, Kelly, you said, you said simple to complex. They have gone from complex to simple and kind of have tried to take their same approach from the complex buildings, which is installing complex systems and having, [00:31:00] you know, um, Very highly trained and very expensive, uh, maintenance and service contracts to maintain those.
I feel like they've tried to take that same model and apply it to the simpler buildings. And it seems like you guys are taking this different approach. How do you guys see that showing up in the market? And why is it sort of taken so long? And do you agree with me
Kelle Donohue: in midsize project? There's a real fatigue.
In, in, in, in the, uh, in the marketplace, just because of the cost, there's a demand for some technology and there's a demand for some controls and some data and, and, and a real way to get your arms around what your, your, your portfolio is doing. But then you go against the traditional, you know, model costs.
And they're expensive short term, they're expensive long term, you know, they've got long term recurring costs. Just that initial price point is a real bite, um, and people tend to back off of it and say, I can't do that, [00:32:00] I can't afford it, I don't see the ROI, I don't see the benefit from spending that, that price point.
So, when we approach it from that, you know, that bottom to up, you know, we really scale. Effectively and efficiently and economically, um, from the, you know, the six devices up to 60, 66 devices kind of thing, you can scale up very effectively and efficiently and still provide all the data that they want to have, the ability to interface with it, the, you know, the user experience.
Um, and we don't go with any long term costs or annual fees or any recurring revenue streams. The only thing that recurs as far as revenue on our platform is, if you're going to engage the SMS and texting, you're going to send a lot of alarms out, you're going to, you know, there's a cost of those services, but there's no annual licensing fee.
And if you want to go to third party SMS or whatever, you can do that as well. We're really focused on, like, free training and trying to get, you know, the price point and the ability for a [00:33:00] consumer of these smart systems that are in that small to mid size range to really be able to, you know, adopt these platforms and see the benefits and reap the benefits of having these systems.
When you go with the big systems, you know, you're like drinking from a fire hose on some of these small sites from, from, uh, from a, uh, an overwhelming architecture. Yeah. And, uh, an overwhelming platform that really you're just looking at picking up three banks and, you know, a headquarters kind of thing. I
Mike Bendewald: think it's really important as part of the go to market for controls providers or consultants is to really understand where the client is at because we, in our experience, you know, we'll work with companies that have hundreds or thousands of properties and they won't even know what kind of assets they have, right?
And there's no way for them to, um, really, you know, track the work orders against these or it's happening on a regional basis. And so there's, [00:34:00]there's some blocking and tackling that needs to happen up front. Around just getting visibility into your facilities today, um, and working on, do I have a best in class frequency driven maintenance program in place, for example, right?
And then once you have that in place, you know what you have, you can then take the next level of connecting to your thermostats, getting more data to then start to improve efficiency through, um, you know, better temperature setbacks or things like that. But really the basics, you know, I would say need to be addressed first.
Get a proactive, you know, preventative maintenance program in place. That's cleaning coils and replacing filters and things like that. If you have refrigeration equipment in your store or something, you know, make sure you have some kind of monitoring in there, right? So you understand what the, when it's about to fail, for example, right?
And so I think there's some basics that you can do upfront before you start to layer in the more advanced, uh, controls, you know, [00:35:00] cloud based portfolio level controls that really improve efficiency. And also improve efficiency from the perspective of energy as well as, uh, from a maintenance perspective and provides that visibility and oversight into what your local contractors are actually doing.
Are they filled? Are they delivering on the promises? Right?
James Dice: Totally. Yeah, because you might have a portfolio, might have a portfolio with different, Providers across the portfolio that you That's right. You might need to maintain and, and there's
Mike Bendewald: no CMMS that, you know, is actually tracking data at the asset level.
And it might just be, you know, facility level. So I think the, the, there's varying levels of sophistication. A lot of those basics. And like back to my, like my home, I have a Nest thermostat. I get an email, I've gotten an email basically every couple years. Now you need to, you need to clean the sensor.
Because it's not meeting sub point, right? And so I'm starting to see that in my own head, and to, to the point [00:36:00] earlier, like, I think there's an opportunity, certainly, to develop a greater awareness and expectation of what these buildings could be doing from a data standpoint.
Bob French: Um, I would say, James, that I agree with your assessment that, uh, there was something wrong with the traditional companies, um, not meeting the needs of the mid market.
Which is, you know, the impetus for forming this company. We asked one of the big, uh, automation companies in the early days, um, you know, God created the world in seven days. Um, why can't you create a simpler system? And the answer from this executive was, well, he didn't have an installed base.
James Dice: Yep. Um, let's zoom a little bit out, um, uh, from controls.
Mike, you, you, besides, besides, like, kind of the portfolio level view you just talked about, can you talk about in these buildings, besides upgrading control systems, what are the other things you look at recommending that these providers do to either, you know, Um, you mentioned [00:37:00] CMMS. So we've talked about controls CMMS.
What are the other things that they should look at doing? And how is that sort of different than the controls mindset?
Mike Bendewald: So, you know, I think just preventative maintenance is a big thing, right? And that can fall under the CMMS category, but just cleaning, cleaning the equipment, right? On a schedule. Um, that, that's a big thing.
And this has to do with O& M and then. On the controls piece, that's when you can start to adjust temperature set points and schedules and things like that. These are all fairly low cost things, um, if you already have a, a system for making those changes. And then outside of that, it just depends on what kind of systems you have in place, right?
And, you know, it could be, one of the things we find as maybe the biggest opportunity for a lot of these facilities is simply proactively planning capital projects. Right now, Kelly was talking about this, you know, a lot of these companies are simply [00:38:00] reacting to things that break, right? It's, it's a run to fail culture.
And if you can be more proactive about your replacement, you can actually go to manufacturers and do bulk purchasing. Proactively plan your replacements of these units that are beyond useful life, so that you're not in these emergency situations, needing to replace things that break, and that can yield a number of different benefits in terms of avoiding emergency cost savings, as well as, um, like emergency replacement costs, cost increases, as well as lead times.
You know, sometimes it takes, uh, uh, uh, weeks, right? Months to get some of this equipment. For more information, visit www. FEMA. gov And so you avoid delays when a tenant comes in and says, you know, Hey, you know what? This thing is past useful life. You need to replace it. You don't have to wait three months to get that tenant in the space.
If you're proactively planning this stuff, then you're able to avoid those situations while also planning a more energy efficient unit as [00:39:00] well. So aligning with replacement cycles in a proactive way is a huge lever. To pull, to increase the nameplate rating efficiency of these, of these systems.
James Dice: And how do people get started?
So can we talk about that? Like, where do I go from here? Given that a lot of times they don't have the attention span, they might not have the budget. Can you guys talk about how people can get unstuck
Bob French: here? Usually the first stop is, um, your trusted, um, mechanical contractor. Um, talk to someone. Uh, and ask them about these things, you know, we're in the industry who live this every day and, uh, more than likely you're going to start getting, you know, some fairly decent answers.
I think that's be the first step is to talk to someone who knows, um, this business.
James Dice: So you're saying like they don't have the staff, but they do have someone that they call upon to Be smart on stuff like this. What about those people? So if I'm a contractor listening to this, what, what do I do?
Bob French: Yeah. If you're a contractor, I think, [00:40:00] um, just a little bit of market research, you know, would really do you well, you want to get into a system that's easy to learn and easy to execute, easy to support.
Um, I know that you've shied away already from the traditional systems because there are not those things. But, uh, there are solutions out there now.
Kelle Donohue: Well, I think, um, one of our, our biggest issues in, in getting to customers and getting them informed about, uh, about the platforms that are available out there is if they do go to their trusted HVAC contractor, that HVAC contractor probably has limited partnerships or limited understanding of controls, um, or they have a understanding of controls, but they have a preferred line that they carry.
And so their, their offering is going to be very, very narrow. Um, I would highly suggest that to owners of buildings and even to mechanical contractors to really start to go out there and investigate what's going to match up with what your customers are asking for. Um, what the needs of your market [00:41:00] are, um, how complex you want to go with systems because it's, it's an investment of time, energy and effort, um, to really learn and understand a complex systems.
But how much time do you have to do that? So it's really gauging the marketplace, um, and doing some, some real research online or attending, you know, trade shows and, and, and, uh, you know, uh, you know, really spend some time doing some deep dive on stuff. Because. You can get a system that's offered to you, and if that's what somebody recommends, because that's a preferred brand that they have, it's not necessarily, um, the right price point.
It's not necessarily the right functionality within that, uh, within your requirements. Um, so you may get a limited exposure to what's really out there. So, um, I would say that, you know, To reach out to, you know, a third party sort of neutral like Nexus and, and, uh, you know, some other third party neutral, um, um, you know, uh, offerings out there that are providing some [00:42:00]research on the, on the industry to really find out what's out there because, um, you know, your, your local expert may not be an expert.
Mike Bendewald: That's well said. I mean, I think that the national level. Companies that kind of understand the best practices across the different regions. You know, if your portfolio is across several regions and you're using local contractors in a regional basis. You're missing out on that, on that kind of intellectual capital that's out there.
James Dice: Absolutely. All right. Two quick questions before we sort of close this off. So let's talk about ROI. So Mike, you talked at the beginning of this about split incentives and the difficulty in finding the ability, like the ability to make the business case to the owner that makes the decisions that pays the bills might be different people.
Can you guys talk about how you approach educating. The ultimate buyer on the ROI. So it could be educating. It sounds like the contractor who's the one selling it. How should the people in this sort of sector be thinking about ROI and how do you guys think about it?
Mike Bendewald: When you base [00:43:00] it exclusively on energy cost savings, I think you kind of fall into a trap.
You paint yourself into a corner. I think you really need to think holistically and really approach it from a business, um, continuous improvement perspective. Like, so you're a business, you're, you're consistently trying to improve your business. Uh, or you should be. And this is just a solution that helps you run your maintenance program better, helps you, um, reduce your energy costs.
And there's, you need to be able to stack these benefits and these values on top of each other and try to quantify them. But really, it's just important to, to stack multiple benefits together, um, and not limit yourself just to the energy costs. There's, um, There could be, um, product that's getting lost.
There could be, um, tenant disruptions. There could be a number of different, uh, downside risks that, uh, you're avoiding as well as values. Yeah. I
Kelle Donohue: think for, for ROI, one of the, um, One of the [00:44:00] things that's overlooked, especially by contractors, because sometimes the difficulty in the process is, is reaching out to your local, regional, or state utilities and finding out what incentives are there for them to go from a non existent system or an old system up to a building automation system, whatever level they need to go to, because there are some real incentives and from a contractor perspective, it's sometimes difficult to navigate that That rebate, um, path.
And so sometimes you have to bring in a third party, or if you've got somebody competent within the organization, they can drive through and make some associations with the utilities to try and drive some money back into the project to make it more affordable. Um, but, uh, it's really, you know, it's, it's, it's scope, um, and, and what your, what your goals are.
Uh, for the project and what you're really trying to attain. And I think you have to get those kind of narrowed down and then see what the cost is. And then you can calculate out a [00:45:00] ROI and then you can adjust as necessary or try and seek some additional rebates or funding, um, from outside of that. Um, but it, it's, it's not a, there's not a magic bullet.
And it's, it's not necessarily a fixed number all the time, and it's, it's also once, once you put that system into play, are they going to utilize it to its full capabilities to drive that ROI as, as hard as they can to really get some payback on it, or are they going to. Docslide and, you know, going to turn everything into manual.
James Dice: Yeah, totally. Bob, when you guys think about, when you guys think about mechanical contractors, you know, I, we have some very sophisticated mechanical contractors in the Nexus community. You go to the conference, you're going to meet them there. What you're not going to meet, though, is like the local small boiler brob that's doing service on the, the small, School boilers in rural Colorado, right?
So I'm thinking of like a lot of contractors out there that just aren't very sophisticated to be able to [00:46:00] educate a buyer on, you know, do this and you're going to save this and your business kind of like go through that analysis that, that Mike and Kelly were just talking about. How do you guys think about educating them as you, you know, as your, your, your main customer?
Bob French: Yeah, honestly, um, that is a real big challenge. Contractors, um, of that size or that mentality have very much of a, give me a project and let me get in there and get out of there as, as, as soon as possible. But as soon as you bring in this service, um, contract or maintenance contract to follow on just a little bit of education with how much more effective they can be at selling and, um, executing those contracts, is generally the point where they start, um, paying closer attention to that.
And, and for any organization of any size, um, companies like Mike's company, um, are a great place to go to help really understand the full breadth of the issue. Um, like Mike said, it's not just, um, financial, um, or [00:47:00] the, uh, the utility savings alone that factors in here. So, uh, organizations like his really excel at that, uh, looking at that, um, that big picture.
Kelle Donohue: You know, I've got some, I've got some contractors out there that actually deploy a building automation system as part of their service maintenance agreement, just so that they have some visibility into the site so that they can, you know, they can determine if they need to roll a truck. On a Saturday, or they can put something in override, um, and so they, they put smaller systems in play, um, based upon those service agreements so that they can, they, they determine that they, when they roll the truck, they're, they're prepared, they understand what they're, what the issue is, and they're going out to service it, um, and, and the, the customer is not paying that premium if they don't have to.
So they see a real cost benefit to start, you know, and that's a change in perspective from a contractor side is to be able to start to get some visibility into a site so that they can serve their customers [00:48:00] better. So they're, they're more effective at what they do. And because they're saving their customers some money, they show more value to that customer.
And then it's a better relationship for them.
James Dice: That just led us into what I was going to end here with, uh, which is we've, we've like, sorted, sort of painted the picture about how complex this problem is to solve, I think. Um, let's give people some success stories to end up with. So I've asked each of you before this to sort of bring a success story to the table.
And talk about how this can be done somewhere. So can you guys, uh, talk about that? Like give people some hope with some real case study level, like, uh, storytelling here. Who wants to go first?
Bob French: Yeah, I'll jump in. Um, I would bring out, uh, a local company here and in, uh, Apple Valley, Minnesota. Um, Apple Valley Commons is an eight story, 60, 000 square foot building, uh, water source heat pump design.
Um, just, uh, 55 water source heat pumps with every [00:49:00] kind of thermostat ever made, uh, over the years installed. Um, scheduling was just a mess and, uh, there was an inexpensive, um, plant control system, uh, installed also. The owner had no idea how to use it. So, um, the hydronic loop was out of whack. The schedules were out of whack.
We just put a system in using a local contractor. He actually came to a 30 percent savings whole building on his utility bill from getting that hydronic loop scheduled and all the thermostats scheduled. And the thermostats or the water source heat pumps are super simple. That is like the lowest hanging fruit there is and there's so many buildings.
Like that. And this was just, uh, an entrepreneur who owned, you know, three local buildings. And, uh, so it's really easy to get done.
James Dice: Yeah. I immediately thought about all the buildings out there, different types of buildings, whether they're hotels or schools with all the little tiny package units spread out doing God [00:50:00] knows what in each of those units in each of those rooms.
Awesome. Uh, who wants to go next?
Kelle Donohue: I can go. Um, so we've got, um, A mechanical contracting client who has a grocery store chain in Wisconsin, and they're an organic grocery store chain, kind of a, you know, Along the lines of, um, you know, the big Whole Foods kind of style. Um, and they had standalone thermostats throughout their facility and, um, they were struggling with, uh, the units failing and then they're not getting any notification on it.
So they decided that they wanted to have a simple system in that was going to monitor the rooftops. And what we found out is, um, they were also having humidity controls, which, uh, humidity control issues, which they did not And they didn't understand and their contractor didn't understand either. So we started implementing some, um, open stats and putting some, um, rooftop unit controls with real economizer and real humidity control on it.
And it made the space much more comfortable. And then [00:51:00] they said, well, this is great. What else can you do? And so we stepped in and started moving into refrigerator and freezer temperature monitoring. So we can monitor if any of their, their, um, Their, uh, refrigeration units were, were falling offline so they could get some notification and alarming on that.
And then they said, well, okay, we gotta, you know, we got a boiler. Can we add that? And so it was a very simple add. So we started with just, let's just take a look at the rooftops that you're having problems with here. And we fixed those and improved the functionality of those. And then they, you know, said, well, what else can we do?
It was like the light bulb went off and they were so happy with what, what went on there. And then they said, okay, let's. Let's roll this up and let's put this in our other stores. So they started piloting, you know, this was kind of a pilot for them to start with, and then they started rolling it out to their other stores.
Um, and it's been a very successful, you know, rollout and, you know, you start from small, you just do a couple of rooftops, but then it starts to grow as they, as they see the need and the benefit. Um, [00:52:00] uh, more information they wanted to get out of that site. It was kind of, it was, it was kind of exciting to watch because you could see them go, okay, I need this.
And then all of a sudden they're, they have an interest in what else can we do? Um, and you see that seed start to grow and, and, and cultivate, uh, throughout their organization. It was, it's a great little, great little success story and a fun project for our team out of Wisconsin.
James Dice: Yeah, I love both of those stories, how they're basically enabling the contractor to sort of be the hero, and it seems like both of you guys are sort of in the background saying, like, Oh, you want to do more?
Okay, here's the next thing you can do. And you're sort of coaching them through that as their technologist and technology provider. Sounds really cool. Um, Mike, you got a story for us? Sure.
Mike Bendewald: So my story really has to do with kind of setting up the basics. Uh, for a multi site, um, financial services company, a couple thousand sites, um, to be able to get them to the next level, to be able to deploy controls.
Um, so they came to us [00:53:00] with some small challenges, um, you know, roof leaks, RTUs failing, which we solved and they didn't have any visibility across their portfolio. And so, um, In terms of what kind of assets they actually have, what's the condition of these assets. And so they hired us to bring that visibility to the portfolio, which then opened up, um, a lot of, we were able to say, solve problems that they're having with their maintenance contracting firm, which was not really providing the level of service that they, you know, said they were.
So, um, we were able to uncover that, get them on a new, uh, maintenance contract, uh, which is now opening up the opportunity to the next level of. Okay. We've got a better maintenance provider in place. Who's actually maintaining these assets. We know what these assets are. We have a capital plan. We assumed we had a whole lot of replacements to make based on the data that our contractor was given us.
Mantis was able to basically say you don't have to spend all that money on replacing your your rooftop [00:54:00] units and your roofing, and instead you can actually save that cash and use it to invest in a more, you know, basically an enhanced controls program. And so I think there's a really nice story of understanding what truly is the problem, and kind of redirecting funds and reorganizing the program itself.
To kind of get to the next level and start to deploy more controls.
James Dice: Absolutely. All right. Cool guys. Uh, I feel hopeful after hearing those stories. I hope everyone does, uh, hearing them as well. Um, we will continue to work with the three of you guys to, you know, develop case studies and tell these stories at the conference and that kind of thing.
For now though, Leave us, each of you leave us with number one recommendation. So if I'm listening to this and I'm a contractor or someone who owns these sorts of buildings, what's your number one recommendation for them to get started here?
Kelle Donohue: So I'll say my number one recommendation is do your research.
Figure out what your, what the demands of your customers are. [00:55:00]Figure out what's a fit, and then figure out what you can actually execute. Um, and then what needs them, uh, meets the needs of the marketplace. Um, is this, is this site going to need to scale up? Is it going to need to get bigger? Do you need to follow, you know, uh, BTL protocols?
And that, that's an important thing to be, uh, following, uh, protocol standards within the industry is, you know, figure out what you need to do. Do your research, find out what's a fit, find out what you can truly execute and deliver for your customers. Um, but, um, you know, due diligence is key.
Mike Bendewald: I think the, you know, building on the, doing the research thing, you know, there's a certain set of best practices out there that apply to certain companies of a certain size and certain portfolio scale.
And I think you need to, if you don't know what those are, you need to understand, you need to come to some kind of understanding of what those are, and then do the gap analysis. Where you're at, [00:56:00] and what's the gap to the best practices, and don't feel like you need to get there in day one, but create that roadmap to get there, right?
So that maybe year one, you're taking your first steps, and then year two, year three. So this is, this is not a overnight process and first understanding what your gap is to the best practices and then developing that roadmap to get there is going to be my, my number one thing.
Bob French: Yeah. Riffing off of that, Mike is close to what I was thinking.
Uh, and I would just say, think holistically, right? You have a customer relationship. It's, it's, uh, they may be in a break, fix mentality, but as soon as you start thinking holistically about what you can do to fix their problem today, but also provide. Agreements and contracts and services that last one, two, three years.
And what are the things that are needed in order for you to provide that holistic service for your customer? And that will cause you to start looking at and doing this research and [00:57:00] focusing in on the things that you need to be that, um, that real partner for your customers, your end users.
James Dice: I'm going to end with a challenge to everyone that listens to this normally.
Um, I can bet that we don't have a bank branch manager from that financial services listening to this, and I would bet that we don't have someone from that Whole Foods esque grocery chain listening to this, but we do have a lot of people that are in touch with these mechanical contractors out there that are listening to this, uh, they're part of your professional networks, et cetera.
So let's, let's, let's send this to them. Uh, I'm going to challenge all of our, our community right now. Um, we are the Smart Buildings Nerds and it's on us to go to that next level in our communities to share this stuff, sorts of stuff with the folks that are sort of just getting started. So that's my challenge and we'll end there.
Thank you, Bob, Kelly, and Mike, uh, for coming on the show.
Rosy Khalife: Okay, friends, thank you for listening to this episode. As [00:58:00] we continue to grow our global community of change makers, we need your help. For the next couple of months, we're challenging our listeners to share a link to their favorite Nexus episode on LinkedIn with a short post about why you listen. It would really, really help us out.
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