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Happy Thursday!
Welcome to this week’s deep dive exclusively for Nexus Pro members. It’s an honor to have you here. This deep dive is a follow up to my recent podcast conversation with Brad Pilgrim, CEO of Parity, Inc. I learned a lot from this conversation and want to share my takeaways and the full transcript with you below.
In case you missed it in your inbox, you can find the audio or video here:
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Enjoy!
—James
I’m starting to really nerd out on the differences between vertical markets. How do the best smart building solutions differ based on what kind of building we’re talking about? I’ve gone down a rabbit hole on refrigerated retail recently which has been fascinating. And the multifamily vertical is just as unique and an equally beautiful problem. I think the prop-tech world gets so focused on commercial office buildings, which is a shame.
I LOVE how focused Parity is on their customer. Their approach to the MF market is refreshing - equal parts technology and solution/service design. I also like their all-star game approach to expanding into the US. The recognition of everyone’s strengths and wanting to create a win-win for everyone that touches the building.
In no way do I believe I handled this interview well. There were so many ways to take the conversation unpacking MF buildings and how those problems are unique, and I feel like we barely scratched the surface. One thing I still want to unpack is how in the tenant spaces, the systems are often standalone. Those spaces are actually part of the smart home market, not the smart buildings market. That’s a whole new silo! How can a company like Parity bridge that gap?
My highlights:
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!
James Dice: [00:00:00] Hello, friends. Welcome to Nexus, a smart buildings technology podcast for smart humans. I'm your host, James Dice. If we haven't met before, I write a weekly newsletter on the same topic. It's also called Nexus. Each week I share what I've learned, my opinions, and what I'm excited about in the quickly evolving world of intelligent buildings. Readers have called Nexus the best way to stay up to date on the future of this industry without all the marketing fluff. You can check it out and subscribe at nexus.substack.com or click the link in the show notes.
Since starting the Nexus newsletter, many of you have reached out to me wanting to talk shop, and we have. After a few weeks of those wonderful conversations, I realized I needed to record and share them with our growing community. So here we are. The Nexus podcast is born. This is our chance to explore and learn with the brightest in our industry together.
One more quick note before we get to this week's episode. I'm a researcher at the National Renewable Energy Laboratory, otherwise known as NREL. All opinions expressed on this podcast belong solely to me or the guest. No resources from NREL are used to support Nexus, and NREL does not endorse or support any aspect of Nexus.
Episode 16 is a conversation with Brad Pilgrim, CEO of Parity, Inc. Brad breaks down the application of smart building technology in multifamily residential buildings, including how that's different from other verticals and why it's such a unique niche. We unpack Parity's solution for that space, which as a long time resident of multifamily buildings myself, sounds like a perfect product market fit.
Brad shares how the pandemic has changed residential energy consumption patterns and why that has actually driven more demand for the Parity solution. And much, much more. This episode of the podcast is directly fun by listeners like you who have joined the nexus pro membership committee. You can find info on how to join and support the podcast at dot com.
You also find the show notes, which has links to. Brad's LinkedIn in page. Oh, and by the way, if you take a look at your podcast feed and you're missing episodes 10, 12, and 14 that's because those episodes are exclusive to members of nexus pro sign up for a pro membership. Now to get your personal podcast fee with access to all the episodes without further ado, please enjoy nexus podcast, episode 16. Alright. Hello, Brad. Welcome to the nexus podcast. Can you introduce yourself for everyone?
Brad Pilgrim: [00:02:32] Yeah, James, thanks for having me. so I'm the co founder and CEO of a company called parody, inc. we're a constant commissioning platform for building HVAC systems, with a concentration on energy management, CO2 reduction and data and analytics. I spent about five and a half years in two different entities, startups.
one, based in the U S and Utah. the other one was a Canadian company. So a company that ended up buying a piece of technology and, South park, San Francisco, and, ended up expanding into like 32 States. we're acquired by NRG. so, great company, you got to work really closely with a lot of the founders, learned a lot about startups and, eventually found myself on the consumption side of the energy equation.
And, that's really where, parody place got.
James Dice: [00:03:17] Yeah. So can you take us through the, kind of the founding story of parody? Like what led you to start?
Brad Pilgrim: [00:03:23] Yeah. So, I guess parody started out of, somewhat of a personal need, you know, work working in the solar industry, really opened my eyes. Like the very first solar company really opened my eyes to like what I really wanted to do. having a bigger purpose, being able to get up in the morning and have meaning, won't go too far into the backstory of that, but so.
I think the bottom line was is I, I moved to Toronto and I was living in a condo and it was actually my friend's condo. And, he moved to, Hong Kong and I was staying in his condo. and they had a special assessment done. And, you know, in a, in a condominium in North, in North America, it's, they're usually structured as nonprofits.
So all revenues to maintain the building, come from the residents within the building or the owners within the building. So. I had the special assessment done and the fees were going up by like 21 or 18 to 21%. and I was like, wow, that's, that seems like a lot. you know, I knew that I had actually invested in condos and I knew that sort of the name of the game was like those fees low, because that's a, that's a big part of your cost of owning a condo.
you know, very different than owning a home. But, you know, in comparison actually more sustainable, so sort of have your mortgage and you have your conduct. The, I'd say on average, you know, a condo fee represents about half of your mortgage. but in this case it was like inching up to like three quarters of what I knew the mortgage was.
And so very high cost per square foot, for maintenance. so I got curious and I said, you know, like what, what, why is that right? I didn't know a lot of ed reserve funds, energy budgets, the way the condos were managed. so I went to an AGM, and then eventually ended up getting hold of the budget.
I knew how to read through, you know, a budget and balance sheet and w the realization that I had kind of industry was, the energy line. So the utilities line into condominiums, operating. A budget was like 35, 40% of the budget. And that was gas, electricity, and water. And, you know, coming from a, again, the energy industry, I knew that there was technologies that made HVAC systems more efficient, and could make pumping more efficient.
And I knew, our variable frequency drives and the potential of them. you know, I thought that every single building must have a standard operating system, right? Like there's no way it just has an on switch. so, you know, sort of diving into it. I asked the point of that question. I said, what have we done?
as far as energy efficiency and the answer I got back was we've done everything we can, we've changed our LEDs. And I think by that point I was like, got it. Okay. So your understanding of efficiency and energy optimization or efficiency is a. Is LEDs, right. Which is sort of like that classic, like light bulb moment.
Right. Everybody understands how a light bulb consumes energy to 60 Watts. If you're installed a 15 mod led, it's obviously less math is simple. so that's really what started this whole sort of, you know, I embarked onto, a research journey and, and then the second sort of key milestone was when I was, I think it was reading Ashley, N REL, Paper.
but I came across the statistic, 40% of CO2 missions come from buildings and I right there, I was like, okay, like, I think I've something worth sort of diving into. and anyways, fast forward, I actually ended up meeting my co founder. you had years of experience with heavy equipment, was also a senior partner at a large, a big four consulting firm here in GTA.
And just a wealth of knowledge, definitely bringing the tech brains, for everything I've done, I was bringing more of the, the business sales, financial side of it. but you know, over the course of six months, we worked together to really identify the opportunity that, you know, parody is currently addressing and, started the company.
And, yeah, that was like three years ago. so it's, it's been an incredible journey and, No, I probably don't have all the time on this podcast to go through that. but, yeah, that's, that's really sort of how we got started.
James Dice: [00:07:12] Cool. I can totally relate to that story. Having owned a condo and having had assessments placed on, on me personally, very annoyingly, you know, you don't plan on those things and they just happen and you really have no choice, to pay them.
Right. it's just like within the next six months you will pay this payment and you don't have any much to say about it. so yeah. I definitely understand, how that works. I can also understand like wanting to scratch your own itch. Cause like that's what nexus is. So solving your own problem is like often, you know, the greatest reason to start a company.
Cause you're obviously intimately familiar with it. So, yeah, so I want to dive into the platform, in a minute, but I thought I'd ask like with you being. kind of a startup in the smart building space. I think one of the, relevant questions for someone like you is like, how are you attracting talent to a startup in this space?
especially tech talent, because I think one of the things I've heard from tech companies, especially new tech companies is that it's hard to, get. Say a young person that could go work at Google or Facebook to, you know, decide, Hey, I really want to tackle this smart buildings thing. And I think once they do get started in our industry, they're often scared away because it's a mess and our technology is 20 years behind.
And like, it's, it's a really difficult, really juicy problem. And I think that's what attracts me to it. Cause I'm like, This is an amazing problem. And it's, you know, there's so many layers, but how are you getting people to take that plunge and say, you know, I want to solve this problem with my career.
Brad Pilgrim: [00:08:49] Yeah. it's a good question. Starting out. It's it wasn't, you know, the so called the sexless, yeah, the HVAC, you know, energy industry that, Drew me towards it. it was in fact the problem, and, and what seemed like, especially in the vertical that we're in, a very difficult problem to solve.
I, on that, you know, I, probably landed a lot of places in my career because people said either it's too hard to do or you can't do it. so that's sort of what got me really interested in it was this looks like a, a challenging problem. And a lot of people have said they can't solve it. and I think that actually is what a lot of I'd say, younger, entrepreneurial, type, you know, gig economy type people are looking for is, and there's actually been numerous sort of, papers and articles out there on like, what are people looking for the youth looking for in today's, sort of working environment.
And I think there's a bit of a stigma of like, people think startup and they go like, Oh, you're all on like beanbag chairs. And, you know, you all drink all day long and, there's this, you know, really ever flowing useful culture, in, in the startup world. And, you know, I won't say that that's not, completely untrue.
but you know, I think as startups have grown from, you know, the days of building a lot of things that have Raj to. people learning from those lessons, and understanding that, you know, you can build startups sustainably. if you have the right team and the right people in place, we have that as a core value is we really cherish and sponsor and support innovation and people that want to really break the status quo, be market disruptors.
and you know, and, and it's just a culture of. Of a playing right. Is, we want to be able to bring people on that field. You know, they're the top of their game. they want to be pushed further. they want it environment to share those really innovative ideas and ideas that they may not share in other places.
and then try them. Right. So get a, an open environment to actually try them. It's something we encourage us, you know, try things and yeah, it's, you know, things are gonna go wrong, but it's okay if you do it in a controlled environment, you know, you just sort of have to take the shots if you want to figure out if you're, you're going to make one of them.
but how that translates to attracting new talent, it's purposeful. we're not attracting, you know, hundreds of employees. we're not trying to write. It's a, we're on a growth curve probably to, to double our, employees and save the next 12 months. So go from a team of about 35 to about 70.
and a lot of our talent exists in obviously engineering. that's mechanical electrical, HVAC or mechatronic. And, obviously you develop, so computer science and computer engineers, But, you know, I'd say on the whole, they're really interesting problems that we're solving and through the work that we've done with a collaboration with Ryerson, university's building science team, you know, we're, we're collecting a ton on the data and having that data, usable in a way in a really unique domain.
and having the models, built to be able to, build machine learning algorithms. That's really interesting for a lot of people. We find that from an engineering perspective and from a development perspective, people really want to dive into that and learn more like AI is a very new industry. and I think when people think about AI, they, they generalize, they may not understand that AI is actually this big umbrella.
and there's all kinds of AI underneath it. And, you know, AI existed things like Excel spreadsheets, right? Google maps, a deck, You know, from an F and L statement all the way to a, you know, a reinforced learning algorithm. These are all classified as AI. So I think between the purpose of what we do, which is obviously addressing CO2 emissions in urban centers or picking urban, living sustainable, having an open environment for people to, you know, test theories and do modeling and maybe do things that they wouldn't be able to do at larger corporate companies.
But also having something really interesting to play with. I think all of those things combined and, and then obviously with, a very good leadership team, sort of the established, you know, senior executive team, people want to work for people that they look up to that's you know, they, they have a lot of interest in and, and they respect.
So I wouldn't say it's one small thing. It's probably a combination of, yeah. Finding everything that attracts those people and trying to create an environment of continuous learning and development.
James Dice: [00:13:08] Cool. I love that answer. It's like, yeah, obviously it's not just the sexy tech that obviously it's not just the team.
It's everything. So let's, dive into kind of the problem that you guys are solving. And, and one of the reasons I wanted to talk to you, is because I don't besides living in multifamily buildings, for sure. The last, I don't know, 15 years ever since I moved away from home when I was 17, I've been living in apartment buildings.
Right. So, in different cities, but I don't know that I understand that problem from a professional social standpoint, it's more just like living in these buildings and not giving a whole lot of other thought to it. So how are. You know, multifamily buildings and how is like specifically the analytics world analytics technology, what are the ways that much that's different from say, you know, your other sorts of commercial buildings, you know, hospitals, offices, that type of thing.
Brad Pilgrim: [00:14:04] yeah. it's a very big question. so I'll pick a couple of things out of it, because, I think like you. and myself, you know, when you move away from, from home, and you want to move into a big city, the, the likelihood of you buying a house or renting a house, it's probably quite low probability, compared to, moving into a condo, right.
No that combined with cities, obviously discouraging urban sprawl and building up and that becoming more economical in the construction industry, finding innovative ways, you know, to build faster. I think that's, that's really why you and I probably both landed in condos. but it is funny. You move into a condo, even most people that buy a condo.
They have no idea how the actual structure of the company or the corporation works. me being a good example, move into a condo and, you know, special assessments done. What's the special assessment. you know, and it's like, yeah, you hit a button and you're like, Oh, there's a budget. Like, right. That makes sense.
Sure. There should be a budget. And then you find out like, Oh, there's a board, right? Oh, I didn't know, there was a board, how do you get on the board? and then you find out it's like a bunch of volunteers and you're like, wow, there's this whole company going on in this thing that I'm living in.
And I have to share it with, you know, 500 to a thousand other people. And you know, one of the big nuances to condos is it's a, it's sort of like a house, but 500 people living in the house. So there's 500 people are all responsible for the mortgage cleaning. maintenance, you know, the energy costs, mowing the lawn, shoveling the driveway.
and those are things you don't think of, from at least a cost and operational perspective when you move into a condo, you know, I think most people think of it like a hotel, right? You move in, someone's taking care of that stuff. which I think one of the concepts behind condos is. You don't have to worry about mowing the lawn, shoveling the driveway, right?
It's a, it's part of the benefit that comes with. so you know, from that perspective, just for an overall understanding, it's very different and I feel that again, a lot of people that move into them don't really understand that from a organizational structure perspective, condos and coops are, are, the vast majority of the time they're nonprofits.
so nonprofits are structured in a way where, All the fees to run. The nonprofit are coming from an internal source, right? So in this case, in a condo, it's the 500 people living in the house. and really what that means is if you and I, and 500 other people who are you know, at least in respect to parody, you know, 500 other people who probably don't know energy as well, don't know, HVAC systems, energy efficiency, maybe understand that, you know, Again, roughly 25% of their condo fee is actually based on energy water, or cooling, heating movement of air.
Okay. They understand that there's a way to manage that. Right. It's sort of an afterthought. I think if you're not in energy, it's even really hard to understand your energy bill. you know, if the solar days really made that, pretty evident to me talking to homeowners about their energy bill and they're like, I just have no idea what it says.
Right. I know what number I have to pay that number if I want to keep it light. So, yeah. so that's, you know, again, it's, it's a really unique aspect of condos. and I would say lastly, the economics in a condo are structured in a way that it's really like the least amount of dollars in everybody's pocket.
Right. And I mean, from a costing perspective, but is the way that you want to look at it. Right. I want to put the least amount of dollars out every single month to maintain my asset. the problems that come with that are you've may not have the most say, you know, pragmatic team, looking at those problems and maybe better ways to solve them.
it's really just keep as much money in the owner's pockets as possible that doesn't leave a water room for innovation. Hmm. And longterm thinking probably too. Right? Absolutely. and that is, I'd say one of the biggest barriers or challenges in the multi-res sector compared to the commercial or mush sector, is that in the commercial sector, largely driven for profit corporations?
usually lots of building management teams, or building operators usually full time. that is a benefit you have with for-profit. You can include that into it. A costing budget and obviously they show profit or your, your leasing costs on that. usually we're in for large engineering projects.
the decision makers in those, companies where obviously, much more okay. Focused on energy engineering, net operating income, and those people generally will come from the engineering world. financial engineering world. And so that's the type of customer that you probably want to be in front of more times than any, they understand it.
They've done their research, the conversations are fluid. the value is very immediate. so you know, those sort of two things is, you know, you're dealing with a, a very qualified, interested person on the commercial side or the, the, mush side. And on the multi residential side, you're dealing with someone that has a different problem.
and I think that those are the two really big aspects, that differentiate the multi residential world from the commercial, or, or, lush market, from an energy perspective or a behavioral perspective, I'd say they're not, they're unique in their own ways. but you know, the. fact that 40% of co two emissions come from buildings really makes you think, everything that you know, you go into, but it's not your house, it's a building.
so if someone was to go from a condo like you and me to an office building, we're in our office building from probably something like nine to five, and then we're in our condo from five tonight. So the energy consumption patterns are quite unique. If you actually look at. What it's like to live in, in a condo and compare that to an office, but almost makes exact sense.
Right? You usually get up every day at the same time in your condo, you shower at the same time, you'll be for work, or maybe you work from home. everybody eats generally around lunchtime. Everybody cooks generally around five, six o'clock, and that just repeats and perpetuity. so. In a condominium, you really see this highly predictable pattern.
and I think in the same in offices, right? and it's what I believe has made the commercial industry much more ripe to adopt these types of solutions. you know, your office is open nine to five. The other hours of the day, you can basically, turn a lot of things off, right. It's just not being used the trick and condos.
And I sort of go back to when I moved into a building, I didn't think they just had an on and off switch, but the way that property technology or it's a real estate technology, hasn't developed, for, for a myriad of reasons, legislation incentive, it has left buildings in that on-off state. so the analogy I like to give is, you know, buildings sort of run like a light switch.
it's pretty much right there built, for peak. So they have to assume everybody using all of their equipment at the same time. so a lot of the common areas systems, are going to be sized for that. and with the lack of adoption of control, building management technology, better software. A lot of those buildings have been left to their own devices.
And, you know, so it's sort of this self fulfilling perpetual problem that just keeps going on. but I think what that's allowed, companies like parody to do is, really identify what it is, the problem for the different types of stakeholders in these markets. And how do we build a really compelling value proposition and find good product market fit?
And really just, you know, focusing in on, a very narrow market and a niche, has allowed us to develop a significant footprint and learn, I'd say a lot more about our particular customer, so that we can service them better and build a product that is actually very conducive to what they need.
James Dice: [00:21:49] I love that. Yeah. there's just so many things that are different about that So we've had on the podcast, there's been several similar types of technologies, but they're all focused on different verticals and the way that those technologies are applied are going to be totally different.
Like you just said, just like the simple. If you're just talking about control sequences, for instance, you know, typical office building is going to have that nine to five schedule, like you said, and they're going to have morning warm up and cool down. And it's all gonna be based around that Monday through Friday.
but, and we'll get into the, actual product in a minute, but do you guys get into, is it just. Condo associations that are your main clients. Are you getting into multifamily buildings that people are renting from one company, or, what is your approach there?
Brad Pilgrim: [00:22:34] yeah, so, you know, multifamily as an umbrella, is really, you know, multiunit dwelling MIRVs am or use a thousand acronyms for them. but that what we concentrate on is, is. not so much the type of the building, it's the tech of the customer. so as I said before, your home is, I'd say a lot more sensitive than your workplace.
so in a commercial building, I think the tenant concerns are very different than in a multi residential building. Okay. Or multi-use building, you might be able to deal with. A temperature. You might not be able to control your office, throughout an eight hour day, I don't know, by putting on a sweater, maybe you complain about it once or twice, but in the end you feel I'm not enabled to actually change that.
but in your home, you know, it's like, your safe place. It's your fiefdom. It's to sort of be in your own environment. And all those things are really important to you. You are at home, you want to be comfortable. you know, it's probably, what's driven the adoption of like smart thermostats, right?
It's like, everybody wants that type of control in their home. but it's also like, again, it's your, your safe place. and if you own it, it's likely, your greatest asset or greatest investment. so you want to be in control. you don't want to not have hot water at some point. we're in a commercial building, maybe that's acceptable.
you know, you want the temperature or the availability of, of cooling to a temperature that you want or heating to a temperature you want to always be there. you know, you probably don't want anyone limiting you from what you can do in your own home. where again compare to the, commercial or, machine industry.
That's, you probably have a bit more leniency. in condos specifically, we deal with, independent, multi residential condominium corporations. and we deal with, rental groups or, or large real estate owners. and in both, both of us are very aligned, right? We're all concentrated on everything the customer needs when they need it.
So, The way that we look at that and really part of what parody means is that optimal supply and demand ratio of never wasting energy or delivering too much to the building. but also at the same time when demand increases being able to react to demand and supply those utilities to a building. but a lot of it is really about having the control and ability to apply or not supply the critical utilities, to be able to show energy savings and efficiency.
And meet demand and use different demand indicators and, different algorithms to understand when a building actually needs something that you may be trying to save on, and vice versa.
James Dice: [00:25:03] Okay. Yeah. And I imagine part of that is, you know, in the commercial world, there's this concept of tenant comfort.
and now it's becoming like tenant health and kind of growing into that whole, you know, virus mitigation concept, but. I'd imagine the tenant concept is different, If it's someone's home. maybe bands are smaller on the tenant comfort.
It's like, if I own this unit, I want to be able to control it to exactly the temperature that I want to control it. So kind of getting into the platform a little bit, I think that's a good kind of jumping off point. So, maybe just explain the concept of the platform first and then we can kind of get into like, whether you're able to control, do anything with the tenant spaces or not.
I feel like that's like a, a line in the sand that might be difficult to cross, but yeah. Can you kind of just talk about what the platform does and how you explain it to these condo associations?
Brad Pilgrim: [00:25:55] Yeah. so I enjoyed this question. This is actually. Where I'd say we're, we're quite unique. so in comparison, again, to a commercial, versus a multi residential or some buildings, we'll usually have a, a building manager or a building, a facility manager, right.
in a multi residential building, you may have a superintendent, more times than not. You'll have a superintendent. There's products built for both verticals, right? One will enable a building manager or a facility manager to be able to do their job better or help them do their job better. The other vertical, there is not, there's no one to actually use that tool or be able to implement those changes that some platforms are recommending, uneconomical unfeasible.
There's no one there to manage the project. The, there may be you know, a knowledge gap.
James Dice: [00:26:38] I could not imagine like the condo boards that I've been served by. I cannot imagine any of them being like, Hmm, I'm going to go log into the analytics software and like manage the building.
Right. They don't have time for that. They're just like you and I, where they're just like, it's a volunteer thing. They just need something that can kind of work on its own. Right? Yeah.
Brad Pilgrim: [00:26:56] Yeah. And I think that was the biggest, it was the biggest identifiable problem was that we'd really love to be more energy efficient.
We just, we don't have anybody to do it. The classic providers of that technology were, you know, you look at the big bricks and mortar, HVAC companies, carrier Johnson, Honeywell, Siemens, Schneider, or massive, they've all been producing these pieces of equipment, and executing in a big, big way.
Obviously they're huge companies. two, I would say largely the commercial and, you know, much markets. Right. It's that's, that's where they play. Well, that's where the service offering really resonates. you know, not that there isn't a, you know, overlaps in the multi-residential as far as, you know, big equipment.
but I think it's okay. An overall, like service offering for a customer. they, they really left a big gap by just not understanding. Really what that customer needed and how their business is organized or a corporation condominium corporation is organized and what that good product market fit is.
generally you won't change a product that works for 90% of the market, just for that latter 10%, assuming that, you know, you, you probably won't get the full market adoption of that, that latter market. So, yeah, so really what did we do differently? It's we offer an energy efficiency as a service.
So instead of offering an analytics platform or a new control platform, or a better way for your building manager to manage their system, we offer it as a service, where I'd say 50% of that stuff has done, autonomy by, you know, developed customized algorithms, that we basically program in place that replaces.
you know, say a 20 person engineering team being in your building all the time. and I will say as far as technology or sort of the availability of energy savings and HVAC equipment, there's sort of, there's three parts to it. but fundamentally there is a point of diminishing returns. and you probably have to really understand that and something we dug into really hard.
Well, we started and said, where are assets best allocated, and our resources in our company. And in the end we understood what is achievable. what's within our capability. And at what point is there a point of diminishing returns that maybe right now, we don't want to invest in, so, you know, figuring out where our technology, you know, Fell into the categories of like super high performing sort of, high-performing and maybe low performing.
we said, you know, we think we're going to be a high performing company, because we understand, how systems work in buildings and what the availability of energy savings and reduction are on the whole for the large majority of people or the large majority of the problems. And that's really what we focused our platform and, you know, the, the savings algorithms that we use.
On was getting the biggest chunks out first, but more of our resources, we're concentrating on making sure our customer was satisfied. and that they are always first. So we have a very customer first focus, because we deal with people in their homes and if we ever put ourselves in there, you know, that's, that's the way we want to be treated.
So we treat our customers like we would treat ourselves. I'd say that's a, that's predominantly what we build our energy efficiency as a service offering around was, you know, a type of customer.
James Dice: [00:30:13] And so, well, let me kind of explain what I think I understand about the platform is that it's, it's a supervisory control solution, partly where you're pulling in data from any sort of HVAC system, you know, like you mentioned.
Stephen Schneider Johnson controls whatever's already in the building. you know, all of the condos are being served with maybe hot or chilled water from the central plant. That is probably not a lot, unlike traditional more commercial type of building systems, you're pulling in data from that.
And then you're, the system is orchestrating with supervisory controls, sequences, to optimize that right. Is that a good way to understand it?
Brad Pilgrim: [00:30:54] Yeah. Yeah. I mean, you know, across the board, most companies that are doing this, we're all working off the same building blocks. Yeah. That's, that's the, I think that was probably the statement around we, you know, we understood that our technology, as it was, you know, two years ago, it really covered off reliably.
A lot of the large pieces of. You know, value in HVAC, energy savings and optimization, that we wanted to, we saw a path to incrementally increase it. And, you know, in parallel we are doing that, but we didn't want to invest a bunch of time into something that again, made those incremental changes where we said, we think we just need to be able to understand our customer better.
but yeah, I, a lot of what we do is a, it's a supervisory layer. we're hardware agnostic. we like that. Because we can basically tie into any type of equipment, any piece of machinery, it allows us to address a lot more buildings. then maybe some other people who only play with certain types of prietary equipment or, deal with certain things, equipment.
Yeah, that was, that was one of the big pieces. you know, we concentrated on early days for saying, you know, how do we get the most for the most amount of people. and obviously continue to build that, that innovative technology, but, overall is, you know, finding out does that product do everything that it needs to do for the customer?
James Dice: [00:32:17] Yeah. core readers nexus on the blog dog side will be sick of me talking about advanced supervisor control, but it seems like I need to write something about it, how it especially plays well in this market. I think they're sick of me talking about it at this point. So maybe I'll I'll wait, I'll wait a few months.
So, so, okay. So that's kind of, like you said, that's like 50% of it. The other half of it is. This concept of as a service or I guess the question would be, what is the other 50%? Where is it like your team kind of handholding these condo associations in the energy efficiency journey? Is that the other side of it?
Brad Pilgrim: [00:32:54] So I'd say personally, yes. There's the way we approach a new customer or a condo is again, we put ourselves back in their shoes. We're kind of owners. A lot of us here are, you know, we live in Toronto with them in condos. and we sort of just say like, if someone presented us with this type of product, what would we do you understand?
when we started out, you know, in the, the condominium industry view. Yeah. We started with commercial buildings. We started with schools, and it was. It was a bit different because it was like, yeah, there's lots of competition and this is the kind of product we need. And, you know, we were looking at it from a condominium perspective, going that's really unique.
Cause like, those are those aren't problems that, you know, condos or people or rental owners have. they have most of the problems come from the tenants that are in their buildings. so how do we build a better product for those people? So we said, you know, one of the biggest problems that they're there, they need to overcome.
one was obviously cost access to capital, various, you know, bylaws restrictions in a nonprofit organizations that don't necessarily allow you to borrow lots of money finance, longterm. So we said, okay, how do we solve that problem for you? the other one was, you know, again, you and I, if we were on a County board and we were volunteers, we're consumers.
Right. So we like consumer products, right. We really like how to market it to us. We really like how we have the stand. Then we get all these nice things that sort of products offer. you know, example. I ordered something, you know, a couple of weeks ago from, online and it was, you know, guaranteed refund.
If it doesn't look like it does in the photo, You know, I only had to pay for half of it when I ordered it. And like, those were all things that like we like, right. It's like, yeah, I like those things, those fit our market. and so we sort of said, how do we build a product that actually fits this consumer type B to B, B to B to C customer.
And really those were, those were the big things was, We don't have access to capital to adopt this technology. Everything we've heard about the technology, there's been a lot of big claims in the past. A lot of promises made and not a lot of them seem through, we don't really understand what's going on and we're just told that it's happening, you know, from an energy efficiency perspective, the classic way to look and see if something worked is look at your bill the next month.
There's lots of problems associated with just doing that. but I think overall from a consumer perspective, energy efficiency, hasn't built a product that really focuses on serving what a customer needs, which is guarantees data. you know, education really consumer friendly looks and feels and, and, you know, sometimes just personal on the other end of the phone that, you know, can relate to what they're going through.
companies like eco BNS, right? They've nailed that, with the smart thermostat, where we've had thermostats for, you know, like a hundred years, but it took a very long time for someone to say, why does anybody use these things? Right. It just didn't work. and that's really the same journey we're embarking on is really understanding like, like how do we build a better product for the type of customer that, that really needs the solution.
James Dice: [00:36:00] Cool. That's really cool. I think my last pushing around the platform would be like, I think I heard you on different podcasts talking about the types of AI that you're using and you earlier talked about the umbrella. so could you kind of clarify, this is one of my favorite questions, by the way, it's like, can you, can we start to cut through the buzzwords a little bit and like talk about what types you guys are using and, How do you normally talk about that?
Or do you talk about it?
Brad Pilgrim: [00:36:25] yeah, I'll, I'll answer, it's a bit of a two part question. we don't talk about it a lot, especially with our customers. It's again, it's not something that, it, it's not something I think even to us as, as consumers is as important as, it may be to someone that is looking for that edge.
I think up until recently and maybe even still it scares some people you know, there's been instances of, you know, some of the most advanced AI doing things that we never predicted at doing. And, and, you know, frankly, I mean, to me, if you're asking me what gets me excited, it's artificial intelligence, I think it's a, I've said this.
Probably in every conversation I've had is like, we have just rubbed away the condensation from the window. we're not anywhere near the potential of what is going to happen in the next, say five, 10 years. it's going to be incredible to see. but from a customer's perspective, it has very little weight.
it doesn't offer me anything better. it sounds like that sorts of possibilities, something going wrong really bad. So, we don't, really marketed. you know, that being said, there is some seriously robust technology behind what we do, from an engineering perspective on HVAC systems, but also from a machine learning perspective, deep learning to be more specific, with the data that we collect, you know, in a, in a deep learning algorithm is, to sort of delineate, you know, AI goes from an F and L statement to, linear regression, multiple linear supervise, deep learning, reinforced learning, and obviously the more complex models you can develop.
And, you know, once you started getting into neural networks, I mean, you get right down to quantum computing. but again, what, what is it that point of diminishing returns right now? And so yeah, through our collaboration with the Ryerson's building science team, we've developed a two or three deep learning algorithms that really allow us to, do things like forecasting, okay.
You know, heat loss calculations, but do it in fractions of a second, every single minute. And those are the important gains that you're going to get in the technology. But. Somewhat being expected by them consumer. I expect my Google maps to know absolutely everything that's just how we're built, but there is actually some seriously advanced machine learning behind those layers.
But when you see Google maps, no one says AI maps. Claims that there's an artificial intelligence driving it because to us, as a consumer, we just come to expect that, the technology is out of level, that it is delivering what we want as a consumer of that product. so, you know, again, largely what we do are anywhere from linear regression and multi linear, all the way to heating and cooling systems largely, have much more advanced systems tied to them that are in continuous learning.
supervise albeit, but continuous learning.
James Dice: [00:39:10] Got it. Cool. So let's shift as we kind of get towards wrapping up here, let's shift over so it's August. That was today, August 13th. you know, we're still in the middle, in the U S at least in the middle of this, pandemic. And I mean, one of the things that is relevant to our conversation here is I'm spending, I mean, everyone's spending a lot more time at home, right.
So I have to imagine that the load profile of the average condo building has changed quite a bit. And so what, what have you seen and what are the implications been for your clients there?
Brad Pilgrim: [00:39:41] sort of really good question. I have to say when we started the, company, part of our linchpin was condos have done the same thing for a hundred years, right.
They, they, they always have the same occupancy level. People's are, people are creatures of habit, right. They leave every day, they come home. And on average, that all varies actually the exact same. behavioral, data points, and that a pandemic, you know, the first time, you know, since like, I don't even know if we had condoms in 1918, but you know, it's the first time in a hundred years that we've had this unprecedented shift from, you know, us going to offices nine to five being editor workplace, just coming home at five o'clock waking up.
So It was wild when it happened. I was like, this is the first time in history. This is actually being done. And of course we built a whole company around this thesis of always do the same thing. so it, it definitely put us in a spot where we were like, what does this mean?
have we, you know, art was our timing way off. yeah. Is this going to change the mindset of customers or. path parody, and then some really strange and good things starting to happen. what we did notice is because what we do is we look at all systems and we try and use demand indicators in the building, as data inputs to supply algorithms.
and there's some really unique ones that we use. what we noticed was. Even though there was a lot more people home, a lot more of the time. And you could probably say there's a combination of like this all landed in shoulder seasons. and for everybody listening, I think they'll know what a shoulder season is as far as energy and HVAC.
but it did land in shoulder seasons. but the big component, of the pandemic. And I'd say that the biggest change is water. and one of the fastest rising utilities across North America right now. but everybody's washing their hands a lot more. we saw crazy water increases. and I guess just to bring that into context, water's a Capitol fixture utility.
It gets consumed by toilets, shower, heads, faucets, you know, sprinkler systems, all of which are, Hard to control through digital controls. It's much more of a yeah. Capital fixture, consumable.
James Dice: [00:41:47] So it's owned by the individuals, not by the condo association or the apartment building.
Brad Pilgrim: [00:41:53] Yeah, in most cases.
but I'd say probably like 50% of the cases, it's owned by the condominium corporation. Really. Okay. So the condo corporation will pay the bill. They'll take that to spread it out into the condo fee,
James Dice: [00:42:05] right? Yeah. Cause it's metered. Yeah. It's metered centrally. yeah, I think what the tenants own the toilets like.
Right. So the changing out the capital there would be on them or is that not true either?
Brad Pilgrim: [00:42:18] That's true. Yeah. Okay. In condominiums now. You know, there is, actually I should say in most cases, independence, I've seen both, I've seen where corporations will own the thermostat thing, quote, heat pump, unit toilets, and it's their responsibility to actually pay for it.
I mean, in the end, if you sorta draw a box around this stuff, a nonprofit organization, they all make decisions together, no matter who ends up actually changing it. And everybody that owns the asset eventually benefits. Right. Okay. So I wouldn't say totally a moot point, but when it comes to decision in dollars out, it's, it's definitely more of a, more to point.
Hm. so again, what are the biggest changes we saw was with water consumption and it was going to be it, so, you know, anywhere from five up to 15% immediate, immediate change, and those deltas aren't water are actually significant that have never, never before seen, Hot water obviously consumption.
So, I think it won't really matter where you are in North America. I can think of a couple of nuance places, but usually you're using a fossil fuel to heat your hot water. I'd say in more recent years, the last 10 years there has been a push towards electrification. so electric hot water heaters are on demand, hot water heaters.
which again, it's sort of a, it's a cost benefit analysis that you have to do to make that decision. But, from a CO2 perspective, is it depends on what power market you're in, what the distribution of, of actual power production is like, to determine if that's a more efficient way or a carbon efficient way to prove how far, but on the whole, how our seed by fossil fuel, it's usually not for gas.
so we did see a spike in natural gas consumption, obviously. But, I guess the point I'm getting to is overall. Okay. What we've seen is because buildings have largely been way over supply or sort of that analogy of like giant on switch, they've just been running on. and it's the for, for your listeners to better understand that.
Imagine running, you drink coffee, I drink coffee. I probably have one at nine, one, maybe two or three get over that hump. but if I ran the coffee maker, 24 seven, three 65, just so that those three times a day, it was there, hot and ready, which is really what we expect to happen. but having it run consistently and stay hot and ready and fresh that's obviously there's like 99% waste. Hmm. So that's sort of the analogy I use in buildings that are, you know, maintaining a hot water temperature all day long, running their boiling system at 140 degrees, just so that when someone may want a hot shower, it's there available and ready.
very simple things, you know, you can do with the, with like a hot water is, you know, you look at the return temperature on it. If you're sending it out at 140 and it's coming back at 140, probably a good indication, you know, Nobody's using it. so yeah, I mean, overall, yeah, back to my point, we saw a change, but it didn't change really the impact that we were having on buildings.
And I think that's because we were still catering largely to the full supply and demand equation of the building. And although we did see changes in, you know, people an increase in hot water, an increase in water consumption. there's not really going to be a lot of change in electricity usage. you know, right now we are seeing probably larger than higher peaks in chiller usage because everybody is home.
we've, we've had some, some pretty hot summers here in the GTA anyways, or some hot days here. But I think probably what we've seen over the last couple of months is there is actually a lot more people getting back out right. And being energy conscious. I think, you know, a lot of the condos or the corporations we've talked to actually have, you know, like announcements, I would say guys, we're home a lot more.
what that means from an energy perspective, especially in a condo, is these costs are gonna go up. We haven't budgeted for these costs, a condo sense of budget every single year. That's what dictates the condo fee. So if we're using 20% more in utilities or, a stark way to look at it is we're home a hundred percent more of the time.
So therefore if that, you know, applied in a linear relationships, the cost of utility for the amount of money, that's a two X factor on most things. So you would expect your, you know, cost of, Gas to be two times cost of water to be two times cost of electricity, to be two times. So that's what you expect to see in there.
In reality, not everybody went home, not everyone, but he is using their cooling at the same time. Not everybody is sharing at the same time. so on the whole I'd say the impact was, was seen. It was visible again, ranging from five to 15% on average, more consumption and things like water, gas, maybe electricity.
but what this has done is in, in, you know, speaking to the pandemic and this whole, bubble analogy of like, you know, make sure you're mitigating your risk, right? You wear a mask, right. try and interact with, you know, your inner circle or your 10% circle as we've done in Canada.
it's really shined a light on the advantages of remote control. And, you know, having the ability to do things like, turn up air systems, change, set points, problem solved from afar, of sear clients that have an energy management system in their buildings. look at it and go, you know, they're, they're very thankful.
They're like, we're so glad we have this now because yeah, it's going to be a huge cost. mitigator. Next year when we have to go back and look at the budget and say, listen, we were in a shortfall because we're all using more gas, more electricity, more water.
but having parody in the building as a service, they know, and they can take comfort and, and have some peace of mind knowing someone's managing this forest the best they possibly can. So they're mitigating our risk with best they possibly can. And I think that's really shone a light in a positive way.
and we've had a lot more. You know, customers, buildings, referrals a lot more sites than around the technology that we're actually providing in our, in our market because of the pandemics. So, you know, I think as I said in the beginning, it's like, we, we were like, wow, this is a first, like really a first and a hundred years.
and we thought it would mean very bad things, but it actually turned out to mean a lot of really good things. and I think this is what this industry needs on the whole is it needs more. Education more people need to be talking about the benefits of it. the adoption needs to happen in every single sector, there's room for people to play, everywhere.
And, you know, I know a bunch of great companies that are addressing a lot of these problems in different verticals. And, you know, I I'm really excited for all of us, because I think real estate, technology is just, it hasn't developed like every other aspect of our lives. and so. Yeah, maybe this is sort of a turning point for property technology.
James Dice: [00:48:58] Yeah. I mean, that was certainly echoed in the last one last podcast with Deb NOLA from switch, she's basically said, Oh, you know, along the same lines seem more seen acceleration and, yeah. Building owners and their customers kind of shifting and making a big shift. So it's, I think it's pretty awesome to hear that that's the same in your market.
so kind of. Closing off here. I want to hear kind of what it sounds like you guys are doubling your staff. That might be one of the things you're excited about, but what are you excited about with, the next, maybe six months to a year for parody?
Brad Pilgrim: [00:49:32] yeah, so, you know, we, we've expanded down into the U S that's really exciting, despite the challenges in COVID, you know, we're, we're a very remote focused team.
You know, when all of this happened and we were forced to get everybody working from home. we were able to do it in less than 24 hours. I think what we didn't realize was we actually operated virtually in office. and we did that for various reasons. It's, it keeps us flexible as a company.
but it also allows us to build large networks of installers, large networks of, you know, finance providers and equipment suppliers. and we're really just like this. Engineering facilitating service in the middle that allows, you know, suppliers of all these great technologies and, the people that have the skill sets, to be able to install this stuff and then us being able to pull it all together and create that good product market fit. so, we, you know, we act as that, that, that middle layer, and, you know, moving into the U S it's what really allows us as a company to, to move very quickly, and reach scale is we're not relying on. You know, hundreds of people or lots of infrastructure or trucks on the road, or texts out in the field.
We know that those companies exist in those markets are hungry. and they need new products and companies like us to, you know, to sort of break the way old things have been done and introduce new efficient ways. and that's what we're seeing. So, you know, moving into the new, you know, via virtually, has been a big proof point.
around that is, is allowed us to, without ever actually physically going, you know, to a building, we can and inspect, do a walkthrough, do a building, energy assessment, work with engineers and installers to actually define the scope, you know, understand exactly what needs to be achieved in the building.
And then ultimately remotely bringing everything online. you know, that's. That's what I'm finding exciting. Obviously the early days of that were much more manual where you needed people out at sites confirming, you know, when I click a button here, it does what I'm saying here. And, it's really helped build out our quality assurance process.
it's just understanding like, you know, how do we deliver this quickly, you know, percentage done, right? Percentage done on time. How do we get those, those numbers crossing that, you know, 95 to a hundred percent Mark, And again, yeah, moving into the U S where they're being able to travel down there.
It's really forced us to fortify a lot of those, those systems. And, yeah, now that we're there and we're, we're growing, both domestically and in the U S it's a, it's, it's a real Testament to the capability of remote work. and having remote teams.
James Dice: [00:52:09] And what sort of partners are you looking to to sort of partner up with, in these, all these local markets
Brad Pilgrim: [00:52:14] Yeah, so without naming names, you know, we have, partners from very large HVAC suppliers. we have partners, that are property management companies, which we feel are very conducive. you know what we're doing. but, you know, in the U S I'm already working with like, you know, large rental companies, in their multi-residential portfolios.
and those are the types of people we want to be able to work with are, you know, the HVAC mechanical suppliers, right? that's probably one of our biggest strategic partners in the buildings we work in is their major stakeholder. We don't have people on the road, on the ground. we don't have necessarily those, you know, mechanical service expertise per se, in those exact instances where you may need someone onsite.
So we make sure that we work with those networks of, you know, mechanical suppliers that every single building has made sure that we can deliver them value or making their job easier, making their business model more efficient for them. so that everybody is winning in the end. but. Yeah. I mean, you know, I would, I would say we, we, we don't work in commercial.
We don't work in, you know, municipal universities, schools, hospitals. we really understand our customer really well. We understand the nuances that multi residential building owners deal with and what condominium corporations or co-ops deal with. And we really focus our product and our efforts of service, around that customer.
And that's a. That's a big differentiator and that's, that's what I'm really excited about is, is continuing to build a better product and a better service that's, you know, really bring, a cohesive, value to all the stakeholders in that market.
James Dice: [00:53:49] Cool. Well, this has been fascinating for me. I've I've been digging into different verticals.
you know, a couple of weeks ago I was deep down a rabbit hole with, Big box retail and refrigerated retail. And this has been kind of feeding me in that new way, which is like, how does, how do all these same problems show up in these different ways and these different buildings. So thank you for taking me through that and that dedicated me and everyone else.
And, really, really want to wish you luck, on getting into the U S and really expanded past that. Cause this is what you guys are doing is awesome. So, so thanks Brad. And thanks for coming on this. Sure.
Brad Pilgrim: [00:54:22] Yeah. Yeah. Thanks for having me. It's been great chance.
James Dice: [00:54:24] Alright, friends. Thanks for listening to this episode of the Nexus podcast. For more episodes like this and to get the weekly Nexus newsletter, please subscribe at nexus.substack.com. You can find the show notes for this conversation there as well. As always, please reach out on LinkedIn with any thoughts on this episode.
I'd love to hear from you. Have a great day.
Happy Thursday!
Welcome to this week’s deep dive exclusively for Nexus Pro members. It’s an honor to have you here. This deep dive is a follow up to my recent podcast conversation with Brad Pilgrim, CEO of Parity, Inc. I learned a lot from this conversation and want to share my takeaways and the full transcript with you below.
In case you missed it in your inbox, you can find the audio or video here:
Nexus site | Apple Podcasts | Spotify | YouTube | Add to other podcast apps
Enjoy!
—James
I’m starting to really nerd out on the differences between vertical markets. How do the best smart building solutions differ based on what kind of building we’re talking about? I’ve gone down a rabbit hole on refrigerated retail recently which has been fascinating. And the multifamily vertical is just as unique and an equally beautiful problem. I think the prop-tech world gets so focused on commercial office buildings, which is a shame.
I LOVE how focused Parity is on their customer. Their approach to the MF market is refreshing - equal parts technology and solution/service design. I also like their all-star game approach to expanding into the US. The recognition of everyone’s strengths and wanting to create a win-win for everyone that touches the building.
In no way do I believe I handled this interview well. There were so many ways to take the conversation unpacking MF buildings and how those problems are unique, and I feel like we barely scratched the surface. One thing I still want to unpack is how in the tenant spaces, the systems are often standalone. Those spaces are actually part of the smart home market, not the smart buildings market. That’s a whole new silo! How can a company like Parity bridge that gap?
My highlights:
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!
James Dice: [00:00:00] Hello, friends. Welcome to Nexus, a smart buildings technology podcast for smart humans. I'm your host, James Dice. If we haven't met before, I write a weekly newsletter on the same topic. It's also called Nexus. Each week I share what I've learned, my opinions, and what I'm excited about in the quickly evolving world of intelligent buildings. Readers have called Nexus the best way to stay up to date on the future of this industry without all the marketing fluff. You can check it out and subscribe at nexus.substack.com or click the link in the show notes.
Since starting the Nexus newsletter, many of you have reached out to me wanting to talk shop, and we have. After a few weeks of those wonderful conversations, I realized I needed to record and share them with our growing community. So here we are. The Nexus podcast is born. This is our chance to explore and learn with the brightest in our industry together.
One more quick note before we get to this week's episode. I'm a researcher at the National Renewable Energy Laboratory, otherwise known as NREL. All opinions expressed on this podcast belong solely to me or the guest. No resources from NREL are used to support Nexus, and NREL does not endorse or support any aspect of Nexus.
Episode 16 is a conversation with Brad Pilgrim, CEO of Parity, Inc. Brad breaks down the application of smart building technology in multifamily residential buildings, including how that's different from other verticals and why it's such a unique niche. We unpack Parity's solution for that space, which as a long time resident of multifamily buildings myself, sounds like a perfect product market fit.
Brad shares how the pandemic has changed residential energy consumption patterns and why that has actually driven more demand for the Parity solution. And much, much more. This episode of the podcast is directly fun by listeners like you who have joined the nexus pro membership committee. You can find info on how to join and support the podcast at dot com.
You also find the show notes, which has links to. Brad's LinkedIn in page. Oh, and by the way, if you take a look at your podcast feed and you're missing episodes 10, 12, and 14 that's because those episodes are exclusive to members of nexus pro sign up for a pro membership. Now to get your personal podcast fee with access to all the episodes without further ado, please enjoy nexus podcast, episode 16. Alright. Hello, Brad. Welcome to the nexus podcast. Can you introduce yourself for everyone?
Brad Pilgrim: [00:02:32] Yeah, James, thanks for having me. so I'm the co founder and CEO of a company called parody, inc. we're a constant commissioning platform for building HVAC systems, with a concentration on energy management, CO2 reduction and data and analytics. I spent about five and a half years in two different entities, startups.
one, based in the U S and Utah. the other one was a Canadian company. So a company that ended up buying a piece of technology and, South park, San Francisco, and, ended up expanding into like 32 States. we're acquired by NRG. so, great company, you got to work really closely with a lot of the founders, learned a lot about startups and, eventually found myself on the consumption side of the energy equation.
And, that's really where, parody place got.
James Dice: [00:03:17] Yeah. So can you take us through the, kind of the founding story of parody? Like what led you to start?
Brad Pilgrim: [00:03:23] Yeah. So, I guess parody started out of, somewhat of a personal need, you know, work working in the solar industry, really opened my eyes. Like the very first solar company really opened my eyes to like what I really wanted to do. having a bigger purpose, being able to get up in the morning and have meaning, won't go too far into the backstory of that, but so.
I think the bottom line was is I, I moved to Toronto and I was living in a condo and it was actually my friend's condo. And, he moved to, Hong Kong and I was staying in his condo. and they had a special assessment done. And, you know, in a, in a condominium in North, in North America, it's, they're usually structured as nonprofits.
So all revenues to maintain the building, come from the residents within the building or the owners within the building. So. I had the special assessment done and the fees were going up by like 21 or 18 to 21%. and I was like, wow, that's, that seems like a lot. you know, I knew that I had actually invested in condos and I knew that sort of the name of the game was like those fees low, because that's a, that's a big part of your cost of owning a condo.
you know, very different than owning a home. But, you know, in comparison actually more sustainable, so sort of have your mortgage and you have your conduct. The, I'd say on average, you know, a condo fee represents about half of your mortgage. but in this case it was like inching up to like three quarters of what I knew the mortgage was.
And so very high cost per square foot, for maintenance. so I got curious and I said, you know, like what, what, why is that right? I didn't know a lot of ed reserve funds, energy budgets, the way the condos were managed. so I went to an AGM, and then eventually ended up getting hold of the budget.
I knew how to read through, you know, a budget and balance sheet and w the realization that I had kind of industry was, the energy line. So the utilities line into condominiums, operating. A budget was like 35, 40% of the budget. And that was gas, electricity, and water. And, you know, coming from a, again, the energy industry, I knew that there was technologies that made HVAC systems more efficient, and could make pumping more efficient.
And I knew, our variable frequency drives and the potential of them. you know, I thought that every single building must have a standard operating system, right? Like there's no way it just has an on switch. so, you know, sort of diving into it. I asked the point of that question. I said, what have we done?
as far as energy efficiency and the answer I got back was we've done everything we can, we've changed our LEDs. And I think by that point I was like, got it. Okay. So your understanding of efficiency and energy optimization or efficiency is a. Is LEDs, right. Which is sort of like that classic, like light bulb moment.
Right. Everybody understands how a light bulb consumes energy to 60 Watts. If you're installed a 15 mod led, it's obviously less math is simple. so that's really what started this whole sort of, you know, I embarked onto, a research journey and, and then the second sort of key milestone was when I was, I think it was reading Ashley, N REL, Paper.
but I came across the statistic, 40% of CO2 missions come from buildings and I right there, I was like, okay, like, I think I've something worth sort of diving into. and anyways, fast forward, I actually ended up meeting my co founder. you had years of experience with heavy equipment, was also a senior partner at a large, a big four consulting firm here in GTA.
And just a wealth of knowledge, definitely bringing the tech brains, for everything I've done, I was bringing more of the, the business sales, financial side of it. but you know, over the course of six months, we worked together to really identify the opportunity that, you know, parody is currently addressing and, started the company.
And, yeah, that was like three years ago. so it's, it's been an incredible journey and, No, I probably don't have all the time on this podcast to go through that. but, yeah, that's, that's really sort of how we got started.
James Dice: [00:07:12] Cool. I can totally relate to that story. Having owned a condo and having had assessments placed on, on me personally, very annoyingly, you know, you don't plan on those things and they just happen and you really have no choice, to pay them.
Right. it's just like within the next six months you will pay this payment and you don't have any much to say about it. so yeah. I definitely understand, how that works. I can also understand like wanting to scratch your own itch. Cause like that's what nexus is. So solving your own problem is like often, you know, the greatest reason to start a company.
Cause you're obviously intimately familiar with it. So, yeah, so I want to dive into the platform, in a minute, but I thought I'd ask like with you being. kind of a startup in the smart building space. I think one of the, relevant questions for someone like you is like, how are you attracting talent to a startup in this space?
especially tech talent, because I think one of the things I've heard from tech companies, especially new tech companies is that it's hard to, get. Say a young person that could go work at Google or Facebook to, you know, decide, Hey, I really want to tackle this smart buildings thing. And I think once they do get started in our industry, they're often scared away because it's a mess and our technology is 20 years behind.
And like, it's, it's a really difficult, really juicy problem. And I think that's what attracts me to it. Cause I'm like, This is an amazing problem. And it's, you know, there's so many layers, but how are you getting people to take that plunge and say, you know, I want to solve this problem with my career.
Brad Pilgrim: [00:08:49] Yeah. it's a good question. Starting out. It's it wasn't, you know, the so called the sexless, yeah, the HVAC, you know, energy industry that, Drew me towards it. it was in fact the problem, and, and what seemed like, especially in the vertical that we're in, a very difficult problem to solve.
I, on that, you know, I, probably landed a lot of places in my career because people said either it's too hard to do or you can't do it. so that's sort of what got me really interested in it was this looks like a, a challenging problem. And a lot of people have said they can't solve it. and I think that actually is what a lot of I'd say, younger, entrepreneurial, type, you know, gig economy type people are looking for is, and there's actually been numerous sort of, papers and articles out there on like, what are people looking for the youth looking for in today's, sort of working environment.
And I think there's a bit of a stigma of like, people think startup and they go like, Oh, you're all on like beanbag chairs. And, you know, you all drink all day long and, there's this, you know, really ever flowing useful culture, in, in the startup world. And, you know, I won't say that that's not, completely untrue.
but you know, I think as startups have grown from, you know, the days of building a lot of things that have Raj to. people learning from those lessons, and understanding that, you know, you can build startups sustainably. if you have the right team and the right people in place, we have that as a core value is we really cherish and sponsor and support innovation and people that want to really break the status quo, be market disruptors.
and you know, and, and it's just a culture of. Of a playing right. Is, we want to be able to bring people on that field. You know, they're the top of their game. they want to be pushed further. they want it environment to share those really innovative ideas and ideas that they may not share in other places.
and then try them. Right. So get a, an open environment to actually try them. It's something we encourage us, you know, try things and yeah, it's, you know, things are gonna go wrong, but it's okay if you do it in a controlled environment, you know, you just sort of have to take the shots if you want to figure out if you're, you're going to make one of them.
but how that translates to attracting new talent, it's purposeful. we're not attracting, you know, hundreds of employees. we're not trying to write. It's a, we're on a growth curve probably to, to double our, employees and save the next 12 months. So go from a team of about 35 to about 70.
and a lot of our talent exists in obviously engineering. that's mechanical electrical, HVAC or mechatronic. And, obviously you develop, so computer science and computer engineers, But, you know, I'd say on the whole, they're really interesting problems that we're solving and through the work that we've done with a collaboration with Ryerson, university's building science team, you know, we're, we're collecting a ton on the data and having that data, usable in a way in a really unique domain.
and having the models, built to be able to, build machine learning algorithms. That's really interesting for a lot of people. We find that from an engineering perspective and from a development perspective, people really want to dive into that and learn more like AI is a very new industry. and I think when people think about AI, they, they generalize, they may not understand that AI is actually this big umbrella.
and there's all kinds of AI underneath it. And, you know, AI existed things like Excel spreadsheets, right? Google maps, a deck, You know, from an F and L statement all the way to a, you know, a reinforced learning algorithm. These are all classified as AI. So I think between the purpose of what we do, which is obviously addressing CO2 emissions in urban centers or picking urban, living sustainable, having an open environment for people to, you know, test theories and do modeling and maybe do things that they wouldn't be able to do at larger corporate companies.
But also having something really interesting to play with. I think all of those things combined and, and then obviously with, a very good leadership team, sort of the established, you know, senior executive team, people want to work for people that they look up to that's you know, they, they have a lot of interest in and, and they respect.
So I wouldn't say it's one small thing. It's probably a combination of, yeah. Finding everything that attracts those people and trying to create an environment of continuous learning and development.
James Dice: [00:13:08] Cool. I love that answer. It's like, yeah, obviously it's not just the sexy tech that obviously it's not just the team.
It's everything. So let's, dive into kind of the problem that you guys are solving. And, and one of the reasons I wanted to talk to you, is because I don't besides living in multifamily buildings, for sure. The last, I don't know, 15 years ever since I moved away from home when I was 17, I've been living in apartment buildings.
Right. So, in different cities, but I don't know that I understand that problem from a professional social standpoint, it's more just like living in these buildings and not giving a whole lot of other thought to it. So how are. You know, multifamily buildings and how is like specifically the analytics world analytics technology, what are the ways that much that's different from say, you know, your other sorts of commercial buildings, you know, hospitals, offices, that type of thing.
Brad Pilgrim: [00:14:04] yeah. it's a very big question. so I'll pick a couple of things out of it, because, I think like you. and myself, you know, when you move away from, from home, and you want to move into a big city, the, the likelihood of you buying a house or renting a house, it's probably quite low probability, compared to, moving into a condo, right.
No that combined with cities, obviously discouraging urban sprawl and building up and that becoming more economical in the construction industry, finding innovative ways, you know, to build faster. I think that's, that's really why you and I probably both landed in condos. but it is funny. You move into a condo, even most people that buy a condo.
They have no idea how the actual structure of the company or the corporation works. me being a good example, move into a condo and, you know, special assessments done. What's the special assessment. you know, and it's like, yeah, you hit a button and you're like, Oh, there's a budget. Like, right. That makes sense.
Sure. There should be a budget. And then you find out like, Oh, there's a board, right? Oh, I didn't know, there was a board, how do you get on the board? and then you find out it's like a bunch of volunteers and you're like, wow, there's this whole company going on in this thing that I'm living in.
And I have to share it with, you know, 500 to a thousand other people. And you know, one of the big nuances to condos is it's a, it's sort of like a house, but 500 people living in the house. So there's 500 people are all responsible for the mortgage cleaning. maintenance, you know, the energy costs, mowing the lawn, shoveling the driveway.
and those are things you don't think of, from at least a cost and operational perspective when you move into a condo, you know, I think most people think of it like a hotel, right? You move in, someone's taking care of that stuff. which I think one of the concepts behind condos is. You don't have to worry about mowing the lawn, shoveling the driveway, right?
It's a, it's part of the benefit that comes with. so you know, from that perspective, just for an overall understanding, it's very different and I feel that again, a lot of people that move into them don't really understand that from a organizational structure perspective, condos and coops are, are, the vast majority of the time they're nonprofits.
so nonprofits are structured in a way where, All the fees to run. The nonprofit are coming from an internal source, right? So in this case, in a condo, it's the 500 people living in the house. and really what that means is if you and I, and 500 other people who are you know, at least in respect to parody, you know, 500 other people who probably don't know energy as well, don't know, HVAC systems, energy efficiency, maybe understand that, you know, Again, roughly 25% of their condo fee is actually based on energy water, or cooling, heating movement of air.
Okay. They understand that there's a way to manage that. Right. It's sort of an afterthought. I think if you're not in energy, it's even really hard to understand your energy bill. you know, if the solar days really made that, pretty evident to me talking to homeowners about their energy bill and they're like, I just have no idea what it says.
Right. I know what number I have to pay that number if I want to keep it light. So, yeah. so that's, you know, again, it's, it's a really unique aspect of condos. and I would say lastly, the economics in a condo are structured in a way that it's really like the least amount of dollars in everybody's pocket.
Right. And I mean, from a costing perspective, but is the way that you want to look at it. Right. I want to put the least amount of dollars out every single month to maintain my asset. the problems that come with that are you've may not have the most say, you know, pragmatic team, looking at those problems and maybe better ways to solve them.
it's really just keep as much money in the owner's pockets as possible that doesn't leave a water room for innovation. Hmm. And longterm thinking probably too. Right? Absolutely. and that is, I'd say one of the biggest barriers or challenges in the multi-res sector compared to the commercial or mush sector, is that in the commercial sector, largely driven for profit corporations?
usually lots of building management teams, or building operators usually full time. that is a benefit you have with for-profit. You can include that into it. A costing budget and obviously they show profit or your, your leasing costs on that. usually we're in for large engineering projects.
the decision makers in those, companies where obviously, much more okay. Focused on energy engineering, net operating income, and those people generally will come from the engineering world. financial engineering world. And so that's the type of customer that you probably want to be in front of more times than any, they understand it.
They've done their research, the conversations are fluid. the value is very immediate. so you know, those sort of two things is, you know, you're dealing with a, a very qualified, interested person on the commercial side or the, the, mush side. And on the multi residential side, you're dealing with someone that has a different problem.
and I think that those are the two really big aspects, that differentiate the multi residential world from the commercial, or, or, lush market, from an energy perspective or a behavioral perspective, I'd say they're not, they're unique in their own ways. but you know, the. fact that 40% of co two emissions come from buildings really makes you think, everything that you know, you go into, but it's not your house, it's a building.
so if someone was to go from a condo like you and me to an office building, we're in our office building from probably something like nine to five, and then we're in our condo from five tonight. So the energy consumption patterns are quite unique. If you actually look at. What it's like to live in, in a condo and compare that to an office, but almost makes exact sense.
Right? You usually get up every day at the same time in your condo, you shower at the same time, you'll be for work, or maybe you work from home. everybody eats generally around lunchtime. Everybody cooks generally around five, six o'clock, and that just repeats and perpetuity. so. In a condominium, you really see this highly predictable pattern.
and I think in the same in offices, right? and it's what I believe has made the commercial industry much more ripe to adopt these types of solutions. you know, your office is open nine to five. The other hours of the day, you can basically, turn a lot of things off, right. It's just not being used the trick and condos.
And I sort of go back to when I moved into a building, I didn't think they just had an on and off switch, but the way that property technology or it's a real estate technology, hasn't developed, for, for a myriad of reasons, legislation incentive, it has left buildings in that on-off state. so the analogy I like to give is, you know, buildings sort of run like a light switch.
it's pretty much right there built, for peak. So they have to assume everybody using all of their equipment at the same time. so a lot of the common areas systems, are going to be sized for that. and with the lack of adoption of control, building management technology, better software. A lot of those buildings have been left to their own devices.
And, you know, so it's sort of this self fulfilling perpetual problem that just keeps going on. but I think what that's allowed, companies like parody to do is, really identify what it is, the problem for the different types of stakeholders in these markets. And how do we build a really compelling value proposition and find good product market fit?
And really just, you know, focusing in on, a very narrow market and a niche, has allowed us to develop a significant footprint and learn, I'd say a lot more about our particular customer, so that we can service them better and build a product that is actually very conducive to what they need.
James Dice: [00:21:49] I love that. Yeah. there's just so many things that are different about that So we've had on the podcast, there's been several similar types of technologies, but they're all focused on different verticals and the way that those technologies are applied are going to be totally different.
Like you just said, just like the simple. If you're just talking about control sequences, for instance, you know, typical office building is going to have that nine to five schedule, like you said, and they're going to have morning warm up and cool down. And it's all gonna be based around that Monday through Friday.
but, and we'll get into the, actual product in a minute, but do you guys get into, is it just. Condo associations that are your main clients. Are you getting into multifamily buildings that people are renting from one company, or, what is your approach there?
Brad Pilgrim: [00:22:34] yeah, so, you know, multifamily as an umbrella, is really, you know, multiunit dwelling MIRVs am or use a thousand acronyms for them. but that what we concentrate on is, is. not so much the type of the building, it's the tech of the customer. so as I said before, your home is, I'd say a lot more sensitive than your workplace.
so in a commercial building, I think the tenant concerns are very different than in a multi residential building. Okay. Or multi-use building, you might be able to deal with. A temperature. You might not be able to control your office, throughout an eight hour day, I don't know, by putting on a sweater, maybe you complain about it once or twice, but in the end you feel I'm not enabled to actually change that.
but in your home, you know, it's like, your safe place. It's your fiefdom. It's to sort of be in your own environment. And all those things are really important to you. You are at home, you want to be comfortable. you know, it's probably, what's driven the adoption of like smart thermostats, right?
It's like, everybody wants that type of control in their home. but it's also like, again, it's your, your safe place. and if you own it, it's likely, your greatest asset or greatest investment. so you want to be in control. you don't want to not have hot water at some point. we're in a commercial building, maybe that's acceptable.
you know, you want the temperature or the availability of, of cooling to a temperature that you want or heating to a temperature you want to always be there. you know, you probably don't want anyone limiting you from what you can do in your own home. where again compare to the, commercial or, machine industry.
That's, you probably have a bit more leniency. in condos specifically, we deal with, independent, multi residential condominium corporations. and we deal with, rental groups or, or large real estate owners. and in both, both of us are very aligned, right? We're all concentrated on everything the customer needs when they need it.
So, The way that we look at that and really part of what parody means is that optimal supply and demand ratio of never wasting energy or delivering too much to the building. but also at the same time when demand increases being able to react to demand and supply those utilities to a building. but a lot of it is really about having the control and ability to apply or not supply the critical utilities, to be able to show energy savings and efficiency.
And meet demand and use different demand indicators and, different algorithms to understand when a building actually needs something that you may be trying to save on, and vice versa.
James Dice: [00:25:03] Okay. Yeah. And I imagine part of that is, you know, in the commercial world, there's this concept of tenant comfort.
and now it's becoming like tenant health and kind of growing into that whole, you know, virus mitigation concept, but. I'd imagine the tenant concept is different, If it's someone's home. maybe bands are smaller on the tenant comfort.
It's like, if I own this unit, I want to be able to control it to exactly the temperature that I want to control it. So kind of getting into the platform a little bit, I think that's a good kind of jumping off point. So, maybe just explain the concept of the platform first and then we can kind of get into like, whether you're able to control, do anything with the tenant spaces or not.
I feel like that's like a, a line in the sand that might be difficult to cross, but yeah. Can you kind of just talk about what the platform does and how you explain it to these condo associations?
Brad Pilgrim: [00:25:55] Yeah. so I enjoyed this question. This is actually. Where I'd say we're, we're quite unique. so in comparison, again, to a commercial, versus a multi residential or some buildings, we'll usually have a, a building manager or a building, a facility manager, right.
in a multi residential building, you may have a superintendent, more times than not. You'll have a superintendent. There's products built for both verticals, right? One will enable a building manager or a facility manager to be able to do their job better or help them do their job better. The other vertical, there is not, there's no one to actually use that tool or be able to implement those changes that some platforms are recommending, uneconomical unfeasible.
There's no one there to manage the project. The, there may be you know, a knowledge gap.
James Dice: [00:26:38] I could not imagine like the condo boards that I've been served by. I cannot imagine any of them being like, Hmm, I'm going to go log into the analytics software and like manage the building.
Right. They don't have time for that. They're just like you and I, where they're just like, it's a volunteer thing. They just need something that can kind of work on its own. Right? Yeah.
Brad Pilgrim: [00:26:56] Yeah. And I think that was the biggest, it was the biggest identifiable problem was that we'd really love to be more energy efficient.
We just, we don't have anybody to do it. The classic providers of that technology were, you know, you look at the big bricks and mortar, HVAC companies, carrier Johnson, Honeywell, Siemens, Schneider, or massive, they've all been producing these pieces of equipment, and executing in a big, big way.
Obviously they're huge companies. two, I would say largely the commercial and, you know, much markets. Right. It's that's, that's where they play. Well, that's where the service offering really resonates. you know, not that there isn't a, you know, overlaps in the multi-residential as far as, you know, big equipment.
but I think it's okay. An overall, like service offering for a customer. they, they really left a big gap by just not understanding. Really what that customer needed and how their business is organized or a corporation condominium corporation is organized and what that good product market fit is.
generally you won't change a product that works for 90% of the market, just for that latter 10%, assuming that, you know, you, you probably won't get the full market adoption of that, that latter market. So, yeah, so really what did we do differently? It's we offer an energy efficiency as a service.
So instead of offering an analytics platform or a new control platform, or a better way for your building manager to manage their system, we offer it as a service, where I'd say 50% of that stuff has done, autonomy by, you know, developed customized algorithms, that we basically program in place that replaces.
you know, say a 20 person engineering team being in your building all the time. and I will say as far as technology or sort of the availability of energy savings and HVAC equipment, there's sort of, there's three parts to it. but fundamentally there is a point of diminishing returns. and you probably have to really understand that and something we dug into really hard.
Well, we started and said, where are assets best allocated, and our resources in our company. And in the end we understood what is achievable. what's within our capability. And at what point is there a point of diminishing returns that maybe right now, we don't want to invest in, so, you know, figuring out where our technology, you know, Fell into the categories of like super high performing sort of, high-performing and maybe low performing.
we said, you know, we think we're going to be a high performing company, because we understand, how systems work in buildings and what the availability of energy savings and reduction are on the whole for the large majority of people or the large majority of the problems. And that's really what we focused our platform and, you know, the, the savings algorithms that we use.
On was getting the biggest chunks out first, but more of our resources, we're concentrating on making sure our customer was satisfied. and that they are always first. So we have a very customer first focus, because we deal with people in their homes and if we ever put ourselves in there, you know, that's, that's the way we want to be treated.
So we treat our customers like we would treat ourselves. I'd say that's a, that's predominantly what we build our energy efficiency as a service offering around was, you know, a type of customer.
James Dice: [00:30:13] And so, well, let me kind of explain what I think I understand about the platform is that it's, it's a supervisory control solution, partly where you're pulling in data from any sort of HVAC system, you know, like you mentioned.
Stephen Schneider Johnson controls whatever's already in the building. you know, all of the condos are being served with maybe hot or chilled water from the central plant. That is probably not a lot, unlike traditional more commercial type of building systems, you're pulling in data from that.
And then you're, the system is orchestrating with supervisory controls, sequences, to optimize that right. Is that a good way to understand it?
Brad Pilgrim: [00:30:54] Yeah. Yeah. I mean, you know, across the board, most companies that are doing this, we're all working off the same building blocks. Yeah. That's, that's the, I think that was probably the statement around we, you know, we understood that our technology, as it was, you know, two years ago, it really covered off reliably.
A lot of the large pieces of. You know, value in HVAC, energy savings and optimization, that we wanted to, we saw a path to incrementally increase it. And, you know, in parallel we are doing that, but we didn't want to invest a bunch of time into something that again, made those incremental changes where we said, we think we just need to be able to understand our customer better.
but yeah, I, a lot of what we do is a, it's a supervisory layer. we're hardware agnostic. we like that. Because we can basically tie into any type of equipment, any piece of machinery, it allows us to address a lot more buildings. then maybe some other people who only play with certain types of prietary equipment or, deal with certain things, equipment.
Yeah, that was, that was one of the big pieces. you know, we concentrated on early days for saying, you know, how do we get the most for the most amount of people. and obviously continue to build that, that innovative technology, but, overall is, you know, finding out does that product do everything that it needs to do for the customer?
James Dice: [00:32:17] Yeah. core readers nexus on the blog dog side will be sick of me talking about advanced supervisor control, but it seems like I need to write something about it, how it especially plays well in this market. I think they're sick of me talking about it at this point. So maybe I'll I'll wait, I'll wait a few months.
So, so, okay. So that's kind of, like you said, that's like 50% of it. The other half of it is. This concept of as a service or I guess the question would be, what is the other 50%? Where is it like your team kind of handholding these condo associations in the energy efficiency journey? Is that the other side of it?
Brad Pilgrim: [00:32:54] So I'd say personally, yes. There's the way we approach a new customer or a condo is again, we put ourselves back in their shoes. We're kind of owners. A lot of us here are, you know, we live in Toronto with them in condos. and we sort of just say like, if someone presented us with this type of product, what would we do you understand?
when we started out, you know, in the, the condominium industry view. Yeah. We started with commercial buildings. We started with schools, and it was. It was a bit different because it was like, yeah, there's lots of competition and this is the kind of product we need. And, you know, we were looking at it from a condominium perspective, going that's really unique.
Cause like, those are those aren't problems that, you know, condos or people or rental owners have. they have most of the problems come from the tenants that are in their buildings. so how do we build a better product for those people? So we said, you know, one of the biggest problems that they're there, they need to overcome.
one was obviously cost access to capital, various, you know, bylaws restrictions in a nonprofit organizations that don't necessarily allow you to borrow lots of money finance, longterm. So we said, okay, how do we solve that problem for you? the other one was, you know, again, you and I, if we were on a County board and we were volunteers, we're consumers.
Right. So we like consumer products, right. We really like how to market it to us. We really like how we have the stand. Then we get all these nice things that sort of products offer. you know, example. I ordered something, you know, a couple of weeks ago from, online and it was, you know, guaranteed refund.
If it doesn't look like it does in the photo, You know, I only had to pay for half of it when I ordered it. And like, those were all things that like we like, right. It's like, yeah, I like those things, those fit our market. and so we sort of said, how do we build a product that actually fits this consumer type B to B, B to B to C customer.
And really those were, those were the big things was, We don't have access to capital to adopt this technology. Everything we've heard about the technology, there's been a lot of big claims in the past. A lot of promises made and not a lot of them seem through, we don't really understand what's going on and we're just told that it's happening, you know, from an energy efficiency perspective, the classic way to look and see if something worked is look at your bill the next month.
There's lots of problems associated with just doing that. but I think overall from a consumer perspective, energy efficiency, hasn't built a product that really focuses on serving what a customer needs, which is guarantees data. you know, education really consumer friendly looks and feels and, and, you know, sometimes just personal on the other end of the phone that, you know, can relate to what they're going through.
companies like eco BNS, right? They've nailed that, with the smart thermostat, where we've had thermostats for, you know, like a hundred years, but it took a very long time for someone to say, why does anybody use these things? Right. It just didn't work. and that's really the same journey we're embarking on is really understanding like, like how do we build a better product for the type of customer that, that really needs the solution.
James Dice: [00:36:00] Cool. That's really cool. I think my last pushing around the platform would be like, I think I heard you on different podcasts talking about the types of AI that you're using and you earlier talked about the umbrella. so could you kind of clarify, this is one of my favorite questions, by the way, it's like, can you, can we start to cut through the buzzwords a little bit and like talk about what types you guys are using and, How do you normally talk about that?
Or do you talk about it?
Brad Pilgrim: [00:36:25] yeah, I'll, I'll answer, it's a bit of a two part question. we don't talk about it a lot, especially with our customers. It's again, it's not something that, it, it's not something I think even to us as, as consumers is as important as, it may be to someone that is looking for that edge.
I think up until recently and maybe even still it scares some people you know, there's been instances of, you know, some of the most advanced AI doing things that we never predicted at doing. And, and, you know, frankly, I mean, to me, if you're asking me what gets me excited, it's artificial intelligence, I think it's a, I've said this.
Probably in every conversation I've had is like, we have just rubbed away the condensation from the window. we're not anywhere near the potential of what is going to happen in the next, say five, 10 years. it's going to be incredible to see. but from a customer's perspective, it has very little weight.
it doesn't offer me anything better. it sounds like that sorts of possibilities, something going wrong really bad. So, we don't, really marketed. you know, that being said, there is some seriously robust technology behind what we do, from an engineering perspective on HVAC systems, but also from a machine learning perspective, deep learning to be more specific, with the data that we collect, you know, in a, in a deep learning algorithm is, to sort of delineate, you know, AI goes from an F and L statement to, linear regression, multiple linear supervise, deep learning, reinforced learning, and obviously the more complex models you can develop.
And, you know, once you started getting into neural networks, I mean, you get right down to quantum computing. but again, what, what is it that point of diminishing returns right now? And so yeah, through our collaboration with the Ryerson's building science team, we've developed a two or three deep learning algorithms that really allow us to, do things like forecasting, okay.
You know, heat loss calculations, but do it in fractions of a second, every single minute. And those are the important gains that you're going to get in the technology. But. Somewhat being expected by them consumer. I expect my Google maps to know absolutely everything that's just how we're built, but there is actually some seriously advanced machine learning behind those layers.
But when you see Google maps, no one says AI maps. Claims that there's an artificial intelligence driving it because to us, as a consumer, we just come to expect that, the technology is out of level, that it is delivering what we want as a consumer of that product. so, you know, again, largely what we do are anywhere from linear regression and multi linear, all the way to heating and cooling systems largely, have much more advanced systems tied to them that are in continuous learning.
supervise albeit, but continuous learning.
James Dice: [00:39:10] Got it. Cool. So let's shift as we kind of get towards wrapping up here, let's shift over so it's August. That was today, August 13th. you know, we're still in the middle, in the U S at least in the middle of this, pandemic. And I mean, one of the things that is relevant to our conversation here is I'm spending, I mean, everyone's spending a lot more time at home, right.
So I have to imagine that the load profile of the average condo building has changed quite a bit. And so what, what have you seen and what are the implications been for your clients there?
Brad Pilgrim: [00:39:41] sort of really good question. I have to say when we started the, company, part of our linchpin was condos have done the same thing for a hundred years, right.
They, they, they always have the same occupancy level. People's are, people are creatures of habit, right. They leave every day, they come home. And on average, that all varies actually the exact same. behavioral, data points, and that a pandemic, you know, the first time, you know, since like, I don't even know if we had condoms in 1918, but you know, it's the first time in a hundred years that we've had this unprecedented shift from, you know, us going to offices nine to five being editor workplace, just coming home at five o'clock waking up.
So It was wild when it happened. I was like, this is the first time in history. This is actually being done. And of course we built a whole company around this thesis of always do the same thing. so it, it definitely put us in a spot where we were like, what does this mean?
have we, you know, art was our timing way off. yeah. Is this going to change the mindset of customers or. path parody, and then some really strange and good things starting to happen. what we did notice is because what we do is we look at all systems and we try and use demand indicators in the building, as data inputs to supply algorithms.
and there's some really unique ones that we use. what we noticed was. Even though there was a lot more people home, a lot more of the time. And you could probably say there's a combination of like this all landed in shoulder seasons. and for everybody listening, I think they'll know what a shoulder season is as far as energy and HVAC.
but it did land in shoulder seasons. but the big component, of the pandemic. And I'd say that the biggest change is water. and one of the fastest rising utilities across North America right now. but everybody's washing their hands a lot more. we saw crazy water increases. and I guess just to bring that into context, water's a Capitol fixture utility.
It gets consumed by toilets, shower, heads, faucets, you know, sprinkler systems, all of which are, Hard to control through digital controls. It's much more of a yeah. Capital fixture, consumable.
James Dice: [00:41:47] So it's owned by the individuals, not by the condo association or the apartment building.
Brad Pilgrim: [00:41:53] Yeah, in most cases.
but I'd say probably like 50% of the cases, it's owned by the condominium corporation. Really. Okay. So the condo corporation will pay the bill. They'll take that to spread it out into the condo fee,
James Dice: [00:42:05] right? Yeah. Cause it's metered. Yeah. It's metered centrally. yeah, I think what the tenants own the toilets like.
Right. So the changing out the capital there would be on them or is that not true either?
Brad Pilgrim: [00:42:18] That's true. Yeah. Okay. In condominiums now. You know, there is, actually I should say in most cases, independence, I've seen both, I've seen where corporations will own the thermostat thing, quote, heat pump, unit toilets, and it's their responsibility to actually pay for it.
I mean, in the end, if you sorta draw a box around this stuff, a nonprofit organization, they all make decisions together, no matter who ends up actually changing it. And everybody that owns the asset eventually benefits. Right. Okay. So I wouldn't say totally a moot point, but when it comes to decision in dollars out, it's, it's definitely more of a, more to point.
Hm. so again, what are the biggest changes we saw was with water consumption and it was going to be it, so, you know, anywhere from five up to 15% immediate, immediate change, and those deltas aren't water are actually significant that have never, never before seen, Hot water obviously consumption.
So, I think it won't really matter where you are in North America. I can think of a couple of nuance places, but usually you're using a fossil fuel to heat your hot water. I'd say in more recent years, the last 10 years there has been a push towards electrification. so electric hot water heaters are on demand, hot water heaters.
which again, it's sort of a, it's a cost benefit analysis that you have to do to make that decision. But, from a CO2 perspective, is it depends on what power market you're in, what the distribution of, of actual power production is like, to determine if that's a more efficient way or a carbon efficient way to prove how far, but on the whole, how our seed by fossil fuel, it's usually not for gas.
so we did see a spike in natural gas consumption, obviously. But, I guess the point I'm getting to is overall. Okay. What we've seen is because buildings have largely been way over supply or sort of that analogy of like giant on switch, they've just been running on. and it's the for, for your listeners to better understand that.
Imagine running, you drink coffee, I drink coffee. I probably have one at nine, one, maybe two or three get over that hump. but if I ran the coffee maker, 24 seven, three 65, just so that those three times a day, it was there, hot and ready, which is really what we expect to happen. but having it run consistently and stay hot and ready and fresh that's obviously there's like 99% waste. Hmm. So that's sort of the analogy I use in buildings that are, you know, maintaining a hot water temperature all day long, running their boiling system at 140 degrees, just so that when someone may want a hot shower, it's there available and ready.
very simple things, you know, you can do with the, with like a hot water is, you know, you look at the return temperature on it. If you're sending it out at 140 and it's coming back at 140, probably a good indication, you know, Nobody's using it. so yeah, I mean, overall, yeah, back to my point, we saw a change, but it didn't change really the impact that we were having on buildings.
And I think that's because we were still catering largely to the full supply and demand equation of the building. And although we did see changes in, you know, people an increase in hot water, an increase in water consumption. there's not really going to be a lot of change in electricity usage. you know, right now we are seeing probably larger than higher peaks in chiller usage because everybody is home.
we've, we've had some, some pretty hot summers here in the GTA anyways, or some hot days here. But I think probably what we've seen over the last couple of months is there is actually a lot more people getting back out right. And being energy conscious. I think, you know, a lot of the condos or the corporations we've talked to actually have, you know, like announcements, I would say guys, we're home a lot more.
what that means from an energy perspective, especially in a condo, is these costs are gonna go up. We haven't budgeted for these costs, a condo sense of budget every single year. That's what dictates the condo fee. So if we're using 20% more in utilities or, a stark way to look at it is we're home a hundred percent more of the time.
So therefore if that, you know, applied in a linear relationships, the cost of utility for the amount of money, that's a two X factor on most things. So you would expect your, you know, cost of, Gas to be two times cost of water to be two times cost of electricity, to be two times. So that's what you expect to see in there.
In reality, not everybody went home, not everyone, but he is using their cooling at the same time. Not everybody is sharing at the same time. so on the whole I'd say the impact was, was seen. It was visible again, ranging from five to 15% on average, more consumption and things like water, gas, maybe electricity.
but what this has done is in, in, you know, speaking to the pandemic and this whole, bubble analogy of like, you know, make sure you're mitigating your risk, right? You wear a mask, right. try and interact with, you know, your inner circle or your 10% circle as we've done in Canada.
it's really shined a light on the advantages of remote control. And, you know, having the ability to do things like, turn up air systems, change, set points, problem solved from afar, of sear clients that have an energy management system in their buildings. look at it and go, you know, they're, they're very thankful.
They're like, we're so glad we have this now because yeah, it's going to be a huge cost. mitigator. Next year when we have to go back and look at the budget and say, listen, we were in a shortfall because we're all using more gas, more electricity, more water.
but having parody in the building as a service, they know, and they can take comfort and, and have some peace of mind knowing someone's managing this forest the best they possibly can. So they're mitigating our risk with best they possibly can. And I think that's really shone a light in a positive way.
and we've had a lot more. You know, customers, buildings, referrals a lot more sites than around the technology that we're actually providing in our, in our market because of the pandemics. So, you know, I think as I said in the beginning, it's like, we, we were like, wow, this is a first, like really a first and a hundred years.
and we thought it would mean very bad things, but it actually turned out to mean a lot of really good things. and I think this is what this industry needs on the whole is it needs more. Education more people need to be talking about the benefits of it. the adoption needs to happen in every single sector, there's room for people to play, everywhere.
And, you know, I know a bunch of great companies that are addressing a lot of these problems in different verticals. And, you know, I I'm really excited for all of us, because I think real estate, technology is just, it hasn't developed like every other aspect of our lives. and so. Yeah, maybe this is sort of a turning point for property technology.
James Dice: [00:48:58] Yeah. I mean, that was certainly echoed in the last one last podcast with Deb NOLA from switch, she's basically said, Oh, you know, along the same lines seem more seen acceleration and, yeah. Building owners and their customers kind of shifting and making a big shift. So it's, I think it's pretty awesome to hear that that's the same in your market.
so kind of. Closing off here. I want to hear kind of what it sounds like you guys are doubling your staff. That might be one of the things you're excited about, but what are you excited about with, the next, maybe six months to a year for parody?
Brad Pilgrim: [00:49:32] yeah, so, you know, we, we've expanded down into the U S that's really exciting, despite the challenges in COVID, you know, we're, we're a very remote focused team.
You know, when all of this happened and we were forced to get everybody working from home. we were able to do it in less than 24 hours. I think what we didn't realize was we actually operated virtually in office. and we did that for various reasons. It's, it keeps us flexible as a company.
but it also allows us to build large networks of installers, large networks of, you know, finance providers and equipment suppliers. and we're really just like this. Engineering facilitating service in the middle that allows, you know, suppliers of all these great technologies and, the people that have the skill sets, to be able to install this stuff and then us being able to pull it all together and create that good product market fit. so, we, you know, we act as that, that, that middle layer, and, you know, moving into the U S it's what really allows us as a company to, to move very quickly, and reach scale is we're not relying on. You know, hundreds of people or lots of infrastructure or trucks on the road, or texts out in the field.
We know that those companies exist in those markets are hungry. and they need new products and companies like us to, you know, to sort of break the way old things have been done and introduce new efficient ways. and that's what we're seeing. So, you know, moving into the new, you know, via virtually, has been a big proof point.
around that is, is allowed us to, without ever actually physically going, you know, to a building, we can and inspect, do a walkthrough, do a building, energy assessment, work with engineers and installers to actually define the scope, you know, understand exactly what needs to be achieved in the building.
And then ultimately remotely bringing everything online. you know, that's. That's what I'm finding exciting. Obviously the early days of that were much more manual where you needed people out at sites confirming, you know, when I click a button here, it does what I'm saying here. And, it's really helped build out our quality assurance process.
it's just understanding like, you know, how do we deliver this quickly, you know, percentage done, right? Percentage done on time. How do we get those, those numbers crossing that, you know, 95 to a hundred percent Mark, And again, yeah, moving into the U S where they're being able to travel down there.
It's really forced us to fortify a lot of those, those systems. And, yeah, now that we're there and we're, we're growing, both domestically and in the U S it's a, it's, it's a real Testament to the capability of remote work. and having remote teams.
James Dice: [00:52:09] And what sort of partners are you looking to to sort of partner up with, in these, all these local markets
Brad Pilgrim: [00:52:14] Yeah, so without naming names, you know, we have, partners from very large HVAC suppliers. we have partners, that are property management companies, which we feel are very conducive. you know what we're doing. but, you know, in the U S I'm already working with like, you know, large rental companies, in their multi-residential portfolios.
and those are the types of people we want to be able to work with are, you know, the HVAC mechanical suppliers, right? that's probably one of our biggest strategic partners in the buildings we work in is their major stakeholder. We don't have people on the road, on the ground. we don't have necessarily those, you know, mechanical service expertise per se, in those exact instances where you may need someone onsite.
So we make sure that we work with those networks of, you know, mechanical suppliers that every single building has made sure that we can deliver them value or making their job easier, making their business model more efficient for them. so that everybody is winning in the end. but. Yeah. I mean, you know, I would, I would say we, we, we don't work in commercial.
We don't work in, you know, municipal universities, schools, hospitals. we really understand our customer really well. We understand the nuances that multi residential building owners deal with and what condominium corporations or co-ops deal with. And we really focus our product and our efforts of service, around that customer.
And that's a. That's a big differentiator and that's, that's what I'm really excited about is, is continuing to build a better product and a better service that's, you know, really bring, a cohesive, value to all the stakeholders in that market.
James Dice: [00:53:49] Cool. Well, this has been fascinating for me. I've I've been digging into different verticals.
you know, a couple of weeks ago I was deep down a rabbit hole with, Big box retail and refrigerated retail. And this has been kind of feeding me in that new way, which is like, how does, how do all these same problems show up in these different ways and these different buildings. So thank you for taking me through that and that dedicated me and everyone else.
And, really, really want to wish you luck, on getting into the U S and really expanded past that. Cause this is what you guys are doing is awesome. So, so thanks Brad. And thanks for coming on this. Sure.
Brad Pilgrim: [00:54:22] Yeah. Yeah. Thanks for having me. It's been great chance.
James Dice: [00:54:24] Alright, friends. Thanks for listening to this episode of the Nexus podcast. For more episodes like this and to get the weekly Nexus newsletter, please subscribe at nexus.substack.com. You can find the show notes for this conversation there as well. As always, please reach out on LinkedIn with any thoughts on this episode.
I'd love to hear from you. Have a great day.
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