Part 7: A case study and what we've built (Navigating the Marketplace)

Hi Friends,

Aside from NexusCon, the Nexus Labs team has spent a lot of time this year understanding the smart buildings marketplace: this messy place where vendors attempt to explain their offerings and buyers attempt to explain their needs, but both often fall short due to fluffy marketing, inconsistent messaging, and overhyped technology cycles. We’ve often referred to this as the Vendor Swamp.

Today, we are excited to announce our new whitepaper: Navigating the Marketplace. Consider it our playbook for buyers. We’ve been releasing the whitepaper as a seven-part series, which today will finally be available to you in complete form as a whitepaper. We’ve also been developing the tool that pairs with the playbook, The Nexus Marketplace, and next week at NexusCon, we’ll be unveiling this tool for buyers to utilize.

In our 7-part series on Navigating the Marketplace, we’ve covered:

‍Part 1: The pain for buyers—why this is so difficult
Part 2: The buyer’s homework—what you need to know before you engage the marketplace 
Part 3: Thinking in categories—how to compare vendors apples to apples 
Part 4: Thinking in layers—how to think about constructing your tech stack
Part 5: Thinking in properties—simple filters to narrow down your options
Part 6: When to go full stack—simplifying the process for 98% of our buildings

And now... Part 7: A case study and what we’ve built.

Our conclusion to the whitepaper is below, but we encourage you to start from the beginning to get the most value. Have you read the whole thing?

Read The Full White Paper

Part 7: A case study and what we’ve built

‍The Nexus Marketplace started two years ago as a big ass spreadsheet. We began organizing technology companies into a huge database to sort through everything we knew about them. One of the first things we realized is how difficult it can be to tell what a company actually sells or does. Along the way, we began manually helping buyers with their real-world buying needs and subsequently built this playbook around how to do it. 

To show how this process works in the real world, let’s conclude this whitepaper by providing a real case study of a buyer who followed the process and survived the swamp. Let’s dive in.

We were approached by a US-based real estate developer and landlord with millions of square feet of workspace in major metropolitan cities. Being a sophisticated buyer, they had started by doing their homework (see part 2). The buyer had already “kicked the tires” of multiple technologies to see what could best support them. 

The buyer identified a significant opportunity to improve operational efficiency and reduce their risks as a landlord. The way their tenants used workspace was highly dynamic, and the buyer needed to better understand how each building was being utilized to make better decisions. Using the buyer’s words, they described it as a game of “Commercial Building Tetris”: slot the right tenant into the right spot to utilize the most space and keep tenants happy. 

With a desired outcome in mind (you must start with outcomes!), the buyer was able to identify space utilization and occupancy counting technology as a business opportunity. However, they were now wading through the vendor swamp, with too many options and little clarity between them. If you’ve been following along in this series, the buyer had completed preliminary market research and was ready to shortlist vendors. That’s where Nexus Labs came in to support.

After we understood the goal, our work began by helping the buyer think in categories (see part 3).

The buyer knew they wanted a solution in the space utilization software category, and they were considering devices from several different categories for the physical sensing technology. They considered optical and non-optical people counters, network scanning, RF badges for indoor positioning, and CCTV analytic software. 

While sorting through the potential categories to choose from, the buyer determined areas of importance that were specific to their organization. Prioritizing the highest data accuracy over perceived privacy made optical sensors stand out compared to non-optical. The existing network and electrical infrastructure within the buyer’s buildings led to a preference of PoE wiring over wireless sensors, which was also common among optical sensors. Video analytics relied on existing CCTV cameras which weren’t implemented at all locations. RF badges made it more difficult to track space usage of infrequent or one-time visitors. Network scanning had higher upfront costs and felt difficult to develop a smaller scale pilot for. The list of 90 vendors suddenly sorted down to 35.

Thirty-five vendors was still far too many, but we were narrowing it down. 

After narrowing down the categories of interest, we helped the buyer think in layers (see part 4). Since space utilization + occupancy sensing are categories that span from the device layer to the application layer, we had to sort through the different ways vendors offered solutions across the layers. There were four main go-to-market models that the vendors offered:

1. Some vendors led with proprietary occupancy sensing hardware and paired it with dashboards they had built out in open-source tools. In other words, these vendors led with device-layer technology but had application-layer solutions.
2. Some vendors led with advanced machine learning software applications they had developed and paired with white-labeled occupancy sensors. In other words, these vendors lead with the application layer technology with paired device layer solutions.
3. Some vendors led with a consultative approach, agnostic to all hardware and software solutions, and willing to act as the prime vendor for the building owner.
4. Some vendors only offered the device-level sensors with no paired application or services (i.e., the D.I.Y. approach).

Although the buyer had already developed a sophisticated Microsoft Azure-based data layer with custom applications in Power BI, they recognized the time and effort required to develop analytical dashboards within their own application. Therefore, they determined they were most interested in “full stack” vendors who could offer both the device layer occupancy sensors and the application layer analytics dashboard. 

This isn’t to say that the buyer was creating a new silo for their building. Interoperability and integration capabilities were paramount to ensure data was stored and normalized following standard procedures. However, the buyer had determined that highly capable analytical dashboards were an essential part of the solution for them, so they began sorting for companies who focused on more advanced application layer capabilities. 

The list of 35 vendors dwindled to seven, which offered the full stack from optical sensor to application, focused on cutting-edge analytical dashboards, and had proven integration capabilities at the data layer.

With a manageable list of seven vendors remaining, the buyer was ready to start thinking in properties (see part 5).

• The buyer dreamed of further reducing energy consumption by optimizing HVAC setpoints and schedules based on real-time occupancy data, so we helped them seek out case studies to show each vendor’s experience in that field.
• The buyer wanted to ensure they could switch providers in the future without ripping and replacing everything, so we flagged vendors with recurring fees that were heavily integrated into the functionality of installed hardware products.
• Being a large, well-established company, the buyer needed a vendor with a long enough track record of products deployed and stable enough funding to scale the implementation with the buyer’s large portfolio.
• The buyer didn’t need installation support or utility incentive filing support – they had these services well-established through other vendors.

By thinking in properties, the list of seven vendors became one, with one or two great alternative options. Successful navigation from a start point to an endpoint should always be process oriented, and navigating the smart building marketplace is no different. By methodically breaking down your organization’s needs, buyers can improve their decision-making and find the right solutions to their unique needs.

Unveiling the Nexus Marketplace

The process above worked great, but still took a lot of support. Our industry has great buyer’s consultants, but their work isn’t exactly scalable to millions of commercial buildings. That’s why we’ve built The Nexus Marketplace to be an online tool that buyers and their consultants can use to achieve all of the steps above with less time and expertise. The Nexus Marketplace is the tool to match the playbook:

Thinking in Categories: Within The Nexus Marketplace, we’ve defined 97 building technology and service categories, and counting. It all starts with the definition. As an industry, we must agree on the capabilities and features a solution must have to be in a particular category, or else we’re not talking in the same language. We don’t take vendors’ words for it, we are using our industry expertise, as well as the support of unbiased buyer’s consultants, to determine which vendors fit into which categories. Their product demos and feature sets must align with the category definition, or they won’t be listed there.

Thinking in Layers: Each of the 97+ categories is nested within one of the six layers. This allows buyers to decipher which vendors have offers spanning multiple layers and helps them visualize how all their pieces fit together up and down the tech stack.

Thinking in Properties: We’re continually adding vendor-specific information like verticals served, number of buildings deployed in, stage of funding, cybersecurity credentials, API documentation, integration paths, and more. Buyers don’t need to worry too much about these properties until they’ve thought through the categories and layers, but in the end these are the metrics that separate the best option from the second and third best.

Buyer-to-Buyer Collaboration: We’re encouraging buyers to share their experience through anonymous or named reviews of vendors they’ve worked with. Future versions of The Nexus Marketplace will allow buyers to share information about their current technology stack, and get connected to other buyers going through the same thing. 

Imagine getting connected with a peer in another organization who is trying to buy the same technology as you. Imagine getting all the lessons learned from a technology implementation that your peer completed last year. 

Today, The Nexus Marketplace is free to buyers, buyer’s consultants, and Nexus Labs Partners. As we look forward to getting your feedback on the first version of this tool, we will be hard at work growing our database by relying on our community to crowdsource accurate data:

• Buyers will be asked to submit reviews and share information about the categories and vendors they have used in the past so they can get connected with like-minded buyers.
• Buyers Consultants will support us in vetting vendors for the minimum category requirements, and ensuring we’re all defining each category and property with consensus.
• Vendors will always be listed for free, ensuring that buyers can see all available options. Vendors will be asked to validate how their company is listed so that buyers can more accurately understand what they do.

Welcome to The Nexus Marketplace, where simplifying the buying process will assist in the acceleration of digitized and decarbonized buildings. 

‍