Podcast EP 111 - Air quality analytics for better employee productivity - Michael Driedger, CEO, Airsset

EP 111 - Air quality analytics for better employee productivity - Michael Driedger, CEO, Airsset

Dec 23, 2021

In this episode, we discuss the impact of air quality on productivity, sick days, employee retention, patient recovery times and other wellness factors. We also explore the challenges of building modern software solutions for the building industry due to legacy equipment and facilities and the lack of good benchmarking data to demonstrate ROI.

Our guest today is Michael Driedger, CEO of Airsset. Airsset monitors indoor air and provides insights and solutions to improve air quality. 

IoT ONE is an IoT focused research and advisory firm. We provide research to enable you to grow in the digital age. Our services include market research, competitor information, customer research, market entry, partner scouting, and innovation programs. For more information, please visit iotone.com

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Erik: Welcome to the Industrial IoT Spotlight, your number one spot for insight from industrial IoT thought leaders who are transforming businesses today with your host, Erik Walenza.

Welcome back to the Industrial IoT Spotlight podcast. I'm your host, Erik Walenza, CEO of IoT ONE, the consultancy that specializes in supporting digital transformation of operations and businesses. Our guest today is Michael Driedger, CEO of Airsset. Airsset monitors indoor air and provides insights and solutions to improve air quality. In this talk, we discuss the impact of air quality on productivity, sick days, employee retention, patient recovery times, and other wellness factors. We also explored the challenges of building modern software solutions for the building industry, due to legacy equipment and facilities and the lack of good benchmarking data to demonstrate ROI.

If you find these conversations valuable, please leave us a comment and a five-star review. And if you'd like to share your company's story or recommend a speaker, please email us at team@IoTone.com. Finally, if you have an IoT research, strategy, or training initiative that you'd like to discuss, you can email me directly at erik.walenza@IoTone.com. Thank you. Michael, thank you for joining us today.

Michael: Thanks for having me, Erik.

Erik: So Michael, we were chatting just before we kick off here, and you mentioned that this is a situation where we can really get into, the people aspect. So the technology is actually not particularly complicated here.

Michael: Well, it isn't, that's always the problem with IoT: the use cases are fairly intuitive.

Erik: Well, I think a good starting point also for understanding the use case is to understand how you ended up originating this idea. So you, obviously, have an interesting background as an architect, as a kind of sustainability oriented professional, what led you in 2020 to then set up Airsset?

Michael: Yeah, I've been at the green building thing for almost 20 years now. And I've done net zero energy buildings. I've done buildings that recycle all their own water. But the one universal thing and all those buildings that I did in the 20 years was they all had very bad air quality. I grew up in in the trades. So my father was a contractor, one of his lungs is half full of drywall dust. For back then my wife has chemical allergies. Just air quality has been something that's just been part of what I've been wanting to do for a very long time, just because it's so poorly executed in buildings.

And the reason it's so poorly executed in buildings is there's just no data. So buildings, 99% of them are controlled off of temperature, and no other factor. So the technology wasn't really there to do it. Well, I mean, there are CO2 monitors that have been around for a long time and all kinds of gas sensors out there. But to do it at a sort of wide scale were sort of everyone can have an indoor air quality monitor wasn't really possible with lots of different options until maybe three or four years ago.

Erik: And so what's the big change there, is just new sensors coming to market that are bringing the price down?

Michael: It's a little bit of that. It's a little bit of the firmwares getting better. So this is my second IoT company. My first was a company called Operto, which is entirely focused on smart locks. It was more of a commercial project. And one of the biggest challenges we had there was just keeping devices online, keeping devices consistently providing us a data. I think it's something that everyone sort of struggles with is making everything actually function, like it's everything functions in theory, but having it function in real time in a school, in a hospital.

In that case, it was vacation, rentals and hotels, so we were letting people in with a lock so it couldn't fail. And we were using air quality sensors to a very limited degree. The way that it works with indoor air quality sensors, it's scientific equipment that's upwards of $40,000-$100,000. And then stuff that you can buy from a local store for 100. The problem is the super expensive ones would never deploy them 24/7 to find out what's happening in a space, they're just too expensive. They're basically scientific medical grade.

And then the other ones are $100 devices throw away after a year, the metal oxide sensors, basically are no longer accurate after two years or something like that. So it's really difficult to find that middle ground, and that middle piece. But now there are, we're connected now to nine different device manufacturers. Airsset is a data platform that's built on top of IoT devices, which collect indoor air quality data. But the thing is to turn data into information so that our partners can turn that into action. Because really, what we're trying to do is take data turn it into insights, and then turn that into solutions for indoor air quality.

Erik: So what does the customer journey look like here? Is it they have an issue, they find you, you evaluate the situation and recommend the right sensor, and then you deploy your platform on top of that? Or the customer, I guess, they have to find you, and they have to find the right hardware, and then link those together?

Michael: It actually happens both ways. So sometimes a customer will find us, and other times one of our partners, indoor air quality consultants, commissioning consultant, building people will bring them to us. Because one of the things that we noticed when we started was that even if we were to give, let's say a landlord, or a building facilities manager all the information about the indoor air quality, chemicals, NO2, CO, all of that stuff, they couldn't really process it, it's too much data, they didn't really understand it. So it almost had to be taken through a filter. And that filters the professionals that we work with, industrial hygienists that have been doing this for 30 years.

But what's happening is a digital transformation. So historically, industrial hygienists, indoor air quality consultants, people in the green building industry, what they would do is they would do an indoor air quality assessment pre-occupancy for a building, they would take the information to a lab, and they would produce a report. And so that would say that's what happened for that one week. And so that's been going on for about 30 years.

The first problems with sick building syndrome happened during the first oil shock, which is no surprise because basically what we did is we said, well, in order to save energy, let's reduce fan speeds, let's reduce the amount of heating we do and the amount of outdoor air. So if you lower the amount of outdoor air and recirculate air, basically, you get sick building syndrome; get a lot of issues with air quality.

But the problem for the last 30 years is that it's always been a moment in time that someone has decided to take information. So now but what we're doing is basically taking these professionals that understand the situation very, very well, the infrastructure is there, they understand the data, the landlords and facilities managers and tenants and business people, they just need the direction, open windows, ask landlord for tenant improvement adjustments, have HVAC commissioning people come back and adjust controls, add humidification.

It's actually an interesting customer journey. For example, example, we got to bank directly, but ultimately, we needed a partner to do the reporting. Because the bank said, well, we have 40 locations, 50 locations, I think it was. We don't have time to sit there and go through each one of them, so we just want a monthly report about each branch. And so the professional who's used to doing that kind of reporting, our partner, we've contracted to do that. But in another instance, he brought us another client who has a portfolio of office buildings and now it's done the opposite way. We sort of think of customers, partners, and resellers and clients.

Erik: I can imagine if I'm dealing with a commercial ability, and you might have a mall, and the mall has an interest in being able to say we have good air quality in the mall. But then you have all the retailers within the mall who might say, well, I'm in 50 miles across Canada, and I want to have my store in each of these. You probably have some complicated dynamics because of the ownership structure and management structure of these.

Michael: Yeah, and that's one of the things that stopped it from happening. So, historically, you'll find that air quality sensors are almost always in the duct, which is not very helpful when you're in the space. And the reason that they were always in the duct is because the HVAC, technically, that's the world of where the building owner owns it. Once you get into the space, that's the tenant improvement. So that's why it was always historically quite difficult to figure out how do you put it into a space, who owns the space? Is it the tenant or the landlord?

So historically, CO2 sensors were put inside of ducts. But I mean, it's really inaccurate data because of the breathing space is where all the CO2 is created. So like when we breathe in and out, we produce CO2 when we breathe out. And so it's that feeling that you get when you're in an office, especially in a meeting room, and you feel tired it’s because the CO2 is building up.

And so demand control ventilation requires that a CO2 sensor be placed, let's call it, a meter off the floor, essentially in the breathing zone. And then that'll trigger the HVAC system to provide more fresh air. The problem is almost always in the duct. So it's almost always reacting too late. But now we have sensors that you can put in a space relatively cheaply that can talk to the HVAC system, and bring in fresh air. CO2 isn't the only problem either.

So when the space heats up, let's say that you turn the cooling off in the middle of summer at night, what happens is it starts to basically bring out the chemicals out of the carpets. And so the VOCs will rise. You'll often see that even in the winter, like we'll see winter conditions where the humidity will rise inside of a space, and so will the temperature and then the VOCs will rise. So that's actually a better condition for providing demand control ventilation because your CO2 is okay, but the chemicals are now in the air. So it's just different ways to improve air quality, because air is really complicated.

And one of the challenges, I don't think we think about it much. You drink six liters of water a day, but you breathe eight liters of air a minute. And it's full of a lot of stuff: chemicals from carpets, carbon monoxide, carbon dioxide, nitrogen dioxide, like we can go on and on and on. So distilling that down into something that each stakeholder understands is what we're trying to create.

One of the things we have is that there's a QR code on these devices and that's different information. So if you're in a bank branch, and you go and you scan the QR code, you get very simple information about the air quality in the space. That's for the public, simplified, sort of similar to like air, like the outdoor air quality index, whereas the building manager is going to see is very, very detailed data, and so as the consultant who's part of the project.

Erik: So you can create different views based on the information requirements, and let's say sophistication or the viewer. Do have anything that's visible in this space? Is that a common request to say I want my employees to see like just one number up on the wall that says, we're green today, we're at 32, something like this?

Michael: Yeah. We have different numbers. So we've created two of our own internal sort of metrics. One is a viral index, and one is a productivity score, cognitive function score. Like in the schools, they like the cognitive function productivity score. Basically, that's a measure. So, Harvard University, Yale University, everyone's done studies of how if you don't have good air quality, basically, productivity goes down. The contributing factors, obviously, being CO2, which we talked about, you get kind of drowsy, you get kind of sleepy, it's hard to concentrate. You have this foggy feeling with high CO2. VOCs are chemicals act in a slightly different way, that give you a bit of a headache. It's difficult for you to remember things really quickly, makes decision making a little slower. And then temperature is also a huge factor.

So really high temperatures, they've tested it in places like call centers in the Philippines, etc, where the temperature goes to like 30 degrees Celsius. So about a 15% reduction in productivity, just you feel sluggish, it's hard to recall, etc. Then there's all those other factors, like gas, like pm 2.5, will affect allergies, and then the allergies are distracted. The cognitive functions score is probably the best measure for the CFO of the company. I mean, that's what you would care most about because it's basically affecting your bottom line.

And then virus index is a general sort of a term for cold and flu that might be in the air, COVID that might be in the air and it's a measure of its survivability and its concentration in the air. So if you have high CO2, it means you don't have a lot of air changes, so you're going to have a high viral load in a space. And then if it's really, really dry, so viruses and bacteria actually fairly similar. They really like really dry conditions, below 30% relative humidity. And I've worked on lots of hospitals. And hospitals will always try to be kept at between 40 and 60% relative humidity, because it keeps spread down the most. So the things that really lead to the virus index are temperature, humidity, CO2, and NO2and particulate matter, because viruses also like to float around a particulate matter, droplet modules.

Erik: So if you're dealing with a hospital, then the hospital is probably pretty aware of this, you go in and you say have a better solution, is that not the case?

Michael: Surprisingly they’re not. It's coming into everyone's awareness, so all this data is from the CDC, and reams of other people. But in Canada, for example, it was literally just last week that British Columbia agreed that viruses are airborne and that COVID is airborne. We're working with some hospitals in the US that are all over it, they get that, it depends where you are. It's hilariously regional. It's one of the reasons that indoor air quality has never really been looked at is because oftentimes its regional based health and safety requirements, and its mandate of the employer to protect the employees. But there's very little mechanism to say, well, if you haven't done something, you haven't done your due diligence, how do you prove it? There's no data historically.

So this is where things are going to start to change like you're already starting to see a lot of discussion around what we have outdoor air quality mandates and requirements and regulations. It's coming through indoor air, but it's probably coming in the next three, four years, and probably largely because of what's happened with COVID.

Erik: As I imagine, the hospital administrators are not so aware of the dangers of airborne viruses and so forth. And if you're talking to a building manager, they could be completely ignorant around the importance of air quality. And to some extent, you need to probably approach them with a fairly quantitative ROI discussion, here's how this is going to impact. Can you quantify these things? Like this is going to reduce sick days, this is going to increase, you've mentioned productivity, to what extent can you quantify this in a way that the CFO, as you say, will buy into it?

Michael: Yeah. The return on investment on energy savings is quite low per square foot. Because if you look at a building, the cost per square foot of energy is really small, even in Europe, where utility costs are very, very high; but labor costs are extraordinarily high, cost per square foot like 100x what it is for energy. So if you save even 1% on productivity, it's almost an immediate return on investment. I'll give you an example.

One of the first projects we did was about, I'd say, like almost three years ago now is that an architect's office, there were about 60 people in the office. It was the end of the day on a Friday, and we came in to do a presentation about how to save energy in the building. And as presenters, we could barely stay awake, like it was one of those things where you could feel it. Sometimes people say, well, we don't have an indoor air quality problem, I don't feel it. In this case, Erik, you could feel it. There was no way you could not feel it, people were half asleep, people were kind of asleep. It was a little bit warm, but that wasn't it.

So we brought in an indoor air quality monitor. And we found that the CO2 levels were close to 2,000 parts per million. So outside is about 350. Remember, we evolved millions of years of evolving outside at 350 parts per million. Our brains don't function in 2,000 parts per million. So everyone's falling asleep. So what we did is we put in an Ecobee thermostat, because what was happening was the system was tripping basically just on temperature, it would get up to temperature and they would stop bringing in air.

And so by three o'clock, so you could see the graph of when people were coming in and it just wouldn't stop and until people left it went back down again. And so all we had to do was turn the fan on so that it ran continuously to just shave off the curve. And we went back to the partners two weeks later, they said we used to be really struggling to meet deadlines and now like we're hitting them. Like we find we're getting an extra three or four hours a day of work kind of people that we weren't getting before. Employee said things like I always thought it was because I had a big lunch, that I needed to have three coffees and the three coffees just wouldn't wake me up after lunch. And this is pretty much every day. So you have a three hour window every single day, where you basically are getting 20-30% less out of your employees. It's a really quick ROI really, really quick.

Erik: Another angle, or one of the topics that came up in conversation I was having with an InsurTech company yesterday was, to what extent insurance agencies will reduce a premium, for example, if you have good air quality because you could say that we're going to have fewer sick days, we're going to have are fewer than reimbursements? Is this something where you're seeing insurance companies make decisions around air quality?

Michael: Well, we're seeing tenants. One of our partners I was talking to him yesterday, ad he said that the tenants are actually writing into the lease agreements. Because it used to be that in the lease agreement, it would just say less provide adequate ventilation. What is adequate ventilation?

So now they're actually putting actual parts per million VOC and CO2 limits. And they're saying that, okay, if you don't meet them, that has a direct correlation on our ability to produce revenue, and you have to take it off of our rental. It's coming from the tenants. Landlords are looking at it more as a competitive advantage. Like they're trying to say, well, we're trying to attract people back into the office, we have the best air quality. So they're looking at it from a different perspective. Everyone kind of has their own motivations and ways of looking at it.

The one hospital we're working with is super curious about patient recovery times as well, because if you get a good night's sleep versus a fitful sleep, you'll recover faster. So there's all of these factors, doctors make fewer errors. We're doing a daycare children that better sleep better, less cranky, when they come home. We're less focused on our side on the devices, we're focused on human health and wellbeing and human productivity. So most of our integrations, sure they're on the hardware side, but we're really interested in in HR. What are the sick day changes? What was the productivity increase in coders and coding time? That's our focus at a software level. The devices are a means to an end to improve human performance and wellness.

Erik: So we're having a conversation with industrial automation company, and they have entirely different environment, they're looking at how do we use AI in in plants to improve productivity, and OEE, and so forth. But I feel like they have a shared challenge with you, which is going into an environment and saying, we're going to use data to improve the conditions and we have to prove that out.

So what we're looking at is this kind of how do you do a successful proof of value where you deploy it, you benchmarking and so forth? Is this something that your customers are open to? And I guess they have to have the data and so forth. Productivity, I think, is a little bit challenging, because actually, companies are not very good at measuring productivity, but something where they can measure, is this part of your sales process, that you would establish a benchmark and say, we'll do this for one month, three months, and then we'll measure the result, and then you can decide if you want to scale up to the rest of your facilities? How did those conversations happen?

Erik: Because I imagine people understand the concept, I'm sure, but then if you could show them where you're getting 15% productivity impact, it's a no brainer. But to some extent, you have to prove that case.

Michael: No. And that's the challenge definitely because it's a lack of data problem. It's also even a lack of data, like ESCOs have the same challenge, Energy Saving Corporations. So when you go in and you do change of the central plant heater, how do you prove that all the energy savings were for that and not something else the facilities manager did? This is always the challenge with complex structures and buildings are perhaps the most complex.

And when you add what people are doing, and the fact that a bad boss probably has more to contribute to your productivity than the air quality, so all other factors removed, how does it affect it? So we're working now with industrial welding facilities. And this is one way it's really interesting.

Basically, what they were telling us was these are 24/7 facilities. Someone's welding pretty much nonstop and producing metal shavings into the air; high Volume ceilings, incredible demand for skilled welders. Now if a welder looks up and he sees really high dust concentrations, they get worried about their safety. The reality is actually the bridge because that was not that bad, but it's a perception thing. Let’s see, it's not great, they have every ability to walk down the street and get a job in five minutes.

So, the ability to show them the data, where they're standing, and above them keeps them there. Retention before and after complete transparency on air quality. That one's an easy one. The rest of them, I totally agree with you very hard. We're working in some other industrial facilities where they do like industrial baking or something like that. 3D printing was another one that we did where it was a little bit more obvious because 3D models have to have certain conditions. And also they don't produce well in very high dusty environments because its effects makes its way into the printing process, etc, etc, etc. So that's like industrial facilities like if you're making electronics can't have any dust in the air. Those are simpler. But definitely the office one is a very hard one. Because there's so many externalities, it's very different difficult to isolate it and say this is air quality.

Erik: So what are the big use cases? I think we've touched on a few. So there's the hospital and there's the health environment, there's the office, then there's the more industrial situation where you have kind of more acute situations, would those be the three big environments? How do you think about the different? And I guess you can think about it in terms of what's the actual physical environment and the type of work being done there and then what needs to be measured in order to improve human wellness.

Michael: And that's one of the reasons that we use different devices, because different is different applications have different concerns. Like, for example, we have a lot of hockey rinks in Canada, and they're mostly cooled with using ammonia. So you wouldn't need an ammonia sensor probably where you are, but you'd need it for the hockey rink. You might have an office building that's right next to the highway, and so you might want to measure NO2, which is basically exhaust. But you wouldn't want you wouldn't need to measure it in like, let's say downtown Vancouver, because you just wouldn't have that as an issue in that particular instance.

Utah, for example, has inversions, so it has lots of problems with NO2, so you would use NO2. It's less to do, I would say, with the use type and location. You wouldn't need to monitor carbon monoxide if you have no gas lights. If you have a purely electrified building, I mean, there's no source for carbon monoxide in your space. So it's one of those things where it's not always easy to pick the right sensor until you have a long sort of discovery discussion with both your clients and your customers and your partners to pick the right thing.

Erik: So that means even if you're deploying on a bank that has 50 branches, even if every branch is identical, you might be deploying different solutions in different branches based on an audit?

Michael: Exactly. One of the branches that they wanted to do right away was right next to, I think they made saunas or spas, basically, like epoxy resin, so that one had particularly high. And so what they wanted was the version that did formaldehyde readings, as well as VOCs. Because whenever the wind changed, and the air intake was sucking it in, they had to be able to know so they could shut it off to anyway. Not a concern with the downtown branch, so we used a different sensor for that one. The concern on the downtown branch was CO2, just build up a CO2 older building.

Erik: So seems pretty clear. Let's maybe get into the tech stack a little bit. I understand your work, you said with nine sensor OEMs, so that's not something you're building in-house. What is your tech stack, you have a platform, we have the analytics, you have the user interface?

Michael: We have an admin panel for our partners so they can produce reports. We have the sort of QR code system where the public can access the data. That's basically the stack.

Erik: And you mentioned that the crux here is translating the data into useful information. So how far along that journey can you take it? I'm sure you can transfer from data to maybe a more easy way to air quality indicator something which is already useful information. Are you able to take that a further step and say, this is improving some HR KPI? Or are you able to make that transition or is it up to the user to convert that data into their KPIs so the things that are operationally important for them?

Michael: Exactly, they'll have to. So in one instance, we were working with a group called Auto Case, which does return on investment information. And so in that instance, that integration would tell you, based on, let's say, you're in Texas, and you're an insurance firm, and the average wage is this, so what our cognitive performance index or performance productivity metric does is it gives it in a percentage. So basically, you just take percentage across wages for a month and say you lost a ballpark $3,000, $5,000, whatever case may be. That's there is like an estimate. And then it's for you to go back and say, this is reasonable. Were there externalities associated with what was happening? It's presented as like their benchmarks like this is.

And you're right. The challenge right now is that we don't get good data back from the HR software. So they're basically ballparks right now. And that's why the goal, I think, over the next five years is how do you quantify, because we quantified everything else? We've monitored water quality and we know, what happens to us if we don't improve air water quality. We know that when the outdoor air quality gets bad, the hospital is fill up with asthma patients. Those are like direct events, and we track those at a public level, but we don't track them at sort of more of a private level. And that's sort of where our focus is.

Erik: I was sitting doing a podcast yesterday, and sitting in a room and I could just tell by the end of it I've still got to record the intro. And I'm like, okay, I got to get up, I can open the door, I'm going to go for a walk and get some air in here, because like I don't think I could get through another 10 minutes. I'm kind of cognizant of this because it's something where we've looked at filtration issues and stuff in the past. But nonetheless, it's really hard for you to be proactive about it, even if you're cognizant. What about integration with HVAC? You mentioned this, but I imagine this is a bit challenging, because you have a lot of different interfaces for control.

Michael: Yeah. In the building industry, everything's proprietary. The moment you have a conversation, it's like it's a BACnet proprietary. So but that's slowly changing. They're slowly opening up. And so the software world, like I would say that buildings are the last frontier for digitization, and IoT, everything is really very, very manual.

Like if you think about most building control systems, they're very, very simple. Like I said, they're only factors temperature, that's about it. That's the only thing that they're running off was almost always temperature, sometimes CO2. It's very rare that you see demand control ventilation. We've done demand control ventilation off of chemicals and CO2. But that's 0.0001% of the buildings out there.

The world of buildings is really interesting, because what happens they're not designed. It's one of the few things where the HVAC system is designed: you pick your central plant, you pick your terminal units, you pick all those things. And then the most common thing in the world is to write controls by controls contractor. And so these poor control contractors are given almost no information. It's not like the world of software, where everybody speaks to common language, or has a number of common languages, PHP, Python, whatever the case may be, it's Siemens, Honeywell, etc. But each of them don't talk to each other.

So oftentimes, if you're a single controls contractor trained by them, you can't work on any other type of system, because everything in that system is based off of what is controlled by the duct or touching the duct. The world of controls, it's not complicated at a technical level. It's complicated by the nature of how the industry has evolved over the last 50 years when it comes to controls.

Erik: That was kind of the competitive edge was locking out competitors with proprietary protocols.

Michael: Yeah, but now it's changing pretty rapidly. Yeah, you've got software companies that are coming in, they're bolting on to the control system. And that's really easy for us to connect with those software companies, a lot more effort to connect directly to the control systems. It's like connecting an iPhone to a toaster. Yeah, it's not easy to connect an iPhone to a toaster.

Erik: So what’s approach? Are you just taking it protocol by protocol and start building up a library? What's the probability now that if you go into any office buildings you would be able to connect to their HVAC?

Michael: The probability is high. It's just the effort is also high. That's the challenge. So, most of them will accept an XML file. So a lot of control contractors, because it's very, very expensive for them to get, for example, even a temperature sensor, so a lot of them have found ways around it, which is instead of using a temperature sensor on the outside air duct, I'll just use the weather network, same outdoor weather, so they're able to use that XML file. The industry is moving in that direction and so now they can use that.

The problem with that is that it's a little bit rudimentary still, and what we really want to move to and it's also a little bit open; security-wise, that's not the greatest thing in the world. So we really want to move to any API, that's more secure lockdown, tokenized. Yes, it can be done. Is it the best way to do it? Not really. But over time, will it improve? Definitely. I mean, it's moving that direction, also, for the reasons of building optimization and energy savings.

Erik: So it's not just the air quality, but there's other drivers that are behind this. So I think you've already explained kind of your position in the value chain. Sounds like you have different types of our software provider, which will be set and then different types of service providers, which would be potentially auditors, could be system integration, could be long term operations. For the end customer, what does this look like in terms of a bill? Is it typical that somebody who's going in and saying, we're going to wrap this all up and give it to you as a package as a monthly bill? Or is it you have a CapEx investment here, then you have an annual software investment, then you have a service contract with a third party? What are the different equations that might be presented to a customer?

Michael: The industry is used to yearly charges, they're not used to monthly charges. So usually, what we'll do is we'll wrap, like you said, hardware software in a small scope. It's usually reporting scope into a yearly contract. So the first year contract will have the cost of the device in it. And then the second year contract is cheaper, obviously, because you don't have to worry about the cost of the device. We can keep it in a way that we're able to replace the device and continue its warranty. It's usually bundled.

So usually, what we'll do is, if we get the customer directly, we'll bundle everything, including the reporting, we find a partner who does the reporting. If the reseller brings it to us, basically, we're just bundling the hardware and the software. Obviously, we look forward to the day where we're just doing the software, and not the hardware. But in reality, because we're making this digital transformation from people who have never used digital devices before, they just want us to just hand them the devices that we know works. Because we've looked at 50-100, I'm sure you'd have discussions all the time about IoT and things that work and things that don't work, they just wanted here's the hardware and software, and then we'll go add whatever we want on top of it solutions reporting. Monthly reporting, quarterly reporting, that's our preferred method, it’s like we deliver the software and the hardware, and then you've done the law on what you need after that.

Erik: I see this in different industries as well, this preference from the customer for simplicity in the offering, otherwise, it is a big ask for them to integrate this.

Michael: You basically also have to move into the industry in the way that it already is used to pricing things, and it's always that controls contracts or yearly cost. So we’re just folding into that expectation.

Erik: On the channel partner side, so the service providers and hardware providers would certainly be channel partners for you and you for them also. Like I know one company that specializes in energy management for HVAC? So do you structure partnerships with them and say, hey, you're already selling this and maybe our solution can be complimentary, and you can bring a more comprehensive offering to your customers? Maybe are you and also is the industry right now to these complementary?

Michael: Very open, and it's a good partnership because they already know the building. One great example where we're working with a provider who does building commissioning and controls commissioning, perfect partnership. When they see something going off, they know exactly what it is, what's wrong and how to fix it. And oftentimes they can do it remotely. It's much better than us bringing in a third party who doesn't understand the building, know the building, work with the owner. It's a much better way. So now we can optimize both for energy and for human health.

Erik: And maybe a last question, because I know you were set up relatively recently. What are your growth goals, what are your priorities around raising capital? Are you doing this bootstrapped? Or are you raising DC?

Michael: We did a small pre-seed in the summertime. And we're going to be doing a seed round come December, January, kind of thing. And it really is just to meet the demand. Because of like you said we have channels, like we're overwhelmed. It's really just to focus on execution, its partner and client success. That's the main focus is just making everybody successful. That's why we're not raising for marketing and sales.

Erik: You should be able to meet the demand?

Michael: Yeah, exactly. And we have partners now in Saudi Arabia. We just had a partner reach out to us from China, partners in the UK. And they basically are bringing us most of the clients that because they have the relationship already.

Erik: Well, sounds like a good timing. Let's say timing is always very important when you set up a new business, and you certainly have the timing right here.

Michael: It is. I don't think our timing could have been better for this one. We've been R&D in it for three years. But it was clear last year it was time to pull the trigger.

Erik: And take the market.

Michael: Exactly. Yes.

Erik: Well, Michael, anything that we haven't touched on yet, it's important to know about the business?

Michael: No. You asked great questions. They pretty much cover most of what we're up to.

Erik: So then last question is, how can folks get in touch with you or learn more about Airsset?

Michael: Info@airsset.com or www.airsset.com. If you're looking to be a partner, www.airsset.com/partners, you can see the different types of partners we have. If you're interested in devices, www.airsset.com/devices, very easy to see all the devices that we use. There'll be case studies coming soon, obviously, but you've heard about them already, so you probably don't need to see them.

Erik: Well, Michael, thanks for taking the time today.

Michael: Yeah, thank you very much, Erik.

Erik: Thanks for tuning in to another edition of the industrial IoT spotlight. If you find these conversations valuable, please leave us a comment and a five-star review. And if you'd like to share your company's story or recommend a speaker, please email us at team@IoTone.com. Finally, if you have an IoT research, strategy, or training initiative that you'd like to discuss, you can email me directly at erik.walenza@IoTone.com.

Don't forget to follow us on Twitter at IotoneHQ, and to check out our database of case studies on IoTONE.com. If you have unique insight or a project deployment story to share, we'd love to feature you on a future edition. Write us at erik.walenza@IoTone.com.

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