The Home Service Expert Podcast - Delivering Better Customer Experience Through Analytics

Episode Date: August 23, 2018

Brian Courtney is the CEO of LifeWhere, a product that focuses on bringing predictive analytics for home utilities. Through LifeWhere’s predictive analysis technology, Brian aims to empower consumers to understand their home equipment better, so that they can make better educated decisions. In this episode, we talked about customer service, sales, profitability...

This is the Home Service Expert podcast with Tommy Mello. Let's talk about bringing in some more money for your home service business. Welcome to the Home Service Expert, where each week, Tommy chats with world-class entrepreneurs and experts in various fields, like marketing, sales, hiring, and leadership, to find out what's really behind their success in business. Now, your host, the home service millionaire, Tommy Mello. Hey there, folks. Tommy Mello here with the home service expert. Today, I got a guest that's going

to talk a lot about new technology. His name is Brian Courtney. He's with a company called Lifewear. It's a startup company, and it's pretty cool what they're doing. Brian, how's your day going? So far, so good. Thanks for calling, calling. Yeah, I'm excited to have you on because we do have a lot of air conditioning and heating companies out there that I don't think have a clue on what it is you do. Do you want to talk about a little bit on how you got started or what brought you to the company Lifewear? Yeah, sure. So past life, I ran the data and analytics business for General Electric. And at General Electric, we monitor things like turbines and jet engines, locomotives, and very expensive assets. And so there was, you know, the sense of it's very no expense to keep

these assets running because nobody wants a jet engine on a plane to fail while the plane's in the air. And nobody really wants a turbine to go down and to have a city or a region's power. So there was a lot of energy and effort put into building out analytics for this equipment to help get ahead and get to what we call predictive maintenance planning, right? How do you understand what's going to break in the future so you can fix it today so you never have that outage hit?

In the meantime, I had become what I would call the schlep rock of home utilities. If it could break, it broke in my house, and it always seemed to break while I was traveling. So it always left my wife in a lurch. And we just had problem after problem. We lived in Massachusetts, and we had a geothermal heating system that failed that we didn't know. And we found out we had an electric heat backup system by getting a $2,200 electric bill. We found that our sub pump had broken in Chicago by going into the basement to three inches of water in a finished basement. That cost me about $30,000 to replace. And then most recently, even when I was moving from Dallas, Texas to Pittsburgh, after I'd sold the house, the fan on the air conditioner went and I wasn't home to hear it.

And as a result of not hearing the noise, the fan not working, the compressor kept overheating and restarting and overheating until it warped. And so my gift to the new owners was to buy them an air conditioner, which was not exactly something I wanted to do. And that's really when it was the last straw. It was just, why am I doing in the industrial side something I should be doing in the commercial side? And it really focused in on, all I have to do is get the price right. I have to be able to get the IoT technology in the home

to be able to monitor the equipment at the right price that makes it make sense for people. And then I think we can demystify the equipment and really try to help avoid all those headaches that I have for others. Yeah, you know, that's interesting. I was mentioning to you earlier, my brother-in-law works at GE and he was telling me that the newest engines that GE is working on can actually repair themselves. Does that have any merit or not really? Well, you know, it does a little bit. But, you know, most recently we saw one of the Southwest Airlines planes

had a blown engine and somebody unfortunately passed away in that incident. Planes fly all the time and the blades and the tips of the blades wear out. And we actually have analytics to be developed for other customers where you can determine when the blades need to be And we actually have analytics to be developed for other customers where you can determine when the blades need to be re-tipped. And if you don't re-tip them at the right time, you have to replace the blades, which is extremely expensive and time-consuming.

And of course, if you miss it, if you miss either the re-tipping or the repair, then catastrophes can happen, right? And so the analytics that we run is really about how do we help the business operate efficiently and effectively, but it's also how to create a safe environment for everybody, right? Nobody really wants to see a problem in a plane, little plane. Yeah, that's, it's crazy, the technology. So, you know, you talked about all the stories, you know, and you got your whole basement flooded at one point and you're just kind of fed up with it.

And you decided to do this startup company. I'm just wondering, how does this apply to a home service expert out there? The predictive analysis, you know, and how to help them deliver better experience to their customers? You know, that's a great question. The home services organizations, they're very interesting in that I don't know if anyone's ever truly targeted innovation for them to improve their business operations directly for them, right? I mean, some of the innovation you've seen is software that is applicable to any business in scheduling and inventory management and call management.

But NEMA innovation, it's truly been designed to make the home service professional more effective, more efficient. And it's kind of hard to come up with. So at Lifehole, what we tried to do is we were trying to say, hey, look, we've got people who don't really understand anything about this really expensive equipment in their home. The third most expensive asset most people own is their heating and cooling system. And I guarantee you, no one's ever put their heating and cooling system on an asset sheet when trying to describe what they own. But a furnace in an air conditioner might cost you $40,000 to $50,000 over a 15- to 20-year window

to purchase, install, operate, maintain, and then eventually replace. That's a huge amount of money, right? Yeah. Flip side is, when problems occur, the people who have these issues know the least about the equipment. So you're a service company, and what do you do? You wait for the phone to ring. If you ask any service professional in any major city, how many customers, how many people in their city had a problem today? They'd laugh at you. They'd say, I have no idea. How could I possibly know that?

All I can tell you is how many times my phone rang. So they don't even know what percentage of the market they're getting on any given day. And then it's feast or famine, right? The equipment tends to fail when it's coldest, when it's hottest, when it's the most inconvenient, right? When they're the busiest, right? People's furnaces don't break in the middle of summer and their air conditioners don't break at the end of the season. They break when it's the hottest and the coldest out.

So the service professionals then have this problem of, you know, hurry up and wait, right? They're waiting for the next call and if they get too many, they have a problem on how do they just manage this. And so what we built was a platform that allowed them to see into the home to understand what's going on in people's equipment. The analytics actually, we gather information off of the equipment once a second, and we send it to the cloud once a minute.

And we apply analytics on that. We analyze every run from a furnace or an active machine. And from that, we're able to say, hey, look, the run capacitor is starting to go, or the start capacitor is starting to go, and the blower motor isn't behaving correctly. And what does that mean for the homeowner? Well, for the homeowner, that means that their unit is running less effective, less efficient. It's costing them more money to produce heat or cool their home. And sometimes that can be very excessive. In addition, something like a capacitor is starting to go from wear and tear on a motor where the motor is two or three times the price. And if they just knew that, hey, if my capacitor is starting to go and I can just get it routinely maintained and get somebody in here to replace it right now, I can solve this problem.

So the way that industry is trying to solve that today is the maintenance contract. The biggest challenge for the maintenance world is when you show up, how do you see intermittent problems? How do you see that a furnace has had issues 16 times in the last three weeks if it doesn't have a problem right this second? So it's very easy for very experienced people to miss problems simply because they don't materialize themselves and manifest themselves while they're there at the point of equipment. And so our system allows them to see everything that goes on with the equipment, to see every problem, to see every intermittent issue, so that when they show up to fix a serious problem, they can also present to the homeowner, here's all the other things that are going on in the service to think about. And that has a lot of benefit and value both times. Yeah, I guess I want to dive a little bit deeper into this because I know a lot about

motors. I know what a capacitor does. I know what an RPM sensor, I know different parts on different types of units, but what exactly does your mechanism, how does it know, what efficiencies does it tell me? It tells me about the motor. It tells me about the capacitor. Does it tell me anything about the efficiency of the air or the humidity or tell me everything that goes into that? Yeah, that's a great question. So we're able to analyze the equipment and either directly or indirectly infer when problems are occurring right any piece of equipment has a sequence of operations and there's certain things that happen in a certain sequence it can be very complex right you have a multi-zone system and you're getting multiple calls for heat

right in multiple zones i mean yes but the equipment behaves in a predetermined way by what the motherboard is telling it. There's a firmware program that's kind of controlling this. And by analyzing things like current, by analyzing reactive power and real power that the unit is drawing on at any point in time, we can see the digital signature of each and every component inside of a furnace as it operates. And over time, the signature changes as the equipment starts to behave or as components start to wear down. As the blower motor's bearings start to seize, the unit draws more and more power because it can't rotate the motor the same way it did before. And as the bearing grease

heats up, maybe things loosen up and all of a sudden it starts to dissipate and it goes back to normal behavior. A really sign like that can tell us that, hey, the bearings are starting to go, that the life expectancy of this fan, this blower motor now is going to end in the next

six months, 12 months. And therefore, it's something that the homeowner needs to become aware of so that when the service tech comes and tells them, hey, the unit actually has this problem, that they can see it and understand it. We kind of break this down into two pieces. One is diagnostic and one is more like analytic and prognostic. The diagnostic is, hey, it broke. Why did it break?

And how do I ensure that I'm fixing the right thing? Right? The second part of that is, hey, I'm starting to see things wear down. I'm starting to see abnormal behavior. How do I associate that with what the problem is so that I can do preventative maintenance today to prevent it from breaking tomorrow? And what we offer is both. So let me ask you this. So you say you're doing air conditioning and furnace right now,

and you said down the road, you're probably going to find some plumbing things like a hot water heater. Your technology could basically go on anything. It could go on a pool, it could go on a garage door, it could go on any, it could go on a garbage disposal. I mean, it just doesn't make sense for that. But what does it make sense for and what doesn't, what's the reasoning behind it? So what we're looking at is the assets that either A, have a high price tag, or B, when they fail, cause a lot of damage. So your furnace and your air conditioner, if you had to replace, it could cost you $10,000 to $12,000. Routine maintenance and just operation, like I mentioned earlier, would cost you $10,000 to $12,000. Routine maintenance and just operation, like I mentioned earlier, it could be $40,000 to $50,000 over its lifetime.

That's a lot of money. Like with me with my subpump in my basement. A subpump is only a $250, $300 item, maybe $600 or $700 with insulation. But if it fails, like in my case, I lost $25,000 for having to rebuild a basement that was already finished in a home that I just couldn't leave it unfinished. So when there's a high catastrophic cost or when there's a high asset value, it makes a lot of sense. As we get more and more scale on those assets, well, then we can go down market to assets that have less and less value, but can still be very inconvenient.

When the pumps go in the pool, you're not using the pool, right? And if you have a big party plan, well, that's an inconvenience, right? When your cell pump goes, you know, it's a $300 asset, but you don't want a flooded basement. Or when your hot water heater tank goes

and you live in Texas and for whatever reason they decide to install them in the attic, you're going to lose a ceiling, a couple of walls and some floors. All right. So we can monitor those assets to get people out ahead of the repair

so that we can avoid the catastrophe. It's just a win-win for everybody. Yeah, that's interesting stuff. So explain to me. Okay. So first of all, I'm a customer, right? I have an air conditioning unit of five ton in my house in Scottsdale. Explain to me how you get that technology into my home.

Yeah, okay. So we sell directly to businesses. So we would sell to a local heating and cooling company in your area. And they would offer this as part of their maintenance or part of their service offering. And for a fee, they would come in, they would install the device, a small charge for the device itself. And then there's a monthly fee that they charge you to monitor your home 24 hours a day, seven days a week.

And we analyze that data that comes off of the equipment. And we notify the service provider when we start to see issues. When we start to see issues, they get notified and then they can start to come up with, well, what is the right timing to get this repaired? Is this something that I need to get out there right now? Or is this something that can wait for a week or two? Is this something that, hey, I've got a routine maintenance scheduled with this customer in three weeks and it can wait? Or is it something that I need to bump them up in the schedule and get it repaired now before more damage is done? So it's a complete cycle. Now, as we do the analysis in the cloud and as our partners see that data and understand what's going on, they can then

propagate that information to the mobile application that the homeowner has. And it starts to show them, hey, here's all the warnings and errors that are going on with your equipment. And simple application, big yellow, big green, yellow, or red light in the middle. And if it's green, everything is good. If it's yellow, you have some issues that are intermittent that we need to worry about on our next maintenance. And if it's red, it means the unit stopped working and we need to schedule a repair.

And in the application, there's a big button that says call my first provider that gets wired to be to their phone number. Okay, so this could go on anything. It could go on a train or any type of unit out there in the whole you know north america spectrum then is that correct that is correct so we focus a lot of energy to make this make and model agnostic and even equipment agnostic now we develop analytics specific to different makes and models i mean there's different kinds of equipment there's there's different kinds of blower motors and different kinds of ignition systems and different kinds of furnaces that would have different components. And so that's on us.

That's LifeWare's job is to make sure that we support all that. And we build up an analytic library that helps us analyze what kind of piece of equipment is this, what signatures are we seeing, which components, therefore, this piece of equipment have. And then we create a run-level analytic that starts to analyze all the runs for that piece of equipment. We can run that on a furnace with very, very little work. We can get that on an air conditioner. But again, we have it running on sub-pumps, on hot water tanks. And the goal in the future is to help monitor some other devices as well and blowers pool equipment so what percentage would you say are you able to detect before the red you know you talked about

green yellow red what is like is it 50 50 where it's breaking right away or is it the majority of the time you could kind of get to the problem before it's you know before i'm stuck with 130 degrees in arizona and i you know i don't know if i can give you the exact answer on that but what i can tell you is that if it's a electrical component like a motherboard motherboard and fuses can go quickly and so the our ability to predict that hey the fuse in your motherboard is going to go you know maybe mission in milliseconds which isn't going to help anybody. On mechanical components, they do exhibit a signature that varies, and we can predict problems days, weeks, and months into advance. We can tell you that the unit is having an issue today.

Now, over time, we'll be able to tell you how much and tighten the window of how much longer we think that that piece of equipment can run for. But today what we try to do is just notify both the homeowner and service provider that, hey, the bearings are starting to go on the blower motor. Hey, that capacitor is starting to show signs that it isn't enabling the motor to start correctly. Or, hey, the ignition system is firing three times instead of once. And if it goes to a fourth time, right, it will walk out and won't start. And so you have to replace your igniter. Okay. So in terms of ROI, return on investment, why does a home service business or an air conditioning heating company, why would they go for a predictive analysis rather than any other

type of marketing? What's your unique selling proposition, I guess? Yeah, we can actually help them, in essence, double profitability. And that's a bold statement, but let me kind of walk you through it. If you can see a problem at a customer site and diagnose it with your best guy in the office, you can send the right guy, the guy with the right skill set and the right part to fix it with one truck roll. Today, you don't really know what they have for equipment. You don't really know what the problem is. They may or may not be able to describe it over the phone with any accuracy. You have to send a very talented person to go over there and diagnose the issue.

Then if it's a mechanical failure and the occupant having a part in the truck may be small, they might need to go get a part. They might need to then come back or schedule a return visit to repair in place. If, while they're doing that, there's intimate issues that have occurred beforehand that they didn't see while they were fixing this particular broken component, they might get callbacks to say, hey, look, you were here this week, and yet, you know, it's still not behaving right. And they can be totally unrelated. And it's simply because the technician at the site didn't have the information to fix everything. They could only fix what they saw was broken. So what our system allows them to do is it allows

them to diagnose the issue before they show, allows them to get it done in a single truck roll. It allows them to see problems as they develop. So it allows companies to take an inventory position that's risk-reduced, right? Where they can buy in quantity and they can buy online that have to go to the local shop and pay full price, full retail, right? So by being able to make something better margin on parts,

by getting better staff utilization, by getting jobs done in a third of the time, you can do more jobs with the same number of people, right? Fix labor costs, more jobs, more profit. So this is really a win-win across the board, right? It really enables the service environment much better margins because they can do much better diagnostics ahead of time. And it also helps the consumer because it gets it done in one shot. It not only allows them to get in and see the exact problem that's caused this specific failure, but because they can then show them, hey, here's the six intermittent issues you're also having, it's either I fix it all now while I'm here, or if any of these cause a problem later this week, this month, this year, it's on you.

You have to pay for it because I'm already here and ready to fix it right now. So it allows us to create transparency in a marketplace today where there is none. It allows us to create visibility into the home for the service provider where there isn't any. It allows them to de-risk inventory positions and allows them to get better utilization from their staff. That makes complete, yeah, no, that makes sense. So I'm a business owner. I'm involved in a lot of different things and I'm really involved in lead generation quite a bit. And I can tell you that for small business owners, especially in the home service industry, it's hard for them to see the benefits. If it's not,

you're going to make this money back in the next week, month or a quarter. So I'm just curious if you ever thought of this approach is going to a manufacturer and saying, look, I'll put this on every one of your units that go in for free. But when it does have an issue, I get to get the lead. I get to call up three different companies like HomeAdvisor and tell them what's going on and create, you know, where you could sell that for 150 bucks when you see an abnormality. Would that be an approach that you think would scale? Or do you think based on what you've been doing so far, that it's really catching on with the HVAC and heating companies? No, actually, we see that in space. So, you know, we're a bit altruistic. We really believe that we

can help improve the operation of service providers. And that's really our primary focus. What we've been surprised by is how many secondary market players, non-traditional home services companies are interested for exactly what you just said. Hey, if I monitor everybody's house and I know every problem in everybody's house and I can sell that for a finder's fee and make money both on the subscription for monitoring 24-7 and for selling it to the service provider. That model kind of commoditizes the services industry because then they're only going to be paid based on what the person who found the job is willing to share. But what we're seeing is a box retail, companies like Amazon, large telecommunications companies that have a lot of IoT in the home, home security companies, home warranty companies, and even home insurance companies are all exploring in this area that says, hey, if I can see problems, I can help this market become more efficient. I can help the consumer.

I can lower my cost. I can make the consumer. I can lower my costs. I can make better margin. And all I'm really doing is taking inefficiency out of the system and keeping that profitability for myself. So we see a lot of very large companies that have approached us to go after that exact margin. I'm pretty good friends, and I've had a lot of people on here, of the big air conditioning companies. One of the things I know is the service agreements are really built to go change the filters and collect data.

So they go out there and they say this unit's 11 years old. They usually tag anything 10-plus years, and instead of sending up a tune-up guy, they send out their salesman because they say, you don't have any efficiencies going on here. At what point, you know, you're finding the direct problem, but at what point does the technology and the efficiencies take over to say, yeah, your capacitor went out, your blower motor is 10 years old.

I don't even know everything about an air conditioning unit, but there's a lot of other things that go bad, just like in a garage door opener, that it's like your safety eyes, your wall button, your remotes, all this stuff will start failing because of the age of it. That's just the way they build stuff now. Where do you come in? You know, what is your answer to that to say, yeah, we're finding the problems. But for me, I had an air conditioning guy come out two years ago, three times within one month. And I'm like, dude, just charge me whatever it costs. So I don't have this happen again. Even if I got to replace a unit at this point, what do you think about that? Where if we're hitting a problem every three months, I'd rather replace it.

And I think that's what a lot of owners would say in the HVAC industry. Yeah, that's really where I think Lighting Flair shines, right? So we are trying to create transparency in the marketplace so that consumers can see and understand what's really going on with their equipment and then can make better educated decisions. So let me give you two examples. Last summer, we were monitoring an air conditioner, right? And we noticed, first off, the first day we started running the analytics, that this unit was just laboring. It ran 28 hours straight, never stopping.

And when we contacted the homeowner, this was during a pilot phase for us, contacted the homeowner, we better not, your unit never shuts off. She said, well, the house feels cool. I don't understand what you're talking about. I said, well, if your unit never shuts off, it's not able to keep up with the requirement to cool your home, there's something seriously wrong. So we were able to show her, not only is your unit exhibiting low freon,

so you need a service that just come out and put more freon in, but by the fact that you haven't had the right amount of freon in your system, you put stress on the components. And we were able to show, hey, look, these components are actually starting to fail. And as a result, when the service tech showed up, he replaced her air conditioner. Her air conditioner from running 28 hours straight to running four times an hour. And her energy bill actually dropped from about $380 a month down to about $100 a month. So she saved this huge amount of money on electrical consumption simply by not even

knowing, right? Because who pays attention to the noises outside of a piece of equipment that you don't even really know much about? So that was an example where we were able to help the service tech actually get a replacement for something that should be replaced, right? And help the homeowner by showing them the ROI that said, hey, look, here's what it's going to cost you to fix. Here's what it's going to cost you to replace. And by the way, here's how much money you're going to save on your energy consumption.

Our system actually can monitor and actually does monitor kilowatt per second. So unlike other kinds of things, these devices don't plug into the wall, so you can't just get a smart meter. We're able to say, well, exactly how much electricity does your furnace use? How much electricity does your air conditioning use? How much gas is being consumed? And what part of my bill is really for my heating and cooling? And so that allows us to show them, hey, when you change out for better and more effective, efficient units, this is the kind of savings you'll get. Now, on the flip side, by and large, most equipment can be properly maintained and can run a very long time.

It's not uncommon to hear about people who have boilers in their cellar that are 30, 40, 50 years old. But that doesn't mean that they've never had a problem and they haven't had to replace components. In fact, if you properly maintain it, you can get a lot more longevity out of these assets. But it needs that maintenance. And so what we're able to show consumers is that this is all of the things that are wrong.

And this is the thing that you're going to likely see bills for this year and next year. And they can now make an educated decision that says, hey, you know, I only see $1,000 worth of repairs. I don't want to replace a $5,000 unit for $1,000. Or they can say, to your point, hey, if I've got $3,000 worth of repairs, why wouldn wouldn't i replace it because i'm going to save money on the energy efficiency later but it allows us for the first time really to have that conversation you know as long as parts are available you can always repair a unit but that doesn't necessarily have the best for the consumer and that certainly isn't the best for the service tax right the service companies make more money in a replacement, obviously, than by fixing a part simply because, you know,

the cost of the material and the cost of the labor goes up as they do a replacement over repair. Sure. Yeah, that makes a lot of sense to me. So you're going B2B with this whole platform. As I'm thinking about it, I've got Airbnb and VRBOs, and I got to tell you, I can't control the air conditioning on there. So sometimes I get the bill and I got a pool heater and I'm like, geez, they really went to town. And sometimes I think they just lower it so low. I mean, I would definitely buy it if it

was an easy add on to my, I got two AC units out of that one of the houses and I would love to see what exactly is going on. And there are times where I don't think the units shut off either, and I've had them looked at. So do you ever see in the future this being a platform and teaming up with a company like Amazon or something like that where you could go B2C with it? Absolutely. I believe, again, that the value prop to the service provider is substantial. Again, I honestly believe in many cases we can help double profitability. That's a bold statement.

I know that. I believe we can back it. Having said that, we're targeting a group who hasn't had innovation targeted to them ever. And so there's a lot of skeptics. There's a lot of people who aren't necessarily up on technology and who look at this as a bit foreign. That's a little bit different than homeowners, who may be a lot more technically savvy. There's 8 to 9 million plus meths out there.

And all it does is make programming your thermostat easier. It saves you three minutes of programming a regular Honeywell thermostat. And yet people pay $250 for that. So there's definitely a direct-to-consumer market. And we believe that there may in the future be a blend of, hey, let me help sell a direct-to-consumer inner geography as lead generation and value creation for getting new partners in those areas.

At the end of the day, if we can connect the problem with the solution, we offer more value, right? Rather than just pointing out the problem. If, for example, I were to sell to consumers, the answers may come out or may be less effective for service providers if I'm showing the consumer everything that's wrong. Well, maybe they'll share that information with the service provider, or maybe they'll use it as a test. And when the service guy comes and says, well, I think this is the problem from my 30 minutes with the diagnostics, they can say, ah, you missed me six things. You must not be very good. But those six things could very well be intermittent issues that they would never be able to see.

And then we create an adversarial relationship when we didn't need to do that. So again, our focus is trying to really help the services companies and have them help the homeowners in return. Yeah, that makes sense. I got a question. This is not completely on topic because I'm a garage door guy. So a garage door opener does a lot more work if the door is not balanced. The garage door springs on a garage door will lift it. Is there any type of functionality that your product would be able to do as if the motors, you know, you could use a third horsepower all the way up to one horsepower, but the motor should not be really working hard. It should be barely working to just make the door move back and forth. Is there anything on there that would show that the springs are not doing their job and the door move back and forth. Is there anything on there that would show that the springs are not doing their job and

the door is not, it's working, the motor's working a lot harder than it should be? Absolutely. And that would be trivial. It would be trivial. It's the same thing with a furnace when you have a clogged filter. We're able to detect a clogged filter not because we have a sensor on the filter, but because the motor starts to labor in ways that it wouldn't if the filter was clear.

So the same thing with the garage door opener. The garage door opener would operate one way, and it would operate another if you were under duress and stress because the springs weren't working. We're actually working on a new design of our device that's going to be a wireless solution, completely wireless solution, battery-operated, batteries the last five to ten years, and you just clamp it on the wire, and it'll start monitoring that device.

And when we get to that level, the cost to add new devices to monitor will be substantially reduced, and then doing things like garage doors will make perfect sense. There's, you know, I have a home here in Pennsylvania now. I used to have a house in Texas. In Texas, we had ridge vents, right? Because the attics get very, very hot.

In Pennsylvania, instead of having a ridge vent, they have attic fans. They have fans on the ceiling that come bare out. For some reason, I noticed that it was running in the middle of the winter, which it shouldn't have been. And it was screeching at 2 o'clock in the morning waking up my kids, which it definitely shouldn't have been. And I said to myself,

this is just another kind of motor that I didn't know I had. I have a Freon system. And when you buy a house, good God, my child's safety is at stake here. If I don't have the Freon out of the house, it becomes a major negotiating issue that has to be there. And I guarantee you that nobody's ever looked at their radon system a second time. Right?

I mean, who goes downstairs to make sure that it's actually operating and running? And yet, LifeWare could monitor that for you and let you know if it's going and what's going on with it. And we're starting with the higher-pric higher priced assets the ones that cost people more money and that have a higher value but we do believe that over time we'll be able to monitor everything so at what point do you hit that efficiency I guess it's the scalability to where the price, I mean, look, it's a garage door. Obviously it's a low, you know, a few hundred bucks for one of those. So it wouldn't make sense in my industry until you hit efficiencies of scale where it's just, you could do it so cheap that it just makes sense. If you're, it just depends, are you charging by house or charging by each motor in the home? And there's, there's a lot of choices I think you're going to have to make here in the next year or two.

But, you know, I don't know if you really want to talk about this because I don't know if you've got a direct answer. But what is the monthly fee look like as far as for the business? I know it might be circumstantial. If it's something that you need to have a direct conversation with them, that's fine. Yeah, we negotiate a price with our partners who then sell it to their consumers and and we see two different models to be quite honest we see uh hey i don't really understand the technology so i'm going to try selling it but see if people will buy it and then we have groups that say oh my god i understand how this improves

my margin structure and i need to get it on every customer I have. And I can offer a very unique service in my region if I'm the only guy doing 24 by 7 monitoring of the critical equipment in your house. In one model, we say the monitoring furnace in an air conditioner has a retail price of $17.95, and you have to buy two light pulses to monitor both your furnace and your air conditioner. And there's an installation fee. The second model is, hey, let's lump this in with part of the maintenance, right? Make this a break-even, and then all of the repairs, you get all the efficiencies and

all the repairs, but then increases profitability and margin. So we see that those that adopt the technology in that latter state charge a much lower price to the consumer, and yet get a lot more value out of the product and actually make a lot more money with the product that way. So in that regard, the price of the consumer can vary. I'll tell you this. My goal is to make it so that the sensors are free, right? I want to get the price of the sensor to be so low that I can give them away to get some of the monitoring capabilities.

And I want the monitoring to be very cost-effective and efficient. I'm working with third parties and building solutions that could run just in your home, that could leverage cloud only when needed to try to reduce costs. But for, again, the critical components, the things that if they fail, you are out of luck. We believe that having 24-7 monitoring is key. So let me give you an analogy, home security. You can buy a home security system that sends off an alarm if somebody breaks into your house, but is in no way connected to help. That's a different kind of service than somebody's monitoring your house 24 hours a day when they see anything that's suspicious of contacting you. People buy both types of solutions.

And therefore, we as LifeWare want to be able to provide both kinds of solutions. We're focused on one today, but we fully plan to support both in the future. and sometimes even free because the power of users, the network effect is so much more powerful. It's kind of like Facebook. They spent, I don't know, seven years before they even started charging. And I guess there's two models there. What is your thoughts? Because I'm sure you know a ton about both models. What's your thought process as far as just getting it out there

and getting huge adoption rate? I'm talking in every facet of the appliances in the home versus going about it this way. Have you ever thought about both ways? And what is your thought process? Yeah, what I would tell you is as a startup, there's cost, right? Oh, yeah. You can only do what you can afford to do. With venture backing, I can afford to be a lot more aggressive to gain and grab market share. Venture wants to see that you have market share and are ready and poised for growth. That's really what they want to invest in, the growth, not in proving the market exists.

And so from that regard, it's a little bit of a chicken and an egg, right? Sure. You need to get both going. What I would tell you is that with scale, the price drops just by volume purchase. I can cut my manufacturing costs in half if I can produce in larger quantities. It's just the way that the world works. And I can pass that savings on to consumers by just offering the technology at cost to gain share, to your point. And that's really what we're trying to do right now. We sell the devices at what we call costs.

It's actually below cost. I lose money on every IoT component I sell, and I try to make it up a little bit in the service, but it's mostly right now just about trying to grab market share. You try to get people to see the value. And as they do, then you get into a virtual cycle of people selling more and people buying more. And that's what we're going after.

Do you have any direct competition yet? Or are you kind of the only person right now, only company doing this? So some of the higher end OEM units that we bought a brand new unit, comes with some monitoring capabilities. And we see 145 million homes in North America as target, and they're not brand new. In fact, people want to get as much life expectancy out of these units as they can. If you can get 10 years out of a $5,000 asset, it's $500 a year.

If you can get 20 years out of that same asset it only really costs you 250 a year that's the price in half so the longer homeowners can keep this equipment running effectively because you might properly maintain it the more value they get right so so we're really trying to focus in on on helping them get that value yeah i think you could lose a lot of money in Arizona, especially the air conditioning. There's an air conditioning truck. I could walk outside and find 10 of them right now.

If you're not running efficiently, you know, your bill, it's not uncommon for a $400 bill in Arizona with a 510 unit running most of the time in the middle of the summer. So if it's not running efficiently, that could be a $650 bill. And I think that's a great point.

So let me ask you this. Yeah. Go ahead. If I could just jump in. Yeah. There's two things that we're trying to do, though, that really help there, and to your point. One is we have one of the few devices that truly quantifies what the value of repair is. And so we're working with the local utility companies

to try to get an Energy Star rating for our device so that they can offer rebates. Because we help save electricity, we help save gas to get the same exact benefit of a warm house, a cool house, at the same exact temperature, and yet reduce their consumption in half through proper maintenance and operation. The second thing that we're trying to do

is we're trying to work with the insurance companies. We're trying to say to the insurance companies, hey, if I am monitoring Tommy's furnace 24 hours a day, seven days a week, the odds of him going skiing and coming home to burst pipes because his furnace was out and the pipes froze is zero. And therefore, his insurance policy should be reduced. If I'm monitoring his sub-pump, his hot water tank, and I can help eliminate the catastrophic water damage caused by failures because people don't know it's time to replace, then I can help reduce costs to the insurance company. And so we're working both angles to try to get reductions that will benefit the consumer

that will then benefit the service provider because it'll allow them to offer the service cheaper and cheaper because more and more players will be helping absorb the cost. Okay. So there's so many companies that are going to be listening to this and saying, will this work for me? What's your perfect avatar? What are the people you see adopting this fast right now? Yeah, so we're looking for services companies that are not afraid of technology. It takes 15 minutes to install our IoT device, and then it takes the consumer about five. The consumer has to enable

or allow that device to piggyback off of their home network and has to install an application on their phone so that we can communicate with them when we see problems. So that 20 minutes of invested time allows us to monitor the units 24 hours a day, seven days a week. What I would tell you is as we start to show the information to our service providers, they're taken aback. They're taken aback because we're showing them information

that they're infinitely familiar with in ways they've never seen it before. Nobody in the services industry has ever seen what does a run look like on a furnace 24 hours a day, seven days a week? How many times is it running? How much current is it going by per second? What is it doing?

How much reactive power? What's real power? Nobody is looking at it from that regard until there's a learning curve. And so we're trying to really make this simple for them by showing them, hey, it's time to look. Hey, we've seen problems. Let us show you what normal looks like for this unit. Let us show you what it looks like now. And this is why we believe that this is what the component is that's failing. Right. And then they can go out and they can service that unit. And when they verify that, yes, indeed, what we said was right, they become raving fans. And so what we're looking for is people who are willing to take that risk to become raving fans. Because when you are the only guy in town offering this kind of service, you know, you have the ability to really grow your business i mean think about it you're driving in

the office and it's you know arizona it's 120 degrees out and your mother-in-law is coming to visit and you get a phone call while you're driving from your hvac guy and says hey your your air conditioning just failed i'm on my way with a part. Can I meet you there before five o'clock? So you don't pay double time. And you're saying, oh my God, it's Friday. I got company. I wonder what I would have done. I would have been living in a hothouse.

It's incredible. I do think there's, this absolutely makes sense to me. I think there's an opportunity for case studies too, because I got a lot of companies that do energy audits that listen to the podcast. And I like to see the energy efficiency of insulating my roof line and some other things of that nature on how that could save. Because I'd like to say after three and a half years or after six years, this pays for

itself. And not only that, but those are huge opportunities, I think. And your technology will help to prove that point correct oh absolutely so so we're able to actually buy square footage understand on people what temperature you're trying to maintain how much energy you can expending to maintain that temperature so we have patents on analytics that we call nearest neighbor what they do is they look for somebody in your geography that would correlate to you in size and in activity. And you tend to use your furnace and your air conditioner at the same temperature, and therefore they run about the same amount per day, and you have the same climate, the same temperature. And then, you know, A, if all of a sudden one of them starts to behave incorrectly, right, it would comparatively speaking really stand out. But two, if you both have

the same square footage house and we can show you one person that's saying, hey, look at this guy over here that half the energy that you have. It's not your furnace. Your furnace is fine. It's the rest of your home. So unless you're running your furnace with the windows open, this guy, by doing slightly better

inflation, is getting this kind of money over you and therefore gives credibility to the energy audit that says, hey, this is the savings you're really going to see because we can quantify it. Right. That makes, I just, I love the concept. And I, you know, I know it's probably too expensive for a garage door company, but I'd like to be definitely involved in it when you get the price point. I mean, like you said, it's a $300 unit. I like to know because on a garage door, the torsion system, the springs, rollers, cables, bearings, they work together, kind of like the brakes on your car with the calipers, the rotors and the brakes. And if I could tell that the unit's working too hard, I think it's incredible.

And that would be a game changer. And especially if you got one of the opener manufacturers to just throw that on. I mean, it becomes a great lead. Like I said, I'm all about lead generation. So if you could absolutely prove to the client, look, your unit's working double as hard as it was working two months ago. There's something going on. And it could be just a tune-up. It could be that your rollers are not rolling properly. It could be something came out of place.

The rail might need to be just adjusted. But I like the concept. So if I'm someone out there, and it might be different than an air conditioning company, there's a lot of companies out there that you'd be shocked in the home service niche that they might specialize in multi tens of million dollar houses. And there's other stuff that they could use this for. But if I'm someone out there, how do I find out more about this? Who do I get ahold of? What's the next steps?

Oh, excellent. Yeah. So our website is lifewear.com. L-I-F-E-W-H-E-R-E.com. And our phone number is 855-L-F-W-H-E-R-E. And I'd like to kind of share a funny story with you on the whole naming part was, you know, we, we sat around trying to think of share a funny story with you on the whole naming part. We sat around trying to think of what we could call this company. And we were a spinoff from another company. And we had the VP of technology, the VP of marketing, and the CEO.

And when we came up with the term LifeWare, we all looked at each other and said, yeah, that resonates with me. And as the technology guy, I'm thinking LifeWare, in software, W-A-R-E. The CEO of the company is thinking the thing, where are we? W-A-R. And the marketing woman is thinking, you know, it's like wherever you are, we're going to contact you, W-A-R-E. And so the marketing woman pulled the URL. So we became LifeWare, W-A-R-E. I like the name. So if somebody wants to get a hold of you and just ask directions, obviously you're a busy guy.

I think most people out there know that. Anytime you're doing a startup and you're a CEO, it's a busy thing. But if they wanted to get a hold of you, they heard you on the podcast, they got some questions for you. What's the best way to reach out to you directly? Yeah, I mean, they can send me an email at brian at lifeway.com, B-R-I-A-N, lifeway.com, or the 18, I'm sorry, 855-L-F-W-H-E-R-E, extension 700. Just give me a call.

Awesome. And then one thing I'd like to end on, well, there's a couple of quick things. Is there any resources or books or something that you'd like to tell the listeners out there to listen to that meant a lot to you? It doesn't have to be business related. It doesn't have to be about efficiency or something that you really wanted to share with them. Oh, that's a surprise. Yeah, we did a really good article, I think, where we tried to capture a lot of the value of what we do and offer with Hubbing Post. And I would recommend folks read that. I mean, to me, there's a business efficiency that couldn't exist before the technology enabled it. And now this technology is something that's new.

It will be a little bit uncertain for most people. And so taking the time to understand this technology is really going to be in their best interest. I'll leave you with one anecdote that I often share. There was a startup in Europe that raised a lot of money in an extremely successful company called New Hail. And their software was just, you hit a button and a cab would come through. And all it did was it broadcast all the cab drivers that there's somebody looking for a fare at this address.

But the cab drivers had to adopt some technology. Well, they raised $175 million and they went to New York City. And within 12 months, they were out of business. They were out of business because cab drivers said, I get fares all the time. I don't need to pay you for them. I don't want to use your technology. But at the same time, Uber came along. And what Uber said was, hey, I'm going to democratize this and anybody can be a driver. And what happened to the cabbies in New York City? The medallions needed to be a cab driver in New York City went from values at $1.5 million down

to $300,000 in that same 12-month period of time. It's something that they could have avoided if they adopted the technology, but that technology enabled new players to come into their market and change the game. I believe in the services market today that that is going to happen. You are going to see national service providers. You are going to see networks of national organizations. You are going to see national service providers. You're going to see networks of national organizations. You're going to see lower cost to consumers, but higher profitability to businesses through efficiencies of operation and excellence in execution. The Walmart is coming into this

marketplace. The Amazons, the national retail chains are all going to start playing in the home services space and somebody is really going to knock it out of the park I believe that if the services companies really stay ahead of this it can be them and otherwise it's going to be dictated to them oh yeah well it's survival of the fittest

it's Darwinism at the best and I'll tell you this with the Google Guarantee program where Google's actually went into HVAC, plumbing, electrical, garage door locksmiths right now, and they're doing advanced verifications, they're doing background checks, they're looking at real reviews from real customers that they authenticate, and it's going to change the game. Because if you're not giving good service, you're not going to be able to get found on Google.

If you're not delivering good timeliness, quality products, and Google is adopting everything, Amazon's adopting everything, and they're changing the game and they're really making this industry. It's better for the consumer, but the people that actually go through the process, the businesses that say, I got to create raving fans. I got to really push to be the best. That means wear booties when I walk into a house. That means drug tests, make sure my guys look professional, wrap trucks, business cards, iPads, better CRMs. You know, these are the guys that are going to make it. And that's why I'm listening to you going, I want this stuff for garage doors. Now I can tell you,

you go to the garage door International Door Association Expo. You would probably talk to three people. I mean, they might talk to you, but they go, I just there's no point. But us, we jump on something like that when it becomes affordable because it is a differentiator and it's a game changer. And it's adopting new things that most people have their eyes closed to. Just like people said, oh, the Internet, whatever. I'm on the yellow pages. Just like Blockbuster got killed.

You look at these companies, you look at bookstores, you look at there's so many of them that just don't see this right in front of them. And their businesses, they might be worth some good money today. They should probably think about selling if they're not going to adopt this technology is what I would recommend. At the same point, Brian, they also said there would not be checkbooks or cash in the year 2000. So I know technology does not get adopted as quick as some people think. And that's a whole other conversation. But I will do this.

I'd like you to send me that Huffington Post article and we'll put it on the same page of the podcast so people could read that. Excellent. Appreciate it. And Brian, listen, I really appreciate you taking a Sunday out of your day to do this with us and I hope we can send you a lot of business because I really do believe this is a game changer and like I said, thank you very, very much. You're welcome and thank you for the opportunity

to talk to your listeners. We really appreciate it. Alright, Brian. Well, listen, have a great day and we'll be in touch, okay? Yes. Thank you, Thomas. Thank you very much. Thanks. Bye-bye. This was the Home Service Expert podcast. Now listen up. Do you want to dominate your market, triple the profit you make without working those long 12 hour days, seven days a week? If the answer is yes, my team and I are opening up some new time slots to help you

solve your biggest business challenge. Just go to homeserviceexpert.com forward slash discovery and book a free 30-minute call with our team today. I will repeat that, homeserviceexpert.com forward slash discovery and book your free call today.