Erik: Liam, thanks for joining us on the podcast today.
Liam: Yeah, thank you. I'm excited to be here and chat.
Erik: Absolutely. I finally have somebody in my time zone. I understand you're in Beijing, and then not going to be here too much longer. You've been actually in China, I think, for like 10 years or something. I guess, back and forth. But what first brought you to China?
Liam: Definitely a lot of back and forth over the years. I first came — this is going to be a complete tangent. I first came to China when I was 16, after watching a documentary on the National Geographic channel about the Shaolin Temple. I decided that I wanted to spend my time practicing martial arts for about 12 hours a day. I set off on this crazy adventure. I ended up in Beijing and a bunch of other places practicing Kung Fu and martial arts very, very intensely. That was what first brought me here, and then I ended up coming back a lot. I work on a lot of different projects, and ultimately setting up Kaiterra which just kept me also back and forth between China and the rest of the world over the past few years.
Erik: Okay. Well, you're using your teenage years much better than me. I think I was chasing girls and getting in trouble, more or less. That's a good use of your teens. So, you set up Kaiterra back in 2014, which I think in itself is interesting. That seems like it's certainly a bit before this topic became the topic that's top of mind for everybody that it is today. But your background before that was interesting. You were doing direction of video, TV series. So, you have this somewhat varied background. Then in 2014, you set up a company. I'm always interested in talking to entrepreneurs of what was it that led you to say I'm going to tie myself to this high risk, stressful venture? What were the decision factors for you? What brought this to mind?
Liam: Yeah, sure. I mean, you said that you spent your teenage years getting in trouble. I was doing a whole lot of that as well. Generally, my type and personality is very much rebellious and not following the rules. When I see a problem, I'm just really excited to try and tackle it. So, I get a lot of energy from tackling really big challenges that are exciting and there isn't a clear answer on how to fix this problem or how to succeed.
Over the years, before starting Kaiterra, I actually worked on several different projects. In high school, I had a small company. We were basically like an online travel platform. I was doing that for several years. Then I got really interested in documentary filmmaking. I spent several years making documentaries, which is something I found really, really interesting and exciting. It's finding issues in areas of the world that are not talked about enough, and sharing the stories there so that people can broaden their experiences and understand more about the world. That was really, really fascinating and a great way to spend a few years.
Then Kaiterra started in 2014. At the time, I was in Beijing. My now wife, then fiance, moved to Beijing. Beijing is known for its extremely poor air quality or high levels of air pollution. My wife, when she was young, she has had asthma. But like many people who has their childhood asthma, you grew up to grow out of it. It goes away. She landed in Beijing, and immediately felt the impact of air pollution. Her asthma was coming back. So, that is the trigger that prompted me to start looking into what is in the air that we're breathing, what can we do about it. Really, that was the long journey that I ended up going all over the world. Realizing that (IAQ) indoor air quality is, or just air quality in general is not a problem of large-polluted cities, which is historically what we're thinking about.
Really, something has changed over the past few years as we've come to realize that IAQ is actually a problem. In basically every corner of the planet, the air is really not optimized. It has a massive impact on how we feel and our health, and our performance, and our happiness, and all these things. So, that was really the start of the journey. But we've gone a long way. Since then, similar motivations but different geographies, different flavors of the same problem, et cetera.
Erik: Okay. This makes a lot of sense now. I'm recalling. I think I blotted those memories out from mine. I remember those years. I think it was like my first five years in China. I never saw a proper blue sky, right? You just never saw the blue that I saw when I was growing up in Portland, Oregon. You could basically tell the weather by how many buildings can I see on the horizon. Okay. That building is invisible. Okay. We must have a pollution index of 300. Now it's 400. It was really brutal. It's improved a lot. But like you said, this is an issue. If you just start sitting in an office and you're having a meeting, and you close the door with three people in there for an hour, by the end of it, everybody's a bit tired. Because you're basically starting to breathe each other's C02.
Can you outline for us, what is the basic problem that we're solving here? The one way that I'm thinking about this is — I don't know if this is a way to think about your business — before COVID, during COVID, and after COVID. Because COVID has its own unique set of challenges, which I'm sure you're very active in. But then, there's these other issues which are not related to viral load. They're just related to the fact that buildings have pollution and individuals' output gases. We have to deal with that in the environment.
Liam: Yeah, it's a really complex topic that, really, there's different flavors of the same problem. When we think about air quality — this one's really interesting — it means completely different things to different people depending on what they had experienced. That's often tied to the local environment that they live in.
China and India, for example, have extremely high levels of particulate matter in the air outdoors, such as what we traditionally think of as outdoor air pollution or smog. That has one set of impact on our health and our well-being and certainly our happiness. When you stare out the window and the sky is gray, it doesn't really inspire you to go have a great day. But there's also a completely different set of problems that also fall under the bucket of air quality, which is exactly what you were talking about.
There are several people in a conference room that's not well ventilated. After a few minutes, let alone multiple hours, you want to pull your hair out or jump out the window because you just feel incredibly uncomfortable. The feeling that we can easily pinpoint is, "Oh, I feel tired." But there's actually so much more going on behind that. A physiological response is taking place in your body because of increased levels of C02, because of increased levels of volatile organic compounds that are being given off by the other people in the room. It's a very natural animal instinct. You have too many people in a small crowded space all giving off odors, and it creates stress. It causes a sense of strong unease, and you feel uncomfortable. We're not necessarily able to pinpoint those exact feelings. But we've all been in those situations where we just feel really uncomfortable in a space. Sometimes you start to feel claustrophobic. That's an interesting way to look at it, right? The room hasn't gotten smaller. But why after sitting in this room for two hours do I feel claustrophobic? Maybe it's all the other things that are taking place in that room that you can't see. So, again, air quality is a really broad topic. It means a lot of different things. We are focused on the overall indoor environment. So, it's really the total of all of these different factors that can impact our quality.
As you're talking about pre-COVID, during COVID, post COVID, there has also been a big shift over the years. A few years ago, particulate matter — this smog in Beijing, New Delhi, places like that — was a big issue. Over recent years, we've heard about wildfires. So, the whole west coast of North America has had a lot of issues with wildfires. A few days ago, Vancouver — where I'm headed in a few days — was the most polluted city in the world. Australia, with the crazy bushfires, there was serious air quality issues both indoors and outdoors there. Then, of course, during COVID, everyone got focused on we're all breathing C02 which is essentially high levels of C02, which is I'm breathing the air that you exhaled a few minutes ago, which obviously is not great if you're looking at reducing the risk of virus transmission.
So, there has been a lot of different angles on the same problem. But I think what's really encouraging is that, over the past few years, the overall awareness towards indoor air quality has absolutely skyrocketed driven by all of these different problems. So, we're now at the point where buildings are starting to take this more seriously, are monitoring these different parameters on a more constant basis, and are making large changes to their buildings to actually improve the air quality.
Erik: Okay. It's interesting thinking about the path from awareness to a solution. Because you could say you use sensors to monitor the situation, and that gives you some visibility. Then what do you do about it? I guess, based on what the problem is, there could be behavior solutions like opening the door. But opening a window is not going to work if the problem is that there's a wildfire outdoors, and then you have a technical issue. So, how do you think about — as a technology provider, how do you go beyond providing sensors to monitor the solution, to looking at we're providing to monitor the problem to we're providing the solution to the problem, or we're helping you to identify the solution to the problem?
Liam: Yeah, it's a great question. What is so fundamentally tricky about this is that sometimes people think of this almost like temperature, where if the room is too hot — it's very simple. A is I feel it. I know, as a human being. Because humans have great sensors for temperature and humidity. I know that I'm uncomfortable. I feel too hot. There's a sensor that can map that feeling very well. Then the process that needs to take place in that control loop is that the temperature needs to be reduced. So, the air conditioning comes on or the HVAC set point is set to be lower, so that there's cooler air coming into the space. Ultimately, you'll feel better. The temperature sensor registers it. It's a very simple problem and solution.
The challenge with looking at air quality more holistically is that these parameters sometimes are hard to measure. The impact is also not necessarily felt immediately in all cases. Particulate matter is a great example. You could be sitting in a very, very polluted room and not feel it immediately. But if you sit in there for 15 years of your career, you're going to have serious health impact. There is going to be very significant negative health impacts. Some of these are short term. Some of these are long term. The other complexity here is that all of these parameters interact with each other in different ways. So, to your example just now, you can't say that if the air quality is bad, or even if you say particulate matter is bad, open the window or close the window. Well, it's not that simple.
If you're in New Delhi, most of the time, you probably don't want to open the window because it's going to get worse. Again, if there's a wildfire and you're in Seattle, you probably also don't want to open the window. However, if there is not a wildfire burning at that minute, in most cases, you do want to open the window if you're in Seattle. Because the outdoor particulate matter levels are probably going to be lower than the indoors. Because indoors, you are going to have smoke from potentially combustion, maybe there's a kitchen in the building, from people that are vacuuming carpets and picking up dust. So, in that situation, you probably do want to open the windows. That's where the true problem lies. It's just to say, okay, how do I optimize for overall air quality, or how do I optimize for the things that matter to me and that matter to the people in the space, while also having a solution that's actually implementable? That's really where the focus of most of our work is. It's about understanding, really mapping out in a building what is going on in this building. What are the potential, for example, sources of combustion? What are the sources of chemicals that are being off gassed in the building? How efficient are the filters that are pulling air into the building from the outdoors? How much of that particulate matter do they filter out?
When you have a model or a map of how this building works, and how these different parameters interact in this specific space, that's where you can start to actually make positive changes. Say, okay, in this situation, we should increase ventilation because it will have a net positive effect. Whereas if the temperature is three degrees higher outside, we probably don't want to do that. So, that's where we can start to shift. Instead of just throwing a bunch of data at somebody and saying, have fun with this, try to work out what's going on with your air quality to give you something that is a bit more actionable and prescriptive.
Erik: Okay. Great. So, before we get into the technology, I'd love to learn more about who the users are here. Let's maybe first cover this at a high level. Are you focused on commercial buildings? Are you addressing residential? Are you going into hospitals and schools and the special institutions? What is the scope of your business from that perspective?
Liam: I guess, to preface this, I think it's probably important to paint a picture. There are really two fundamental issues that are tied to indoor air quality. There are two different ways or two different things that people really care a lot about that are impacted by indoor air quality. One of them is the health and well-being of occupants. That one is pretty obvious. We're just talking a lot about how if the temperature isn't right, if the humidity levels are wrong, if CO2 is high, if there's particulate matter, you don't feel good. You're not productive, and you don't feel like you're in a good space.
The other thing that people are typically very concerned about — which is tied to indoor air quality but is often overlooked — is really about energy usage and the carbon footprint. Just to share some statistics that some of the listeners may be familiar with or maybe not. About 28% of all global greenhouse gas emissions come from the operation of buildings. That's a crazy number. It's almost a third. Basically, the world's carbon footprint is coming from the operation of buildings. That includes many different things: the pumping air around the building, the HVAC system, the lights, the equipment within the building, et cetera.
Typically, the single biggest consumer of energy inside the building is the HVAC system, the heating ventilation air conditioning system. That is a crazy amount of the world's energy being used to heat and cool, and move air around a space. It's also being run on really, quite often archaic systems with very, very simple control logic. Turned on at this hour or turned off at that hour. That means that there is a ton of waste in these systems. There's a lot of room for improvement and opportunity — the opportunity to really do better and reduce carbon footprint. Fundamentally, you have the opportunity here in one swoop by tackling your indoor air quality, to address these two challenges — creating a healthier indoor space, and also creating a lower carbon space.
So, I'm saying all this to paint a picture about who the users are and what they care about. Ultimately, our customers are typically Fortune 500s. They are companies that have really strong goals on these two axes. So, they might be going after sustainable and healthy buildings certifications such as WELL, or LEAD, or RESET. They want to make a real difference in their space. These are typically your grade A offices, where you walk into the building and you're overwhelmed by how nice the space feels. They realize that this is important. It's essentially part of their brand promise. You'll come work here because you're going to have a wonderful office. It's going to be a space that makes you productive, that makes you happy. It's going to be a lot nicer than your home office. That's really a selling point for these companies. It's a tool that they can use to bring people back into the office.
So, ultimately, the end customer for us is, typically, let's call it Fortune 1000s. There are a lot of different people and parties involved in that ecosystem, from architects, to the engineering firms that are involved with the design, to the contractors. We try to work with all these different players in different ways to satisfy all their needs. But I'm jumping into the deep end there. So, I'll pause and see if I was answering your question.
Erik: Yeah, I think it does. That helps. Because I'm sitting here in Shanghai, and I think it's a great B plus office. It's a pretty nice office, but it's not like a finance building or something. You can tell the difference, right? I think one of the challenges in an office like the one that I have is that you've got a building owner, who just doesn't really care, and then you've got an operator that does a pretty good job but within limits. They're not going to try to go to the extremes. They're just going to do a good job. Then you have the tenants, and we're the ones that really care, I suppose. But we're also renting the building. I rent my office for three years. I might go switch to another office. Am I going to invest in CapEx? Maybe. Maybe not. So, you have that more complex situation between the stakeholders.
I guess, in your situation, maybe the operators are motivated to go above and beyond. Then, also, the tenants have probably a lot more leverage than me. They're probably locking in contracts for longer periods. Because if they're going to put 500 people somewhere, they don't want to go and move that team frequently. I guess, one point would just be the price point. But the complexity of the stakeholder community, is that an impact that drives where you are able to operate or where you choose to operate in terms of buildings today?
Liam: Yeah, I think you were spot on with all of those observations. The companies for whom this will make the most sense are the companies where they have the — for example, it's your staff in your building. You're really focused on increasing happiness, increasing well-being. Potentially, you're also concerned about the energy consumption within that space. Either you are the operator of the building. So, we work with a lot of Silicon Valley companies that have their own campuses. I mean, that's really the perfect scenario. It's where you have the ability to control the building management system within the building and its sole tenant within that building or within that campus. So, everything's under your control. There's a team that can work on using our platform to actually make these optimizations, implement them. That's really your ideal scenario.
I think what is becoming very interesting is that in the scenario where you described, in your office building, there is increased demand from, really, all parties. It is a very complex juggling act. Because the facility management company or the operator wants to be able to provide a good space for the tenants. The tenants are asking for it. At the same time, there are many aspects that are not necessarily within the control of all those stakeholders. Fundamentally, to increase or to improve air quality, you'll often need to interact with the building management system or with the air handling units to change the amount of air that's coming into the building. But that's not necessarily something that everyone has control over or the tenant has any say over. So, you might be able to install air quality monitors. But when you fundamentally find out that you need to increase levels of ventilation, you might not be able to do anything about it.
So, that's historically been a bit of a challenge. But I think we are seeing a lot of change in the direction of tenants before signing the lease, saying this is what you need to provide to the operator. Then the operator potentially agreeing to that and actually installing their own air quality monitors, their own set systems to be able to prove, "Look, this is the error that I am delivering to you." I'm, for example, providing 500 PPM C02 levels into your conference room. So, I'm doing my job. Now, if your conference room for 4 people has 12 people stuffed into it, that's a little bit outside of my control. That's on the tenant. So, there's a balance to be struck here. I think you're right that it is one of the most challenging aspects, especially in the more complex building environments where there's so many different parties involved together, to work out who's responsible for what, and then work together to be able to move the needle.
Erik: Got you. Great. It makes sense. Well, let's get into the tech stack then. So, we've got sensors. We've got analytics. I guess, we have — actually, I was working with Mann+Hummel and their clear air product, helping them to assess the China market. I think it was 18 months ago or so. Obviously, Kaiterra is a partner of theirs. So, this was my first introduction to Kaiterra. But you have parties that you're integrating with who are providing other technologies into a building. Can you give us an overview of what does the tech stack look like? Then where is Kaiterra playing in that tech stack? Where are you partnering with companies?
Liam: So, we cover everything, basically, from the field, the hardware devices that are in the field. We design and build the air quality monitors that are sitting in an office on the wall. We provide the data collection and, essentially, the application layer that sits on top of that to help make sense of that data. I think that's really the important point here. It's about making sense of the data. Because nobody wants more CSV files that they don't know how to interpret. As I was saying earlier, the real challenge with this is that it's not as simple as saying, oh, C02 levels are high. Let's increase ventilation. Because you might bring in a whole host of other problems by doing that. Particulate matter, being one. Ozone being another. That's a really interesting challenge that we've seen. How do you balance things like C02 and ozone levels when ozone is high outside? These are fundamentally fixed by doing the opposite thing.
Really, that's the space that we are operating in. We try to be as open and accessible and connectible as possible. So, we think it's really important that the customers are able to access their raw data, and push that raw data into whatever platform they might be using, if they're using another platform. There's an issue with — I'm running a building. I have to use 25 different pieces of software. So, if clients are able to pull our data and pull it all into one piece of software, we're very happy for them to do that. We also think that it is really important to not forget that buildings are still operating on, basically, entirely equipment and protocols that have been around for 30, 40 years. I know that there are a lot of IoT solutions that are very IoT first, and it's all about the cloud. But at the end of the day, if you want to make — at least within the realm of air quality, if you want to make a difference, you need to be talking to the other software and the other equipment within the building. That means going with protocols like BACnet or Modbus, at least supporting them being able to interact with them. Because otherwise, really, all that you're able to do is tell the customer, "Hey, here's a problem. Check it out on my proprietary dashboard."
In all the products that we design, we make sure that they can simultaneously talk to the cloud, so that you can analyze the data, you can get all those great reporting features. You can see what the patterns are, the long-term trends, things that a building management system wouldn't traditionally be able to do. Then simultaneously connect within the building completely locally, potentially offline, if you want, to the building management system, to the other equipment in there so that you can also do things like demanding control ventilation in more traditional systems. So, it's important to be able to bridge that gap between the local and the cloud-enabled data analysis world.
I guess, to answer the other part of the question that you had for some of the other companies that we might or the other types of products or data streams that we might operate with or interact with. There's a lot of interesting things that can be understood about air quality if you have other sources of data. The most obvious ones are things like weather data. Knowing what the temperature is outdoors is going to make a huge difference in what you decide to do within the building. Should you pull in more air from outside? Should you recirculate more air, and keep it well air-conditioned? But there are other things that are also equally important.
So, occupancy data is very interesting. Even door is being opened or closed is fascinating. I can give you a quick example on that one. Those are really the patterns that start to emerge once you have all the data. So, we've seen multiple instances in different parts of the world where there are patterns that emerge that don't necessarily make sense or look very strange at first. So, in one example, we saw that there was an office and during their working hours, the levels of — this is both for particulates and for VOCs. But in this example, it was the levels of VOCs (volatile organic compounds) which are basically chemicals. It was extremely high in the morning. Then it slowly decreased throughout the day, until it eventually got to quite a low level. That is counterintuitive. Because what you usually expect is that, as there are more people and there's more activity during the day, the VOC levels would increase. But in this place, they always started really high at at night. What was identified was that it was actually — this is an office that was connected to some manufacturing facility. They're both very well-ventilated, so there shouldn't have been a problem. But during the nighttime, there was the cleaning staff. When they were cleaning, they would leave the door open between the connecting the offices to the manufacturing facility. So, it has actually over the night a buildup of VOCs. When people came in in the morning, they'd open the door, because it had been closed maybe half an hour ago. For some reason, the entire space was already polluted. It took multiple hours throughout the day for it to drop down.
We've seen the same thing with particulate matter levels being high in the morning because of a kitchen that was doing cooking in the morning. The ventilation system wasn't yet running, but there was cooking taking place. That actually caused particles to spread throughout the building. So, when people came in, the air was polluted right from minute one. In both of these instances, there are really quick and easy fixes that you can make. If you change what time the BMS turns on the ventilation system, or if you just close the door at night when you're cleaning, then both of these problems would go away. Those are, I think, some really interesting examples of what you can see when you have more sources of data, occupancy doors, and pattern recognition.
Erik: Very interesting. Both of those cases are cases that are, on the one hand, simple, but on the other hand, they require that particular insight. I mean, these companies were operating for years without realizing this. I can imagine. Maybe on the predictive side, also, you probably have situations where during particular times, you know that, okay, right now the air quality is good, but within an hour, there's going to be a low-pressure zone or just the natural flow of traffic. So, we should get as much air into the building right now, and then we should close off for rush hour or whatever that might be. But these things are somewhat local, right? So, they're local to the building. They're local to that operating environment, which can make prescriptive or predictive analytics challenging, right? Where are we in the current state of analytics so that you can extract insights without a really expensive training process? Maybe you still need to involve experts who are analyzing data. What is the process to extract the insights today?
Liam: It's always a work in progress. This is something that we are always iterating on. We really pride ourselves in being absolute experts when it comes to indoor air quality and the indoor environment. Most of our people that are working on the sales team or customer success team, they come from a very technical background. So, you got a couple people with degrees in chemistry or physics, which is not necessarily typical for your average account executive. But we believe that it's really important. Because fundamentally, we're trying to solve problems for customers. They are complex problems. You have to be able to understand what's happening within the building.
Every building is different. Like you said, it's localized. Every building is built differently. The operations are different. They're in physical, geographically different places, places. What worked in New Delhi is definitely not going to work in Seattle, and the same thing in Europe. In a lot of buildings, there's no air conditioning, or there's no HVAC system at all. So, that fundamentally changes how you do things. It does make it very hard to come up with, let's say, one model that you can just throw on to every building, and it'll give you the right answers.
So, where we're at right now and the journey that we've been going through is really taking that deep insight that we have. Initially, having quite a high level of involvement from our team in terms of interpreting the data, helping you make sense of it, understand it. Then as we go, slowly building out internal tools to help ourselves be able to decipher the data and identify the patterns in the data. Then, ultimately, productizing those so that our customers can do that themselves without actually relying on that knowledge and that expertise that we have. We're really building a lot of that into the software. It's a really interesting and fun process.
We actually have a — in Kaiterra, we've got an internal Kaiterra University, which is really deep training on everything environmental. It gets very, very technical. Basically, everybody in the company goes through that. If you're a software engineer working on this stuff, you've probably gone through Kaiterra University. You understand the physics of what's going on within the ventilation system, for example, that allows people to build a much better product. Ultimately, that's going to help solve problems for the customers.
One interesting example, as well, that I can share tied to that. We saw recently in a building in the Bay Area. I guess, without getting into too many details, it's a big, big tech company. But fundamentally, what we were able to see — this is done through a combination of the software tools that we've built and a little bit of human interaction from our customer success manager. It's to be able to see that there was essentially throughout the weekends and certain days where the offices were not actually occupied, the ventilation system was not being tuned appropriately for a weekend. So, it was still off and running at, basically, max capacity when there was absolutely nobody in the building. It seems like it's such a simple thing. Of course, somebody would have checked this.
But the reality is that buildings are complex environments with multiple stakeholders, multiple people involved. Some really dumb things can often get overlooked. We're talking about an amazing building here. It's just recently renovated, one of the top companies in the world. Just really a great property. Really, with teams focused on employee experience, with teams focused on workplace experience. Still, there were just some really basic mistakes taking place. But you can't see that until you have the analytics that helps you find the pattern, because there's just too much data.
I remember being in a meeting with multiple stakeholders. There was the person who was in charge of the building operations and the BMS, and there were people who are in charge of sustainability and workplace experience. We're telling them like, "Guys, it looks like you're wasting potentially up to 30% of your energy by doing this." So, there's a huge potential for optimization here in reducing your carbon footprint while having zero impact on employees. They're just like, "Well, no, that can't be right. That doesn't sound right. John, or whoever was running the BMS, can you double check this?" He looks, and he's like, "Oh, yeah, it was running on Saturday." Everyone's like, "Well, why is that happening?" I don't know. But it is. There's a lot of examples like that out there.
Erik: Yeah, luxury problems for profitable companies, right? Nobody ever looked at the energy bill and said, "Hey, can we get this down?"
Liam: Yeah, just nobody thought to look, or two people didn't talk to each other.
Erik: I'm curious about the middle of the market. Because it makes complete sense for you to focus on Fortune 1000, and that can probably keep you busy for a good period of time. But then you have this vast middle of the market where I'm sitting today. What do you see in the potential? First of all, is this in your roadmap going forward? Do you see tech stacks that can also help in the more messy environments where the tenant feels a pain, but might not be able to influence the building owner, or the building operator might not be able to convince the owner to invest in the CapEx that's required for this type of system? Because I think you'll see this quite often, where the technology is first adopted by the upper tier of companies who are willing to take the first steps. But then, as it matures, you could probably start to migrate some of the tech stack to more mass market. Is that part of your roadmap? Then what would be a timeline for when this type of solution would be coming to me, let's say?
Liam: Yeah, absolutely. I definitely, I guess, want to emphasize that our core customers are the ones that probably are really driving this forward in the marketplace, are typically your Fortune 1000s. But it's definitely a problem that we're all dealing with, and that actually we can still get a huge amount of benefit out of immediately.
So, I'm just taking one of our own offices, for example. Also, not in a Google or Microsoft type of building or office setting. It's much more humble than that. We still managed to make massive improvements on our own air quality by having access to this data, and by being able to identify some of those patterns. It can be as simple as actually knowing that certain rooms are too hot, and then turning the air conditioning down. If you don't have an HVAC system, then that's fine. You can still control the temperature with an air conditioning system. We've installed a lot of our own equipment to filter the air, to bring in air from outside to reduce C02 levels. These tools are all available and on the market. Everything that you need to improve your air quality is there. It's just quite often you don't know what to do. You don't know what the right settings are. Should I turn on the fresh air system an hour before people come to the office? Should I turn it on, turn it off after people leave? All these different things.
Again, the challenge is that humans are, in some ways, good sensors but, in other ways, very poor sensors. We know when it's way too hot. But if we're a little bit too hot, we just feel uncomfortable. We don't know why. But actually, if the data can tell you what the problem is, then you can just go turn the air conditioning unit down one degree, and you're good. So, we've had a lot of success in our own offices. We can see it with bi-weekly reports that we get. Over time, this is how the score has improved. Because we've systematically ticked off boxes one at a time. One of the reports that you'll get is, for example, say, the highest impact thing that we could do in our office is to increase humidity levels. Because it's too dry, and people feel uncomfortable. That's very straightforward. You can install a couple of humidifiers. Put in place a process to have somebody fill it up with water, make sure that the humidifiers are working. You can radically improve your indoor environment in just about any office space, any building type if you have the data and you have a system that can identify what the top areas for optimization aren't telling you what to do.
Erik: Okay. Great. As we're speaking, I'm thinking we probably have one of your sensors sitting around the office, actually Because we had one that we were — I think we were using this when we're doing demos for ECLAIR.
Liam: Oh, interesting.
Erik: I think we must still have it around somewhere. I should dust it off, and then see if we can start to start tracking some performance here.
Erik: Last question from my side. There might be some other things that you want to cover. I'm always really interested in business models and pricing models when you have this combination of hardware, which has a CapEx cost. Then you have analytics, which is more of a SAS or an OPEX situation. Then you potentially also have expertise that's required for setup and so forth. So, you have this complex solution. How does it look like for you? We don't need to get too much into the details of pricing. Just, what is your approach to bringing this to market?
Liam: We really think that we should charge where value is delivered. People should pay for when they get the value. Pricing should match the value creation. So, the way we look at it, what's the value that we bring to the customers? It's about fundamentally solving their problems and actually improving their environment. That is done through all of that analytics, through that software or platform. So, there's an initial cost for the hardware to just get the sensors on your walls, in your office. Then there's an ongoing cost for all of the software that turns that into something actionable, and gives you insights. There are a couple of different models there and pricing options, depending on what people are really focused on and what they care about. So, if we're able to deliver more value, then the price should reflect that. If based on your circumstances, there's less value being delivered, then the pricing, again, should match that. So, it's really a combination of hardware and subscription.
Erik: Got you. I like that approach. There's always this topic of taking that to the extreme and having pay if we hit a particular KPI. That's like, you've got perfect air, then you pay. Is that something that you view as possible, or is that like there's too many variables for that to be a realistic pricing model?
Liam: Yeah, that would be wonderful. I would love to say, "This is what your air is today. This is what your indoor environment is today. We think we can make it 20% better by giving you insight and telling you what to do. When we hit that, then that's when you pay." That would be great. There's a bit too much complexity. At least, we don't have the ability to deal with that complexity today. I could tell you what the problems are. But whether or not you're going to implement those things, it's out of my control. Because there are some things in there, be it as simple as close the door between the office and the factory at night. That's very simple. But if there's a lack of internal processes on the client's side, that might not get implemented. The air might not get improved or changed filters more regularly. It looks like someone's forgetting to change the filters in the air handling unit. That's something that we can potentially identify. Instead of you're supposed to change it three months ago, but in fact, nobody's been doing it. That's where a lot of the issues are coming from. These are all different things that we can identify. But it does require the participation of multiple stakeholders in order to actually make that ultimate change and bring about the improvements in air quality. So, I'd love to go there. A little bit tricky today.
Erik: Yeah, I think for a lot of situations and a lot of use cases, that's a hard one. Great. Well, Liam, I think we've covered a lot of territory. Anything that we didn't touch on, that's important for folks to know?
Liam: No, I think we've talked about a lot of stuff. I guess, I just love to reiterate that number, that 28% of all greenhouse gas emissions are coming from the operation of buildings, which is a number that having looked at it for a few years, I still find shocking to this day. By making a small change in our indoor environment, we can feel way more comfortable, way happier, and also be doing a whole lot of good for the planet, which often outweighs some of the changes that we think about. Think of, from a personal level, how can I live a more environmentally friendly life? If you actually do the math on it, quite often, the most environment-friendly thing that you can do is make your building slightly more efficient. Operate just a little bit better. It's going to have way bigger impact on the planet than many of the things that we often think of at an individual level.
Erik: Great. Well, that's a great call to action. Have a look at your electricity bill, and then contact Kaiterra. Liam, what's the best way for folks to get in touch with you or to get in touch with the team?
Liam: Yeah, our website is Kaiterra.com. Probably, finding myself or anybody on the team on LinkedIn and sending us message is a great way to reach out.
Erik: Awesome. Liam, thanks for the time today.
Liam: Yeah, thank you. I really enjoyed the conversation.