CleanTechies Podcast

How Logical Buildings Built the First Residential & C&I Energy Management Service w/ CEO, Jeff Hendler

August 02, 2023 Silas Mรคhner - ClimateTech & ESG Headhunter Season 1 Episode 115
CleanTechies Podcast
How Logical Buildings Built the First Residential & C&I Energy Management Service w/ CEO, Jeff Hendler
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Show Notes Transcript Chapter Markers

In this episode, Silas Mahner (@silasmahner) speaks w/ Jeff Hendler Co-Founder and CEO of Logical Buildings (@logicalbldgs) about his journey from Wall Street, to the Utility, to founding a Smart Building company.

We also cover how their Grid Rewards program works, how a company like this can be competitive, and what he sees as the next big challenge to solve.

Enjoy the Episode! ๐ŸŒŽ

๐Ÿ“บ ๐Ÿ‘€ Prefer to watch: subscribe on YouTube.

๐Ÿ“ซ Interested in written summaries and takeaways from the episode? Subscribe to the newsletter.

Want to be part of the community and engage further? Check out the Slack Channel. https://tinyurl.com/mwkn8zk5

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Topics:
**5:26 How he Founded Logical Buildings
**16:39 What Grid Services Are
**29:26 How to Win in the Market
**36:43 Partner Relationships
**43:24 Advice on Talent
**48:51 Biggest Upcoming Challenges

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Links:
**Jeff on LinkedIn: https://www.linkedin.com/in/jeff-hendler-568b4210
**Logical Buildings: https://logicalbuildings.com/
**Grid Rewards: https://www.gridrewards.com/
**Check out our Sponsor, NextWave Partners: https://www.next-wavepartners.com/
**Follow CleanTechies on LinkedIn: https://www.linkedin.com/company/clean-techies/
**HMU on Twitter: @silasmahner

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Other episodes you might enjoy:
**Most Recent Episode: Reflecting on H1 2023 CT Funding & Discussing Transferable Tax Credits Along with the Opportunities they Present (Somil & Silas)
**Similar Topic: CleanTechies, the Podcast #15 - Brian Turner (Buildings IoT)
**Something Totally Different: Helping Utilities Utilize Wasted Data with Sean Murphy of PingThings

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Jeff Hendler:

So we're turn king full building thermostats, we're turn king smart appliances. We're also turn king EV charging for buildings. Multi-million buildings right now are going through a panic attack right now of providing parking spaces with EV chargers because people are walking up the block to the next building if they find out that you don't have enough.

Silas Mahner:

Welcome back to the clean decades podcast, where we interview climate tech founders and VCs to discuss all things building and investing to solve the biggest challenge of our generation climate change. Today we are speaking with Jeff Hendler, the co-founder and CEO of logical buildings. A lot of New Yorkers will recognize them by their program, grid rewards. They rolled this out big time last year and it was plastered on every subway ad board. What they are is a general platform that helps with energy efficiency in buildings. They do a few other things as well, but this is their main focus for both residential and commercial buildings. Jeff has a really mixed background and was able to do a great job explaining how grid rewards works in conjunction with utilities, and he explained kind of his story from Wall Street to the utilities to then building this smart buildings company. When you finish, let us know what your favorite takeaway is and, without any further delay, enjoy the episode. Welcome to the show, jeff. How are you doing today, jeff?

Jeff Hendler:

Henler. Great Thanks for having me, silas. I'm forward to our conversation.

Silas Mahner:

Silas, absolutely. I'm super glad to have you. I hope you are staying cool in this New York heat. Maybe you've turned your AC off as we're going through our before. We already passed the peak energy usage right Because we're recording at like 630.

Jeff Hendler:

Jeff Hendler yeah, we're definitely on the downtrend for the day, silas.

Silas Mahner:

Very nice, very nice. Well, we'll get into that. So I guess let's just start off by giving us a quick introduction to yourself and to who you are. Jeff Henler yeah, I'm Jeff.

Jeff Hendler:

Henler, I'm a co-founder, ceo of Logical Buildings, where a climate tech platform serving the built world to facilitate the energy transition, to electrify, decarbonize your building footprint and do it in a way that you could earn return on your footprint where you are, where you live, if you own a building, which we'll describe in more detail.

Silas Mahner:

Very nice, and how did you end up getting into this space? In general, because a lot of people have a certain type of journey that kind of leads them to this space. I don't think a lot of kids think, oh, I want to be in the energy efficiency space when I grow up. Like, how did you get into it?

Jeff Hendler:

Yeah, great question. I started on Wall Street working for a big investment bank that focused on utilities and risk management of commodities in utility space, power and gas assets from production distribution and worked for utility as well. Host the Wall Street experience as the energy markets deregulated on a hostile level, as the monopolies transformed into generation plans that had a certain type of settlement system that was transparent, and utility became more of a distributor, not the producer of energy, and then that actually evolved into the retail space where you could actually choose your supplier for electric and gas. And I co-founded a retail energy company in 2004 called IDT Energy and in 2011, we went public on New York Stock Exchange as Genie Energy. And that experience of understanding the full value chain of how you create energy, how you distribute it, how utilities actually price it, gave me a unique perspective of the inefficiencies of the market. People joke around that if you would ask, like father of telecommunications, alexander Bell, if he came back today, he would not recognize the telecom market with Apple and Samsung and the way we communicate today.

Jeff Hendler:

But if Thomas Edison came back, he hasn't missed a beat.

Silas Mahner:

It's pretty much the same.

Jeff Hendler:

So the electric industry today is going to apply a transformation to make the products and services that you take for granted in telecommunications just as accessible. And that's a journey I've been on in my career and I found a unique position of how I could facilitate that change in the bill market.

Silas Mahner:

Hey there, quick break to remind any founders or VCs listening. If you are looking for deal flow, seeking to raise funding, looking for partners to help service your needs, or perhaps you're looking for corporate investment partners, feel free to reach out to us through our Slack channel, which can be found in the description. Because we meet a lot of people in this space. We set aside time each week to make introductions to the various people that we encounter. This is something we do free of charge in order to help these incredible companies solving climate change to scale. Looking forward to hearing from you in the Slack channel. Very nice, so I guess from going public, you said it was called Genie Energy at the time. Then, once you went public, how did you end up getting into building this company?

Silas Mahner:

Because, that is still pretty different from what you were doing before.

Jeff Hendler:

Yeah, so in that journey of retail energy and understanding the details of how energy is priced and the economics behind it, I saw right away some really interesting that is the utilities really didn't know how much energy you're using at a given time.

Jeff Hendler:

They made assumptions based on a monthly profile. They would take a meter read. They still do, many do this till today. They'll take a meter read at the beginning of the month, end of the month, subtract and you have like, say, a thousand kilowatt hours how stylish use those thousand kilowatt hours? They have no idea because the meter, the ruler, that's measuring that didn't have that granularity. On the flip side, that same utility was being charged from a HOSEL grid based down to the hour, even down to five minutes, how much electricity passed through that home. Somehow they had to bridge that gap of what they estimated you were using and what they actually had to pay to the HOSEL grid and make a business out of that. It's like wow, that's really inefficient. Why can't the end user actually know what they're using at the time they're using it and then be charged accordingly? And that would actually give them an incentive to make more intelligent decisions of how they use their energy, because energy, truly electricity, is truly priced down to the hour. So how do I bridge that gap? And, concurrent to asking that question, many utilities were embarking on a path of putting in smart meters in their utility districts, which would enable them to provide that information down to the consumer, that granularity, something called interval data that the digital meters now is able to provide.

Jeff Hendler:

In 2012, barack Obama signed an executive order called Brink Green Button, which basically was a mandate to utilities that they need to make their data accessible to end users at the press of a button. That's all that really much the executive order said. But since then, certain protocols and standards have been put into place by the Department of Energy and NIST, which is like the National Industry Standards of Technology, nasb, which is the North American Energy Standards Board, that sets protocols for utilities to make that information available to third-party app developers which we are, as long as the building is also an app developer and we're taking that AMI data and now making it actionable and usable by end users so they can now bridge that gap of when they actually use their energy, how much they're using and what it costs at that time and, even better, we're able to calculate what the carbon content of that energy is at that time.

Jeff Hendler:

And that gives a signal, an educational piece of value as well, not just economical, to an end user to make intelligent decisions of how they use their energy. So no, hey, it's more expensive now, or it's more carbon intensive now. Or we could give them some predictive analysis and say, hey, in the next hour or two it's going to be much more expensive, or now's a good time to use energy because the carbon content is low. Later it's going to be high. These types of information, making that transparent and available, is incredible import to a consumer to make more intelligent decisions. That has not just an economic impact but an environmental impact in their surroundings.

Silas Mahner:

Hey, there are you building a climate tech business and looking for very specialized talent? Consider reaching out to our sponsors, next Wave Partners. Next Wave are experts in talent acquisition, recruitment and retention across the climate tech, renewables and ESG spaces globally. So if your team is growing or you're looking to make a career change yourself, feel free to reach out to Next Wave at next-wavepartnerscom, or reach out to one of their consultants directly via their LinkedIn page.

Jeff Hendler:

Yeah, that's interesting.

Silas Mahner:

I just want to say one thing I appreciate you the way you've made it extremely simple to understand the history of how this came about, because of something I usually I do read, but I tend to be a little bit lazy with doing deep, deep research on how these things come about. So just simple executive order that can allow this data to be published. And then now people who are, I guess, maybe some big people, will take this offensively, but utilities aren't exactly necessarily the most innovative place usually.

Jeff Hendler:

So usually you're going to want to make the things available so that the innovative people can go and do something with it and make an impact and, since my background, I started on a Wall Street end, but then I did work for utility, so I did gain respect for the utility sense of hey.

Jeff Hendler:

They have a social good, they have a responsibility for resiliency, for reliability, and they have to balance that with providing market choices as well.

Jeff Hendler:

When I went out back into the non-regulated world and as a founder of IDT, co-founder of IDT Energy, I still maintain that respect for the utility of being hey, they're a valuable stakeholder and partner in the process and providing them the necessary feedback of how they can be more nimble and more effective in what they do makes their business that much more valuable and successful too, and we've always kept that mentality and we're very much engaged in a positive way with utilities, with regulatory authorities. It's an evolution of policy and integration of technology. So I started an opportunity to go out on my own and partner with a real estate developer who really is like the customer for what we do, to test the theory of the case and that portfolio of buildings, and I was able to empower them with real-time data that was actionable. We put that in the hands of like property managers and then today we're able to put that in the hands of residents themselves and retail tenants. Shouldn't that make an effect, shouldn't have a positive impact on their behavior?

Silas Mahner:

without automation.

Jeff Hendler:

Just having the information alone and the theory of the case became practical. We became a case study, we've proved it and having that intel of an owner, developer and seeing where the pain points were in their buildings and specifically started multi-family buildings, which is like a really interesting space to start One. Actually, that's where most of the energy is in a metropolitan market. It's not in office buildings, it's in multi-family buildings, because people not only live there, there's a lot of common area, utilization of energy, there's elevators, there's ventilation, there's water pumps, there's amenity spaces and today, because of the COVID effect and hybrid working, people are not only living there but they're actually working there too half time and sometimes full time, remotely. So there's a lot of energy being utilized.

Jeff Hendler:

And it's also somewhat of a miniature city because you also, in multi-family buildings you have at the street level there's a coffee shop, there might be a pharmacy, there might be a grocery store, there might be the fitness center, there's a parking garage Now we're talking about electric vehicles are starting to come in.

Jeff Hendler:

So we were able to expose ourselves to solve a lot of necessary problems and challenges that exist in that type of built environment that is interconnected between common area, which is typical of commercial buildings, residential and mixed use and put us in a position to learn a lot, to invest and implement technologies for those different types of asset classes in a building build world. And that's really positioned us for success in the greater built market. As the past couple of years there's been EHD initiatives, environmental, social governance to do decarbonize your building, which is voluntary, but there's also been compliance, like in New York City, of local 97, where there's actual penalties for not taking action that start in 2024. And you have a mixture of these types of voluntary or financial penalties or, you know, benchmarking, where you have the public and get a letter of grace that are some type of public shaming if you get a de-annual building if you're not that efficient.

Jeff Hendler:

That is happening throughout the country and it puts our business, what we do, literally in the nexus of solving a lot of these issues. No-transcript first, measure and verify Like what's my baseline, like what is my built space, what is it consuming, what is the carbon content, and then from there, what can I do to change that, what are the available technologies that I could implement, be prescriptive, based on my data, based on my lifestyle, that are going to have the most impact at the least cost. And we solved those problems. I could use some, many examples. So you take a multifamily building and the lowest hanging fruit is fluid controls, the thermostats, and that's where controlling electric or gas. And even if you go to electrification, it means more electric to manage. And in most multifamily buildings they're manual controls, they're set and forget, and many of the buildings are starting to put in Wi-Fi or some type of mesh network One has an amenity for the residents that live there, and then one have a connected lifestyle.

Jeff Hendler:

Well, if they're making an investment in Wi-Fi, why not support your thermostats on an enterprise control network as well? And therefore you could, no matter 24-7, no matter where you are, you'll be your residence, your retail tenants and in the common areas. For property managers to be that much more impactful and reactive or proactive in managing their set points and see immediate results. Efficiency that's one of the first easy layup things to do in a building is to enable that load control. The other thing that that does is enable the building to participate in grid services.

Jeff Hendler:

There's many states, like Newark, california, texas that if you are able to measure and verify time abuse management of your load, they'll pay you for it. So when there's like what you mentioned earlier, like hey, this time of day loads are coming off, we're going into the evening, well, in the middle of the afternoon there could be constraints in the grid and the utility will put out a Mayday signal. Hey, we need demand side resources. We need buildings to use less. We'll pay you to use less and as an incentive that works and providing that messaging to end users, to buildings and their residents, has quite a dramatic impact in actually providing resiliency and reliability to the grid and those programs are becoming more prevalent and we see the Texas in California throughout the Northeast for residents as well and that's been a big game changer. Now to make that all work you need to have, like a smart meter, an AMI meter.

Silas Mahner:

You need to be able to integrate that with IoT.

Jeff Hendler:

You need to be able to communicate that. You need some good connectivity, like Wi-Fi, to make it much better, but the environment's going in that direction to enable it to be really successful.

Silas Mahner:

Hey there, thanks for listening to this episode. If you made it this far, it's likely that you're enjoying the show, so I wanted to ask your help. If you're enjoying it, please give us a review on Apple podcasts and share with somebody in the same industry who might find this interesting. And if you're interested in getting summaries of these episodes, go subscribe to our newsletter that comes out on LinkedIn and Substack Links can be found in the description. Thanks for your help in growing the reach of this show. Yeah, I guess.

Silas Mahner:

So just to make sure the audience understands how that last part works paying people to basically shut out their energy. Essentially, to make it very simple and you've correctly forgot this wrong but when there is a large demand in the afternoon, perhaps most people are turning on power or different, different usages. Going up the grid may not have enough power and they want to avoid a blackout. So they ask people hey, we'll pay you in some form to just basically tone down how much you're using. Don't pull as much. That way, we can achieve this without a blackout. Is that correct?

Jeff Hendler:

Yes, totally correct, and it's based on the measuring, the energy itself, the kilowatts.

Silas Mahner:

And how do they? My big question is how do they understand and maybe you can shed some light here who is actually going to get rewarded? Because that's what I was wondering. It's like oh man, I'm just basically one AC unit, how am I going to get my check at the end of the summer and how are they going to know that I actually did anything about it? That's what I was wondering about, because I'm one person in a large building that is not. Our heat usage is all connected. It's the old pipes that if you touch it you're going to cook an egg on it, those kind of things. So I'm just kind of curious how that works.

Jeff Hendler:

Yeah, so the key is to follow the meter. Whose account is it? So if you're a resident and your apartment's directly metered for home, well, then you're eligible to get a direct benefit from the grid for making those choices and reducing your load. Then that provides the eligibility you need to have that AMI meter. Ami means Automated Meter Infrastructure, a smart meter that you truly already put in. So if you're in ConEd, as an example, you already have that meter, they put it in, and so now it's a matter of OK how do I sign up for the service?

Jeff Hendler:

Who provides that service? So ConEd has a program. It's a smart usage program that they have registered aggregators. Logic Building is one of those registered direct market participants in the ConEd program.

Jeff Hendler:

Some of those aggregators only provide services to commercial buildings, some of them provide only to residential, some do both. We do all the above. We were the first to come out with a residential capability because we were already in multi-family buildings for a number of years and we were following ConEd as they were putting in these meters, and kudos to ConEd that they opened the market up. They lowered the eligibility standard to 10 watts, meaning that if you could reduce 10 watts, that's like the minimum amount we could measure. 10 watts, a tenth of a kilowatt, and that's the granularity of these smart meters. You can participate in programs through an aggregator. So with that man, is that anyone? I mean, if you have a light bulb, you know it turns off the light and anything behind the meter like. So it's not just like your HVAC, it's anything that you're using your coffee maker, your washing machine, your refrigerator, your electric oven dryer, you have EV charging, if you have a pool pump, if you have a water heater, all of those appliances, all those you know, all that type of equipment that's creating an electric load is going to get captured by the meter and if you reduce that you're going to get compensated.

Jeff Hendler:

So, knowing that, we actually approached Samsung and there's Smart Things Division that has smart IoT and said look, I know you're working on smart refrigerators and dishwashers and ovens and having a smart home. We should pair up on this because if you're able to take your Smart Things ecosystem and receive a signal from us as the aggregator through our program called Grid Rewards, and we integrate that into your Smart Things app, then your refrigerator will have a payback mechanism. Your refrigerator will start cycling less when you get our signal, which is pain-free. Nobody knows when it's cycling less, but you're using less electricity and that's really valuable. So we just you know, they just rolled that out really about six weeks ago, after we've completed the integrations, that's live with Samsung Smart Things. If you're in ConEd and you have Samsung Smart Things, you know your entire home, not just your thermostat now, can provide value to you.

Silas Mahner:

As you know, the owner of that and it's a tremendous, tremendous value and we only seem like getting better.

Jeff Hendler:

And that puts us in a position to talk to multifamily owners and say well, we know, every year about 10% of your appliances are being swapped out. They hit their life, they've been there for 15 years in your apartment building. You need to get new appliances, you should get connected appliances, appliances that can talk to the grid, because if your residents who are living there, they can reap the reward of having better interactivity with the grid to their meter. At ConEd, which most of the apartment houses in New York are directly metered, that's a huge value. And with Local at 97, the owner is getting scored on the residential use anyhow.

Jeff Hendler:

So there used to be the split incentive where I wanted to invest in the residential space Because I well, they're just paying to build a ConEd, I don't really care. Well, now they do care, because the energy use is converted to carbon and based on the amount of carbon, they get to be penalized financially. So it's aligned interests with ownership and their tenants' residents to provide residents with much more energy efficient equipment, whether it's thermostats, whether it's kitchen appliances as well, and that's a game changer.

Silas Mahner:

So I want to just make sure I understand this quickly. So the resident is the one who, even though I rent I don't own I still get the rewards, but the building owner, if they do not make it possible for me to get the rewards, they can get penalized. So they have a downside and we have an upside. Is that correct?

Jeff Hendler:

That is correct, as the owner, from a carbon compliance point of view, is on the owner of the building, everything, block and lot. That's how that law the carbon climate mobilization act, which is now local in 97, was codified. The owner is responsible for every inch of space that they lease out from a carbon compliance. So it's in their interest to incentivize anyone that they lease their space out to to use less energy. Now you, as the person living in that space and as the account holder of that meter, you reap all the benefits of demand response grid service. Those payments go to the account holder of the meter. You also get the value of hey, you're paying a bill for your space. You definitely want to pay less, so having smarter appliance, more efficient appliances, are going to help lower your bill as well.

Jeff Hendler:

And then, as a consumer, you would just like to know, like, hey, when I'm using energy in my space, I would like to know when carbon is more intense. There is time of use carbon. Most people don't even realize that and no idea that there's certain hours of the day that are high carbon, certain hours of low carbon, certain hours of day that we're using more renewables, when you want to know that when I'm using energy in my home, I'm using the most renewable energy that's available right now. That's coming either from hydro or from wind or from solar, not coming from the dirty fossil fuel plants. And, you know, on really hot summer days, obviously, as demand increases, we're becoming more reliable on the dirty fossil fuel plants and we're able to, you know, provide guidance on that to our end users and they could track how much carbon they're saving by using less energy during those hours.

Jeff Hendler:

And then, when the grid calls an event and says, hey, you know, it's really really tight, we don't have enough capacity, we want to avoid a blackout, you know, between the hours of, you know, five and eight pm, whatever window that network's in, then our homeowners, apartment folks, they earn money directly from the grid for taking those actions and that's like a great way to solve this issue of making it a community-active type of dynamic where you could be a climate community leader. You could be an influencer amongst your peers by telling them hey, I took action at this time. I actually used less carbon. I saved money. Guess what I didn't get paid for using less energy for making a you know environmental impact.

Jeff Hendler:

And that's the message that we're also empowering property owners to you know, broadcast to their tenants and residents that, hey, you building that have these smart meters. There is this program, our program of rewards that you know it doesn't cost anything. It's a free download and it only gives you insights on what you're using and how to use it to lower your cost and earn money. It's kind of like really straightforward stuff.

Silas Mahner:

So that's. I really appreciate this kind of backstory. This is helpful to understand and how everything works. I want to shift a little bit more to the business side. I have a question around. This is a pretty deep way to jump into it, but if the utilities are required by law now to make available the information for third-party developers, like logical buildings, wouldn't that cause a lot of people to rush into the space to try to build a similar type of service? And if so, then what is your kind of take on how logical buildings has done, because to my knowledge I've not actually heard of many other ones in New York. How do you build a moat? How do you succeed in that market of third-party developers that might rush into it? Like, what is the kind of secret sauce that you've done to try to really really make that win the market?

Jeff Hendler:

Yeah, and that's a great question. I mean, we were fortunate because we came into the market Before there were AMI meters, before there were smart meters. We actually went to Conend and said, for a multi-family building, can you put a smart meter in? They said, well, you have to pay for it. And I said, well, our building owner will pay for it because they really want to know what they're using. And they were like, well, it's like having a colonoscopy for your building. They really see everything you're using. They said, absolutely, that's what they want and they'll pay for that. And we did. So. We had a head start on the competition of being in the buildings in the common areas because we've grown our business with portfolios. The multi-family space is a difficult space because people who rent are transient, they're only there. So if you're starting a business, why would you want to spend your marketing dollars, your customer acquisition costs, on a tiny load of an apartment that's going to turn over in maybe a year or two?

Silas Mahner:

So that's an automatic.

Jeff Hendler:

The only way to make that actually work is that you establish a relationship with the building, the ownership and to do that you have to really start investing time in the corporate entity that owns that building because they're probably the only many buildings. So we started there. That was a tough place to begin. So that's somewhat of a barrier to entry is the complexity of multi-family ownership. You have equity owners, you have property managers that might not be the same. You might have asset owners like a Prudential or Invesco that they own the building but they're not a management company so they bring a third-party management company. So now you're dealing with two chefs in the kitchen, so to speak. You have a transient base of residents and tenants. So it's somewhat complex type of that asset class to go to.

Jeff Hendler:

And that's why most prop tech, clean tech companies that you're aware of are focused on commercial. Because commercial is a lot easier in terms of who you're dealing with and rinse and repeat and also it's a more long-term type of customer. But we've proven because we took that tough road of establishing relationships at the C level of portfolios of real estate investment trusts or asset owners international are just large independent property owners that have many, many properties. Investing in those relationships in time really has paid off for us because it enables us A to just move through their portfolio as we get a few of their buildings and prove it out and expand and then B there to service the residential tenants who are more transient with our services Now because of ESG and because of the carbon compliance being in that mix has been really dialed.

Jeff Hendler:

It happens to be really good timing now to be in that mix for us because now they must do something about it for the residents, for their retail tenants, because of the compliance. So it's been really, really valid for us.

Jeff Hendler:

Now nonetheless, we're out there doing pure play residential. We're doing pure, like our relationship with Samsung SmartThings, broadcasting that to the single family home market or anyone who has a meter. We have relationships with sustainable Westchester. We have a marketing relationship with Sustainable Westchester, which is a 150,000 member organization in Westchester County of folks who are focused on sustainability, as a direct marketing arm to pure residential play.

Jeff Hendler:

We also are doing a lot of commercial now as well, because a lot of our owners own commercial buildings and like, hey, this is really working well in our multifamily. We really like your engaging platform, we like the communication, the education. We do a lot of training throughout the year. We could use it in our commercial buildings as well. So we've gone pure play commercial, but all started out of the multifamily.

Jeff Hendler:

One last thing that just differentiates that we do a lot of engineering services as well, beyond the grid services. So we're turnkeying full building thermostats, we're turnkeying smart appliances. We're also turnkeying EV charging for buildings. Multi-family buildings right now are going through a panic attack right now of providing parking spaces with EV chargers because people are walking up the block to the next building if they find out that you don't have enough, and they might not even have an EV yet, but they're thinking about it. But their friend has one or their parent has one and they want them to come visit them and be able to charge up if they do. So there's a mad rush going on and we're turnkeying that and that's also a differentiator in terms of what we do.

Jeff Hendler:

We turn your building into a virtual PowerPoint. We've actually created a facility $110 million facility for owners to tap into so they can get no money down financing to do these turnkey thermostat projects or turnkey smart appliances, turnkey EV charging in their buildings, to electrify, decarbonize, literally do the energy transition in our building and a much faster clip, because we could front the money for that.

Silas Mahner:

So I think Dill.

Silas Mahner:

That's that. By the way, I like the point about the EV charging. I think it's something that might seem really silly or something simple, but it just gives you an idea that, again, the things you would assume that consumers are going to do is not always the case. Right, we don't all make logical decisions based off of just the facts. Right, there's a lot of emotional things, like you said, the family visiting or whatnot. So one thing you mentioned a couple of times here working with other people, and I think that the partnership space is something I'm really fascinated by.

Silas Mahner:

When we look at logical buildings, for example, there's an incentive from the utility to get people to use this right. So, and they probably have multiple service providers similar to logical buildings, but I'm assuming there's not terribly many that they offer. So you have essentially a guaranteed client base, right, because they're probably promoting it, other people are promoting it. So once you have that, you kind of then get access to a certain set of eyeballs, if you will. Right Now, you also have the incentive for the building managers to decarbonize. How does partnerships play a role with you working with other hardware providers, for example, or other service providers to either get a I don't know if you have partnership agreements to get a percentage of sale or something to work with other companies to help them grow as well.

Jeff Hendler:

Yeah, absolutely, and we grow organically within our client bases. But we do have partner relations. One, for example Comcast. We are Comcast Smart Building Solutions partner. So they started a new division last year called Smart Solutions that have certain types of experts, whether smart building expert so on their website you'll find us to solve smart building requirements like smart thermostats or the charging or the appliances. We're doing that for Comcast. They're offering that out to Comcast business, they're offering that out to Xfinity Home and Xfinity multi-family.

Jeff Hendler:

So that's great for us, great for Comcast, because connectivity is one of the prerequisites for, obviously, for IoT and more IoT, more smart devices you have in your built space that the gradey can perform. You can be proactive, reactive, 24-7, 365, you'll be able to be on top of your building. You're also we also through that, are able to provide non-energy value, like monitoring your water leak detection in your air quality. So we're very holistic. I tell people we're logical buildings, we're not logical energy, we're not logical indoor air quality, we're not logical water. But we do all those things because it's all relevant to the building. The energy piece is really important because A because of the carbon impact, but also the financial impact is quite significant and everybody's always focused on their bottom line as well, so that's obviously an easier sell, so to speak. So Comcast are really really valuable partner in our mix. I mentioned Samsung, with our integration with smart things and DR being that provider for them. At DR, we were awarded through the Department of Energy, slash GSA Government Services.

Jeff Hendler:

Administration which is a large owner of buildings in the United States, all the federal buildings. So we have demonstration projects with them underway. It's called their green proving ground. We're in a federal facility in Newark, New Jersey, monitoring their load and providing them prescriptive energy management intel, so to speak, in real time.

Jeff Hendler:

Do their facilities management to make the government facility that much more energy efficient. And with the IRA now becoming reality, the Inflation Reduction Act, that's gonna be really helpful. Well, the programs that they're putting into place, based on what they're learning from the program we're in we were. Also they're completing a study that will soon. We got to see the first draft, which was great, from the DOE, also for a multifamily project that we worked on in West Harlem, 3333 Broadway, largest multifamily building in North America, 1200 unit buildings, like all one buildings, that's separate buildings, you can't miss it.

Jeff Hendler:

Off the West side of Iowa, iowa was like five buildings to move together. Well, we provided, you know, pretty rewards in that building. Also, our smart kit product for the common areas. And here's a building that's, like you know, in West Harlem. It's a disadvantaged community and enabling folks to participate, empower them with rewards and earn money in their environments as well. And we learned, you know, the farm energy is doing the whole study that we released. How, you know, folks in disadvantaged communities can really benefit from this because it didn't take any type of investment of any smart device, just like the meter was already there by Con Ed.

Jeff Hendler:

The apps are from download is now it's just a matter of providing messaging through the app, and most people in disadvantaged communities have access to a smart phone, and we had great results from that that are now going to be released from the Department of Energy.

Silas Mahner:

That's like huge so how?

Jeff Hendler:

do partners like that getting that? You know that measurement, verification. You know that good home housekeeping, seal of approval from the government, that, hey, you know that works. You know they're really reducing energy. You know they're really reducing the carbon footprint of a home, even in disadvantaged. You know low medium income communities big deal, very big deal. We see, you know what we're doing. As you know, certainly diversity, equity, inclusion, play, because the meter is going to every home right and that now makes everyone eligible, everyone to participate in programs and be compensated at the same dollar equivalent, as, I like to say, the 1% of you know large commercial accounts that have we were the only ones being compensated until a couple of years ago for participating in the very same programs. So we're very proud as a company that we're now enabling those services in disadvantaged communities where energy takes a much bigger buy-to-add your disposable income as well. So it's having a really big social impact. We even have within our app good reward. Users are able to donate their earnings for worthy causes, like we act as one.

Silas Mahner:

I was actually just thinking about this earlier. I was thinking for some of the people in New York. I don't think they necessarily need the savings. So that's why I was actually going to ask you if you were planning to do something. So you've already thought of it.

Jeff Hendler:

Yes, it's in the app. If you have the app you can see you can throw in all the different, you know, national conserves you know for you know, fun for keeping you know. New York, clean water, clean air we act. I mentioned moms out front like really good, you know, there's the New York Food Bank. There's a lot of like really good causes everybody would want to help with that. You could put your dollars towards for making good energy decisions, making positive impact on the environment.

Silas Mahner:

Yeah, absolutely. Oh wait, let's see what do I wanna do next? So there's a. We're kind of running out of time, but there's a topic I'd like to really ask you about, because logical buildings, if I understand correctly, has been around almost 12 years now. Is that right?

Jeff Hendler:

Of 10, is that?

Silas Mahner:

right, okay, 10s, so around there. So, given that it's been around longer than a lot of a lot of climate tech startups, there's a lot of companies that have come out of the world work recently, which is good, but they don't quite have as much tenure. I'm really curious to get some insight from you around talent. So obviously, my day job is a work in the talent space, but I'm usually curious to see how leaders of companies manage the growth of their organization from a talent perspective. Oftentimes there's maybe downturns and you have to kind of reset the culture or kind of you lose some people and you have to rehire. Can you just talk, broadly speaking, about your experience and your advice to other founders as they go on to become more tenured companies in the climate space?

Jeff Hendler:

Yeah, I mean we're really passionate about what we do. We really we know we're making a difference in the environment. We are really innovative. We've introduced new product that never existed before. So when you have, like, you know, that type of those ingredients that are really attractive for top talent, you get really good people to climb aboard. We have a great intern program as well, and our interns like really shine and again, it's because of the passion we have, the innovation, we have the proof in the pudding, so to speak. We're really doing it.

Jeff Hendler:

People talk about, like, what they like to do or they find you know, a startup, like you know, we want to do, we do it and but we continue to be innovative. We continue to like just be out of the box and like why. We continue to ask why not? Why can't we do that? And we like putting all our people in the field. Whoever joins our company, we put them in the field, we have them walk buildings with our engineers, because it's really what we find is that it's people who are not engineers and they, when they go into a building and they see how it operates and they're amazed like Really, that's how, like you know, that's how the water is being pumped. That's how you know the air is being ventilated.

Jeff Hendler:

That's how the waste is being managed.

Silas Mahner:

You know, that's how they're calibrating use of water and use of electric gas and it gets them to think of.

Jeff Hendler:

You know innovative ways to make that more efficient and effective as well. So we're very much, you know, embracing of our folks and right from the get-go and hand what they have to say as well, and and we're very transparent with that. So, yeah, that type of environment has been really successful for us.

Silas Mahner:

Have you ever had any specific challenges with talent where there was like, okay, you know, we've, we've become an attractive company, so now we've got a lot of people who want to come work for us. And then some of those people maybe I know you don't want to speak, maybe anything negative about the town, but has there ever been a time where you really like made a mistake or learn something? Because I do think Maybe it's just my bias towards it, but I think talent is extremely important and I also know that there's probably gonna be a lot of mistakes made by founders in the next Years as their companies grow and continue to expand.

Jeff Hendler:

Yeah, I mean look, I mean we're, we really hit a hot key stick. You know inflection point in the past, like you know, 18 months, like we doubled in size. You know we brought on, you know, say 18 months ago or about 15 people. Now we're 40 people. So I think we're like really still new in that space to be able to answer that. I think the worst thing that's happened to us is that, you know we had someone who was really super special but didn't, didn't want to be a business development person and and want to be a policy wonk, you know and and got a great offer, you know, in the policy political side of the world, which you know that's great and we think it's fantastic, gives us really good relationship in some high offices too.

Jeff Hendler:

So you know, that's okay because we, you know, we actually are proud for the career development of our people as well, and if they're experienced with us, open the door, yeah, they need the next. You know energy secretary, you know the United States, that's great, you know. So, yeah, that's, that's how it's been for us.

Silas Mahner:

No, I really like that. I like the answer. It's. It's a lot of people are very salty when people leave the company, but I think that it's a it's arrogant on the part of the manager and the company right to be that way, because it's like you know they're unless they helped found the company. Even if they did help found the company, maybe they have aspirations beyond that and it's important to be understanding of that.

Jeff Hendler:

Yeah, yeah, we're very much in career development and we know that that should develop into broader careers and we support that.

Silas Mahner:

Yeah, absolutely. Well, we've got time for one more that I think we can go into, which is given You've seen kind of the development of, let's call it, the smart grid space or the smart building space, as New things are being solved, new challenges being solved, new problems being solved. What are you excited for next? What do you think is going to be a big challenge to solve, coming up something that other people who are looking to start Companies might be interested in pursuing, maybe something you guys are pursuing? I'm always curious about what's next to really like clean up the, the leftovers, essentially, as we continue to solve the really, really major Challenges with, with climate change.

Jeff Hendler:

Yeah, well, there's certainly this collision course of Supply and demand on the horizon. Okay, what do I mean by that? Well, there's a lot of, you know, thought out policy to Decommission Coal plants, natural gas plants, nuclear plants. You know the the natural gas plants, coal plants, especially natural gas plants, you know, provide a lot of flexibility of load management, right? So what's going to replace that? Right, there's a lot of transmission Projects to bring hydro down from, say, canada and to New York, as an example, but if those your projects. Or having your offshore wind. But if those projects don't really happen, there's a really big capital intensive projects, though the plants of hospitals are are being decommissioned and tapping.

Jeff Hendler:

For example, indian plant, nuclear. You know, indian point nuclear plant is no longer operational. That's what was 25% of the base load in New York City. That was 2500 Mega watts, you know, for a typical base load. Well, typical load on a given day in New York is 8000 megawatts. Well, indian point was applying a nice, reliable, 2500. What's got? Okay, and and in the state of New York there's a lot.

Jeff Hendler:

So there's like some reliability issues on the horizon in that Demand on the supply side now on the man side getting bigger because we're electrifying, we want to electrify our mobility with cars, and it's happening a lot faster. I can tell you that anyone anticipated the, the, the showmanship, the coolness of like Tesla's, and now there's many more companies coming out, you know, whether foreign or domestic, and people are buying into it and they love it, right? Well, that takes no, for Tesla's is like a. This could be a hundred KW, it's a real charging. At the same time, that's like a building load of like a 15-story building, okay, so imagine 40s, yeah, so so that's a big conundrum for the market of the like.

Silas Mahner:

Mobility electrification of heat.

Jeff Hendler:

There's mandates, you know being tossed around in New York that you know no more natural gas. You know we have to. We got to cut the pipeline like cut the cord and natural gas and go electric heat, electrifying heat, I mean that's a huge demand, so huge. So yeah, the, the industrial. So you know the the CEO, president of NYSERDA, doreen Harris, you know she recently spoke at a at a function that I was at. I was on a panel, she was a keynote speaker and she's mentioning that, like New York's gonna have to, you know, increase their you know capacity To fulfill demand. That's double where it is right now Over like the next 10 years.

Jeff Hendler:

That's crazy right so we're at right now a rough capacity Demand of 30 megawatts. It's gonna go if the policies that New York is going after would be 60 megawatts. We're only at 30, but we're also, you know, retiring a lot of, you know, fossil fuel generation. That's, that's reliable and that's flexible. What's gonna happen? Some?

Silas Mahner:

something's gotta get yeah, I mean also that there's the issue of the transmission. I'm assuming that there's like a lots of small transmission inside of New York that if you double it I can assume there's gonna be same issues on the transmission. Yeah, I'm not an expert on that stuff.

Jeff Hendler:

You know it's, it's the you know it's a big issue.

Jeff Hendler:

The transmission is a huge part of the electrical equation and that's not in place, you know. You know all bets off, on, on on reliability. So there's, there's we. You know what's next is ensuring that, you know, having reliable power on site. So, behind the meter, batteries okay, that's what we see. You know there's gonna be much more development. It already exists, first of all, and there's a lot of coming, like LG, they're coming out with home electrification System for residential homes. That are gonna come be much more demand Because of these reliability issues that I don't want to, you know, have to rely on the grid completely.

Jeff Hendler:

If I have, if I have and if I have an EV Vehicle, I want to be able to, you know, not also play, pay all those costs of demand, peak demand charges. I'm gonna need a battery in my home that could take power at night time, when it's cheaper, there is time of use tariffs. Now that exists that you could actually, you know, save money Charging up your battery at night time, then using that power either for your EV or for your home. And, better yet, it happened to be in a place you could have solar on your home. Well, now I'm getting a renewable, you know resource, the Sun to you know you capture that energy on my battery. So all these things are now available.

Jeff Hendler:

The cost every year go down. The ascents has only got up. There's tax investment credits now offered by, you know, the IRA, codified, for EV charging, battery and solar all three. Even for electric heat pumps. There's incentives for that. So what we see next is a lot more electrification, a lot more behind the meter Battery storage, a lot more smart appliances because they're going to use less electricity. They're also going to be able to enable homeowners to be the power plant, the virtual power plant, that they're going to earn grid rewards and $0 from the grid because they're equipped with these smart devices, that they use energy at the precise time they need it, or they're able to shift that load, use their battery, so the grid is more reliable for what it has left, so to speak.

Silas Mahner:

Yeah, okay.

Jeff Hendler:

That's what's next.

Silas Mahner:

Yeah, that's a tall order, that's a tough one, but I think that there's probably and I can think of what I was talking about I had some ways that non-science entrepreneurs can make a difference. That's always what I'm looking for. What are some non-science businesses that could be set up by people who don't have a PhD in chemistry?

Jeff Hendler:

But yeah, go ahead. It's all being summarized. If you go into a Home Depot or Lowe's, whatever, and if you look at the smart appliance section of whether it's LG or Samsung, now GE, they all have it the price point is competitive to the conventional appliances. So the appliances are there, many states, the meter's there now that are able to be eligible.

Jeff Hendler:

The next piece that's coming into play, it's kind of there, but it's only going to get better as a battery, and that's going to really because, keep in mind, electricity is on demand, like in a big commercial way, you can't store it but you can at the home with a small battery and the size of a refrigerator that can provide you that load shift capability for, say, 8, 10, 12 hours and create a lot of value day in day out, yeah, and if it's automated in a way that it can essentially pay for itself, you can then get also the barriers to entry lower, yeah. Exactly so. That's only going to get better. So that's the way it is. That's like the next.

Silas Mahner:

Yeah, very good. Well, we're out of time now, but this has been really good. I appreciate you coming out. Any final calls to action or where people can reach you?

Jeff Hendler:

Sure, I mean go to our website, logicbuildingscom. Better yet, go to groodbewardscom If you're in New York, texas or California. Join that revolution. Power yourself to A. See what you're using, earn money, save money, know what your carbon footprint is and just make a meaningful impact on your community.

Silas Mahner:

Yeah, I will say, the feature to see if you're using renewables or more dirty energy is actually really, really cool. I'm a very visual person, so it's really helpful to see. Oh my gosh, like that's what I'm doing. I'm definitely going to make sure I turn the AC off or wash my dishes later, or something like that.

Jeff Hendler:

So yeah, last plug, I would say, if you're your own rapper listening in, hey, we have a $110 million facility to help you decarbonize and transition your building to be more efficient as well.

Silas Mahner:

Very good. Is that specifically for New York, or is that also across those?

Jeff Hendler:

other three markets.

Silas Mahner:

Currently specific to New York. Okay, very cool, awesome. Well, this has been great. I'm definitely excited that we can share this, so thanks for coming on.

Jeff Hendler:

All right, thank you Really appreciate. You guys have a good one.

Energy Efficiency in Buildings and Climate Tech
Policy and Technology Integration Evolution
Success in Third-Party Developer Market
Talent Management in Climate Tech Companies
Future Power and Energy Supply
Excitement About New York Market Expansion