https://www.linkedin.com/in/toddhoffmaster
This great interview is with Todd Hoffmaster. Todd is the CEO and co-founder of AkitaBox. AkitaBox is a great idea. It’s a SaaS application for proactive building management. AkitaBox automates maintenance, planning and inspections to simplify building management.
We’ll also learn more about Todd and his background including his days on the mat as a wrestler. Todd has a great background to start something like AkitaBox.
AkitaBox is located in Madison, Wisconsin, so this interview was actually in person. That’s pretty exciting for me.
Here are some other things we talk about:
-What’s the current state of building management systems?
-How do you know who to hire next?
-How do you deal with the stresses of being a CEO?
-Where do you want to take AkitaBox?
-How did you determine the roles for the four co-Founders?
Transcript
Dave Kruse: Hey everyone. Welcome to another episode of Flyover Labs and today we are lucky enough to have Todd Hoffmaster with us. Todd is the CEO and Co-Founder of AkitaBox and AkitaBox is quite a great idea. It’s a SaaS application for a proactive building management. So essentially the auto maintenance plan and inspection is to help us simplify building management and we will learn a lot more about that. But we will also learn more about Todd and his background, including his days on him as a wrestler and Todd has a great background to start something like AkitaBox. So this interview is actually in person, which is kind of unusual and it’s a little nerve racking because we can actually make eye contact and so we’ll see how this goes. So Todd, thanks for coming on the show today.
Todd Hoffmaster: Yeah, thank you.
Dave Kruse: So before we get into AkitaBox, can you tell us little bit about your background?
Todd Hoffmaster: Sure, yeah absolutely. You mentioned my wrestling background, so I actually wrestled for 20 years, wrestling college. The University of Wisconsin here was fortunate to be part of a team. At the University of Wisconsin I studied business. Unfortunately for me anyways business was not – it didn’t come second nature and I decided to try my hand with something a little bit more creative and transferred to the University of Minnesota and got my Architecture degree as well construction management degree from the University of Minnesota Twin Cities. So that’s kind of my background. I studied to be an architect, practiced architecture for quite some time, worked for a very large technology company implementing different types of technology in the built environment, the built world for another six years.
Dave Kruse: Which company is that?
Todd Hoffmaster: Mortenson Construction
Dave Kruse: It was Mortenson. Okay.
Todd Hoffmaster: It was Mortenson, yeah. So then moved on to consult across the country with different facility owners, building owners, building management teams, different contractors looking to implement different technologies, really assist them with the ever changing environment that technology has.
Dave Kruse: Nice, all right. So if you go back to the your wrestling days, which I am kind of fascinated, because you wrestlers are kind of psycho, but in a good fun way.
Todd Hoffmaster: We are psycho.
Dave Kruse: Yeah obviously. Especially back then when they, like you could starve yourself, right, that’s changed now, but…
Todd Hoffmaster: Yes, the food, to this day I eat because I have to not because I want to.
Dave Kruse: Are you serious?
Todd Hoffmaster: Which is a little different.
Dave Kruse: Really? So that has carried over.
Todd Hoffmaster: It has, there is a mean street to wrestling that has carried over into my business and personal life.
Dave Kruse: So could you not eat for a while, if you didn’t need to?
Todd Hoffmaster: It I was stranded on a desert island, somewhere I could probably make due for quite some time.
Dave Kruse: As long as you knew a winning was coming.
Todd Hoffmaster: Exactly, exactly, exactly.
Dave Kruse: So yeah, I’m just curious, how did you initially get into wrestling?
Todd Hoffmaster: Yeah. So I had some cousins that liked to wrestle and I was always fascinated with a one on one type of sport that that was. It did have some function of a team sport, but there was nothing like being alone on a mat or somebody else trying to lack of a better term beat you up and you either taking it to them or they taking it to you. So there was always a draw for me for that to really you know, to go down that road of being either alone or being part of – doing it yourself and not having anybody else really help you. For me anyways I really enjoyed that.
Dave Kruse: Interesting and do you remember the first time you won?
Todd Hoffmaster: I don’t, no. That has been a long time. I know most of my losses if that makes any sense.
Dave Kruse: Oh! Really. You probably didn’t lose a lot, if you wrestle here you got…
Todd Hoffmaster: I lost my fair share, but yeah …
Dave Kruse: What was your toughest loss?
Todd Hoffmaster: The toughest loss was my senior year in high school to get to state. I ended up losing a very close match. I made a really stupid mistake. I played over and over, spent almost 20 years but I still play it in my head. That’s…
Dave Kruse: You sound like the wrestlers.
Todd Hoffmaster: Yeah.
Dave Kruse: What was the mistake? Let’s put it out there…
Todd Hoffmaster: Yeah, so the guy shot inside single and I tried to shoot basically step over the top and I was a little too slow and I knew it and I didn’t cover up. So he took me down with about a second and a half left and ended up beating me by one.
Dave Kruse: Oh my goodness! So that’s complete mumbo jumbo to me, but this isn’t a wrestling podcast, so we’ll move on, but I love it, all right that’s what I wanted. All right, so I’m curious when you started out as an architect, you know what type of, all right throughout your career what kind of buildings did you design?
Todd Hoffmaster: Yeah so, starting out as an architect you really don’t get to design much. You get to be a part of a lot. So for me that was part of the learning experience. Initially I was doing basically bathroom details for commercial buildings in essence the one floor always the same and it was no fun, there was no creativity. But I got into residential architecture and so that was a little bit more, a little more exciting, but in the same sense it was very subject because you know sitting with husband and wife, someone is designing a house and designing a house for them they – one likes it, one hates it, there is no reason, no rhyme or reason. So for me being more of an engineering mind or engineering background or engineering frame of mind, it was very frustrating for me having that subjective feedback and not understanding what path forward to take. So
Dave Kruse: That’s not easy. Do you remember any homes that you built or designed or any part of a home that you thought this is really cool, they should really do this?
Todd Hoffmaster: Yeah, actually I designed my sister’s house.
Dave Kruse: Oh! No way.
Todd Hoffmaster: Yeah, yeah exactly. So she built it and first time I stepped into the framing of the house, I was like, oh my gosh! What did I just do, there was an area that I screwed up on. So we, I spent the weekend actually ripping that down, because I felt bad, it was a mistake of mine but we learn from our mistakes. So it turned out great, so they are still living there today which is great and fun so…
Dave Kruse: That’s cool. That speaks highly of what you will do to make your customer happy and your sister.
Todd Hoffmaster: And my sister.
Dave Kruse: Awkward Thanksgiving.
Todd Hoffmaster: Yeah, exactly very awkward. She still reminds me of that and I still remind her that I fixed it, so it’s a good situation.
Dave Kruse: Exactly. It’s a win-win. All right, and then before we get into AkitaBox, what – is there – do you have like one experience that you really enjoyed during your career, something that’s influential that you use now or…?
Todd Hoffmaster: Yeah. So there was, I was fortunate to be one of the first projects in the country that was interdisciplinary; meaning that is was a tri party group between owner, architect, contractor, which was the Wisconsin Institute for Discovery and my role there was to really leading and pushing technology. I was fortunate to have some of the best and brightest minds not only in the mid-west region, but around the country that was are consulting with. So I got to see firsthand how they dealt with different cultures, different issues, different minds, different ideas and bringing all that together to actually do so something that rarely has been done before. So I it was really, really exciting. I’ll take that experience and those relationships with me for life. In fact I speak to a majority of those individuals who still frequently as we grow AkitaBox, so
Dave Kruse: Was there. Do you have example of why or what came up in the discussion or design that was so interesting?
Todd Hoffmaster: Yeah. So there is, as a – if anybody is a designer out there, they would know that there is always this kind of push back from construction design, what’s feasible, what’s not with the owner in the room and so we are having very frank conversations about what this build needs to be, what it should be, what the vision of this building is and for me being a part of what the vision is and then being part of the solution to reach that vision, it was something that I will never forget. But there is a couple of different opportunities for us to have a decision being made that moved away from that vision. One was some of the designs of actual internal of the building being only one bathroom just like the Apple, Steve Jobs that they wanted. They wanted a lot of cross disciplinary communication across the tech that would be in this facility and I remember vividly a lot of conversations surrounding you know, would end why? Why? How do we create that one bathroom, communication? Yeah, well no, it’s in one area of the building. So everyone who go, everyone would have to go to one area of the building in order to – and then so the idea was just like Steve Jobs, the idea was is that they would start communicating, talking, water cooler talk and those types of things and we sat around the table saying would this really work and how would it work. And then the second things on top of that was the building was four stories and it was too tall, meaning in the State of Wisconsin here it would be consider a high rise which came with it a bunch of different issues. And so for us we were able to reduce the overall vertical high by using different technologies and that was a win. There was a lot of skepticism that we could actually do it and we ended up doing it, so…
Dave Kruse: So you reduced the height, but you kept it four floors.
Todd Hoffmaster: Yep.
Dave Kruse: Using the technology.
Todd Hoffmaster: Yeah between different…
Dave Kruse: Different layers.
Todd Hoffmaster: Different floor types, yeah.
Dave Kruse: Yeah, interesting. Wow!
Todd Hoffmaster: No one thought we could do it and we challenged ourselves that we could it and we ended up getting it done. So that was really awesome.
Dave Kruse: And what happened to the bathroom. Did you guys…
Todd Hoffmaster: That mistake, one bathroom.
Dave Kruse: One bathroom.
Todd Hoffmaster: Well, too many wanted to go to the bathroom, but in one area of the building, so I know the people on the east or west side of the building. Sorry about that, not my decision, but we ended up…
Dave Kruse: Take a little walk. You could have done. I was in this bar or club one time a while back and I think it was in Chicago they had a I think it was a like a Hotel W that in the women’s and men’s bathroom they had like windows, so you can see each other like washing hands. So you could have done that, you could have like…
Todd Hoffmaster: That would be…
Dave Kruse: That would be scandalous.
Todd Hoffmaster: That would be a scandal. I don’t know if that would fly in the state of Wisconsin in a University building, but that’s interesting.
Dave Kruse: Yeah.
Todd Hoffmaster: That’s something.
Dave Kruse: And I wonder how many more ideas have been created now because of that bathroom. You will never know.
Todd Hoffmaster: Never know, guess there has been millions.
Dave Kruse: All right, so let’s talk about AkitaBox.
Todd Hoffmaster: Sure.
Dave Kruse: And it would be awesome if you gave us – I mean the first time I heard about AkitaBox right away I was like, ‘Oh! That’s a good idea.’ There is not a lot out there like it, that’s a pretty clever idea and so if you could just kind of describe AkitaBox and then you know money raise. We can come back for this investor, employees, co-founders, but yeah that background.
Todd Hoffmaster: So the genesis of AkitaBox was really, we were again back in my day when we were consulting across the industry from contractors to owners and what have you, there wasn’t a simplified way that a lot of information that is required that really maintained the building was collected. So the collection process was just a disaster, and is still a disaster and that’s what we are trying to disrupt. So the collection, so AkitaBox really collects, organizes and analyses building data and documents in one unified, simplified location. We use locations to be able to really go through the data in a way that makes sense to the people actually putting the data together and then we report on that information to be able to again see where either data deficiencies are or where data collection processes can be improved.
Dave Kruse: What type of data are you collecting in?
Todd Hoffmaster: Anything really about buildings. So if you think about if an owner really cares about the space or custodial you are talking about floor type, wall type, number of fixtures and those types of things that is reinforced into a FTE schedule or a full time employee of how fast they can clean, what the building type is, what’s the room typology and healthcare, that’s a big deal right because turnover of rooms, the room types, the money marker and how things work, all the way to different assets, different pieces of equipment. Would it be static pieces of equipment or dynamic pieces, meaning pieces of equipment that can maybe move around a little bit. So static piece of equipment from everything from camera stations, security cameras to large multi ton air handling units.
Dave Kruse: All right, and so how are – clearly in the engineers business, how are they managing all this data now.
Todd Hoffmaster: Yeah.
Dave Kruse: What is kind of the state of art?
Todd Hoffmaster: The state of the art is still piece of paper that is this nice notebook that you have in front of us and people still to this day they believe it, they can feel it, they can touch it and so there is –we’ve walked into – I don’t think we’ve ever seen one of our clients be completely paperless and so they have constantly have paper. Now they might have it in digital format as well, but a lot of times that information in digital format is not available. So they will walk around with paper, pencil, pen. They take notes on a cell phone and they just take notes and then they regurgitate that back into something else. They use excel. We have one client, I won’t name the name, but they have an excel, basically a master format of almost a million lines and it kills excel and they have to get it in different computers to be able to handle it and there’s only a few that can handle it, so it’s all over the map, it really is. Some of our more sophisticated ones have very complex data structures that three quarters of the data is not populated because they don’t use it, so they actually manage their building.
Dave Kruse: What’s more complex or what would be…
Todd Hoffmaster: Some of the complex, I mean you are talking 50 to 100 data fields per asset that they are trying to collect right, because they felt like in the day, back in the day it was the right thing to do and they never sat down to understand that if it’s in my system and should or should it not be collected and so a lot of times what we are actually doing with our system is approaching it in a different way where you are with a very select few data files, you get a lot of value from that, and you don’t need everything, because there is a lot of stuff associated with different documents and different fields. But you only need a certain amount of fields to actually do your job to maintain the building appropriately.
Dave Kruse: So what would be an example of let’s say there are 50 fields. How many fields do you take it down to and what are you capturing?
Todd Hoffmaster: Yeah, so I’ll take – give you an example of let’s say a large, air handling large piece of equipment. So for you out there that maybe own a home or have a apartment complex air conditioner right. So an air conditioner probably make, model number, and then installed date and maybe warranty for that right or maybe be standard operating procedure, what needs to happen and when for appropriate maintenance to occur. That’s a very select filed, that’s not a whole lot right. But now all of a sudden some of the individuals from a large complex systems are getting into coil size and they are getting into you know run size fittings and those types of things that these guys are trying to input in. Really a lot of that information is contained in the manuals, ONM, some of the documentation and very rarely was that information relevant unless some catastrophe happens. So they are collecting more information that doesn’t mean anything.
Dave Kruse: Interesting okay.
Todd Hoffmaster: Does that make sense?
Dave Kruse: No, that makes sense. So and I have some more background questions. Before we do I’m curious how. So kind of walk us through when you bring on a new client, how – what type of auditing do you and what type of information you bring to the system or how does that work?
Todd Hoffmaster: Yeah.
Dave Kruse: Because like you mentioned a lot of stuff like around outlets and like walls and stuff and so like…
Todd Hoffmaster: Depending on the client, but we try to start with what’s most important to them, the number one, because if we can’t prove our value immediately it’s hard to justify going to an outlet or going down to a more granular detail, right. So we start with what’s most important to them and what they are struggling with. A lot of times its life safety, so meaning what is the – what needs to happen inside of a building to keep it up and running. Just like – in my opinion just like human’s buildings are living, breathing things right. It has water, air and if those things aren’t working the building is falling apart, the building is in decay and so these controlled systems are very important to the life cycle and again, it depends on the typology of the building. Would it be healthcare, K12, higher education, laboratory facility or a commercial building such as this. There is different needs and so you kind of have to understand from an owners perspective what their needs actually are to make sure they are building is kept up.
Dave Kruse: Makes sense, okay. So what would be, of course I keep asking examples because I’m just curious. You kind of talk about kind of both the life issue. It’s like K12 or an office building, what would be like the key assets or the…
Todd Hoffmaster: So K12 is pretty simple. If in case of emergency what needs to go right and in order to get people out, right, so K12 its emergency, its strobes, sirens, again the criticalness of making sure those are operational and there is a legal aspect, they have to prove that they have been monitoring and maintained, exit lightings, all those types of again things that need to happen in case of an issue or emergency that needs to happen and so fire safety walls, different fire dampers, basically shut off airflow to certain spaces that require it in order to contain the air so it suffocates the fire. So again like, there is – buildings are actually to guys out there listening, buildings are very complex, even though they may look simple on the outside, they are very, very complex on the inside and how they should operate and how they need to operate effectively. So K12, yeah it’s all about fire safety, smoke safety, keeping the kids safe.
Dave Kruse: That’s interesting, and it’s amazing they probably don’t a little better job documenting all this because you think that would be helpful and safer for everyone.
Todd Hoffmaster: Yeah it’s scary out there sometimes, not mean to scare the partners out there, I’m a parent.
Dave Kruse: But a little bit is okay.
Todd Hoffmaster: Yeah little bit is okay. I am a parent of two, so the – you know you walk into any building you see an evacuation plan right. So a lot of that information has to keep with – kept up to date. If they make changes they have to, its state law here in Wisconsin and its pretty much federal law to make sure those things are kept up.
Dave Kruse: So do you guys take an account the state and federal laws, because I imagine like at a hospital, like a backup generator is probably pretty important.
Todd Hoffmaster: Yeah absolutely, you don’t want to be in surgery and the power go out right. So my wife is a nurse and yeah, that’s a very important things and it doesn’t matter of the time of day there is an emergency that happen every minute of every second, everywhere in the world. So making sure those backup systems are operational and tested appropriately.
Dave Kruse: Yeah okay. Interesting, and all right so let’s get a little bit more background just the for the audience you know, the money raised, investor and your employees, your co-founders and whatever is confidential, that’s fine.
Todd Hoffmaster: Yeah, no worries. We actually, we started talking a little bit before we stated the podcast, so we are actually a little bit unique here in the Midwest and we are corporately incubated.
Dave Kruse: Yeah, yeah.
Todd Hoffmaster: And so meaning there was a larger entity that we started this software under. And we started developing, we’ve had some funds internally, we are using revenues from one company that we are growing and to basically grow this new product line and we realized that there is a lot of opportunity to not as to share the risk, but there is a lot of opportunity to grow our company software side faster. And in order for us to do that based on where we were as a consulting company, we realized that the best way to do that is to take external capital. So we actually submitted as a new company, taking all our own intellectual property and everything we developed internally, so we negotiated that release from our existing company, started a new company last year, August 7th is when we officially incorporated. We actually got into generator which here is the Midwest is a one of the top 15 accelerator programs in the country so we are excited to that lease as a jumping on point to get capital. So we got some early investment within generator accelerator program and software and they gave us $140,000 to jump start. From there we are able to bring majority of our software development team that we, the Co-Founders as you mentioned, so there is three of us, four of us actually over into AkitaBox and are able to keep us afloat a little bit more and give us some runway and then from there we were fundraising. It took us quite a long time to find the right partner. It wasn’t like we had the right, the opportunity to take funding right away, but we wanted to make sure we found the right partner for us and in our deficiencies within our Co-Founders, as well as the opportunity for partnership and growth. So as new basically startup individuals we didn’t have any startup experience of really starting a business. We had experience is operations, experience in consulting, experience is sales, we had experience is software development, but actually truly running a software business, we really didn’t have that and so we were very picky, right, wrong or different to select the right investor and so we ended up closing around of $1.1 million in funding would be last year in June if I have that date correct.
Dave Kruse: Close enough.
Todd Hoffmaster: Close enough and we took on a singular investor, not groups of investment. So we had an opportunity to take you know $20,000 here, $40,000 there, $50,000 there but looking at the long term vitality of our business and specifically the next couple of rounds of funding, it was important for us not to just take the money and run. It was more important for us to have the right partner and yes, hopefully they had money to help us grow.
Dave Kruse: Hopefully?
Todd Hoffmaster: Yes.
Dave Kruse: And did you kind about kind of the follow-on rounds. Like would this current investor ever follow on with some investment. At least maybe no fall of course, but…
Todd Hoffmaster: Yes exactly. And that was the enticing part. A lot of times that you know what we reached out into the community here of startup investment is a lot of times these $20,000, $50,000, they don’t have the finances to really fund a next round right. But we’d know if they were only going to put in $50,000 or $20,000 would they have the energy to help a growing company, right. So the more money they put in, the more invested they are emotionally in making sure that we are successful and so that’s another kind of hidden reason why we went the route that we did, is to make sure that we had people not just financially invested, but emotionally invested in our success.
Dave Kruse: Got you, okay. And does the investors help you, the investor, singular, help you in other wise besides…
Todd Hoffmaster: Yeah absolutely. We are fortunate. We meet with them every week, we try to meet with them every week. Every other week we meet with a couple of select individuals that we can talk through our issues openly, so they know where we are at. They help us set up some financials if you will and so they are almost like an employee of ours that we don’t have to pay, which is exciting. But you know we issues that come up with HR and we are able to tap into the HR Director and ask a few questions without issue, you know so it’s really a true partnership. And for them what they get out of that is they get not only a part equity of AkitaBox, but also since they are more, a little bit more established company or established kind of individuals, they get to see and work with millennials if you want to call us that, in a way that you know they hadn’t before and they get to ask very direct questions about issues they might be having with some of the people that they employ at the various jobs that they have. So we are able to help them as well, and educating them how we go about our culture and everything else.
Dave Kruse: Interesting. Sounds like a good partner, that’s hard to find, that’s for sure.
Todd Hoffmaster: It took some time.
Dave Kruse: Yeah, sounds like you were choosy, which is key. A lot of times people are and yeah, they regret it. I was curious what the, you mentioned there is four founders. How do you figure out your roles?
Todd Hoffmaster: Yeah, there was a lot – first there was a lot of overlap. I am not a software developer, so that was easy. Yeah, if you guys couldn’t tell, I know a lot of about the industry. One of my other Co-Founders is very technical. In the industry, very highly respected inside the industry, his name Josh. He was also one of the main brainchild’s of this company, jumpstarting it and you know where he lacks I pick up and where I lack he picks up and same thing with Luke, one of our other Co-Founders. He’s got a background in enterprise sales and enterprise marketing and what have you. I have never done that before, I’ve only been selling typically one off, but more of less I’m very personable, so I can have a good one on one conversation with people that need it. Ravi, our CTO, again software, he is the star of the three, the rest of us. And so we really picked up where each other either don’t want to do or what we lack and so we talk a lot about what we lack and where we can pick each other up, more so than what we can and can’t do. So an example would be Luke, he is very good at setting plans for sales and marketing, our sales and marketing team. He is phenomenal at it. I wouldn’t know where to start. Now I back him in certain areas that he is not necessarily seasoned in and so it allows us to be experts in what we have and we trust each other first and foremost. And when we don’t, you know we have the ability to say look, we are going to try this for this amount of time and if we fail, then we are going to do something else and there is a trust factor there.
Dave Kruse: That’s a good attitude, I like it. So can you tell us a little but about the tech?
Todd Hoffmaster: Sure.
Dave Kruse: And you know I’m kind of curious how much was developed in the other company where it was incubated and then at what point did you bring it out and…
Todd Hoffmaster: Yeah. So the – inside the initial company before our spinout, we actually had a very, very minute minimal viable product that started gaining steam and then from there we were like, Wow! We need to either see what’s out there and what this thing can do and so we ended up hiring a consultant, an individual consultant for a startup. He called himself a startup architect, right, to help us really engineer our technology. And then from there we started hiring in areas that we would need to start building out team, would be main development testing and what have you and so the software architect allowed us to go very fast, very quickly, which was great for us to continue to test on. Unfortunately because we are on the enterprise side, looking back on that now, we didn’t know what didn’t know which was good because we failed. We were paying for something, some decisions that we just needed to get stuff out of the door fast, but we are correcting those as we speak. But for the most part we you know – we tried to go as fast as we could on the enterprise side of who we sell too. We needed to have a lot of bells and whistles for the most part in the collection process and so we were able to go fast. So our stack really hasn’t changed. Actually you know this, I called Ravi, our CTO before just to make sure I had the name and nomenclature right. So we have a full Java script stack, angular is what we use, we use MongoDB, we use other various libraries. We’ve switched JS libraries a couple of times to make sure that we stayed up to date, but our database has not changed and our Java Script stack has not changed since we started it so.
Dave Kruse: Well, and you mentioned you made some mistake. Like every company does many, many times and so like for most maybe you make a lot more. So from those mistakes, do you change your processes or do you change kind of how you think about stuff?
Todd Hoffmaster: Yeah absolutely, absolutely. The one thing is as we took on more and more let’s say clients if you will, the more we realized that we were stuck or we have to communicated even more when things were changing fast and rapidly because we are enterprise, because our system in the built environment we think about and we talked about the systems being very dynamic inside a building and very complex. Most of our users are not very technological right. So if you change one button or change one thing, you were getting phones calls and what’s going on, what’s going here while we constantly needed to right as we improved our product, as we learnt through our customers. So that was a big issue and a big challenge.
Dave Kruse: Interesting, and that’s funny because like the SaaS, you know the cloud application this is awesome, so you can change it right, and just roll it out, but that’s the issue, I supposes is that people aren’t willing to change and its changing all the time.
Todd Hoffmaster: Right, its changing all the time and people didn’t like change and so we now we’ve got automated testing, which we never had before, which allows us to develop faster, but put out a higher quality code. An example is, some of our – I don’t want to tell you the clients name, but some of our clients, we need to be up and running, because if an emergency happens, something happened or that information needs to be available for those people and so we had to put in a very robust quality program internal to our software development testing, makings sure that we test all the scenarios that educates us and what have you, something that we never really had to think about before. User accounts, anybody out there think about the different users’ accounts before you even start developing. That killed us, because we wanted to keep it simple. We kept it simple, we kept it way too simple for the different markets and the different things that we are in and it just killed us.
Dave Kruse: Because a lot of you guys probably had like a facilities manager and then they had the staff and they all want like different like, yes this is different.
Todd Hoffmaster: Different access to different information. So if you think about in any software development or web application or application, you kind of have to understand who your players are and your users versus the people paying for it and we didn’t understand that, and the people that are paying for it wanted basic control, right. So who wants to control the data for us, we didn’t have that defined when we first stated. We just thought, hey, we’ll give it to everybody because that seems easy, the easy thing to do. It’s not going to be used if you give it to everybody, specifically when we are talking about building information and valuable information.
Dave Kruse: Interesting, okay. All right and so who, I’m always curious who is your first customer, was it after you spun out of did you have your…
Todd Hoffmaster: Yeah. Well, that’s a great question. We were our first customer. So because we were consulting and because we were building our own kind of product internally, we were our own customer. Now that was good and that was also very bad. And the reason why say it was very bad was because we built something that didn’t scale, because the deficiencies were made up the consulting work right and how we consulted. So we built something that in essence we couldn’t scale without the consulting business. Does that make sense?
Dave Kruse: Yep.
Todd Hoffmaster: So it hindered our scalability, and we’ve spent some time correcting that and automating some things through that process. The first client again was us, and again it wasn’t relatable because our users weren’t technologically inclined and everyone within our company was very technology based. So we could get away with some things. Our first first user was Madison College here as well as Edward College, so two universities. And they struggle with collecting information. In fact we actually did the collection process ourselves everyday and then we would sit back with our developers at night and tell them what went right, what went wrong and from there we kept improving the process, improving the steps needed to build a scalable product.
Dave Kruse: Did you have relationships with Madison College?
Todd Hoffmaster: We did, we did.
Dave Kruse: That’s good.
Todd Hoffmaster: The guy in Edward College is a family friend. So he allows us to go on site and test some things out. We got paid just a little bit of money to make him basically invested with his time, but definitely not what we charge now.
Dave Kruse: Okay, fair enough, that’s probably good. So let’s see, soo many questions and we only have so much time. We are probably going over and that’s okay.
Todd Hoffmaster: No worries.
Dave Kruse: So I’m curious, I was going to ask this later but you know and we may have already talked about it, but what was one of the hardest parts of AkitaBox so far?
Todd Hoffmaster: Yeah, the hardest part of AkitaBox so far to be honest with you is saying no. Because everyone, once they see our product, there is a lot of people that say what’s next, what’s next, what’s next right, because after the collection process there is more valuable information in the hands of the people that need it than never before and so, hey, can you software do this, can your software do this. Well, we’ve gotten better at saying no, but in the same sense I know we are losing an opportunity to stay like, stay there if you will. We mentioned we were very good technically within the industry and so the process to which we implemented some of our first clients, we never wrote down at all, because we could do it and we never had to train or teach anybody how to do it and so our first few hires were not from the industry, that posed a challenge for us of how do we educate, communicate, what and how we can do things, as well as you know get these new employees up to speed. In order for us to scale we needed to learn how to do that and document our processes. That’s something we are still struggling with today and the reason is because you know each building is different. Buildings are all living and breading things like I talked about and each need for an owner is different. So you kind of have to understand where things, where the software, where AkitaBox can fit to add value. You don’t want to just sell an AkitaBox without any additional value. So for us it’s a big undertaking for internal education, about where and how we can sell, where and how we implement, where and how we can make an impact.
Dave Kruse: Interesting right, and that’s probably I’m guessing from all the startups they never documented and right users trying to get a sale and get out on the field.
Todd Hoffmaster: Get going.
Dave Kruse: Later on they are like wait a minute, now we have to tell everyone else how to do this.
Todd Hoffmaster: Right exactly.
Dave Kruse: I think that’s probably – if you were document from the beginning, I mean you might have been doing it the wrong way and then you have to sell it. Yeah I think that makes sense, that’s probably.
Todd Hoffmaster: Yeah, not only document you know the way, but you are constantly – like I said we are constantly changing our software. So you are constantly changing, you’re constantly educating what those changes are coming and not only that, but okay let’s say our implementation process is five steps, we want to get down to four, we might know how to do that, but the rest of our staff might now and so we need to have our staff basically again be educated on how we can automate certain, that one step process out from a development side. So we have to educate our developers on what is going on. So communication for us is one of our biggest challenge between our implementation of our software, on the enterprise level, communication to our clients on the enterprise level, sales and marketing on the enterprise level, what, how are we educating the industry of what we do and then all the back to development and developers, right. They needn’t understand the true client issue before we go and develop something new or enhance something. So its full circle communication.
Dave Kruse: And how do you respect the clients, see the value in AkitaBox. You mentioned the safety which makes a lot of sense.
Todd Hoffmaster: Yeah.
Dave Kruse: How do you actually, is that really an ROI necessarily or its just more?
Todd Hoffmaster: There is a lot of soft return and sometimes point blank when you sitting in front of a client you say this may cost you more money for the first year, but the second third and fourth years you are going to save 30%, 40%, 50% up to 60% of the time back and so your ROI might not be immediate and that’s hard for people to understand right, because they always want in this day and age you always want an immediate return. If I buy something I want immediate return; if I buy something I want it to turn on right. So there is always this immediate satisfaction. And so we are educating people that that immediate satisfaction depending on where you are at with your data and your building information, that immediate satisfaction could be right away, but it could be a year or two, like a year and a half later and so you have to build that trust.
Dave Kruse: And would the same one have the staff and the time and…
Todd Hoffmaster: Efficiency, creating, yep exactly, staff efficiently, but if you are inside of a building, if you have more areas or need you are maintaining more and so might actually need more against people, so increasing the cost.
Dave Kruse: Interesting.
Todd Hoffmaster: But at least you are building, the longevity of your building, the maintenance of your building, the energy cost of your building, all those should counter act and go down.
Dave Kruse: Got you okay. And so a couple more questions. One is around HR. I’m always curious, I know you have grow pretty fast. How do you know who to hire next?
Todd Hoffmaster: So one of the things that our, all of our Co-Founders are around the table, but we make it a point that we hire for need, we do not hire for want, because we have to feel the pain first and we – all of us kind of agree that that is the right thing and the right way to actually build any business, regardless if it’s a start up business or not is. You kind of have to feel the need before you hire. If you hire for want that could be an issue. For us that’s kind of how we’ve approached it, and it seems to be successful for us. Again, if we see a pinch of the software or on the sales side, we are always constantly looking for great people. So we want a good backlog of individuals and if the right fit happens based on a need or based on a perceived need coming up again, it’s a balancing act. But finding – my role is to alleviate any issues, perceived issues or not and kind of project for what our need could be and then look out two, three, four, five, six months to make sure that we are hiring the right people, making sure that we got our internal training documentation setup, making sure that when we are onboard someone its faster, its more efficient for them, we got the right team, the right culture, that’s number one; the right person on the right seat of the bus.
Dave Kruse: Got you, okay. And well, let’s see, how high has your hiring been going. I actually talked to you once before that, well and that’s always the cases. It sounds like you do a pretty good job of bringing people on but if they are not working out then, you know let them move on.
Todd Hoffmaster: Yeah.
Dave Kruse: Which is always awkward.
Todd Hoffmaster: It is very awkward because you know you are selling a vision and people are believing in your vision and sometimes you can see within the first probably three of four weeks that that vision is not being kept and/or understood or really even cared about and that’s the biggest one right, you see that it’s not cared about. And it’s hard too, because you can’t just hire everybody that is used to startups. And so we hire a lot of people that come from the corporate entity and so we are doing a lot of training for on boarding of what is a startup and because its different than a corporate realm that they are used to and we – when we interview people we ask them what a startup, what they think a start up is and so it’s interesting, the answers we get.
Dave Kruse: Actually that will be interesting for everybody. That would be a good – somebody should have a blog post asking 100 people, what’s a start up?
Todd Hoffmaster: Yeah, so I’ll say that from an interview processes for HR there is two main questions that we ask and this has been – it worked wonders for us actually. One is, tell me what you think we do, what’s a startup right. And the second one is, teach me something.
Dave Kruse: Well I like it yeah.
Todd Hoffmaster: The reason is because it’s get the interview E, comfortable and talking about what they actually care about and it could be anything. So one of the recent ones was skydiving, a person loves skydiving. It’s like well, I would never to do that, but you know they got into the detail of you know how to pack a parachute and it was the most intense detailed discussion about that one entity and so I knew that that individual is very attention to detail.
Dave Kruse: Yes, you better be.
Todd Hoffmaster: Yeah, your right. Exactly. So you get to hear, you get them, the interviewee in their comfort zone. I’ve a firm believer to get someone, you don’t want someone out of their comfort zone in the interviews you can do that, maybe on the second or third interview. But in the first interview you want to get them comfortable, because you want them excited about the position to which they could get.
Dave Kruse: So as a CEO its always and it’s not always the easiest role. How do you deal with the stresses? I mean it sounds like you have some great Co-Founders, but you are still the CEO, you are still kind of you know.
Todd Hoffmaster: It’s a lonely job.
Dave Kruse: Yes.
Todd Hoffmaster: I’ve got a phenomenal wife, two kids. We try to hug every day and night; five and two, Morgan and Carmine. I try to make them as, be as goofy as possible which keeps me sane. My wife does hate that but she’s got to put up them, but her three kids.
Dave Kruse: Yeah
Todd Hoffmaster: Exactly. Pretty much, pretty much are three kids which I’m included in that. But you know I got a good network of people outside of the work environment that I make it a point that my cell phone is off, people that I care about within our industry. My Co-Founders know that I am between these hours I’m not available unless something is really wrong to get a hold of me, call me.
Dave Kruse: Are you able to stop thinking about work?
Todd Hoffmaster: Never.
Dave Kruse: Because that’s a problem.
Todd Hoffmaster: Yeah. You know I got hobbies, like small little hobbies that I do. I love golf. It’s very again for me it’s very mental, I love golf. And I just like movies because it’s get me out of reality. For me getting out of reality is a good thing, because it allows my mind to wander and some of my best ideas come from when I’m watching a move or something like that, because you have to find an ability to turn your mind off and I still struggle with that, but I’m getting better at it because that’s one of the. You want to talk about New Year’s resolution coming up, that’s going to be one.
Dave Kruse: Awesome, I’ll check back. All right, last question and this is on the future. So in five years how do you kind of see AkitaBox, the product rolling out and what would it be able to do or help and…
Todd Hoffmaster: Sure. Yeah. So our industry there is a lot and lot – billions and trillions of data points to deal with builds. There is billions and billions of square feet in world. There is a new building going on right now. If you just look outside of look across the street or anything thing there is renovations going on; it’s a constantly changing industry. The one thing that will help with that is artificial intelligence. I mean being able to run millions and millions and millions of different algorithms on millions of different cross referencing because built environment effects all industries from industrial manufacturing to the way airplanes are built or flown, they fly into airports. I mean we live, breath and work and live in a building. The world is our building and so AI is really that engine that will bring a lot of those building components together. Not saying we are headed down the AI road, but the way that we want to collect information is it could be very valuable for people in that putting together those data points.
Dave Kruse: Got you, okay. So interesting. Well, that makes sense. Well that’s good and right, and yeah I mean do you see yourself in five years partnering with somebody with AI or bringing that on or would you sell yourself or how would you do it?
Todd Hoffmaster: Yeah, well my investors out there. Yes, we want to get a good exist. The way that we imagine fitting in is really partnering with some with AI. We want to be experts of what we are experts in. We don’t want to branch off from that. That’s very dangerous as a newer company to start dabbling in areas we just don’t have any experts in, unless we are Facebook or Google right. So being able to partner with someone is to understand what data fields they may be missing in the AI engine and then making sure that our data that we are collecting is you know in a format that can then be useful in some sort of AI entity.
Dave Kruse: Well, we have go out with AI as often to preparing the data. So if you can hand deliver it to them that’s about 80%, 90% of the sale.
Todd Hoffmaster: And because we are location based and because we have the location of where, what, who are doing things, that’s a very valuable information that someone could have, yeah.
Dave Kruse: Definitely. Well, I think that’s I think a good way to end and definitely I appreciate the interview Todd and I don’t know if I’ve ever met anybody who likes buildings as much as you, which is awesome, but I appreciate it and so I mean that’s why I said you are the perfect person to be running the company. I think you will do quite well and thanks for sharing your experience and just learning more about you.
Todd Hoffmaster: Thanks Davie. I appreciate the opportunity to come talk.
Dave Kruse: Definitely, and thanks everyone for listening to another episode of Flyover Labs and hope you enjoyed it as much as I did and I guess we’ll see you next time. Bye everyone.