The Future of Climate Control With Smart Buildings

Dunja Jovanovic: Could you share insights into the initiatives you and 75F are spearheading in the cleantech sector?

David Koerner: I lead a global team of marketing superstars at 75F, based here in Minneapolis. We're a forward-thinking clean tech company with the backing of Bill Gates and some of the largest HVAC and automation companies. We specialize in optimizing energy efficiency and comfort in commercial buildings using sophisticated smart sensors and control systems. Our technology is dedicated to addressing the excessive energy consumption in buildings, significantly contributing to global greenhouse gas emissions. It's quite fascinating that nearly half of a building's energy usage goes towards heating and cooling, with a substantial portion wasted due to unoccupied spaces.

DJ: What distinguishes your platform from others in the building automation sector?

DK: What makes us different is that everything is built on data and improving efficiency and comfort. If you were to liken us to anything, think of us as the commercial counterpart to the household Nest system, though our system encompasses far more than mere temperature and humidity regulation. One product, the "75F HyperStat," goes far beyond basic temperature sensing to include CO2 monitoring, PM2.5 airborne particulates, IR sensors for real-time occupancy detection, and even tracks lighting and sound levels to determine when offices or rooms have high occupancy. This holistic approach allows for real-time adjustments of HVAC systems to close off empty or unused areas and redirect air where needed most, ensuring energy is saved and utilized most effectively. Unlike traditional systems, ours is wireless, straightforward to deploy, and integrates a plethora of sensors and actuators, setting us apart through ease of use and comprehensive functionality. It’s built to control any commercial HVAC equipment, from small rooftop or wall units to massive boilers and chillers.

DJ: Introducing such technology surely comes with hurdles. What challenges do you encounter when trying to reach a wider market?

DK: One of the main hurdles is the process of educating the marketplace. There's a hesitation towards adopting new or efficient solutions, driven by misconceptions that sustainable options entail inconvenience or unwarranted expense. We aim to debunk these myths by showcasing how sustainable practices can align with economic benefits and operational improvements. In short, we aren’t lowering comfort in businesses or offices, we are just lowering energy bills from heating or cooling empty spaces. This industry also faces a notable shortage of professionals skilled in smart building technologies, which is why we've made our system as user-friendly and intuitive as possible, to alleviate the need for extensive training.

DJ: In such a scenario, how do you attract clients and convince them of the integral role sustainability should play in their business model?

DK: It all boils down to showing instead of telling. We put a strong emphasis on getting customers to try 75F in a pilot or demo so that they will love the brand, not the other way around. By presenting a compelling business case, emphasizing the technology's rapid payback period (just 14 months on average), and its direct benefits in air quality and extending the life of HVAC equipment, we challenge the perception that sustainability is merely an add-on rather than a crucial component of modern business operations.

DJ: Considering the pivotal role of marketing in raising awareness and promoting sustainable practices, how significant is it in your strategy?

DK: Marketing is vital, not just at 75F, but to climate change. Despite the noble intentions of past environmental campaigns, the ‘inconvenient truth’ is that decades of morally-focused or fear-based climate messaging have had a limited impact on changing public behavior. Our approach shifts the narrative to focus on the opportunities available to businesses that can benefit their bottom line as well as their community and the environment. By highlighting the tangible benefits of adopting our technology, we aim to make sustainability an attractive proposition for businesses, governments, and the owners or occupants of buildings.

DJ: Navigating the unique landscape of cleantech marketing, especially with issues like greenwashing and the demand for transparency, how do you ensure your messaging remains impactful and genuine?

DK: Maintaining authenticity is crucial. While we leverage AI for operational efficiencies in our thousands of customer buildings, we place a significant emphasis on authentic engagement and storytelling in our sales and marketing. Our strategy revolves around sharing tangible benefits and maintaining open channels of communication. This blend of genuine narrative and clear messaging helps us forge deeper connections with our target audience, ensuring our message resonates strongly and authentically. In an era of AI, everything human is a differentiator, including real customer success stories, profiles, phone numbers, events, and even podcasts like this one.

DJ: Before we conclude, Dave, could you share where interested listeners can find out more about you and join discussions with other clean tech professionals?

DK: You can discover more about our work at 75F by visiting our website, 75F.io. I'm also open to connecting personally with anyone interested in cleantech marketing. I started a LinkedIn group "CleanTech Marketing," designed as a collaborative forum for professionals in our field to exchange ideas and insights. It's a no-sales space dedicated to fostering discussions and trading stories among clean tech marketers, and I encourage you, Dunya, and our listeners to join and contribute to this growing community.

Did you know that buildings account for almost 3% of global energy consumption? Half of that goes to heating and cooling of the buildings, and half of that just goes to waste. That's why we invited Dave Koerner, a marketing maestro from a company called 75F.

They're here to disrupt the building industry with their technology and reduce the energy wastage and greenhouse gas emissions. And there's more to the story. We are going to explore on how marketing strategies can push the envelope when we talk about environmental conservation and how businesses can adopt the sustainability practices as a part of their core strategy.

So stick around. This is going to be an interesting chat.

Hi Dave, welcome to the Green New Perspective Podcast.

Dunja, thank you so much for having me.

So can you tell me and our audience a bit more about yourself and 75F, the company that you work for?

Sure, my name is David Koerner. I lead the marketing team at 75F based in Minneapolis. We are a Bill Gates-backed clean tech company.

We have smart sensors and controls, controls kind of like this one, to make commercial buildings of every size more efficient and more comfortable than ever before. Buildings are the fourth leading contributor to greenhouse gas emissions. I suppose it kind of depends on what data you're using though.

And they're hugely inefficient. About 50% of the energy in a building today is used heating or cooling that space. And that's true almost across geographies, which is fairly interesting.

Most of that conditioning of air, most of that knowledge and energy expense is wasted because huge chunks of modern buildings are empty. Roughly 80% of a building is empty. Not just floors, but you might have offices that you use rarely or your conference room is only used about 20% of the time.

And then overnight, of course, many buildings are empty. So it ends up that if you can make buildings more efficient, more intelligently, you can save a lot of energy and thus a lot of carbon.

And what makes your platform different than other building automation systems out there?

We're approaching this problem in a very different way. This device I held up looks kind of like a thermostat. At a high level, I guess what we're doing as a company is something like Nest, but for commercial buildings.

But this is much more than a thermostat. We call this the 75F HyperStat. Fun marketing, being part of that group.

That's a lot of fun. The HyperStat has not just temperature and humidity control, like perhaps the Nest thermostat in your house. But on this device on board, we're measuring CO2 and we have an occupancy sensor here.

We're also measuring light and sound. So when you walk into a conference room, scrape chairs, turn on lights. The system identifies that that conference room or space is occupied and prioritizes that space.

Dampers in the ceiling begin closing. Fans on the rooftop or any existing HVAC equipment begins being adjusted by actuator, something like this, automatically. And air is redirected where it's needed most to the highest occupancy spaces.

And that's happening continuously all the time in thousands of buildings where 75F is installed. So that process of using data and IoT to make buildings more intelligent is totally unique in the industry. Most systems are wired, not wireless.

They require custom programming. They're not easy to install. You have to connect and configure a lot of different parts and pieces of that system.

And we have fully integrated sensors measuring CO2, like I mentioned, but also PM25, VFCs and spaces to ensure optimal indoor air quality. Energy meters, monitoring the energy in a building. Actuators, of course, on the roof or on chillers or boilers.

Everything within an HVAC system, working in concert to try to deliver the energy savings that our customers are asking for.

And what are some of the biggest challenges in bringing that kind of technology into the market and presenting it to the broader audiences? Well, that's where you come on, I guess.

A challenge that we see across clean tech today is this crossing the chasm, where in traditional industries, consumers and businesses are waiting because they're concerned that sustainable choices are also going to be inconvenient ones. And convenient to them, a user, and inconvenient to their business. The biggest challenge, the biggest opportunity we have is to educate customers that the technology exists today to make buildings massively more efficient, or to make transportation more affordable for more people.

And to the extent that we can do that, we can be successful. A challenge within the construction industry, this is getting a little nerdy and niche, but there's a lack of talented smart buildings people. And if solutions require trained technicians to be certified on complex, grid connected building automation systems, if they require users to learn how to use software tools, then there's gonna be an upper limit to how much we can actually reduce carbon in buildings or how fast companies like 75F could scale.

So the way that we approach that problem is we make a system that has integrated AI, it's flown in 60 languages. Any customer can ask a question and receive an answer without figuring out how to use a dashboard or a backend, just authenticate their account, find their password. And you can walk up to a 75F system and change the temperature in a room, figure out what's happening on the fourth floor.

Why is the conference room hot? What's the noise coming from the ceiling in my building? And you can get an answer immediately.

As it's wireless, it's easier to install. There's no running wires. There's no programming, like I mentioned.

So the system that's easier to install, easier to manage and maintain, means that we can sell it to more buildings than traditional solutions. Fun fact, 96% of buildings are smaller than 150,000 square feet. Over 80% of those have no building automation system today.

They don't have smart thermostats. There's not a way to log under your phone and see what's happening in those spaces. So there's a huge opportunity around the world to make buildings more efficient and to reduce total global greenhouse gas emissions and emitted carbon by over 5%.

How big of a part marketing plays in that educating that you mentioned?

Yeah, it's tremendous. I think climate has a marketing problem. The last 20, 30 years of the environmental movement have from a marketing standpoint been fairly unsuccessful.

If you measure marketing by your ability to influence a customer, change a behavior, particularly in the US it's worse than ever before. The percentage of American citizens who believe that climate change is real is, according to Pew Research Polls, as low as it's ever been. I think part of the problem is that we continue to talk a lot about fear, talk a lot about the moral obligation that we have to do something now.

And instead, what we try to do as a marketing organization, as a company, is talk about the opportunity that businesses have to make a decision that's good for them, good for their community, and importantly, good for their company. We're saving most customers over $100,000 a year in energy costs, and that's while increasing the comfort of guests and occupants in their building, increasing the performance of their teams. They're working at a tech startup like this.

That's a net win for everybody.

What are the marketing challenges unique to the cleantech?

If the first rule of advertising is you have to get a customer's attention, then cleantech companies from very small to very large are struggling with that today. I think most customers might tell you something along the lines of, this is important, I love what you're doing, but this isn't one of the 10 most important things to me right now. Between global conflicts and election year here in the US, that's sucking media and PR attention.

This rise of AI and very real concerns about privacy and all those things. There's not a lot of space to talk about thermostats, but that's what we're trying to do here. We are the make thermostats cool again.

Well, I had many guests here on the podcast from all over clean tech, agri tech, nature tech, biotech space, bigger companies, smaller companies, and they've shared a challenge that they have. They usually know a bunch of nerds, geeks, scientists that are developing technologies aiming to combat the climate change, but they know how to communicate those technologies to broader audiences, they just don't know. So what would you say?

How can they navigate the complexities of communicating their efforts?

Yeah, we could even go outside of clean tech because like I mentioned earlier, the climate crisis is a marketing problem where you should be able to apply some basic marketing principles. One is get a customer to try your product so that they'll love your brand. Don't give them to love your brand so that they'll try your product.

It's always going to be a low ROI activity to convince customers, I'll just use 75F as an example, that smart buildings are a pressing problem, that smart technology is a solution to global carbon emissions, that this is the most important thing that we all need to do right now. So as a company, we don't do that. Instead, we say if you're looking for a building automation system, you'd be crazy not to take a look at 75F.

It's industry-leading, it's award-winning, it's been proven across thousands of sites and customers to deliver great performance. So we make our conversation a smaller one. And as a challenger brand, we let our competitors, Siemens, Johnson Control, Schneider Electric, Honeywell Carrier, we let these big companies do the heavy lifting of the future of AI in buildings or position pieces in news articles about grid-connected buildings or the future of the energy grid or how comfort is critical to the performance of teams as we return to office, all those pieces.

I just want to send a clear and consistent message to our widest addressable audience, which is not the broader community. It's just folks who make decisions about modernizing or upgrading their spaces, who care about sustainability, comfort or both.

What role do you think government policy and regulation play in shaping marketing strategies in think tank?

Oh, it's huge. And I think you will see government play an increasing role in our transition to sustainable energy. If that's the greatest existential threat to mankind, I think it is.

The most exciting thing I'm seeing on our side is something called EUI, which is energy use intensity. Essentially, it's like miles per gallon for a car, but EUI tells you how well your building is doing. So if it's a school, EUI is a score that gives you the energy use per square foot of that building and lets you benchmark against other private schools or daycare facilities in your area, lets you benchmark your city government or municipal buildings against a neighboring city, and gives you a starting point for figuring out how you make decisions as a consumer, as a business owner, based on that.

And I expect in five years EUI is probably going to be everywhere. Currently, we're working through all the IRA here in the US and green buildings policy in the EU. But in the future, I think there's going to be a greater emphasis on benchmarking and monitoring performance of buildings everywhere.

We've mentioned several times that sustainability in companies is viewed as something extra, not something that needs to be integrated in the business of each company or each business. So how can cleantech companies address this perception of, let's say, higher costs associated with environmentally friendly products or services in their marketing efforts?

Yeah, we focus a lot on payback period because the payback period for building automation is less than three years. These are incredibly smart and very affordable devices. When you're talking to a chief financial officer or to a business owner, it's important to create a business case for making good decisions about modernizing or upgrading those spaces.

Sometimes tenants are doing installs even in spaces that they don't own because the devices are wireless, they can take them with them. And because the payback period is so short that it's kind of crazy not to. Also, many people are uncomfortable.

I feel like since our earliest ancestors created fire in a cave somewhere, immediately somebody was uncomfortable. You're either sitting too close to the fire or too far away from it. To the extent that we can solve the problem that you have today and make you feel good about that decision, we can win.

If you're a school district in rural Oklahoma, we can save you the equivalent of 3.8 teachers, but we also can, perhaps more importantly, deal with parent complaints that the math classroom or the gym is too cold in winter or too hot in summer. If we can create a 3D model of the space, a thermodynamic model, use sensors to track how that space heats and cools over time, predict using third-party data what the weather is going to be, then we can only use HVAC systems where they're needed. We can take advantage of free cooling.

We can deliver comfort while simultaneously saving energy. And that's a no-brainer. It doesn't matter to me whether you believe in climate change or not.

I'm going to present a persuasive argument why you should change your behavior and try something and decide for yourself whether it saves you money or makes you feel better about your decisions as an owner or operator of that space.

And how big of a role the storytelling plays.

Oh yeah, tremendous. I think storytelling is fairly fundamental to marketing. At the core, this is something that Las Vegas does really well.

Dunja, you've had a great year, second year of your podcast. Congratulations. You should celebrate.

You should get some of your friends together. You should go to Vegas and just... They don't make up a valid business argument.

They say Vegas and shining lights. Because I think what Vegas knows is it's easier to convince somebody to jump off a bridge than to convince them it's a good idea. So just like as a company, you need to make a business case.

I think at the core, you need to get them to make the leap. You need to convince them that this is something that you should try right now. And you do that just by relying on all of our need to try something new.

And everyone, there's a reason why there's so many flavors of ice cream or so many jams and jellies in the supermarket. I think most of our customers have tried and older thermostat, and they don't love thermostats in their homes or in their offices today. They don't love the comfort in those spaces where we all notice when we're too hot or too cold.

And we all know that we're paying huge amounts for energy and none of us like the waste. So if we can just sort of fall back on the sort of basic human emotions in our storytelling, then that's just a really compelling message.

And do you feel there's a difference between, let's say, regular marketing and clean tech marketing in terms of storytelling, especially if we think about greenwashing and then transparency? How can companies communicate their efforts to be transparent, to not use greenwashing tactics?

Greenwashing is a touchy topic. There's a lot of viewpoints on this at a high level. I'm a fan of anything that's helping the planet, helping this transition to sustainable energy.

I don't really care who wins or who profits. The result is the same. We need to lower greenhouse gas emissions around the world.

For our customers, our businesses, we need to stop wasting money and wasting energy. Our grid is already at capacity. In fact, if we electrify everything, we need to forex the grid over the next few decades.

So anything that's going to accelerate this transition to sustainable energy, if you take just a purely utilitarian view, that's a win. There's maybe not a clear right or wrong here. But as a startup, as a marketing guy, I think we need to just turn the dial up to 11.

I firmly believe that the definition of marketing, the role of marketing in a business is to influence customer choice. And within cleantech, that changing customer behavior, being in the business, changing what people buy, what they care about, get them to move from product X to product Y is extremely difficult. And I think modern marketing is probably less effective than ever before.

So if you put all those things together, just with the noise of digital channels, the lack of effectiveness in most marketing tactics today.

What do you think that is?

I mean, this has been talked about, but there's so many reasons. Just the sheer number of digital channels, the decline of traditional media, there's more things competing for the time and attention of consumers. Consumers have less disposable income if you're in a B2C company.

There's the rise of social media generally and now AI and its dilution of original content. I think digital marketing is less effective today than ever before. Most brands and businesses are reaching fewer customers.

Ad blockers and privacy filters have made it very clear that the traditional approach to targeted customer acquisition has only increased costs for companies and as a result, most marketing tactics are less effective. So what we have to do as a startup, what we try to do here at 75F, is tell a clear and consistent message. Instead of trying to be a mile wide and an inch deep, we cut aggressively anything that isn't a constraint, isn't directly affecting our business.

So let's shut down the blog post, shut off Facebook and focus on LinkedIn, get off Twitter, I refuse to call it Twitter, and most other social media platforms for our market and for our customers. And to just narrow our scope and simultaneously to try to make our message as punchy and aggressive as possible. Like we want customers to get this in their hands and I want them to try to decide for themselves whether it's right for them.

So in almost everything, we just want to turn the dial up to 11, we want to be extremely asymmetric. And only by doing that can we leverage our challenger brand in the market and can we leverage our much smaller marketing budgets than established traditional competitors.

And what advice would you give to other startups when it comes to their marketing strategies that are aiming to disrupt the building industry or any other industry, it doesn't matter?

Yeah, I love marketing principles. I learned a ton about marketing tactics. I'm not sure how much of that applies, but marketing principles seem to remain fairly consistent in clean tech or across any other category.

There's this fundamental theory of constraints. What is the limiting factor for your business today, your product or service? And if you can understand at a high level what that is, you can build strategies based on that without spending a lot of time or a lot of pain and A-B testing or trying to find a path.

For example, there's a debate about should you gate or ungate content on your website? And AI probably changed that debate slightly, but the fundamental constraint is, are leads a constraint or is demand a constraint for my business? If I need leads, first and foremost, if that's the bottleneck, then a decision about gating or un-gating content isn't about what kind of content it is or how rich it is.

It's about if I need leads, I need to gate the content to grab those leads if there's no better, cheaper, higher ROI way of doing that. If you reduce any marketing question to the strategy, to the constraint, then as cleantech companies, as marketers, we give ourselves a lot easier a challenge because otherwise it's just too easy to be spread too thin.

And what do you find the most exciting about the future of the company and the future of marketing in cleantech?

I love this space. I think marketing generally is under attack. You see CMOs at Fortune 500s.

Just this week, the CMO at UPS was released and the CRO or Chief Strategy Officer took on the role of marketing. That seems to be part of the cyclical cycles that we've seen within the marketing profession, but that seems also extremely short-sighted. Marketing is absolutely critical to a business and this transition to sustainable energy requires understanding customers, creating products with exceptional market fit, articulating the advantages, both the physical advantages but also the less tangible advantages and benefits of making choices that are good for all of us.

And so I don't think there's any more exciting place to be. And you know, public service announcement, if you are working in banking, if you're the marketer for HR software, if you're selling, you know, home loans or something, you're a real estate agent and you're burned out and trying to figure out is what I'm doing matter, does what I'm doing matter, then come to CleanTech because we have hundreds of companies and we need you. This is a very real challenge.

Yes. Yes, please. Come.

It's nice. The water is nice. Come on in.

There's more than enough room, more than enough opportunity for everyone.

Yeah, I have to say being in CleanTech is great.

It is. Congratulations on the second year of your podcast, by the way.

Yeah, that happened as well.

You found a way to be successful in a time of peak podcast.

So you are already using AI. So how do you see this developing in the future?

Sure, we're early adopters. As a company, we've spent millions, maybe tens of millions, it's kind of embarrassing to say, building dashboards and reporting tools and analytics, hiring UX designers. By introducing AI, we skip all that stuff.

What we're talking about is a zero interface building automation system. So just like as a company, we were first to market with AI as a marketing team, as a global marketing. We have been aggressive fans of AI.

Each marketer has a single tool that they become expert in within the team. And they're the go-to person for staying on top of the tools and trends. Each person has a license for just one, or in some cases, two AI tools.

But again, we try not to... I don't want the team to attempt to develop expertise in 10 or 15 different tools, but instead just to really focus and become an AI prompt engineer on just one tool. But as a marketing team, there's also the question of authenticity.

We're doing this podcast, but you know probably more than most the importance of authenticity to small businesses. If you believe that AI is the future, then you simultaneously believe that you can differentiate by creating a more authentic brand. That's not just putting your executives on video screen.

It's also putting your phone number on your website, having a real person pick up the phone when a customer has a question. It's blog posts and thought leadership pieces. It's experts and narrow specialties with a knowledge that AI can't match.

You've created the second most popular clean tech podcast on Google now. I'm sure you agree that authenticity is probably more important than ever.

Dave, my last question for you is the same one that I asked to all my guests here. Can you share the website of 75F where people can explore the company more? And then if you have some of your blogs, social handles, some Discord channels, Slack channels, CleanTech communities that people can explore, please do.

Please check us out. If you are considering 75F or if you know somebody who is, thanks for your support in advance. And reach out to me.

I'd love to tell you more about what we do. Personal plug, I also just stood up a new group called CleanTech Marketers on LinkedIn. Dunja, you need to join.

You need to be one of our first. Because within marketing, CleanTech is a kind of unique community. And in the last four years, most of my peer group have become CleanTech Marketers.

So we have a small group on LinkedIn where we share news. Nobody's there to sell. There's no agencies allowed, but a ton of great CleanTech Marketers.

So look up CleanTech Marketing Group on LinkedIn or don't. I'm not your mother. I see you could do it too.

We have come to an end of yet another episode of the Green New Perspective Podcast, which is the perfect time for me to mention our wonderful sponsors, New Perspective, a Boston-based marketing agency working with clean tech clients only. And if you want to see how they're helping their clean tech clients to grow, please check out the info in the description of this episode. And if you like what we're doing, consider sharing, liking, commenting, and subscribing to our channel on your favorite streaming platform.

It really means the world to us. I hope you enjoy this conversation and hopefully I see you in the next one. Bye.