Bringing the Heat | Michael Wong from Genea

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Michael Wong 0:00
there was massive opportunities to help really automate a lot of the manual processes in commercial real estate for the benefit of the operators as well as the tenants. But it’s an industry based on relationships.

Alexander Ferguson 0:18
Welcome, everyone to UpTech Report UpTech Report is sponsored by TeraLeap.io. Learn how to leverage the power of video, my guest today, I’m joined by Michael Wong, who’s based in Irvine, California, and CEO of Genea. Welcome.

Michael Wong 0:31
Thank you, thank you for having me.

Alexander Ferguson 0:33
Your product is a cloud based software for commercial real estate. And you’re sharing that it’s owners of commercial real estate, this is definitely a tool they may want to check out. And he also mentioned that it’s kind of like a nest type component for your office with a billing element, can you dive in a little bit deeper of what was the problem you initially set out to solve and how is this evolved over time of what the solution you provide?

Michael Wong 0:56
So there are different solutions. The first product I bought into which I’ll get into the history later on, was overtime, HVAC services in office buildings primarily. And so it used to be a very manual process where if you have to work late tonight, or over the weekend, you’d have to contact property managers 24 hours in advance, you’d have to dispatch engineers to program the equipment to turn it on. And then there’s a billing component to it. Because when you turn on HVAC services, after hours, it costs the building money. So those invoices or costs are passed along to the tenants. So what used to be a very inconvenient process for the property team, as well as for the tenants, we were able to solve with solva software. So our software plugs directly into the BMS system, the building management system of a building doesn’t matter what kind of system you have, it could be trained, Siemens just controls we we can communicate to everything. And, and once we’re plugged in, the tenants simply have to log into an app on their phone, our app request for service three to 6pm. Tonight, per your lease that rare requests is going to cost you $330 From A to confirm it sends confirmation emails, turns it on at six turns it off at nine creative invoicing at the end of the month, all that billing information flows directly into their accounting software for the for the property team. So once again, what used to be a very manual process not convenient for the tenants has now been automated soup to nuts. So that was initial technology.

Alexander Ferguson 2:28
You mentioned there when you when you bought and we’ll get more into that in part two of our interview, but just to share a little bit, when when you bought into Jenny about nine years ago, I think it was what’s one thing you had wished nine years ago you had known then that you do know now

Michael Wong 2:42
I wish that I would have known what it was going to take as long to build the brand. Because you know, commercial real estate as a little bit of a backdrop is one that had been very slow to adopt technology for good reasons, right? If you were a very successful owner of commercial real estate, the reason why you’re successful is because you bought buildings, right? You sold them right and you lease them up correctly during it was all transactionally driven terms of value creation. So on the operational side and the property management side, it was viewed as you know, not really all that important because it really didn’t drive the value is somewhat of a commodity during the last financial crisis in 2009 2010. If there’s anything good that came out of that it’s commercial real estate owners had to own their assets longer. And therefore they look internally, how do we incrementally create value and that’s when you start adopting technology. So the reason why I give you that backdrop is there was massive opportunities to help really automate a lot of the manual processes in commercial real estate for the benefit of the operators as well as the tenants. But it’s an industry based on relationships. And so there’s a lot of commercial real estate technology companies that have popped up that have come to me and said, How did you get 21 of the top 25 largest owners of office buildings to be clients. I said it’s not easy. You have to build trust, you have to do via relationships, because it’s a very relationship driven industry. And so that’s what I kind of learned the hard way, which is you can’t just snap your fingers. And even though we have a wonderful product with a lot of value props, they don’t know you from a hole in the wall. So you really have to kind of earn your reputation over time, which we have.

Alexander Ferguson 4:28
For those that want to hear more, Michael. So I’m excited to hear that. We jump into that part two of our interview, but coming back to then the product itself that you’ve built. What would you say for those who are owners of commercial real estate? A common misconception or thought that they may be having right now that they should be thinking about differently when it comes to managing their facility and using their BMS.

Michael Wong 4:52
So with specifically that overtime HVAC product right now People who don’t know that there’s an automated way of providing service like our Junya app, they just think the work order systems fine, right, just the way we do it is just fine. And so I think, you know, as we see, home automation go through, you know, the next evolution, you can control your door locks through an app on your phone via, you know, kind of internet enabled devices, all that stuff, your tenants are expecting that now in their office. And so to the extent that you don’t keep up with their expectations, then you will lose the battle of retaining and attracting tenants into your buildings. So we’re seeing that across the board, for most of their top commercial real estate owners is we need to, when we’re talking about improving the building, a lot of the focus historically has been on the physical aspects of the building, upgrade the elevators, upgrade, the lobbies make the physical structure look nicer. But a key component, what tenants are looking for is now does the building have the technology that expect and so we’re a part of that. So we do that with our HVAC technology, our access control technology is making a massive impact, instead of using your white 80 ID card to swipe in and out of buildings, or tenants, or would like to use your phone instead, because you never lose this device. But you can lose that weight card all the time. So those are the things that the tenants are looking for. And quite frankly, we can bring more convenience to the tenants as well as streamline the operation for the property teams.

Alexander Ferguson 6:34
So the common misconception is the status quo was fine. What we have what we’re doing is fine. But the tenants, your customers, your consumers, they’re expecting a better level of technology when they’re using Am I catching that? Correct?

Michael Wong 6:48
Absolutely. While at the same time, because so much of the technology is software based, you can actually get a very compelling return on investment, because there’s not typically in major upfront costs. So it’s not like you’re having to invest in a brand new chiller, most of the software that we have created or acquired, all works with your existing equipment. So you can increase the functionality of it bring a better tenant experience. And we have time and time again been able to quantify a ROI that has been very, very compelling for all our clients.

Alexander Ferguson 7:23
This leads nicely into a question around your business model, isn’t it large overhead cost up front? What does that look like as far as the end? Who’s using

Michael Wong 7:31
this? So, so much that the company has been built on that trust, right, our brand is one where we really earn the trust of our clients. And so we don’t go to a large real estate owner and say, here’s our product, roll this out your entire portfolio, quite frankly, we basically say, let’s work on a pilot program of give us, you know, a building or two or three, let’s prove out this specific product value prop within that pilot, and then we’ll earn the right to do more. And so a couple of stats I’ll tell you about. The reason why I know we’ve done a good job is we’ve had 99% customer retention at the building level, which is outstanding, because this is an industry where buildings are bought and sold all the time. So time and time again, even when a building gets sold into another portfolio, we earn the right to stay with that building. So we’re almost like carpet and paint. It’s kind of weird to be a technology upgrades of the carpet and paint. But then the other thing I kind of point to in terms of earning trust is our net promoter score. So net promoter scores customer satisfaction score. And our last customer satisfaction score of 75. Net Promoter was it puts us above apple in terms of how loyal and how passionate our customers feel about us. So why do I bring that up? Because you asked, you know, how do we how do we charge for our services, it’s very much of a proven model. So for all our software applications, we don’t charge anything upfront for the setup fee will invest our time will invest our money to getting the building set up and implement it. We don’t start charging a fixed monthly fee until we go live. And we don’t even ask for a long term commitment. We just ask for 12 months during that 12 month process, you pay us that fixed monthly fee. And that fee depends on what service you have. At the end of 12 months if we haven’t done a great job driving value. If we haven’t made your property team or your tenants happier than unplug us we didn’t do our job. So it’s not like our high retention is because of long term contracts. We’ve constantly earned our right to continue to do business and we proved ourselves so

Alexander Ferguson 9:45
that’s really helpful to you fully believe in it if you’re going to invest the time and energy and money before someone starts paying you. You mentioned integrating with the their BMS do you integrate with any type of building management system

Michael Wong 10:00
So the things that we integrate with with our HVAC product, we integrate directly into your BMS system. And those systems are made by Siemens Honeywell Johnson Controls. And it could be an old 20 year system that’s proprietary, not open protocol, it doesn’t matter, we built software to communicate to all the different brands. So that’s for the HVAC product for our sub meter belling product to the extent your sub meters or network back into either a data collector or into the BMS, we could physically plug our software into the data collector or into the BMS automatically read the meters and automatically create invoicing for it. So that’s been very helpful in terms of streamlining that, that manual process. And then for the access control side of things, to the extent that you have mercury based access control hardware, so that’s about 60% of the underlying hardware out there has mercury firmware, then we could plug directly into that. So we could do a software takeover of that hardware and bring a much better cloud based solution to that. So it really depends on which product you have. The whole mindset is, we want to help increase the productivity of your existing equipment, without having to make a big upfront investment. We can bring software component software to make it work better.

Alexander Ferguson 11:20
Where do you see the company in five years from now? What can you share on the roadmap of where you guys are headed?

Michael Wong 11:26
You know, so we’re big fan of, we go where the customers need us. And so starting off the eight facing product, we built a really good reputation there. And the reason why we got into submitter billing is because our customers said, We love this HVAC product. It’s made our tents lives better, it’s made our property teams lives better, it’s made us more money, can you help us with another problem. And the problem that kept on coming up is the sub meters were being you know clipboards and spreadsheets. So we basically developed a better solution to help solve that problem. Now we’re billing for over 20,000 sub meters around the country, its last year grew organically over 70%. And then when you start staying close to your customers here and about other pain points that they had, access control was a major pain point. You know, every time somebody joins a tenant within the building, and needs an access card, it’s somebody physically has to go down to the property management team to the physical on premise server to add or remove users. Every time somebody joins another company. It’s a full time job. And so understanding that knowing that 99% of access control is software sitting as in a server in a computer in a basement of a computer. That whole industry will go to the cloud. And so we looked at either acquiring or developing a better solution. Long story short, in December of last year, we acquired what is by far and away the best technology for the space. And we’re now we’re rolling that out to our clients. So five years from now, what I would say is that because commercial real estate has been slow to adopt technology. There is no 800 pound gorilla in our space. I think there will be an 800 pound gorilla because if you’re Brookfield Hines, Irvine company EQ office, if you’re people that work in those companies, you want to have a brand that you can rely on right and so there’s really no brand that you can rely on until now. So genie has become that brand our net promoter score and ours are our retention tells me that so the so that’s the goal build the 800 pound gorilla that this industry needs.

Alexander Ferguson 13:35
Very forward facing you you see what people need and already planning for it making acquisitions for I’m excited to see what comes next for Junya for those that want to hear more about Michael’s journey and lessons learned. Stay tuned for part two of our discussion. That concludes the audio version of this episode. To see the original and more visit our UpTech Report YouTube channel. If you know a tech company, we should interview you can nominate them at UpTech report.com. Or if you just prefer to listen, make sure you’re subscribed to this series on Apple podcasts, Spotify or your favorite podcasting app.