Felipe Ávila da Costa pitches his internet-of-things startup Infraspeak to Christie Pitts of Verizon Ventures and Sheel Mohnot.
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Episode transcript
You’re listening to The Pitch, a podcast about startups. I’m Josh Muccio. On today’s show – hotels. Apparently, maintenance requests at a hotel are as common as homeless people in San Francisco. Just kidding! Homelessness is a big problem. And if you want to help, HandUp.org is a great place to go. Anyways, back to hotel maintenance. Big problem.
Felipe Ávila da Costa: We have an average of 80 failures per day. They are fixing a lot of stuff because they are not doing the preventive maintenance right.
That’s Felipè, the founder today. Is it Felipè, or Felipe?
Felipe: Felipe is good.
Sheel Mohnot: Felipe?
Felipe: Either way.
Sheel: Either way? Tell me how you say your name?
Felipe: You know, I was born in Brazil and I moved to Portugal. So I’m used to people saying different ways. So just say Felipè.
The voices you just heard, Sheel Mohnot, my cohost, and Christie Pitts with Verizon Ventures. Felipe is building a maintenance solution for not just the hotel industry; apparently, it’s bigger than that. Much bigger.
Sheel: So what you’re saying is, it’s huge?
Christie: Unlimited growth potential.
Sheel: Billions of dollars. Trillions!
Here’s the pitch from Felipe.
Felipe: So basically, Infraspeak is the most efficient way to manage the maintenance of building and equipment. Nowadays, most facility managers still use paper and Excel files to manage the whole process. Managing the maintenance of air conditioning, elevators, fire extinguishers, and so on. And we built a new way of doing it. Our way is simpler and more efficient.
Sheel: So tell us how it works.
Felipe: So basically we put NFC tags on all the equipment. And that allows the technician to have an app on their mobile phone, and touch the tag to get all the information they need about the equipment. So the task they need to do, the tech specs of the equipment, the documentation. So that gets the paper out of the way.
Sheel: Got it. So you put these NFC tags around the building in various places and when the guys come to do the inspection they don’t have to enter it in.
Felipe: Basically, we have this mobile interface for the technicians. But we also have a web interface for the managers and for the CEOs and CFOs. So in the web interface, they can plan and control in real time everything that is happening. And the technician in the field gets easy access to all the information at the same time.
Christie: So it’s like eliminating data logs, basically?
Felipe: Basically, by one side organizing everything, nowadays it is a mess. The second thing is to make the information go all to the same place and everybody is on the same page. And the third part is about being efficient. Nowadays, people lose a lot of time transferring data from paper to a computer and so on, and especially generating reports. And this is made automatically at Infraspeak.
Christie: So how do the NFC tags –
That’s Christie Pitts. She started 12 years ago as a customer service rep at Verizon. Now she’s with their venture arm, aptly named Verizon Ventures.
Christie: NFC tags. Why are they relevant to the solution?
Felipe: This is just an ID. We just switched the barcodes and QR codes for NFC tags. The extra thing here is since the NFC tags are not replicable, it guarantees the presence of the technician right next to the equipment.
Sheel: Got it.
Christie: Okay.
Sheel: So they can’t lie about what they’re doing.
Christie: Check and balance.
Sheel: Yeah. Makes sense. Okay, cool. So what made you get into this business?
Felipe: Actually, it’s my co-founder, he’s a civil engineer. But he’s also a hacker. So he’s a facility management geek.
Sheel: Wow. I didn’t know that there was such a thing.
Christie: Facility geek.
Sheel: Facilities management geek.
Christie: Is there a facilities Comic-Con?
Sheel: They have a conference for nerds.
Felipe: But after finishing my degree, I started working at the biggest incubation center in Portugal. So I spent my last five years helping startups to start. Actually, Infraspeak was one of the startups that I mentored during my time there.
Sheel: Cool. And they poached you?
Felipe: Basically they stole me from there.
Christie: So do you have any customers right now?
Felipe: Yeah. Basically, we started 18 months ago talking with the market. Twelve months ago we closed our first customer. And we made 120k in revenue in this last 12 months. We have 32 customers between Portugal and Brazil. Like Siemens, plus many others, especially in the technical systems. We are in Portugal, we started making business in Brazil two months ago. And we are now coming to the States to bring our innovation here as well.
Sheel: How do you charge?
Felipe: We are a SAAS company. We charge a set-up fee, and then we charge them based on the number of users. The tickets go from 200 a month, to maybe 1500 to large customers.
Sheel: Got it. And you said when you were coming in also that these are hotels using it for maintenance?
Felipe: I can tell you example. Vila Gale is one of the biggest hotel brands in Portugal. We made a pilot project with them during three months in one location. And it was great, it has been approved. So we move at the pace of five new hotels per month, and they have 20 hotels using our system now.
Christie: So when you onboard a new customer, do you ship them a kit with the tags? Or do you have to go out and help them install the tags?
Felipe: For the first customers, we wanted to go there. Because we wanted to learn all the process. But now we are iterating the process to send a kit and making videos online. They can onboard online.
Christie: And have your customers giving you any feedback in terms of efficiency created? For example, did they have a maintenance person that said they were checking on something and then weren’t actually doing it? Have they uncovered that through your solution?
Felipe: By the way, just the knowledge that we are tracking things, makes things better.
Sheel: Makes sense.
Christie: Inspection, right?
Felipe: We did four case studies in a month, with our first customers. And for example, one of our customers, a small customer, we are charging them around 200 Euros per month, and they estimate savings of around 1000 per month. Based on just efficiency of the process.
Sheel: But how do you quantify that 1000 Euros per month savings?
Felipe: Basically, they had one person that 50% of her time was just transferring information to the system. And that person started doing other stuff in the commercial thing. And also a lot of paper and a lot of printing that they saved. For one of our other customers, a larger customer, they were spending 5000 per year on paper.
Christie: Wow.
Sheel: Okay.
Christie: Sustainability.
Sheel: Yeah, legitimately. Okay, cool. And how have you been selling? This is enterprise sales. Who is the person that buys the product?
Felipe: It depends. Most of the time, it’s the account manager. Like the one managing, or the facilities manager. He’s the one who feels the pain. He’s the one that is overwhelmed with so much work to do, and is working weekends to make everything work. So this is our first point of contact. And basically we show the solution to them, and most of the time they are like, “whoa. I need this”. And then he becomes our champion inside of the company. But we then need to get the budget. Normally, after that stage, we have a second point of contact with the CEO or the CFO to get approved. And basically, that’s it.
Christie: So how long is it taking from the time that you meet the facilities manager, to the time that they onboard as a customer?
Felipe: For large companies it’s taking 6 months, 8 months to close. For small ones, it’s like one month.
Christie: So there’s a lot of work being done right now in terms of predictive maintenance. And this is happening both on the manufacturing side and on the supply side. So does your solution interact, for example, if it’s GE equipment, does your solution provide updates and reports to GE that their devices are being maintained properly?
Felipe: There is a bunch of opportunities coming after this. In the IOT field, we have an API that allows us to integrate with any IOT system. Then the facilities manager can get the data from the equipment directly inside of Infraspeak. On top of that, we are going to have a bunch of data inside of the system. So every day, there is 7000 tasks being done in the system. We already have almost 600 tasks, almost 50,000 equipment in the system. So we are basically collecting data every second.
Christie: How much equipment did you say? 50,000?
Felipe: 50,000.
Christie: Different pieces of equipment? Can you give us a range of what kind of equipment that is?
Felipe: It goes from swimming pools to HVAC, like small ones, plates, or big equipment that you have in the roof. It can be water pumps, elevators, fire extinguishers, doors. Any kind of equipment that you see that needs maintenance, you can register inside of Infrapseak and control the maintenance inside of Infraspeak. So the system is very flexible.
Sheel: Help me understand how big this market is and what the opportunity is?
Felipe: Actually, this isn’t the right answer, but it’s too big to measure.
Sheel: Okay. So what you’re saying is it’s huge?
Christie: Unlimited growth potential.
Sheel: Billions of dollars. Trillions!
Christie: Trillions.
Felipe: I will say trillions. Like, it’s huge. The metric we have is 1% of the GDP of developed countries. So it’s huge.
Sheel: 1% of the GDP of developed countries is what?
Felipe: It’s like the trillions.
Sheel: No, but, for what?
Felipe: Maintenance.
Sheel: Maintenance. Got it. But then what’s the opportunity for you? So your opportunity is selling the SAAS product to those guys. And you can probably increase the price from where you’re at, and it probably is substantial. But you haven’t quantified it because it’s so large, I guess, is what you’re saying?
Felipe: Yes. Exactly. It’s all about focusing. We are trying to focus on some first, and ruling the niche and then moving forward.
Christie: Where are your competitors right now in the US?
Felipe: Plenty. By the way, we used to say that we have around 300 competitors. There are plenty of solutions. IBM, SAP, Microsoft have huge-grade solutions. But they are very expensive. So only the large industrial firms and so on go for this kind of solutions. And then there are plenty of old-school solutions in the market.
Sheel: So what are you doing differently than the old solutions and the new solutions?
Felipe: I would say, most of the software focus on maintenance, they focus on the industrial maintenance. Oil and gas, power lines is like huge maintenance. So other systems are focused on this kind of use case and then they try to adapt to simpler maintenance. But they bring all the complexity of the industrial maintenance to these companies that are not that complex. And we saw this and we said, let’s focus on these guys. Since we are focused on them, we are able to build a much better solution for them.
Felipe, founder of Infraspeak, just stepped out of the room. Here’s Sheel and Christie.
Felipe: All right, Christie. What do you think of Infraspeak?
Christie: I think it’s an interesting company. This is a real need. Are you familiar with PlanGrid?
Sheel: Yeah.
Christie: Okay. Perfect. It’s like PlanGrid for maintenance, is the way I was thinking about it.
Sheel: Yeah, totally. PlanGrid is another one that I didn’t realize that the market is as big as it is. It’s huge. So does it fit in with your overall thesis at Verizon?
Christie: I don’t think it fits within Verizon’s thesis from an investment perspective. But when Felipe was coming out I was mentioning to him that we have ThingSpace, which is an IOT platform for developers. And one of the companies that is at ThingSpace is called Verdigris. And their solution, essentially, monitors energy levels for hotels. Same vertical. And they provide predictive alerts to the maintenance team. For a large hotel, there is on demand energy pricing. Are you familiar with that?
Sheel: Yep.
Christie: So hotels can save tons of money, or get penalized. So if they don’t respond to these alerts, then it has a huge financial impact for them. So Verdigris helps to provide the information they need to know when to respond. But it doesn’t solve for what Infraspeak is solving for. So it doesn’t provide that digital record that the maintenance people actually responded and took action.
Sheel: Totally. My thought was, it makes a lot of sense for compliance. It’s really just a checklist. I didn’t get a chance to look at the app deeply, but I assume that it’s relatively simple. But there’s a huge need for it. So I like that. I generally like things that are replacing paper and pen. The one thing I’d want to understand is the competitive landscape. And he alluded to there being competitors. To an outsider, this seems very interesting, though. This particular solution of using NFC tags makes a lot of sense.
Christie: Actually, the NFC tags are interesting. From my perspective, the NFC tag is only really showing that the maintenance person physically went to that thing, right?
Sheel: And it quickly gives a time stamp and location stamp, which is nice.
Christie: But I wonder how scalable that is. That was one of my questions.
Sheel: What do you mean?
Christie: He said with their initial customer they had to install on each item. And they want customers to be able to do this on their own in the future.
Sheel: It’s pretty easy to install an NFC tag.
Christie: It’s true.
Sheel: You just stick it on the thing, right?
Christie: But I’m just thinking about when I got my security system in my house, the security person was asking me, “is this your living room, or is this your den?” And I’m looking at the guy and I’m like, I don’t know and it’s MY house! So if you have multiple light bulbs, for example, what’s the naming convention that you’re going to be able to use, and so on and so forth.
Sheel: But you’re selling to facilities managers who are presumably good at this stuff.
Christie: Right. So that part is a little bit… I just wonder if they’re going to run into issues from a scaling perspective. Because they can’t send somebody out to install every single time.
Sheel: Yeah. That’s interesting to think about. And I wonder if, in the business, they should have a network of installers, that way they can make sure everything is done.
Christie: Well, if they could get a strategic partner that installs the equipment, that could help install this maintenance system, then they would be golden.
Sheel: Yeah, that’s true. Interesting. That’s a good idea. So it sounds like generally you’re positive, but it might not be a good fit for Verizon Ventures?
Christie: Yeah. Not a good fit for investment, but definitely a good fit for the IOT solutions that we have.
Sheel: What would be a good fit for the investment? Because you guys do do IOT investment?
Christie: Yes. So actually Felipe was saying that he’s good friends with Joao who is the CEO of a company we invested in called Veniam. And that’s a great example of IOT investments we make. Veniam provides connectivity within municipality vehicles to create, and this is their tagline, the internet of moving things. So it’s capitalizing on IOT buzz, but essentially their connectivity solution creates this mesh network that moves throughout cities.
Sheel: Makes sense.
Christie: That’s kind of where we’re playing right now. Platform companies that are creating new opportunity for other IOT players to come on and play as well.
Sheel: The only thing that I would say that was puzzling for me about this, was the website. We only looked at the website for a few minutes, but I had no idea that this was an NFC-based solution. No idea.
Christie: Right. And I think having worked with a lot of IOT companies, there’s a stigma around hardware. So a lot of times, and I don’t know if this is the case for Infraspeak, but a lot of times the hardware is kind of hidden.
Sheel: Yeah, it’s true. Anyway, I dig the company.
Christie: Really great opportunity if they can capitalize on it. We didn’t ask this question, but I wonder how many maintenance people are actually diligent about tapping. Or I wonder if they feel like it’s a headache.
Sheel: We should have asked. I’m sure I know what he would say. But compared to the previous way, it has to be better, I would assume. No?
Christie: I don’t know. I mean…
Sheel: I guess, if you think about it, if your previous way was paper and pen, then you probably have a printed sheet with the locations that you need to be at, and filling in the time. Maybe for some people, older maintenance people, would probably prefer the paper and pen.
Christie: I don’t know.
Sheel: But from a compliance perspective this is much better, right?
Christie: Definitely. Going back to the PlanGrid example. Once you show someone the efficiency and be able to easily pull up records, it should be simple to get adoption. So hopefully that’s not a challenge.
Sheel: Cool, thanks.
Christie: Yeah. Thank you.
That’s all for today’s show. Thanks for listening.
You can find me on Twitter, Facebook and Instagram @joshmuccio and Sheel is @pitdesi or follow the show handle @thepitchfm. To join our weekly newsletter and get behind-the-scenes stuff that we don’t share on the podcast, go to thepitch.fm and subscribe by email.
We’ll be back with a new episode next Wednesday. I’ll see you then.