Why smart technology adoption is crucial for real estate evolution
Welcome to the Decoding Innovation podcast series, brought to you by the EY-Nottingham Spirk Innovation Hub, where we explore the innovative technologies, business models and ideas that are shaping the future of industries. During each episode, we meet with stakeholders at the cutting edge to discuss innovations in their space, challenges they need to overcome, and their outlook on the future. Welcome to the EY- Nottingham Spirk Innovation Hub Decoding Innovation podcast. I'm your host Brent Duersch. I'm joined today by Dan Drogman. He's the CEO and co-founder of Smart Spaces.
Welcome, Dan. Hi. Hi, Brent. How are you doing? Great to see you Good to see you again, too. Hey, let's get started here.
Let's talk a little bit. First, just give us a little bit of introduction and tell us a little bit about your background. Yeah, certainly. So, I started my career in software development during the .com boom.
So, this is the late 90s, early noughties, and I had aspirations of becoming a web designer. But that did come with a huge price tag on it. Because it was a.com boom, we thought I'd start my career on a huge salary and sadly, mid studying at university, the .com crash happened and I started at a far lower salary, but genuinely, I still pinched myself when I first landed my career in the industry, thinking I'm getting paid to do what I love.
I genuinely used to sit there going, wow, I'm actually getting paid for this. And I don't know if that's because I worked in supermarkets throughout my university. Yeah, quote. So I didn't have to have much as a benchmark to be, but certainly yes, I really enjoyed those formative years, albeit it wasn't with the brand-new car on the driveway I aspired to early days.
So, Dan, to talk a little bit about what led you to found the company, Smart Spaces, what led to the idea, how you went about starting it up? Yeah, certainly. So around 2009, we were working for a company that worked in the commercial property sector, marketing a lot of the large office developments in London and across the UK. And at that point in time, a lot of the office landlords were looking to provide space to smaller companies, looking at startups and so on. And that required a much more stricter and tighter way to manage these spaces.
So that meant if someone wanted to use a meeting room, rather than pay for that meeting room or month, they just paid for what they used. And so in 2009, we started to develop meeting room booking systems and billing systems for what was the service office sector, which became sort of the flex sector that it is today. This is way before we worked in big brands like that, it really evolved. And so, yeah, around 2009, I'm working for this commercial property company; that wasn't their core business. And so, what we were doing was sort of seen to be a side gig. And, one of the landlords we worked with said, look, I can see that you do a majority of the work alongside your brother Tom, who had actually only come in to cover maternity leave.
So in my team, developing software for landlords. We had a gap for maternity leave. And Tom come in, my brother come into, yeah, help me. And what I would deem to be two weeks’ worth of work, he managed to complete in about a day.
Almost made me look bad. And so, yeah, my younger, better looking, more intelligent brother joined us. And actually, that's when I first sort of formulated in my mind that, wow, we could have a company together.
And actually, we were very fortunate that a landlord thought the same way as us and thought, hang on, we could be a tenant of our space and help write the software for our space. And yeah, we were really fortunate to that client for doing that. So tell us a little bit about the Smart Spaces platform.
Who's it designed for? What are some of the key capabilities that you're offering? Yeah, so at the time we were building these booking systems, we were also looking to do the same in the hospitality sector, which actually led to us winning a huge hotel chain, a global health hotel chain booking platform. And so really, that upskilled the team in the level of the quality of the code they had to write, but also the products and, most importantly, the products in multilingual, lots of different options for financing, but still predominantly browser-based. And we then went on to develop these systems for companies like big business parks, where you have a wealth of amenity on the park. But the thing that sort of found, and I must admit we had some few failures in the years we have been in business, but the first big failure was when we built an intranet for a big business park here in the UK. And we put our hearts and souls into this, and all of the knowledge we had acquired for our careers was deployed in this platform, and it had the booking system for The Hive, which was a common space that everyone on the park could use. It had the ability to order online, not with an app, because the smartphone, the market was just starting.
And so we built this out. Client paid us a nice amount of money to do this. And so we thought it’s going to be a successful project only until a few months later when we met the client and they said, oh, can we have a look at the activity? And we're looking at the activity. And we were so embarrassed. Literally the only people on the system using the system were ourselves.
And, you know, the client was like, wow, that's disappointing. And I think what happened was we didn't manage to interrupt or get access to the workers’ day- to-day experience within this business park. And so, they at that time, it was still easier for them just to go over to the restaurant, look at the menu and order their lunch at the till.
And so, you know, we built a system, we had the booking system where people would just email reception and say, can I come in? And so, an awful lot of human labor there, not so many efficiencies. And so, wind the clock forward to around 2015, when one of our clients asked us to build the same product, we knew what we'd already fouled on, like we knew what the problem was. It was making it a utility that people use every day.
You have to use it at least twice a day. And so, when we built the app for the business park, we knew we needed to have mission- critical functionality that would allow us to advertise to these occupiers or tenants of the park the wealth of services you have available while making the user experience as like one-click purchase as possible, as frictionless as possible. And where we found that was in a number of places was in ANPR for a car park booking. So automatic number plate recognition or LPR as it's called in other countries, combined with mobile access. Once we had those two pieces where people use the app to use the parking, use the app to access the space, we then had a 100% of the user base of the park. And so, when we put a push notification out that you could get a discount if you ordered your lunch through the app and avoid queuing, we got record numbers of transactions.
And so there, we sort of thought, hang on, we've cracked it, you know? And it's funny. Now, today, it doesn't have to be mobile access or car parking. But we always looking for that transactional feature that it's a must have that gives you that user base, which then allows you to sell additional services or provide additional services.
So then, help me think a little bit about the smart building space in the commercial world, maybe versus the smart home world, right? Because a lot of people are familiar with IoT smart, you know, smart hubs, connected products within the home. How do you think differently about that as you transcend into the workplace? Like what new capabilities does that bring? What new challenges does that bring? Yeah, certainly. There's a lot of differences, but also quite a few similarities.
And, I think, the biggest similarity we required to get a lot of traction was the fact that people would go, well, I can do this at home, why can't I do it in the office? I mean, that is a great use case to have. But the core difference in my hardware technology perspective is the majority of home domestic market systems are DIY, you know, you buy them online, you fit them yourself. They're a retrofit, they're really integral to the smart home unless you've built the smart home from scratch, which is sort of a different kind of managed system. So, when you're working with offices, especially the style offices where you work, so we would say something from around 20,000 sq ft upwards. And that would have systems that have been included or developed as part of the base build. And so, that's going to be your IT infrastructure.
So, the internet connectivity to the building and the network that it's connected to, you have the HVAC. So the heating, ventilation, air conditioning, which is typically in a 20,000 sq ft upwards building connected to a building management system. You then have the lightning network, which would also be a smart, lighting network. And it's especially targeting a sustainability accreditation. And then you have the energy meters, and sometimes connected to the BMS, sometimes they're not. And then addition to that, you then got the other things, which is the till system, where you order your coffee. You have
a wealth of sensors available and you have the access control. And if you have parking, the automatic number plate recognition. And so, when we first started this journey, we were actually working, we started out on retrofit projects.
So we were very much up to, what we were capable of providing in terms of an end- user experience was completely dependent on what the building already had. And so, these early business parks we worked on, headquarters buildings, we would go in and literally do the survey of every piece of equipment in the building and then take that survey away and contact the manufacturers and work out what was integrated and what wasn't. And so, you know, you'd get quite lucky. You'd find there's a BMS manufacturer that was well known and we would say, oh, they use BACnet. I know from protocol that we can interface with. Brilliant.
Others had Modbus. But when we started this journey, there wasn't very many that had secure protocols that could be exposed to the internet. So, one of the first things we did was write those drivers that allowed us to connect to the insecure local services, secure them, encrypt them and then provide them to a cloud service that then would be able to connect to a smartphone app. So, there's a lot more investment in the commercial systems because they are obviously operating a large-scale asset. They're more managed. But they're not actually probably as cutting edge as what a lot of the DIY tech is.
And so, we’re really, the first investment in our technology was bringing these legacy systems up to date with the more, contemporary modern systems, so we can have a like- for-like user experience. So, if you can access your apartment with an app, you can control your temperature, you can control your lighting scene, you can set preferences and have it remember those preferences, or have a workflow where the garage light comes on when you switch the porch light on, we needed to actually do a lot of work on writing the drivers for the localized systems and expose them to APIs to the cloud until we could achieve a similar user experience, which we're very proud to have today. So how did you find it to be working with the companies that provided like some of the building management systems and some of the other infrastructure as a startup? Like, did they play nice? Did they take you seriously or was it a challenge? You know, what was that collaboration like? Yeah, it was really challenging early on. As always in life, the smaller companies are the easier ones to work with, you know, so the smaller lighting companies, which still had significant portfolios but was still owner-operated, they were great because they thought we were great. They built a lot of the drivers already and were so upset that no one ever used them. And I think that's something we've seen industry-wide is that everyone had an API in, say 2000 to 2015, but no one use the APIs, very rarely.
And then now actually everyone uses the APIs. But these systems didn't even have APIs. Like I said, BACnet, Modbus, yeah, a whole host of languages which were open, which was the most important thing, but certainly not as Managed or as easy to integrate as we get with MQTT and APIs today. And so, they didn't take us serious.
And so, what that meant was that we were actually usually pushed over to the integrator, so the company that fitted those systems. But they almost were really scared of us because they thought we were going to eat their lunch like we were there to try and poach their business. And we were like, no, we could actually give you more business because actually, the more hardware you install, the more capability you provide us, the better. And for that, we can provide to our own customer. And we don't do that. We don't have those services.
We don't come to the building and install BMS or install an ANPR system. We are just a software company. So yeah, and so I took a little while and like it, I think, we persevered and one thing, because we come out of a commercial marketing company in the property sector, we were quite good at marketing. So, the moment we got our first asset to market, we posted it on LinkedIn. We posted it on YouTube, we got PR and all the relevant press.
These manufacturers went, wow, that's cool. And then they went, hang on a minute, isn't that one of our buildings? And we're like, yep. They were like, you're quite a new market. You're not replacing all, yeah, treading on toes in an existing market. And so, they've become way more open minded to the point now where we're a strategic partner of all these major manufacturers globally.
And we get invited to help guide where they make investment. And because we don't manufacture any hardware in Smart Spaces, they see us as a zero threat. And we've really pushed the industry forward and we've managed to feed back. I think the most important thing we’ve fed back is data on how their systems get used in the real world and are they actually providing a suitable service. And so, yeah, that data is something they do not really have access to.
So, and I liken it to like the car manufacturers now where they know more about your driving style than you do. Finally, we've got the manufacturers in smart buildings, all the hardware manufacturers for building systems to understand, actually, how does their system work in the real world? So, take me through a couple scenarios. Take me through a scenario of a smart workspace, a connected workspace that's done well, and then we're going to come back and I want to hear a horror story or a nightmare story about what happens when it goes wrong. Oh perfect, sounds great. Yes, a perfect day really in one of our buildings would be one where we can look at your Forward calendar. We can suggest a desk to be booked on the days that your team are in, attending the building.
You then have a mobile pass. If you decide to drive to work that day, your number plate is registered for the dates you put so it's aligned to your desk booking. You don't need to go off and book a car parking space separately.
Because you've arrived at the office, you're then credited. And this is a really cool thing we're seeing globally at the moment. You get credited an amount to spend for your lunch, which is a good way of helping, you know, get you back to the office, but also cover your cost of commuting. You then go into the building, but you don't even need to take your phone from your pocket so we can use ultra-wideband technology to understand that you have a credential on your being. And we can look at the CCTV to understand you are that person. And then you can go from straight to seat without having to go for a turnstile or present to a reader.
The lift is called to your home floor. You can edit that, but we know which floor you've got because you’ve got the desk, and then you have the ability to meet your colleagues. You've now got a signal that says that you're in the office, so people aren’t going to have a wasted journey to come find you, and you can do the same, find your colleagues. The other thing we can do, which is really nice, which has been very popular, is a lot of our clients have decided to put circadian rhythm lighting systems in, but you can have it set to your preference. And what we've seen across the preferences in our app is that everyone tends to go to the warmer shades. And when you approach your desk, you would have the ability to choose whichever you want to work in.
Do you want to be in the noisy area? Do you want to be in a cool, quiet area or do you want to be in a warm, quiet area? And you can choose on the floor plate and we can run these zones, and you can choose. It's not much variance, but it's enough to help you be more comfortable in the workplace. We can then also have the ability to book your gym class whilst onsite.
And then as it comes toward the end of the day, we can notify you if you need to leave early based on traffic or public transport interruptions. Once you leave the building, that space will be shut down. So, we can also warn if you try to book a future booking on, say, a Friday. If there's not enough critical mass, we can push you to another space within the building, because that space will be disabled.
So, you've got an element of personalization, an element of frictionless there. And also making sure that that journey is not wasted. You know your colleagues are there the day you're going in.
So you're not making a journey and think, actually, I could have achieved more working from home. And for all of that, you've been advertising the great facilities and amenities that are available in the office that you might not necessarily have at home. You've got the fitness, you've got the cafe, you've got an events calendar.
And so, they’re key in drawing people back to the office and the office needs to be a place people want to go, not have to go. So I love it. Now, take me through what happens when it goes wrong and not necessarily like your platform, your technology, but you. I'm sure you've seen real estate managers, building managers try to implement, you know, kind of smart building technology.
Where have you seen it go really sideways? Oh, certainly. So, I think that the biggest problem is the siloed systems. So, for you to be able to do what I just described, you're logging in to five different systems. You've got your access control system or your visitor management system.
You've got your desk meeting and reservation system, typically that be two different systems. The catering system is a different app as well. You've got to remember your password for all these systems and that means a lot of password resets to start with. And then with the car parking system, it just starts to become inconvenient. When you're driving into the car park, you haven't got close enough to the barrier, so you are having to get out of your car, go up to the radar with your plastic card. You realize you haven't got the right plastic card.
You go back to your car, find your wallet, get the card out, authenticate. You then get to your office and you think, oh, at least I've got the car to get me in the car park. Oh no, that's a landlord card. I now need my occupier’s card. So, you're now fumbling around for another card? You can't find that card.
And so, you then have to go to the security office to request a temporary pass, which is a signout process. You're now late for your first meeting. You arrive to your desk, which someone is already sitting in because there's not a sensor to release that or to notify you that says that desk is occupied. So, you then have to go and find another space, to find out when you start working. But none of your colleagues are in that day anyway. You haven't been allocated your discount for the restaurant, so you're just paying out of your own pocket and you're not getting the loyalty for that because you forgot the coffee card with the stamps on it because that's not in your digital pass.
There’s no ability to personalize. You know, the lights are what they are. And, you know, some designers have chosen that really stark in the UK, kebab shop lighting. And it's that really stark white light. It looks almost comical. It's like a forensics team.
The 6000K light that burns out your retinas. And you've got no method of tuning that or changing that. And you're also working in a really warm, noisy, stuffy space because you didn't get an option of spaces to work in. The building doesn't shut down when you leave. It shuts down when the master time clock goes at 8 p.m. So, you wasted energy after the last person walks out and you find that actually, when you go in Friday, the whole building's heating one entire floor just to cater for you working in the space that day. So,
that's like a worst case, which there's a lot of buildings out there, many, many a building that we've come across before we've implemented our platform. We've been like, wow, but that's a lot of work. And where we find this so powerful is almost like businesses the scale of EY. The more employees you have, the bigger problems we solve, because the more time we solve, you know, queuing up a security office to get your badge printed, if you were onboarding a new location or you're moving offices, that's a lot of man-hours for the security to process that card, give you that card. And then when you're working hybrid patterns, you know, you lose that card, quite often and always need to have it on you.
And, you know, we all know we have our phones with us all the time. We don't necessarily have a plastic card or wallet. And so, just that alone can save large businesses an awful lot of admin.
And I think it also helps from a cybersecurity perspective, where you're managing personnel. When I create your email account, it also creates your physical access and your access to all the resources. And as I change the locations you work in, the access to those locations also get provided dynamically. It's very scalable and very efficient. And I think that's the key. But at the same time, it adds the personal touch so people feel cared about.
So, Dan, how did you get started, bringing some of your first clients and customers into the fold, right? You're working with large companies, you're in startup mode. How did you start to make those connections and build some of those relationships? Yeah. So, I think, one of the great things about technology is that the technology industry's been great at persuading every business they need it, even though there's been so many terrible technology rollouts and software applications, especially ones run by governments and so on. I mean, me and my brother used to wonder how so much money got wasted on some of these systems that never even made it into the hands of the users. But despite all of that, because of the rise of the internet, because of the companies that had successful digital transformation, I think every business knew that they should be experimenting with tech. And I think Smart Spaces got very fortunate to have clients that were willing to take risks, were early adopters.
And I think when we look back on our track record and look, originally we were working for the landlord. Today, most of our customers are enterprise businesses. And actually, we still work for landlord, but because the nature of enterprise business is in scale and the multi-locations, that is a huge growth area for us. But these landlords back in 2015, if we look back at the schemes that we worked on, they were incredibly successful schemes without our technology because that development manager was willing to take risks and push the boundaries. He didn't just go for the same carpet tiles as these, the building next door. He invested in things like solar PV, even though he didn't have the sustainability legislation there at the time.
He was forward thinking. You know, they invested in things like a cinema in the park to be able to, you know, host events. They invested in foosball tables in reception and they started to, like, break the mold. And one of those things they broke was the tech mold.
And that was very fortunate for us. So then, it was all on our shoulders to actually deliver something that actually got used. And it's coming back to that story from earlier, which is that product market fit we'd already fouled massively. And so, we went in with our eyes open and we were very, very conscious that on that first meeting after we went live, that the analytics showed some really meaningful data and, yeah, engagement that covered our bill. And actually what happened was we had that rolling out across the portfolio of these businesses, these landlords, because they went, wow, it works. But it wasn't easy, I promise you.
And so certainly, yeah, we're very fortunate that we had the early adopters. And then in the property sector, like, you know, people do learn from each other. And once you'd proven it for a few of the early adopters, the others came, and so now, there's not many buildings we know of in the European market or US market coming to market that aren't a smart building. So, we talked a little bit about IoT. We've talked, you know, a little bit about wireless connectivity, Bluetooth. How about AI? How are you thinking about AI in terms of how it interacts with your platform and what capabilities it could provide for your customers? Yeah.
So, there's a couple of sides to that. So, the first thing we've been doing, for quite some time now, is having AI as part of our development practices. So, this is analyzing our code, looking for security vulnerabilities. Every single line of code still goes for a human code review before it gets published or deployed. So, we've been utilizing that and utilizing a number of different online platforms that assist us with like formulas for scaling different resolutions at different devices. And that's really help grow it like give our team a lot more productivity when it comes to, yeah, developing these integrations of APIs and testing and so on. From a product perspective,
the biggest thing is that, you know, we connect to every single aspect of the building. We are access control, lighting control, HVAC, BMS, energy, lights, EV chargers, tills, lockers, showers, everything. We connect every single thing back to our cloud. And then that facilitates what you can do in the app, what you can do in our rules engine, what you can do in that analytics. Now, the biggest problem with that is the amount of records we store in our database. We store petabytes of data on an asset, and that is truly, I know there's a lot of cheesy terms that get bandied, but it is an unrefined oil to a certain extent.
And where we've had the most luck with ML and now using LLMs to write really natural language queries. So literally comparing weather to our cycle amenity space and how that's being used, public holidays versus what we're ordering food, energy patterns versus booking patterns. And so, we've developed our new analytics package using an LLM because our support team previously were bogged down with report requests. And we literally thought that I can't be, they are both in the finance sector. They both have a 400,000 sq ft headquarters, and they both have all the same systems connected to our cloud. Their occupancy and productivity reports will be the same.
No, that's not how we do business. That's not how we do business. And we were just finding that it was really consuming such a resource for our team to go off and create these bespoke reports. Our investment is giving our tenants the ability to create these reports themselves. And, that's been the biggest impact we've had today. And then we are breathing life into some of our older systems.
So, we had a robot, one of our developments called Heidi and Heidi was a robot designed to cover reception when the reception team wasn't there. And we had this hooked up to a speech-to-text system. But the whole library of conversation was something that we had created at Smart Spaces.
So, it didn't take very long for you to exhaust that query, those queries, and then the robot just come up with a load of things. Sorry, I don't know that. Sorry, I have to refer you to reception.
And, you know, after building the query system and LLMs being part of our everyday, the robot which has been in our warehouse, we thought, hang on a minute, we can bring a new life, lease of life, into this robot, and this robot can have access to the wealth of all information available to LLMs now. Space to text has become far, far better and far more accurate. And so, we're bringing that back but in a different light for training purposes. And so, yeah, but I didn't say, you know, you could probably have quite a good conversation and a reception while you're waiting for the person to come collect you.
So, yeah, now I'm really excited at what we're doing with AI at Smart Spaces. So, if you think about all of the systems that you're integrating, that you're connecting the dots, is it fair to think that you're creating, you know, effectively a digital twin of a building or how would you think about what you're creating versus, you know, the world of digital twins? That's brilliant. Yeah. So, I think, yes. So, at the foundations, it's an operating system. So, it's a way to operate your asset efficiently and improve how you operate your asset. And a huge piece of that is your digital twin.
The app is a huge piece, and we foresee that the app might change medium in the future. It could be a wearable, it could be an implant. It could be, you know, a whole host of different interfaces, but at the moment the app is the best interface. And the digital twin is the best way to simulate. The best thing about a digital twin is that you don't make these changes in real life.
You can test them before you flip them on your user base. And where we found that incredibly powerful is strategies around heating and cooling but also strategies around lifts. You know, that's where you can really upset a lot of tenants, through some small changes. And we record all those dwell times, waiting times, in our app. And we can understand what impact you're going to have if you make changes.
Thinking a little bit about all the partnerships you've had to put, you know, to get into place with everything from, you know, lift manufacturers to HVAC manufacturers, like how do you manage all of those partnerships and those relationships, right, knowing that, you know, as all of those companies are kind of evolving their offerings, what capabilities and what data they may have available, you know, it feels like it could get overwhelming for a team very quickly. So how do you keep track of all that? Yeah, certainly. I mean, it’s forging a partnership, a long-term partnership. You know, one thing we certainly want to enforce early on is don’t have breaking changes in your API. And, yeah, don't force people to migrate straight away.
And so, we've gone through all that pain of, you know, migrating from V1 API to V2 and V2 is still a beta and it's not been as reliable. And you got to bear in mind actually that we are the last interface until the customer. So, they don't blame the lift manufacturer, they blame Smart Spaces. And so, we actually do the first-line support globally, follow-the-sun model for all of our deployments.
And so, we know very quickly what's not working and what is. And yeah, there's been some manufacturers who we’ve worked with, it's been like, it's been hell. And we don't recommend them if we get asked what is your dream building in terms of the hardware? They don't get recommended because we get too many support tickets. And, yeah, it doesn't provide a satisfactory user experience. And so, the ones that do and the ones that we forge our long- term partnerships, it just gets stronger and stronger. The team you've got today, you've got a relative lean team.
How do you think about the talent that you're bringing into the Smart Spaces team right now? Referral, that’s some of the best hires we’ve ever made on referral. We have really stringent tests for the software developers. And I'd say our success has been in hiring the software team. How do you think about geographic expansion, like both from a business offering standpoint as well as a team footprint standpoint? Yeah, certainly.
So, the great thing is we use partners to deploy our solution locally. We have commissioner engineers that can assist those clients if they're finding all those integration partners, if they're having difficulty. So, that really helps us scale globally because we don't need to be there physically. We run the 24/7 follow-the-sun support model. So, all of our clients get the luxury of 365/24 hours a day support. And then, we've had local sales teams, and we have local sales executives that work in the regions to sell our solution to travel partners or direct to clients, depending, yeah, how they operate. And
interestingly, we've decided to keep our software team onshore here in the UK. We let our team remote work for holidays and things like that, but predominantly, the majority of the year they're based here in the UK, which is expensive compared to some of our counterparts that decided to outsource that. But coming back to your previous question on how do we manage these integrations, how do we have the code quality, the product, market fit? It’s because we've got this tight-knit team. And we'll continue to expand that. And we're still predominantly headcount, it is still mostly engineers.
And then we've been really fortunate, and I think this has been for some of our competitors as well, is that we've got a really good enterprise client and they take you globally, and they help you expand globally because they've got one office in their portfolio that has the best user experience. And they want that consistent around the world. And that's helped get us into over 26 countries now. And so, that's been fantastic and sort of helped finance that as well. Now, as you've evolved over the years, have you, what's been your approach to raising funding or how have you, you know, essentially found the capital to grow the business? Yeah, so it's a good question. So, when we started out in 2010, we started out with like very little seed capital from our dad, actually, so our dad gave us 20,000 sterling.
And we made some terrible decisions, like we bought a really expensive printer that we didn't really need, probably wiped out about 2,000 or 3,000 of the 20,000? We didn't pay ourselves. Actually, we didn't pay ourselves for a long time. We lived off our savings. I think we had to contribute toward the rates and service charge for the office we were in. And I think actually it went toward our first software developer employer, I think a good chunk of that went toward that first employee. And so, you know, by the end of year one, we had run out of savings, we burned through the 20,000, we needed to turn a profit quickly.
And so, both being, all free employees, being coders, we could take the brief, build it and get paid for it. And so, that was really powerful. It wasn't really any wasted costs. We did have a nice office, but like we said, we were counting a lot of that cost for developing the software for that client.
That landlord was very generous and introduced us to all of his customers. So, his other tenants, the office next door. And it was incredibly embarrassing. It was like your dad wheeling you out in front of your friends to try and sell you as a service, you know, come wash your car or something like that. And these people will be running their businesses.
And they'd be, like, what we don't need is a software platform. We’re, you know, fine running ourselves academy or our insurance company. But funnily enough, after the 20th person introduced it to a couple who were, yeah, we need solutions.
And actually, important note to make, in 2010, we were building these solutions completely from scratch code base. Smart Space is now 100 million sq ft in over 26 countries. It's all on the same source code. It's one platform globally. You can host it yourself, in your own cloud. But the source code is one platform and we all contribute to that.
So then thinking ahead, what do you see as next on the radar for Smart Spaces? I think, for me, an expansion into other areas of real estate, and that's already something that we've got in the pipeline. So, there's a number of projects that are going to come to market that are mixed use. So, they will have a residential angle, a hotel angle and a commercial angle, plus a leisure aspect as well. So, that's really exciting. And I think that's the future of real estate, because, you know, we can't continue to build buildings that only function part time. You know, you are either out of the office and your home is not being used, or you are not in the office at weekends and the office is vacant.
And I think these mixed-use schemes are the future in terms of efficiency in cities. And so, that's really exciting. So huge announcements coming out there in the future. And then, I think, the residential sector looks interesting to us, especially Build-to-Rent (BTR), where, yeah, we've got a number of projects underway where actually the tech stack is very similar to offices because rather than have demised IoT systems or demised boilers and heating and cooling, it's a central system. And that's why our system was developed from the outset to manage, and, you know, you get some bad behavior when you have an apartment that you've, it's a one-cost, so you just rent that apartment for US$5,000 a month or US$2,000 per month. And it's one bill. What's incentivizing that person other than their conscience not to leave the windows open and the heating on or the air conditioning on? You know, we can easily analyze that behavior, override systems, or even incentivize to change behavior.
And that's eroding the margin for a lot of these BTR companies. So that's an exciting space for us alongside the mixed use. So, that's next, really. And you know, listening to our customers, you know, that a lot of the features we've built in our platform have been by listening to the customer.
You can't always build everything they want. If we had done that, we had certainly be in trouble. And, there's certainly a thing that don't ask the customer what they want, from Henry Ford, because yeah, they're not always right. But they certainly, especially, when they're the ones managing a particular process that you're automating, that's where I think, yeah, you can really lean on them. So, someone who manages corporate client suites globally, you should be listening to that person to understand. Oh, okay.
So this software just did that for you. That would save you this amount of time. Yes. And this would make the users use that instead of pestering with an email. Yes. Listen to that. That's gold.
So many companies know we are the masters. They go into property companies and they tell the property company how they should be running their property, which never goes down very well. So, Dan, this has been a fascinating discussion. Well, what I'd like to do is close it out. You've created a phenomenal platform here and you've been successful from a business standpoint.
What advice would you give to founders who are starting out in the early stages of their journeys, like based on what you've learned and experienced in your career? Yeah. So, the interesting thing is I've worked at some companies, some of the companies we were involved in writing the software, they were funded businesses, you know, so they had raised VC or PE and they were highly stressful environments. And we were, you know, we were a contractor basically serving that entity, writing software, writing code. And we just felt it was so stressful. When we would go to a meeting with one of these companies versus a company that was, you know, a profitable enterprise, the atmosphere was just so much more relaxed. The meetings were more, yeah, just a different animal, different experience.
And, so that sort of scared us out of the funding to a certain extent. Obviously, there's so many success stories. So, learning and what we've experienced, if you are really, truly passionate about what you do, if you don't want to be an overnight success, we all want to be overnight successes.
But, if you’re patient and you just want to get out of bed in the morning with a smile on your face and work with great colleagues to create a great product that you truly believe in, and you're a very useful, skilled individual, do it slowly but be beware that you've got to do it yourself. You've got to roll up your sleeves. You know, at the same time we were writing these coding solutions in 2010 with our first employee, we were also doing the invoicing, we were also doing the marketing, the cleaning, everything. Between the three of us, once we built a booking system for a restaurant and to make some extra revenue, we printed the menus for the restaurant and my software developer looked at me going, you didn't tell me this when you guys hired me, that I'll be printing menus for a restaurant. I've actually just listened to his feedback. We said no to that again, because we very much nearly lost him as our first employee because of this menu printing episode.
And actually, it turned out we laminated them wrong, so they had the contents of most people's meals inside the menus. The next time we went to the restaurant and said we learned that we shouldn't be printing menus anyway, but we are quite entrepreneurial in terms of we knew we needed pounds and pence to cover the bill. So, we were quite open-minded, and I think we were very accommodating. We were yes men.
You know, we said yes to a lot of things. We say probably “no” a little bit more, but that culture hasn't changed enormously. You know, when someone comes to us with an idea, we think it makes sense, we'll go for it. Fantastic. Dan, this has been a great discussion.
I just loved the stories. I loved hearing about your experience firsthand. We'd like to thank you for being on the podcast today and wish you all the best in your future endeavors at Smart Space. Brilliant. Thanks, Brent. It's been a pleasure. Cheers. The Decoding Innovation podcast series is a limited production of the EY-Nottingham Spirk Innovation Hub based in Cleveland, Ohio.
For more information, visit our website at ey.com/decoding innovation. If you enjoyed this podcast, please subscribe. Leave a review wherever you get your podcasts and be sure to spread the word.
2024-12-15 23:27
