Episode 21

Making the Most of Office Occupancy

On our Rise of the Next podcast, Honghao Deng and Jiani Zeng tell us how Butlr, which provides insights into commercial space usage, pivoted during the pandemic.

Picture courtesy of Butlr

Zina Moukheiber

Senior Director of Global Communications

Published

14.12.22

In the fall of 2019, Honghao Deng and his co-founder Jiani Zeng joined 500 Global’s accelerator program, as part of Batch 26. Their company Butlr, an MIT Media Lab spin-out, had developed sensors that anonymously track through body heat how people move indoors, to help businesses manage the use of commercial space. Applications include monitoring foot traffic, maintaining clean bathrooms, or activating air conditioning when needed.

Butlr was set on deploying its sensors in commercial buildings and retail stores, when Covid-19 hit and traffic vanished during lockdowns. “This whole entrepreneurial journey is always winding. In a way it feels like you’re almost on track, but it’s never the case, right?” says Honghao, a computational designer. 

This may sound familiar to most founders, but Honghao and Jiani made the best out of a bad situation. They decided to focus on helping commercial spaces reopen by managing occupancy. The advent of hybrid work also brought new opportunities to provide businesses with data, as they make leasing and energy-saving decisions.

Listen to their conversation on Rise of the Next. 

Subscribe here to episodes of Rise of the Next on major streaming platforms.

 

Shereen Abdulla (host) 

Honghao, Jiani, welcome to Rise of the Next. It’s so wonderful to have you on.

Jiani Zeng  

Thanks for having us.

Wai Hong Fong  

Thanks so much for the invitation.

Shereen Abdulla  

My absolute pleasure. I’d like to start by asking you to tell us about yourselves and Butlr.

Honghao Deng  

I’ll go first. I’m HongHao Deg, Co-founder and CEO of Butlr. Butlr is this small sensor that is completely wireless, battery-powered, privacy-friendly. It is an architectural sensor we’ve been putting 1,000s of buildings, especially in senior care and also commercial real estate for hybrid work. I can go on and on and talk about my product, so I’ll delve into the self-intro a little bit. So, I did my computational engineering, electrical engineering studies during my master’s degree at Harvard. But my background was in architecture, so you see the connection here — like sensors in buildings.

Jiani Zeng  

I’m Jiani Zeng. I am Co-founder and Chief product officer at Butler. So, I met Honghao around five years ago at MIT Media Lab during a hackathon and we did a bunch of, series of research projects together and then started Butlr. So, Butler is a technology company that translates body heat to spatial data like people location, movement, and occupancy. We help businesses understand how the space is being used; for example, offices, senior living, etc.

Shereen Abdulla  

And how did you guys come up with the idea?

Honghao Deng  

Like Jiani mentioned, both of us did a lot of researching responsive building environments back in the time when we were in MIT Media Lab. So, it’s really about the idea that users can interact with the environment, or environment understanding users’ needs, and react to what exactly people want in the space — because of,  for 2,000 years, it’s unlike other technological domain, like the way people travel — we started from riding horses 2,000 years ago, but right now we’re on autonomous cars. But if you look at buildings, there’s still a few pillars in this lab. It didn’t change, it didn’t respond well. Covid is a great example — all of sudden people are not using the way like it’s the way before. So we’re really thinking on the right solution to be able to understand users’ needs in the space and then do certain kinds of automations. But definitely not using privacy-intrusive cameras. Nobody wants a future where cameras [are] following everywhere.

Shereen Abdulla  

On that note, how does Butlr work?

Jiani Zeng  

We translate body heat, like temperature data to spatial data, like people location, movement and occupancy — we’re using a low-resolution thermal sensor to sense people’s spacial data and translate them into insights to help businesses understand occupancy numbers, understand what’s the social usage in their offices or senior living. In senior living we can even do fall detection. We can detect people’s poses in a space — either they’re lying down, they’re standing, or moving in the space.

Honghao Deng  

There’s two groundbreaking technologies in our sensing solution. One is that using extremely limited data — lower resolution, below 100 pixel, single channel, just body temperature and heat — and then translating  it to high-definition output like body posture in your location, occupancy number in extremely high accuracy. Nobody else can achieve that before, not before our unique model that’s taking not just low resolution single frame data but also applying other very advanced model on top of it. It is the low power framework, nobody else on the market is able to do that by having a wireless sensor out there with multiple years of battery life. And now for us, we achieved that.

Shereen Abdulla  

What problem does Butlr solve?

Jiani Zeng  

So, if you think about it, a lot of spaces — they are like a black box to their owners, right? They don’t know the data inside the space, how the space has been used. So, for example, without the data it’s very hard for the landlord to make leasing decisions. Like, next year, do you want to expand your office or do you want to reduce the expense in office leasing — this kind of decision. Also, for hybrid-working — if they don’t know how their employees are working, how the space has been used, currently they cannot make other decisions on how to improve them. So our solution comes in and provides those insights in those black boxes in real estate in different spaces, like commercial real estate, offices, public spaces, and senior living. So they have the data to do the analysis on and to make those decisions in the future. And previously, other competitors, they’re using camera solution s or radar solutions, which [are] not privacy friendly, or much more expensive than our solution. We are one of the most scalable solution[s] in this market. So, imagine those landlords who [have] 500k square feet buildings, and a bunch of them they need a scalable solution to deploy those sensors and devices in a big space. That’s when Butlr comes in and gets the market share in this domain.

Honghao Deng  

I would say the primary two use cases are — first, commercial real estate that’s helping all those big companies, Fortune 500s, like big tech, to understand their utilization and also transforming themselves, because it doesn’t make any sense after the pandemic to own such a huge footprint of real estate but with no one using it. But, you cannot improve your space, your usage, or improve your buildout without analytics or data. So initially, users o these big companies that are using our sensor to rationalize their workplace footprint. So, starting with cutting out footprint or making decisions based on data for expansion plans. One of the largest real estate — commercial real estate groups, actually saved $5 million per year, just looking at occupancies data to cut down footprint. And very soon after understanding the footprint and also dynamically scale or shrink the footprint to save money, immediately the company ran into the second phase, which is hybrid-workplace experience, because they are putting probably two teams into traditionally one-team space and then expecting everyone to do timesharing.

All of those great tech companies, all of these great Fortune 500s, they were going through the issue that when people book a room using booking software, nobody shows up, and there will be one person booked an eight-people-big conference room. And as a result, you save all this money — you were thinking about, “Hey, I save a lot of money, but I maintain this office experience.” But the reality is exactly the opposite.   Everyone is fighting for a meeting room now, and then you realize it doesn’t work anymore. So the second phase, immediately is using our sensor, not just to cut on footprint but also do automations to make the space more efficient. In this way, they close the loop to create this kind of hybrid workplace experience.

And in the longer-term, of course by people aggregating this data for dynamic cleaning to save further on maintenance. No point in cleaning a space that’s already cleaned. That is also a really great ROI. For every 10 restrooms you save like $20,000 a year.

Shereen Abdulla  

Who are Butlr’s customers?

Honghao Deng  

So, in commercial real estate it’s mainly the big owner-occupiers in the space, like Fortune 500 companies, as well as the third-party integrators that already have devices and also servicing those buildings. And then, for senior care, that’s a little bit different. In Senior Care — this is a domain we’re rather early in the exploration, so we’re not yet towards the end users like owners or occupiers or operators in senior care. Mostly, we’re working with integrators and also partners to further develop the use case for not just fall detection and also for prevention.

Shereen Abdulla  

Who would be some examples of integrators?

Honghao Deng  

So, those are the integrators that already have devices in the buildings or they offer end-solution to the building operators or owners.

Shereen Abdulla  

Now you started building Butlr back in 2020, just as Covid lockdowns took place — and in fact, your 500 Global accelerator program Demo Day even went virtual. I’m curious, how did the pandemic affect your business in its early days?

Honghao Deng  

Jiani and I probably didn’t mention at the very beginning how this company’s technology developed. Actually, from [the] very beginning, we were on this TV show from CBS, really using our sensor to be able to do all this automation. When Jiani laid down on the couch, the lights dimmed, and also lights dropped. And on that TV show, even the Director asked us to track a puppy. And so, the light was following the puppy — all those kind of fancy lifestyle use cases. And then we entered 500’s Batch 26 cohort, and then we started to do product-market-fit testing. And then with their help, we started to navigate into retail space, and also hotel space. And very luckily, we signed our first contract, 2019 November.

And then — this whole entrepreneurial journey is always being windy. In a way it feels like you’re almost on track, but it’s never the case, right? Things always happen. And then, three months later, [the]  pandemic hit big time, right? And then you — I would say back in retail use cases, it’s mostly about privacy friendly, Google Analytics — that’s super easy to deploy in the supermarket in the big box retailer to understand users’ interests right in this space.

But when [the] pandemic hit, who cares about what customer interest is in brick-and-mortar retail, nobody’s there. That’s an obvious point that we definitely need to work on, figure something out to help us out because of we’re — back then really relying on that contract to give us revenue, to keep the lights on, but also we’re about to raise the Seed round, or Pre-seed right after 500 batch — which,  the Demo Day went virtual. So, it’s certainly a tough time. 

I recall that we were on an airplane pulling back from visiting a customer trying to get our revenue collected — and we were like that’s definitely not happening. And then afterwards, we really locked ourselves in a room — gosh, this is not the way we should continue to pursue. This is definitely —doesn’t have that product-market-fit anymore, during the pandemic. 

So we locked ourselves in a room, brainstorming, and then like we really, really banged our face and [thought] through what can we do for the retailer or for other customers right now. And then, suddenly, a spark goes down that hey, why not help them to reopen, right? We can do occupancy control because everyone is worried about this maximum occupancy in the stores. So we were literally the first one doing that around March 2020. And then very soon, we got inbound from Verizon. We deployed every single store in San Francisco city, almost. And then that brought us into the office use case because we were literally also seeing [from] the data that actually people are closing down stores, based on the data that we provided, even though they’re using us for occupancy control. And then very luckily our counterpart at Verizon said that our office workplace team is looking for occupants solution. Why not try to do that, right? A nd then that totally unlocked a huge vast market that, trying to deal with really painful status-quo solution that’s super, extremely expensive, that’s not privacy friendly.

And then when we launched officially last year, Q3, the market’s reaction has just been crazy. That’s how we find that product-market fit in commercial real estate. As well, I would say, senior care’s also a little bit catalyzed by Covid because of — it’s super hard for a caretaker to go on-site.

Shereen Abdulla  

And now with work-from-home and office re-openings, how was the demand for workforce planning changed, and therefore for Butlr?

Jiani Zeng  

I think we got our first office use case customers during the pandemic and we thought okay, maybe it’s only going to last for the pandemic — after the pandemic people would not be using this technology anymore. But, the truth is, I think Covid really changed the office hybrid working style permanently. So it’s not only during the pandemic, but also after. I think businesses — they started to pay attention to the data, how the space has been used to make leasing decisions, energy-saving decisions, since [the] pandemic. And even after pandemic, they’re still going to be paying attention to those data and make their future decisions.

Shereen Abdulla  

In addition to the challenges during Covid lockdowns, what have been some other challenges you faced building Butlr?

Honghao Deng  

One of the things is definitely operation[s] and also getting our solution to customer[s’] sites. Again, we just entered the market since last Q3, and now we got a bunch of, dozens of Fortune 500s and also, a lot of fans using our product. For a small order from a fan company it’s like 2/3 thousand sensors in one or two buildings. And then now like the breaking point for our operation team is really customer delight. Right now, customer delight is always, always the biggest thing, but also it’s about supporting customer[s] in Australia, supporting customer[s] in [the] EU, with different time zones. And also maintaining the same experience to what is the fastest approach you can get access to any occupancy data in your environment. To maintain the same kinds of experience you do need to have the right procurement team, the right supply chain, the right logistic team to get there on time, as well as by providing the right support.

Jiani Zeng  

Yeah, let me just ask you that question. So, I think one of the biggest challenges we’re facing right now is operational challenges. If you look at our client, for each office building there might be hundreds to thousands of sensors to deploy in each building, and we have hundreds of customers having those sizes of buildings. So, with our current size, 60 people, I would say it’s quite challenging to make the whole thing work, having to deliver the product on-site and having them work perfectly. So, our solution — one, is working with integrators like a lot of our customers right now [are] integrators, who [have] experience working with their end customers in real estate. The second one, I would say, hire the right people and have them join Butler to do the things we’re not — we don’t have much experience before. I think this will really help us scale fast and tackle the issues or challenges in operations.

Honghao Deng  

Let me add a little bit to Jiani — customer delight is a core to Butlr’s offering. And also a lot of innovations — this company innovates really fast. It’s really, really about innovation based on customer feedback.

Shereen Abdulla  

In July, you raised a $20 million Series A round. How do you plan to use it?

Honghao Deng  

So what we just mentioned is really scaling the team up, be able to meet the demand and also keeping what matters most for us, which is customer delight. That means the operations, right? Operation talents. We just had a Head of Operation join us from Berkshire Grey, he was a VP there. And also, building up the operation team across time zones. And second, is that on [the] marketing side we do find out that a lot of our existing customers are frustrated customer[s] that have been dealt with status quo solutions. We do see our technology itself catalyzing to customers, and also market adaptation because of how scalable it is. But also, we do think down the line we should be the ones that are educating the market. So that’s why before, really most of our great customers are really almost inbound. But we should turn it around right now, proactively doing our own marketing and also make our brand out there.

Shereen Abdulla  

Closing question — how do you both work together and complement each other?

Honghao Deng  

Both of us I will say — we are engineers and designers [by] background. But doing a startup you cannot make it successful was just a very limited pool of skills. So, both of us — at the very beginning, just two of us — really, really small team during 2019, we do have to develop other skills on top of what we’re good at. So, I think I turned into more business focus and also venture focus to get us the right resources, and also applying our innovation to help customers to solve issues and also getting the return of investment for the customers. And Jiani really is, I would say, putting the core of innovation based on customer feedback — applying the resources we got and then put it into our product and make it the best.

Shereen Abdulla  

Awesome. Honghao, Jiani, it was a pleasure to have you on the show.

Jiani Zeng  

Thank you so much.

Honghao Deng  

Thank you. 

Shereen Abdulla

Absolutely.

 

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Zina Moukheiber

Senior Director of Global Communications

Zina is the Senior Director of Global Communications at 500 Global. She was previously a journalist at Forbes where she spent two decades covering a wide range of sectors, including technology and science. She initiated regular coverage of the biotech industry, penning cover stories on emerging technologies and drug developers, and created a blog on the intersection of healthcare and technology. Zina helped launch the first Arabic edition of Forbes, Forbes Arabia, and later became the Group Editor of Forbes Middle East.

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