Green Giants – Episode 60

Grant Gunnison (01:14)

Well, I mean, certainly a lot of learnings, you know, I think I think in a lot of ways, kind of got thrown into that business or threw myself into that business. Growing up, I was tangentially involved on weekends after school, etc., from a pretty young age through high school and the like. But certainly, hadn’t run a business before, and certainly hadn’t been doing that day to day.

So, going from being in a lab to being day to day, doing ops in people’s homes and everything else is quite a change of pace. So, yeah, I think, pretty quickly, a very, very different lifestyle to start from where I was at. And to your point, lots of learning along the way there.

Maybe one or two things to just poke at quickly. I think I spent hundreds of hours, I was in hundreds and hundreds of homes meeting with homeowners, and folks are quite nice. One reaction to that was like, great, like lots of friendly people that are super nice and everything. I think it turned out I was pretty good at sales. closed about 60 % of the leads that I got, which is something I am still proud of to date. But I think in the middle of that also realized just how painful it was to deliver the product that homeowners were looking for. Expensive and for them just a huge, huge time sink.

Wes Ashworth (02:24)

Yeah, and thinking about that, so going through those hundreds of in-home visits, what stood out to you as the most broken parts of the retrofit experience for both customers and contractors?

Grant Gunnison (02:38)

Well, getting started is hard for a homeowner, right? They may have a well-formed thought about the solution they’re looking for, but often they don’t, right? And so, they’re looking for help understanding what it is that they want to actually do. And that information delivery is mailed to them in the form of a nice, seasoned contractor. And I was that person, right? So, I mean, I was driving all over the place, you know, sometimes 45 minutes in a single direction to get to these homes. And, it’s pretty difficult then to run more than a couple of visits at a time in a day, maybe three. And, it’s pretty tough. If you’re closing 60 % of your leads, great. That means you can, maybe on average, you’re selling two new projects per day.

But quickly, you find yourself limited in how much volume you can put through the business. I mean, the product or the purchasing experience is very painful. I mean, they put up with it, but they don’t want a bunch of strangers in their house, of course.

I mean, to the extent that they even feel the need, the social pressure to clean up their house before this person comes over to their house, right? And it’s like self-imposed, but lots of folks do that. All just to say that, what folks are looking for is to educate themselves on what to do. They may not know what to do to solve their problem. They could have a well-formed thought, but often that’s not the case. So, they’re really having multiple contractors come over so that they can get educated on these things, and it’s just a debilitating process. Probably two hours probably dedicated per appointment. Have three of those at six hours plus you got to find all those folks online and like find some folks you trust so add a couple more hours for that all of a sudden you know it could be a simple project and you’re already eight hours in before you can really make a decision on what you want to do.

Wes Ashworth (04:27)

Yeah, absolutely. And you see those kinds of pain points, and we’ll dig more into this as we go. The thing too is just thinking about your transition from aerospace to home systems, and kind of your path. What stood out to you, or what did you see, maybe that others might overlook when talking about residential decarbonization? How did that, I guess, help your perspective, and what did you see differently that others might overlook, not having that?

Grant Gunnison (04:51)

Well, I think there’s such a macro problem here, and it’s such a large problem. I mean, you think about what it takes to go do four or five of these projects, meaning a heat pump, water heater, to get all the gas out of a house, maybe some insulation, whatnot, in one home. It’s not an insignificant project. I mean, we’re talking about probably a couple hundred hours of total effort by the contractors, homeowners, et cetera. We have 60 million homes in America that need that couple of hundred hours done to them, right?

And so you sort of look at that and you go, oh wow, I at one point did kind of this top-down analysis of how much time it would take us to actually get all this work done and tried to map that to the workforce and I just looked at that and said, the math isn’t math-ing here, like the numbers don’t add up and I think the issue there was to say, okay, well, if we even wanted to go decarbonize all these homes, what needed to be true? And I think that quickly led me to go, well, we need to build some technology because we need to scale some of this stuff up, and we really need to reduce some of the critical human pinch points we have in this process.

Wes Ashworth (06:00)

Yeah, absolutely. And thinking about too, just like your education, what you went through up until that point, a lot of times it exposes you to different things. You see different problems. You see different ways of solving problems. And it helps you think differently, probably. Like, you feel that benefit in your day-to-day and just thinking about where you started to where you are now, and maybe your ability to help solve some of those problems.

Grant Gunnison (06:20)

I mean, I don’t think I’ve met another person who was in the field running a general contracting business for a few years and also building space systems. So, I do maybe I have an end of one perspective, unclear. There could be some other folks. But I think that does give you a really practical perspective on what it takes to deliver these projects. You know, I have seen a number of folks come out of Facebook and Google and want to start companies in this space, and it takes them a long time to come up to speed on what contractors have to deal with, but they’ve never sat in those shoes. And the emotional challenges that also come with managing a staff that also has to be in the field, and managing a very small balance sheet, and sometimes upside-down cash flows, and all of these things. I think I’m very grateful for, look, those were hard experiences.

Let’s be clear about that, but I’m very grateful for that perspective now, in being able to have empathy for the contractors that we work with. I mean, in a lot of ways, we’re just trying to make their lives a lot easier and do our best to do that, and I think that has a lot to do with the fact that I was operating one of these businesses, and it’s certainly not easy.

Wes Ashworth (07:26)

Yeah, absolutely. So, after stepping into the world of home contracting, like we mentioned, it didn’t take long for the inefficiency of the system to reveal themselves. And what began as a hands-on problem-solving quickly evolved into a deeper critique of how home upgrades actually happen and why so often, they don’t happen. And you’ve talked about how the traditional contractor sales process demands a huge amount of time and energy, as you mentioned there, for both contractors and homeowners, yet often delivers little in return. Anything else in terms of just what made you realize just how broken that system is and that there had to be a better way forward?

Grant Gunnison (08:06)

Yeah, I mean, I think realizing and living the day-to-day product delivery experience for homeowners, very clear to me that that was quite broken, especially from their perspective, right? But also, like looking at our P&L to just go, my gosh, we’re spending 25 % of revenue on ads and sales and a truck and insurance and gas in that truck and all of the different things in that, and said, well, if you want to actually improve this business, there aren’t a lot of levers. You can get a little bit better at marketing. You could maybe get a little bit better at sales, but that’s really not going to give you a step function change in your acquisition costs and be able to maybe reduce those costs for homeowners or dramatically reduce the time, or just be more profitable, which every small contractor would love. There are typically low-margin businesses. 

And I said, you just need to have something that’s radically different to change the entire approach in order to really clean up the ecosystem. And I think in a lot of ways, like the in-home visit, is really secretly keeping the entire industry’s feet stuck in concrete in a lot of ways. And if we can eliminate that as a step in the process, then there’s actually a wonderful number of opportunities there to improve the experience for every stakeholder in this ecosystem. It took me a long time to figure out both how to get that done and what that might look like, and to see if people were willing to play ball in a totally different workflow. Anyways, I think that the culmination of a number of perspectives there that I think led me to the opportunity.

Wes Ashworth (09:34)

Yeah, and things you’ve already touched on. So, from that homeowner’s perspective, it is expensive, time-consuming, and awkward. Yet it really has gone unchanged for so long in terms of that experience and how we do that. So, I guess why has it gone unchanged for so long? Is it just that, people are resistant to change? Or what do you think it is?

Grant Gunnison (10:03)

I think it’s really a technology gap in a lot of ways. I mean, if you look at the ecosystem or the folks trying to innovate in this ecosystem, you have the marketplaces, the folks like Angie’s List or the Energy Space, maybe Energy Sage or Electrums, or these marketplaces. What you can do on a web form or web experience is not much more than one step into the customer journey. You can do some education, and then you can do contractor matching, but you can’t really, you can’t get them a quote. You might be able to get them an estimate that’s medium to low fidelity, but that’s as far as you can get.

And a homeowner has a pretty high bar. They want a price, they want a scope of work, they want a contractor they trust, and they probably need some kind of financing. You need to be able to deliver all of those things. The technology we’ve had hasn’t been able to deliver that without having to go to the house. One section is marketplaces; another section is sales enablement.

There are some folks who are building online estimate tools, folks who can get a ballpark price without having to pick up a phone. I think that’s engaging and great, and it’s a little bit incremental and a step forward. And then there’s also folks that are building better sales tools for when folks are in the house, right? I think all of those things ultimately are just a little bit around the fringe. And yes, there are improvements, and those are also like maybe interesting businesses to build, but ultimately are not really going to take a leap forward in the productivity and cost reduction that we really need, I think, to solve the problem.

And so maybe that’s a long-winded answer to say, if you want to get this done, you have to be able to deliver a guaranteed quote to somebody without going to the house. It’s a pretty high bar in terms of the information quality you need in the house. And the technology just really didn’t exist until maybe five or so years ago. And so, that’s it’s a pretty cool opportunity then to say, well, shoot, we can do this differently than has ever been possible. And if that’s the case, then what can you actually create? And there are some pretty cool opportunities out there, leveraging some of the hardware that folks have in their pockets these days.

Wes Ashworth (12:04)

Yeah, absolutely. And one of the other things you mentioned a couple of minutes ago is just a significant portion of project costs often go towards sales and customer acquisition. And I guess, firstly, why is it so expensive to match homeowners with the right solutions? And what’s been missing in how the industry approaches that problem?

Grant Gunnison (12:21)

Yeah, well, Google’s done a pretty good job of, sucking up as many dollars as they can. So, the channel cost is quite high. And what I mean by that is, as a contractor, if you want to put ads up on Google to get a booked appointment, and it’s not just Google, of course, there are lots of channels to market through. Contractors spend somewhere between seven to 15 percent of revenue on just lead generation, right? And so, yes, some folks are a little bit better than others at it, but ultimately, they’re roughly in that cost. That’s why in a lot of ways, contractors are so focused on referrals because that can be one, 2 % of revenue, right? So, it’s like a pretty transformational difference, but it’s difficult to build your business strictly on referrals.

The second piece, then, is that you need a human to deliver all that education right, and the truth is like we’re expensive. I mean, a good salesperson is making mid-100,000, maybe over $200,000 a year in HVAC, could be more than $300,000 a year some of these some of these guys. And so, what that means is every visit they need to you to, I mean every day if you’re making 200 grand a year, they need to make a thousand dollars a day, and so I mean that that just is what it is, and so that quickly adds up. Sales can be again probably 8 to 12 percent of revenue as well, and you add that up and you’re somewhere between 15 and 25 percent quite quickly.

Wes Ashworth (13:49)

Yeah, no doubt. Was there a moment, so you’re going through this and you’re seeing these kinds of issues, and like the kind of thing, and like, man, this just seems kind of broken, inefficient, expensive. Like, why are we doing it this way? A lot of people get there, and then they just kind of accept it. Like, it’s just how it is, operational headache. Was there a moment where you were like, no, okay, I actually have to do something about this and find a better way and implement that kind of software solution? Like, what was that journey like?

Grant Gunnison (14:13)

Yeah, well, that’s true. I had a pretty viscerally painful experience running this business. We’ll do a little detour to tell some of the extracurriculars around it. But I think there were kind of two separate moments, and they were five years apart, actually. Really, that was the pain point. Then my eyes opened, and I said, I think I know how to solve that problem.

But at the time, again, the technology didn’t exist. So, there wasn’t a solution. I also wasn’t mature enough in my career to even build that solution at that point. But all in say, I think one of the most painful parts of running that business. So, I was in Southern California driving all around Orange County in LA driving on the five freeway tons of traffic trying to get to an appointment, phones ringing, trying to be productive while you’re in the car and traffic and everything else and just going like oh my god, how are we possibly going to drive enough revenue this month? When I’m stuck in traffic and I can’t even get to appointments to sell these projects. I had that experience over and over again, but I think there are a couple of particular points that I come back to often in that.

There isn’t really a way to do it more efficiently. And a lot of folks just feel stuck. I mean, I’ve talked to a lot of contractors that, I mean; to be honest, they’re just suffering in silence. You know, they don’t know a better way to do it. Hell, there really isn’t a better way to do it in a lot of ways, so I don’t blame them. But they’re all looking for it. They wish it were easier. And no one’s coming to save them in a lot of ways, right? There isn’t someone who’s going to make it a lot easier for them. So, anyway, I felt that in a pretty visceral way. And the mountain of pressure to make your sales month, and everything else that weighs on top of you. There are a lot of those, I think, moments of just super high pressure and just feeling stuck. And so, some viscerally painful moments.

Five years later, fast forward, I was in the midst of building these small satellites, and just maybe for reference, these small satellites are called CubeSats, I mean they’re about the size of a Kleenex box, maybe a Kleenex box and a half. They’re very small, and they have a little two-inch camera aperture on them. We were doing some Earth imaging with them as well. A buddy of mine was working on that. We’re on the whiteboard. He’s talking about how he’s pulling features and measuring clouds and stuff.

I was like, what sensors, what sensors are we using here? Cause I was more on the electronic side, not on the optical side. And we got to talking about that. I went home and like looked at a number of the different cell phone cameras that were out there. And I went, well, dang, these are basically the same thing. If we’re able to do what we were just talking about in the lab on a smartphone, could I convince a homeowner to actually just send me some of these photos, and we can run it through the same software that we’re using here and could I get a good enough idea of what the scope of work was to be able to price something I said well, maybe I should maybe I should just try that? And I did, funnily enough, I mailed some folks some smartphones. I needed the highest end ones at that point, they weren’t even very common, so I kind of was forced to do that and 12 months later had sold a couple hundred grand worth of projects to homeowners, mailing them this little kit with a phone and a little infrared sensor and a flashlight and all these things. I mean, it was so gimmicky. But people actually loved it. They didn’t realize they were getting a little kit and everything else. And anyways, sold those projects. I delivered them with some local contractors, and they were just happy to get the work and kind of proved out our model there. So, it was pretty cool to just sort of do that on the side of being in the lab, and the day after we delivered our satellite, I said, I’m gonna go do this for real now.

Wes Ashworth (18:17)

Yeah, that’s so cool. I love those stories so much, and kind of how it all came together. And obviously, it clearly sparked something that you’ve turned into just a viable growing business. And so, I want to talk a bit about that in terms of just turning that insight into a whole new model with Zero Homes. And firstly, just walk us through how Zero Homes actually works, especially for those who aren’t familiar. And then, from virtual audit, installation, what makes the experience just fundamentally different?

Grant Gunnison (18:40)

Yeah, well, I think we sort of flip it on its head a little bit. Instead of folks having to find contractors and host a bunch of folks in their house, they can download the app, get started immediately. We ask them to do 15 to 30 minutes of work, depending on how large their house is, just to send us all that information, which we process, and then folks jump on a 30-minute call, just like we’re sitting now. And then we have an internal dashboard. We’re collaboratively designing these solutions.

And so, if you need to do heat pump layout and size of systems, we’re doing that in real time together. And so, it’s a very engaging process, as opposed to getting a PDF that says, heat pump, maybe a couple of specs on it, and $20,000 on there. Like people are real-time designing their systems, and they’re picking which brands they want and all the different performance factors, and we can talk through all of that in quite a deep conversation, people get to learn a lot through that and they can ask all the what if questions they have in real time.

And so, it’s a very collaborative, educational, engaging process that is, in my opinion, just dramatically different than hosting someone in your house who’s going to go poke in every nook and cranny of your house and come back and go, hey, think this is your solution.

Kind of like, well, is it? I don’t know. There’s not a lot of confidence-building happening there. And look, I don’t want to be too hard on contractors. Some are much better than others at that. Some of them sit down and have a long conversation about kind of the different options and things. But all to say that there’s sort of a new educational engaging process being provided to folks that is super low touch and very low cost, right? And that we can help homeowners in Florida and Oregon on the same day. And we have, right? And that’s incredible, right? We can provide a very high level of expertise to folks without having to physically be in the same building as them.

Wes Ashworth (20:29)
Yeah, that is it’s so cool and such a great solution and I think makes so much sense for our world today and just how consumers want to interact and engage, and buy And as part of that as we’ve already talked about so you’ve eliminated those site visits, which I’m that way I hate people coming in my house, I mean just I think most people are probably that way. You eliminate a site visit still deliver permit-ready plans, which is amazing. You’ve talked about some of the technology, but what kind of other, just technical or operational complexity sits behind the simplicity, but what sits behind on your side?

Grant Gunnison (21:13)

Yeah, well, we built some software that does quite a bit of analysis on these homes. So maybe I’ll speak to that for a minute. We built a 3D model of folks’ homes, which is quite cool. We can actually show them that and walk through it and the like. And we use that as a basis to do all sorts of things. I mean, we’ll measure individual rooms to see if we can fit certain appliances in there. Also,  some have specific volume requirements, like a heat pump, water heater, for example. We need to know how big that room is, or we need to duct it. We also need to, maybe drain some condensate from it, run electrical, so having a basis of where all the things are in the house is important. We also need to know what they are.

And so, we’re asking folks to scan barcodes and labels and take photos of their electrical systems and appliances and so on and so forth, and we layer that all into the model, and so we can have a very rich discussion about what to actually do. There’s quite a bit of analysis under the hood to both build that 3D models and then subsequently to understand if you have enough electrical capacity at your house or how big of a heat pump do you need or how big of a water heater do you need and why is it that water heater versus this water heater?

There’s a lot of intelligence built into that. So, there’s a rule system and so on and so forth. But at the core, it’s a number of different types of analysis to figure out what can be done. And then the last thing is what are the outcomes that you’ll get from these projects, right? So, is it energy savings or cost savings or carbon savings, depending on what you’re sort of looking for? Is it comfort that you’re looking for? Or just assurance that this is actually gonna keep your home comfortable? And I think we can address all of those things, but individually, they need a fair amount of analysis to kind of support that. And so, we’ve built all of that in-house to support those conversations.

Wes Ashworth (22:48)
Yeah, I love it. And you mentioned heat pumps, obviously a central part to Zero’s offering, but they’re still difficult to sell and implement well. What’s driving that friction, and how are you solving it?

Grant Gunnison (23:10)

Yeah, well, we try to do our best to set contractors up for success, right? I think one of the biggest challenges in this space is that heat pumps are not the same as furnaces. And maybe that’s like, well, duh, but a practical consideration here is they’re just completely different machines and they’re much more complex to design. Just one bit on that is furnaces are very powerful. They’re creating heat with a very dense fuel, right? And so, they can produce a lot of heat really quickly. 60, 80, 100,000 BTU furnaces are very common. And they cost somewhere between $8,000 $10,000. To get the equivalent amount of heat output in a heat pump, that’s probably going to cost you $50,000 or $25,000 in equipment. So, sizing the system is actually the most important part. Turns out it’s actually really hard to do. And because furnaces are so powerful, you don’t really need to design them to any level of fidelity like you do a heat pump.

So, part of the reason for that is, a 60 to 80 to 100,000 BTU furnace, the cost difference for the box itself is five hundred bucks. And so, it doesn’t really matter. Contractors can go, hey, like, are you comfortable in your house? Great. I’ll just throw an 80,000 BTU in. You already have one of those, and you should be fine. That conversation can’t be had in heat pumps. And so, it’s really important to design them correctly.

There are a couple of different methodologies for doing that. Some folks use utility bills. You can do that if you have natural gas or like pretty consistent bills being delivered to your house, though there’s some danger in that. You might need multiple years of bills, and you need to correct for weather, and if you went on vacation for two months, there are all sorts of challenges. But then there’s a bottom-up physics model-based approach. And we take that approach because it works for every home. We do calibrate with energy bills as well, but all just to say that we want a solution that works for everyone. So, that is painstaking to collect all the information for and deliver that through a simple process for homeowners.

And maybe here’s the punchline is just that here’s what that leads you to is saying with a lot of confidence. Hey, Mrs. Jones, you need a two-and-a-half-ton heat pump for your house. And let’s talk about how we got there. And that builds so much confidence in these folks because they’re going to get quotes for two-and-a-half-ton systems, a four-ton system, and a five-ton system. And they’re like, I just want my house warm. I have no idea what to do, but this is such a high-dollar, high-consequence decision. Maybe I should just use the bigger one because then, for sure, it will be warm, right? There’s such a danger in that because that’s actually not necessarily true. It’s a hard problem, and we wanted to build a system that would build a lot of confidence for homeowners while also trying to get them into a system that’s going to be affordable.

Wes Ashworth (25:56)

Yeah, that’s incredible. And so spot on, think just in kind of the way a consumer would go through that process and their thought process and all that sort of stuff. I’m sitting here smiling because I’m like, relate to all these sentiments. So yeah, it’s so good. Another piece I wanted to touch on, so you briefly hit on earlier, just it’s critical to move beyond sort of rough quotes and give homeowners a scoped price project upfront. Why is that the case? And talk to us a little bit more about that.

Grant Gunnison (26:20)

Yeah, well, again, the challenge is education, right? I mean, if you just sort of look at the macro problem again, if we’re going to spend $1,500 a house to just deliver education to every home, I mean, that’s a bananas number to think about over 60 million homes. I mean, it’s like, wow, we need the educational process to cost a couple of dollars total. You can’t do that in the physical world. You just can’t. You have to transform this into a digital domain in order to deliver those sorts of results from a cost perspective.

And so, that is really the critical point here is we have to just totally transform the problem to be able to solve it in a way that is going to deliver the results that we need. And homeowners want that. At the end of the day, they don’t want to get put through the wringer just trying to come up to speed on these projects.

Wes Ashworth (27:11)

Absolutely. And the other side of that, because we talked about the homeowner a little bit, what role do your contractor partners play, and how does your platform shift the economics in their favor as well?

Grant Gunnison (27:21)
Yeah, so great question. Again, having a ton of empathy for these guys, what we’re trying to do is pretty simple. Let’s remove the cost centers from the business and get them in the field, driving revenue as often as possible. So, contractors can think of us as their external sales team. We are not bringing leads to them. We’re bringing totally scoped, sold jobs. We’re meeting with the homeowner. We’re scoping that entire solution out. We’re selling it to them. We turn around, hand them the plans, photos, all the things they need to get comfortable with what the work is that’s going to be done. We then purchase the equipment so they don’t need the admin and overhead or balance sheet or credit to be able to purchase this stuff. We deliver it to their warehouse, and then we schedule for installation. And so, what really ends up happening is we’re paying them for the time and labor that they’re spending on those jobs. And we try to deliver that at really good margins. So, they’re roughly 50 percent gross margin on their time, which is pretty in line with what they typically charge, and we keep their schedules full.

So, the kind of benefit for working with us and what we’re trying to provide to them is keeping their utilization as high as possible, giving them good margin work, and those dollars are going straight to their bottom line. And so that makes their year-end certainly a lot better and keeps them busy when they’re not, in shoulder seasons and whatnot. We can add, good margin work to their schedule. So, they’re staying busy.

Wes Ashworth (28:39)

Yeah, which I know you’ve created tremendous value for the contractor, and having them in mind. But I know beneath the project is the philosophy that starts with the homeowner kind of thinking about them and the way they’re going through it. And then I’d say the rest of the industry probably builds around utilities and contractors. But Zero seems to really put the customer experience at the center, which I find great and refreshing. And again, most retrofit tech is built around contract utility workflows, as I said. But why did you choose to center around the homeowner instead, as sort of like an initial focus?

Grant Gunnison (29:09)

Well, they have the most pain. Well, they have the most pain, the most to lose, the most to gain. I mean, maybe it’s just as simple as that. But people today are going through purchasing experiences that are completely digital. You can go on Amazon buy almost anything you want in five minutes.

You can’t do that for anything in your home other than solar today. And, I think people are expecting a higher quality experience and a lower touch experience. And ultimately, we wanted to deliver a world-class experience for homeowners. We’re talking about pointed upgrades in homes, but I often hear from folks, especially some of my friends who are newer homeowners. Gosh, homeownership is hard. They’re like, wait a minute, I didn’t know I needed a Rolodex of 20 different vendors to like manage this house.

 Sure, I thought this was an investment, passive income. It’s like, OK, let’s have a real conversation about how it’s anything but that. And I think in a lot of ways we’re just trying to make that a lot easier. And then maybe from a practical business sense, they hold the wallet. I mean, they’re the ones spending the dollars. And so, we wanted to build a world-class experience for the folks who are spending money on their homes, and I think we can deliver more value to them and the entire ecosystem if we’re helping them through this process. In a lot of ways, we’re just building the infrastructure that kind of raises all boats to make it easier for the homeowner that also makes it easier for the contractors in the field makes it easier for the distributors and the like and so in a lot of ways we’re just trying to make it easier for everybody.

Wes Ashworth (30:34)

Yeah, and you touched on this a little bit earlier, but what have you learned about the design threshold required to win a homeowner’s trust, especially when you’re asking them to commit virtually? I think more and more people are comfortable with that kind of model, but it is new. Some are a little hesitant as well, too. So, what does that look like when you’re looking at the design and just winning their trust?

Grant Gunnison (30:54)

Yeah, I think when I first got going in building this stuff, I thought we’d be able to completely automate this stuff. And I do think that there probably are some folks who are willing to go through a totally self-service configuration system to purchase these products. I do think that’s real, but I do think it’s a smaller part of the market than I originally thought. And a lot of folks want to ask a long tail of what-if questions. What if I put my indoor unit here or there? Like, how’s that going to impact the comfort in this room or that room or cost? There are a lot of dimensions that people are trying to solve for. And we have yet to figure out how to do that without having a human in the loop. Will we try to do that or lower the burden? Absolutely. But I do think that you need someone to build some confidence and talk through the long tail of questions that homeowners have, because this is a big purchase, and it’s custom. It’s not, I’m going to go to a car lot. There are a hundred cars here. I’m just going to pick one and drive away. It’s, I need to design something that’s custom to my home. And so, we’ve had to build a system that can handle bespoke design for any shape and size of home, and then be able to have a quality conversation about that, and then build confidence in the person that this is the right solution for their home as well. And so, we have some experts on the team that are really well-versed in all of the building science and the products and how to design and how to install these things, and our software aids them in making that a lot easier to have that conversation. And, we’ll see over time, but I just think something that I thought might have been true is that we could totally automate this for a lot of folks in the market. Maybe I’m backing off on that a little bit.

But the important thing there is, of course, eventually we’ll want to provide these tools to contractors as well, help them, improve the unit economics of their businesses. In a lot of ways, these folks feel like that’s how they’re delivering value, which is having this conversation with folks. And I don’t think we’re trying to take that away from anyone, right? I think we’re just trying to make that conversation a lot easier to have, right? So, it’s kind of an important piece there as well. The human element of this is real.

Wes Ashworth (32:58)

Absolutely. So, building a better experience is one thing. And I think you’ve highlighted that really well. Scaling it is another, and a whole different, different host of challenges that we’ll get into. But let’s talk about what it’s been like to lead Zero through that rapid growth. You know, we talked and you described yourself somewhat as that CEO, just in the trenches, just getting it done, making it happen. Talk to us about that. Like, what does that look like in practice during this phase of Zero’s just rapid growth?

Grant Gunnison (33:32)

We are growing pretty rapidly. I mean, it’s been doubling basically quarter over quarter for several quarters now. That doesn’t just mean twice the number of homeowners. It also means building better products to make things easier and adding team members quite rapidly. And all sorts of things break when you do that, right? And so, of course, we’re trying to deliver the highest quality experience to every person that we touch. Behind the scenes, there are a lot of things that are being rebuilt. Internal processes, the way that we work internally with folks, and the product that we are building and using. And so, there’s just a ton of work being done to make sure we can consistently deliver the highest quality experience that we can. And another part of the complexity for us is we’re doing that across geographies. So, the game changes a little bit as you jump from one geography to the next. A couple of things that do practically change are the weather changes, the building stock changes, and the rebates and financing solutions change.

So, that does stretch our staff a bit from the context switching as well to be able to make sure that we’re maximizing the amount of dollars we can get folks for these projects, making sure that we’re getting them through financing forms and all those other things as elegant of a way that we can that complexity grows, right? And I think we’re still a small business with 19 people. It’s hard to handle a lot of that complexity with such a small staff. So, all in say, it’s a lot of hard work going into both growing at such a voracious pace, making sure that we’re delivering the customer experience that we want to as part of that, doing our very best and not compromising on that.

Wes Ashworth (35:14)

Yeah, absolutely. And as a founder in a fast scaling, fast growing climate tech company or any company, what’s been the most difficult part of keeping momentum while also building culture and just that part of the equation as well too, which I think do think is so important as the company goes and as you continue to scale.

Grant Gunnison (35:33)

You know, it’s funny, I’m someone who can easily get caught up in the next thing to do. Or when we do accomplish something, the opportunities that then open, and just continue to focus on, sitting on the grindstone, get more things done. I’ve had to learn how to also celebrate, and not say, we’re just going to wait until we accomplish X thing, and X thing is a year away, but actually, really enjoy the journey because that’s what you’re doing, and you have to enjoy every day.

Fortunately, I think as part of this growth curve we’re going through, I’m having more fun building this business and getting to work with all these people than I ever have. And so, it’s also just a true joy to go to work and go, wow, the team is just crushing it. And then get to celebrate those wins and be intentional about going to baseball games or doing camping trips or whatever that is. That’s something that I’ve really had to learn and work on for myself. Otherwise, I’ll just go back to work. Literally, we’ll go win a new contract, and I’ll go, hey, great. Okay, cool. Let me go work on the next one in five minutes later.

I just have to check myself a little bit there and, and it’s important, think, to communicate to the team as well, the ones that you’re having, and also to celebrate those things and to, intentionally have some fun, let yourself even have some fun in this and, and not just go, hey, like we’re after this big, big goal that we have. I mean, ours is very ambitious. I mean, electrifying 60 million homes is not a small goal. Are we going to celebrate along the way, or are we just going to celebrate when we get that done? And I think the point there is you’ve got to enjoy the journey.

So, it’s been fun for me, I think, to sort of grow up a little bit as a leader. That’s sort of one dimension of a lot of those things. But it’s been really fun to work on some of those challenges as well, not just our product or customer experience or all the other business-related items.

Wes Ashworth (37:11)

Yeah, that’s good stuff. I know you’re actively raising your Series A, I believe. What’s resonating with most investors and just overall, what’s that process been like?

Grant Gunnison (37:36)

I mean, raising money is funny. It’s a bit of an art, of course. And, I think fortunately, we have built a very unique product, platform that, it’s very first of a kind, and delivers some pretty compelling metrics, from a business sense, but also actually, I mean, this is the thing that I’m probably most proud of our NPS score is incredible, folks love this product. I mean, it’s over 80, and not very many companies can say that. And so, for me, it’s really amazing to see the thing that I thought could be built really coming to life. And then in a lot of ways, kind of being able to celebrate that with investors, and they ask a bunch of questions, and you see their eyes go, wow, okay, I didn’t realize that that was also possible and how that impacts the business and your ability to actually drive impact.

So, of course, they ask really hard questions too, and you have to defend yourself and spend some time with them and the like, but I think it’s been fun, actually inspiring some of those folks in terms of what’s possible. This has been a very hard segment for investors, especially in the climate space. There are some folks in PropTech who may not have been burned as many times on that “home improvement”. But I think rightfully so, people are quite skeptical of trying to build in this space because there have been a lot of, I don’t know, shots on goal, maybe that’s the wrong metaphor, but a lot of companies have tried to build businesses in this space and not very many have succeeded. So, it takes me a little bit of time to get people over the hump, but they do come around. Not all of them, but a lot of them do.

Wes Ashworth (39:14)

Yeah, and kind of with that. you’re going through fundraising, momentum is building, new partners, growing traction, and national attention. Zero is beginning to shape not just how homes are upgraded, but how people think about home energy in the first place. And I want to talk a little bit about this. So being selected for Exelon’s 2c2i initiative signals real momentum. Tell us a bit more about that. Also, what does this partnership mean strategically?

Grant Gunnison (39:39)

We have chosen to go through and help utilities actually run these efficiency and electrification programs. Historically, utilities have focused on efficiency in terms of gas efficiency or lighting or weatherization, and insulation work. Not all of those opportunities have been exhausted, but a lot of the impact is starting to wane.

New technologies in terms of heat pumps for space heating and cooling, and water heating are coming to market, and the products are quite high quality these days. And these utilities are turning their attention towards; we actually would love homeowners to install a bunch of these new appliances. The challenge is they’re like three to five times as expensive as any of the other things utilities have worked on. The barrier to entry is very high. And they’re not being very successful in getting folks to adopt these things without writing massive checks, right?

So, in Massachusetts, as an example, utilities are writing $10,000 checks to every homeowner to get them to put one of these systems in their house. That is completely unsustainable. I mean, it’s just it’s ridiculous how much money is being spent there. And so, the thing that we can really do with these partners is really upgrade what has traditionally been used to educate folks, that sort of humble energy audit. We are collapsing what a typical sales visit and one of these advisory calls are into a single experience. So, we can talk to homeowners about all those different opportunities, whether it’s weatherization or batteries or heat pumps or windows or solar, et cetera. And then we can also say to them, hey, like if you want a guaranteed price for one of these projects, we can send that to you tomorrow.

And, unsurprisingly, that converts people a lot better than if you send an energy auditor out, and that ends with a list of contractors for homeowners to call. And they got dozens of hours of work to then meet with all these folks. It’s like, well, wait a minute. That’s not really a great customer experience. There are a few other things that our utility partners are after, but really, at the core of it is we’re helping upskill that process, and we are helping them be more successful in installing these newer appliances that frankly they really need to get on the grid.

And so, as a component of that, our capabilities are quite impressive to these folks and really helping drive impact. And Exelon, as a utility, of course, they own six or seven utilities across the country, has a need to do a lot of this work. They’re pouring money into this and not getting a lot of return on it. So, for them to both make an investment in the business, but also to help us operationalize our technology and our model within all of their utilities, is obviously a huge opportunity for us.

They deliver power to it at 10.7 million meters. It’s like eight or nine percent, I think of all of the meters in the country. So, it’s something just totally crazy. And today we’ll be announcing a partnership with one of their ports co’s. So, ComEd in Chicago, we have a formal operational relationship with them. And so, I’m really looking forward to hopefully getting our platform embedded in many of these other programs over the next year as well. And to have those folks internally actually really helping us do that is going to make a, well, it already has made a material difference. And I think we’ll continue to make a material difference in helping us jump into those ecosystems. So yeah, excited about that for sure.

Wes Ashworth (42:45)

Yeah, that’s incredible stuff. Without a doubt. And I’ll try to link some of that stuff in the show notes as well too, so people can go check it out. Thinking a little bit about the future, not too far in the future, but if you see the next three to five years, thinking about Zero in terms of reach, product evolution, market impact, where do you see it headed?

Grant Gunnison (43:10)

I mean, we want to be the front door for homeowners to get access to the information they need to be able to execute on these projects, right? And so, we will be more available over time. We really have the ambition to be nationwide. We have the ambition to not just have folks go to zerohomes.com to be able to get help there, but to actually take our technology and put it in a number of different places. So, powering other people’s marketplaces to get help with a broad set of products and we’ll start with heat pumps there and then also when we’re ready we’ll also provide our technology to other contractors in the space as well and help them make it easier to educate folks and deliver these projects at lower costs as well. So, we’ll be in a lot of different places over time, and give us a couple of years, hopefully, we’ll be nationwide and helping thousands of folks get these projects done.

Wes Ashworth (43:56)

Absolutely. Final question, I’ll just really open it up to anything else we missed here. anything else you want to share about Zero, about where you’re headed, about something with the industry, just anything that maybe we missed or didn’t get to hit on. The floor is yours for a couple of minutes. Just go for it.

Grant Gunnison (44:19)

I’m just really excited about the future. I know that as we sit here, the current macro is a little crazy. Water’s choppy in a lot of ways. The headlines are a little hard to read. And I would just say generally there’s a lot of chaos in the world, but from what I see internally and from what I see in the homeowners we’re working with, things are getting better every single day. And so, it’s really cool to just see the velocity of the business improving and to have more and more folks coming to us excited about how we can help. And that to me is just super inspiring. I’ve been grinding for a long time to be at this point in business. And so, to really see both my team executing like crazy and helping more folks is just super, super fun. So frankly, I’m quite inspired about what is going to come in the next 12, 24 months, but I think we’re headed in a great direction, and it’s going to be really cool to see what kind of impact we can really drive here.

Wes Ashworth (45:20)

Yeah, without a doubt. Super exciting stuff, and well said there, and a great way to just conclude this episode of Green Giants. Huge thank you to Grant for sharing the story and for the work Zero Homes is doing to make home electrification more accessible, efficient, and user-friendly. Do check out the show notes. We’ll link some things there for you to go check out. If you’re a homeowner ready to take the next step or just about where the space is headed, check out zerohomes.io, and again, we’ll link that.

As always, to our listeners, if you enjoyed the show, be sure to follow, rate, review share it with a friend. It definitely helps us grow and bring more inspiring guests on, like Grant. Thanks for listening, and with that, we will see you next time.