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To build or not to build for investors

Hunter (Moonshot) McKinley and Jay Hsueh discuss building startup, work spaces as we know it, and the opportunities that working remotely bring.

May 18, 2020
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Hunter McKinley

Transcript

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Hunter  0:01  

All right, what is going on everybody? This is hunter McKinley, also known as hunter moon shot here from Yac. And we have a special guest today. His name is Jay from Robbie Roby. I'm sorry about that. And we're going to do things a little differently today, you'll notice that we didn't livestream this one. We're actually recording it offhand.

Jay has just had a remarkable career so far. And he's got a really cool project. And I just wanted to dive a little bit deeper into this project than we normally would. We're going to kick it off just with with you, Jay. So tell us about you and what you're working on.

Jay  0:33  

Thank you, Hunter. And then is it be honor, you know, to speak here. So I'm Jay Shu. So I'm the CEO and founder of Roby. So what we do is we allow company to implement a smart home technology in commercial buildings. So really interesting problem we have found out isfor example, you feel too high appeal to cold coffee machines, broken Wi Fi now working on all that in the office you have you have to submit a ticket right and then somebody needs to take it

Hear of that, that usually take a you know, 20 minutes one hour and then compare without, at home, you can connect everything with your Alexa device or app, basically is a one click and it's done. So our question is why so painful in commercial? Good, we just don't get it right. So we dive into this problem solving and it has been quite a journey. Yeah, really fun. That's amazing, man.

Hunter  1:23  

So how did you get started on this? You said that you're the founder. So how did you come up with it? Yeah.

Jay  1:29  

Yeah, really interesting. Because previously, I was doing more like, we create an AI platform doing a consulting services to many industry, basically. And one of the biggest challenges actually data collection. And then we got the first customer who is Honeywell and they assigned us to the building, automate building automation department and realize like, wow, the infrastructure. Data Collection is really solid, right. And now Make us really excited about this. And then we comes out an idea like how to use in data, you know, to balance out like the comfort and also the company's operation wise, you know, how how do you save money, also employee feel happy about it. We bring this idea up, you know, and the customer get excited about it. And then we interview about 40 company 20 off then say, hey, J, if you build that we're going to use it. Yes. And we're just like, Okay, let's do it. Yeah.

Hunter  2:32  

That's awesome, man. Now, you say you say Honeywell is your first client?

Jay  2:36  

Yeah, yeah, it was the first one.

Hunter  2:40  

Yeah, that's that's not typically how it goes. How did you meet them? Was this like an old client of yours? Did you have a connection there because typically clients or companies don't start with a massive company like Honeywell off the bat.

Jay  2:52  

It is kind of interesting. I met I met the guy on an airplane. good story. And during the time I was you know, just started the company is super aggressive so I keep presenting my platform my services Hey, how how good it is. And then yeah, and then he got interested. He said, You know what? We have a PLC that you want to test it out. And a PLC works well working well. And then yeah, and then we continue with the project. Yeah, that's crazy. That's,

Hunter  3:24  

that's amazing. All right, well, so anyway, uh, yeah, so for for this episode, I would just want to dive a little bit deeper into like, maybe your workflow. Clearly there's some stuff going on in the world today that would affect office spaces. So before we get into like the news articles, I'm just curious how is COVID affecting you and your clients?

Jay  3:45  

So basically, for enterprise customer, of course, they just, they just shut down. They pretty much slow down quite a bit, that's for sure. But I think it also opened up the opportunity for us it's like people are looking for postcode. COVID-19 the new normal what we've been looking like, right? So we have been to view quite a bit of the company to figure out what would be the future looks like but it seems to me will be we are not going to back to where we were before, that's for sure. And several point like real beacon help, like a big one is how do you create a touchless? offices or touchless Hospital? Right? And that Pauline Roby Can, can help that because we integrate with boys or your personal device, you know, kind of reducing the touching points. So that part is a big, and also I noticed that there's some opportunity, for example, like how do you keep social distancing in in your office, right? And then even, for example, in a break room, you used to put a candy there. Not anymore. You cannot do this anymore. Yeah. You're older right now. Right? So it's like that is really interesting, and it's very uncertain, but in the same time, lots of opportunities.

Hunter  4:56  

Yeah, last week, we were talking about how some of the largest companies in the world Yeah, I mean, the smaller ones like us are, but really even though across the spectrum, everyone sort of is innovating right now. And they're coming up with new ways to accomplish their business goals. So I'm curious on your end, has there been an uptick in voice first technology? What does that look like?

Jay  5:17  

So the boys definitely become more important after this pandemic for us, so Previously, we are more like on on, you know, chat platforms, for example, Slack, Microsoft team, the adoption still much higher. But now it become much more interesting, right? Because the previously the skepticism of like security is high say, oh, Alexa is listening for example, in office, whatever, which I don't think that's true at all. And but but what happened now is like, this is kind of a forcing function say, Hey, you know, what, what else do you have? Right? What other illusion you have you just like this is the easiest way to interact, right? And then the fastest Way too. So imagine yourself you don't have thermostat anymore. You don't have light switch anymore. The voice is probably the best alternative. You can ever find it right. So that's exactly that, that that's what I think. Yeah.

Hunter  6:13  

Yeah. You know, we were just talking with Darren a few weeks back. He's Darren Murphy. He's one of the head of remote ag get lab. And he talks about how a lot of companies are actually going to be moving away from office spaces. And just everybody starts working from home. Now, I know that you work primarily with office spaces. So I'm curious, what are your thoughts on that?

Jay  6:35  

I agree, partially means like, the more interview I got is like, it's gonna change like this, and they still keep the office. But the office space we're gonna reduce means like, because they will probably like 50% of them will work remotely, but it's more like rotation based I would say so. For example, Monday, Wednesday. Friday, this team will work on remote stuff like that. This will be I think, one biggest change and then once company adopted, I can see Yeah, it's probably hard to go back and for us we Yeah, we are seeing like the opportunity to in terms of like the remote working. So definitely we change our product a little bit to adapt in that. So for example, one of the area we are looking at is like how do we how do you create and help the gap in between the people in office and people at remote? Some of the challenges I can see from a founder point of view will be productivity. Hmm, absolutely. And a lot of behavior change as well. So small things but I can share with you so for example, when you are in office, you see people physically see people are working right? And now you're not. So you kind of force yourself to be result driven. Super is all about Okay, are all about this and that and then All those kind of measuring tours, things like that. So definitely Yeah, I think it's a an interesting change in our opportunity in the commercial building space will be more like how do you create a safe office people are feel comfortable to go back, you know, some period of time. And the other part we are looking at how you feel that a gap in between remote worker and people in office?

Hunter  8:27  

Yeah, tell me tell me a little bit more about that gap. Because I think that's really where that's really what the problem is, with remote work is when they're fully remote. They seem to be happy when they're fully in office. They seem to be happy. A lot of the problems come for me from what I'm seeing. It seems like a lot of the problems with remote work come when teams are hybrid, some are remote, some are in office, and that's where I think things like Yac that's really what we're trying to solve. So just from your perspective, what are some things that maybe you've seen that people do or mean that they don't do about this problem? you have any thoughts around that?

Jay  9:05  

I think there's a lot of uncertainty, that's for sure. Like people actually don't know what to do. The more interview I have is like they talk about it, but none have been done that yet, right? Because this is a completely new new world so far. So I can give you my example in Yeah, in my company. So for example, team bonding is definitely one of the things like you know, make it very hard right now. So for example, right previously, it's okay. Because those new hire was like we met before we work before, but now we are hiring actually. So this one we are hiring. So those people will not never seen their teammate in person at all right? And then you kind of and then as a manager, I actually spent more time to prepare my team meeting right now. So to me it is never be like before, so to meet You previously for me, you just updated and now it's different, I need to prepare something fun something like stuff like this celebrate somebody, you know, as a small organization like, and that become actually very difficult. So I think that that are still you know, I can see like struggling like, you know, how do you make that easier and the onboarding process as well. If you're thinking about it, you hire someone you never seen and then you got to do everything online. And then hiring process as well, you know, and then team bonding. So those are the area I can see like very difficult so far. Yeah.

Hunter  10:40  

So when the surgeon Tell me about your team, you said that you guys used to be fully in office and now you're not tell me where you guys located? What did it look like before was it looked like now?

Jay  10:50  

Yeah, so we based in Seattle, and then we Yeah, and then we rent? We work a small office, you know?

Hunter  10:59  

Really?

Jay  10:59  

small office at we work and now it's like, hey, the reality is I, I would never go back, right? The Office too small, right? It's just noise no way you give us social distancing. Right? Exactly. Yeah. And we have nine people, right? And it, it just No, it just no way. So it becomes also an interesting decision for me as well is like,

Okay, so now we even we rent a new space, I will probably just rent the Open Table, I will probably not gonna rent a small office, right? It doesn't, it doesn't work anymore, right. So that's, that's one, one way to think about it. And then second ways, like, Okay, if we have an open table, that's just for example, like, we don't have office space anymore, we just have open table and then all of a sudden we need to scale up pretty say, from 10 people to 20 or 30. That's my strategy, right? It it becomes very different, like and then if you see the changes is I would never sign anything like that. Turn, least anymore is in such an environment, it just doesn't make any sense. Right? So we weren't asking us like, you know, to sign the contract for another like half year or one year, it's a tough decision for, for us, to be honest. Right?

Hunter  12:16  

From what I'm saying. That's really what it is across the board. Even at our own company, we used to have an office while we still had the office, but none obviously goes to it. And we're gonna have to make a decision here soon. You know, do we keep it? How much of it do we keep? You know, we've got three rooms. We kept expanding, we started with one, then we got two and then we got three. And now there's a whole co working space on the other side of our office. And so now we need to ask ourselves, you know, is it really worth having, you know, three full rooms for only a handful of people that are going to be showing up. So it's going to be interesting to see what happens to commercial real estate. I'm not into the real estate department, but I know that you're definitely in that world. You know, Darren said something interesting. He's like everybody that has commercial real estate, all that all that space is going to be freed up It's gonna turn into apartments and commercial real estate will be sort of, you know, teetering back and forth but he seems to be on the more optimistic side. So yeah, it's just a really interesting space but do you have anything you want to add onto that before we head into just the Weekly Roundup?

Jay  13:19  

Yeah, so commercial real estate from my point of view, at least what I had contact with you know, definitely made me to start prepare something new like tendon are looking for solution now, right? It's like if you want me to back to office, how do you guarantee that save right and then second big question for everybody now is like, how long is going to be like this? Right? all depend on me and all that stuff, right? People say one year some people say two years that but like the reality is like nobody knows But for commercial real estate, yeah, they gotta face the fact like, you know, old attendant don't want to sign a long lease and then they in order to do Track attendance, they need to find a solution. If they do that all manually, their operational costs will be extremely high. So give you a good example like your elevator, you cannot have more than 10 people. No, no chance. Right? You'll probably need to limit it to 14. Think of that. Yeah. Right. How do you manage that? If you hire a person just sit there to monitor Yeah, that, that that can do but that's a cost, right? So your operational cost is going higher. Right? But that's an opportunity for a tech company now. How do I okay, how do I save you time and money from this? You know, stuff like this? I mean, could be very interesting.

Hunter  14:38  

Yeah. I don't even think about an elevator because obviously, you're all packed into that small little space. Everyone's touching buttons, and then on top of it, it's constantly revolving around especially in New York City. There's people going in in and out all day long. No wonder they're having their their outbreak. Yeah, man. It's, it's gonna be interesting to see how it comes back. I don't know. I try not to talk about coconut Every single podcast, but it just seems just like it's just shaking up so many industries. And it's just interesting that you are sort of at the frontlines trying to figure out like, how do we think about that I think about the future of work from home. I never ever think about the future of work from an office space. Although it is, I think there will be some sort of hybrid future. I don't think that there will be a moment, you know, 10 years from now, I just don't I just don't see organizations being fully remote, or I'm sorry, fully in the office. I think I see them as fully remote. Twitter, I think just this week announced that they're going to be fully remote indefinitely, right. So that's what I think is going to be the future. So the question becomes, how do we help those folks in the office so it's just really cool that you're thinking about it and figuring it out? And it seems like I saw you guys that have been in business for quite a few years. So it seems like you already had a handle on how to deal with this stuff. Maybe you didn't prepare for a pandemic, but it seems like you guys already laid the groundwork which is pretty cool.

Jay  15:59  

So the yeah So the interesting part is that it's kind of a read definition of office right now. So that's very cool. You're thinking about that, right? Because like, the more I am from SEO point of view when I do the interview, the other cool part is like, hey, they actually saving a lot of money from real estate. I mean, yeah, that's that that's actually true. Right. But But, however, keeping that office, what is the function for that? office? Right, I think that's, that's, that's a new way of think about it. And then how, what does the new office looks like? Because previously when I look at when we sell in Roby to the authors, you know, one of the things like some people don't get it was more be like, Okay, this is something good to have buy to me. Kind of, right. Yeah, you saved me money, but I cannot lay off people. Some people think about that way. But now they're thinking about Okay, this is something I definitely need to have if I still keep my office, right. So this is some something Go play will be interested for sure.

Hunter  17:02  

Yeah, all those vitamins that became painkillers overnight because of this. Exactly. Anyway, so now I actually remember one quick story actually remember, we were in Menlo Park and we were pitching to an investor, actually, several investors, and some of the smartest people I've ever talked to. And one of them said, like, you know, this mushy gushy stuff about Yac like, I don't really care, like what's going to get people to stay on it like what's what's, how's it going to save them money, make them faster, more efficient. And we've actually since pivoted what Yac is and made a bunch of changes. But voice messaging is the most efficient way of communicating. So we have that nailed down. But one thing that COVID has really changed for us is introducing that human aspect earlier to you know, earlier in this conversation, you said something about how you need you have that human element, and it's amazing how that human element went from like, Okay, get past the mushy gushy and you look at the, you know, the suicide rate and the depression rate in a marriage. At least in America right now, and it's through the roof, and tools like, you know, video messaging, voice messaging, that becomes so much more of a painkiller. I hate to use that word in this Yeah. But it becomes more of a painkiller than a vitamin. It was a nice to have before but now it's like, yeah, we actually need to talk to each other. So it's interesting how it's now

Jay  18:19  

and it also like open up the market for us. So now we like hospital. Reach out to us, like so. Really? Yeah, patient room, right? Thinking about patient room, there's no way they will allow people to touch anything anymore. So now what happened is any patient touch anything? They're gonna come in to clean it up, right? And now you don't really need it in a future you you kind of forced to adapt in those kind of technology and then school, thinking about dormitory. Right? And then hotel, they still use the VI right? They thought that because like you said like our opportunity. become like okay, pretty

So we are more focused on offices and now all of a sudden say, okay, we are more like commercial building, right? All the commercial building, including those property. Yes.

Hunter  19:11  

Everything. I hope I get to follow up with you in about six months, and you're telling me every Stadium in the United States is now are now arriving. At Lisa, so cool, man. Well, you know, I think the important thing is to just, you know, as an entrepreneur is to pivot in these situations and not be so romantic about what the past was like, and just start looking at the future. JOHN Doherty, that he, I disagree with him on a lot. But one thing that I really agree with him is that now is the opportunity for entrepreneurs to really problem solve. And I think it's really cool that you guys probably wouldn't have gotten into hospitals, and now you get to help other people save lives. Like that's just like something worth thinking about. And you're sort of forced into it. But I really like that aspect of the virus that he actually gets to, to pivot into something more even more impactful than what you maybe were thinking before. So with that, I think we should just Move on to show the Weekly Roundup. Now I don't know, how much do you know about startups? The Have you have you heard of clubhouse? The new viral sensation of Silicon Valley?

Jay  20:11  

I haven't. I haven't. But I heard their name, but I haven't really read on it. So let's check it out.

Hunter  20:17  

It's super, it's super interesting. I can't show you my screen because of the way that we're doing. I'll just tell you really quickly. This is like become this global phenomenon really just in Silicon Valley. It seems like there's like less than 1000 people on it. I could be wrong, but it's totally private. It's not public, and it's mostly voice based. And they're just getting ridiculous valuations. So like, the tweets actually just some from Athena. And she says breaking clubhouses and talks to close 130 million dollar round at 150 million post money led by Andreessen Horowitz. So I don't know if you know who they are, but I'll make this full circle for you. So I'm just curious. Have you ever heard of this strategy where you're Basically just building for investors. I guess I'll leave that conversation off with. Do you have investors? Are you completely bootstrapped?

Jay  21:07  

Oh, we have investor. So actually we like Stefan is our investor and take star so we were. Yeah. So we were piggyback on Britney and then some other VCs as well. Yeah.

Hunter  21:19  

I saw that. Yeah. So really what I want to talk about with this is, it seems like they're basically building them. But just there's a movement right now in Silicon Valley building specifically for investors. And this clubhouse is really like a To me it's basically a virtual Country Club, where you have to be somebody to get in, and then it basically strokes the ego of the people that are in and the very smart people don't get me wrong. And then those people happen to have millions of dollars that they invest. So I'm just curious, like, what your thoughts are on any of that,

Jay  21:54  

like the fundraising part in like building another strategy for investment

Hunter  22:00  

The strategy of building specifically for investors to get investment at ridiculous amounts.

Jay  22:07  

I don't know, I, I really do. So I'm first my founder. First of all, it means like, I'm not like, I'm not tons of experience on that, but but I do hear a lot of, you know, story, you know, from Tech star. So when I was in the program, you know, got lucky enough to, to talk with a lot of great founders. So I felt that there's several type of the founder, you know, doing like differences to get funded. They both successful don't don't get me wrong. So one one is more like you said, I built a story around and then for the investor to get a huge, crazy, you know, valuation. Hey, that's not easy at all right? That's not easy. It's not easy, because VCs smart right, then how do you convince them to so and the other type I have about which like, I'm more adopted in in that way because my personality So it's more like, you know, you've been transparent and then you show the progress. It's kind of like, okay, here's my goal in three months, hey, VC, I'm not raising right now, however, I tell you, this is my goal three, three months, you know, by, you know, five months later, and then I come back to you updating you my progress and all the time. So the investor God, you know, the clarity about what you're doing. And I think that's one like, at least that's for me, I feel more comfortable with, but I feel like somehow I sometimes want to learn like, how do you guys read this kind of money? You know? For me still, like, they never tell you that right? So I'm curious. I was like, What do you read?

Hunter  23:43  

So George just messaged me, there's actually a follow up to this. They actually did raise a series A, which is ridiculous to me. They raise a series A and $2 million in secondary shares. That means the two founders just took home about a million dollars each for building an app that's been live for Two months with no revenue model. Okay, so that just got even crazier not to not to make this whole thing about clubhouse. I just think it's insane to me that these people are it's literally two months old. And they're just raising ridiculous amounts of money, but

Jay  24:16  

they just made me feel bad. Basically. If you remember, like few years ago, what is the company called Magic lip? Remember? Oh, yeah, I haven't even released any product. And it was like a couple billion dollars. Boy, I mean,

how did they even get that point I read.

Hunter  24:37  

Yeah. Well, magically, I think they just said something just came out with that. Maybe they were trying to be acquired, I think because they couldn't figure out how to make enough more billions of dollars or something.

Jay  24:51  

No, I think I've raised some review because the expectation I think the problem will be the expectations probably too high. So when they release the pressure Some people just tear apart or look into as Oh, there's nothing innovated in a hallway or something like that, and people get disappointed and all that stuff, you know, but but for fundraising part, I definitely always curious. I want to learn that too, that's for sure. But how do you bring that story so convincing that people so believe in the big few big future? I think that's a part. You know, a lot of entrepreneurs should learn, like, dream big, but also how to tell the story properly, that's for sure.

Hunter  25:32  

Yeah, man. I was actually just talking to a founder. He's actually a really awesome founder. He's only is a first time founder just like you. But he's only been for two months. And he's got this whole story man, nine years ago does Yeah. And he came to America with the dream worked his way up into into delta, and about two months ago, I think he got either furloughed or laid off because of the virus started this thing called Kapow, which is basically virtual coffee shops. You see, like VC or you see founder or maker, and you click him, and you just hit schedule. And then you just it gets put onto your calendar and then you get to see who it is. And then you hop in. It's like an hour long. And of course, everyone brings their coffee mug and you get to talk to them. But what's so amazing about him is that he's like, he, we were talking about that like building your story. And you got the American dream, like, two months ago, you built this literally really cool things already got 1000 signups on his site, and he hasn't even launched a product yet. But it's amazing how far a story will go and make it happen for you. Like for us. Our story has always been like, we kind of accidentally started Yac we didn't mean for it to happen the way it did. We didn't even look for for money. It we literally someone else made that decision for us. Aiden Wolf, commented to Adam Draper was like, Hey, you should check these guys out. Next thing you know, we're on a phone with Adam Draper. And then he ended up in being our lead investor in our first round of funding. So it's just kind of funny how just The story and and how people talk about you is really how things play out for the rest of your company. And at least in our case, our entire company has been based off of that.

Jay  27:08  

Because there is a one time so one of our angel investor brought me to a meeting. So I had one guy's chance to sit in on the investor site and listen, founder pairs. So he was like, hey, Jay, why don't you just join me and then listen to somebody else pitch it was like, Okay, sure. And I sit down, and I listen. And this was my first time I realized, wow, actually, this is the feeling like, investor feeling actually means like, everything sounds so great, right? Just like, must be something wrong because you're so you're the founder, you know, there's something wrong. Absolutely right. It's not gonna be perfect. Not gonna be perfect, but every time you try to put some question and they answer properly, and then you just realized, okay, so everything looks so perfect. So I asked, I invested Okay, then, every week or every month, how many these kind of meeting you have? Right? Probably 10 or 15. And everything sounds so perfect. And how do you even distinguish that right? And then that's kind of like I my real life patient of like, wow, this is a really a mind game as well. So yes, man. Exactly. And then and then the mic and have a many different ways you can play right and then you know, you just need to find your style, you know, right. Kind of like nailed it down but yeah, really funny for me.

Hunter  28:37  

Oh, cool, man. That was all I had for this. So what's going to happen guys is we're going to actually hop into another podcast round this is going to be bonus content. This is actually going to be streamed exclusively for the for the rugby team, but just the J before we head out and move into that bonus content. Do you want to just give them a way of getting in contact with you and and your team?

Jay  28:59  

Yeah.

Yeah, please. I mean, thank you so much for inviting me on. You know, it's really good conversation. So if anyone wants to have a discussion about you know, future work, operation, you know, stuff like that. I'm happy to share more information, please just contact me at Jay@www.tellroby.com/, be calm, or you can just find our information on the website. Thank you very much. Awesome, awesome. Well, Jay, thank you again for being on anyway guys. I want to we'll try to see if we can figure out a way to put the link to the bonus content on our website yac.com slash, you'll see it podcast slash episode nine. So anyway, guys, appreciate you coming on and we'll see you next time. Thank you.

Transcribed by https://otter.ai