Presenting: Matchbook AI and Komfort IQ
Also: Electrum, Jose Gomez and Hydraulics, and Julie Pantiskas
Welcome to the July 2021 issue of the Pasadena Angels newsletter. This month we’ll open with a short preview of the companies that will present at the monthly meeting. Below that you’ll find an update on a company that’s making solar happen for a number of utilities and a profile of a CEO who’s changing the hydraulics industry. Also, look below for a few details about Julie Pantiskas, Pasadena Angels member and startup mentor.
July Startups Presenting Tomorrow
Presenter: Rushabh Mehta & Brenda McCabe
Matchbook AI is an enterprise data integration, governance and management solution that delivers clean and relevant data across the enterprise.
Presenter: John Ko
Komfort IQ sells a hardware and software solution that predictively identifies unoccupied rooms and controls the heating and cooling on a room-by-room basis in commercial office buildings to save energy and improve occupant comfort. Important note: Our company is NOT like the many companies that are using IOT and AI to optimize Building Management Systems; our application and technology is very different and unique.
Company Profile - Electrum, Your Life Electrified
It’s true that solar is the future, but that doesn’t mean that it’s easy to be in the solar industry. Electrum has had to pivot to chart a course towards the future. However, CEO Max Aram didn’t count on a pandemic hitting “PAUSE” in the middle of a round of fundraising. For the agonizing month of April 2020, no one started any solar projects, just as Max had to go to his investors for cash to make it through to profitability.
For several years Electrum was “Pick My Solar,” but Max identified that the company’s core competence was building effective tools for consumers and guiding them through their solar projects. That skillset could be applied in different ways, and instead of competing with major utilities, like most solar companies, they could make the utilities their partners.
So, Electrum has private-labelled their platform. Look closely, and you’ll see that these four customer portals are really the same front end dressed up with different regalia:
Electrum is able to leverage the utilities’ and solar panel companies’ existing customer bases. That eliminates one of the biggest expenses for a traditional solar installer: customer acquisition costs.
Those companies are able to leverage Electrum’s online marketplace and team of energy advisors to provide their customers with a simple way of shopping for home electrification products such as solar, battery backup, heat pump water heaters and EV chargers. The utilities realized that solar energy is a juggernaut, and they could either participate and help determine how it rolls out in their service area, or it could happen to them. Electrum gives them the means to implement a sophisticated platform that does project specification,compares quotes, and enables online transactions as well as financing. Electrum also provides a team of energy advisors who give unbiased advice to homeowners and local contractors perform the installation.
It used to be that solar was a fairly complicated business. Because most projects required financing, it was a mortgage business layered on top of a highly regulated construction business. You had to get each part just right to make a profit. It’s only gotten more complicated now with “smart panels,” batteries, and electric vehicles absorbing capacity at different times of day. On top of that, people are using more electricity at home in the post-COVID environment, almost 25% more electricity on average.
In the spring of 2020, Max approached his investors, in the middle of a pandemic, as the industry dynamics were getting more and more complicated, and explained his plans to achieve profitability. Despite the uncertainty of the time, the Pasadena Angels and his other investors were with Max 100%, and Electrum raised $850,000 to bridge to profitability. And, just like the construction industry, the solar business took off like a rocket. In fact, before the funding round closed, Electrum’s trailing twelve months of revenue had doubled. Profitability was realized in August of last year. Revenue has doubled again since closing of the round in July 2020 and they have grown to a team of 80. The solar business is heating up for Electrum.
Founder Profile - Jose Gomez, CEO of Fluid Power AI
22 year old Jose Gomez drove east in a borrowed truck across Mexico with $500 in his pocket. His instructions: “If anyone stops you, just give them a hundred dollars and keep going.” When he got to Laredo, TX, he had to find a specific pump in a specific factory, tear it apart to cannibalize parts inside, and drive them back to Tijuana by the end of the next day. Then he had to install them in a completely different pump. “Do whatever you need to do and charge me whatever you need to charge me, but get it running by the day after tomorrow,” the customer told his father.
Jose and his father ran a hydraulics repair company in Baja California in 2010. His father is old-school hydraulics. He’s been repairing and maintaining trash trucks, cranes and forklifts since childhood, and he raised Jose with deeply embedded values, not the least of which were “You will go to college” and “Hydraulics are cool.” At 12 years of age Jose was tearing apart hydraulic pumps and by age 16 he could assemble anything that used hydraulic fluid.
Jose went to college and got his degree in Mechanical Engineering at Berkeley. Afterward, he went right back to hydraulics, opening a business in Baja California with his father, and within a few years, they had 20 employees and served companies throughout the peninsula. That’s when he made his trans-Mexico trek to resurrect a molding machine. In hydraulics, customers maintain their own equipment, and downtime can cost a fortune for a 400-ton mining loader or a 1,600 ton molding machine. Few AI programmers and telematics engineers understand that like Jose.
There’s understanding, and there’s understanding. A person can read a book and understand that “no plan survives contact with the enemy,” but a person who’s been hit in the mouth by Mike Tyson understands it in a much more visceral way. Jose Gomez understands the people who repair and maintain hydraulics. He’s been in their shoes. He sold them parts out of his Dad’s garage when he was 14. He drove across Mexico to fix their machines in his 20’s. He’s climbed all over their cranes and under their trucks in the dark. He understands what downtime means to them, and why they are their own last line of defense.
He also knew that he needed to apply more technology to hydraulics if he was going to scale the family repair shop. During college, he developed hydraulic systems for cars (Ford Motor Co.) and for human exoskeletons (Berkeley Bionics which was later sold to Lockheed). After a few years with his dad, he went to work for some modern equipment companies. With UTC Hamilton Sundstrand and CYMER ASML Jose deployed automated test equipment for development and production use that integrated artificial intelligence and embedded system technology.
Then he met his current business partner and co-founder Francis Toglia, with whom he is “quantum coupled,” which is apparently engineer-speak for “close friends who finish each other’s sentences.” In 2019 they decided to leverage all the combined AI, IOT and embedded systems experience they have to solve problems in hydraulic systems. They saw a market that was old-school, unsexy, blue collar and being ignored by everyone else. And, in Francis, Jose found a business partner with complimentary skills that fit like a puzzle piece, a guy who can own the vision with him and who will stand side-by-side.
They developed a black box that can bolt right on to any hydraulic system - truly plug and play - and allow the operator to know everything he needs to know - how the system is performing, when it will need maintenance, and what parts will be needed. They applied for and were granted a patent. Last year they built the full stack of the product they call the “Heart Beat” and showed it to an old customer and colleague: Ramona Disposal. They bought one. Earlier this year EDCO bought 10. Now EDCO wants 58, and Fluid Power AI is in the process of providing them.
All that progress required capital, which is where Pasadena Angels came in. PA was crucial to the last two rounds of funding. Pasadena Angels’ due diligence process was thoughtful and thorough, and once it was completed, it enabled Fluid Power AI to complete everyone else’s due diligence with ease. And, Larry Uhl’s participation in the prior round made it easy for investors to check on Fluid Power AI’s ability to meet its commitments. Larry knew what Fluid Power AI’s milestones were and how they planned to use their funds. He was invaluable as an independent validation that the startup was hitting its marks.
Becoming a CEO has been a learning experience for Jose, but it wasn’t as big a stretch as it might have been for some engineers. His deep understanding of his customers is a powerful asset. But, he’s still had to open himself up to learning lots of new skills. He has a long list of mentors who have been helping him develop those skills, including Marco Thompson at EvoNexus and, I’m sure he would say, his father. After all, it is indisputable that hydraulics are cool.
Member Profile - Julie Pantiskas: From Produce to Salad Dressing
Her story starts with a fruit stand in Northern California, and now she owns Bob’s Big Boy salad dressing. It might seem like a pretty straight line from produce to salad dressing, but the story of Julie Pantiskas is a lot more complicated.
Her fruit stand days might have ended when she went to UC Davis and got her Economics degree and then joined Macy’s where she thought she would have a long career in retail. But, the family fruit stand had become a retail shopping center that needed help, and before long, she was made President. Eventually, she was developing real estate, building shopping centers and signing leases with Target and Sam’s Club. From there she went to Deloitte Consulting’s retail practice in San Francisco, and then to Walt Disney Company, where she eventually climbed to the top of their ecommerce business.
In search of more technology experience, she landed a role with Oberthur Technologies (chips for cards and passports), and then Belkin (routers and cables), where she globalized operations and then revamped branding. All the while, she applied her skills for focusing on the customer to new industries. After that, she managed a business with Snoop Dogg, managed Marketing and Projects for a mortgage company and even worked in cryptocurrencies. Only after all that did she dare to get into salad dressing. If that isn’t the most roundabout path from produce to salad dressing, I don’t know what would be.
Last year, two entrepreneurs came up with a software solution to reduce latency online. Combined with 5G, their software will allow people to sing together and play music together online. They applied to join the Viterbi Startup Garage at USC, and they were accepted. Julie has been coaching Open Sesame since then. She’s leveraged her experience to help them with customer discovery. Is their software the basis of an app or will it be infrastructure for Telcos around the world? She’s worked with them on approaching Telcos, developing pitch decks, and presenting recently at an Amazon North American Conference, where they were honored with an opportunity to address a very select group of entrepreneurs and Amazon affiliates. She’s also introduced them to the former president of Warner Distribution (also a fellow Pasadena Angel), the head of digital for Fender Guitar and an attorney for intellectual property rights.
Two months ago, Open Sesame presented to the Pasadena Angels, and they were received well enough that they’re currently in the due diligence process. Some of that reception is thanks to Julie’s year of coaching and her decades of diverse experiences. And, that’s one of the things she loves most about the Pasadena Angels. PA brings together a diverse group who ask different questions and leverage different experiences. That rich medley gives her a better understanding of startups and their prospects.
You could look at her background and think: “There’s a diverse set of skills and experiences, perfect for coaching startups” - and you’d be right. Being part of an organization that multiplies the benefits of those experiences and skills is an order of magnitude better, which is why Julie is in year 7 of her tenure with the Pasadena Angels and has every intention of staying for more.
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Dave de Csepel
Chairman, Pasadena Angels