In this month’s ‘Startup Stories,’ Co-founder and CEO Mark Chung reflects on the beginnings of Verdigris and the valuable experiences that have shaped the company’s success in improving energy efficiency through artificial intelligence.
Seven years ago, I was returning back to my Sunnyvale home from a three-week vacation. Everything looked to be in place, except for my energy bill, which seemed to be more than a little off. What was typically a $100 bill was on the steeper end of $600. When I called PG&E and reported a problem with my meter, they ensured me that there was nothing wrong since they installed smart meters a few years ago. This answer was a little less than helpful, so I decided to take my Stanford electrical engineer-trained self to Home Depot to see if I could tackle the problem. I bought kilowatt meters for about $10 and hacked them to be Wi-Fi enabled and plugged them in throughout my house, yet I still couldn’t find anything that was an anomaly. Next, I built an electrical map to monitor every appliance, machinery and light in my house. The problem finally revealed itself: a broken pool pump that was spinning inefficiently and using too much energy. Two things came out of this experiment: my electricity problems were solved and a business idea sprouted for a technology that can truly help people.
From a Homebrew Electrical Map to an AI Network
The business concept for Verdigris came from the realization that the algorithms we were working on for deep packet inspection had broader applications. That insight, coupled with my home energy bill experience and seeing how energy bills for buildings were so antiquated, led my co-founders and I to see the importance of improving built environments. With no such system for commercial buildings in place, we decided to develop our own with a combination of hardware and artificial intelligence that could easily break down a building’s energy use (Click to Tweet).
Our team scaled this technology from a homebrew electrical map to an AI network that could power the world’s smartest commercial buildings, and that’s how the company was born. The name “Verdigris” comes from the bluish-green patina that forms on copper when left outside and exposed to air or the weather. Copper is the elemental infrastructure of every single building in the world and what all of our electricity runs on. It symbolizes our company mission to expose that to the world and ultimately make it more green.
Steady Wins the Race
During the early stages of the company, we were aggressive with the readiness of our team and product. Propelled by a potential investor’s advice to scale quickly, we signed a big contract with a powerful local utility company to demonstrate the power of our technology. Only the reality was we weren’t ready. After we brought up the systems in the lab, we took them into the field and discovered that the real world conditions were incredibly challenging. We had installation issues, noise issues, failures in the field, and connectivity loss and drop-offs with wireless hotspots that we weren’t able to control. It was a complete mess and we eroded a lot of early confidence in our product. Worse, we embarrassed an early champion for our technology. Ultimately we had to uninstall the systems and were told to come back when we were ready.
From this we learned a few things: focus on effectively growing our business (versus what an investor might want to see) and value our customers who are the number one supporters of the company (Click to Tweet). Early champions are difficult to come by, so we shouldn’t burn them because an investor dangles a carrot in front of us. We also learned that there is a fine line between being ambitious and setting expectations for customers, so it’s important to strike the right balance.
A Collective Effort
Verdigris has come a long way since being founded five years ago and I’m incredibly proud of the team that we’ve built today. My co-founders Thomas Chung and Jon Chu each bring unique experiences, capabilities, and perspectives that combined bring forth an incredible vision for the future of humanity through Verdigris. That’s not to say we haven’t had to make sacrifices along the way. I’m also thankful for the support of family members who have seen this through with us, especially my wife. In 2014, I remember planning a special weekend for our wedding anniversary and instead I had to take a last minute flight to Boston to meet with a potential partner at Autodesk. They eventually became a strong partner and one of our first customers, which led to raising our first Series A investment. My wife will never let me live this down!