Monitor and Control Your Utilities with PowerX

Roy Morejon:
Welcome to Art of the Kickstart, your source for crowdfunding campaign success. I’m your host, Roy Morejon, President of Enventys Partners, the top full service turnkey product development and crowdfunding marketing agency in the world. We have helped startups raise over a 100 million dollars for our clients since 2010. Each week, I’ll interview a crowdfunding success story, an inspirational entrepreneur, or a business expert, in order to help you take your startup to the next level with crowdfunding.
Roy Morejon:
Art of the Kickstart is honored to be sponsored by Gadget Flow. The Gadget Flow is a product discovery platform that helps you discover, save, and buy awesome products. It is the ultimate buyer’s guide for luxury gadgets and creative gifts. Now let’s get on with the show.
Roy Morejon:
Welcome to another edition of Art of the Kickstart. Today, I am being joined by Manuel Schonfeld, the founder and CEO of PowerX. Manuel, thank you so much for joining us today on Art of the Kickstart.
Manuel Schoenfeld:
My pleasure. Pleasure to be here.
Roy Morejon:
I’m really inspired by, not only your product, but also your story. This company that you’ve launched, truly has a mission to combat climate change overall. You’ve got previous work experience at some of the biggest companies in the world, Harvard, been there, you’ve got a TaeKwonDo black belt. Let’s start at the beginning I guess, and give the audience a little bit of your background and how you’ve ended up here launching PowerX.
Manuel Schoenfeld:
Sure. I worked actually in the energy sector most of my life, and the last companies I worked for were Morgan Stanley and the World Bank, and then the latest was McKinsey. And also at McKinsey, I was focused on renewable energy and energy markets around the world. Specifically, the last project I worked for McKinsey, was in the Middle East for a very, very big client, oil and gas client. I was really surprising that client had a lot of money, hundreds of millions of dollars set apart for making its processes green. What could possibly go wrong? So I staffed my team, it was all great, we could really contribute to combating climate change, making the client’s process green. And in the end, the project nearly failed, it didn’t, but nearly failed because we were lacking good, reliable climate solutions. [inaudible 00:02:37] could help with climate change. I started about one year ago. I said, “All right, I’m not really part of solution as much as I wanted to be.” So that was the time when I decided to leave that industry and actually found a startup myself.
Roy Morejon:
Let’s talk about that. What inspired you to start and create PowerX outside of that? I think this solves a major problem for most people’s homes, but when people are thinking about smart homes, usually it’s about the appliances and not necessarily the problem that you’re solving. So talk a little bit about where all that started and what inspired you to create PowerX.
Manuel Schoenfeld:
That’s a great question. We were looking at where users spend … the average American really spends the most money on the utility bill. The first one is really AC and space heating. And there are a lot of solutions out there, many thermostats, we all know Google Nest. On the other hand, the very second item on the list where you spend most money is water heating. But there was really no great solution out there. When we saw that, we thought there is only so many thermostats you can build, but climate change, doesn’t stop with room heating. The entire utility bill, both water, gas, electric, everything is up and it’s causing CO2 emissions, so we need to target more than just one major bucket. And that’s when we said, “Water heating is definitely a culprit,” so let’s focus on that one, but also the buckets three, four and five, and that includes overall water spend and so on, and gas in your home. That’s when we said let’s build PowerX, let’s build a solution that doesn’t go for the first bucket, which is well covered, but does buckets two, three, four, and five, a few spendings.
Roy Morejon:
So not only have you taken on just obviously launching a product out there, but you’ve taken on the electric, the water, and the smart energy power section of the house. I mean, in terms of product development side of things, what did that process look like? And how do you go about deciding which features to include, and why launch all three at once?
Manuel Schoenfeld:
That is also a great question. In terms of timing, the real decision, like we said, “Okay. Let’s launch all three at once,” was because climate change also doesn’t wait. I think we have a rather narrow and narrowing window, and we didn’t want to go there and just start there with a bit of water heating and then maybe in three years do something on electric. We said, “We have the chance now to go really big and to just cover everything you have in your home, every appliance, every water outlet, and water heating gas.” So that’s in terms of timing and doing it all together. Then to your second question, developing this and making that work. That was really, really, really … It was a long and difficult path to be honest, especially during COVID and the lockdowns we have had. I’m currently in Germany under lockdown, and the development team is all over the world, from the US to India, to the Middle East, and China.
Manuel Schoenfeld:
We had 27 people by now, from artificial intelligence, engineers, machine learning engineers, to the manufacturing plants that we have in Malaysia and China. It was quite a stony, a rocky, a difficult path, but also very fulfilling. What we hope, is really that users get the message. I think that’s the key point where we have to work on, get the message that PowerX is quite a bit different, because you only buy these three sensors and they cover your entire home. Everything you have in your home, every appliance, everything there is.
Roy Morejon:
Yeah, truly incredible. I mean, you talk about how difficult it is to bring to market, and I don’t like to call them failures, but learnings. What were some of those things that you’ve learned along the way of bringing a hardware tech product to market that some of the other founders out there might not have thought of?
Manuel Schoenfeld:
Given that my training is actually data science, that is a really, really good question. First, hardware honestly is hard. It’s much harder. I perceive and I think, also investors agree with that, is much harder than building software because you can’t iterate every day, and just change something every second day. You need to get it right, and then you build your plan, and you build your processes, and there’s just not much wiggle room to correct things. So, as a first learning, it’s like, “You really need to make sure once you go into production or once you start pre-production, you really have to be sure this is what this need is, and this is what you want to build.” And that leads to the second learning. You need something that founders all over the world need to know which is product market fit.
Manuel Schoenfeld:
You need to make sure that your product actually has a market to go for. With software, it’s on the one hand a bit more difficult, but also a bit easier because if it doesn’t really have a market, if there’s not much customer demand for it, you can probably reiterate and reiterate, and then find the niche that fits. Also, if you don’t, there’s not overly much lost. It’s a bit more difficult with hardware, because bringing it both up to speed, but also just making it work for the very first time, it’ll cost you a couple of thousand dollars. You need to have injection molds for printing the plastic. You need to have machinery that will do your PCPs, the … what’s inside your hardware. And that’s quite a task that takes a lot of time and also much more investment money than other products, like software would take.
Manuel Schoenfeld:
That being said, I think that’s also what I heard from many hardware people and founders, it’s very fulfilling to just hold your baby and see something, have something in your hands where you say, “Wow, that’s actually all these long hours. That’s what our team did.” So quite some risks. Be prepared for a long and difficult ride, where any little component, if it’s delayed, can just delay your entire project for weeks or months, but also for if you get through the challenge, it’s very fulfilling.
Roy Morejon:
Absolutely. So you talked a little bit about the need for capitalization. I’m assuming you’ve gone through in terms of raising capital so far. What was the process around that, if you had?
Manuel Schoenfeld:
Yeah, we did, and we were very lucky, I must say. Very early on, we got funded by some really big names in the industry, by Y Combinator, by Sequoia Scouts, and also by Antler. I think in the beginning it’s really … I usually compare it a bit to a horse track or a horse race. So they’re, if you will, three stages in getting invested in, and in a horse race, there are also three parts that really contribute to a horse winning or not. The first one is the jockey. So if the jockey, the person who rides the horse is no good, has no training, forget the entire race. That’s a bit like the beginning when you’re being funded. The companies look for the founder, who will drive this idea. The second then, isn’t the horse is just a horse.
Manuel Schoenfeld:
How good is the horse? Is it strong? Can it run, has it a track record? Has it proven that it can do this race? That’s very similar than also what investors look for in like the second stage? Is this company … Is it a good idea? Does it have some traction that you can invest in? It comes a bit later looking for traction and looking for a strong company. It comes after knowing that the rider jockey is good, that the founder is solid. But it’s for sure very important as well. Then finally, the third one is what’s the race track like? If you look at it, like that’s a bit, the market of all. How big is it? Is it like a very small niche market only available in the US, or is it something that you might scale to something global? So while all this is staged, first you look at the founder, then you look at the company, and finally you look at the market. All those three things play together to make a company investible. We were quite lucky that we got such an investment very early on.
Roy Morejon:
Yeah, I like that analogy. Absolutely. Let’s talk about the upcoming crowdfunding campaign. What made you decide that launching this innovation on crowdfunding was the right path for your products?
Manuel Schoenfeld:
I think crowdfunding has a number of really interesting points to it. The first one, it’s timing. You can bring it pretty early on, even when you’re just in pre-production or when you’re just finishing out the last steps in the product. We for example, are in pre-production. So we already incurred some spending if you will. But you can’t really sell it at that point in time, saying to them to not call what normal customer on, let’s say Amazon, you can say, “Okay, here’s the product, but please wait for eight weeks.”
Roy Morejon:
Right.
Manuel Schoenfeld:
So in terms of timing, crowdfunding just bridges that time gap, which makes it perfect for [inaudible 00:12:55], and where we are in the process. Then the second thing is, I really love the crowdfunding. At least to me, it seems more about a mission than the average customer. Like it’s less this Homo Economicus, but also more, “Hey, I like to say this idea. I support what these people are doing. I back that.” PowerX really is 110% mission driven. So this vibe, I feel, from crowdfunders … Really second thing about crowdfunding I believe is a great tool and a great way to go. And then a third reason is in terms of … It’s a very early indication of product market fit. It’s a very special sales channel. The people usually do crowdfunding there, they’re like early adopters, they tend to … Tech geeks, people like gadgets and see the potential of early technology. So I really liked that aspect as well. And it also fits PowerX, which is basically artificial intelligence, cutting edge, very early on in the technology product. I think that’s a great crowd for product market fit.
Roy Morejon:
Certainly. So you’ve been working with us here over at Enventys Partners for a while now. What were some of those considerations that you went through when choosing the right agency to partner with with your launch?
Manuel Schoenfeld:
Yeah. I actually did quite some research and I’d say, with everybody I spoke, Enventys Partners came up in one of the top three agencies to work with, and it was also probably the most comprehensive agency that would go with you from the very start of the process. There are some agencies who might be stronger, in the very moment, [inaudible 00:14:55] up, you have some early traction, and then they jump on and do the advertising. But Enventys Partners are like a whole circle agency that goes with you from the very beginning of your project, and that was really important to me. And the second thing that was really very important, is the reviews, which is very, very good and it’s one of the top three companies to work with. So quality and also the whole circle.
Roy Morejon:
Beautiful. I know the campaign hasn’t launched yet, maybe by the time this goes live, the campaign will be live, and of course we’ll include links to that. But give me some of your biggest surprises or takeaways in terms of what’s been done in the pre-campaign marketing phase of the upcoming launch.
Manuel Schoenfeld:
I actually really liked … That’s a very funny, or like a weird surprise, but I really liked the way the website was structured. It was very different to what I would have expected drive sales or conversions, but given that you try it out, or Enventys try it out, like many, many different formats. It was very interesting for me to see like, “Okay, that’s how actually a website conveys the point.” So in terms of the format of the messaging to convert was very interesting to me. And a second thing that was really surprising, also nice to see, is we have a very complex product. It’s very difficult to get to the point to what it really is. Gas, electricity, water, all covered, your whole home solution.
Manuel Schoenfeld:
We break down all data we get into all the different appliances and [inaudible 00:16:46], and so on. We protect you from leaks. So many different messages out there. What is PowerX really? And I think what was quite surprising, also nice to see in this phase, was how did the team engaged and wrestled with getting this message, this one phrase down, to make sure we are on-message and to hammer home our point of what PowerX is and how much it can actually do for you.
Roy Morejon:
Absolutely. Yeah. Certainly from a consumer education standpoint, getting it boiled down to one sentence, if you can, in terms of three sensors to take control of your utility bill, I think explains it pretty concisely. Would you agree?
Manuel Schoenfeld:
I do agree. I do agree. I mean, there’s benefits, which it doesn’t convey our current studies with a hundred families, for example, showed it can save on average a $1,000 for a family of four people, per year. So take control of your utility bill basically also means save a thousand bucks on average per year. So there’s a lot that comes with it, which we somehow want to wiggle in there and get in there. But I do agree with you. That’s probably the one phrase that captures it best.
Roy Morejon:
Beautiful. Well, Manuel, this is going to get us into our launch round, where I’m going to rapid fire a handful of questions. You’re good to go?
Manuel Schoenfeld:
Go for it.
Roy Morejon:
So what inspired you to be an entrepreneur?
Manuel Schoenfeld:
Climate change doesn’t wait and I’ve done many different things. Lived in many, many different countries. I just wanted to face a challenge.
Roy Morejon:
Nice. If you could meet any entrepreneur throughout history, who would it be?
Manuel Schoenfeld:
That is difficult. I think either Elon Musk or Bill Gates. I think they had quite some cool ideas and they just didn’t give up. So yeah, one of those.
Roy Morejon:
I was just reading about Bill Gates, owning the most farmland now in America, which is …
Manuel Schoenfeld:
Yes.
Roy Morejon:
Let’s say you had a chance to meet Mr. Gates. What would be your first question for him?
Manuel Schoenfeld:
In fact about the Bill and Melinda Gates Foundation. Like, “When did you feel that you have to give back? When did you feel let’s leave Microsoft and let’s build a foundation that would stand for you and your name as much as Microsoft did.” And also as part of this, “How did you manage to actually convince the Warren Buffetts and so on of the world to invest millions and millions of dollars in a foundation called Bill and Melinda Gates Foundation?
Roy Morejon:
Yeah. Quite incredible. Any book you would recommend to our startup founder listeners?
Manuel Schoenfeld:
I would love to give a book title that concerns startups, but I won’t. I actually want to recommend a book about quantum physics. I know, quite a bit weird. Beyond Weird is the title. The reason why I recommend it is because it shows that reality is so different from what we think it is. Everything we see, but we believe is failure is like success. The quantum world, which is basically the world we fundamentally live in, is just complete a completely different reality to what we believe reality is. It’s very weird. Anything and everything can happen in this world. Everything is statistical, if you will. So there’s probability for everything. And in a way that really, for me at least, it really freaked me to say, “Well, if that’s the fundamental being of our world, that anything and everything can happen. And that’s actually the world we live in, then I’ll be able to know myself.” If anything is possible, and that’s kind of hardwired into the DNA of our world, then I’ll go for it.
Roy Morejon:
Beautiful. Manuel, where do you see yourself in three years?
Manuel Schoenfeld:
I really hope that PowerX makes a dent in terms of climate change. And if I were to picture myself in three or four years from now, it would be looking at a sheet or some number that shows how many megatons of CO2 we actually saved. Then also how many animals and human beings and plants that indirectly saved or rescued from extinction. Ideally looking at the number like this, in three years.
Roy Morejon:
Yeah. I look forward to looking at that too. Last question in the rapid fire round, and I know we haven’t launched the campaign yet, but appreciate your insights on what does the future of crowdfunding look like?
Manuel Schoenfeld:
That is tricky to ask me such a question, rapid fire. Honestly, I hope that it becomes even more focused on projects that are not inherently fundable by large VCs. I already see, and I really love it. Like when I look at Kickstarter, for example, I see a number of projects, just that they’re just cool, but not really investible, like cookbooks or board games, or something that brings joy and something that just is nice for people. At the same time, nothing you probably build in a one billion dollar company. What I hope is that Kickstarter and the crowdfunding really, as a whole, just fills that gap and helps these companies that really bring joy and enjoyment to life, but are not fundable by the big VCs.
Roy Morejon:
Absolutely. Manuel, this has been awesome. This is your opportunity to give our audience your pitch, tell people what you’re all about, where they should go and why they should check you out when it launches.
Manuel Schoenfeld:
I think, honestly, you should check out PowerX for three reasons. The first one is because it’s just really cool. It’s cutting edge. There’s nothing similar out there. You may know the Google Nest for room heating and so on. PowerX does all that and way, way more, it takes control of your home with its artificial intelligence that no other system out there just can. Just because it’s so cutting edge and so not “I’ve seen that before.” I think check it out for that reason. The second reason, it’s much more economical. It actually saves you, as a single person in a home, $360 per person on average. That’s what we see from a hundred families that we work with, all across North America. If you’re a family of four, it’s actually about $1,000 per family.
Manuel Schoenfeld:
That’s just, especially in these times, a real significant contribution to your bill and to your wallet. The economic reason is the second and very strong reason why I think you should check us out. And then there’s a third reason. And that’s probably the one which is really closest and dearest to me, which is climate change makes a really significant, excuse me. I mean, PowerX makes a really significant impact, a real significant dent in the fight against climate change. If every tenth§ American household, for example, were to use PowerX, we would sequester more CO2 than, sorry, we would save more CO2 than what entire Yosemite Park can sequester. That’s every year. That’s thousands and thousands, millions of trees really.
Manuel Schoenfeld:
So again, for really three reasons, I would love if you checked out PowerX. Number one, because it’s really cutting edge AI developed by a team including me that are Harvard scientists, did data science at Harvard. Number two, because it just saves a significant amount of money. And number three, because it has the potential to make a real dent in the fight against climate change. For these three reasons, I’d really love to see you on the PowerX page, or just also drop me a message manuel@powerx.co.
Roy Morejon:
Beautiful. Audience, thanks again for tuning in. Make sure to visit artofthekickstart.com for the notes, the transcript, links to the campaign and everything else we talked about today. And of course thank you to our crowdfunding podcast sponsors, the Gadget Flow and product type. Manuel, thank you so much for joining us today on Art of the Kickstart.
Manuel Schoenfeld:
My pleasure. Thanks a lot Roy.
Roy Morejon:
Thanks for tuning into another episode of Art of the Kickstart. The show about building a business, world, and life with crowdfunding. If you’ve enjoyed today’s episode, awesome. Make sure to visit artofthekickstart.com and tell us all about it. There you’ll find additional information about past episodes, our Kickstarter guide to crushing it. And of course, if you love this episode a lot, leave us a review at artofthekickstart.com/iTunes. It helps more inventors, entrepreneurs and startups find this show, and helps us get better guests to help you build a better business. If you need more hands-on crowdfunding strategy advice, please feel free to request a quote on enventyspartners.com. Thanks again for tuning in and we’ll see you again next week.