Sramana Mitra: How long did it take you to hit a million in revenue?
Jeff Wilkins: Two months.
Sramana Mitra: What sized contracts were you doing?
Jeff Wilkins: We started as a reactive company. A client or one of their tenants had a problem with one of their HVAC units. In the early days, they’d call or email us, and we would dispatch a contractor.
Afterward, we would invoice the client. This was not a contractually guaranteed revenue where a client would spend $10 million for this over the next 12 months. There’s an enormous amount of spend in our space. Individual clients of ours are spending $50 million to $80 million just on HVAC. It’s insane.
It’s not this big lump where you got one shot a year to get this business. If you don’t win, you basically hibernate for the next 12 months. There are jobs all the time. We basically went and said, “Let us work some of these jobs.”
As we got better and performed better, a bigger share of wallet starting to come our way. We started to come up with the value chain trying to create products and services that would be stickier and more differentiated.
Sramana Mitra: If you look at that first million in revenue, was it all productized revenue or was there also manual service revenue?
Jeff Wilkins: We didn’t sell any software access. There would be two items on a job like this. Your equipment cost is X, and the labor is Y. We were building our technology and paying our staff to pull the levers behind the scenes.
The product is sold as either a repair or replacement job for the client. There is always a labor component to what we do. We mark up the labor of a network of independent contractors across the United States that are licensed, HVAC technicians or plumbers.
Sramana Mitra: What was the next major inflection point in terms of customer acquisition and market traction?
Jeff Wilkins: We started in residential. Then we started to get requests for commercials. Any building you go into has stuff we could sell. It’s staggering. We got a request for JP Morgan Chase branch in the eastern United States.
Like a lot of startups, we bit off more than we could chew. We find out that some of these jobs are engineer jobs which are super high end. These are not necessarily a good fit for our contractor networks. There were deep breath moments there.
We’re starting to see a lot of traction in that space though. You start to see more of these property owners that have that geographic complexity.
At Motili, we offer the value proposition of the three S’s. One is the simplicity of a single throat to choke. Many times prior to Motili, our clients had their own internal staff. They had to go find contractors, onboard them, and then manage them internally.
Now in Motili, everything comes back to remotely invoiced. We handle all the complexity. Across the country, we are the one throat to choke. That was a big part of it.
The other thing that was really interesting was, we started to realize that our value was much more than jobs in isolation. We offered a chance for clients to save money because we had these direct relationships that allowed us to significantly undercut the pricing that these clients were paying.
A lot of the decision-making about what was going to be done and how the equipment is going to be sourced is made at the edge of a local facility manager or a local contractor. Bob is buying his equipment from a retailer who bought it from a wholesaler, who bought it from the manufacturer.
We were able to get much better pricing for the client and also help them standardize the process around how this would be done, and have some rules that didn’t vary wildly geography to geography. Savings is the second asset. We are saving our client 20% or more.
Then the last thing we started to do was to add insights into how to do the job better. You get questions from a client like, “I’ve got a 40 million HVAC units and a budget to replace 15,000 units. Which units should I replace?” Our clients didn’t even know.
We started to go out and capture, through an asset tracking project, allowing us to build and manage multi-year Capex plans for the client. For the first time, they can actually visualize assets on the field and man them better than they ever could before.
As we pivoted that way, we became less of the reactive break-fix and much more proactive, strategic vendors where we started to have high-level relationships.