Russ: This is the BusinessMakers Show heard here and seen online at theBusinessMakers.com. It's guest time on the show and we're gonna focus on energy conservation, at least at first here because my guest today is Dane Witbeck, cofounder of Houselynx. Dane, welcome to the BusinessMakers Show.

Dane: Thanks a lot, Russ. I really appreciate you having us.

Russ: You bet. Well, tell us about Houselynx.

Dane: Well, we started Houselynx at the end of 2009. My partner and I were both new homeowners and as new homeowners, we were always looking for ways that we could save energy in our homes, so I noticed there was a large temperature disparity between one side of my house and the other and we thought, you know, that's a real problem and if we could solve that, we could save energy and increase comfort for us and our families at the same time, so we came up with a wireless, motorized battery powered vent register. A vent register is basically the aluminum or plastic vent that you've seen in your house that has the little tab on it that you can open and close and ours is connected to the internet and it's battery powered, so it can be controlled through the website or through an Android app and we're developing iPhone and iPad apps as well. So the idea is you could set the temperature of like your kitchen separately from your living room or from your bedroom and actually with those vents opening and closing, you control that airflow and set those temperatures separately. It saves energy and increases comfort at the same time, so that's the solution.

Russ: Okay. Now, I understand you and your founding partner in addition to just having bought homes, you both were engineers as well, right?

Dane: Yes, that's correct. Yes, I'm a material science engineer by training. Most people don't know what that is, but we work on metallurgy or polymer engineering, but I'm sort of a transfer into the tech space. When I got into my career, I started doing website development for an oil and gas company. Prior to that I had also done sort of a web startup on my own, so very interested in the Web space and so sort of transferred over into technology.

Russ: And your cofounder, what's his name and what's his engineering background?

Dane: Louis White is a mechanical engineer and at Utah State University. He is 3d design and embedded firmware on the software side, so he does a lot of the hardware.

Russ: Okay and had you two been working together before Houselynx or did this just sort of happen as a result of the experience?

Dane: Yeah, no Louis and I have been best friends since we were 12 or 13 years old, so there's been a lot of things that we've worked on together and a lot of fun that we've had together.

Russ: Okay, but boy, did both of you buy new homes at the same time and -

Dane: He was a little before me. So he was more early 2009 I think when he bought his house and I was at the end of 2009.

Russ: Okay, okay. Now, zoned air conditioning has been around for a long time as a way to really sort of more efficiently utilize your air conditioner and you kind of described yours in general, but what is it about the Houselynx system that differentiates it?

Dane: That's a really great question. So, traditional home zoning systems require a dedicated piece of hardware in your house to manage the entire process and they also require a contractors to come in and to make that happen for you, so when I looked into having it done in my house, it was gonna cost $8,000.00 and our solution is self installable and it's all controlled through the internet, so it gives the user an incredible user interface and it leverages current technology like Apple has provided and Google has provided through Android and iPad and so we've done it cheaper. Yeah, so that's what we're excited about, simple and cheap and that's the best way to solve a problem.

Russ: Okay, well that's the way the American free enterprise system rewards innovators, so maybe you're aimed in the right direction. So I would take it it's very suitable for retrofitting a house?

Dane: That's exactly the market that we're going after. Obviously, that's the largest number of homes, especially right now. There's not a lot of new builds. We're hitting the retrofit market for sure. That's not to say we want to rule out new builds because as a builder being able to just install something at the end and not have to change your process at all is also beneficial and so we were looking at that, but primarily retrofitting is what we're going after.

Russ: Okay, so what's the status of the company today?

Dane: Well, the company is still, my partner and I, we are still a bootstrap startup. We still have features that need to be finished, so we're still in - still designing the product, to some extent, however, that being said, we have functional prototypes that are becoming production ready and for our first customers, which are signing up now currently on our website, the ship date is February 11 for the first systems, so that includes vents and it includes temperature sensors, thermostat controller, which controls your AC system and as well the gateway, which connects everything back to the internet. So those four things are gonna be ready to go February 11 for beta users. So we're really excited about where we are and we've got a lot of work in front of us as well.

Russ: Okay, so it's definitely early stage, but you're right at that critical point in early stage.

Dane: We are. We're very - we're right at that cusp where we're ready to start brining in some revenue and grow a team, look for some serious investors and so it's a very exciting time.

Russ: Okay, now I also understand it's kind of a big day for you, a first step that we managed to capture here 'cause you let go of a day job starting today. Right?

Dane: That is correct. You know, and I've always had the theory that your business is a legal entity, but it's sort of like a real entity in that when you respect it, it respects you back, so thank you for confirming that, today being my first full time day. I quit my job and Friday was my last day at my company and then I wake up this morning and I get an e-mail invite to be on the BusinessMakers radio show and so thank you for confirming the theory I've had for a long time.

Russ: You bet. So, I also understand that there's sort of been some intellectual property application going on here. You guys even have a patent pending on what you're doing. Right?

Dane: That's right, around the cloud control of the ventilation system. So, there's been other people that have solved this problem other ways, but with a one cloud control over many gateways and into many vents from one central server, that's really where we save a lot of money. We can run that one code many times instead of a whole bunch of controllers in everyone's houses with a bunch of code that's running over and over again, so it's more efficient and saves money in the end and so that's what the patent's around and we've got some other ones in the works as well that we can't discuss 'cause they're not filed yet, so we're excited about our IP status as well.

Russ: Okay, and you brought some hardware with you, so I want to show that to our audience after this. You're listening to the Businessmaker Show, heard here and seen online at theBusinessMakers.com and we'll be back with more with Dane Witbeck, the cofounder of Houselynx after this. This is the BusinessMakers Show, heard here and seen online at theBusinessMakers.com and continuing on with Dane Witbeck, cofounder of Houselynx. Now, you talked about the patent and you talked and gave a description of the product itself, but let's go ahead and show people the hardware that you brought in.

Dane: Okay, sure. This is the vent, a prototype vent. It's got a magnetic cover on it and this is the core vent. It's got a louver system in the back here. These open and close. It's got a stepper motor inside here and as well as a wireless chip that connects to our entire system. So what you would do is you would put this inside of the hole in your ceiling or wall, put two screws in it here and then when it's sitting there like this, you just take the magnetic cover here and you pop it on.

Russ: Cool.

Dane: So this is what the - it looks like.

Russ: All right.

Dane: This is paintable so you can make it match your house or whatever you want.

Russ: Cool. Retrofit, that's pretty cool. Now, before you move on, I've got to tell you, in my house, as much as I try, my wireless router doesn't reach everywhere. So are you gonna tell me I can only operate this thing where my wi-fi reaches?

Dane: Well, that's a great, great question you brought up. So, this actually does not run on wi-fi. It runs on a protocol called ZigBee, which is like wi-fi or like a wireless signal, but it's a different protocol. It's optimized for low data rate and low power devices, whereas the wi-fi takes - you really need to plug it in. ZigBee things can be battery powered and this is battery powered.

Russ: What are some other things that use ZigBee?

Dane: Well, there's lots of home automation products that use ZigBee. In fact, lots of lighting controls and as well as outlet boxes, which we have here.

Russ: Okay, but are you saying that ZigBee would overcome the problem that I have on wi-fi meaning it just reaches further and -

Dane: Right, so ZigBee reaches about 300 feet on its own inside your home, at least our version of it does. However, it's what's called a mesh network and so different devices actually talk to each other besides just the central gateway, so if you string devices within 300 feet of each other, you could continue indefinitely and they will all talk to each other forward and backwards. So the more devices you put into your home, the larger your network naturally becomes. There's nothing hard to configure about it. It just does it.

Russ: Okay, so continue on. What else do you have to show us?

Dane: So this little guy is a really key component to the system. This is the gateway that connects everything back to the internet and it's actually a ZigBee gateway, so it's like the wi-fi router, except it's a ZigBee router.

Russ: Okay and so - but you hook that to your computer, to your existing router or what?

Dane: It's got an Ethernet right here and you just plug it in to your current wi-fi router or if you have another Ethernet gateway, you can plug it into that and anything that's Ethernet, connected to the internet, this will connect back to the servers automatically so it's a key component. Another thing that we have here is an outlet box, so this is an outdoor outlet box and these are not gonna be ready by February 11, unfortunately, but this prototype is fully working, so -

Russ: Oh, so this is expanding beyond sort of the zoned air conditioning so you have an outlet box that you can control over the same network.

Dane: Right. For example, in my house, I have these outside and my landscape lighting's hooked to it and so I can turn off and on my pool light and my landscape lighting directly from, you know, my Android. And so it's pretty cool and we're doing indoor. We're going to do an indoor version as well that doesn't look so bulky. And then a temperature sensor is a key component of the system. You need to have temperature readings in any zone that's controlled independently so the system knows what the temperature is in that zone and can turn off and on the vents based on that temperature rather than on the thermostat's temperature, which might be somewhere else in the home. So for every zone in your house, you need a separate temperature sensor.

Russ: Now is that battery operated?

Dane: That's correct yes, it's battery operated. You know, it's easy to remove cover and two double A batteries. The vent is four double A batteries and these are just plug in so they're powered off the - your home.

Russ: So okay, so a low cost energy conservation, if I was gonna put in let's just talk about the zoned air conditioning system that controlled the different sections, how much would I be spending?

Dane: Well, that's depending on the size of your house obviously and how much of your home you want to zone, so it's important to know that you don't have to replace every vent in your home. If you have a section of your home that is for example in the summer when you have the AC on if there's a section of your home that's always getting colder than the rest of your house, that's the first place you want to focus on. So these are $69.99 a piece right now.

Russ: Sixty nine dollars and ninety-nine cents.

Dane: Correct, $70.00 a piece and the gateway is $100.00 so to get two vents and a gateway, you're looking at $240.00 to get started right now and of course our targets are to get the prices lower as we ramp up in volume.

Russ: Cool. Well, that is low priced. Now, here you are a couple of engineers that have come up with a pretty creative product. How in the world are you gonna sell it and market it?

Dane: That's another great question. So we plan on continuing to sell through the Website. We think that people are smart and we know that they can do this and they can install it themselves and they can get it done. However, we also consider ourselves a web startup whereas some other people in this space are more hardware focused. We're definitely consider - we consider ourselves a web startup. So like other web startups, we thought, "How could we make this free to get started? How could we provide the solution and let people get going with it for no cost at all and then be able to build out as they go. " And so our plan is to partner with retail electric providers. We've been in discussion with a couple that are very excited about the solution. These are the companies that you buy electricity from and they buy from producers at wholesale and sell to you at retail.

Russ: And they're the companies that are always competing for new customers' business, right?

Dane: Exactly and on = you know, they have a commodity. They have electricity so they're looking for ways to make themselves different from their competitors and so they have a budget for acquiring a customer and so our thought is, instead of spending money on a billboard or a TV ad or whatever, why not spend the money with subsidizing the cost of a basic system for that user and giving them, for example, the gateway and a thermostat controller that controls the AC or heat, give that to them for free and they can get started with that and then they can turn off and on the air conditioning, they can program it through the internet, they can get going with the apps and the consumer can have that functionality for free just for signing up with that retail electric provider.

Russ: Great.

Dane: And then from there, the consumer could upgrade all the other devices that we have as needed or as their budget allows and so we're really excited about that. It puts us into the freemium space, which is what is really hot right now with a lot of web startups and so if we can - when we can put that all together, those deals together, we are really excited about the ramp up.

Russ: Well, cool. I'm excited about the product, for sure, and think that you've come up with a pretty cool strategy, although my experience tells me even those ideal looking strategies don't always pan out, so I would encourage you to have a couple of others on the plan for sure too, but -

Dane: That's great advice. That's great advice. Plan B, C and D.

Russ: Right.

Dane: And be ready - that's a great thing about being part of a startup is that you can pivot. You can move quickly and if one thing doesn't pan out, you can move to another idea quickly. So we're excited about that, but if for whatever unforeseen reasons we can't make it happen, then we'll have to pursue other routes.

Russ: You bet. Well, Dane, I really appreciate you telling us about Houselynx today.

Dane: Thank you. I appreciate you having me on. I really do.

Russ: You bet. That's Dane Witbeck, cofounder of Houselynx. And you're listening to the BusinessMakers Show, heard here and seen online at theBusinessMakers.com.