You don’t have to be here long before you realize that Oberlin is a very entrepreneurial community. There are so many companies, nonprofits, and social enterprises that have been started by Obies or where Oberlin alumni and friends have been a key connection in the startup community or have been funders of these ventures.
The Distinguished Oberlin Entrepreneur series taps into this incredible network. These informal, conversational interviews provide an opportunity for us to come together and share some of the formative experiences of those entrepreneurs.
If you encounter an error in the transcription, please contact us at email@example.com to let us know.
[start of transcript]
Narrator: [00:00:00] Welcome to the Distinguished Oberlin Entrepreneur webinar series. Today, Bara Watts, Director of Entrepreneurship at Oberlin is speaking with Vladi Shunturov, a graduate of 2005. Vladi is President and co-founder of Lucid Connects.
Bara: [00:00:25] Well, good afternoon. Again, we are here with our third webinar for 2019 and we are very excited to be able to speak with Vladi Shunturov, who is a former Oberlin student and a successful entrepreneur.
Before I start, I just want to briefly say why we're doing these webinar series. It has been my experience in the brief period that I've been here at Oberlin that Oberlin is, as a community at large, a very entrepreneurial community. Although we don't sometimes realize that that is the case. There are more companies and nonprofits and social enterprises that have been started, that have been run, or where individuals from Oberlin have been a key piece of the startup community or have been funders of those entities, then I think I previously been recognized, and so this is an opportunity for us to come together and share some of the experiences of those entrepreneurs that are succeeding in and bringing their ideas into the market. So without further ado I'd like to introduce to you Vladi Shunturov.
Vladi: [00:01:35] Thank you so much for having me. I'm excited to participate in this and also excited that Oberlin now has a formal program that can support new teams that want to take their ideas and actually get them off the ground.
Bara: [00:01:48] That's wonderful. Well thank you and you've been a very active participant in mentoring and in speaking at the launch a program that I have been fortunate to run in the last two years. And now I'm so thrilled to be able to share your story with the larger community first. Let's start with, give us a little background.
What is the company Lucid? What does it do? And where is it right now in terms of its business structure?
Vladi: [00:02:20] Yeah, absolutely. So we founded Lucid almost 15 years ago and the company was really focused on improving the built environment and making the built environment more efficient through the use of data. And so the premise was if we take information out of buildings and largely buildings if you think about them are fairly at least building to the time or were fairly analog -- there wasn't a lot of digitization, there was a lot of visibility over how they're performing short of a utility bill to the school for example will get once a month or older facilities.
We really wanted to create a real time visibility into how the various systems are performing with the goal of informing both the operators and occupants of the building and hopefully allowing them to be more efficient in the use of resources. So everything was centered around the premise of data-driven efficiency measures with 8 commercial buildings.
Bara: [00:03:19] That's awesome. So you said you started the business how long ago?
Vladi: [00:03:25] So almost 15 years ago. And so we've gone through various stages. We initially grew the business in a very bootstrapped way were very little cash initially focusing really the first decade that we were in business.
We operated primarily on customer revenue. So you're the non-traditional startup model, which is not very common today. And then we went through a phase of rapid growth where we went and raised a whole bunch of money from various institutional investors including formation aid and GE Ventures and Autodesk and others, and it grew the business quickly, invested heavily in technology and then ended up really expanding our customer base. And then we went through a phase of trying to make the build the business efficient and actually profitable since not losing money.
And that led us to an exit. So eventually we ended up selling the business to the leader in digital LED lighting, Acuity Brands. And now we've been in this next phase which has been really exciting which is integrating the business and then leveraging the technology that we've built to enable other capabilities instead of our parent company.
Bara: [00:04:37] That's awesome. So now you've given us a wonderful high-level arch to the startup and development and now the current transformation of the business. Let's take a step back and talk about where the Genesis of this idea came from and what. And how that impacted the development of this now, I think as I understand it started when you were back at Oberlin as a student, is that correct?
Vladi: [00:05:10] Yeah, that's right. I came in. So I grew up in Bulgaria. I came in as an international student. I was planning to study computer science and math and in typical operating fashion ended up graduating with computer science and Environmental Studies major and so the Lewis Center really did live up to its initial purpose which is to serve as a lab and is a building not only were learning occurs, but it was really designed to be woven into the curriculum itself.
And so as a very modern very green building, which also by the way was very complex. It presented an excellent opportunity to create a prototype system where we could actually monitor every aspect of the performance of the building from. The photovoltaic generation to the energy use of the various systems of the building to house.
The living machine was performing and while we didn't necessarily use the most appropriate technologies for doing this, we called together a system that worked and did exactly that and it gave us a glimpse into what a really today. I think the industry calls it The Internet of Things looks like if we begin to instrument.
The things that matter around us whether that's utility infrastructure, whether that's vehicles, whether that's commercial building systems, we can begin to interact with them in ways, which really weren't possible before and so that's really what the Lewis Center lent itself to is to enable that Innovation and to show us what I connected building a connected future could look like and add to that was incredibly exciting.
At a time, so that's what got actually that's why I ended up majoring in Environmental Studies was because of the building because of the technology opportunities that it offered.
Bara: [00:06:56] He recalls. So if I recall you worked with John Peterson who is still a professor in faculty and here at the career at the Lewis Center and in Environmental Studies and very entrepreneurial in his own right? So you started to develop the strategies with the Lewis Center. Did you install and start monitoring at the college, and how did that evolve?
Vladi: [00:07:30] Yeah, it's a good question. So the whole system and the whole notion was really John Peterson's vision from the start. I came a little bit later. So he had already worked with generations of students before me to put in the instrumentation to sensors the data logging capabilities to pull data, you know, lots of data hundreds of sensors installed throughout the landscape in the building itself collecting data every single minute.
So that was before the notion of Big Data existed that was before the database technologies that allow us to collect that much data were really available at the time. So it's really pushing the edges of what software could do. So I came in after an initial version of the system was built and was tasked with trying to figure out how we can actually get the data and visualize it in a way that is engaging because it is a lot of data and I think if you fail to translate it to.
A non-technical audience frankly if you even failed to translate it to a technical audience to just won't be affected it would sit there. So it's a really interesting Challenge and I think John challenged all of us from the Star to you know, do things that we didn't really think we're necessarily feasible and the time spent in the timeline that we had it but we pulled them off.
And that you know the display that we build a system the real time system that we build got a lot of attention. We had a lot of visitors. We got a lot of interest from other schools that were interested in building similar systems is they were looking to invest in an efficient buildings and smart buildings and but it was but it was still an experiment right that that was someone bounding because it was this next gen building of the 21st Century.
Which we wanted all other buildings to look like so that's where we started scratching your head and saying we can we take this technology can we apply it to week old environmentally dumb buildings and can we actually use them to improve how they operate because you know, most of the stock in the United States is building that already exists. So if you want to have an impact that's kind of where you have to start.
Bara: [00:09:31] So what I found is that you call this an experiment and obviously an in the course of innovation. It's an iterative process and do you feel and obviously it and I'm saying obviously but I'm a I'm expect I'm assuming that a lot of the work and they learning that you got while working on at the college fed into your capacity and ability to start launching the business but still staying with the college experience. Can you talk a little bit more into give us some examples of what that experiment process was like, you know what maybe some of the learnings maybe some of the bumps in the road might have been that that you are able to do it the college and do it the college in a way that provided an affordable way of testing that that might have not been as easy to do on your own once you start yet but left the college and starting your own business.
Vladi: [00:10:31] He perhaps... The one thing that you do have access to is certainly grant funding to support your wild ideas even if they fail. I guess that's somewhat similar in the startup world where you get funding from an investor, and so you don't know if you're going to succeed or not, but you certainly are welcome to try.
The other the other pieces that you have certainly students you can get volunteer labor from students to go and try things out some of the some of the experimentation which you know, many of those things that are turned into a product but they allowed us to at least test different hypotheses involved as going and reading electric leaders by hand.
So we actually organized the energy reduction competition on the Oberlin campus called compete to reduce and we rallied a whole bunch of volunteers to go and manually read meters. Now ideally, we would have technology that automate that process but we didn't and so it allowed us to see what is the difference between a building that's instrumented.
It provides real-time streaming data to the people in it. For example we did this with Fairchild and Harkness, and we saw some pretty incredible results. They managed to cut down their energy use by 55 and 56 percent respectively versus buildings where we did manual reads through volunteers once a week. That's all a significantly lower reduction. So the clear indication that if you actually solve the technology part problem, then the rest will follow. There weren't really any products out there, so I think having someone like John who brings experience from systems ecology and wiring rigs together to collect data from ecosystems was instrumental because you couldn't just go and buy an electric meter to can push data to the cloud or to a to a computer that technology exists today.
So we really were focused on the software aspect of what you do with the data once you have it but the infrastructure required to give us the data that it exists and that's all we had to basically experiment with and pool components together to get that data pull to work.
Bara: [00:12:31] So I think what when I when I talk about entrepreneurship, especially in an educational capacity, I break it into two big pieces one is innovation and the others activation and it seems that what your experience was as a student and with John was having the college more as an innovation lab. An ability you have buildings you have technology you had access to knowledge and resources, support through faculty and leadership to start innovating around these ideas and testing out the ideas right and going from preliminary ideas and then being able to actually put it into buildings and then be able to start putting together a process to be able to visualize that data.
Now you talked about earlier that there was some funding that also came in against that, into the college I'm assuming, from the work you are doing is that correct? Or that more that would came in against when you were starting your business after leaving the college?
Vladi: [00:13:38] No. No, that was that was why we were students and you know, I will say that the skills that we learned in grant writing and how to go and find funding that doesn't necessarily exist within the school because we were very limited on what whirling could provide we have to go and seek outside funds to support our work, really to all of the skills that were necessary to go and eventually raise money from investors because you need to articulate the need, articulate your idea.
It's a highly competitive environment. There's many other cool projects. In fact, the one of the key grants that we want which was from the Environmental Protection Agency called People, Prosperity and the Planet. There were hundreds of teams applying, 66 teams were awarded $10,000 to test their hypotheses. Actually two different Oberlin teams, one was a biodiesel project, one was what we were focused on and then those 66 teams a year later went to present on the VC National Mulder projects and six were selected to be awarded another $75,000 which we were one of those winning teams.
And so in the highly competitive environment, Oberlin was the only non-technical school represented there with a very technical project. So I think that the learnings that we gained through that process were instrumental in allowing us to eventually seek outside capital for the business we wanted to build.
Bara: [00:14:58] What I find very interesting and I'm already seeing that happening with a lot of our students that -- and alumni and faculty frankly -- who are coming forward and through LaunchU and beginning to pitch is that they are rising to the top in other regional and national competitions for what would be technically based businesses and things that are incredibly innovative, and I think that's something that our general community is not as aware of is that level of performance that our Oberlin members are already demonstrating, which obviously you and your team did.
Now this was, you came, your project that you worked with John was pre-LaunchU. That's correct, right? Because I was not around the beginning of...
Vladi: [00:15:51] That was pre-LaunchU. We made our fair share of mistakes, which some of them are incredibly expensive like incorporating as an Ohio LLC was probably one of the worst mistakes we made. That ended up costing of hundreds of thousands of dollars down the road to reincorporate as a Delaware C-corp, but there were also a lot of benefits because you know, there was a total of four of us. It was myself and my classmates Gavin and Michael and whenever you're starting a business, it really helps to have partners and have more than a one-legged stool.
It's really difficult to go alone at this. Especially because you're going to get exhausted things that are going to work out and we kind of need each other to lift each other out for the for the low moments of the business. So we kept trading roles. I mean, each of us had a stint in sales, each of us had a stint in, you know managing certain contracts. So we took turns on various aspects of the business until eventually the roles solidified over time.
Bara: [00:16:54] I too am a very positively inclined around partnerships, especially in start-up because of what you just described. Can you talk a little bit about the dynamics of setting up that partnership? They were students with you at Oberlin, is that right?
Vladi: [00:17:10] Yeah, we were all Environmental Studies majors. In fact one thing that John likes to say is that we were the least likely three people to ever be friends at Oberlin and we couldn't be more different from each other, but it was really the Environmental Studies program the brought us together.
So Gavin eventually ended up our is our head of design, Michael steps into the CEO role and I expected to the CTO and product role. But it was a strong partnership because we were all excited about the technology and very much we're pushing the boundaries of what software could do it because you know if you think about software technology 15 years ago, everything was you know very much on your computer and then increasingly becoming -- cloud connected to cloud didn't exist as a concept. More and more things were on the internet, but nothing was connected to the internet. It will still your computer and your documents, and your data had nothing to do with infrastructure, buildings, vehicles. In the world we live in today, everything is connected from this thermostat to, you know, vehicles, to you name it. So it really, was it a front end of a, you know, big transition in technology that we're really now fully entering I would say.
Bara: [00:18:24] It's interesting what you said about John saying that you were the least likely group to come together being a proponent of team leadership. I often say that entrepreneurship is a team sport, but I have also been very aware that sometimes your best friends are not the best people to go into business with. And that you're looking for business partners that actually fill in the gaps and if you described how those gaps were filled by the each of you having a very different set of skills. Very different personality types.
Did you ever have challenges in communicating? Was there a process for, you said eventually you also knew your lane, but were there any challenges that you faced going forward and how do you address that?
Vladi: [00:19:17] I mean, absolutely. I mean things get tense there was more than one moment that we were by each other's throats and you know, you get upset because you feel like one person is not pulling their weight or the other person is slacking and you take turns who that is or you may disagree and what direction you should take or you always feel like you're not moving as fast as you should be. So I think that tension is, it's natural. I think that tension is healthy, and at the end it's what it's what enables each of us to keep each other accountable. I think that's probably one of the most important things in in those partnership is the accountability between people.
Bara: [00:19:55] Exactly. I think it is the -- and sometimes that tension can be a very good thing it sort of pushes somebody to think a little bit more dynamically or maybe pull back a little bit and think a little bit more cautiously make sure you've got all your ducks in a row.
Vladi: [00:20:06] Yep.
Bara: [00:20:07] Certainly in running a business forward there's a lot of new territory, but I'm a real believer that that you know, making sure you've got a map and a plan so you're not literally going to jump off a cliff is the best way of launching a business. It should not you it's about trying to find ways to mitigate risk.
So you've all, are you all still part of the company? Are you still members? Is that a thing still?
Vladi: [00:20:33] Yeah, Gavin and I are. Michael ended up moving to Seattle. So he was our CEO for probably about the first nine years or so, and he got a little burnt out and wanted to do something else.
And so I stepped into the CEO role at a time and he moved to Seattle and he's been working in policy and data transparency when it comes to utilities. So. Very mission driven work, very difficult work convincing utilities that they should be transparent with their data with their customers with the infrastructure they're deploying. So he's been supporting us from the side.
And then after that position, I actually switched teams when I worked at, I now work on a different team within the company that acquired us working on indoor positioning technologies, but we are in the process of collaborating more closely with the original Lucid team. So Gavin is still very much running design for that group.
Bara: [00:21:33] Great interesting. So and that's and that's also not uncommon where you've got a team that's moving forward. But then as you begin to evolve and sure different individuals may decide that they need to go in different directions.
And that's, I think I'm not a, it's wonderful if you can make sure you find ways to do that in a healthy way. It doesn't always work that way.
Did having certain legal structures help or is it more about the communication development that you had amongst each other?
Vladi: [00:22:02] I think it's more about the communication development. I mean look, you don't want to be indispensable for a business. I think if the business depends too heavily on you where they won't survive without you then then you're not building a lasting business. So hiring and training people that are fully capable of carrying the way forward is really important.
I think building walls around you is and isn't necessarily conducive. So it's been, overall, I think it's been an amazing collaboration. I think we've all learned from each other. I think we both skills and capabilities over time. And you know, if you were to ask me what I what I go and start them out of business for those people again, I probably would.
Bara: [00:22:38] That's great. It's great testament. So let's go back again. Just a little bit to, you've been at Oberlin, you've been working on this project with John, you've now gone through learning how to write grants and pitch, and you've been able to win the EPA award, and you're down in Washington DC. Is that about the time you're ready to graduate?
Vladi: [00:23:05] Yeah, I think we could just, we had just won the P3 program right as I was graduating. So I think it was praying and so that that got us a lot of headlines and so that got our name out there. And then this is the first time we actually had outside organizations reach out to us and say, hey can you guys build a similar system?
And so at the time there was no such thing as a product. It was an idea very much still an idea. But we had Harvard University and Emory reach out to us and say, hey can you build something like this? We really didn't have technology to offer we had ideas about what we wanted to build. And so we ended up and we knew we didn't have the engineering resources.
So we ended up raising a little bit of money from friends and family and then hiring a company overseas to build the first version of our of the cloud software which collects the data and those all the. Processing of the data and then Gavin and myself focused on building initially a custom front end for Harvard, a custom front end for Emory.
As we did more projects, we eventually started to productize what we were doing. So it started as a custom development shop to build these projects for other universities and that eventually graduated to something that started to look more productized and eventually was fully productized.
Bara: [00:24:29] That is really interesting. So Harvard and Emory, they came to you. Do they pay you for anything or this was more that you are going to, they became your laboratory of your next stage and validation and...?
Vladi: [00:24:40] You know, I mean we had we had to eat so they have to pay us and there was no choice.
Bara: [00:24:45] Okay.
Vladi: [00:24:46] Yeah, they became our very first customers and we were able and frankly some of the some of the money that they paid us was instrumental is in allowing us to continue the development efforts and so we started contributing technology back to Oberlin so that Oberlin can continue the research. You know, John kind of had an independent focus on conducting a research, or how this technology can be used in the classroom, how we can impact behavior, how it can leverage people's emotions in making decisions.
And so he needed technology. Oberlin didn't have the technology. It also didn't have you know as many engineers available to work on this. We started contributing technology back to Oberlin to support the research that John continued to do. So, we kind of diverged on two paths. One was the academic research path which still continues today, and the other one was, you know, we focused, myself, Gavin and I around building the technology capability so we can actually offer this to anyone not just Oberlin.
Bara: [00:25:51] I think that's an ideal situation. I know that a lot of the public colleges, especially they do IP or Tech transfer, they look to be able to access any of the technology that is taken out and commercialized as something they can continue to innovate on within the academic setting. And I think that's because it was born out of an academic process, innovation process separate from us.
Even the college is starting a business on their own independent. And I think that's one of the wonderful values of students and faculty and staff working together around Innovation is that it provides added ongoing potential for the college. So you're you've got this en route now, you've got two incredibly prestigious first clients that that you're able to bring you on, give you some capital yet you don't even have a full product. So you're able to use that client and actually develop a product with that. What was your doing?
Vladi: [00:26:54] Typically that's what you want to do. You want to you don't want to... I think the notion of will build it and they will come typically doesn't work out. Sometimes it does but more often than not it doesn't. And so you always want to build the product with your customers as much as possible and have them pay for that development as much as possible, especially in the early days and those customers are so invested that they become your probably your best champions and acquiring additional customers, so you definitely get a network effect from that as well.
Bara: [00:27:23] So did you grow then just word-of-mouth? How hard was it for you to go out and find new customers after you've finished with them?
Vladi: [00:27:30] I mean it's slow. I think in general we picked the wrong industry to be perfectly candid looking back to start a software company in because within buildings, Building Technology is a very slow-moving field and people are very risk averse, so they update Building Technology very slowly. So the growth trajectory looks very different than let's say if you're building software for sales and marketing teams or fintech or something like that. So we didn't know any better at the time and so we just kept persevering and pushing forward. But getting an organization to commit to deploying a technology solution that you know fundamentally is designed to transform how they manage their buildings is, takes convincing because you're saying hey, I'm finally going to give you visibility into something that was opaque that makes certain people uncomfortable, you know facility energy managers that now the entire team of high visibility over the performance of their assets. They are not always the first to jump and say yes, can I please have that obviously that's a cultural shift and as the market changes and building operations because much more of a data-driven art then you start to get pulled from the market into these solutions, but in the early days was very difficult and very slow to convince people to buy it was really sustainability teams that saw the value in what we were doing. So it wasn't facilities and other energy, so sustainability I'd say put us in business. I think our Oberlin credentials really helped us because Oberlin has a big name in the sustainability space. I think the work that David or has done in the Lewis Center gave us gave us a big stage to talk about what we had done at Oberlin what we had done elsewhere. So that that really helped in the early days, but eventually you need to make the transition to having a product that has ROI that you can defend, and you can sell to a much broader set of buyers.
Bara: [00:29:27] I think you're describing a really important dynamic that happens when you are a newer technology or a newer system or service in the marketplace. You really were a blues, you know blue water system and a lot of people didn't know who you were, what you did, and there was not a lot of other competition. That's the good news. The bad news is you didn't have a lot of people schooled and educated in the value and in the process of what you were trying to do and that's always a challenge. He said sometimes the most logical first players aren't necessarily the best players in the long run and see that you were able to find and connect in with the sustainability teams. And that was your on-ramp once you started to move forward and so I'm assuming were those sustainable safety sustainability teams in the academic area or they in the in a business, commercial....
Vladi: [00:30:18] Yeah. It was it was academics. Our initial customers were universities. I you know universities are a good place to start because they understand imperfect technologies that are still in progress and they're fairly forgiving what stuff doesn't work in a break.
It took a while until our technology was mature enough to start selling into enterprise customers. We have a lot of big-name customers now like LinkedIn and Google and Autodesk and a lot of others that have very large campuses that you need a level of maturity of both the take itself, but also of your processes and your people how they deploy.
The technology how they get the customer to value and how they make them successful that takes a few cycles to perfect and if you go to those customers too early and you sell them an imperfect solution, they don't have the patience and I want to support you to get you there necessarily. So starting in a university setting I'd say it was definitely the right choice we stumbled are mostly because that's where we first started getting headlines.
And that's where we started getting word of mouth and demand. But if I were to do this again, and sell a solution, you know, let's say within the commercial buildings or main universities are a good place to start early on.
Bara: [00:31:30] So how long were you in the focused on the academic? And then and what and how did you transition into the commercial?
Vladi: [00:31:39] We really couldn't transition into the commercial until we raised venture capital. So then we raised about 20 some million dollars. During our series B raise which gave us the resources to invest in a much more professional sales organization, really invest the resources and the platform itself from a product and engineering perspective.
So as you start up you can't always afford the to hire the best skill set. And so you tend to hire people who are younger, earlier in their careers, who are still trying to figure out how to do certain things. Probably one of the most important things we did early was we did bring a head of engineering Tom Gear who did bring an enormous amount of experience.
I'd say if we hadn't done that. I doubt that we would have succeeded because if you don't have a product that works in a scalable, you have to keep rebuilding your technology, which is common sometimes then you can really miss out on the market opportunity. So, you know, that'll be one advice I would have is invested strong product leadership, invest in strong engineering leadership early and also don't spend too much money on sales until you really feel like they have a product that works at the market is pulling. And so we have to do that that took venture dollars because you couldn't really do this in our organic way and only then where we able to start going after enterprise customers that are that are willing to spend larger chunks of money with you.
Bara: [00:33:09] So you said you were able to get the funds through your three-year B round. So I'm assuming that you had an angel and maybe a, was the angel more your friends’ families and pools and then an A round and was that then focused around staffing and technology for the academic space?
Vladi: [00:33:29] Yeah, yeah, exactly.
And I think you know, it wasn't very much money. I think in these days it wouldn't even qualify as a seed round but back then it was a it was an A round. So but again, it's you know more or less the business grow organically up until we raise the large the large capital raised in 2013. I think you know '14 is when we raised the large B round up until then it was you know, this kind of drip drip feeding a little bit of money.
We were running tight. It was really a payroll to payroll operation. I mean, you know every single, every two weeks, we weren't sure if we're going to clear payroll, and the moment we can afford more than a month's worth of payroll in the bank we typically would grow the team and get an extra person.
So it was stressful for a while until you get to the point where you can actually have dependable revenue flow. But it also teaches you skills, and cash flow management teaches you how to really stay on point and do collections from your customers and how to make sure you're always on point when it comes to sales pipeline and having sufficient projects they have visibility over.
Bara: [00:34:32] You know, I mentioned earlier, you know that I break entrepreneurship into the innovation and activation, activation being the whole business peace and all skill sets to go behind that as well. You were in computer science and environmental science. How the heck did you get all the skills to be able to do what you're doing from a business perspective?
Vladi: [00:34:56] I think you figure it out. I mean, I think I was very entrepreneurial from a younger age and you know, whether that's from grandparents or whoever else taught you those skills. I think that was something I carried with me prior to coming to Oberlin. I think when I came to Oberlin, you know II want us to computer science because I wanted to learn how to develop software.
You know the uh, the thing about liberal arts education and computer science that it's more about the science and less about practical skills. And so I think Oberlin's motto "learning and labor" was particularly true for me because most of the skills I developed really came through the work. I was doing developing technology for the Lewis Center and not so much in the classroom, but outside of the classroom, so the labor aspect was.
Probably where I learned most of what I know and technology today. And so I think Oberlin presents a great wealth of opportunities where students can get involved and do a great deal of learning that's outside of the classroom.
Bara: [00:35:59] Interesting. I think today we call it the experiential learning and I find that it's a wonderful way for people, for students, anybody I guess, to be able to take what they are learning from an intellectual perspective and once they start exercising it, going through a physical process that it gets glued together in a very different way. It's a different way of thinking and having to think through problems and solutions. It's really...
So you had to learn accounting and finance and human resources and all of that. Did you have mentors?
Vladi: [00:36:35] No, I just, I just let Michael do that. He did, he did all that.
Bara: [00:36:40] And does he, how does he...
Vladi: [00:36:41] Yeah. He just figured it out. I mean this is the thing, you know, there's things you like to do. There's things you really don't like doing and there's stuff in the middle. So we kind of figured out what each of us was okay with doing and what were things that we absolutely had no appetite for and thankfully between the three of us we had enough coverage of the core functions of the company.
So and eventually evolving you learn and you get help you get mentorship and you'll figure it out. But yeah, Michael did all the accounting.
Bara: [00:37:09] Well that's good. So division of labor know where your talents and skills are so we you're now going into the enterprise level of the business. You've got your B round. How many people you have on staff right now? What's your overhead like?
Vladi: [00:37:24] We were at about 28 people bootstrapped before we raised the rounds. We grew to about, I'd say 55 pretty quickly after the rounds we peaked that 75. We over hired so we definitely made the mistake of hiring too fast too quickly, and also investing and spending more money on sales than we should have. We should have not gone...we shouldn't have invested in sales that early, we should have invested in product and engineering little bit more, a little bit earlier, and held off on scaling sales until a little bit later. But you know, you're in an environment especially in the Bay area where you have sort of hyper growth bars all around you and it's all about higher higher higher.
However, what I would say is not every industry is a perfect fit for venture dollars, right. Venture dollars require venture growth and that level of growth may not be feasible inside of a sector that adopts technology more slowly. So strategic investments from people in the industry may be a better fit because that's capital is more patient and capital is better aligned with the growth rate that you can get in a sector and sometimes you do have to be successful.
You need to grow at the rate at which the market is able to adopt your solution. So there was a little bit of a mismatch because we got on the on the hamster treadmill with a number of large Venture partners. Where it was about really rapid growth and we grew I think we grew very successfully in very fast for our sector, but at the same time we spent money, you know, pretty and efficiently and doing so we captured a lot of customers those very expensive to go and capture those customers.
So if we were do it again, I will probably go a little bit slower and not put too much fuel in the fire when it comes to sales.
Bara: [00:39:12] You doubled and then tripled it sounds like your staff and the kind of business you're in is very people and knowledge-based. Did that--
Vladi: [00:39:23] Yeah, the customer base grew as well. I mean we went from you know, a hundred and fifty some customers to about 500 customers. So acquiring each of those customers takes a lot of cycles. But after we kind of peaked at about 75 people we had to go through an exercise of really trimming things down and try to make it very efficient. And what was interesting, I think there's this, you know kind of death trap into it's in between I say fifty and a hundred people where if you don't cross that threshold, it's really rocket territory. And so you want to go from fifty to a hundred as fast as you possibly can. We couldn't really do that. So we actually scale things down to about 45 people from 75.
And what was amazing was that we managed to accomplish significantly more with 45 focused people than you want their responsibilities were then with 75 people because the level of coordination and management you need with 75 consumes so much of your cycles that you can't really focus on the work that needs to get done.
So we managed to squeeze, you know, I didn't think we would pull it off, but we performed way better at 45 people than at 75.
Bara: [00:40:30] Interesting. And what about the organizational culture? Culture is King in my book in terms of business success, especially as you start to grow and bring on talent and making sure that people are aligned with that culture. You started as Three Amigos and built this business. How would you describe the culture that you started with and were you able to maintain it or where their struggles in maintaining that culture?
Vladi: [00:41:01] Yeah, a couple points on that. So for us many people joined the company and worked for the company because we were a mission-driven company.
We were focused on sustainability were focused on efficiency were focused on transforming a space that. It has a massive environmental impact and is going to take many years to transition to being more efficient. So that really helped us in recruiting and hiring talent when it comes to culture. You know, the way to look at culture is you want to treat your processes your people and the company like a product you want to continuously improve it and you need to solicit voice of the customer feedback from your employees how you want to improve the way in which you work?
So culture is really the way in which you perform work and how you interact with the people around you and so it's interesting because in different teams that will shift and I think probably where we were most successful in that was in our product and engineering teams because you want empowering individuals to drive the change within the company.
So the less you have a top-down structure the more you have small teams with a very specific mission. We're trying to attack and you empower them to be successful. The better off you are so the whole notion. I think if you guys could watch the Spotify video of how they organize their engineering team.
This is out of all the various things we've tried is probably the most successful one is the notion of squads for you to find squads. They have a very well-defined mission and while that's designed for engineering I think in practice, it works really well for other teams as well because then you empower individuals to make autonomous decisions and be successful in accomplishing the mission.
The only thing you got to make sure is that you've defined the correct missions for each for each team.
Bara: [00:42:45] And to finding the correct mission, is that something that you do with them or is that an organizational decision that then is defined and then they then interpret that. How do you how do you go about doing that?
Vladi: [00:42:58] It's collaborative and you let them define it. I think each squad needs to have a leader within, it obviously needs to sync up to the overall mission of the company in the goals. And what you're trying to accomplish so it's someone needs to drive that collaboration and facilitate the discussion, but eventually wants to nail down the mission which takes a few cycles. Then you just allow the squad to go and execute on that.
Bara: [00:43:21] Interesting. Yeah, that's great. And what about developing talent within. Do you do you have processes inside to bring talent into more maturity inside the organization or do you die trying to buy basically hire the talent you need?
Vladi: [00:43:37] It's interesting. So when we were Independent, we always thought because I mean think about it where we came from, we came from a state where we didn't have enough expertise. And we couldn't afford the expertise. And so we any time we had the opportunity to hire. We will try and higher up because we are trying to upscale all the time and sales and marketing.
We definitely got to a point where I'd say we almost upskilled too much and we brought people who are to too seasoned or maybe they don't want to roll up their sleeves anymore because they've been in let me know much large companies and needed much more support staff to do what they need to do. So there's a balance of how much you want to upskill.
The culture inside of Acuity which is a company that acquired Lucid that we're in right now is they primarily up skill so they very rarely go outside and hire outside of the team anytime they need on your role that will shuffle people and they'll put them in different roles and they'll kind of toss you in a different assignment every two years roughly and so it keeps you busy.
It gives you focus to gives you your challenge and allows you to grow. We didn't do nearly enough of this and I think that was a miss that was a big lost opportunity to really invest and develop our people but it was always such a mad rush and you needed something fast. You need to research the capability and you didn't have it within the team.
And the thing is that when you're a small organization you also don't have someone who can teach that person so you don't necessarily want to learn from doing that's a very expensive way to figure stuff out. You really want to be mentored. So thank you for you. If you have if you have mentors and advisors, they can support people within the company to become better this probably preferred approach because you're going to end up retaining or team a lot more and So eventually we started doing that within our operations team.
So people who are in charge of implementing. Our customers had a growth path to start taking on product responsibilities lot of the full-time role, but. On a project-by-project basis and that really improved morale would also improve retention of those people because they had a clear path of where they could go over time Wednesday Master what they're already doing.
Bara: [00:45:43] Very cool. I want to go back and ask another question regarding the relationship with Oberlin in the development of the business from the point that you graduated. Were there other Oberlin alums that were involved in either in funding or mentoring or participating in the program and in the success of your business and what role did they play?
Vladi: [00:46:10] Yeah, it's a good question. We certainly hired a good bit of Oberlin alums on our engineering team and in our custom operations team. It's all that was that was something that we certainly did. I also want to call out Jeff Hanson who was a very close friend and mentor of mine who was absolutely instrumental.
He became closely affiliated with the company. He helped us raise bridge funding which kept us in business while we are raising the series B round so we can continue to grow and not have to cut back while we're in the most critical part of our fundraising process. He stayed very involved as the company grew as the Beauregard more the board composition got more complicated and we needed feedback on various points.
Jeff was always a phone call away. I know he's been very involved with launch you and also with various initiatives at Oberlin, so he became a very close friend and a mentor.
Bara: [00:47:04] We've been, this last LaunchU we had a group of alumni and parents that serve as venture mentors and the impact they've had on the startup companies has been phenomenal and just even the call of their businesses just for the time that they go through LaunchU has been phenomenal. So having that kind of mentor support from those within our community is really, really powerful. And then obviously where you are right now is that you that you have moved and is it appropriate to say that you sold or that you merged with Acuity? Tell us what that how that came about and what the relationship is now.
Vladi: [00:47:47] Yeah Acuity is a very large company. It's a public I said public Fortune 500 company. So we certainly didn't merge with them. We were acquired by them and in the beginning during the acquisition process, they left us pretty independent, which is not very typical for companies such as that, so we were actually allowed through operate in the family for about a year and a half or so and then we started going through the integration process.
You know as you as you're building software technology and you're a large company, you can't really afford to have multiple teams building technology in a different way when it comes to software, especially when those pieces need to somehow interact and work together. So it's been a very fascinating journey to see just how different cultures can be different teams and the challenges that present themselves in integrating those groups because you know, they do work in different ways. They use very different tools. They have they don't necessarily agree where north is when it comes to technology development. And so we've been going through this consolidation exercise aligning or on what Jeff Hanson will say our "true north" and then slowly pulling the groups together so we can be more efficient as a whole.
Bara: [00:49:04] And tell us a little bit about Acuity and this is you know Lucid is a company that you put your heart and soul and sweat into. Why allow, why be acquired? So who are they and then why what's the value of that acquisition for you?
Vladi: [00:49:22] Yes Acuity is the leader in North America and digital LED lighting so many of the lights you have in the ceiling sort of thing.
You know, there's a 52 percent chance that they're made by Acuity and so through that they've acquired various businesses in the building technology space businesses to do building automation, HVAC fitting, ventilation air conditioning technologies, businesses that do emergency exit signs and buildings.
And so they have a vision of creating connected infrastructure through the lights because lights are ubiquitous. It may have power and so when it comes to Internet of Things technologies to connect things you need power and internet and so they started putting Bluetooth capabilities in each of their lighting fixtures and through those they can now communicate with devices in the building so you can solve the "last mile" problem of connecting a device that somewhere in the sights with the controller.
That's a building which has been connected with a cloud. From the cloud you can have the cloud software capability to deliver whatever value or use case the customer wants to do it with the data. So we were a natural fit in that because we had the cloud capabilities of being able to work with the data on multiple devices and systems.
They really focus on the infrastructure of how do you actually deployed the fixtures build the network within the building and back all the data back to the cloud? And for us we needed further reach so selling into this Market while we are selling in hand-to-hand combat with individual customers.
We really needed channel distribution. And so Acuity brought a very large channel distribution of thousands of distributors throughout North America. They can take our product to market. But also we need a further investment in technology and it really didn't make sense to keep layering more capital on top of the cap table.
So it made a lot more sense to do this as someone else's platform and then collaborate with them so you can create a network effect that they could keep investing in the business over time. So part of it was wanting to team up with a partner who has the same long-term vision and also has the patience to invest in technology over time knowing that it's a long play. It's not a quick turnaround.
Bara: [00:51:38] Interesting. And how does it feel to have had your baby acquired by a larger entity and having to then learn and figure out how to integrate in?
Vladi: [00:51:51] It feels very stable. Very, very grounding. I think especially having the opportunity to walk away from the business and have the business continue to operate in much the same way that it did before it feels fantastic.
It feels like you've built something that is here to stay and it's going to last so that's what you want. You don't want it to crumble the moment you walk away. So I feel really happy that we got to that point. Certainly it's taken a lot of work.
Bara: [00:52:16] And so now what is the future then if you look, you're looking now into the horizon 10 years, 15 years out. What would be your dream for Lucid and what it provides?
Vladi: [00:52:32] We've really focused on from the start to solve the problem of fragmentation and buildings; buildings are very complex. They have a massive environmental impact and the technologies and there are too sophisticated for the average operator to be able to use effectively.
So we really focused on building the universal call the universal UI the universal platform for which different building technologies can plug into and then you can intuitively cooperate with them manage them understand how they're performing. So it's really reach. I think you can fast forward 10-15 years. The question is how many how many buildings are we into and how many different systems that we layer them top of to create that unified experience for building owners?
Bara: [00:53:14] Vladi this is so exciting. And thank you. I think we're at the end of our time here and I have to say for myself and I hope for all those that are watching and we'll be watching when we send it out again as a video that this has been enormously informative and interesting and you've been very candid in sharing with us your whole process for from starting as a student at Oberlin working in innovation with John Peterson and then taking it to market and now here we have a business that is truly transforming the our commercial businesses around the environmental passion that you had way back when you started at Oberlin College.
And so I think that's a really exciting piece for our audience to know and for our future students to understand so I want to thank you very, very much for what you've done already and for sharing all this with us today. Thank you.
Vladi: [00:54:14] I thank you Bara, and I'm really excited for the teams that are studying businesses now, that they have this as a resource. So I look forward to doing more with LaunchU. Thank you for hosting us.
Bara: [00:54:25] You're very welcome. Thank you. And for all those who are watching, again, please share with your friends, family, colleagues, former alumni, roommates and classmates that we that it is open to the entire Oberlin community, LaunchU, and we look forward to seeing some of your proposals and helping you become successful such as in the way that Vladi has been successful.
So for us today, thank you all very much. Have a wonderful Thursday and enjoy the day. Thank you very much. Bye.
Narrator: [00:55:00] Thank you for listening to the distinguished Oberlin entrepreneur series. If you or anyone, you know as an entrepreneur and would like to be interviewed for this series, please contact Bara Watts at Bara.Watts@oberlin.edu.
Thank you, and have a great day.
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