PropTech: Zen Ecosystems Q&A

Seattle, Zen Ecossytems, architecture/engineering/construction, built environment, Zen HQ, Zen Thermostat, Comcast, HVAC
Image courtesy of Zen Ecosystems

By Jack Stubbs

In an era where sustainability in the built environment remains a pressing concern for industry professionals throughout the architecture/engineering/construction (AEC) community, companies are continually looking for ways to bring sustainable and green design strategies to the market.

Zen Ecosystems, a company founded in 2015 in Melbourne, Australia, is one company that seeks to deliver energy management capabilities to the commercial real estate industry. We recently spoke with James McPhail, CEO of Zen Ecosystems, about the platform, the services it looks to bring to the commercial real estate sector, and how sustainability in the built environment remains an increasingly pressing consideration for members of the AEC community across the country.

Seattle, Zen Ecossytems, architecture/engineering/construction, built environment, Zen HQ, Zen Thermostat, Comcast, HVAC
James McPhail

What can you tell me about Zen Ecosystems (where and when the company was founded, current objectives of the company, etc.)?

In 2017, we committed to delivering smart energy management capabilities to the commercial realm with the launch of Zen HQ, which combines the Zen Thermostat with effective cloud software and other building controls. Our current objective is to continue to expand both the reach of our business-to-business offering and the value of the product to our customer base through continued product development. Additionally, we continue to place strong emphasis on development of partnerships—with utilities, distributors, network operators and utilities—to bring our smart thermostat technology to the residential marketplace.

What are some of the day-to-day services that the platform provides? Who are some of the company’s primary clients and what is the company’s scope, both demographically and geographically?

We currently serve businesses and residences throughout the US, Canada and Australia. Our core commercial clients are multi-site businesses that have a large portfolio of buildings with small- to medium-sized footprints. These companies greatly benefit from a centralized energy management system that’s simple to operate.

Zen HQ provides commercial customers with complete HVAC and lighting control in addition to facility energy use reporting. The Zen HQ platform allows for quick changes to HVAC and lighting settings, schedules, set points and access permissions from a computer or mobile device, without needing to set foot on-site. A few notable clients include retail giant National Stores, and franchise locations of Jack in the Box, Goodyear Tires, Denny’s, Super 8 and Motel 6.

Zen Ecosystems operates in both the commercial and residential real estate markets (as well as in retail, restaurants, hotels, educational institutions etc.). What are some of the challenges involved in ensuring that the company’s strategies scale effectively across all of these different sectors?

The core ethos of the residential Zen Thermostat and the commercial Zen HQ platform is the same: both systems offer simple, connected and effective energy management solutions with beautiful design. In order to ensure our solution scales effectively across the range of commercial verticals we work with, we focus on building types that can benefit the most from intelligent energy management. Smaller building footprints are hugely underserved by the smart energy management industry but offer exceptional savings opportunities. By focusing on ease of installation and ease of use, Zen HQ makes energy management attainable for any market.

Are there certain cities/submarkets in the country that are experiencing particularly pronounced challenges when it comes to monitoring and regulating energy/water usage in buildings?

The smart energy management systems market has traditionally served large commercial and industrial customers. These buildings are the “low hanging fruit” of energy management because it’s possible to create effective systems with a one-size-fits-most approach. This means the majority of our current Zen HQ customers have been overlooked, in part due to the complexities of serving the mid-size commercial sector.

All small- to mid-size businesses are looking to boost slim margins by maximizing energy savings, but the pain points for each business vertical are different, making it more difficult to find the right solution. A hotel needs to ensure each guest is comfortable in his or her room while keeping conference rooms pleasant, and retailers need to ensure HVAC systems are properly shut down at the end of each business day.

Sustainability in the built environment has become an increasingly prevalent concern for tenants, clients and architects across the board in the industry on a national scale. Can you elaborate on the importance of partnering with distributors and utility operators to bring new energy solutions to the market?

Adding new technology to existing infrastructure and programs ensures savings are more accessible than ever before. Zen Ecosystems partners with utility operators to make it easier for commercial customers to participate in Auto-Demand Response (ADR) programs. By reducing a building’s heating and cooling load to optimize for time-based demand response events, ADR programs help companies significantly reduce peak demand and support the utility’s goal of managing electrical use.

ADR isn’t a new innovation, but we provide an intuitive interface to support customer participation and amplify results. For residential needs, the Zen Thermostat was chosen as a partner for Comcast and XFINITY Home as part of their EcoSaver program, which incorporates HVAC savings into customers’ busy lives. As an on-site link between utility and retailer or multiple-system operator and homeowner, our partnerships help customers become smarter energy consumers without requiring a second thought.

Regarding sustainability issues in particular, outreach with clients and the wider community seems central to the goals of the company. Can you elaborate on the importance of community involvement when it comes to addressing issues in the built environment?

Our community, and the community of many companies, encompasses a wide range of stakeholders including customers, employees and local residents. Fortunately, each of these groups is increasingly recognizing the value of sustainability, including energy efficiency. Employee buy-in is essential to the success of a workplace system. More than two-thirds of respondents in Nielsen’s global study on Corporate Social Responsibility say they prefer to work for a socially responsible company.

Even better, environmentally conscious companies are also likely to see improvements in employee retention rates. We aim to increase employee buy-in for Zen HQ by making it simple to use. For example, we offer flexible lockouts of thermostats that allow a building manager to manage thermostat set points, but a building occupant to make a temperature adjustment within a pre-set range to allow for improved comfort. When a company’s shift to smarter energy management makes users’ lives easier and still considers human needs, it’s much more likely to be embraced as the new way of doing business.

Have you seen community awareness around energy/water usage increasing over the last few years? How will further educating people—and keeping the lines of communication open—continue to play a role?

We strive to educate customers and potential customers about the environmental benefits of managing energy use, but we are also very conscious of showing the economic advantage of doing so. Both residential and commercial customers are learning that cost savings and environmental benefits such as reduced emissions and greater energy efficiency go hand-in-hand.

In broader terms, how do you think technology will continue to play a role in the ever-evolving real estate industry, especially when it comes to tracking and monitoring energy usage in commercial and residential buildings? What is the added importance of partnering with technology companies?

With the rise of the smart home, residential customers are increasingly seeking intelligent energy management systems. The real estate industry is recognizing the importance of connected devices and technology as potential buyers and tenants increasingly consider these resources to be necessities. By partnering with technology companies, real estate companies can stay ahead of the curve and keep up with customer demand while also maintaining the longevity of managed properties. These resources aren’t just for new construction, as Zen Ecosystems solutions make it easy to upgrade existing building systems for vast energy-use improvements.

Looking forward, is there anything in particular that concerns you about the state of the commercial and residential real estate markets, especially when it comes to addressing sustainability issues in the built environment?

Residential and commercial buildings account for approximately 40 percent of total U.S. energy consumption. Commercial buildings in the United States currently waste $120 billion in energy every single year due to inefficiencies. Given the technology and connectivity advancements of the past decade, these numbers are shocking. There is vast opportunity to improve the sustainability of our built environment, but there needs to be ongoing education about the problem at hand—inefficient and excessive energy consumption—and how we can use the right tools to address it.

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