Episode 1: Josh Green, CEO, Mysa
Mysa is one of the fastest growing companies in Atlantic Canada and has taken the world by storm with its line of smart thermostats. Josh Green is one of the founders of the company and its CEO. In this episode, we get down into the details of Mysa’s story and the keys to its growth and success.
Joe: We’re already well into 2021, and I guess I’m wondering what the focus has been this year so far, and the reminder of 2021 in terms of continuing to grow Mysa and the business.
Josh: For the first couple of years, e-commerce has represented 90% of our sales in the given year. Last year we had our first foray into retail with getting into Best Buy here in Canada which was a huge milestone for the company and it showed great performance.
Joe: I’m wondering — how do you include the customer in your product development? Is that a formal practice or is it just anecdotally something that you do?
Josh: One cool thing is we have a Slack channel in our communications tool that allows us to consolidate all of the customer reviews from the different channels so whether it be Amazon, through our website, the iOS and Google app stores, we consolidate all of those reviews and they feed into this single channel and every employee at Mysa is part of that channel.
Joe: Was there ever a time that you felt like, “Okay, maybe this isn’t going to happen.” Was there any moments like that?
Josh: Yes, lots of them!
Joe: I guess the first topic was, can you just give me an overview of Mysa and your role with the company?
Josh: Yeah. Today we are Mysa and we build smart thermostats to help homeowners save money on their heating and cooling and I’m one of the co-founders and CEO of the company. And Mysa started about five years ago now, it was just an idea and at that time the idea was actually just a thermostat for baseboard heating, which happened to be really popular here in Newfoundland and Labrador. And I discovered it through this other consulting gig that I have. I was an energy auditor trying to help people make their homes more energy efficient and through that consulting gig, that’s when I saw and came across this market opportunity for a smart thermostat for baseboard heating.
That was kind of the jump-off point; that really was the birth of Mysa and then proceeded to build a team. We did some pre-orders and got some investment and was able to bring the product to market and then kind of flash forward, and we can come back to some of the stuff in between, but flash forward five years, we now have 75 employees here at St. John’s, Newfoundland and we’ve now shipped another smart thermostat for in-floor heating. We have another smart thermostat coming out for mini-split heat pumps and air conditioners in just a couple months from now so we are now a multi-product company and we sell our products right across Canada and into the U.S. currently.
Joe: So, we’ll get into some of those topics a little bit deeper, but just a question to slip in here is; obviously 2020 was an unprecedented year for all of us, for many businesses. I’m just curious what types of challenges you folks faced in 2020, and any lessons learned from that.
Josh: Well, starting out, so was right around the end of March, the immediate things that we were concerned about that we thought were going to be big challenges, was moving a workforce that typically was used to working together in an office environment right next to each other, and moving to do that in a distributed manner through working from home. So, that was something that we said, okay, well, this could be a challenge. And it turned out, actually, that we kind of rolled into it pretty seamlessly. I think that was due to the fact that even while we were in the office we embraced a lot of digital tools. All of our communication were things through Slack and had some really great tools for keeping track of things and communicating. So, that transition actually turned out to be easier than we thought actually so that was really helpful to see. And I think also our strong work culture also helped keep relationships strong through that time.
And then the other challenge for us was funding, of course. Keeping the lights on. That’s a business owner’s number one thing, I think, that keeps them up at night; about do I have enough money to pay my employees and keep everything going? And even going into 2020, we had planned to do a significant funding raise; We were aiming for $10,000,000 at that time and when COVID struck we had investors who we were talking to basically say, “Hey, we’re closing our doors for the time being. The uncertainty in the market.” So we were unsure how fundraising was going to happen but thanks to some amazing existing investors that we had, plus also BDC and EDC had some amazing programs that were able to help us raise the funding that we needed and we met our fundraising goal, which was a big thing.
Those were the two biggest ones on my mind, from a business owner’s perspective was can my team work and still be productive together in this new working environment, and making sure that we had the funds to keep things going. We’re lucky in our industry of thermostats, it seems like through the pandemic, while people were not being able to take trips and go on travel and that kind of stuff, I think we were riding a tailwind of people investing in their homes. And so we had that at our back and so our sales were not affected too much from COVID which was really great. We were able to still see significant sales growth through 2020.
Joe: How about supply chain? I don’t know a ton about the way your business works, in that way. But I’m just curious if supply chain was challenged in 2020.
Josh: It actually, believe it or not, wasn’t. And so I mean, I think it’s a factor of a couple things. One, we were probably just lucky. We had just finished a production run. So our manufacturer and supply chain is mostly in China and we had just finished a major production run there before the virus started becoming widespread and shutting things down in China. So that was just dumb luck that production timelines were good there. But then also, our supply chain, our operations team are really strong people and they’re always about risk mitigation and so they identified potential risks really early and we took some steps to issue purchase orders more in advance of what we typically would. So, just trying to eliminate some of the risk there and by the time we were ready to start production again, luckily things had settled down a lot more in China and the supply chain capacity there had pretty much gotten right back up to 100%. So, again, it was a little bit of luck for us but also an amazing supply chain team who did take some good risk mitigation strategies and steps.
Joe: So, we’re already well into 2021, and I guess I’m wondering what the focus has been this year so far, and the reminder of 2021 in terms of continuing to grow Mysa and the business.
Josh: Yeah, the biggest thing for Mysa in 2021 is the launch of our new product called Mysa for Air Conditioners and also works with mini-split heat pumps. And we had actually – we were striving to try and launch it last year but in the face of so many things that slowed us down a little bit, and so we’re launching that product now in May of this year. And it’s probably one of the more difficult products that Mysa’s ever built. There’s a lot of complexities to it but we know that there’s a huge market for it and so, the biggest focus and the biggest growth lever for Mysa will be to make sure that that product launches on time, successfully, and that customers really love it. So that’s our biggest focus. All 75 people are contributing in some shape or form to another to making that product a success. That’s the biggest thing for us but also diversifying our sales channel. So, when Mysa first got started, and this was part of our intentional strategy, we did a very direct-to-consumer e-commerce focus.
And we did that for a couple of reasons. A, it allowed us to be really close to our customers and have conversations with them. But, B, just from a pure financial aspect of having the best margins, that was the best option for us. So that’s how we got started. For the first couple of years, e-commerce has represented 90% of our sales in the given year. Last year we had our first foray into retail with getting into Best Buy here in Canada which was a huge milestone for the company and it showed great performance. And so, we’re doubling down on that in 2021 and hoping to get into more retailers across Canada and in the U.S. So, more sales channels as well as our launch of our big new product is the focus for this year.
Joe: I don’t know if you can just share that anecdote real quick. I saw a post you had done on LinkedIn, little bit ago. A post of you, and I think your brother at Best Buy, holding up the product that you had gone in looking for a number of years ago. Can you just talk about that? I thought that was really a — really interesting moment, really stood out to me.
Josh: I do. And really I mentioned back at the beginning about the energy audits so at that time, not knowing about smart thermostats, I had customers of these energy audits saying, “Hey, can you go find me a smart thermostat for baseboard heaters?” And so I did Googling online but I also remember distinctly walking into Best Buy and there was Nest and Ecobee there for furnaces but I said, “Do you have any thermostats for high-voltage heating?” And they said, “No, those don’t exist yet. All we have are the low-voltage thermostats here.” And so I said, “That was very interesting,” and I said, “Thank you very much,” and I walked out.
Then it was a whole four years later from that conversation and trip into Best Buy that my co-founder and I, Zach, we were able to walk into Best Buy here in St. John’s, here in our hometown, and actually see our Mysa on the shelves at Best Buy. That was a pretty ‘coming-full-circle’ moment for us. At this point we had already sold 100,000 units and so it was great but, for some reason, just seeing that come full circle was just really a special moment, I think, for us.
Because it’s the realization that it’s not just the Best Buy here in St. John’s. It’s all of the Best Buys nationwide where baseboard heating is popular we’re now in stock which is just amazing to think about from coast to coast, right out to British Columbia which is one of our biggest markets. All the Best Buys out there have Mysa on the shelves there. It’s pretty cool to think about.
Joe: That’s an awesome story, and I’m sure a pinch-yourself kind of a moment for both of you.
Josh: Because it’s the realization that it’s not just the Best Buy here in St. John’s. It’s all of the Best Buys nationwide where baseboard heating is popular we’re now in stock which is just amazing to think about from coast to coast, right out to British Columbia which is one of our biggest markets. All the Best Buys out there have Mysa on the shelves there. It’s pretty cool to think about.
Joe: To date, what do you think has been the most challenging part of the whole undertaking?
Josh: It’s funny, right. It’s actually — If I’m really honest, it’s the internal stuff. It’s not the external stuff for us. We were really lucky, I think, to find product market fit really quickly and provide a solution that customers really liked and frankly little competition. So from an external point of view that was pretty straight forward. Growing this company from just the two of us, the two co-founders up to the 75 people we are today, that’s what focus on and would keep us up the most was how are we growing, who are we finding, the types of people, how do we all work together? And there’s so much to unpack there but I will just say in general just growing the team and growing how we all work together is the most challenging.
Joe: And in terms of that, recruitment; is your team based mostly in Newfoundland and Labrador? Is it spread out beyond that?
Josh: Yeah, it was not necessarily intentional but when we put up job postings and job ads, there’s a ton of talent here in Newfoundland and Labrador so that was really just the easiest types of people to hire were the people that were living here, and really talented people here. So, over the years we’ve hired almost exclusively here from Newfoundland and Labrador so the 75 people that are with the company today all live here in the province. Actually just yesterday we hired our first remote employee in Halifax so that’ll be an awesome experience and I’m really looking forward to seeing how that goes. In this new world with all the different tools it’s definitely making it easier breaking down a lot of barriers. We’ll see how that goes over time but the talent here pool in Newfoundland is — has been great. I think it will continue to be great. I’m encouraged by a lot of the signs that are happening and I think the right things are happening.
Joe: In terms of your engineering team, has that been a challenge to recruit? And have you been able to find the talent locally?
Josh: Yeah, yeah. Absolutely. All the developers and all of our engineers who build and design the hardware, all of them are either graduates of MUN or they’ll learn their craft on their own which is a more and more common thing. You’re seeing just an engineer who would traditionally be a mechanical engineer or electrical engineer go learn software development on their own and I think that’s going to be an increasing trend. And we’ve got several of those people that work at Mysa and then other, of course, developers that come out of MUN and CONA and even high school. We hire sometimes, there’s some amazing people coming right out of high school.
Joe: Can you talk about just the journey of going from zero customers to your first customer? You know, with this direct consumer business model that you have. I mean – I’m sure it must’ve felt pretty daunting at that point, starting with zero customers and having to scale upto that critical mass — you know — ASAP. Yeah, just wanted to know if you can talk about that. Like, how you were successful getting to where you are at today, getting your brand out there in such a big geographical area – to get that critical mass of sales.
Josh: Yeah, for sure. That was a really important piece and honestly that was really what kind of kicked us off. All of the credit here goes to my co-founder, Zach. I guess I was, in the early days, the more technical person and I was off building the prototypes and that kind of stuff. But it was Zach who really took the reins on figuring out how do we even market and sell this thing. He also has a mechanical engineering background like myself but he is a very resourceful person and he consumes information like no other person I’ve ever seen. He really basically went online, went to wherever you get — Audacity or wherever there’s online courses and he figured out how to put together an e-commerce webpage with a checkout. He then went and figured out how to do Google ads and Facebook ads, just from doing some online courses that cost him — I don’t know, sometimes the courses cost $10, sometimes they’re like $50 or whatever, but he just went and figured it out.
And then just went and implemented it. And so he put together this website along with some other employees to make it look good with some high-quality pictures; showing that the value proposition about helping homeowners save on energy and controlling their baseboard heat. Then he figured out the Google ads to drive people to the website. And that’s all he did was just put it out there. He did some iteration, of course, to get the Google ads and Facebook ads working but I remember we put the website out there. I think it was probably maybe September when we launched it. Then for about three-ish months it kinda – we had nobody buy our thermostats, and so a little bit disheartening, but I remember it was Christmas Eve so it was December 24th where the first order came in from some — I can’t remember which state it was down in the U.S. but this guy, he bought, I can’t remember, I think it was like four or five thermostats from us.
And Zach and I were blown away, “Hey somebody actually just gave us money for this thing.” And at the time these were also pre-orders because we had not built the products — so this was a pre order campaign. That first one came in on Christmas Eve. I think there was a couple more before the end of the year. Then eventually, I think we got to maybe 300 or 400 thermostats sold a couple of months into it and then over the next, I think, 12-ish months of doing pre-orders we had raised near three-quarters of $1,000,000 in pre orders for the product and then shipped it in February of 2018. So it was this pre-order campaign that just put yourself out there in a professional manner as much as possible. He went through a lot of details to make the website look as great as possible, not to be this scrappy startup, but make it really look professional as much as possible. And yeah, that’s how we got past that first hurdle of trying to show the first sales.
Joe: That’s great to know — in terms of Zack’s role with that. And, that’s a conversation I’d love to have with him. Just to dig deeper in on those topics. And so from there with that — I guess you guys have been scaling those marketing efforts and optimising them. And is it just kind of a similar marketing mix and formula from that point onward?
Josh: Yeah. Then after we, I think it was midway through 2017, we realized it was really starting to grow and we had gotten some private investment so we were very fortunate to be able to hire some really great people. A very early hire was Dan Goossens and he was instrumental in really taking over the marketing front, hired some great people, graphics designers, copywriters, to really put an even more focused and more professional effort on it. But it was very much the same; a great website, some really beautiful Facebook ads and optimizing Google ads. That was very much the focus and even from there, even today, very important are these campaigns — email marketing campaigns, SEO. All of those types of things have been really crucial and have scaled as we’ve scaled.
Joe: Yeah, just through the grapevine I’ve heard about the content marketing that you folks have been doing, and the SEO benefits and the success you’ve had with it. I guess it’s a whole mix of tactics that you’re employing as you go.
Josh: Yep, a whole mix. And listening to customers and understanding what things interest them and where they like to buy. Another big growth lever in our early days was Amazon. It’s a platform now a little bit later, I’m not — It’s a great platform and it represents a good portion of our sales. There’s some challenges with Amazon, of course, but in general, in the early days, I think Amazon was also a great tool for getting ourselves out there and being found. So I do recommend any entrepreneurs who have a product that’s a good fit for Amazon, it is a good platform to get some good traction.
Joe: Can you talk about that a bit? Just the pros and cons of Amazon?
Josh: Yeah, so — In the early days, e-commerce was then split between our own website, getmysa.com, and on Amazon. When we sell a product through our own website, we have the small processing fee to Shopify. And then we have to fulfill it with our third-party logistics partner. But then with Amazon, they take a much bigger cut of every sale that we do. They do handle all the shipping and logistics which is nice but on balance, they take away some of the margin that we would otherwise get if we sold it directly on our website.
And that wouldn’t be too much of a big deal but there’s been some other challenges just regarding dealing with shipping them inventory, having to deal with any returns that come back, not being as connected to the customer. When we sell on our website, we know exactly who bought from us and we can reach out to them if they got any problems or to give them another opportunity to, let’s say, get a sale price or something. But when it’s on Amazon, now Amazon is between us and the customer, and it really limits how much that we can engage with customers that buy through Amazon. So, those are a couple of the things.
Joe: Can you talk about that — you and I last year had a brief chat, and you mentioned about just how challenging it was to put that supply chain in place, that’s a beast in it of itself. Because I think some people may be interested in hearing how you guys were able to do that. Because, obviously that’s a huge part of launching and running a business like yours.
Josh: Absolutely. And it’s the same story of — this was really credit to Zach here. And again, Zach not knowing anything about supply chain but, and it’s funny, literally Zach — okay, let’s figure out how to manufacture these things and then ship them to customers. And so he would Google how to manufacture electronics. And he eventually found that there were some electronics manufacturers in Ontario and so he just called them up and said what we were building and it’d be interested if they wanted to be a partner. I remember he lined up four meetings with four different manufacturers in Ontario and we just flew up, just the two of us, and went to these manufacturing facilities and told them what we were building. I think they were at least impressed that we had amassed at this point, thousands of pre orders, so we did have some credibility in that we had pre orders for our product but it was still just kinda like two — So, Zach and I, we’re brothers, Just two brothers showing up and saying, “Hey, we want to build thousands of these thermostats here. Do you want to work with us?”
Zach kind of spearheaded that effort. And then we also found some third—party logistics partners and opportunities where the inventory would be stored at their warehouse and then when a order comes in through our website, it just automatically flows through and they bill and ship the order to customers either through a Canada Post or something like that. So that whole piece of the manufacturer and the third—party logistics, just Google and reach out to them and set up meetings, and that’s really all it was. It’s grown and matured from there — So, after first producing the first ones in Ontario, we have moved the manufacturing to China and also our third—party logistics has matured as things got more complex.
If there’s a story here, it’s just like — nothing is too complicated or daunting. And even if it may seem daunting, just start at it and — I will say that there were a couple people here in St. John’s that actually were helpful that we met with early on. Maurice Tuff, he’s part of Lemur Motors, Blue Driver. He met with Zach and I and gave us some advice. He had already gone through this how to produce a device so that was helpful. And the good thing now is I think we, Mysa, we were able to help out some companies like the WaterLily here locally. BreatheSuite is another company that’s building some hardware so we’ve been able to help them a little bit and I think now that people are realizing there’s work to go into it but it’s certainly a very attainable thing for any company to go build some hardware and set up a supply chain and make it a global one even to that point. Mysa currently sells to Canada and the U.S., but there’s no reason why we couldn’t — And I think this is like the WaterLily guys; I believe they ship their products to over a dozen countries around the world which is just phenomenal, that they are from here, from St. John’s, Newfoundland, and ship their product right around the globe.
Joe: Can you share in terms of what the growth strategy looks like from here going forward. Say in the next couple of years, is it the retailer focus? You know, the existing distribution channels, is that your focus?
Josh: Yes, I’d say it’s a couple things. It’s new products. So,I mentioned the air conditioner product that I mentioned. And we got more in the hopper that we’re really excited about. So new products which unlocks new markets. So new products. New sales channels to also reach people. I think again, it’s been increasing but there’s still people who do like to buy in person. And so even though Mysa was only online at first, we knew it was important if we wanted to reach other customers, to get into physical retail. So we’ve had our first step towards that and we’re going to do that a lot more in 2021.
Increasing the different channels in which Mysa is available and there’s some other ones. One that we’re interested in is working with what we call the trades channel, so working with electricians and installers of thermostats and actually using them as a sales channel. And then the other one that we’re interested in, and just exploring at this stage is actually other geographical regions. So, like I said, we’re currently in Canada and the U.S. but we are actively looking at some other countries around the world that have heating and cooling systems that work with our products, and so that will be a pretty big growth opportunity, further out than the other ones but certainly one that we’re looking at.
Joe: What’s your ideology when it comes to how you prioritize product development?
Josh: That’s a great question and it’s not easy and we’re all the time getting better at it. I think really in the early days, we were really focused on just putting out the one thermostat and, of course, all the software that goes around a smart thermostat to make sure that it’s really great. But now as we’re getting into multiple products, it’s becoming more complex about how much effort do we put into a single product and how much can be shared. We’re working on trying to get better in terms of trying to really put together some business cases for each thing that we’re working on and the business case can be smaller or larger, depending on how the size of the investment would be. But that’s just something now at this stage.
If I think back to the first four or five years of Mysa, I don’t know if we would actually even been able to do those business cases and do them justice but it’s just now that we’re approaching the scale that we can actually do them and I think they’re going to have a ton of value in helping us. Every dollar that we invest, we want to get the most out of it. But, I would say that over the last three years, we build this as much as we can into our work culture and how we work, and how we talk to our employees. We always are talking about how Mysa has limited resources and we really need to make sure that those resources are going to the right things. And so even something like what we — We use OKRs which are Objectives and Key Results, to really help us understand what work we’re working on.
And the process of creating your OKRs really forces you to try and prioritize what you’re working on and so we’ve been using that framework for the last several years. Every quarter, as we’re figuring out what we’re working on in that quarter at any team level, we’re always thinking about what we’re prioritizing. So that’s kind of been baked in but like I said, from a more due diligence and really trying to put some business cases on it, we’re just getting to that stage now.
Joe: Do you think there’s anything unique in terms of how Mysa is set up, let’s say around how your teams are set up or how you collaborate as a team, how the teams are managed? Anything like that you feel like is unique to Mysa?
Josh: I think one thing that I am pretty passionate about and it’s kind of been very, I’d say, natural for Mysa, and I also credit a lot of the early employees at Mysa that helped push Zach and I in this direction, frankly. But I would say when I talk to some other companies, I would say that one thing that is unique about Mysa and perhaps you might say is a more common trait in tech companies or startups, but we have a really, really flexible work environment here where we talk about really treating each other like adults and letting everyone manage their own time and so we don’t have time sheets. We have as much paid time off as you’d like. You can shift when you work in the day, even before COVID. Where you work, also. People were working from coffee shops even before COVID was a thing, or working from home.
So I think that is something that is — I think, really been actually very beneficial to us. It has helped us attract a lot of great people. I’d say it even helped those people be really productive, giving them the flexibility to, if they got kids or other commitments, be able to go do that when they need to, and then focus on work when they need to. I really just think it’s a great way of working and I would encourage other employees to really embrace that work model.
Joe: In terms of yourself, what’s your focus these days as the leader? What’s your sort of day-to-day role in the business these days?
Josh: I’d say number one, and — so, I guess in the really early days, it was that more co-founder-ish: what was the product and then get it to customers and what was the product going to look like? But after that co—founder stage and then really embracing the role of CEO, my number one focus and to this day is the actual company itself and the team and make sure that we are growing the internal team as much as possible and working together as is possible. And I’d say at least 50% of my brain capacity is focused on that in a given day. And then the rest of it on the actual business strategy and tactics at that point but I’d say the biggest singular focus again is within the company itself. And we got an amazing team then that brings it all together.
Joe: And long term, say in the next five to ten years, what do you think that looks like for Mysa?
Josh: That’s a great question and I guess the way to answer it is kind of tell a little bit about why we exist as a company which is to do our part to fight climate change — is why we exist as a company and today we built smart thermostats to help homeowners save on energy costs. That is contributing to lower their environmental footprint. And we really want to keep doing that and actually do it at a much, much larger scale. And so some of the things that are a little bit further out that we see a lot of opportunity in is actually working really closely with electric utilities as well because we see this trend happening of we need to electrify our grids as much as possible and our entire energy systems. And so moving to renewable energies, moving to things like electric vehicles, moving all heating.
Today there’s a lot of homes still heated with oil and natural gas. Long term seeing those all switch over to being fully electric. So, long-term, Mysa really wants to be a big force in trying to make this electrified world happen and with our focus on heating and cooling, that’s were we’re going to play. But yeah, I think we see a lot of opportunity working with homeowners and utilities to really embrace this future where we have this electric — fully electric grid system serving all our needs and doing it in a way that is sustainable to the earth.
Joe: How do you see Mysa in terms of structure? Is it continuing as an independent business or are things like partnerships and mergers, are those the type of approaches, in the future, you guys are thinking about?
Josh: Yeah, I think we are. And even for the sole fact alone of if there’s a partnership out there that would allow us to accelerate the scale and the scope of our impact, that’s really important. And I say this to our employees a lot is that we are in a climate emergency. There’s not a ton of time to wait here and so there is a bit of urgency. And so if there was ever an opportunity to work with other partners that would allow us to accelerate our impact, we would love to be able to do something like that.
Joe: I’ve just got a question I meant to ask earlier, in terms of your product development. I’m wondering how do you include the customer in your product development? Is that a formal practice or is it just anecdotally something that you do?
Josh: No, it’s really important and so there’s a couple different avenues in which we do that. One thing that I think is kind of cool is we really leverage customer reviews a lot. And so the great thing about our product, and then I think this is another great thing about the Amazon platform, is that reviews, customer reviews are so integral to the Amazon platform. I don’t know about you but if you’ve bought any products off of Amazon you’re looking at the customer reviews, how many stars, how many reviews are there. And customer write in just so much gold information about how to improve the product and so not only reading the five and four-star reviews and what improvements are there.
But even the people who are giving us one and two-star reviews, why are they giving us a poor review and what can we do to better improve that? So one cool thing is we have a Slack channel in our communications tool that allows us to consolidate all of the customer reviews from the different channels so whether it be Amazon, through our website, the iOS and Google app stores, we consolidate all of those reviews and they feed into this single channel and every employee at Mysa is part of that channel. And so they are seeing in real time customer reviews coming in. And so, depending on the time of the year, there might be anywhere from five to as many as 30 reviews come in on a single day. And so I think everyone seeing that customer feedback in real time, it really makes it clear about, “Okay, we do this really well. This area over here needs improvement and we need to focus there.” So that’s really just leveraging customer reviews — has been super impactful in helping us prioritizing what we’re working on.
Joe: That’s really cool. I can certainly see how you get the straight honesty from the masses with an approach like that.
Josh: Yeah, and so we do as well from time to time have conversations with customers either with phone or chat or email or whatever. But I would say that I think people in reviews, there’s like — they don’t hold back.
Josh: If you have a conversation with somebody you might say, “Oh, well it’s okay and I don’t… ” But I think I a review you get the honest, brutal truth and that is actually really important.
Joe: It’s like having 30 or 50 people in a focus group every day—
Josh: Yeah, absolutely.
Joe: It’s just pretty good—
Josh: Yep, yep. And what is also really cool about it is on the flip side, not only on a way you could improve, but when you do improve something, say if you focus on a particular thing then you go spend time and effort working on it. Then you release it. And then seeing subsequent reviews saying the thing that was broken is now fixed or is improved. That again, it completes the whole circle and it’s, I think, really satisfying and motivating to the folks that are actually working on solving those issues and problems.
Joe: And how about competitors? Have you started to see competitors popping up?
Josh: Yeah, certainly. Basically our only competitors are out of Quebec, actually, and there’s two or three up there who’ve kind of been bumping along. I think perhaps just through our being in the market we’ve actually pushed them to even improve their stuff a little bit more so recently we’ve been seeing them make huge gains forward which is great for them and I think it’s great for customers having multiple company’s offerings and having that competition makes it better for everyone. So we have seen an increase, I think. Like I said, five years ago there was really no options for smart thermostats for baseboard heaters and today there are a couple three or four that you could choose from besides Mysa. So I think it’s great that there’s competition now in our industry.
Joe: What — what is your philosophy when it comes to competition?
Josh: Well yes, I think that it’s good. And I think — I don’t think of them as the enemy at all. It’s like — they are just like us. They’re a company trying to make a go of it and I would hope that they do well and I think they’ll do something great and we’ll do something great, and then it kind of goes back and forth. But yeah, focus on the customers is very important so I’d say we spend a much, much smaller amount of time thinking about the competition and more time thinking about the customers but I certainly have a — Like I said, they’re not the enemies. They’re just companies just like us.
Joe: Yeah, you see that, in terms of companies that seem to get caught up in watching their competition — trying to predict what they’re going to be doing or copy it. But yeah, I’m with you. I think the focus should be on your customers, and I think ultimately to do that — that kind of is the best way of predicting the future.
Josh: And it’s also about making an impact, right. The more people buy smart thermostats, to my mind, the more energy savings that there will be. And so as long as the industry is not having people install manual thermostats and they’re just leaving them on and burning lots of electricity, wasting, that’s bad. The more people that we can have buy smart thermostats, the better. So I think of it as the whole industry winning together.
Joe: Just going way back to what we talked about at the beginning, why do you think there was nobody doing this? Is baseboard heaters more of a Canadian thing? An east coast thing? I’m wondering if you guys understand why there was a gap there.
Josh: Yeah, that’s a great question. In Canada, I’ll start here in Newfoundland, it’s about three-quarters of the homes here in Newfoundland and Labrador have electric heating. So it’s super popular and it’s funny, as Zach was saying to somebody yesterday, I have never lived in a house that didn’t have baseboard heating.
Josh: It’s very, I guess, popular and known to us here. You look broader in nationwide, in Canada, that number drops down to only a third. One-third of homes in Canada have baseboard heating. And then when you look and combine the U.S. market and the Canada market — so now it’s in total, the two countries, it’s actually only one in 10 homes. So now we’re down to 10% versus the nearly three-quarters here in Newfoundland and Labrador. It is a smaller market than the traditional furnace-base thermostat market. And then, I think that’s why the focus of some of the bigger players that came before us, think of the Google Nest, Ecobee thermostats. They’re focused on the larger portion of the thermostat market and they’ve been expanding and building that out solution but also expanding into other smart home solutions.
And so you think about Nest, they have thermostats but they also have cameras and a whole host of other smart home products, and not necessarily focused on all the other types of thermostats that are out there. And so that’s really where we saw an opportunity was, there are lots of other thermostats out there. So, we built the baseboard thermostat which was our first product. The same thing happened with electric in-floor heating. There was no smart thermostats available for that type of category of thermostat, so we built a thermostat for that.
And now the same thing again with our air conditioning and mini-split heat pumps, Nest, Ecobee, they don’t work with those types. So we’re finding these types of thermostats that are not as popular but now, what we’re finding in aggregate, when we have all these different product lines, we are nearly if not bigger than the rest of the market. So it’s been an interesting journey and I think it got missed but I think luckily for us it did get missed.
Joe: Again, it’s wild, I guess. You look back on it to think that it was just a couple of brothers that saw the gap, moved on it, out of everybody on the planet. It’s uncanny, I guess, that you were the people to see it and to move on it.
Josh: Yeah. I totally — I mean again, I think it’s a little bit of our luck. I’m from here, from Newfoundland and Labrador, born here in St. John’s, but I lived in Halifax for 10 years. I did my engineering degree there. And I often think back to after graduation, if I had stayed in Nova Scotia, where baseboard heating is less popular; it’s probably on the order of only 20% of the homes there, or less. If I had stayed in Nova Scotia, I don’t think I would have seen this opportunity for smart thermostats for baseboard heating. But I certainly could have stayed there. It was just kind of happen chance that I moved back to Newfoundland where there happened to be baseboard heaters here very prevalent. So, A lot of it comes down to the right place at the right time.
Joe: I guess initially getting that initial traction and what was around that, I’d say, that regional trend around baseboard heaters. But now, I guess, for long term success — it sounds like what you’re saying is that there’ll be tertiary heating types and products that also is sort of coming together. These aggregates, you know, these markets are small on their own. But when you aggregate them, it’s creating now this sort of substantial market, I guess, for you guys to develop and to grow on. Is this it — is that correct?
Josh: Yeah, absolutely. And also just trying to pay attention to where the trends are going on new types of heating systems because that — the industry also doesn’t stay stagnant and so making sure that we’re paying close attention to what are the new types of systems and frankly, I know here in Newfoundland and in many places across Canada, mini-split heat pumps are one of, if not the most, popular and highest growth types of systems that are being installed. And so having a product for the highest growth opportunity in the HVAC space is one of the reasons why we chose to build a product for it and I know there will be more to come.
Joe: If a company like, say Nest, says they’re going to start a thermostat for baseboard heaters and getting into these other tertiary categories that you’re talking about, how much of a threat would that be for Mysa? Or, I guess, is there a pressure that you feel to get into home security and this smart home, like that broader suite of home products? Like you see with the companies like Nest. I’m just curious what your thoughts are on that?
Josh: Yeah, it would actually be the opposite, not to diversify. And so there’s a great book, I don’t know if you’ve read it, Good to Great, I think is the name of the book and they talk about the hedgehog concept. The idea behind the hedgehog concept is that hedgehog when at first with adversity it does one thing really well. I think it’s like — roll up into a ball or something. It does one thing really, really well and it focuses on that. And so Mysa wants to do the same thing. We actually think if we were to diversify into cameras or plugs or whatever, lights, I think that would actually make us in a weaker position. And so we really want to embody that hedgehog concept and so our focus is on building the best heating and cooling products as possible, and trying to come up with new innovative solutions and really compete on that and lead with that. That’s really our focus on being the best heating and cooling product or thermostat product and focusing in on that.
And then even beyond that, I think what we’re increasingly finding, is there’s a lot of really important things that our customers are looking for and some of the things would be privacy. You take a company like Google, I would say that they’re probably not on top of mind for people for a company, “Oh, I trust Google with all my data and that’s not an issue for me.” Whereas we think that privacy is extremely important and we are starting now — I mean we baked it in from the beginning but even more heavily now us leaning into something like privacy is going to be a huge differentiator compared to a company like a Google or an Amazon. Amazon’s always building new products. And there’s more besides just privacy. But of that nature, of really leaning into what’s important to customers.
Joe: Josh, just a couple final questions. The first would be, what would be your advice to someone else that’s trying to start a business like yours, that involves B2C markets and going outside of the province, maybe to even different countries to sell the product? Just based on everything you’ve done and learned so far, what would be your advice to someone like that?
Josh: Will this be for advice for somebody who’s already got an idea and they’re kind of already out there or…
Joe: Yeah, I guess it would be somebody with an idea that’s wanting now to make a go of it.
Josh: Yeah, so — I’d say just do it and get on with it and try it. There’s no need to really super analyze something and do these massive risk—adjusted spreadsheets to understand if it’s a good business idea or something — Forget that. I think just go do it because in doing, I think, that’s when you learn. You’re going to do stuff, it’s going to fail, and then you’re going to learn from it. You’re going to iterate and do something else. Although this is where I am realizing this is my personality and so like — think about the personality wheel, I do know that I am that kind of person who likes risk and pioneers.
So I am the person just to jump into things. I know there’s other personalities out there and all can be successful in entrepreneurship but that’s my attitude towards it is just really dive into it. Try things, learn, fail, then learn, then do more things. So just really getting out there and do it is probably the biggest piece of advice. And then, definitely it’s persevering because it’s going to be a long time and it’s way longer than people think, I think, to get things going, and how much harder it is. So the amount of setbacks that you’re going to have, that we had, we had so many setbacks. But you’re going to have those and persevering through those is really important.
Joe: Was there ever a time that you felt like, “Okay, maybe this isn’t going to happen.” Was there any moments like that?
Josh: Yes, lots of them, really close. I guess what got me through was first and foremost a great business partner and co—founder. Having somebody who’s there in the thick and thin with you is so critical, at least for me it was. If I didn’t have somebody like Zach to help me get through those hard times, and likewise because I think sometimes when I would be down he would be up and he would help me and then vice versa. So I think having a really great business partner to pull you through is important. And then also great family support, my girlfriend who is now my wife. Support from those people are also crucial to get through those pretty bad times. Because there was lots of them, lots of setbacks.
Joe: So, final question is just — to talk about the road ahead. We don’t know what the future holds. With all businesses, whether it’s your type of business or whatever type of business it might be, it really is an uncertain time. It’s a very challenging time. And I’m just wondering if there’s any overall business advice that you would have if you had the business community in front of you, what would your advice be as we go forward?
Josh: I think, while it’s very important to have a long term vision, and you need to have that and you need to have a long term goal, and you can’t be flip-flopping all over the place because that also gets you nowhere. However, I do think it is really important to be agile and being able to move and adjust when you need it. And that’s sometimes difficult for companies but I think in this world that we are finding that is very tumultuous and things are coming at you really fast, I think the thing that’s going to really make a difference are those businesses and those entrepreneurs that are able to embrace that change, understand it, adjust quickly, and move on. I think that’s going to be really important in 2021 and the years that come forward, to really be agile.
Joe: Cool. All right, Josh, that’s 60 minutes, my friend.
Josh: Wow, didn’t feel like it. That was awesome. Great chatting with you.
Joe: Yeah, you too man. I appreciate your time and just being able to dig-in into Mysa a little bit and to hear your story. It’s something I’ve been watching and it’s just really cool to hear from you on it and understand some high points and some of the — I’d say low points, you know that you went through.
Josh: It’s part of our ecosystem that we have here is that it’s — everybody wants to help and inspire people and so I think this is a great avenue to do that. So thank you for having me.
Joe: Yeah, It was an absolute pleasure! Really wish you guys the best in the coming days as you grow your business and execute the plans that you’ve got on the go. So yeah, really — really enjoyed the chat as well and wish you all the best, you and your team.
Josh: Thanks, man.
Joe: Okay, man. Take care. Have a good one.
Josh: You too.