Marshall: Fortunately, Radiator Labs does not have that problem because the inefficiency we’re carving out for the building is gross, unnecessary waste. So we’re making people more comfortable while getting rid of this waste that really is almost unconscionable. I can throw some numbers at you. In New York City alone, $1.2 billion worth of fuel is wasted every year due to over heating. Imagine taking $1.2 billion of any fuel, any fuel you want, and burning it in the streets. That is literally what’s happening because when our buildings consume heating fuel, they combust and let it out into the air in which you breathe. You’ve probably seen those big black plumes of smoke come out of the building, that’s a boiler. You’ve probably cleaned off of your windows black soot, that’s from boilers. Eighty percent of that is from boilers, it’s not from cars.
NYLP: Welcome to the New York Launch Pod, a podcast highlighting new startups businesses and openings in the New York city area. I’m Hal Coopersmith and the voice you just heard was Dr. Marshall Cox, the founder of Radiator Labs. Radiator Labs invented the Cozy, which is a smart radiator cover to prevent overheating in rooms due to radiators so people don’t have to open their windows in the winter, landlords don’t over spend on heating and all this while being able to control the temperature from a smart phone. We go in depth about that ubiquitous New York City item of the radiator and at the end we even discuss why they sometime make that obnoxious clanking sound. So you won’t want to tune out. Marshall estimates that $1.2 Billion per year is spent on overheating and he might know since he’s a PhD from Columbia.
If you’re a new listener welcome, and if you’re a returning listener thank you for coming back. I would love to hear your opinion on this new format with an introduction. Now, let’s go to the interview.
Stepping on to the Launch Pod we have Marshall Cox who is the founder of Radiator Labs. Thank you for stepping onto the Launch Pod, Marshall.
Marshall: Excellent. Thanks for having me.
NYLP: So what is Radiator Labs?
Marshall: Radiator Labs is a company that essentially is trying to eliminate the overheating in older buildings. And getting into some more detail, the overheating is actually indicative of an enormous amount of waste in these older buildings. Actually, it’s the single largest line item waste in US buildings, steam heat, which is what heats the majority of buildings in New York City.
NYLP: So you developed a product that covers radiators in older buildings.
Marshall: That’s right.
NYLP: What are you defining as older buildings?
Marshall: Older buildings are ones we define as those built…essentially built before World War II and this gets into the arcana of steam. A lot of buildings in New York City are heated by steam and a lot of them are that old. And the reason is because before World War II, we didn’t really have good water pumps or good fans. Those systems weren’t really reliable. So the only good way to heat a big building was to boil water in the basement and let that steam rise through convection through the pipes and heat the spaces. The reason why we now have buildings and these buildings are overheated is not because steam is bad, steam is actually great. When these buildings were first built, they were amazingly well built, they were really well balanced. And then we invented double pane insulating glass and when we pretty much universally retrofitted our windows…an apartment with two windows versus an apartment with one window, you completely change those windows and now they need completely different amounts of energy. But they’re the same radiators, the same pipes and so you basically have to cater to the coldest, worst apartment in the building and when you heat that apartment up, the rest of the building gets disgustingly overheated and the only thing you could do is open your windows.
NYLP: Well, I love the concept because in New York everyone thinks radiators…they seem like radiators are all over the place. How many buildings do have radiators in New York City?
Marshall: That’s a tough question, actually. We spend a lot of time looking through city data, census, etc. There’s hundreds of thousands of buildings in New York City. We actually know the number of radiators more or less and you can decipher that from how many rooms there are in apartments. There’s about 10 million radiators in New York City, 10 million steam radiators. So there’s a lot.
NYLP: And it feels like everyone has had an experience living in an apartment with a radiator or an office or something like that.
Marshall: Yeah. I know. It’s one of those New York City experiences. There’s a lot of tourists, it’s loud, sometimes it’s dirty and you live in a sweltering hell hole in the middle of winter.
NYLP: Why did double-pane glass mess up everything? You talked a little bit about it but these older buildings, they get really hot in the winter. If we just replaced all the windows that were single pane with double-pane, shouldn’t everything just be more efficient? Why did everything get thrown out of whack?
Marshall: That’s a good question. The reason is that windows, single pane glass, leaks more energy than your brick wall. When they were sizing the radiators to different rooms, it was really a question of, “How many windows do you have?” And double pane insulating glass is really, it’s a huge advance in insulation over single pane. It’s almost as insulative and sometimes you can get crazy ones that are more insulative than your wall.
NYLP: What exactly is this product? It’s a cover that goes over the radiator. How would you describe it?
Marshall: So the cover…Radiator Labs Cozy, is a smart radiator enclosure. And we get this question all the time, no one understands how this works. And the very quick answer, which is engineering parlance is, “We’re using this cover to thermodynamically manipulate the condensation of steam within individual radiators”. I can use another terrible analogy here. If you are taking a camera out of an air conditioned home into a hot, outdoor area, you might have noticed that the lenses get fogged up. That’s because, cold surface…if there’s humidity in the air, a cold surface will condense that humidity onto itself. In a steam system, a similar process happens. You’re boiling water in a basement. That steam travels to cold surfaces and condenses on those cold surfaces. That’s actually the majority of the energy that’s transferring from rooms. It’s the condensation of steam. It’s not necessarily that the water is hot, it’s that when steam turns into liquid, it transfers a lot of energy in that process. So when we install these covers in rooms, the way that we’re controlling how much heat transfers to those rooms is, we control the air temperature inside the enclosure. So hot air rises and our covers block that hot air from rising and then we can re-establish with a fan. So if you’re in a room that’s historically overheated, we put this cover on, our fan doesn’t turn on because the room is perhaps overheated and the air inside the enclosure heats up very quickly to a very high temperature and that temperature is steam temperature. And when the air inside the enclosure is steam temperature, the steam inside that one radiator can no longer condense. And so the steam system is trying to heat that coldest apartment and in a normal building, they’re condensing steam everywhere because every radiator is “cold” relative to steam. But when we install the Cozy throughout a building, in those hot rooms, we can basically make the radiator look very very hot so that steam does not condense in a hot room, it travels to the colder room. You’re not wasting steam condensing in places you don’t need to and so you more efficiently get steam to the cold places that you need.
NYLP: Now, we didn’t talk about this at the outset but you’re a very smart guy, PhD in Engineering. Let me see if I can translate that in layman’s terms.
Marshall: Please do. I would be…I would use it a lot.
NYLP: I did a little bit of research about radiators so you let me know if I’m doing this correctly. But basically, a boiler will heat up water into steam and make that steam touch a radiator which will heat up the entire room. And with your enclosure, you’re able to make it essentially air tight. Before a room overheats, the steam will go to another room.
Marshall:It’s close.
NYLP: It’s close.
Marshall: Yeah.
NYLP: Where did I mess up?
Marshall: It is complicated. We don’t need it to be airtight. All we have to do is be able to control whether air rises or it doesn’t. So the way we do that is, we have a little fan and when the fan is off, hot air can’t go anywhere so the air heats up, it heats up and that’s how we affect the condensation rate of steam. And then when the room is cold, we turn that fan on and we kind of blow cold air over the radiator and on to the room and that will eventually turn that heat transfer on. So our systems are measuring room temperature and radiator temperature in real time. If the room is cold and the radiator’s hot, that fan turns on and otherwise, the fan is off. There’s more complexity to it than that. All the systems are connected to the internet so we can take all that data and we optimize…we tell the building’s boiler to turn on or turn off, we control that. So we can use things like, it’s going to get cold in a few hours or it’s going to get really hot in a few hours so you should probably change the amount of heat you’re generating right now because the building has a huge thermal mass and it will overshoot if you don’t do this. So we know way more about what the building needs than what we’ve ever had before and we’re able to control it. Basically increase the efficiency by dramatic amounts, all while giving temperature control to tenants for the first time in the history of these buildings. So that’s an integral part of what we do, we give everybody an app that they can control their temperature with. I’d never been able to do that in my apartment before I invented this. It’s pretty uniquely, powerful thing to have that it’s amazing that we don’t have.
NYLP: So now that the building is connected to the internet, if it’s going to get colder out, for example, will you know over night, okay, time to fire up the boiler, time to heat up the building before it gets cold so that the air goes throughout the building?
Marshall: Sure. You can do that and I would call that a second order effect and what I mean by that is, it’s actually…it’s not a big deal that it’s going to get warm or it’s going to get cold the next day. It’s catering more to the moment than to what’s going to happen in the future, not because it’s not important but because it doesn’t have a huge effect. That being said, the real thing you’re driving to is, “What is the temperature in the building right now?” And obviously, our system tries to balance that out. Does somebody want a night set back, does somebody not want a night set back. Basically, let’s make sure that the boiler’s giving enough energy that the building needs right now and then it’s not overheating it. There’s a subtlety that our system works that kind of gives us more control than what the building has right now beyond just turning on condensation. And that is that every time we install a cover on a radiator, we’re essentially creating an energy storage device. In a normal apartment, say yours or mine without a cover, the room gets cold, let’s say the boiler’s catering just to you, and so it turns on, you put on your radiator, it gets really hot. Your room’s going to heat up to whatever temperature you want, say a comfortable temperature but then you have a 100 degree Celsius, smoldering mass of iron in your apartment that overheats it and there’s nothing you can do to stop that. If the radiator’s hot, it’s going to heat up your room. In our scenario with our Cozy, you heat up the radiator, the room heats to whatever temperature you want and now you have this 100 degree Celsius hunk of metal inside a cover which can store that energy for anyone who needs it. In a normal unmodified building, when the boiler turns off, the radiator gets cold and your room’s going to get cold. And so there’s this overheating, underheating, intrinsic temperature swing that you have to experience, there’s nothing you can do about it. In our system, we can heat up the radiator, get your room to the right temperature, keep it there and then when the boiler turns off, we have this energy reservoir we can draw from slowly over time to keep your apartment at the right temperature to bridge the boiler off time. And so we can actually keep your apartment, not only at the temperature you set, but we can do it consistently with almost flat line accuracy.
NYLP: And how can I set the temperature in my room, in my apartment, with a radiator that I’ve never been able to do that before? How are you able to do that?
Marshall: The default system set point is 75 degrees. Some people want it lower than that but what we do offer is a free cellphone app that lets you control the temperature much like you would be able to control with the Nest thermostat for example if you’re familiar with that.
NYLP: And is there any leakage from the unit at all? You mentioned that it’s important.
Marshall: It’s actually a part of the design. We don’t want our fans on 24/7 whenever heat is needed. You can insulate the cover to whatever extent you want. We insulate it to a certain amount so that heat leaks out at a rate that’s more or less necessary during a warm winter’s day. And perhaps, more so, we insulate it so much that temperature of the surface never exceeds a comfortable temperature. You touch your radiator, you’re not going to touch it again because you’re going to burn the crap out of yourself. We insulate it so the cover never exceeds a comfortable warm temperature.
NYLP: How did you come up with this idea?
Marshall: You mentioned I’m an engineer. My expertise is actually in a really weird field which is organic semiconductors. If you ever heard of an OLED TV, I was part of that research field for a very long time, but I lived in a hell hole. My apartment was just outrageously hot and I complained…actually, this is a good story. I lived in this apartment for three years, up at Columbia. And I just acquiesced to the fact that I lived in a miserable, hot apartment in the winter and didn’t really do anything about it. I complained but I didn’t do anything about it.
NYLP: For three years, you didn’t do anything.
Marshall: That’s right. And then, I have a twin brother who is a professional ballet dancer, he’s actually pretty famous, he danced in the Miami City Ballet. He was a principal there for almost 10 years. And then he quit and moved to New York to dance in a Broadway show. So he danced in Twyla Tharp’s Come Fly Away show. It was a new show so you never know how long they’re going to last and he slept on my floor for six months and did not stop complaining. Just everyday it was like, “Why? Why is it like this?” And he was next to the window so he bore the brunt of the unfortunate-ness of the overheating. Essentially because he…
NYLP: Because it was hot and then the window was cold.
Marshall: Exactly. He was a very unhappy person and for good reason. He was on an aero bed so it was not the most comfortable situation. Anyway, so based on that, his complaining, I internalized those complaints and talked to…my advisor at Columbua and he and I kind of thought through a solution and I built it. I actually built it overnight and it worked.
NYLP: Overnight?
Marshall: Yes. It was really easy to build. There’s this cool thing called an arduino which is a hardware hacker tool. And if you know how to use it, and anyone can learn how to use it, they’re amazingly easy to use, you can build an electronic system trivially. And so I did that, I attached a fan to the arduino, I attached a thermostat to the arduino and built a insulating cover out of, I would not advise doing this, a foil-faced bubble wrap with duct tape as the thermostat in my apartment. Though my apartment reeked of duct tape for days and that was horrible, the temperature was just like a dream. It was perfect and that basically drove me to, “Wow. This could be something”. And so I looked into my top tech at Columbia university. I think the real catalyzing moment was, we competed in and won the MIT clean energy prize in 2012. That was a little over $200,000. And we used that to basically develop the first real system and then went on to save energy.
NYLP: It’s no longer made out of foil, bubble wrap and duct tape. What is it made out of now?
Marshall: So now, it’s made out of what’s called Galvasteel. It’s a steel that doesn’t rust. It’s metal and we have a few, this very large metal fab that can bend, weld, they can do electronic components and then ship to whatever buildings we need to install in.
NYLP: How long does it take to install the system?
Marshall: The installation is very quick. So it takes about five to ten minutes on a good radiator. Of course, we always run into you have to move stuff, you have to negotiate with the tenant, you have to make sure they’re home and it could take longer than that. But you open an apartment with a radiator closure and five to ten minutes later, you’ll be done.
NYLP: What if there’s stuff over their radiator? Are there pipes that are in weird places or let’s say that some of the older buildings, I’m sure you’ve seen this, have built-ins already?
Marshall: Oh yeah, absolutely. We do a bunch of things. Some buildings we don’t just do, right now. So baseboard for example. We don’t have a cover for baseboard yet, it’s in development. So we come in, we look at the radiator, we measure all of them. The survey staff identifies all those issues. If there’s a cover there, we typically like them to remove them because it’s a cover that doesn’t do anything and we have a cover that does. If they’re really tied to them, if it’s a beautiful built in mahogany, amazing cover, we can install underneath it usually. We have ways to solve the problem in almost every situation.
NYLP: So once you developed the prototype from duct tape and bubble wrap, what was the next iteration?
Marshall: The next iteration was a fabric cover. There’s a pretty robust community in New York that helps startups, matches them with producers. And so we found a bunch of people who could make fabrics, who would pad fabrics. We tested them to figure out what fabrics work for this situation and we basically used what I would say glorified oven-mitt to make the first covers.
NYLP: And that’s what won the MIT prize?
Marshall: Actually, it was before that. The MIT prize, if anyone listening has a start-up or an idea, I would encourage them to compete in business plans and particularly, if it has clean energy aspects to it, the MIT Clean Energy prize, which I think is the best business plan competition in existence. We went to that prize and presented essentially horrible data. Data showing that nothing was working, a data set that was…I was pretty depressed to present but, we said, “This is the data we got. This is what we learned from it and this is how we fixed the problems we had”. And that was a really compelling message for them. I think that’s why we won. It was before the fabric and more sophisticated communication and control that we went to MIT Clean Energy prize.
NYLP: What was wrong with the data then?
Marshall: It’s funny, I still remember we got a … I think it was one of the first media things we were talking about, the first articles actually where I was describing some of the problems. One of the problems is we chose this really loud fan and it was annoying, super annoying and people were really angry about that. And I remember one of the comments to the article was, “What is wrong with you? Of course the fan’s a big problem”. And it’s amazing that I wasn’t really thinking about it, “Oh, the sound of the fan, we really don’t want to annoy the crap out of people”. Yeah, that was a problem. There was issues with the control of the boiler. Actually, one of the buildings, the boilers just broke on for three months. The boiler was on for three months. We’re telling people that it was on, it was just not addressed. There’s a lot of those crazy things that happened like that but it was all worthwhile, I guess. It was not a good data set but it helped us get to a good data set.
NYLP: How many iterations of the Cozy until you got to the product that you have now?
Marshall: I’d say five, five or six. All the iterations are big. The first fabric version I sewed myself, I learned how to sew, I bought a sewing machine that I don’t know where it is anymore, that’s kind of sad. And the first fabric version was different from the second fabric version because we used a different fabric. We iterated on the system that in-houses the fan. We iterated on the PCB every single time, the Printed Circuit Board that is the brain. We iterated on the data capture and/or the server that nowadays is a pretty sophisticated DynamoDB. It takes it in, it facilitates connections to other databases that connect to the cell phone, that connect to our dashboard which analyzes all the information to try and extract useful information. Every step is not necessarily large but significant.
NYLP: What do you need to install Cozys in a building?
Marshall: This kind of gets to how we sell. Today, we sell to whole buildings and that’s because one of our value propositions is saving energy and to save energy, we really need to deploy this in a majority of the building. The process is now, find a building owner that wants to do this, we go and survey the building, and you have to remember that every radiator is a different size and shape. It’s dramatic, the number of variations we see out there. This gets into more of the steam arcana. So a lot of these buildings were built by Bob in Brooklyn, in his basement for decades and then Joe, maybe in Queens, was building his own radiator. And this is back, a long time ago. So all these were built before standardization. There are crazy variations we’ve seen. We really have to go into every apartment, measure every single radiator and then we build a cover specifically to cover that radiator. So survey happens, we build them, we come back and we install them. That’s the process.
NYLP: So the whole building needs to have your product in order for it to work?
Marshall: The majority, I’d say over 70%. We get emails all the time, people want to install this in their own apartment and we can’t sell them to those people yet, although we’re working on it, because there’s a lot of complexity. Can we trust the consumer to measure the radiator with the accuracy that’s required? There’s a lot of weird stuff that you really have to be careful of. Is the window sill overhanging the radiator? Is there a pipe that needs to be measured? How do you measure a pipe right? So can we trust the consumer to measure it accurately? That’s a question we have to answer. Can we rely on the customer to install it? Probably, but it’s going to require a lot of instruction and if they do it wrong, they’re going to be really upset. So we don’t want to get in a situation where someone self-installs, it’s not working and they call us on the coldest day of the year when we are working to make sure all our buildings are working. So we’ll do that at some point but not yet.
NYLP: And all the apartments need internet access?
Marshall: Actually, no. There are two things we hate right now. One is batteries. Hate batteries. The other is relying on people to connect things to the internet with data that we need. We don’t have batteries, you can’t actually have batteries on the radiator because they can’t survive the temperature, so we plug into the wall. That’s actually a big limitation for us. We really need a wall outlet. So that’s not a problem. We really have another problem, big problem. The other limitation is internet connection. What we actually use is something called a ZigBee wireless radio. The Nest has a couple, actually more than one which is weird, but essentially the way it works is, a radiator talks to the radio next door which talks to the radio next door all the way down to the basement. And there we have this central, what we call gateway, that brings all that data and connects with the cloud. So it uses what’s called mesh networking.
NYLP: You only need one internet connection to set up an entire building and everything else. And then is it difficult to set a boiler up to an internet connection as well?
Marshall: Yes and no. The answer is really, some buildings already have it. A lot of the newer boiler controls are already internet connected and if you’re a building owner and you have a dashboard that shows you what’s going on, you’re connected already to us. We speak to boiler controllers through the internet. We even put some of the bigger boiler controllers out there but if you’re in a building that has an old system that does not have an internet connection, you have to upgrade it to work with our system. And there’s some compelling reasons why you should do that anyway.
NYLP: And so what does all this cost?
Marshall: That’s a great question. So right now, we are selling more or less the covers for about $500 each. Some landlords, some building owners are okay with upfront costs. For those who aren’t, there’s financing available. And there’s also a lease model that we’re developing right now. We’re trying to cater to every kind of building owner, whether they have a large capital capability or if they don’t.
NYLP: And what’s the savings?
Marshall: The saving’s varied. It’s a question we get a lot. If you go on a diet and you’re rail thin, you’re not going to lose much weight. If a building is efficient already, we basically tell them, this is a value proposition that is mostly comfort. If you want to give control to your tenants, if you want to be able to see all the analytics that we provide our buildings, that’s why you should buy this. Obviously, there’s a lot of buildings that are inefficient. And for those buildings my proposition is, you’re going to save a ton of energy and it’s more compelling. We have a few buildings we’ve done so far. We’ve done about 12 buildings with about 1500 apartments. We’re doing many more this year. We had our first third-party verification report come out and I believe you saw that. Some buildings up at Columbia University, where I invented the technology actually, those buildings save one… actually, we have our own internal report and we have a third party report. Our internal report says that one building saved 24%, the other saved 34%. The verified results say that both buildings actually saved 41% off their heating bill. So you have to understand the parlance that goes on here. Your heating bill is what energy is used for heating and then your energy bill usually includes heating and hot water. So, the third party results say that including hot water, we saved 23% and at least 26% but that’s including something that has nothing to do with heating. Our results say it’s 24/34% without the hot water as well.
NYLP: If someone’s investing $500 per radiator, what’s the time horizon until a building owner would see payback?
Marshall: That’s actually a complex question as well, I’ll try to answer it. It’s energy costs and it’s how efficient the building is and it’s what fuel the building consumes. So, if you’re on natural gas, natural gas is super cheap right now. So paybacks could be five, ten years if you’re just selling it on that one value proposition. If it’s oil, it could be three years, it could be five years, it could be eight years again, depending on what the building is experiencing. If it’s district steam, district steam is crazy expensive, it could be three years, it could be one year. It really depends again, on how much energy we can save, what the building’s like etc.
NYLP: When you talk to a landlord, a building owner, what do you say to them?
Marshall: Whenever we talk to somebody, they’re usually coming to us because they have a problem. One of the nice things about working in this market, at least in the context of sales, is that a building owner walks by their building and the thing they see in the winter is all the windows open and they’re like, “Why? Why are they doing that? I’m paying for fuel”. So this is actually another arcana about steam. It’s really hard to submit your steam so while you might part-pay your national grid gas bill or your electric bill, no one can really measure how much steam you’re consuming, and so your rent pays for your heat. All that is to say that your landlord is paying for heat, they’re paying the fuel bill. So they see the winter open windows and they go crazy. So they come to us, they ask us, “What can we do?” We tell them, “Your building may or may not be overheated. If you have indications from your tenants that they’re boiling in their rooms, that’s a good indication but let’s start out by going into your building and making sure that it’s good fit for the technology”. We use the data that’s available to measure, “How efficient is your building? How does it compare to other buildings?” And then we can come back to the building owner and say, “Okay. This is what we think we can do in your building. There’s things that are in our control but if your building has intrinsic problems, if the radiators aren’t tilted right, if all the air vents are broken, if the steam traps are broken, we don’t fix that. We’re not going to install Cozy and magically make these problems disappear. So you really need to have a well-functioning building before we can try to address, start to address these heat imbalance problems. We try to approach them with this holistic solution, “These are the things that we’ve seen that are wrong with the building. These are the things that you should do and we have partners that can do this work as well. And then here’s the Cozy solution”. So, I think, our story is we’re going to save you energy that’s almost without question. How much, is the question and then how much is that worth to you versus all these other ancillary benefits we provide, comfort, control and building analytics that did not exist before.
NYLP: Well, particularly when you get especially cold days in New York, a landlord is skeptical and says, “This is going to pay back in five years, why should I do this?”
Marshall: Five years is actually a pretty good pay back for a building. Our perspective is, you shouldn’t be looking at this just solely from, “How long is the payback?” Because there are things that we offer that go outside that. We take over the heating system. We’re running the building to be as efficient as possible. We’re looking for problems in the building. We’ll tell you…we’ve told our customer, “Hey, apartment 4D, the radiator just stopped getting hot and your tenant is going to start complaining soon. This is why the radiator stopped getting hot”. So we can actually pinpoint very small problems in the building, depending on whether you want to be not told if there’s problems like that, we can identify larger problems. Sixth floor maybe, your top floor in your building is the weakest part of your building by far. If you insulated your roof, you’d save a ton of energy. So basically, taking over the heating, providing a holistic oversight to it, is of significant value to people. So people…it’s funny, we talk to some people who couldn’t care less about the comfort of their tenants. That happens unfortunately. We speak to people who only care about the comfort of their tenants. And so it really comes down to what matters to the building owner and it’s fortunate that we have value at every angle there. There’s this interesting phenomenon in energy efficiency which is the split incentive. And the split incentive is most things that increase efficiency in buildings, do so at the expense of someone or something. And typically it’s, “I’m going to make you uncomfortable, but we’re going to save you a ton of energy, isn’t that great?” Fortunately, Radiator Labs does not have that problem because the inefficiency we’re carving out for the building is gross, unnecessary waste. So we’re making people more comfortable while getting rid of this waste that really is almost unconscionable. I can throw some numbers at you. In New York City alone, $1.2 billion worth of fuel is wasted every year due to over heating. Imagine taking $1.2 billion of any fuel, any fuel you want, and burning it in the streets. That is literally what’s happening because when our buildings consume heating fuel, they combust and let it out into the air in which you breathe. You’ve probably seen those big black plumes of smoke come out of the building, that’s a boiler. You’ve probably cleaned off of your windows black soot, that’s from boilers. Eighty percent of that is from boilers, it’s not from cars.
NYLP: Why is the city not getting more involved in this? $1.2 billion, are they looking to subsidize these sorts of things?
Marshall: Absolutely. It’s one of the biggest problems in New York City in terms of energy efficiency but it’s really hard to fix. There’s been technology out there for decades that purports to address this. You can fix a building with plumbing, you can do it. It’s really hard. One of the guys who is probably the most well-known in this industry is Dan Holly and he wrote a book called, “The Lost Art of Steam Heat”. And basically the thesis says that a lot of people in this industry talk about the dead men which points to the fact that most of the guys who know how these systems work are dead because they built them in 1910. So we have these old buildings, they’ve been running like this, since anyone who owns them has owned them. Do they actually recognize it as a big problem? Probably not. The city does and one issue is, can they mandate fixing this for them? That’s a big draconian step. Can they try to incentivise and support the industry? Absolutely.
NYLP: Are there subsidies right now available?
Marshall: There are for natural gas. There are not for oil, there are not for district steam. Those are fuels that are more expensive and right now we’re in kind of a fuel price minimum. I’m not going to say, “ideally” because low fuel prices are great for a lot of reasons but they’re not great in the context of convincing people that efficiency matters. When prices go up, it’ll be a much easier sell for an efficiency product. When prices go down, you have to start making your own stuff.
NYLP: Do you have any competitors?
Marshall: In terms of smart radiator covers, no one does what we do, which was a very big surprise. When I installed the first one in my apartment, I did some research. The competitors are mostly plumbing solutions. Again, there’s people who put a lot of effort and a lot of research into these plumbing solutions and you can make them work, you can. We think that there are some situations where the Radiator Labs Cozy is not only the best solution but the only solution. An example is single pipe steam. The competitor to us is a TRV, a thermostat radiator valve. I might get in trouble for saying this, but some people call them Danfoss valves because Danfoss is a company that makes this kind of stuff. And when I put that comment on our website, we got a cease and desist from Danfoss. TRV’s work for two pipe steam. You can do it with a really in-depth and careful installation partnered with what’s called an orifice plate. For single pipe, there’s no other solution. So if you want your building to be efficient and have control, it’s Radiator Labs. If you have two pipe system, you can potentially increase efficiency with TRVs and orifice plates but you cannot get control. So if you want to control your temperature and you want high level insights in your building, we’re really the only game in town.
NYLP: And I was looking at thermostatic radiator valves in research and they are not that expensive to purchase.
Marshall: That’s right. They’re pretty cheap. Although there are some that are…the more sophisticated and well operating ones are a little more expensive. The installation is the most expensive because you need a licensed installer to install them typically. The real Achilles heel of TRVs is that steam is an extremely caustic material. When steam condenses, it’s pure water and pure water does not stay pure for very long. So it really leaches stuff out and drives a lot of chemical reactions immediately. So the lifetime of TRVs is typically two to four years. And once they break, they need to be replaced and there’s really no way around that. There are a few advantages we see to the Cozy, one of them is maintenance.
NYLP: The cost of a TRV, to purchase is what, about $50?
Marshall: That’s probably right, yeah.
NYLP: And installation is how much?
Marshall: It’s probably about $150.
NYLP: And with the Cozy, how long does that last?
Marshall: The only moving part in our enclosure is the fan. We use what I would call the Rolls Royce of computer fans. They’re designed to be in a hot environment in a computer. They’re designed to last forever. I think the mean lifetime to failure is eight or ten years which means some will fail year one, most will fail after eight or ten years and some will last, the rest of your life. That’s the only thing that could break really.
NYLP: Do you have a patent?
Marshall: We do. That was one of the things I alluded to before which is surprising, is that, there isn’t any literature out there on the unique things we’re doing here is we’re insulating the enclosure. And we’re basically manipulating the insulation with a thermostatically controlled fan. And no one’s done that before. We have patents that’s in process for the US and Europe. It’s just that people overlooked the impact you could have by again, manipulating the thermodynamic equilibrium.
NYLP: Why do you think no one thought of this idea before?
Marshall: I think the big issue is that…not an issue, but I think that people who are in the know with steam systems are people who know a lot about plumbing and they know about building systems and how they are now. They’re not necessarily people who are thinking about condensation of steam as it relates to the temperature of the room or manipulating that temperature outside of it. They’re thinking about valves and things that can affect the flow of steam directly when there aren’t significant advantages to controlling the secondary effects of both those systems.
NYLP: People are thinking about the trees rather than the forest.
Marshall: That’s right.
NYLP: And so, when did you think, “I’m onto something?”
Marshall: When my room became a paradise. Everybody I knew had that problem. I talked to my parents who live in New York City, they thought it was great too. This is actually funny, I propositioned my brother who was like, “Who cares? Radiators? Why would you ever spend time on radiators? No one cares about that”.
NYLP: Your brother who complained about the room?
Marshall: No. This is actually my brother. I have a second brother. Now, he’s actually an investor so I convinced him. I think the fact that it was a huge problem in my naivete, I thought that no one had a good solution. People really care about this and they put a lot into it. I think this is another tool in a tool kit that now is the only solution for some and a great solution for others.
NYLP: So you’ve estimated the number of radiators in New York. What about radiators all over the country? You have the patent in Europe too. How many of these radiators are there around the world?
Marshall: There’s about 120 million in the US and that includes commercial. It’s much harder to measure how many commercial radiators there are. The American Housing survey has so much information on residential stock. There’s about 60 million radiators in the US, in the residential side. And this is all bigger, older cities, mostly in the Northeast area of United States. You’ll find it in Colorado, you do find it in San Fran but they don’t have much heating. And then over in Europe, a lot of the cities…a lot of the countries rebuilt significantly after World War II and so a lot of those buildings that had steam were destroyed. After World War II, hot water made a lot of sense. There’s a lot of consensus over hot water. Our system works for hot water although TRVs work great for hot water. So is our solution better than TRVs? If you look at price, not right now. Eventually, maybe. Do we offer more services? Potentially, but something we’ll look into in the future. Very big markets for steam not America, are actually Russia and the Ukraine. Not the best markets right now but maybe one day.
NYLP: And you participated in an accelerator MetaProp?
Marshall: Yep.
NYLP: How was that?
Marshall: It was great. The MetaProp team is a really good team. I like those guys a lot. They have a very different perspective on the world than I do. I’m a huge nerd. I’m an engineer. I’m very technical. They are…and the MetaProp accelerator, in particular, is very sales focused and it’s really nice to be exposed to such a different mind set, and very illuminating.
NYLP: So you brought up sales. How are you going to generate sales?
Marshall: We have a sales team now hence we have collateral, we have that third party verification. We know most people in the city have this problem. We are identifying who are the people we want to approach to see here. We’re trying to generate buzz and have people come to us.
NYLP: Are you doing cold calls for landlords or networking? How are you reaching…?
Marshall: It’s mostly networking. Some of our current customers are some of the biggest landowners in New York City. I don’t want to name names but you would recognize all of them. We try to make them happy and once they’re happy, we try to have them introduce us and that’s happening. I have a COO, Dave Yeskel, who has been in the industry for a while in New York City and knows a lot of people. So we do a lot of outreach to people we know through the people I know etc. It’s a small world, real estate in New York City and that works in favor for some people and we’re one of the people.
NYLP: Is most of your product sold in New York?
Marshall: It is entirely in New York right now. We’re a small company, we’re a young company. We’re growing fast but we do not want to spread ourselves thin. Not only are we not selling outside New York right now, we’re capping the number of installations we’re going to need to do this year. So we’re not going to install more than 10,000 units, which sounds like a lot but actually isn’t. It might be in 40 buildings. And we’re doing that because we can probably sell a lot more than that but can we actually carry through and do a great job for these people if we’re doing 50, 500 buildings? The answer is probably no. We have to build a system to be able to handle that many. So we want to keep it small this year, do a great job for the people we do work with and then build a process to be able to do a great job for more people next year.
NYLP: Have you sold out for this year?
Marshall: We have not sold out yet. Again, it’s August. We still have systems available although for how long, I don’t know.
NYLP: Talk a little bit about the benefits of starting your company and solving this problem in New York City and what that’s meant for you.
Marshall: New York City is a very interesting place for tons of reasons. In the entrepreneurial world, there are few places that people talk about in America and obviously, the archetypal location is Silicon Valley. People talk about Boston, people talk about New York. I’ve been around the entrepreneurial environment for now almost seven years and it was a different place seven years ago, particularly as a clean tech start up. It was a dirty word for a while but things have changed dramatically. When Radiator Labs first started, there were not many incubators out there and there weren’t many accelerators for tech…I wouldn’t say tech, hardware companies, and now there are. A lot more money available, a lot more investors who are looking at the space, a lot more resources from… Columbia University now has an incubator. The ACRE is great, that’s where we really started. Now there’s START-UP New York. Ecosystem is gaining speed, we’re actually working to be eligible for START-UP New York which has great tax incentives. It’s a great time, I think, to start a company. I think the ecosystem here in New York is pretty strong.
NYLP: Where’s The Cozy manufactured?
Marshall: The Cozy is manufactured entirely domestically. We get our fans from…America does not make computer fans, but beyond that, we get our sensors from California, we get our circuit boards made in Maine. We get a lot of our injection molding done in Florida, our metal covers are made in New Jersey, our fabric covers are made in New York state, upstate. We try to do things in New York City when we can, it’s impossible for some things, it’s hard for others. There’s a lot of things you can do in the United States if you want to. There’s pluses and minuses. There’s very good reason to keep it close because you can call them on the phone and you can get stuff built very quickly and shipped instantaneously, more or less.
NYLP: Where’s everything assembled?
Marshall: Things are assembled in the factory in New Jersey.
NYLP: What would your career have been like if your brother didn’t overheat in your room?
Marshall: That’s a really good question. I don’t know. I feel like I still would be in the entrepreneurial world, in some fashion. It certainly wouldn’t have anything to do with radiators, which is always surprising to me. I know more about radiators now than I ever imagined I would. And, in fact, I was mentioning to you on the way in, it’s a blessing and a curse. I share this curse with others because I think it’s funny but, I do not…I cannot watch any movie or any TV show without me really noticing every radiator in every scene. My fiance would probably…
NYLP: And trying to cover it.
Marshall: Yeah. If they’ve got covers, it would be like, “Hey, radiator”. It’s a common refrain in my household.
NYLP: So maybe you can answer this riddle, if you know so much about radiators. Why do radiators make that awful clanking sound and sound like they’re about to jump off the wall and attack someone?
Marshall: There are a few reasons, a few root causes and they don’t have to necessarily overlap with each other. One could be radiators that are not properly pitched. So if the water can’t leak back out of a radiator internal tubes, it can accumulate and then steam comes in and it bubbles and it makes a popping noise. And the steam is coming in or it’s coming out and it sucks and gurgles. There are a lot of pressure differentials that are created in these systems when it happens. Sometimes, and this is actually one of the big causes, people think that, well if their apartment’s hot, they can just partially close the valve and that will get less heat to them. Actually is a pretty big fallacy. If you close your valve partially, it doesn’t do anything for the amount of heat that gets to your room but it does cause that banging noise. And the engineering explanation is that when you have a very small orifice through which steam will get through, steam will through no problem, it’s gas, but the water has a very hard time getting back through. So when the water, you know the meniscus in our cups here, water likes to attach to stuff with hydrogen bonding. And when it gets into a very small aperture, it forms basically a water plug. And then you’re condensing steam in your radiator but steam is being supplied in the pipes and you build up a pressure differential and that water plug pops and then you get a bang. And what forms is a confluence resonator so that pressure change translates into the radiator back into the blast, back into the radiator and that’s the twanging sound you’re probably familiar with. And there are sometimes just heating and the pipes cool down and heat up. After a while pipes expand and that can cause that snapping noises you’ve alluded to.
NYLP: So don’t partially close the valve.
Marshall: Do not partially close your valve. It’s actually one of the things people ask us a lot, “Do you guys solve the banging noise?” The answer is, “Maybe.” If you problems are intrinsic to the pitch of your radiator as to some weird things that could be going on in your building, no. But if it’s because people are partially closing their valves, when we install the Cozy, we open all the valves and then we more or less tune the radiator so people can’t get to it or have no need to. And if that’s the cause, then yes, we do reduce the noise.
NYLP: How do people find out more about Radiator Labs?
Marshall: The easiest way is to go online. We are a, I’d say, problematically commutative team so we communicate with everybody. People email us, we’ll get back to them. We are very happy to go into great amounts of detail into what we’re doing. We really like engaging with the community. So someone wants to learn more, we are happy to speak with them in person, on the phone, whatever they want.
NYLP: Marshall Cox, thank you for stepping on to New York Launch Pod and sharing your time with us. I hope that you cover all the radiators across the world.
Marshall: As do I. Thank you so much for having me.
NYLP: And if you want to learn more about the New York Launch Pod, you can visit nylaunchpod.com or follow us on social media @nylaunchpod.
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