Measuring what Matters with Matt Ellis of Measurabl

Startups get the party Startups get the party started. Startups get the party Startups get the party started. You want tech and tacos, tacos and tech you know we got tacos and tech is on smash border green guacamole keeper countins counting beans Contador quentan frijoles found us trying to raise some queso la vida San Diego school of rappy rapping fire tortillas round jalapenos in these modern times a crappy beer and coffee my coding yoga posse fold the body origami we be surfing coronado eating tacos El gordo the taco stand in pesto lucha libre and sombrero Got a shout out to cost angels by the ocean watch the sunset la Hoya shores Entrepreneurs trying to get funded when San Diego Startup Week is popping in the summer Oceanside, the Tijuana esti be full of hustlers from couch surfing to penthouses right on the beach Tech leaders who you believe stars are within reach we interview and founders who be shooting for the Moon SDTechOS with your host Neil Bloom. Startups get the party startups get the.

Welcome to the Tacos and Tech podcast where we discover cutting edge San Diego technologies and the builders making it happen. I'm your host Neil Bloom, San Diego's Tech Ambassador and together you're going to put a face to the name of today's tech leaders with our own blend of local lifestyle. This segment is brought to you by Cox Edge. Our longtime partnership with Cox Business has helped their engineering teams develop new tech products for small businesses and startups. Cox is investing in Edge capabilities and working with developers and engineers across the ecosystem to deliver ultra low latency compute solutions, helping customers to improve application performance and to reduce cloud transport and on premise infrastructure costs. Interested in hearing more about Cox Edge? Please visit coxedge.com and mention Neil Bloom or freshbroodtech.com for our partner discount. Welcome back to the Tacos and Tech Podcast. I am your host and I am thrilled to have another episode of the Talkers and Tech Podcast here with Matt Ellis, CEO of Measurable. Hey Matt, thanks for being on the pod.

Hey Neil, good to be here.

Yeah. I am thrilled to have you on. Tell your story a bit about Measurable. We previously had Nicole on Finance Extraordinaire but I'd love to hear the founding story and the journey as the entrepreneur from your end too, which we're going to get to. But do you want to give us a quick one minute overview of what measurable is?

Happy to do it Neil. So Measurable is the world's leading ESG software for commercial real estate. What that means is we help real estate investors think of REITs or asset managers, Measure, manage and report on sustainability. Utilities, energy, water waste regulation around carbon disclosure, physical climate risk exposure, floods, hurricanes, wildfire project investments like renewables and H vac optimization. All of that is going into our software. And out the back end is coming investor reports and data products to help the real estate community identify green buildings and invest money better.

That's awesome. It's such a more and more relevant conversation to be having around sustainability and environmental aspects. Especially, we're going to talk deep about what the pandemic has done to this, but also just that businesses care now more and more every day, it seems like it. And not a marketing scheme to say.

Well, let me make a comment on that too, Neil, because here's the thing with the real estate business. 40% of global carbon emissions are tied up in buildings. That's the energy consumption, that's the carbon. It's also about 30% of potable water. Just shy of that in terms of raw material use. And we spend 90% of our time indoors. So when you want to talk about environmental, social, governance, or you want to talk about sustainability, you want to talk about diversity, equity, inclusion, you can't do that without talking about real estate. It's foundational. So I do think that there's a big sea change in the economy, but I also think when you look at that issue, you really have to zero in on what's the common denominator. It's the buildings that we all go to work and live in.

Absolutely. Really cool. Well, we first crossed paths and you might not even remember this. Otterson and I put on a demo at the docs event in 2015. You pitched at it. I think this might have been quasi early days for measurable 2015 or so. Do you remember that?

Oh, yeah, I remember it so well. As a matter of fact, I remember that I was giving the pitch and behind me was our cto, Lance Zonkin, who was driving the software. But the funny thing about Lance was that he was waiting for this clear verbal cue about when to start demoing the software. As I gave a voiceover, I was focused on the audience. Lance never left the website. He never actually, you know, I never gave him the cue, so he never went into the product demo. So everyone's sort of staring at me like, where's the show, man? Where's the demo? Yeah, people were very polite, and it was only afterwards that when we concluded and Lance looked at me and goes, dude, I, I never, I never heard you say go.

I love that.

That's funny. Well, from those early days to now, quite a story. But I want to dive way back. Like where, where are you from originally?

Yeah, Tustin, California.

All right.

Oc, the oc, yeah. People will know Newport beach, they might know Irvine. But sometimes people go, oh yeah, Tustin. That's where the IKEA and the Tustin automobile are, right?

Yeah, definitely. If you go towards the 5 off that fork. 400, 505, for sure. How'd you end up here? I think you have a real estate background, right? So was that something your family was already doing and you just knew real estate was where I was headed or how'd you get there?

Well, I mean, between Orange county and San Diego was UC San Diego for undergrad and then San Diego State for graduate school. So that's what brought me down south. And then the real estate business. Yeah, my father was in the residential side and insisted, maybe because you could tell I was sort of a lackadaisical kid. He insisted that I get my real estate license when I turned 18 and then when I graduated college. The cork of the real estate licensing business is that if you have a four year degree and what they call an agent's license, you can get your broker's license, which is the big boy version of the real estate license. And so my dad saw to it that I did all that. I had never actually done a real estate transaction until I started working at CBRE after college.

Got it. Okay, that's interesting. That's funny enough actually I come from that world too. My mom was a residential and my dad was a commercial real estate owner, landowner. So I lived a little bit of growing up in that environment as well. It was right around kind of the economic crash, I imagine. So was real estate, was it hot at the time when you're getting into it, or what was the industry like?

So of course, you know, wouldn't it be convenient that I would get out of graduate school when the world is falling apart and remember that the great financial crisis, the gfc, was at its heart a real estate crisis. It was the residential real estate markets that infected the broader economy. So auspicious days to get into the real estate business. But like my whole career, I suppose I've had many helping hands. And it was a fellow named Tom Martinez, who worked at cbre, was an industrial logistics broker in San Diego doing cross border deals between Tijuana and San Diego. And he vouched for me, and he made me the last person to get hired at CBRE in San Diego in the teeth of the 2008 financial crisis. And so that was the start of my career.

Wow. And were you. What were you working on? I mean, were. Was tech even relevant? Were tech companies taking real estate at all?

No, survival was relevant. I remember I would walk. My. My assignment was to walk door to door in Poway for those of our listeners who've been out through Poway Industrial Park. And I would go out there and try to find any tenant that occupied space and see if I could advise them on their lease. Now, the problem with that was that there were very few people even in business back in those days in that park. So getting a tenant to work with you is exceedingly difficult. But that was my focus in terms of technology. I mean, my goodness, real estate business is well known for being probably the last great industry to embrace the digital revolution. So we thought it was cool getting a lease comp online. There wasn't much cooking.

Yeah. So how did that path lead you towards sustainability? Because I know that's where you eventually ended up with Seabury, right?

Yeah, that's right. It started there in Poway, I suppose, in some ways, or maybe from some of my personal education, from my parents, my mom, that motivated me to care at all about the environment. I'd like to think that that's innate in all of us. But back to walking buildings in Poway, I remember knocking on doors and I saw this decal on one of the doors that said Energy Star certified. And I thought, well, what does that mean? Why is it on the door of this building? What does the owner care? What does the tenant care? And because there weren't many deals going down those days, I got back to the office and I was anxious to look busy. So I Googled Energy Star certification. I found my way from that to LEED certification and the general concept of green building. And that was where I saw something that aligned my personal interests in sustainability with my professional career for the first time. And it was several years from that moment to the end of my time at cbre, where I ultimately served as the Director of Sustainability Solutions. That job was a corporate entrepreneurial job. So I would create and commercialize services around energy and sustainability. And that really was an education. I mean, I got to see firsthand the rise of this issue of ESG and sustainability in the built environment. From the perch of the world's largest real estate services provider, I got to think about technology solutions for that transformation. And that was the genesis of measurable.

Oh, really cool. I got to imagine this was a big lean forward for CBRE and just the real estate world in general. Were they one of the first to even think about sustainability as a result of their size?

They touched and saw it all, if you will, but sustainability inside back then was, I don't know, six, eight billion dollars a year business. It didn't generate any revenue and so therefore it didn't have any resonance. You have to fast forward, Neil, all the way to the time that we're having this conversation to see a real sea change in the way that CBRE and its peers in the real estate community addressed sustainability. It's gone from, as you mentioned earlier, sort of a brand shine marketing, kind of the right thing to do, charismatic, to a hard business imperative. And you have to go from that poll to the one that we're at now of this is a must do essential for survival to really see technology, services and of course money come out and change the way that these companies behave.

Really cool. So take me through the early days of immeasurable. And was it as you actually called that from the beginning, did it have a different name?

No, it had a better name than that. If you guys remember. I didn't know this because I'm not big on pop culture to my fault because I guess there's a Justin Timberlake thing. Dick in a box. I don't know if I can say that on your show and you can edit that out later, but here's the thing about that. I didn't know that that was like some skit. So I had this idea that we would have sustainability, it was in a box and we would let it out. We would give sustainability to the real estate community. And so we called it Green in the Box. What a name. And I remember trying to initially raise money, you know, the first few bucks, friends and family, initial angel dollars. And it was a mistake. But what happened was I had pitched the business to kind of a wealthy attorney and I got acquainted with him through a friend. The friend debriefed me after the meeting and said, look, my attorney friend, he likes the business idea, but he's going to pass. And he had forwarded as part of this email chain letting me know the result, the attorney's comment. And the attorney's comment was, I like this business, but the name fucking sucks. So, yeah, that was, as you can imagine, we changed the name and I think we've aligned on something quite a bit better than that now, but that's measurable. I think that all took about six months. We were probably under the old banner for about six months and then measurable the rest of the time.

That's not bad. And you didn't have an E, so domains were hopefully a little easier to grab as well too.

Yeah, that was part of the motivation also. I just thought it was kind of cool at the time. Wind back the clock eight years ago, I think startups were all about the intentional misspelling.

Yes, a K instead of a C. Yeah, absolutely.

Yes, exactly.

So what were early days like? Were you kind of moonlighting doing this by night while still be at CBRE or when do you feel like you could go all in?

Yeah, I went all in when I presented measurable as a business plan to CBRE and they declined to do it. And I said, look, I have high conviction, I need to pursue this. And CBRE to its credit was incredibly gracious. They assigned all the intellectual property over to me. They supported a couple of their senior executives who were bullish on the idea to allow them to invest as individual investors. They became our first customer, CBRE Global Investors, what's today called CBRE Investment Management, one of the world's largest real estate investment managers. So what a send off. Oh, they also gave me a bonus which became the seed capital for this company. So really it was me presenting a business plan and when the company wasn't ready and in a position to act on it, I felt like I had no choice, I had to pursue it.

I got it. So was it just you at first and you recruited Lance or how did you kind of build your team in the beginning?

The genesis of the idea and the business plan that I put in front of CBRE and the initial moves to take it out of cbre, I'm the founder of this company. At the same time, I don't think that's what matters. What matters is that Lance Onkin, who you mentioned, and another fellow named Dave Schuman. Lance was on the water pole team with me at ucsd. Dave Schuman was my suite mate and I was talking to Lance saying things like, what's agile? How do you write code? What's a CTO really do? What's a tech stack? And Lance very patiently was talking about this for many, many months and giving me some tips. And Dave Schuman meanwhile, who was over working for Bloomberg in New York City, was helping me write the initial proof of concept product, the minimum viable product, as we'd like to call it. Thanks to Eric Ries. And he was doing this for free. And so my friends were basically helping me guys that I turned to that I knew who had expertise. And it wasn't too long after I started to get a little friends and family money in and I thought I had something, that I went back to Lance and said, you know, you've really been great about helping with this. Would you ever consider leaving your great job and coming and joining me? And he said, as a matter of fact, I'd be happy to do that. So I worked with both, and Dave was a similar situation. So I've worked with both Dave and Lance, who are the first two full time employees of Measurable at the same time. I'll tell you, it really lit a fire under me to make sure I had enough money to give those guys a guaranteed at least one year Runway. That was what we all agreed to, is I had to raise enough money to give everybody a salary for a year.

That's exciting. So was there a product at that time or it was gonna go talk to other versions of CBREs to get them on board kind of while you're building product in the back end or what was that like?

Yeah, I had another friend of mine, a guy named Pete Kazanji, who's a serial entrepreneur up in the bay, built and sold a company to monster.com, the jobs giant. So at this time I just knew enough to start asking questions. I started asking Pete, my brother, who was also an entrepreneur, Lance and Dave, of course, among others. And I got the copy of Eric Reiss's book. I just remember the concept of minimum viable product. I remember the idea that we're going to want to sell the idea, get customer validation, build against that iterate. So I took that to heart. So while we had a minimum viable product, which was this little Java applet that Dave Shuman had built to ingest utility data basically and spit it out in a certain format. I'd gone out to my real estate friends and said, what if we could do this for you? What if we could take this data and turn it into this format with a push of a button, Would you buy that? And the answer came back yes. And I said, okay, would you sign this one page agreement that we called the early adopters agreement, and it asked them for $5,000 upfront in exchange for the promise of a working product in some future period of time. I told them about six months maybe. And so we did that. Dave, Lance and a few others got together and built this minimum viable product. And it did what we said it would, more or less. We got our $5,000 upfront, we got five of those customers, so $25,000 in revenue, and we started marketing the business to venture capitalists.

Okay, that's cool. And was that product at the time what you were promising? Eventually. What it was and is today?

Oh, gosh, nothing like it. I mean, yeah, look. I mean, the promise of the product at that time was that there are these new investor requirements. So think of like pension funds and sovereign wealth funds and endowments, and they're taking billions of dollars and they're plowing it into real estate vehicles. These are run by REITs and real estate asset managers. It turned out that people in the investment side, the pension funds, the sovereigns, cared enough about sustainability that they wanted those folks that were putting the money to work for them to measure it. What an idea. Right? And that was hard to do. It was very, very difficult to get sustainability performance data off all these buildings flung all around the world. So we figured out some tricks to take that data and automate that data and format it in this specific way that was palatable to the investor. That initial idea was grounded in a bigger idea, which was that sustainability was going to be transformational to the real estate asset class. That every real estate transaction, from a lease down at some building to buying and selling that building, to financing that building, to that loan going into a bond called a real estate mortgage backed security, that we would prefix the word green to every single one of those transactions. The lease would be the green lease, the building would be the green building, the loan would be the green loan, and the bond would be the green bond. And so I sold that vision that we would attack this opportunity across the entire value chain. We build software for every use case using the same data all the way. We say meter to market, boiler room to boardroom. So that was the founding vision of the business, is to bring about the sustainable transformation of real estate. But we had to start somewhere. And the most important thing we could do at that moment in time was help our customers get the data and report the data.

Got it.

Wow. Now I want to hear how you attacked it. So huge vision. I love it. And I've got to imagine you're doing the boiler to boardroom. Now, what was it like? I mean, which of the pieces we're getting early interest and where'd you go build? What'd you decide? What product lines to kind of focus on?

The first one was the investor reporting piece. The second piece was to build more tools around Getting the data in the first place. So a great analogy for measurable, there's two both Intuit products, TurboTax and Mint.com so any of our listeners that have ever used Mint.com, it's personal financial software, but one of the things it does very well is it integrates with your bank account and your auto lender and all sorts of financial assets that you might have and it brings into a consulted dashboard. I wanted to achieve the same thing with sustainability data for buildings. I wanted utility data and project data and weather data, which influences carbon output. All of these things needed to be integrated and ingested and made automatic. That was a massive undertaking. We're still at it today, but we've made great strides in that. So part one was formatting what data we had. Part two was getting much, much better at accessing the data in the first place. Where do we go from here? Well, you start serving more value against the data. So quality, assuring the data using machine learning techniques to make sure that the data that we have is actually reliable and trustworthy. And what we'd like to say, investment grade. We wanted to take that data and turn it into yet more formats. So while we could provide investors a certain type of format, why not ad hoc sustainability reports, asset level sustainability reports, data quality reports, carbon specific reports. We needed to build all of that. Why not serve all of these different actors from real estate brokers and property managers through to CFOs and pension funds, so those Personas require different user experiences. Today, for example, we're actually launching a peer headless data product. You don't log into a UI at all. You actually just receive via API a set of statistics that tell you whether a certain building is green and how green. So a whole new product offering there again, based on the user Personas that we're trying to serve. And it all started back with that simple idea that this was going to be transformational to every transaction and measurable. Basically said, great. First thing we're going to do is measure it, build the tools to do that now build the tools to interpret that data now build the tools to make that data useful back in the business. And that's where we're at today. Wow.

Incredible. Got to know what the pandemic has done to the business. Still uncertainty of people coming back into buildings, but you obviously serve more than just office buildings. What have you seen over the last year and a half or so?

The answer to that question starts back in the gfc, like we were talking about earlier when the financial crisis occurred 2008, 2009, 2010. Everyone said that will be the end of this nascent little conversation we're having about green building. It was exactly the opposite. Those were the golden years of sustainability and green building. Things like lead certification exploded onto the scene. People scratched their heads. But what happened there was that when the real estate markets are dislocated, everyone is fighting for what tenants they can get, trying to make their buildings more attractive, and at the same time, they're trying to cut costs. Turns out the sustainability is exceedingly good at doing both. Differentiating buildings based on how green they are was attractive to tenants. What tenants were in the market were the big ones, the banks of America, the Googles, the Facebooks, people who are still growing, and they wanted green space. And the cost savings piece, the ability to reduce energy consumption, which is the single largest controllable expense in, say, an office building, was also appealing. So the recession actually was a huge motivator and a springboard for sustainability. Now, the answer to your question, today you have the pandemic. People flee their buildings, they go work from home, highly competitive environment, major economic recession, again, principally centered around real estate. And wouldn't you know, same thing occurred. Sustainability took off in the background. There was also the policy changes. So when stimulus investments from the European Union and even here in the US Came out, people didn't really notice this unless you're paying attention. Inside those packages were a lot of incentives and inducements to take the dollars the government was giving and invest them into sustainable projects. And that was especially true in the real estate business. So there were policy levers, there were economic realities that were forcing real estate owners and operators to become greener. It happened in 2008, happened again in 2019.

What a wave to ride. Again, pretty amazing. Something I've always heard you talk about and a lot of people at Measure talk about is your recruiting funnel from the water polo community. So I'm curious, maybe that's still the plan. But how do you approach talent attraction and recruitment? Especially you as the CEO, kind of chief talent scout. What's that like now? Especially in the hybrid work from home kind of days?

Sure, I have a lot we can say about that. So one thing is definitely true. Lance played water polo, and that builds bond and relationship. And I think when you start a company, this is true for me and our business, and maybe there's some general truth to it, but when you start a company, you're just trying to build and survive. And when you want to build and survive, what do you try to. Do you try to build a team who you know will do hard things with you? And if you have shared experiences around competing at a high level like Lance and I had together, that's at least one indicator where if you're grasping for a life raft, you can grab onto those friends and those relationships. And I think that's what athletics kind of does for a lot of entrepreneurs. There are other aspects to it too, right? It's not just a shared experience. It's the idea that in military service or in athletics, you tend to have individuals and personality types that are extremely hardy, they're extremely resilient, they have a lot of grit, they can suffer both mentally and physically. And those happen to be attractive attributes in early stage business, probably any stage of business, but I think especially so in early stage business. So in the initial company formation, I just wanted people who would work hard and I knew I could get that by recruiting athletes. And the athletic experience I had was water polo. So why not go there now? That changes over time. There are so many water polo players, men and women out there. And I still love to see athletes show up. But what I really want to generalize here is it doesn't matter what sport you played or that you played a sport at all. What matters is that you can demonstrate a conviction and a hardiness and personal life, because that then maps to business quite well. So we continue to want to recruit folks who have experience, life experience that's compelling and interesting. It doesn't mean educational experience. It doesn't mean that they wrote code or were sustainability professionals in their prior life. It just means that they can demonstrate an aptitude to try to do those things. And as we move from a office centric with a large minority of remote employees culture and organizational structure to a decentralized remote first hybrid structure, I think that served us very well because what we're looking for is people who can face the difficulties in communication and the difficulties in time zone and focus on what makes it all work, which is the people. It doesn't matter where they live or what they did before they came to us. It just matters their attitude. So I hope that helps. Neil, that's how I look at it these days is do you have distinguishing personal experience and conviction in the business that we operate? You'll be fine. We'll teach you everything you need to know from there.

Love it. You've recently raised some next round of funding to scale up. What's that going to do for you? Where are you taking this over the Next few years now.

Yeah, it's going to do a lot. I think one of the things it's going to do is declare measurable as the market leader. I think that's important. We've statistically so far outpaced our competition. We are at now as you and I are talking almost 12 billion square feet of real estate. If you're not in the real estate business, there's 81 billion square feet of commercial space in the United States of America. So think about that. Better than 10%. Now, our footprint isn't all in the United States and our buildings that we serve tend to be large. So by sheer quantity we are still a drop in the bucket. But there is something significant happen. The scale of adoption of our technology is wide. It is across 80 countries. It's $2 trillion in real estate all in. And we needed a moment to focus the market's attention on that fact. And I think raising capital is one way to do that. Which is to say we are here, we're here to stay and we are validated as a business that can help you by a lot of clever and sophisticated strategic and financial investors. So that is one reason to raise the round. Another reason is running a business at a loss is expensive. The need for this money and the just absolute belief I have that pursuing the product vision I've laid out for meter to market, solving for ESG at every transactional moment, that is an amazingly large technology endeavor. We could raise five $50 million rounds, which is what we just did, one $50 million round. We could raise five of those. And I still think we'd be at this project for years just because of the size of the ask. So this will give us a good dent against that product vision, but it's certainly not the last stop on the capital raising trail. I absolutely see more for us. Awesome.

I love it. I have to give a shout out then to think about interlock. Even in a later round, we'd love to be a part of it.

Why not? Right?

Absolutely.

Well, in a funny way, since I'm an investor with you guys in some small bit fashion, I suppose I could find my way back into measurable through you. Wouldn't that be. That would be circular.

That'd be great. Buy some of your own shares. Well, we love the story, love the hustle, but then love just the life changing kind of aspect that you guys are building. I mean, what an amazing thing to do in San Diego is to build technology that has an impact and tells you what your impact is too. Bonus So I love that and love that you've obviously built it here in town. But got to know, and everyone really wants to know this, do you have a favorite taco spot?

I'm going to answer that question. I'm also going to say that it's important to talk about San Diego and the community that we got. Neil, you do this all day long. I asked you earlier about Mike Kren and he's another fellow that's been doing this all day long. But the men and women in our community, from Mayor Gloria, who is focused on and thinking about and supporting our technology entrepreneurs through the universities that are supplying the talent, this is a place to build business and this is a place to build great and successful business, to zero in on what we do. Climate, sustainability, social impact. I think San Diego can really excel here. We've got a backbone in health technologies, making people's lives better, more livable. But we also created the thrust around climate science down at Scripps Institute of Oceanography in the Keeling curve. So isn't it fitting that we are producing businesses that are working on environmental and social sustainability also here in San Diego? So I think there's a lot cooking. I just want to give that plug to you and to the whole ecosystem of entrepreneurs and their partners that are making it happen. And the answer to your question is. I told you I'd give you one answer. My answer's changed and now there's three answers. Once upon a time, El Pescador was the best. I lived down there in the village and then I moved and I fell in love with blue water because I lived in Mission Hills. And then I found my way down to the Mission Brewery building with measurable and was just a little bit closer to Point Loma and ran into Mitch's. And so I left off with Mitch's and I'll leave it there. I think they're the best.

Oh, you can't argue with that. Those are all good, all really good options. There is no wrong answer. And there's the right taco for the right celebration or even time of day. You've got your breakfast tacos, you got your happy hour tacos, you got your fancy tacos, you got your 3am tacos. So these are good. These are good additions. I don't think we've actually had Mitch's mentioned yet, surprisingly. So. It is being added to the taco database as we speak.

Good to get those.

Good.

They definitely deserve to be on the board.

Absolutely. Matt, thanks so much for being on the podcast. I loved having this conversation with you and I'm excited to continue watching measurable and you build because you guys do it so well and thanks for being part of this.

My pleasure Neal, thanks for having me on cheers.

Thanks for joining us on the Tacos and Tech podcast with Neil Bloom. Thanks again to Cox Business for helping make this possible by expanding the reach of the San Diego tech ecosystem system. Big shout out to School of Rap for our rad intro music and this podcast is edited and mixed by Patrick Norton@citizen recording.com you can find Neil Bloom on Twitter at Neil Bloom and on LinkedIn as well as well as fresh brewed tech and tacos and tech pod on Twitter too.

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