Interviewed on January 30, 2020
Interviewed by Yingying Zhu
Sce Pike is the CEO and Founder of IOTAS, a Smart Property Tech company that provides a complete turn-key IoT solution to the Multi-Family-Home Industry. It aims to help increase value by providing a simple, yet elegant Smart Home experience to residents while reducing costs to building owners. Beginning in Silicon Valley in 2000 when she joined Palm, Sce’s background has always been centered around smart technology. Later, in 2007, she co-founded Citizen, which focused on Internet of Things (IoT) products such as Connected Cars, Connected Health, and Smart Home and was sold to Ernst and Young. In 2015, Sce Pike and Jeremy Steinhauer launched IOTAS and since then they are now deployed in 45 metro areas in the US in over 100 buildings with nearly 125,000 IoT devices.
You had held several different positions as senior engineer and chief executive for a number of tech companies. What prompted you to start IOTAS? The most fundamental part of my background is that I studied anthropology and electronic arts, which led me to user experience design. I started a mobile development company that was user experience focused. When everybody jumped on the bandwagon for mobile development, I shifted that company to connected cars, connected finance and healthcare, and connected homes. Smart home technologies had become one of the first popular areas for IoT applications. Luckily a Portland based multi-family developer approached me for technology differentiation solutions for a 200-unit building across 4 city blocks in 2014 and eventually they became IOTAS’s first customer. That was the “aha” moment for me realizing that the demand from multi-family homes may be the driver for smart home technologies to actually take off. The industry was already poised for something revolutionary as Google purchased Nest and Samsung acquired SmartThings. I was very excited about the opportunity and pitched ideas relentlessly to the developer. We ended up placing 40 smart devices per apartment unit in half of the 200 units within 5 days. It created a comprehensive smart home experience – lights turn on when you walk in and off when you go to bed at night; lights, window and curtain work the exact way suitable for your routine.
What is the perfect device package for your smart homes? How much rent premium do they create? We started out with a full-on package of 40 device per apartment as mentioned and now we are averaging 14 per apartment. We quickly realized that to capture the experience, you don’t have to put in smart devices everywhere. We can achieve the ideal experience by placing 7-20 devices per unit, including door sensors, light switches and leak sensors. We found that the Class B/B+ subsector makes the most economic sense because these apartments have upside in their rents. They can capture 10%-11% rent premium by adding a fairly economic package of devices and get their ROI (Return on Investment) within 4-6 months. Once the developers see this result, they start to put IOTAS into all of their portfolio for both existing and incoming residents.
What other benefits do developers receive from IOTAS products? Operational savings and tenant retention. We see about 7% of labor savings on a weekly basis for property managers because they no longer run around to check leaks, molds or turn on and off HVAC and lights within vacant units and common areas. We also help the leasing staff to save their energy from running across the buildings and turning lights on to show “higher occupancy”. By now, we have amassed enough data to analyze the correlation between the usage of smart devices and how long these people stay in a building. We are seeing higher retention rate or stickiness for residents living in a smart home than those living in a regular home, thanks to the 35% daily active usage of our devices and apps.
Who are the customer groups IOTAS focuses on? We know what we’re good at and who we can benefit and we continue to focus on the best resident experience and property intelligence for those customers. What IOTAS does is to enrich the user experience and improve rent premium, operating efficiency and long term retention. We typically go after and work with partners who are longer-term holders of the buildings. We pride ourselves on our value proposition for Class A/B/B+ ownership groups that have 5,000-10,000 units. The buildings are typically close to city center, within 20-30 minutes of drive. For them, IOTAS’s smart home technologies are a great tool to differentiate from their peers and achieve above-the-average rent and renewal rate.
What is the next big thing for IOTAS? This year we are going to focus on resident engagement, making it more appealing and helpful experience for our clients. While we do partner with the best hardware providers on the market, it is less about the hardware and more about the services and integrations. One example of this fun experience for residents is an automated Email/SMS message of “I love you. Good night.” to the resident’s boyfriend or girlfriend when they turn off the light at night. Another example to improve the user experience for building managers is to integrate the various heterogeneous building management services together, allowing utilities, HVAC, access and security, property management to “talk to” each other.
Congratulations on the successful Series A fund raising that you accomplished in 2019. What is the main area that you will be investing in for future growth? Thank you! Rolling out enterprise solution is a huge initiative that we are taking on with this round of funding. IoT (Internet of Things) does not work without the “I” of it. It is probably the biggest challenge for all of us in the IoT space to make sure the infrastructure is working well for the smart home systems in the buildings that were built in the 40’s and 50’s. With the enterprise SaaS offering, IOTAS will allow our enterprise partners to integrate smart home functions easily with their owns solutions via IOTAS SDKs and APIs. This way, our enterprise partners, i.e. TelCo’s (Telecommunication companies), ISP’s (Internet Service Providers), OEM’s (Original Equipment Manufacturers), will be able to offer a bundled solution for smart communities under IOTAS’s framework. Our residents now have one cohesive app that let them pay for their cable service, watch videos and control their home devices in one place. Our building owners can enjoy the seamless integration between the Internet service and smart home service as the necessary hardware and software will be fully coordinated before being put together.
How do you view the controversy between the benefits of data analytics and the harm of losing data privacy in a home environment? I think the real question is who owns the data. Some large Internet companies seem to hide behind the issue by saying they are going to do everything they can to make sure your data is secure with them while secretly owning and handling the data as they wish, in turn causing a lot of issues and liabilities as a result. This is my own personal belief that whoever creates the data owns the data, and it is actually a safer position that IoT industries have to adopt. Occupancy data such as what time the residents go in and out of an apartment is their data. IOTAS gives the users the right to store their data at their discretion, for a day or week or never or forever. Machine created data and environment created data, however, like humidity or boiler temperature, isn’t necessarily created by the users so the buildings should have full rights and access to them. IOTAS is a company that helps buildings use aggregated, anonymized data that they have full access to, unless the users grant more access explicitly in exchange of benefits such as insights, healthy living and community engagement.
How did you learn about the real estate market given your mostly IT background? Before I launched IOTAS, I did a market analysis and realized that real estate is a trillion dollar industry in the US and it is extremely underserved by technology. Even though the industry may seem ancient and slow, I think it has done a great job of being able to redefine itself by adopting new ways of doing things. Comparatively speaking, automotive, finance and health care industries that I also worked on are more burdened by process and regulations. In addition, I was very excited about this perfect alignment between technology, industry and human for IoT user cases. Technology was finally ready; the users definitely desire it; the industry is willing to spend and explore. I personally do not have real estate background. Therefore I brought in our sales director from BuildingLink and our head of product from RealPage who have tremendous experience in real estate and helped IOTAS capture this amazing market opportunity.
You are an investor at Portland Seed Fund and Portfolia and a board member at PDX Women in Tech. What do you want to achieve with those roles? I am really excited about local business (Portland Seed Fund) and women founded businesses (Portfolia, PDX Women in Tech). Portland is a great community but there is not enough funding for this town. We have regular CEO meetings in Portland and I am happy to take lunch meetings with people in the town to talk about their business and who I can connect them with. As a woman in tech and also a minority woman, I believe in more representation. We need to see more of us succeed to solidify the fact that women can be great business leaders. I am always happy to meet with another female founder who is willing to take the risk to start their own business and I do whatever I can to invest in them or spend my time and resources to help them get funding.
What do you think the female founders need the most and how did you go about it yourself? They definitely need capital as well as mentorship. I probably spoke with around 100 VCs before Series A was closed, while others may have to speak with 50 or less. Capital is probably the biggest challenge for female founder, because we are automatically dismissed as we don’t “fit” the mold. What I found helpful is to have other investors and advisors that are savvy and have gone through the process to speak for you. I have a large network of mentors and advisors such as the former CEO of Time Inc., a phenomenal serial CEO who has long track record of mergers and acquisitions, a real estate asset manager of a large fund. I encourage all female entrepreneurs to have at least five mentors in different areas. It is helpful to have them on your deck for sales pitch, but more importantly, it is helpful to foster the long term relationship and network with these high caliber people. My additional tip is to be persistent. Men are better at going after somebody and thinking that they have a natural affinity with that person. Women sometimes give up if they don’t hear from somebody. When I started in IoT and needed someone who knew it well, I persistently hounded someone with a strong track record for 6 months before he agreed to join the board and became so instrumental to the development of the company.
Edited and condensed for clarity.