Please enjoy this transcript of my conversation with Ben Boyer, Co-Founder and Executive Chairman of R-Zero and Managing Director at Tenaya Capital. Transcripts for other episodes can be found here.
“Every single one of our products has a very clear aesthetic that we care about. Our goal is to build things that people want to be around.” – Ben Boyer
Ben Boyer is Co-Founder and Executive Chairman of R-Zero, which designs hospital-grade disinfection solutions utilizing UV-C light. Ben is also Managing Director at Tenaya Capital, a leading early-growth stage venture capital firm. He has served on the board of numerous companies, including Smartling, TruSignal, and PlanGrid.
Founder Spotlight: R-Zero – Pioneering with 100+ Year Old Technology with Co-Founder and Executive Chairman Ben Boyer
Daniel Scrivner (00:06):
Hello, and welcome to another episode of Outlier Academy's Founder Spotlight Series where we dig into the ideas, frameworks, and strategies that the world's best founders are using to build what's next. I'm Daniel Scribner, and on the show today, I sit down with Ben Boyer Co-Founder and CEO of R-Zero, maker of the world's first continuous and autonomous disinfection system. R-Zero combines powerful UV-C hardware devices which they call nodes and are capable of removing pathogens, germs, and bacteria from both the air, as well as surfaces with powerful software that connects all these devices and monitors their performance in real time.
Daniel Scrivner (00:42):
What's fascinating is that R-Zero has modernized and is scaling a very old technology which is UV-C. UV-C is a form of ultraviolet light with a wavelength of 200 to 280 nanometers which effectively destroys and inactivates both bacteria and viruses, killing them and preventing them from reproducing. In 1903, the Nobel Prize for medicine was awarded to Niels Ryberg Finsen for his work using concentrated light to treat lupus vulgaris. Since then, UV-C technology has been used extensively for disinfecting water, air and surfaces to destroy a whole host of harmful microorganisms.
Daniel Scrivner (01:17):
R-Zero has taken UV-C and modernized it so it can be deployed in almost any setting to sanitize the air and surfaces. In this episode, we cover the origins of UV-C, why it's so effective and why it's still underutilized. How R-Zero is ridding the world of ineffective chemical cleaners which are still the most widely used cleaners and disinfectants. The origin story of R-Zero and the lessons Ben Boyer brought from his 22-year career as a venture capitalist to quickly prototype sale and scale R-Zero which in its first year sold over $40 million.
Daniel Scrivner (01:51):
You can find the notes and transcript for this episode at outlieracademy.com/94, it's episode 94. For more on R-Zero, just visit rzero.com, that's literally the letter R-Z-E-R-O.com. With that, please enjoy my conversation with Ben Boyer of R-Zero. Ben, thank you so much for joining me on Outlier Academy, I'm really excited to talk about what you're doing with R-Zero.
Ben Boyer (02:17):
Yeah, no, I appreciate your interest in what we're working on and willingness to listen to me talk.
Daniel Scrivner (02:24):
I think as everyone will find out, it's going to be well worth it. We'll take a little bit to get into things and tiptoe into what you're building because I think we need to build up a little bit of the backstory. So to start, can you just share a quick sketch of your background and as part of that touch on why you felt compelled enough to get out of venture and decide to found a company?
Ben Boyer (02:45):
Sure. It wasn't as I'd say premeditated is that my background is venture capital, been working in the industry for 22 years. I still work in it albeit in a very different capacity than before R-Zero. And ultimately, COVID hit me really hard is probably the best way to put it. For me, it reminded me a lot of the same emotions I had around 9/11. Obviously, a very different set of circumstances, but it felt like another moment in time where everything was about to change.
Ben Boyer (03:14):
It really hit me, there is a moment I often think about, and it was in early March I went to a local Whole Foods and I just saw fright in people's eyes. You couldn't buy toilet paper, you couldn't buy paper towels. I saw people with full medical scrubs and I was like, "Wow, okay, this is real." And at that point there was still no concept of R-Zero, but I was using my home office for the very first time in my entire life.
Ben Boyer (03:40):
My daughter who was 11 at that point was doing school at home. The streets in Los Gatos were totally quiet, and I just started thinking to myself that there's got to be some organization out there that knows how to deal with pathogens because ever since the advent of humans, we've had pathogens. And so I for whatever reason started thinking about hospitals. Again, not thinking I was going to start a company, but it was more intellectual curiosity given that is a communal gathering place for sick people, and generally speaking, when you go to the hospital, you don't end up getting all of the other pathogens that are in the four walls.
Ben Boyer (04:21):
It felt like maybe there's some lesson that can be learned that would get my daughter back in school, would get me back in my office and hopefully help prevent the spread of COVID. And so I started to research infection prevention in hospitals. There's a fair amount written about it, it's really not that complex. The way they think about risk is against three dimensions. It's hands, air, and surfaces, very little in the way of technology that's been brought to mitigate the risk of pathogen spread, but what little technology that does exist looks something like this, and it tends to be UV-C based in nature.
Ben Boyer (04:59):
So I'm reading about UV-C light, I don't know much about it, I'm not an engineer by training. I've spent enough time in technology that I'm comfortable around it, but I start researching UV-C, and what I learned is it's incredibly old. So the Nobel Prize in Medicine was awarded to someone named Niels Finsen in 1903 for his work with germicidal UV. It's been used to treat wastewater the 1910s, HVAC since the 1920s, and it works so well, it's still used in that exact same capacity today.
Ben Boyer (05:29):
The reason for that is there's no pathogen on the face of the earth that has any resistance to UV-C light, unlike chemicals which over time can build resistance to the chemical itself. UV-C light is inactivating the pathogen at the RNA and the DNA level. So as long as the laws of physics remain, this system and others like it will be able to disinfect anything. That to me felt like, "Wow, okay." So the solution might be as simple as products like this being utilized to disinfect the air and surfaces in all of these environments that are struggling to deal with COVID."
Ben Boyer (06:07):
I can tell you definitively, I think I was looking for an investment for Zonia, that's a venture capital firm I co-founded and a GPN. And so what it is very natural to me as market mapping. Once you have a thesis around an opportunity, be it a market or an emerging technology, the key then is to start trying to understand who are all the vendors in this space? What do the products look like? What are some of the strengths, the weaknesses.
Ben Boyer (06:32):
And so that was basically a spreadsheet that I pulled together and in doing so, what I came to realize was there were a number of vendors. Most of them were pretty old, not a lot of innovation and their products were incredibly expensive. I also learned that their products have incredible bodies of evidence. And what I mean by that is the hospitals that have adopted technologies like this have seen a tremendous reduction in what are called HAIs or Hospital Acquired Infections.
Ben Boyer (07:03):
These are secondary infections, so think go in for a knee surgery, you come out with a staph infection. You go in for an MRI, you catch C. Diff. As it turns out, My North Star which was hospitals do struggle with pathogens and they do struggle with infections, but the ones that tend to do best utilize systems like this to do a whole room disinfection, and what they're disinfecting is both the air and the surfaces. And so the body of evidence was rich, the products looked really interesting, they were very expensive.
Ben Boyer (07:33):
I reached out around this time and this was probably the beginning of the second week in March to the former head of product and engineering for one of my portfolio companies. It was a mobile marketplace, provided technical workers to come to your house or your place of work to fix an iPhone screen or install a nest thermostat. And I had always remembered he was a very talented employee, but I always remembered he had a very non background for the head of proc and engineering for a mobile marketplace.
Ben Boyer (08:03):
He's a mechanical engineer by training, he worked at Abbott right out of college building medical devices. And then he went to a medical device startup and ran the neurovascular value chain. And so I reached out to him and I said, "Hey Grant, I don't know what I'm doing. I'm using my home office, there's no one on the streets, but I'm doing a bunch of research into UV-C light. It appears as though this is the gold standard for disinfection within hospitals and primarily being utilized in the highest risk environment which is the surgical theater. Are you interested in digging in with me?"
Ben Boyer (08:35):
And he said sure. And so I shared with him all of the work that I had done. And I said, "Do you have any idea why these things are so expensive? There's a company in our space that sells to their product for $125,000." And he said, "I have no idea, but let me dig around." And it was probably two or three days later. I don't remember exactly, everything over the course of the past year blurs together. But he just said it's just a light with the timer. It shouldn't cost that much.
Ben Boyer (09:02):
And he had actually sketched out on a napkin what he thought a product should do and what it should look like, and it looks pretty similar to this. And he said, "Look, I think we can sell the thing full or call it a fifth of the cost of these other units. And I think we can have incredible margins." And I said, "Well, this is awesome and very exciting, but you're obviously missing something. There's got to be some reason why that's a $125,000 product and you just haven't figured it out."
Ben Boyer (09:30):
My venture hat was on. I said, "We've got to do more due diligence. And we've got to find someone actually understands this market." We networked our way into a conversation with someone named Dr. Richard Wade. Dr. Wade ran Cal/OSHA for more than a decade. He taught at Harvard in Oxford. And when we spoke to him, he was the principal scientist at an environmental health and safety consulting practice called Omega.
Ben Boyer (09:53):
And in that role, he wrote the disinfection protocol to reopen Blackstone's offices, and he wrote the disinfection protocols for the Diamond Princess boat. And so we pitched him on this idea and he loved it. He said, "Look, I've been using UVC and labs for decades. It is incredible. I think its moment is now. And it has just a tremendous number of advantages when compared to chemicals." And we said, "Well, that's great Dr. Wade, but what are we missing? Why is it that companies like Xanax sell their product for $125,000? And we think we can build a better version of that and sell it for a fifth of that cost?"
Ben Boyer (10:28):
And he said, "You're not missing anything." He said, "Pricing in this market is really just an artifact of our screwed up healthcare system. It's the reason why when you need stitches and you go into the ER, it could cost $2,000." He said, "It really comes down to how expensive HAIs are for hospitals." And as it turns out, HAIs are incredibly painful both for the patient, the family, as well as the hospital. So these are top 10 leading killers in the US every year, and they'll cost a hospital anywhere from 20 to $40,000 to remediate.
Ben Boyer (11:01):
So the industry has really evolved around this concept of, "Look, if we save you three to four HAIs, it pays for this $125,000 piece of hardware." And when we understood that and we recognized that we could build a better product, we decided to go start the company. We recruited a third co-founder, a brilliant guy named Eli Harris. Eli co-founded a company called EcoFlow, which just became the Unicorn and had recently moved back from China. And so the three of us sat down and decided to go forward with the business call it in late March.
Ben Boyer (11:35):
And ultimately my initial thought with it was I would seed the company and be an active board member. But what ultimately happened is I realized there's a much bigger opportunity than helping organizations deal with COVID, and disinfection is just broken. It's a giant industry. It's dominated by a hundred to 150 year old chemical companies like Ecolab and Clorox. Their products are horrible for people. So there's been countless exposure lawsuits.
Ben Boyer (12:01):
It's terrible for the environment, they're incredibly carbon intensive to transport, but the manufacturing process is also horrible. They create super bugs because of resistance, but above and beyond of those big challenges, they don't do what you think they do. COVID as a virus tends to spread through the air. So applying more Clorox to a school or in an office environment, it's not doing anything. If you're focused on bacterial infections, they do in fact spread on surfaces, but how often are you seeing E.coli salmonella outbreaks in school rules are in an office?
Ben Boyer (12:34):
And so ultimately, the three of us sat down and just said, "This whole thing is messed up. And if the goal of disinfection is infection prevention, you really have to address air and surfaces and do so in occupied spaces." And so that really became the mission of the company. And we started working on products that provide that even before we had launched this product, and we launched those in Q4.
Daniel Scrivner (12:58):
It's fascinating. You covered a ton of ground, so I've got a few follow up questions on all of that. Just really quickly on the name. I'm guessing R refers to what? The transmissibility of a pathogen? And so R-Zero is trying to lower that as low as you can?
Ben Boyer (13:13):
That's right. So R-naught is basically the coefficient of virality for a pathogen type. The higher the number, the worse it is. And so if you have an R-naught of ten. One person for every one infection, 10 additional people gets sick. And so obviously, I don't think there will ever be such thing as R-Zero, but the goal for the business is to drive this as close to that as possible.
Daniel Scrivner (13:36):
It's a really interesting example. One, talking about this UV-C technology has been around a hundred plus years now. So it's a very old technology and then it still feels like it one, hasn't quite penetrated the market and isn't being used in all the ways that it can. And so I'm curious, when you were talking to that doctor and he was saying he really thinks the moment is now, why is that? And why is it that all of a sudden, a hundred years in, this technology maybe is really ready for prime time?
Ben Boyer (14:04):
Yeah. It's one of those things I think the answer has been staring us straight in the face and it took COVID as this moment in time where we needed to find enhanced disinfection solutions for everyone. It was not just to the hospital standard, every organization, and again, this was in early 2020. We didn't have therapeutics. There was really not even a very clear protocol of how to address a sick patient.
Ben Boyer (14:30):
And so disinfection or preventing additional spread was incredibly important. And so I think his commentary was really stemming from that concept, that everyone was struggling to effectively do more to reduce the spread of things. And ultimately, what held this back was cost. So there have been systems like this in hospitals since like probably the 1950s, 1960s, and they work, but for whatever reason, it's not been an industry that has seen a ton of innovation.
Ben Boyer (15:00):
I think the products, if you saw most of the companies that we compete with, they look very industrial. We work with the same industrial design team that built all the nest products. Every single one of our products has a very clear aesthetic that we care about. Our goal is to build things that people want to be around. If you saw some of these products, they look like they belong in a hospital. They look industrial, they look scary, but really, more than anything else is just cost.
Ben Boyer (15:26):
And I think what we have proven because we're the first vendor to really target the non healthcare applications that we have sold into hospitals. We have an investment from the Mayo Clinic, we collaborate with them on infection prevention, but we really target, initially started targeting all of these other organizations. And we've sold seven figure deals into financial services, into healthcare, and then into education.
Ben Boyer (15:49):
I think we're protecting about 800 schools today. And so ultimately, what I think really was the enabler in this market was one, COVID, but two, was us saying let's collapse pricing and let's make this accessible. And one of the missions or the mission of R-Zero is to reduce sick days by democratizing access to hospital grade technologies, and so that is our goal.
Daniel Scrivner (16:13):
Yeah, I imagine a lot of the other units probably look like things you'd be worried to have your body next to. It's probably the other thing I think you guys have done a great job of focusing on design. So one, it actually, I think fits into a room and hopefully it doesn't look like a scary medical device, but two, to your point also looks like something that is safe for you to be around or at least somewhat inviting. You talked about selling into school, what have been some of the unique challenges of selling into healthcare versus schools versus organizations?
Ben Boyer (16:40):
Yeah, so what I would say is all of our products are tested at a third party lab. So we have very good actual lab data about the efficacy of the products and in a lab environment, they're actually testing these devices against live pathogens, so it's not theoretical. What's interesting though is even before the product is taken into a lab, based on math, we can actually model and tell you how effective it's going to be and we're very good at that.
Ben Boyer (17:06):
It's not all that complex as the math goes, but we know predictively based on the output of a bulb like this with our type of ballast, these parabolic reflectors, what this germicidal output would be, and really at certain distances, how long would it take to inactivate different pathogen types? And what I would say is that lab data has really been incredibly impactful as we sell into most organizations. In hospitals, that is required, but what they also want above and beyond that is clinical.
Ben Boyer (17:37):
We are in the process of doing clinical work. And so we're working with Harvard, we're working with Columbia University and we're about to kick off with an insurance carrier. And so the challenge though is these projects or the clinical research takes a while.
Daniel Scrivner (17:53):
Like 12, 24 months? More than that?
Ben Boyer (17:56):
It depends on what exactly you're targeting, but minimum of 12 months. And we're just celebrating our second birthday in a month. So we didn't have a product to sell or to begin clinical work for six months after we started the business. So where we are in building that body of evidence is it's early. We do have healthcare institutions that have bought based on lab data which is great.
Ben Boyer (18:20):
Ultimately, we are very confident we'll eventually build the body of evidence, it just takes time. But that's what's made selling into healthcare, it just takes longer. And again, we've sold seven figures into healthcare, so we're getting past it, but I do believe over time it will become a very large part of our business.
Daniel Scrivner (18:37):
Yeah, no, I think it's fascinating, and I wanted to make sure everyone listening knew about it because I think one of the things that is important here is we talk a lot about innovation and obviously, you have a very old technology that you're repurposing and modernizing in a lot of ways, but there are a lot of unique challenges about obviously being a startup selling in healthcare. And one of them is number one, first, you need to do the lab data and then you need to go and actually do these clinical trials and the clinical trials make sense I'm sure from a hospital's point of view because they're used to doing clinical trials for everything.
Daniel Scrivner (19:10):
How would you describe, how do you think about the difference between lab data and clinical data? Is clinical data literally in order of magnitude better? Why do it? Why have that be the barrier?
Ben Boyer (19:23):
I ultimately think it's worse, and the reason being is what you're bringing into the equation is human error. And look, we're not going to be there every single day the device is operated. There is a very clear protocol that we design for each of our customers based on dimensions of the room, areas that could be shadowed and things like that. And at the end of the day, we're not there to actually be able to see that the protocols being met.
Ben Boyer (19:49):
Now, if you run study long enough, some of that just falls out. And so we are very comfortable with clinical work and we like doing it, but ultimately, the way UV-C works is really just math. It's the intensity of the light at a certain frequency. So UV-C is a spectrum, it's not a single wavelength. This system operates at 254 nanometers. We have an air disinfecting unit that operates at 265 nanometers, and we have a human safe wavelength of light which is 222 nanometers.
Ben Boyer (20:21):
And so depending on the distance that these devices are from whatever it is they're disinfecting, we know very clearly how long it takes to achieve a one log reduction, a two log reduction, a three or four, whatever it is you're targeting. So ultimately, at the end of the day, lab data, so understanding the dimensions of the room where the test was, what was the pathogen type and the conditions in which the disinfection took place to me answers your question definitively because these are physical spaces.
Ben Boyer (20:52):
It's not as though walls are moving. So we know that running X device in a room that's a thousand square feet for this long will provide this level of disinfection. All that said, we are huge believers, we have a head of clinical now and for all the listeners out here that want to do clinical work with us, we are looking for more and more clinical partners.
Daniel Scrivner (21:13):
Awesome. I want to talk a little bit about the different products you have because you have three products today some of those obviously we've talked about are human safe. So they're meant to be in close proximity to where a patient would be. I know you have one unit that sticks to the roof that can even be over a patient's bed. People that aren't watching the video can't see the unit behind you, but then you also have one that I would guess is what? Six feet tall, basically projects light 360 degrees that is not meant to be around humans.
Daniel Scrivner (21:39):
And as you were talking about before you hit record, it actually has a sensor on at the top and will automatically shut off and detect if people are nearby. Just talk a little bit about the product line you have and yeah, the different use cases there.
Ben Boyer (21:50):
Sure. Yeah, so I'll tell you about the hardware. We have a lot more people that write software than build hardware, but we build great hardware. So we have three products today on the hardware side, the one behind me is a whole room disinfecting unit. This is the first product we brought to market. And what it allows for is a tremendous reduction in pathogen load in a physical space.
Ben Boyer (22:10):
So think about a classroom, rather than just clean it at night, also run a disinfection. When we were building the product, we tried to be very thoughtful around building something that could be integrated into existing janitorial workflows if to work with us required hiring additional staff, that would've been a dead end. And so the system has four buttons. It's IOT-enabled, so we capture data and build an audit trail in terms of disinfection.
Ben Boyer (22:35):
So when it was operated for how long and where, but ultimately, most of the use users of our product are pulling one of these with a janitorial cart, cleaning a classroom as they normally would. When they're done, they bring the device in, they run a disinfection, it disinfects the air in the surfaces. And then while that process is going on, they're in the classroom next door cleaning. And so again, just a very simple process.
Ben Boyer (23:00):
The next two products that we launched and we effectively launched them at the same time are both products for occupied spaces. So this is not something you would operate with in the room, the fixtures are well. The first one is a product called beam which disinfect a huge volume of air. We can add eight to 32 effective air changes per hour, depending on the number of devices in the size of the room which is astronomical in terms of building an HVAC.
Ben Boyer (23:28):
And so it is a product that really redefines the healthy building IQ challenge which is how is it that we create the healthiest air within a physical setting. And there are limitations to upgrading your HVAC. Most of the customers that we have are running air at three to four air changes per hour which means every hour you've run the air in that building through the filters three to four times. At that level, you do not have sufficient purification to prevent the spread of anything. And so there are some organizations that can't afford to rip all that out and put something in place that could run a higher MERV rating.
Ben Boyer (24:09):
So more filtration and more air changes per hour. And so they're left with alternatives like HEPA filters, portable units, and our product while perform anything on the market that is portable. And so this is our opinion and that of a lot of our customers a game changer. And so it's a beautiful product that can be installed either on a wall or dropped from a ceiling. We have customers that have done both and it creates a zone of a radiance above people's heads. So it works while people are in the room, the system is IoT enabled like every product we've developed and it has sensors to activate itself when it senses people in the room, it will run until it sees the last person for an additional 30 minutes, and then it deactivates itself.
Ben Boyer (24:53):
The product uses LEDs, so it's energy efficient. And again, it was only operating when it's needed. The other product that we brought to market is a far UV system. So far UV is it's a pretty novel wavelength of UV-C at the lower end of the spectrum at 222 nanometers and 222 nanometers it turns out is perfectly human safe. And so the science has shown that 30,000 hours of exposure to that wavelength does less cellular damage to your skin and your eyes than 10 minutes in the sun on the spring day and so perfectly safe. It also turns out it kills all pathogens.
Ben Boyer (25:32):
And so in our mind, this is the technology that becomes the building block for all physical buildings going forward. It provides the ability for real-time disinfection. So rather than you and I be on a Zoom call, we're sitting at your desk or mine and I'm breathing and sneezing and coughing, and we're just having a conversation. If we have a fixture in the ceiling that's emitting this light down and creating a zone of radiance around us. You're getting some level of disinfection just as we're sitting here. So think about sharing a restroom with someone, think about an elevator.
Daniel Scrivner (26:06):
Ben Boyer (26:07):
Conference rooms, break rooms. This device operates inverse to this. So it will only turn itself on when it senses people in the room and then it will run. You can program it to run first long as you'd like afterwards. And so it's a game changer, it truly, truly is. There's only a couple companies globally that have the ability to produce this light safely and efficaciously, and we're one of them and we're incredibly excited about the potential of going forward.
Daniel Scrivner (26:38):
Yeah, that's an incredible milestone to hit less than two years into R-Zero's life. So you talked about that there are more people working on software than hardware which I'm not surprised by, but I think most people that would go to the website and I guess look at the fixtures because obviously, the fixtures are what people are going to see in the room that might be surprising. What do you focus on in the software side and what does software enable that doesn't? And how do you, I guess, think about in terms of overall innovation R&D, how much are you dedicating to hardware versus software?
Ben Boyer (27:10):
Yeah, so we started with the hardware and we call them endpoints because they didn't exist either in a form that was cost effective or something that was efficacious. And so we're working from the outside in. Every one of our products out of the box comes with software. And what you should think about this is a capability to manage the devices remotely. If it's a fixture, as well as analytics and reporting about the space that it's operating in.
Ben Boyer (27:38):
But ultimately, we have a very clear roadmap of additional software products that we want to build on top of that, and so it starts with the floor plan. And from there, we have the ability to layer in our risk model. So we have a dynamic risk model that we've created based on a lot of math, much of which originated MIT. And it allows us to score spaces based on physical attributes and the way they're utilized and we can score for different pathogen types.
Ben Boyer (28:05):
We also acquired a company last year that has occupancy sensors, and this is providing our risk model with data about where people are and are not. And that obviously changes the risk of a space over time. You'll see us move into other sensor-based technologies going forward like IQ and we have a huge product roadmap on the hardware side to take advantage of the data that is emitted to remediate.
Ben Boyer (28:33):
So one of the things that is incredibly meaningful for us in terms of the products we build and our vision is we want to be closed loop. We don't want to just report that you have a problem, we want to build products that are actually going to resolve the problem. And so a lot of the software work is with regards to that. We've been approached by a number of very large strategic players in and around the space that are interested in having us do API integrations with their software.
Ben Boyer (29:01):
And so there's a lot to be built on the software side, there's a lot more hardware that we have to go build, but we're really excited. We think The Healthy Building Movement is really in its infancy and we think it will evolve like the green building movement, and we think we can be an incredibly important piece of that movement.
Daniel Scrivner (29:20):
Yeah, even hearing you map out what your software does today which obviously think, I don't have any super familiarity with healthcare, but even knowing about something like an audit trail would obviously be incredibly important. If you're a hospital and you're doing this to minimize hospital induced infections, having that data is going to be really important. One of the questions I wanted to ask is because we've talked about the hardware a little bit, we've talked about the software a little bit.
Daniel Scrivner (29:42):
I want to go a little bit higher level and talk about as you have been thinking about building the business, how are you thinking about the competitive advantages? Because it seems like one of those clearly is on the hardware side, but almost more around the industrial design of it and being able to do efficacious on the software side could that's one, how else have you thought about that?
Ben Boyer (30:03):
Yeah, so at some point, we're going to compete with a startup that will come hard and work like we're working and be able to produce three hardware skews in two years in a bunch of software. But by and large, we're competing with some very large, they're good businesses, but they're not moving as quickly as we are. We've had strategic interest from chemical companies, building automation companies, general lighting companies, and so I think we're cutting across a number of very large spaces.
Ben Boyer (30:32):
They've done a lot more in their history than we have. So we say it very humbly, but what we can do to compete is out innovate and out execute. And so we are small, but on our team, we have 11 past co-founders of businesses. This group of people have raised billions of dollars. And so we're honored that we have so many people, many of which were CEOs in the past life that are in a different role that are just mission-oriented and really want to help create safer spaces forever.
Ben Boyer (31:01):
And so ultimately when we think about competing, it's against these organizations in every single dimension. So one is we're science-driven, so it's got to work. We're not going to build products and just sell them for the sake of selling them. You will not see us release chemicals. We are not a believer in chemical interventions. The world doesn't need it. It's not good for them.
Ben Boyer (31:22):
And even though I think in R-Zero branded chemical for our customers, we probably could get away with it, we would never do that. And so we're building against basically a matrix of problems, as well as what are the scientific methods to resolve the problem. Beyond that, we care a ton about user experience. And so we track NPS religiously and we have very high NPS scores. Last I checked it was above Apple. And so we care about how these products are to work with.
Ben Boyer (31:52):
Are they inviting? Are they simple? You're dealing with something that's incredibly important which is disinfection in the time of COVID. And so it's really important that people feel comfortable operating them. The software itself is modern, and so if you were to interact with our software, I think it would feel very familiar to you. We've taken a very consumer-like angle. We've seen software for some of the vendors that sell products like this that are much older, it's very industrial and it might have been state of the art at 14 years or 15 years ago.
Ben Boyer (32:25):
It's not like interacting with a web application like Salesforce or Facebook and it can be. And so our goal is to basically win in every dimension. We also care a lot about price and while we have to build a business and we do have very strong margins and we're very proud of that, ultimately, the goal is to get as wide of distribution as possible. We're building a for profit company, but we know the better we do, the healthier the world is.
Ben Boyer (32:54):
And so the goal is not to really torque the business for margins. We've had a number of investors say to us, "Why not double your pricing? You're still cheaper than your primary competitors." And our answer is because there'll be less people that can access the technology.
Daniel Scrivner (33:09):
Yeah, it seems like a huge part of your play overall is that even just in the different channels that you've sold through today, it seems that you guys have a fundamental belief that the size of this market is maybe 10 times the size of how people thought about it before, but it's because the price point has to be ... It's like you have to hit all of these things that you're working on doing.
Ben Boyer (33:29):
We learned a lot by reading the body of evidence and learning about our competitor's products, some of which are 10, 15, 20 years old. And it really gave us the map of what we had to build because as we had to build something better. We had to make our product emit more energy so that it would disinfect the same size spaces faster, and we did that, but we also came to realize that while healthcare is a really important market and it will be an important part of what we do, taking the technology outside of healthcare is a much bigger opportunity.
Daniel Scrivner (34:00):
And I think in a lot of ways, that also goes right to the heart of why you found at the company early on is to help people like your daughter be able to go to school and not have as many sick days and not have schools closed down for 10 days. Just all of the incredible disruption that COVID's brought.
Ben Boyer (34:13):
Yeah, it's interesting, influenza. You become a student of pathogens and I tend to wash my hands a lot more than I used to, but it was interesting was it was in the summer of 2020, in South Africa, they effectively had no flu season because that was the winner. And that was the moment where we all realized that all of these different pathogens that are endemic. So 40 million Americans gets influenza, 20 million Americans gets norovirus. It doesn't need to be that way.
Ben Boyer (34:42):
We've accepted it, and to me, we've accepted it because of the limitations of trying to use filtration for disinfection and to use chemicals to deal with viruses. And so as that started to click, we're like, "Wow, it doesn't need to be that way. We actually got rid of the flu if all we did was go out after the flu." So forget COVID, and we obviously focus on that and norovirus. Every year, influenza is a top 10 leading killer in the US.
Ben Boyer (35:09):
It tends to get virally spread through schools, but the people that die are over the age of 65, it's the grandparents. And so if we can slow the spread of these pathogens at the school level, there's a down market or downstream effect where some of the grandparents and parents aren't going to die. And so there's a huge impact on just society if that's all we solve.
Daniel Scrivner (35:32):
Yeah, even just parents. Yeah, any parent of young kids knows how much sicker you are as soon as you have kids and they're bringing back everything from the school home. And it also seems going back to that initial comment around why is maybe the right moment in time. It does seem like obviously being at a point in time where we have a major pathogen that's airborne spread obviously can tip the needle into why something like UV-C as opposed to surface treat chemicals makes a big difference.
Daniel Scrivner (36:00):
I want to ask one question around Internet of Things is I feel like this was a buzzword I heard a lot five plus years ago. And now today I can think of a few businesses that effectively have a very successful model that are true with Internet of Things, but it's largely your model. It's like these physical hard wear devices that are then connected, and the software is really the powerful layer. As somebody who's been investing for a long time and is now building a business that can be described as an Internet of Things business, what's your take on the space? What is your take on if where are we at in the moment of time of Internet of Things booming? What's your sense?
Ben Boyer (36:36):
I think what you describe are the applications which is what we are. So we're basically leveraging connectivity to close the loop, provide data, report. And for us, it's really important both for reporting to the customer, but also for us being able to provide that dynamic risk model that is adjusting. Beyond different applications, and so Nest is one of our hero companies. We hired the global head of business development from Nest to join us, and I think he saw a lot of similarities.
Ben Boyer (37:06):
He's wonderful, his name is [inaudible 00:37:07] and he's just amazing, but Nest did an amazing job by reinventing a very old space and they did so in a way where they created this luxury product which had features and functionality that could help from an energy efficiency perspective, wonderful control. Think about going on vacation, leaving your air conditioning on, being able to turn it off with your phone, but they did so with a much higher price point.
Ben Boyer (37:32):
And I think it's amazing that they did, that's very Apple-esque, but think about what a thermostat would cost before Nest. You could buy one for $10 and it would do everything that the Nest product would do other than for the connectivity elements. And so as we were thinking about our business, we wanted to go the other direction from a pricing perspective and enable it, but different applications that do exist. And there are a number of companies now that you utilize IoT data in order to provide either a consumer service or something in the enterprise.
Ben Boyer (38:05):
Beyond that, there is an infrastructure layer. So think about security, the chip sets, different things like that are out there and security is very important. It is important to understand where that data is going. Our data is not very sensitive, even our occupancy sensors, it's just PIR. So it's looking at heat and motion, that's it. So we have no ability to discern a person. Our occupancy sensors have a neural network on the hardware, so it doesn't even use the public cloud to process anything.
Ben Boyer (38:35):
So as these things go, we're pretty benign, but there are occupancy companies that have cameras, and you're actually seeing LIDAR which can give you a lot of data about what goes on in a physical space. There's some that actually use true video cameras that can report and provide data. And again, you just have to be really cognizant and conscientious about that stuff, and which is why the security layer matters.
Ben Boyer (39:00):
We build everything we do. So we write our own firmware, we create our own hardware. Our Far-UV system is based on own [inaudible 00:39:10], we have our own filters. The one thing we don't do is the chips. And so we work with third party vendors that provide different chips. We use Bluetooth, we use LT, but different technologies to take the data off the device and report it to the Cloud.
Daniel Scrivner (39:25):
Yeah, talking about the neural net that's in the product, that's pretty profound, that's part of the product and I think speaks to why what you're building is so much more modern than I'm guessing some of the systems that are out there. I want to ask a couple closing questions. And one was I imagine as someone who's been investing for 20 plus years, you've developed some pretty particular ideas about how to go about building a company.
Daniel Scrivner (39:47):
And so I'm curious as you launched into this, and it sounds like initially you didn't think you were going to be running the business and it was more of starting at maybe investing in it. How did your background as an investor influence how you approached it? And I'm guessing that's probably from a sequencing where what you were over indexing on early, but how do you think about that? What would you share there?
Ben Boyer (40:06):
Yeah, first off, there is no playbook for all businesses. It depends on the team, it depends on the culture, it depends on the product, the space, who you're competing with. And so I think there was some early recognition that what we're trying to do is pretty different. I don't have a past portfolio company that went down this path, effectively trying to build a modern disinfection or infection prevention platform.
Ben Boyer (40:33):
And if you look at infection prevention, it really hasn't been innovative upon in 100 years. This product is 1950. So I'd say the last real innovation, but what I did learn from 20 plus years of investing is a lot of lessons as to what not to do and how important it is to have alignment on the team in communication. What we did in the early days of this was I know at some point we'll look back on it with pride and I do have pride today.
Ben Boyer (41:03):
We're just moving too quickly to really think about it, but we went as hard as I think any startup has. So we incorporated in April, we raised a seed round in May, we raised our Series A in August, we delivered this product in September and we booked over $40 million in five quarters after that, and so that required a level of effort. And I think a continuity in terms of strategy, all people rolling and rowing in the right direction, it's rare to find, and why I think we were able to do that was because of the mission.
Ben Boyer (41:39):
We wanted to get the product out because we wanted to help, and we felt like every day that we wasted, there was an opportunity for some additional person to get sick and maybe die. That worked. I would say we built R-Zero in the early days based on a lot of adrenaline, a lot of coffee, and that will not scale forever. And you have to eventually start planning things and the like. And so I think as I look back on past investments that didn't work or some that did that were successful at this, I was able to take certain lessons and apply them.
Ben Boyer (42:10):
I think one of the things that I had seen break companies was culture, and it's not to say there is a singular culture to build a company, but you have to define what that culture is early and then hire against it because if you have some people that have one perspective about what working hard is, and then you have another group of people that has an entirely different one, it's not as though there's a group that's wrong, but there is a group that's probably wrong for your business, and so we did little things like that.
Ben Boyer (42:39):
We hired a head of HR who's now our chief people officer, and she's incredible, and we did it early. We made investments in some of the people infrastructure early. And I know that that is going to pay off as we go from 150 people to 300 people. But again, I think the advantage I had versus maybe another first time entrepreneur was I had just seen a lot of ... I've learned a lot of lessons in 20 years. Some are good, a lot are bad, and we try to avoid as many of the negative lessons as possible.
Daniel Scrivner (43:10):
Yeah, no, I think it's very well said that it's more about what not to do and how to bring those lessons into what you're building, but I think clearly even just hearing you lay out those milestones, knowing what that would take even to execute against that and the number of people you need to hire early on, "Hey, you guys did take a very, I think proactive, thoughtful, upfront approach." And you were also sprinting from day one.
Ben Boyer (43:32):
We were, and the founders, I can't say enough positive things about Eli and Grant. They've become like family to me and I'm much older than both of them. So I think on some days I'm like their dad other days like their older brother, but I'm in my mid 40's, Grants in his early 30's and Eli is in his late 20's, but I never thought I would feel the kinship I do with them. I imagine there are thousands of text messages, we talk every day.
Ben Boyer (43:58):
There is no such thing as vacation and doing so over a very protracted period of time, you build this emotional connection that again, I've been around stocks for a long time, never experienced this, but what it allows us to do is we're all very different. I think our innate skillsets are different, but very synergistic. And we are able to divide and conquer really well. And Eli is the best seller I've ever been around.
Ben Boyer (44:24):
He's not actually trained at selling, he is just brilliant, and he gets everyone to like him, and that's based on trust. Everyone likes trust and respects Eli, and he deserves that. Grant is brilliant. He's a real engineer. This is his product, and he deserves all the credit for building something as quickly as we did that is unequivocally the best product on the market. From a price to performance perspective, has nothing that's even close to it.
Ben Boyer (44:52):
Where I could be helpful to the organization was around understanding what this business should look like over time and pointing us in that direction, doing the fundraising and ensure that we have the capital to aggressively go after the opportunity and then utilize my network to recruit people like Neil Day who's our CTO and he was the CIO of walmart.com, the CTO of Shutterfly he's again, someone that joined us when it was just like four of us and we didn't deserve him, but he thought what we were working on was interesting and those sort of things.
Daniel Scrivner (45:22):
Yeah, that's incredible. Last closing question. What has been the most difficult and most fun moment in milestone so a far in building the business?
Ben Boyer (45:34):
The most difficult, getting the first couple products out the door and stable was it was like Whac-A-Mole. We would fix one thing and there would be some other problem. It was all at the IoT layer, and it had to do with the chips that we were using, and we eventually did it, but it was incredibly painful, and we had a ton of orders and we were not going to ship these products until they worked. And we had angry people that were saying, "I want the product."
Ben Boyer (46:00):
We understood it because they're dealing with COVID, and so it was every day was frustrating and I could do nothing. All I could do was to talk to the customers and let them know that we are doing everything in our power to get the devices to them as quickly as possible. And so that was frustrating. I felt impotent. Neil worked 24 hours a day and so did Grant to get the products to operate as we needed them to. And it was all about reporting.
Ben Boyer (46:29):
The UV-C worked fine, it was just literally so that we could create that audit trail. And then I'd say we took an investment and signed a multiyear collaboration agreement with the Mayo Clinic last year. And I think the person that sponsors it at the Mayo clinic is the global head of infection prevention for the entire Mayo Clinic. He and his team actually asked us for our opinion about different things.
Ben Boyer (46:53):
And so that realization that less than two years into working on this project in a space no one knew anything about, we've just read a lot of science. We're helping the very best infection prevention specialists in the world to think about mechanisms by way they could reduce pathogen load and make their environment safer. And again, I'm just shocked and our technical team deserves the vast majority of that credit.
Daniel Scrivner (47:22):
It's just incredible. Well, what you guys have been able to accomplish in less than two years. And it's also I think this is ... I feel like when I first started looking at R-Zero, it's not a space I would ever intuitively think about, but as soon as you thread that needle of why it matters, how big the opportunity is, why it's new and novel, I think it's really interesting.
Daniel Scrivner (47:40):
So it's fascinating to then think back to the origin story of just super humbling being like, "There's got to be a better way." Trying to figure that out, and then here we are two years later with 40 million plus in sales. So anyone listening can learn more about R-Zero by visiting rzero.com, can also follow you on Twitter. You don't tweet a ton, but you have tweeted some very great medium articles at B-J-A-M-I-N999, and there's some great stuff you've written on medium that we'll link to as well too about everything from some of the journey of building R-Zero to why a great board of directors really matters. So thank you so much for the time Ben, this has been a lot of fun.
Ben Boyer (48:16):
Daniel Scrivner (48:18):
Thank you so much for listening. For links to everything we discussed, as well as the notes and transcript for this episode, visit outlieracademy.com/94. At outlieracademy.com, you can also find our incredible interviews with the founders of Level, Superhuman, Eat.Sleep.Rally and Commonstock, as well as bestselling authors and the world's smartest investors. You can now also find us on YouTube at youtube.com/outlieracademy.
Daniel Scrivner (48:42):
On our channel, you'll find all of our full length interviews as well as our favorite short clips from every episode including this one. So please YouTube and subscribe now. You can also follow us on Twitter, Instagram, and LinkedIn under the handle outlieracademy. Thanks for listening, we'll see you next week right here on Outlier Academy.
On Outlier Academy, Daniel Scrivner explores the tactics, routines, and habits of world-class performers working at the edge—in business, investing, entertainment, and more. In each episode, he decodes what they've mastered and what they've learned along the way. Start learning from the world’s best today.
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