Mark Chung. He’s the CEO and co-founder of Verdigris, a Silicon Valley-based internet of things startup focused on smart buildings. Previously, he was a principal engineer for Net Logic, AMD and PA Semi. He graduated with electrical engineering from Stanford University and lives in Sunnyvale, California. When he’s not building, he’s spending time with his family. Famous Five: Favorite Book? – How the Mighty Fall What CEO do you follow? – Mark Zuckerberg Favorite online tool? — Pivotal How many hours of sleep do you get?— 8 If you could let your 20-year old self, know one thing, what would it be? – Mark wished that he’d be more growth minded and started earlier   Time Stamped Show Notes: 01:07 – Nathan introduces Mark to the show 02:04 – Verdigris is an artificial intelligence company launched in 2012 02:10 – Verdigris focuses on developing technology for commercial buildings that are managing their energy 02:22 – One of Verdigris largest customers is Jabil, a large manufacturing firm 02:28 – Verdigris sensors on Jabil’s electric panels collects data from the whole facility 02:40 – Verdigris synthesizes the data into simpler and more understandable reports that facilities’ managers can review 02:49 – Then they can understand if they’re losing money on electricity or potential equipment fail 03:21 – Verdigris is a combination of software and hardware 04:05 – Verdigris has a hybrid model 04:11 – Verdigris charged on the hardware when it gets installed and a recurring fee for the software 04:21 – The hardware is the bigger revenue stream 04:47 – For a 2-bedroom house, it will cost $1K to install Verdigris 05:23 – Each clamp is $50 a piece 05:54 – Verdigris has raised a total of $16M 06:05 – The first round of funding was in 2012 and Verdigris was launched at the end of 2011 07:11 – Because Verdigris has a hardware component that enables the SaaS, it becomes a sticky product 07:29 – Churn rate is lower than typical SaaS companies and retention rate is higher 07:46 – From a cost standpoint, hardware cost doesn’t take all of equity capital 07:53 – You can also finance the hardware 08:34 – Verdigris measures the total amount of electricity measured 08:54 – Currently, they’ve measured a few megawatts—enough to power a small neighborhood 10:00 – For the SaaS side, monthly subscription fee is $50 or $80 per box depending on the level of service 10:40 – Verdigris gets their sales directly and holds their data infrastructure 10:47 – Verdigris uses Verizon as their back end for all data communication 11:30 – Verdigris is focusing on the commercial space first 12:10 – Customers pay per month is between $50-80 on data plans 12:28 - $1k a month is near average of what customers pay 12:44 – 80% of Verdigris’s customers are paying customers 12:56 – Average MRR is around $260K 13:19 – Gross customer churn is zero 14:40 – Verdigris looks for customers who spend around $10K a month in electricity 14:56 – Team size is 30 15:05 – 90% is engineering 15:15 – There are 3 founders 15:23 – The founders are all engineers, one being more business minded than the other two 16:02 – CAC 16:07 – Verdigris doesn’t do a lot of paid marketing 16:43 – Verdigris has spent around $10K in 3 months for ads 16:49 – Most people learn about Verdigris through Verizon 17:00 – Verizon’s sales people in the field talk to their Fortune 500 customers selling different IT solutions 17:19 – When the customer matches Verdigris’ customer profile, the sales team tell them about Verdigris 17:50 – Verizon found Verdigris 18:26 – 2017 revenue goal is over $5M which is 4x from last year’s 20:50 – The Famous Five   3 Key Points: With so many SaaS products available, having a SaaS product that uses proprietary hardware creates a sticky, hard to replace product. Your target market should be curated with your pricing plans. Building a partnership with an already established company is beneficial, especially if you’re a new one.   Resources Mentioned: The To