Interview with EnTouch Controls, Greg Fasullo

Last week, Dallas-based Entouch Controls ( announced it had raised a Series A round of capital. The firm is headed by Greg Fasullo, a serial entrepreneur who has had prior success and co-founder of Valere Power. Greg filled us in on what he's up to at Entouch Controls.

What is EnTouch Controls all about?

Greg Fasullo: We're a bunch of tech guys. We've built a bunch of businesses in Dallas, and we're focused right now on energy management, mostly for commercial buildings. There are five million commercial buildings in the U.S. which are less than 15,000 square feet in size, including retail stores, restaurants, medical offices, to small offices. Most of those buildings are spending 40 to 50 percent of their energy bills on heating and cooling. Since those buildings are small, they don't have facility managers, their budgets are not very large, and tenants simply use digital thermostats to control their heating and cooling. Those thermometers tend to be low cost, their clocks never seem to be set right, they hang when you lose power, and schedules are, most of the time, not set properly. Mostly, those businesses go to the thermostat, and adjust the temperature, and hit hold. The impact of doing that is substantial for most small businesses, and if you own a franchise, say of ten restaurants, you might be spending $300,000 to $400,000 a year on electricity, with half of that heating and cooling. If you optimize that, you can save 15 to 30 percent on your energy bill.

We saw that problem, so we attacked the market with a very light, energy management system. That system essentially replaces a thermostat in a building with a color touch screen, similar to the iPhone on the front surface, and rather than being just a thermostat, is Internet connected, and at the same time is connected to all of the other units in a facility, so they can talk and synchronize , to increase comfort in the bulidling. We're also measuring energy back at the utility panel. We're one of the few controllers whose goal is to make it comfortable for customers, but minimize usage in the off course. It's a very simple and very low cost retrofit, which can enable energy management for a majority of commercial buildings, who can't afford the large systems from our competitors. So, businesses who install our systems can save money, save time, and help the overall environment.

Your prior background is in telecom. How did you decide to look at energy management?

Greg Fasullo: It kind of evolved over time. We originally saw the need for control systems in commercial buildings. It's common sense. If you look at thermostats on the wall, it doesn't make any sense. For example, we have two cooling zones in our buildling, and we had an issue where a fan on one of the units had a belt go loose, so we had the unit running all the time. The result was an energy bill which was really high, and we started wondering why we were spending so much on electricity. About a year ago, we thought we'd look at creating a really simple control system. We had been looking at solar at the time, designing for net metering and combining solar and HVAC control for small businesses. Valere was a very similar idea in the telecom space. We saw the need there for very small power systems for DSL and wireless, and there were no good alternatives. So, we took technology, and developed the product, and built channels. It's the same thing here. There are four big players here--Siemens, Johnson Controls, Honeywell, and Schneider Electric. They're really the top four providers in the space, but none actually offers a product that makes sense for small businesses. They're focused on large skyscrapers and big commercial buildings. It's a huge, open market. There are a couple of Internet thermostats for the residential market, but not the commercial market.

You recently announced a round of funding - what can you tell us about that round?

Greg Fasullo: We just closed on a Series A round, raising $2M from a local ventur capital firm, Trailblazer Capital. They've done some really neat stuff. One of their companies they sold to GameStop, Spawn Labs, and that was a pretty successful exit for them. They're a really involved venture firm in the Dallas area. Where they focus is on entrepreneurs and making a difference in the community. They are looking for technology that enables change, and what they liked about our technology, was its simplicity and energy savings.

There are lots of competitors in the energy market, how do you differentiate?

Greg Fasullo: There are a lot of folks in the residential market, but they all tend to be easy-to-use products for a single zone. They control one HVAC, and all HVACS in a facility are run independently. Those are companies like Echobeat, Prolific, Powerhouse Dynamics. Most of those folks go about with independent temperature zones, and do not provide coordinated HVAC control systems. If you have a restaurant with four to eight cooling zones, running on independent thermostats which are not connected, you are not managing the heating and cooling in a synchronized manner. Because we coordinate with each other, we can manage those zones as a single temperature zone, and can maintain a high level of comfort in a dining room. The third thing, is we have a commercial grade energy monitoring device, a small wireless device, in each of the HVAC panels and AC electrical powers, which measure main power and branch circuit power, and we're able to take that and monitor and use it for hardware control Some of our IP is associated with monitoring energy and how we couple that into our algorithm for cooling and heating a facility.

What did you learn at Valence Power which you are applying here?

Greg Fasullo: I think the most important thing, is as a company, you want don't want to just build a product, you really have to build an entire company and infrastructure. Having great technology is a required starting point, but you've got to couple that with a great path to market, great customer service, and a great experience with the business to make a difference. At Valere, we were able to build strong customer relationships. Our approach to the market is through a couple of different channels. We move product directly to franchises of large chains, but most of our market is through partners. We well through HVAC companies, control distributors, and others associated with energy conservation. We are going to do a really good job supporting them, from opening the product, to how installs work, to how slick our website is, to how we provide support. If we do that well, that will enable us to build a really good business.