Transitioning from Manual Tasks to AI: The Future of HVAC and Commercial Kitchens

Meg Schmitz:
Alrighty. Hello, everyone, and welcome to or welcome back to my podcast. It’s called the Free Agent. My name is Meg Schmitz. The discussion here is all about free agency and taking control over your future. The mission of my show is to share inspiring conversations with real people who took the leap into self-employment, business ownership, sometimes franchising, and also freedom from corporate refugees and executives tired of the desk job. To entrepreneurs and investors looking to share camaraderie and inspiration through their own business journey. My podcast shines a spotlight on real people who stepped into the unknown, took control over their destiny, and became their own boss. And so today I have the pleasure of inviting Ryan Martineau to the podcast. This is going to be a little bit different interview than usual. I think it might resonate more with my franchise companies. But let’s dive in, Ryan, and talk about. Let’s talk about XOI Technology, which is a company that my husband and I have been invested in for probably good 10 or. No, it’s more than that, more years than that. So we’ve watched a lot of the evolution, but XOI is really solving the labor shortage in some very interesting technological ways, which is very relevant today. I don’t know where you want to start because you haven’t been with XOI for that long, but let’s start with XOI and solving labor shortages and just how your offering is really resonating with franchise companies.

Ryan Martineau:
Yeah, no problem. And thanks a lot, Meg. It’s great to be on with you. So, yeah, XOI has been around for, I think, you know, 12 to 14 years, founded by the CEO Aaron Salo and a couple others. But what they really do is focus on. It’s a job site workflow technology that supports large franchisees or large service providers providing maintenance and asset replacement services in the commercial building space with a lot of focus on HVAC units and commercial kitchen, could be boilers, furnaces, any type of asset that heats, cools or circulates air or water, which is a huge business as you can imagine. And it’s a really interesting market segment that is changing and evolving very quickly. 

One thing that one kind of market force is. You’re right, Meg. There has been a market kind of drop in the overall supply of really highly skilled technicians for various reasons in this job, when you’re maintaining heavy equipment in buildings and there’s so many different types of equipment, and these are very complex pieces of machinery, it does require an advanced skill set that is often acquired over time. These are very experienced, skilled people and for whatever reason the supply has diminished over time. I don’t know if it’s younger people just haven’t chosen that career path. It’s caused a shortage and that becomes problematic. Well, at the same time, I think demand for that type of service, especially at scale, has started to increase, right? You’ve got large companies, organizations with multiple, you know, many, many facilities, distributed over large swath of real estate that are really looking for service providers to provide a consistent, high quality service and provide efficient uptime of that equipment. Meaning, like if it breaks, they need it to be replaced, obviously, because it’s core to the operation of that facility. 

And so there’s much higher demand for, you know, in speaking in terms of like a franchise model, large service organizations that can provide consistent operations and uptime of that equipment across these portfolios. So that’s kind of the forces in the market. And you know, because of that shortage, those service providers are seeking out technologies or software like XOI’s that provide automation to help one streamline operations, enhance consistency, reduce errors, improve customer satisfaction, and leverage data to provide insights and track metrics that their customers can use to make better decisions and understand how well things are going.

So that in a nutshell, XOI has created a technician software that does that. It’s a mobile application that an HVAC tech can use to one, capture asset data. So they can take photos of equipment and it will digitize the nameplate information of that equipment. And then over time they can track activity against that asset. So they can say, okay, if it had a certain issue, how do I categorize that issue? How many issues has that equipment had? What’s the average time that a technician is working on that equipment? And really what that helps is, you know, operators of large franchise service providers kind of track technician performance, general operating performance. It also allows technicians to take photos, do notes, AI work summaries that really reduce the amount of time. 

So for example, where things used to be written down by hand, now you can just capture something with a photo and it’ll scan it, right? That reduces a lot of time. Notes used to be written or translated on a phone call. That can all be done through AI or automated. So the tool is meant to make the technician’s life much easier. Taking away some of those menial tasks that just used to take time and really automating that and using that data to kind of help either the technician or the service provider management or the end owner of that equipment make better decisions or have better understanding of how things are performing.

Meg:
When Pete and I were first involved with Aaron, many years ago, more than 10 years ago, for the listener, the example that he gave us, and it’s outdated already, very outdated, but just think of, think of six guys, all apprentices, going out in trucks to get up on a rooftop to get up on to look at an RTU rooftop unit and identify the service issue. This one has a squeak. This one isn’t working at all. But the apprentice is not necessarily equipped with the knowledge or the tools to go on site and fix it. So back then there were glasses that they were wearing that had a recording device so that Jorge back at the corporate office could monitor the input from these 5 technicians who are out on 5 different locations but Jorge, the experience guy was the one who could say this okay one need a new belt this one needs a new. 

And then they diagnose it on site and the replacement part can be dispatched or whatnot. So that was what, 10 or 12 years ago? Your offering has really jumped with artificial intelligence.

Ryan:
No doubt about it and back to that point, one kind of feature service that XOI does provide is, one we can, as soon as a technician takes a photo of that piece of equipment, we can recognize what that is and provide all the documentation, manuals, spec sheets, etc. So that they have that information at their fingertips on their phone to make better decisions around, you know, how to maintain it. 

If they do have questions, they can access a network of experienced technicians which they can call on the spot and troubleshoot any issues that they might have, back to your point, which can be very, very useful. And that’s a huge feature that people like. And the other thing kind of that they partnered with the company that I founded on is once you take a photo of that nameplate and you get the model and serial number of that equipment, we can instantly provide up to 120 asset attribute fields. 

So we can tell you what it is, how old it is, what the expected useful life is, all the belt and filter and refrigerant information, for example for HVAC. And that allows technicians to immediately understand, okay, here’s what it is. If I need to replace that belt, here’s the size. If I need to replace the filter. Here’s what that is. So it just gives people better information to make better decisions in real time and avoid the cost in time it would take otherwise to go look all that information up by hand. You avoid truck rolls. So the goal is to really save technicians and service providers the cost of those menial tasks and allows everybody to be more productive.

Meg:
And so we can depart from XOI, which is fascinating stuff. Tell me about the company that you founded and your history and background.

Ryan:
Yeah, for sure. So we, I, I founded Specifx Data with my two co-founders, Ben Patch and Pete Shimkiss. We’d previously, you know, collaborated and worked together. I was at a company called Redaptive where I was actually a co-founder of that company in 2014. And they did energy as a service. So we were really focused on developing large scale multi-site, multi-asset replacement and retrofit programs. So did a lot of LED lighting conversion, HVAC optimization, some renewables for really large enterprise companies like you know, for example Bank of America or AT&T. Those are some of the names of Redaptive’s clients. 

And it quickly became evident that to do that well and at scale, a huge unlock and requirement was you needed to know a lot about the assets that those companies own. So whether it’s a franchisee like a Burger King operator, a big problem is that many asset owners actually don’t know which equipment they own. They don’t have a good digital record of it, they don’t have an inventory of it. And so you have to go out and figure out what they own. So somebody has to go on the roof, you know, take a photo, identify the equipment and then in order to do kind of like any, you know, day-to-day activity or any planning or engineering saying hey, how old is this equipment? What is it? What should I replace it with? So to do that across thousands of pieces of equipment, you need to know a lot about that equipment. And Ben Patch created, had spent about eight to ten years of his career previously basically putting together a set of automation and software that can take a model and serial number and decode it to derive all that high value asset information. Typically to do one of those it takes about 60 minutes. 

So if you’re paying somebody 70, $80 an hour, you know, it’s about $80 to do one. So if you did 5,000, it takes, you know, many weeks and many tens of thousands of dollars and essentially we can do that in a matter of seconds. So it really cuts down the cost of asset data acquisition and allows you to better figure out how to plan. First of all, what’s the age distribution of all this equipment? Which ones have different refrigerants? There’s a lot of regulation against refrigerants. Which ones are the most energy inefficient? If you care about electrification and moving away from gas powered equipment to electric, allows you to identify that. And so you can much quicker then say, okay, this is the exact subset based on my goals and objectives of what I want to replace and then determine what I should replace it with. And then model out how much will that cost and what will I save in terms of reducing my overall operating expense, maintenance expense, energy consumption expense and then are there any climate and regulatory impacts and creating that business case? And that planning is typically like a five to nine month experience for most large enterprise. And we’ve really consolidated that down into a matter of minutes. So it saves a lot of time. And it’s kind of a key unlock for better planning activity.

Meg:
And so going back in time and just curious about you as an entrepreneur. When did you realize that you had the entrepreneurial DNA?

Ryan:
That’s is a great question. Because I never would have thought of myself as somebody to do that. I give a ton of credit for my experience. When I was at Redaptive, I was definitely a co-founder there. I wasn’t the CEO in that company and was kind of the third co-founder. But in growing from three people and seeing and building that up to five to ten to twenty-five to a hundred plus people over about a seven year experience, taking on multiple roles in that company, from an operational role to a partnership role to leading sales, you start to learn a lot about what it takes to grow companies and the decisions that need to get made and how to hire well, how to train, how to scale in your systems. So I would say that gave me a ton of confidence and I think when the stars aligned we’ll just say and Pete and Ben and I thought we had a good concept, then we all kind of freed up at the same time. That gave me a ton of confidence. Having seen it before and learned from others to kind of pull the trigger and take the leap and start Specifx.

Meg:
Take the leap. That’s my tagline. So nice insert there. What was the attraction then? It seems very natural then with XOI.

Ryan:
Yeah. Oh, extremely natural. So yeah, I mean we started the company, eventually launched our product and you know, kind of as a sales leader—I suppose as the CEO—started reaching out to, you know, people who we thought would recognize it. One of our biggest customers at the time said, you know, told Pete and I, hey, have you ever heard of XOI? You guys should really chat with them. They’ve got a really cool product that we like and think that what you guys are doing would be very complimentary to what they’re doing. So I got in touch with the team and Bashir, their head of product, and then Aaron, the CEO at XOI. And it just kind of clicked immediately. You know, when we started describing what we were doing, I think a light bulb went off for them and they thought, wow, that’s really interesting. We could take what you do and kind of integrate it into our product and supply that data to our clients.

Ryan:
And so we did a huge test and validation and then, you know, we signed a big agreement and it quickly just took off. The XOI customer base really liked what they were seeing and we, you know, kept growing and they became our biggest customer. And then, yeah, I think over time when, you know, XOI just recently announced that they were kind of acquired by KKR, the private equity company, as that was happening, it kind of provided this amazing opportunity where they were able to acquire Specifx and we became part of their product set. Now the other thing I would say about Aaron and the XOI team is just, I think we really see the same vision of where we can collectively take and evolve our product and our data products. And so there’s things that we’re working on right now that, you know, first of all, it kind of allows us to accelerate what we were building already at Specifx and add things. So for example, we’re providing attribute data. XOI can provide, you know, asset literature, performance data. So there’s all types of like really compelling things we can create in this really interesting data asset that allows these big kind of either franchise or large service providers, asset owners, just more and more compelling information to help them make better decisions. And so I think that kind of like chemistry, aligned vision, I think the teams are really strong on both sides. And just the fact that we kind of saw that momentum just made a ton of sense to do that acquisition.

Meg:
So I remember working with Aaron and being in Nashville, introducing him to some of the franchise concepts that I know so well. Is it Neighborly that you have a relationship? Which of their brands are you specifically?

Ryan:
That’s a good question. I don’t know exactly which Neighborly brands we’re working with. 

Meg:

They’re nationwide and they’re huge 

Ryan:

And they’re and that model is becoming, I’d say increasingly more pervasive. You see a lot of consolidation in the commercial and residential HVAC service provider space. Right. And there’s a lot of like large, even big private equity companies that are kind of buying more regional companies and combining them, you know, based on the market kind of demand that I outlined a little bit earlier. So you, you know, and you can see them. There’s like, you know, Comfort Systems is out there. There’s lots of examples where they’ve kind of done this and when you do that, you want—one of the ways to make those larger organizations more efficient is to apply consistent sets of useful software and practices that give them that efficiency to lower their costs, make them more productive, make the service they provide better to their customers and really differentiate them from competition. And so I think there’s quite a bit of that type of demand when you can provide that consistency that I just mentioned in that franchisee network. So you’re really taking advantage of a centralized relationship that can be kind of distributed out to all those portfolio companies or to the regional groups under that franchise.

Meg:
Well, it’s, and it’s been interesting. Everything is interesting these days depending on who you’re listening to. But with the tariffs and the understanding then of how some of these decisions to make America great again and bring manufacturing back to America, I imagine this is going to open some really amazing opportunities for you because I’m not sure that American youngsters are ready for those kinds of jobs. They may be more on that, on the AI tech side rather than the actual labor side.

Ryan:
Yeah, agree. I mean you’re exactly correct. There is a lot of change happening and, you know, in any kind of changing environment that brings a lot of opportunity and the technology is getting better. Right. There’s more automation, there’s more need for analytics and artificial intelligence applications. And so this is particularly, I think, an industry that is ripe to adopt new technologies like this to improve practices and drive that type of efficiency. Whether it is on younger technicians that are newer in the workforce that can use technology to get training faster or access to help and support from more experienced technicians. That is like a clear no brainer. If it’s kind of like, you know, tariffs or like, you know, lack of clarity or predictability in the pricing of certain assets or replacements, and you might as an asset owner, building owner or portfolio owner, you may think, hmm, like, how do I figure out what should I expect to spend next year if there’s changes in prices? And so having better information that’s well structured, harmonized, organized, and then some of the applications that we can build to give those answers more directly and have that readily be available, that’s all extremely valuable. And that’s the types of solutions that we see going forward that there’s a huge need for in the building management, asset management, and asset servicing industries. And we want to be kind of a preeminent leader in that space.

Meg:
It seems like the ideal candidate then—employee—would be someone who’s already gaming, someone who’s really… We can gamify the service by giving them in the palm of their hand in their phone the opportunity then to learn a trade. But it’s not, it’s not your grandfather’s work.

Ryan:
No, no. And in some respects it’s still, it still is. Like, it’s still a physical complicated machine in a hard to reach location, often in very tough, challenging conditions. And so it’s not easy, but, you know, yes, there are layers of intelligence and automation and insights that can be provided to make that easier and get people trained faster, get answers faster so that you could be more productive, instead of potentially needing ten technicians on your team, maybe you need eight or less because they can fix more issues, resolve more issues faster. So it definitely kind of increases like the revenue opportunity, the profitability opportunity for firms. And, you know, the more of that technology you can adopt that’s high quality, working with teams like XOI that have, you know, strong customer support teams, strong onboarding teams to really make it work for your company, that’s great. And from a technician standpoint, if I’m a big employer and I’m thinking, wow, like there’s a shortage of labor here. How do I retain my employees? How do I make sure that they think that I’m giving them the best tools and automation to make their life—you said gamified—but yeah, like make things easier and faster and simpler and less kind of like, “oh, do I really have to do all these processes?” How can I just actually give them what they need to make themselves more efficient? We’ve seen a lot of that and they think, oh, if I use XOI, you know, my employees really like this. It makes me a more attractive employer. So that’s another big advantage that I’d point out.

Meg:
As we’re talking, I can think about my franchise portfolio of companies and how many of them are in home services. Or they’ll say we are a technology company that happens to do roofing. 

Ryan:
Yeah.

Meg:
The more these franchise companies can implement the type of application that XOI has produced, this is what franchisees, my owners, are looking for is, get it. I get it. I’m locked out of my car, I need to get in. But if there’s no senior locksmith out there, then how do we… It’s a necessary service. It’s going to eye scan, it’s going to fingerprint, it is increasing in the technology advancement—it’s clearly not your old school locks with tumblers.

But yeah, a lot of my companies are looking at ways like this in order to make the staffing piece of it much easier. And the retention really comes from those younger… younger. I’m 62, so they’re all younger. But those minds that are in the apps. I’m always amazed at how many young people who are entrepreneurs come to Pete and me for advice because they’ve got an idea for an app. So you’re solving so many problems that I think a lot of my franchise companies would be really interested in.

Ryan:
I think that’s a totally fair point. And as you know, you get younger and younger, a young workforce entering, you know, they’re very accustomed to using these technologies. They kind of look forward to it. They’re almost—you know, I don’t want to call it dependent—but it’s very easy for them to pick up. But what I’d say is like, when it comes to technology adoption, especially in this market, we don’t ever want to be seen as something that’s a painful thing to work with. You know, like there’s all these things where it’s like, do I really have to do that? Do I have to go out of my way to check every box and fill out every form? That type of stuff, you know, when you have to do that—someone’s making you do it—it feels painful. And so the name of the game on technology is to make it feel the opposite of that. It’s not a drag, it’s actually just really easy to use. Elegant, simple, really helpful and straightforward. 

And so we don’t want to overcomplicate it and just focus on solving those issues that are very responsive to the actual boots on the ground and the actual technicians in the field. Yeah, right. This is not kind of an overarching corporate piece of software that everybody gets annoyed with. This is something that people look forward to using and kind of get excited about and it’s easy to adopt.

Meg:
Yeah. Well, as Pete and I have been following along over the years, this is exactly what was so attractive about the investment in XOI is that it is a problem-solving, fun—really. Just watching the evolution with Aaron and the team of enhancing the experience for the guy up on the roof. Like, who wants to get out a piece of paper and a pen? This is making their work—and like I like to say—let’s remove the pain points so that they can do… like mental health professionals who are so encumbered with all the paperwork they need to provide now to insurance companies, they’re moving away from what they went to school to do. 

Ryan:
Yes. 

Meg:
And now they’re mired in administrative stuff. So let’s get these technicians who want to learn the trade in advanced technology like you’re offering. 

Ryan:
Yeah.

Meg:

And I think that makes those people more sticky.

Ryan:
No doubt about it and I think you nailed it. And that’s kind of the name of the game. And, you know, I think that shows up and I think one of the most satisfying parts of being customer-facing and working with our customers is when they give that feedback. And it’s, you know, it’s very honest and they say, “I’m really happy that we adopted this. This is how it’s improved our ability to operate as a company and my ability to make decisions and be more efficient with my job and productive.” And these tools have really helped me. We get really good feedback like that, you know, quite a bit. And I think XOI has a huge and growing customer base and, you know, I don’t think we would be able to do this unless we kind of nailed that piece of it—customer satisfaction. So couldn’t agree with you more.

Meg:
And so with the KKR investment now, I imagine that those dollars are going to unleash some new opportunities, new areas that you’ll start to migrate into. Is there anything that you can talk about where the business is going in the future? Where is it going to go?

Ryan:
Yeah, no doubt about it. So if you think about XOI and they’ve created a really awesome technology and software to support technicians and also do a lot of data collection—asset data collection, issue categorization, performance benchmarking—they’re also able to provide documentation. So there’s a lot of structured data around the asset. And then if you think about Specifx, which they acquired—our ability to unlock and automate, you know, providing up to 120 unique asset attribute fields about every single piece of equipment and there’s tens of millions of SKUs out there. If you can start to combine all of that, you know, I think data… there’s a lot of really interesting insights that you can do. And there’s applications of that data around capital planning, engineering, energy modeling, regulatory analysis, rebate availability—things like that that help drive enterprise decision-making that we think is super, super compelling and kind of an area where there’s a lot of demand for that across the entire industry space. Whether you’re a service provider, a facility management organization, a third-party software provider, asset manager, an ESCO, OEM, distributor—there’s lots of different users for that type of data product. So, you know, I think we have some focus there and are really excited about our roadmap.

Meg:
So are you a data geek?

Ryan:
No.

Meg:
Okay.

Ryan:
Not historically. I wouldn’t call myself—well, you could call me a geek, I’ll accept that. But I do… you know, data is the new gold. And, you know, if you’re building insights or AI applications in these markets, those who have the most unique, structured, and highest quality and quantity of data—that’s like, you need to feed that to the AI applications and automation. And we think that we have a very, very compelling and unique data asset. And there’s lots of interesting stuff that we can do with it and our partners and customers can do with it. And so, you know, in many ways, we do believe that XOI is a data company and we have the opportunity to do big, big things with that.

Meg:
Yeah, I would absolutely agree. Your value proposition is—as I’ve heard—the customer testimonials, the data that you provide, the data that is provided by the app, and the time savings, the cost savings, the making it fun again. 

Ryan:
Yeah. 

Meg:

There’s so many moving parts as a business owner that you’ve got to get minute into the details of where are you draining off your revenue or your profitability? I mean, where’s it—where can it be reclaimed? And that’s really what a lot of your offering is.

Ryan:
And if you think about it, like making data-driven solutions that are particularly tailored to—we’ll call it a vertical or facility management, asset management, HVAC, etc.—you really have to have a good understanding of how that marketplace works and all the work and activity that goes into it and really craft your solution for that specific ecosystem. And I think that’s where we are laser focused on and, you know, I think we have the data and frankly the customer base to do that really well.

Meg:
So what gets you excited every day?

Ryan:
Yeah, I mean, pushing forward growth, right. I think like XOI has, you know, been an amazing company and worked really hard over the last 12 to 14 years to build a really, really compelling product. And I think one of the most—beyond the team—the thing that stands out to me is how big the customers that they have and how well they’re doing with this and the kind of loyalty and satisfaction of those customers. And, you know, they have like 60,000 technicians, several hundred customers, tens of millions of assets in the software. And I think the sky is the limit in terms of what we can continue to do and evolve that set of services and insights. So that’s interesting. And we want to be the market leader in that space and, you know, wake up every day trying to push that forward as hard as we can and give something to our customers that’s really meaningful. So that’s what gets me out of bed.

Meg:
One of the great things for Pete and me is that KKR came along and we have our exit from XOI. But one of the biggest regrets that we have is that we’re now exited from—honestly Ryan, in our portfolio, I think the one that or there are maybe five—and we’ve got a lot—but XOI has always been in the top five of what’s interesting and exciting. And Aaron is so easy to talk to. He’s a very engaging individual and a business leader. He’s built a real solid company, now with you coming on. So we’re going to be very sad to not have the kind of insights into the growth and expansion. 

Ryan:
Yeah.

Meg:
It’s so exciting. These last 10 years have been really exciting to watch XOI, no doubt.

Ryan:
Total credit to Aaron and his co-founders and that entire team. That’s a huge, monumental achievement. It is not easy to do that and it takes a ton of perseverance and a ton of listening and learning from your customers and deeply studying that industry and earning that kind of respect and admiration of your customers. That’s—it’s a marathon. And like I’ve told him, an incredible achievement to get this partnership in place with KKR and reward everybody that believed in XOI and Aaron and invested. And so that’s just a huge win all the way around. And I still think it’s just kind of the beginning of the next journey. And I think we couldn’t be happier to be part of that team and super excited that we’ve been included and really, really bullish and optimistic on what we’re going to do next.

Meg:
Well, it’s a great marriage and I’m so delighted that we were able to grab the time today to make this interview happen. I’m really hopeful that my franchise companies will take a listen to this. I’m going to push it out and advocate for that because it is so relevant and necessary, especially as it trickles down to the franchisee and their profitability. They’re running a marathon as well, but they’re at the street level. So we’re really going to push hard on this one to get it out to the portfolio of companies and we’ll watch what happens.

Ryan:
Cool. Yeah, I really appreciate the time, Meg. It’s a total pleasure and, yeah, look forward to maybe chatting again soon.