New Technology … To Be or Not To Be?

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Hello there. We’re the new kid in town. Perhaps we met at the ACCA Conference or on the expo floor at IE3 earlier this year. If not, hopefully you’ll get to know us in the coming months and years. Nobody asked, but in the spirit of over sharing, I’d like to offer some thoughts and observations as a newcomer to your industry.

Let me start by saying we’ve felt incredibly welcomed by the HVAC, HP, and IAQ communities. Through ACCA and other organizations, we’ve met so many brilliant & hardworking service professionals and business owners. We’re constantly learning new things and are working hard to incorporate that knowledge in the products that we bring to market.

That said, I’ve also picked up on some negative attitudes towards technology and newcomers to the industry. I hope that it’s a minority opinion, as I fear HP and HVAC businesses are about to experience some transformative changes in the coming years.

Like it or Not – Change is Coming
I’ve been working with the Internet since the invention of the web browser. Anyone remember Mosaic or WorldWideWeb? I’ve always been sensitive to the human impact of my designs, but innovations from some of my more successful peers have often proved detrimental to established companies and their employees. One needs to look no further than Amazon vs. local retailers, Kayak vs. travel agents, or Uber vs. taxi drivers. Technology and new ways of doing business have the power to disrupt markets. In each of these cases, incumbent companies and workers have not fared well.

HVAC and HP enjoy several advantages, which I believe have thus far insulated it from major disruption (e.g. complex systems, need for a highly skilled and local workforce). Nevertheless, make no mistake, these barriers to entry are being chipped away as new products come to market, networked equipment becomes pervasive, and well-funded service organizations expand nationally.

On the technology side, companies like Nest have successfully tapped into consumer sentiment for well-designed and easy-to-install products, in much the same way Apple does for computers, mobile phones, and music. Manufacturers like Mitsubishi, Fujitsu, and Daiken have entered US markets in big ways with mini-split products that are efficient and easy to install. And a new generation of startups like 7AC Technologies are working to commercialize heating and cooling systems that are even more efficient and effective.

If that’s not enough, innovations in service delivery from companies like Next Step Living are expanding across states, and have the ability to take customers from energy audit to financed installation of weatherization, solar, and high-efficiency HVAC products.

Are you nervous yet? If not, you probably should be.

You Kids, Get Off My Lawn!
As tempting as it might be to write off technology and new ways of doing business as naive or inexperienced (and many are), I think it’s a huge mistake to paint them all with the same brush. If you spend some time, examining how technology has disrupted other industries you’ll see similar patterns to what I believe we’re seeing in HP and HVAC.

Transformative changes rarely look like it at the outset. More often, they look like 80% solutions that lack the professional service and features associated with their incumbent competitors. When a solution is delivered at a fraction of the cost or provides a premium customer experience (real or perceived), investor money often follows, and you have the right conditions for a major shake-up.

Most of these new ventures won’t be successful, but they don’t have to be. It only takes a few big winners to transform up an industry. Love it or hate it you can’t deny Nest has already made a major impact on the market for residential HVAC controls. And their success is only attracting more new faces to the HVAC and HP industries.

I think this is a great thing – and you should embrace it.

Survive or Thrive?
A mentor once told me that chaos presents the most powerful business opportunities. By turning your back on new entrants attempting to change the market you risk missing out on the handful of innovations that may prove to be truly transformative. You might be able to continue doing business the way you always have, but history has shown this isn’t a great formula for continued success.

The most successful people we’ve met in HVAC and HP seem to embrace new ways of doing business and are committed to continuous improvement. I can point to examples here in my home state of Massachusetts where HVAC business owners moved to HP and utility-sponsored efficiency programs when the home construction and renovation markets dried up in 2007. Several have said they wouldn’t be here today if they hadn’t moved to these programs.

Instead of dismissing new ideas and ways of doing business, dedicate some time to experiment and work with new technologies and companies. Skepticism is healthy, but excessive negativity hurts. As industry professionals, you possess a wealth of scientific and industry knowledge that is difficult to replicate. Many of us are eager to learn and want to build systems that add value to the role of the service professional, not diminish it.

If you’re willing to help reinvent your industry you might just be able to stay on top of it.

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Posted In: Building Performance, Residential Buildings, Technology