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EQ Podcast: It’s OK to Pivot Your Startup
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- Published on October 1, 2019
- Last Updated October 4, 2021
- In Podcast
Full Interview with Adam Hoffman, Founder and CEO of Qstodian
Meet Qstodian: The ChecktheQ team’s original focus was on wait-time tracking in large venues such as airports or stadiums. But conversations with their founding clientele led them to discover an almost invisible and unmet need within the industry: custodial services management.
Check out the full interview with Adam Hoffman, Founder and CEO of Qstodian on YouTube and subscribe to our channel.
Jonathan Allen: [00:00:00] Congratulations on the Qstodian thing. I’m sure that’s the direction you didn’t expect to go in but I can see the logic of it.
Adam Hoffman: [00:00:07] Yeah, you know better than most. You were just saying how these things go where, with CheckTheQ , that was a business I started and I had like first-time entrepreneur written all over it.
You know, I hated waiting in line at airports. I thought, “I know other people have this problem. Airports don’t like it. Thus there must be a viable business here. Of course, this makes sense!
And then over two years of actually learning how to sell to airports, where their real pain points are, how to listen to the marketplace… Sort of like the entrepreneurial learning curve.
Like you said totally unexpected; came out of nowhere that it turns out that there’s actually a far larger problem here. It’s more invisible than security lines, and the anxiety of getting your flight or not. And it’s, “how do people manage cleaning schedules and custodial work?”
And, like, super unsexy. Perfect example of something that never would have come up in a college course. The only way to discover these unsexy opportunities is I think is to literally be working in the industry and listen to people.
JA: [00:01:09] Yeah.
AH: [00:01:11] But we think we have found an industry that has largely gone untouched by the data transformation, which is affecting so much, and with there’s a huge opportunity here. And that’s why I pushed all our chips in on it.
JA: [00:01:24] Yeah, I love that. And that’s what’s really exciting about it your story. It’s kind of a learn by doing, you know, so entrepreneurship on a kind of bright idea got you into an industry that you had no exposure to and then being inside of that industry you suddenly saw all these other bigger and better opportunities.
And I think the other thing is it seems like it’s just a logical pivot in the tech you already have developed.
AH: [00:01:56] Yeah for sure. I think so. A couple things come to mind there. The first is, it feels like we sort of have found cousins. Like, they’re not exactly the same. It’s not like these are twins.
Wait times and how clean spaces are and when people last cleaned them, but they definitely are in the same family, like you mentioned. So being able to leverage some of this technology we have already developed helps a lot.
And then, I think the other thing you said is also really true, which is I struggled a lot as a, you know, entrepreneur in my early 20s about, ‘is it better to go work a conventional job’ for a bunch of years and then maybe pursue entrepreneurship, whilst establishing that knowledge base, or is it better to ‘dive right in’?
And I think I hear a lot of smart people that disagree on that issue. So what I found is that, like, I think our biggest shot at success the other biggest opportunity has really come from, like you said, learning by doing. And learning how to listen too; I think was a skill that I really critically undervalued going in as a 22-year-old, you know trying to beat the world.
Turns out that people that have been working in an industry for 60 years, or 40 years, even 10 years, know it really well and know their problems. And so a willingness to listen to them has ended up serving us really well so far.
JA: [00:03:16] So, talk to me about how you adapt the original tech to the Qstodian solution?
What I understand of the original Tech is, like, it could predict what the wait lines are at the airport because it basically had a kind of scanner, or RFID or something like that, that would basically count the line. Is that correct?
AH: [00:03:41] Yeah, absolutely. So with the initial project product, we realized to track wait times. We had to have some way to count people.
And it’s worth noting that early on we drew this ‘Line in the Sand’ and we said, “anonymity is something we’re going to protect a hundred percent” when we’re doing wait times; with any product, we do in the future. And, so, we pulled that through to Qstodian as well.
And so the way we did it originally, for wait times was we use sensors like you said, “scanners,” to count how many cell phones we saw, basically. Totally anonymously, again, and we use that as a proxy measure for people. And then we do know that most people have a cell phone with them or a mobile device.
And so we were able to say, “Okay, we see ten people have been in the security area for – we see their phones have been here for 30 minutes – now, they’re gone, they must have gone through security.” And so, we were able to use that foundation we established with sensors that we were building ourselves, and hardware, to figure out how can we anonymously track the number of people using different areas in the building.
Different restrooms, different rooms, and especially, like our previous work was useful because when you get to a bathroom people are concerned about privacy a ton, as am I, as someone that uses the bathroom. I don’t like cameras or anything. And so we’re able to use slightly different but related sensors.
So now we use sonar and infrared to anonymously count people to get similar statistics about, ‘when are people using this part of the building.’ How long are they using it for? And then just like we did in wait times if the wait times got longer than say, 15 minutes or 30 minutes, over the airport one.
We’re able to send the automatic alert over text or email to notify the airport: “You need to talk to the TSA to get more agents down there,” et cetera.
Except now with restrooms, it’s “X number of people used the bathroom since the last time it was cleaned.” Let’s send a direct message to the custodian who’s assigned to that part of the building and get them down there immediately.
So there becomes this whole play around workforce management. And using data to more efficiently -and a more cost-effective way- schedule maintenance and custodial cleaners that I think has serious potential, because what we found is that, not just for airports but for all different types of buildings, hospitals, gyms, stadiums, office buildings cleaning is a significant cost center.
Because, in the status quo, it’s let’s clean every part of this building, the same amount, every day. So we need six full-time cleaners who are going around the clock.
The reality is that different parts of the building need radically different attention. And so what we’re doing is providing the data so that these cleaning companies in these buildings can make far more informed decisions about how they allocate their resources.
JA: [00:06:32] Interesting. So, I can imagine that from the airport perspective, they’re all for this. How have the custodian workforce responded to it?
AH: [00:06:45] Great question. So yes, you’re absolutely right about the airports. It turns out that for buildings like that -for airports- the cleanliness of restrooms is actually the number one factor for like terminal upkeep that affects whether people enjoy being in an airport or not, which is nuts to think about.
And something like 80% of people won’t return to a restaurant if they have a bad experience in the bathroom, even if they like the food, because there’s a fear if the bathrooms gross, who knows what’s going on in the kitchen? So this stuff really does matter.
In terms of the cleaning companies, initially we thought we were just going to be selling this to the property manager, an airport, a stadium, and let them do it. We’ve actually had a bunch of inbound leads from cleaning companies because they see this is a way to streamline their operations, and either pass the savings on to their customers, or not, but see a way to either cut out a larger margin on the contracts they already have; and become more competitive on bidding for future contracts.
So it seems like there is an opportunity here for a real win-win-win between the customers who go to a space, the space itself, and then the folks whose responsibility it is to keep it clean.
JA: [00:07:53] Yeah, that’s brilliant. That’s such good news.
One of the unexpected benefits is -and it would be logical if you thought about it for one minute- but, it turns out, custodial companies want to differentiate themselves in the market.
AH: [00:08:08] Absolutely, and to be honest, it’s one of those things that… It did not occur to me.
You’re right that it’s like, if I had actually seriously thought about it, it would have come to mind. But I didn’t.
And this is an example where I think entrepreneurs need to be willing to learn ‘On The Fly’ and listen to the marketplace because I didn’t even think about those third-party cleaning companies as a stakeholder in the whole equation, when we made the pivot, but then even in just the first couple weeks since we’ve been launched the feedback we’ve been getting is, “Hey, we actually do exist, we’re a big stakeholder and we’re incredibly excited and could be a potentially lucrative opportunity.”
JA: [00:08:46] Plus all the implementation side of that must be much easier to do through the custodian companies than through the kind of core operations of the building managers, anyway.
AH: [00:08:58] You really hit it on the head. Which is that, not only do they become an incredible implementation partner, they could be a potential distribution channel as well.
If they start upselling their existing customer base, and install base, and this becomes an additional feature they can offer, it’s a way for them to differentiate themselves; and a way for us to have someone on the inside, making the sale.
JA: [00:09:19] So, obviously, you’re not going to be just airports. I mean, presumably, you’re going to go to stadiums and big venues like that as well.
AH: [00:09:28] Yeah, stadiums, convention centers, we think some restaurants chains. We actually are installed in a couple of office buildings in St. Louis already, including T-Rex. They were our first case study and feedback we’re getting is that, even in an office building, cleaning matters and it costs money.
And there’s an opportunity here. I think that’s why this is potentially so lucrative is not like there are 400 airports in America, but there are like hundreds of thousands of commercial office buildings, and if we do figure out a way to be a serious value out there, then I took this truly has the makings of something huge.
JA: [00:10:04] Right. So, at the moment, the tech is basically monitoring users of the bathroom. Is there a tracker for the cleaners or managers of the bathroom?
AH: [00:10:16] Yeah, great question. So that’s the next thing we’re working on.
You know how it is in the entrepreneurial world, you want to get that minimum viable product out as early as possible, and the feedback we got is just the data collection is the first piece that was needed. But we view this as the beginning of a pretty big play here to fundamentally change the way that maintenance and custodial work are managed.
And the next phase of that for us is closing the loop: tracking when specific cleaners clean a restroom or a room. So it starts to create even more accountability on an individual level.
And then, we can do things like track, “how long did it take someone to respond to it? So that is absolutely the next generation of where we’re headed, I think.
JA: [00:11:00] Once you’ve got all of that locked down, you can see a world in which things like festivals and just the overall movement of people in open spaces becomes a possibility too.
AH: [00:11:15] Absolutely. This is where it all ties back into what we were doing with wait time tracking originally, which is this vision for being able to quantify how people move through the world.
And I think there’s one version of that vision, which is comparable to what’s happening in China right now, which is much more surveillance-based and used for nefarious purposes. But, there’s also a vision where ethical companies that are committed to protecting the privacy of people, can gather this data anonymously and use it to improve the experience for everyone.
Like you said, the music festival, putting restrooms in the places that people need them the most to save them time. Or figuring out how to staff TSA better to save people time and help them get their fights on time.
So, I think the world we’re headed to is one where most decisions are data-driven. And I don’t think that’s the world we come from, that’s where we’re headed because this technology is possible for the first time ever.
And our vision is to be the company that brings that into the world but does it an ethical, moral, respectful, way that meets the needs of all stakeholders.
JA: [00:12:15] Yeah, it’s got huge potential. I mean how frustrating is it when you’re in a line and you can see that there’s two checkouts open, but there’s seven checkouts there, all unmanned, and it’s three people just chatting amongst themselves.
AH: [00:12:32] Exactly, chatting amongst themselves. Like, how many people does it take to put tomato sauce on the shelf?
JA: [00:12:36] Yeah, right and through Qstodian, you’re basically creating nudges that nudge the workforce in the right direction, at the right time.
AH: [00:12:47] Exactly. Let’s help companies use the employees they already pay more efficiently.
JA: [00:12:54] In some of the other literature I’ve read on this, your company, there’s something that points to Net Promoter Score type metrics. Net Promoter Score type metrics is definitely not part of CheckTheQ.
Did you have to kind of read up on that? And what stuff did you take from that?
AH: [00:13:12] For sure, so what we’ve been talking about is predominantly this automatic tracking part of the business but we have an idea for a second complimentary product line, which we also launched which is steeped in Net Promoter Score literature.
And this was a way to solicit feedback from people that are using restrooms, in real time. The predominant way we do that is through making custom stickers that go inside each stall and on each mirror, that have a phone number for that restroom. Folks anonymously text it with their feedback; our system logs it according to the restroom it was sent for.
JA: [00:13:47] Wait, I’ve already seen that in. That’s you?
AH: [00:13:50] That’s us as well.
JA: [00:13:51] Oh, wow.
AH: [00:13:52] Yeah. So, there’s this passive tracking piece, which the average person doesn’t even have to be involved in.
And then there’s this other wing of it -this feedback system- which gives the people using the restrooms the ability to proactively report stuff. And then our system logs it and again, like you said, those nudges sends a notification with a feedback to the right custodian, or the manager; whoever they want.
JA: [00:14:17] And, out of interest, has anyone actually used that.
AH: [00:14:20] It’s a great question. I had no idea whether people would. Turns out they use it a lot.
What we found is that no one wants to talk about it, but when you’re sitting on the toilet, everyone has their phone now. Not everyone is going to report everything they see but it turns out there’s a pretty large proportion of people who, when they run out of toilet paper, they’re either going to Tweet about it, or do something constructive like send the feedback.
And a lot of people are opting to send that feedback. And it has this dual benefit of: One, giving customers a productive channel to express their frustration to, instead of hosting a negative Yelp review, or calling a place out on social media, which a lot of folks do.
But it also allows the establishment to be far more responsive in real-time to the needs of their customers. One example, is that a restaurant, for instance, will typically check their restroom every hour, you know, like a time you’ll go off on the manager’s phone and they’ll go check it out.
But as we know all it takes is one person to make a huge mess. And so, if someone took a child in and the child made a mess everywhere, that could have been one minute after they just cleaned it, and all of a sudden you have unhappy customers for the next hour who were experiencing this.
With the feedback mechanism, all it takes is one person speaking up to save hundreds of other customers from experiencing the same problem. One of the places we first launched was T-Rex, an office building in St. Louis, which we think of as co-working space, but that eight floors now, a lot of which are private offices.
And we put the stickers in each restroom, and what we found is that around 40% of the feedback was actually about maintenance-related things, 60% was about cleaning. And the implications are pretty significant because the little problems that property management might not know about, but that really impact the experience of their tenants day to day, can now be addressed.
And it also means that a place like T-Rex can save money when it comes to hire a contractor to fix things up because they can have them knock out all of their problems at once, from the reporting over the course of a month: every toilet seat that’s wiggling, every water fountain that’s leaking, knock it all out, so they’re not having to pay someone to come back over and over.
JA: [00:16:32] Yeah, that’s a really interesting point because T-Rex. Yes, the bathrooms are always getting blocked. You don’t know who to blame for that. Is it T-Rex’s problem? Is it the plumber? The custodian’s problem?
All that kind of stuff and you feel like if you take it directly to T-Rex, you’re making a big issue about it; if you take it to the custodian, you’re kinda like ruining his day.
Simply putting the feedback mechanism in place, also just elicits a behavior change and signals, “Hey, we’re interested in fixing this,” in general.
AH: [00:17:13] Exactly. You just hit it on the head, which is there’s the dual benefit. There is the, “we can actually go and make changes now,” and get this feedback from acting on it.
But there’s also the important signaling mechanism, which is, “We are a property manager that is invested in your experience. We’re proactively soliciting your feedback.” And it turns out that makes a huge difference to how people feel about where they’re renting their office space, or whether it’s choosing where to go eat at, or the medical facility they’re in.
And I think that, until now, until we launched Qstodian there has been a big disconnect because the people that manage a building, or are in charge of hiring a custodial service, want this feedback more than anything. This is a report card.
This is incredibly valuable, but there hasn’t been the appropriate channel for the everyday person to easily communicate it, in a way that is anonymous. Anonymity is a huge deal because no one wants to be the person to go to the front desk and say I just clogged your toilet.
No one wants to say, “Hey my kid just peed everywhere.” It’s embarrassing and, like you said, it almost starts to feel personal. So we found this is another example of being able to align incentives through a simple technology solution that is starting to pay real dividends.
JA: [00:18:28] Nice. Okay. I love it.
Talk to me about the courage to change. I’m sure there’s two feelings there. One is this is a really obvious thing to do but still takes courage to go through with it.
AH: [00:18:42] Absolutely. This is where it’s not just my story, it really is a team effort.
So we have six full-time employees and we got the courage up and the conviction as a group that this was the right decision to make. I think that when you have a team, or you have folks that support you -and this can be true for a solo entrepreneur who has a support network in place- it really feels validating to know you have the support of the people around you.
At the same time it is terrifying. I think all of Entrepreneurship is so scary because there’s so much uncertainty, but for me it was, like, once we’re in that mindset of, “there’s no guaranteed success,” once you’ve accepted the possibility of quote-unquote “failure,” it becomes much easier to make a significant change like that.
Because we’ve already internalized the risks. CheckTheQ was super risky. But once we all, you know, “leapt off the cliff together,” then it allowed us to really embrace a more nimble mindset to make a change like this.
The other thing I have to mention is that we take an investment from a number of great folks and organizations and they’ve been incredibly supportive. And I think that being aligned with our investors, both on how the vision has evolved and the strategy behind it, has been really quite valueble.
JA: [00:19:57] That’s lucky. Yeah, you’ve had really supportive investors.
AH: [00:19:59] Exactly, it is luck.
It was total luck. As a first time entrepreneur, I had no idea it was important to really think about who you’re going to take money from. I just thought, “ah they’re going to write us a check.
This is awesome!” We totally lucked into having some of the most incredible investors I could have had.
JA: [00:20:15] Nice. Probably that was the difficult part , how did you raise the question with investors of permission to pivot?
AH: [00:20:24] Great question. I think it was definitely the most daunting conversation that I’ve been most anxious about in my life.
It’s like, how do I bring up this idea to people who put hundreds of thousands of dollars their hard-earned money in? I did the thing we did best allowed us to do this fairly seamlessly, as we kept our investors in the loop every step of the way, from when we started thinking about it, when we got the initial feedback, so they were never blindsided.
It was very scary to do that, obviously, to bring it up initially, but I think it was one of those tough conversations that has ended up making everything else much easier. Because as soon as we started having the first inkling, we started discussing it with them, as we built New Vision, they were building it too.
And so as we were learning about the opportunity, they were learning about it. And so no one was blindsided. No one was surprised. It really ended up being a team decision.
JA: [00:21:16] Nice . One thing I like about the new name : there’s a callback to the original company.
You know with the ‘Q’. Because obviously in a pivot you don’t need to call back to the original company. You can completely pivot. What was the, kind of, rationale behind that?
AH: [00:21:36] I think part of it was just the gut feel of, “this pivot is very much built on where we’ve come from,” and we wanted to have an homage to that.
And then I think the other piece is, culturally, the team is working at Qstodian now, we’re the same team that worked on CheckTheQ and a lot of what we built there, I think is incredibly important to us. You know, you sink years of your life into something and it really becomes part of you.
And I think that the company culture and the values that we built at CheckTheQ, we wanted to bring to Qstodian. We view it as the next evolution not a separate venture.
JA: [00:22:09] I love that. I think signaling that evolution to yourself and to your team is very powerful.