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IoT Lessons: How Software Opened the Door to Smart Locks

ABOUT THIS EPISODE

Yale has been manufacturing locks since 1840. Put another way, they have hardware on lockdown.

Software, on the other hand, has been a relatively new addition to the company’s repertoire.

In this episode, Jason Williams, President of August Home, Yale Real Living, and Smart Residential Global Accounts, shares his thoughts on the journey his company has been on since they started manufacturing smart locks and the lessons they have learned along the way. 

We discuss:

  • The story and strategy behind acquiring August Home
  • Lessons from learning the language of software
  • Reasoning behind entering the smart lock space
  • Advice for companies starting their IoT journey

Follow Yale Real Living and August Home on Twitter:

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We needed to be prepared for when you know that the momentum really hit and this connected home space, the smart home space, really took off. You are listening to over the Air Iot connected devices and the journey, brought to you by vary. In each episode we have sharp, unfiltered conversations with executives about their IOT journeys, the mistakes they made, the lessons they learned and what they wish they'd known when they started. Welcome back to over the Air IOT connected devices and the journey. My name is Ryan Prosser, CEO very, and today we're joined by Jason Williams, president of August home, Yale real living and smart residential global accounts. We've talked a lot on this show in the last few weeks and months about hardware. Is Hard. Today we're going to be talking about software. Is Hard. Jason, thanks for being on the show. Yeah, Ryan, thanks for having me excited to be on over the air with you, cool man. So, you know, I think a lot of people are probably already familiar with Yale, probably already familiar with August. You guys are kind of the Og's of the IOT space, but for the you know, for the few folks out there that aren't as familiar. Give us Yale, August, give us the story, Thirtyzero Foot of you. Yeah, so Yale's been around forever. We've been making door hardware, door locks, for over a hundred and eighty years now. August not quite so long. August was an acquisition we had late in two thousand and seventeen really focused on smartlocks and and that IOT space. We've been together now for four years and you know, it's been a real great marriage between hardware and software, which I know we'll talk about a little bit more in a minute. So yes, we will, indeed. So it's so. You mentioned August. I think it's a really interesting part of the journey. You guys have been doing hardware since, I don't know, some like in the middle of the nineteen century or something. It seems like was when you guys kicked off star. Software much newer for you guys. We talked with a lot of people on the show and then, of course, at very that understand hardware deeply. Software is a new as a new piece of this. You know, they're looking to add intelligence or connectivity to the device that maybe they've been making for a century or more. What is Wik? You tell us about that journey and like, let's pick up the story prior to the acquisition. I know that you guys went into it with one mindset around software. Can you talk about about that? Yeah, I'm and I do want to. I do want to say one thing. I mean, you know, we're trying to talk talk about software being hard, but hardware is absolutely hard. So all that, all the other podcast you've had about that are absolutely right. We just have happened to do it for a long time and so we've gotten really good at it. So so, yeah, let's let's go back and really, you know, the story begins for Yale back in two thousand and nine. That's really when we decided that we wanted to start the journey and get deep into the the smartlock space, you know, and you know. So we kind of laid out a strategy and that strategy, you know, really revolved around getting the best hardware that we could produce and and the I think we executed really well on that. When it comes to software, number one, we procrastinated a little bit, to be honest with you, and we decided to choose a path forward that was not super software intense and it really was around partners. We wanted to partner with the folks that were kind of growing up and evolving in this smart home space that could help us bring our products to market and get the most out of them. In the funny thing was, I mean it wasn't Amazon or Google or apple in those days right. It was, you know, smaller companies that you know, you probably had never heard of back then. You know some somewhere in the security space. Alarmcom was one that was just kind of getting started. Control for was another one, more in the CDs space, and so really we were led on those partners. That that first you know year or two years that that we were in the market. We launched our first smartlock with Yale and September of two thousand and eleven, and you know,...

...those partners really helped us get to market and it wasn't until, you know, probably two thousand and twelve, two thousand and thirteen, where we really started saying that, hey, you know this, this partner strategy is great, but we need to we need to control our own destiny here to a certain extent, and that's really where where software came in came into play. You know, we at that time kind of sketched out a plan where, you know, we did have to go and create our own, you know, mobile applications, our own back end infrastructure with servers, and you know, the reality is we didn't really have anybody on on on the team that was a software expert. You know, we hired some folks that had, you know, been in the space and kind of understood it, but not not really the expert. So, you know, we set off and, you know, we went and worked with a I think, a great little company that that helped us kind of you know, design that software. And what we realized was it it took. It needed to take a lot more than that. Right. We really funded. We funded two to three people, you know, as kind of the two guys in the garage type concept. In you know, we kind of took some time. We probably took longer than we needed to. What we came up with was something that worked. It was it was okay, but it wasn't a world class software, piece of software that could scale up to millions and millions of users in billions of transactions on a regular basis. And that's where I mean, you know, we realize and it was even before we got that in the market. We realize that we weren't going down the right path fairly early and I think that was part of, you know, our salvation, if you will. Was it that we knew we screwed up early and we, you know, set off on a parallel path, and that parallel path is really what led us to acquiring August home. Back at the end of two thousand and seventeen, we identified this iot start up, the Siliconton Valley based company, that they were quite the opposite of Y'all right. They had their foundation in software. They had, you know, let's call it eighty a hundred software engineers working for for them and they develop this world class platform. You know, they were they were pretty good at and doorlocks to right, they are pretty good at hardware, but software was really what they what they excelled in. And so, you know, we set out, we acquired them and, you know, from two thousand and seventeen to today, it's really been about driving their software into the Yale hardware around the world. Within twelve months we had our first Yale lock in the US driven by August. was called Yale connected by August, and then over the last twelve months we launched platforms in Europe and Asia, both utilizing that same platform, and you know, we couldn't be any happier now that you know we are on the right path and and we have what we think is the best solution in the world. But it there were some bumps in the road. It was not easy and you know, we learned the hard way that software is is hard. It's more than than those two guys in the garage. I mean it's a it's an entire organization inside of Yale and in August that that is getting that job done today. Yeah, you know, I think the the acquisition story is fascinating. What like talk a little bit about the integration of those two cultures? You know what we hear a lot is, you know, hardware doesn't lend itself supernatural truly to this agile thinking. That a lot of or methodology that a lot of software practitioners live and breathe by. How have you guys blended these two cultures? You've got this hundred and fifty year old hardware company that has, you know, a lot of rigor and discipline around building excellent products, and then more of a like Silicon Valley, you know, tech infused software and IT'S DNA company. What has it been like stitching those two together to get the most out of both of them? It it. First of all, it's an ongoing process, you know really. I mean if you kind of take a step back, if you look at US Avoy,...

...the way we approach acquisitions, there's you know, I mean we've bought hundreds of companies over the years. I mean you can argue that Usabloy, you know, while we make lots of door locks, our core competency is acquisitions, you know, and in a lot of cases, you know, those companies operate on their own for, you know, for many years. With August it was it was a little bit different because we bought them, you know, for you know, a reason, right, and that was leverage and software to drive the Yale Lock. So you know it. We did kind of leave them off on their own for the first year or so and then at the end of two thousand and nineteen, actually not too long before covid is, when I took on the responsibility of leading the August business as well, and that's really when that integration started, not only kind of from an engineering perspective. But you know, sales in marketing as well. But if you if you look at the engineering integration, it really goes beyond kind of what we're doing in the US because that I'd mentioned, that was kind of a global transition right to bring that platform into into those regions. So it was it was much harder than kind of what it seems like on surface, because we had engineering organizations multiple places in Europe and Sweden, where Ossable, our parent company, is headquartered. We've got some core engineering in Soul Korea and we've got pieces of engineering in the US, but we've got engineering all over the world and so that in and of itself, disintegrating the engineering teams was a massive undertaking. And then the complexities you mentioned. You know, how do we how we get all these people that were focused on mechanical locks to understand how to incorporate the software development process into into the planning cycle and things like that? And you know it absolutely, as I mentioned, is a work in progress. You know it is a learning process every day and you know that. I think the good news is where or kind of mate, we're definitely making that that progress and you know we're getting over those speed bumps and the folks that have been mechanical, mccannom mechanical, their whole careers are starting to get up to speed and and start talking the the software language. So, you know, I'm happy with how things have progressed and you know, it's really going to start increasing our kidence of product development and the more we get get down that bath. So you mentioned mechanical folks and if I use the word software language, I know your educational background, you know, back into when in college, you have a degree in mechanical engineering. Any any learnings you can share as a professional that you've absorbed in this process, you know, becoming kind of fluent in software, so to speak, that have pushed you in unexpected directions to make you a I don't know, add some texture to how you approach business problems or think about developing technology driven solutions? Yeah, I think, and actually it's even, you know, kind of to me higher up in in the and the hierarchy there. It's really dealing with the people, right, because you know the people that have created these these mechanical products and you know, with companies that have been around for hundreds of years, I think are very different from the people that are, you know, out in Silicon Valley that are starting up companies that work in that type of environment. And so for me I've grown a lot just figuring out how to adapt to a different culture and how to bring these cultures together. I mean, it's been a really chat and a really big challenge, I think, for me and and the leadership team and and you know, I'd say that's been kind of my biggest growth with respect to kind of learning the language. I mean it's, you know, making sure that you sit back and you listen to the people that that know what they're talking about, that know what they're doing right. I mean, I I don't need to be the biggest boys in the room. And if I'm sitting there with with our CTO, Christopher now and he's talking about, you know,...

...software in the challenges, you know I'm going to give him the floor, I'm going to listen to him and and I'm just going to absorb and so it's just been an it's been a lot of learning for me. It's been and ongoing process there and I again moving forward just surrounding surrounding myself with the right people that that are experts and letting them kind to do their job and do their thing is, as I think, the right, right place for me. Let's talk about product market fits, something we're sort of obsessed with a very what you guys, like I said, you know, Yale is kind of the Og's of the smart home space. You guys got in really early real and have established a pretty dominant place in the market for the product that you build. What were the signals early on that were, you know, that caused Yale to say, Hey, let's go do this and then, as you were doing it, hey, you know, here are the products and features or direction to take this product. I mean, I smartlock is a complicated thing to build, but a fairly uncomplicated idea. You know that? I mean I think there's a lot of value there. That seems pretty self evident. Was it so self evident that you guys just said, let's go, this is an obviously good idea, or was their market research what will cause you? What were the signals that actually cause the business to say, let's invest now, let's invest more. You know what it can you talk about that process a little bit? Yeah, and I've got to give credit to to the executive team at it Assabloy, because they brought me into bring Usabloy in the US into the smartlock space back in two thousand and nine. And if you remember at that time, I mean the housing market was in shambles, right. I think two thousand and eight, two thousand and nine was was that housing market crash and you know, people in the building industry, I mean companies the building industry, were laying people off left and right. Yet the the leadership team at it, Assa Abloy here in the America's were we're setting their sights on building a team to, you know, get started in this down market so that once it turned around, you know, we were ready to enter that smartlock space. So I think that's first and foremost, just having the foresight to kind of look beyond the the existing situation and, you know, play some bets in the future. And I think if you look at why they did it, I mean it was it was pretty obvious, right. I mean there were there were some big trends going on and and you know, I think we all know, a smart home has been trying to be a thing probably for forty or fifty years, right, but you know they're there. was starting to become this technology swell in technology adoption. Really, I think you look at smartphones, right, I think was one of the big things that, you know, really kind of signaled that this was going to be a thing, as people were walking around with Com peuters basically in their hands. And so yeah, I think I think we, you know, we placed a bet and said that electronic locks, smartlocks, were going to be the future. Not only were they going to be in the future and residdential, but also in commercial that's the other thing to know about Assa a boy, our parent company in the America's I mean we've got a huge commercial business where we're you know, we've been selling electronic locks into, you know, universities and hotels, multifamily housing, apartments in electronics have been kind of a thing there for many, many years. So there were some signals in the commercial markets as well. So you know. So I think, I think that's why we started off on the journey. You know, I think what what kind of made us successful was there was there was a lot of patients within within the executive team, at it awesomely right. They saw the vision, they knew this was going to come and, you know, and it was going to take some time right and it wasn't necessarily Yale that was going to make things happen, but we needed to be prepared for when, you know, that the momentum really hit and in this connected home space, the smart home space, really took off. You know, I wanted to ask you about your journey a little bit so that I think the the product journey that that's that's a fascinating story,...

...and I think equally interesting is the one that you've been through, having shepherded this company in this product along since the, you know, basically the beginning of the from a smart home perspective. What learnings can you share as an executive, as someone who has been, you know, got into the story quite the Yale story early. So it you know someone's out there, they've just been hired to lead a maybe a different hardware company through its Iot journey and they're saying, Hey, I know I'm early, I know that this is going to be a long journey. Jason, what else do I need to know? And I hear you saying it sounds like you're saying, Hey, one thing that's really important is your executive team needs to have a lot of patients and if you if that, if that isn't there, then you right off the bat you're on shaky footing. Is Is that fair? And what else would you say are important things to be on the lookout for? Yeah, I think that's that is fair. that. Patients is a big thing in the executive team. Realistic expectations, I think, is another one in that kind of flows from the top down and it kind of goes hand in hand with patients. But I think from from a from a personal perspective, it's, you know, almost check your ego at the door, right, which is, I think, I think, a hard thing for, you know, for some of us to do for sure. But you know, we had set out and we had a strategy put together and you know we were going to address the single family home, right. That's that's where, that's why we built our product, that's where we were focused. But as time went on, it was it was clearer that smartlocks for more than just about kind of being a gadget that fit within the smart home. And and yes, there are definitely a lot of reasons why. You know, people want smartlocks in a single family home. Right. There's that convenience, there's the peace of mind and security. That goes along with kind of the digital key aspect of smartlocks. But when you look at some of the other areas that smart blocks have shifted into that we weren't necessarily planning for out of the gates. It's really what has led to a bit of an explosion, in my mind, of smartlocks here in the US and a couple of those areas. One is vacation rental. So you mean you think of an Airbnb who wants to kind of roll into, you know, Montana Ryan where you are at two o'clock in the morning and they have to drive fifty miles to find, you know, the person renting you your place and get a key before you can go, you know, get crawl into bed. You know. It's a big inconvenience. It's a big the consumer experiences really breaks there. It's a smart locks have been able to change that. You know, you roll in and you put a code in that you got, you know, three weeks ago, and you're good to go. Apartment complex is another one. Forever, you know, we've used electronic access control on the exterior. Haven't been used on the interior doors and it's just cause headaches for management companies out there that have to worry about turnover, which happens at least once a year on average in apartments today. They've got to go in, they've got to change keys. There's a security issue with with mechanical keys, right, you never know who has a key to your apartment home or your house. You never know when somebody uses that key. And so smart locks have just really change change the face of that industry and you've seen you've seen a whole new industry pop up because of it. These property technology companies have crept up over the last three, four five years and you know they're they're selling proposition has really been access control. Now they've built some other things on top of access control, but it's really simplifying the experience, simplifying making things more efficient for the management companies. And you know, smart locks have really come along from the right. So I think flexibility, and it was a long way to say it, but flexibility is really one of the keys. Right, you've got you can't just kind of get on a path and just be so focused on that path. You've got to be willing to make detours and and you know, have branches off of that path. So that's that's why I and I guess the last one is you got to know when to call it quits. Right, you got to know when to call it quits.

Not Everything you do is going to be the right thing. You got to know when, when, when things are going the wrong way, how to pull the plug. And we've had to do that. I mean I think not too many people are willing to admit that. You know, you've had to pull the plug on a product or a program. But we got in early with NFC. You know, we started work on an NC lock. I think it was in two thousand and eleven, two thousand and twelve, shortly after we launched our first lock. We thought that was going to be the next big thing. It was getting into into all the mobile phones, and so we spent a lot of time, effort and energy working on it. And you know, by the end of we are betten on some things. Right, we were betting on NFC kind of getting put out there by the by the major handsets and usable for access, and that didn't necessarily happen. And not not only that, but if you looked at NFC, it was different across all the android devices. It might work great on US Samsun, but work terribly on on a google device back then, and so we just got to the point where the user experience wasn't there. We didn't have a technology path forward and really it was on the android. Those out there. We couldn't tap into the to the apple side. They were just kind of getting you know, NFC working with banking at the time, and and so we just we finally pull the plug. We said NFC is not going to be it not going to be today. Let's let's switch gears, let's go down the Bluetooth Path, and then we went running down that path, but pulling the plug. If we would a gritted our teeth and just said that, hey, this has to be the right path, we we wouldn't have made it right, because we're sitting here now in two thousand and twenty one and it feels like finally NFC starting to gain some some momentum. You know now that apple is kind of crack the code on payments. You know, we'll see what happens for access, but it's I think it's finally coming. But five years later, you know, pulling the plug is one of these fantastically valuable topics that a lot of people don't want to talk about you know, and and a hat tip to you for, you know, give it an example of a thing you guys had to pull the plug on. We I've found over and over the more rooted hardware is in a company's DNA, the less likely they are to want to talk about it, you know. And we find that software companies say fail fast, hardware companies say failure is not an option. And and so, you know, a failure is not an option. They don't want to admit that it may have ever happened to them. And what it does? Of course it does. You know, they're we're driving te you know. This is how innovation works, you know. So you, like I said, you guys are one of the big brands out there. I think anybody who has a smart home probably has one of your products. What's next for you guys? What are we going to you know, this episode probably going to air and October, November. What can folks expect to see towards the end of this year? Twenty Two? Yeah, I think you know, if you look at what we've done and where we are, I mean we've got great door locks, we've got great software. You know, we've got a scalable solution right now and so, you know, what we've talked about for a little while is how do we build on top of what we have today? And for us what that means is we want to drive a smart security story right and so that's getting beyond door locks. That's getting into things like smart storage. So we launched a cabinet lock last year, which can, you know, electronic lock that could secure cabinets or drawers, valuables in your home, medicine cabinets, you know, keep things away from the kids. So we're looking at products in kind of that space. The other the other big one, and I think could could, you know, be really revolutionary, is, you know, this concept of package delivery and in home, in home package delivery and home services secure package delivery, and so we started shipping a smart delivery box at Yale, smart delivery box late last year. Is Well, all of these products tie into our mobile application, the Yale No August App, you know, so you can grant access, you can control them remotely, and...

...so kind of building out, continuing to build out the devices, to leverage of software's really important to us and you know, I'm excited to talk about some of the the relationships, especially in the delivery space that we are we are building better leveraging that delivery box so there's a tight integration between us and and our delivery partners, so they can seamlessly get into those boxes, they can lock lock those boxes behind them so that you know, you can order more often, you can order higher value things and not how that walk off your porch, which is probably a problem that a lot of us have experience. Maybe not, Ryan, you and your Montana House. I imagine that's pretty safe up there, but some of us that live in cities not so much. Yeah, we don't see a lot of porsche piracy out here, that's for sure. You mentioned partners. You know. You've been in this space for a while. You know smart you personally know smart home space pretty well. Who out there's doing good work that we need to know about? Get let's plug somebody here on there today. Yeah, I'm going to go back to the the prop tech space and I was talking about really multifamily housing apartments. That has seemed such a rapid rise in in access control and smartlocks, and really one of our first partners in that space, company called Smart Rents, that we've been working with for for several years now. They're CEO Lucas Aldamn, you know, brought together a great team, had a great investment strategy were, I think in many cases he's he's selling his product to do a lot of his investors and you know, they have really, I think, turned that industry on its head. And so smart right, I think is a company to look out for. They recently, think, went public via spack not not so long ago. So they're they're off to the races. They're definitely one to watch. Cool, you heard it here. First, smart rent. Last question. You know, we've got a lot of fans out there of the the Yale product line. For folks that want to follow Jason Story, how can they follow Jason? How can they follow Yale? What are some great ways to to keep up? Yeah, as I'm always happy reach out to me at a Linkedin and find my profile there, but also, from a company perspective, at Yale Home and at August home ink on twitter, best places to kind of keep up with good with what's going on with with Yale and August as we continue pushing forward and in the smart home space. Cool. So if you want to keep up with Jason. He's Jason Williams, somewhat common name, so probably Jason Williams, come a Yale or or August will get you there. Will Jason appreciate you being on the show? That's that's it for today. Folks, my name is Ryan. Thanks for listening. We'll see you guys on the Internet. All right. Thanks for having me, Ryan. You shouldn't have to worry about IOT projects dragging on or unreliable vendors. You've got enough on your plate. The right team of Engineers and project managers can change a pivotal moment for your business into your competitive edge. Varies. Close Knit crew of ambitious problem solvers, continuous improvers and curious builders know how to turn your ideas into a reality on time and up to your standards, with a focus on mitigating risk and maximizing opportunity, will help you build an Iot solution that you can hang your hat on. Let's bring your Iot idea to life. Learn more at very possiblecom you've been listening to over the Air Iot connected devices and the journey. If you enjoyed today's episode, make sure to hit subscribe in your favorite podcast player and give us a rating, have a question or an idea for a future episode? Send it to podcast at very possiblecom see you next time.

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