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Scaling from $0 to $25M at the speed of (UV) light with CEO of R-Zero Systems, Grant Morgan

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What if I told you that a technology that has been around since the 1910s is the secret sauce to a company that was founded in 2020 and has completely exploded in the year since? And when I say exploded, I mean scaling from $0 to over $25 million in…. Less than a year. Well, that’s the story of R-Zero Systems, and it’s a great example of how, in today’s world, spotting an opportunity, moving fast, and being able to solve problems in real-time is what separates the winners from the losers in the business world. Whether you’re in CPG, retail, healthcare, or some combination of multiple verticals, the biggest problem a company has is the ability to sustainably scale. But R-Zero Systems is showing just how to do it well, and that’s not the only solution the company is bringing to the table. 

On this episode of Up Next in Commerce, I sat down with Grant Morgan, the co-founder and CEO of R-Zero Systems, and he told me all about the wild ride the company has been on since its founding in spring of 2020. See, R-Zero is a biosafety technology company that, thanks to its innovative products, helps customers create safer spaces for its patients, employees, students, and anyone else entering an indoor space. It was created for the same reason as any other company — to solve a problem. The difference, though, was that Grant and his team were able to first, ramp up production at a time when few others could, and second, bring something critical to the very specific needs of the market that was already proven to be effective, but wasn’t very accessible.. Turns out, that’s the key to growing quickly is effectiveness and accessibility all at once, oh, and maybe a few other things too. Want to know what they are? Find out on this episode! Plus, listen closely to hear my epic UV product ideas that I know Grant is eager to add to his product road map, and some of the funniest product requests he has received to date. 

Main Takeaways:

  • Sick and Tired of Being Sick and Tired: One of the factors that affects productivity is sick days. By finding a way to reduce sick days, a company can operate more economically and efficiently. But more than just impacting the bottom line, by investing in creating a healthy environment, you are providing workers a better overall experience. 
  • Proof Positive: Even when you are working with a proven technique, application, or resource, when you introduce it in a new way, you have to go through the due diligence to re-prove its efficacy. Especially when what you are trying to prove is invisible to the human eye.
  • The Right DNA: In order to scale, hiring is key. But this task shouldn’t be treated lightly. One wrong hire can impact the culture in more ways than one could imagaine. So how do you create and keep a culture worth building around, and find the right people for the company? Tune in to hear how Grant things about hiring within a fast growing company.! 

For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.

Key Quotes:

 

“We thought that there would be societal and infrastructural change that comes out of the Coronavirus, but that it would be focused around human health and productivity. And so one of the hypotheses that we had was that there would be a lot of lingering psychological scar tissue built up in the eyes and the minds of the public and that’s very much proven true… Not only people are going [going] to want to physically be safer, but they’re going to want to feel safer as well. And so, as we started digging in, and studying really, how do we do disinfection? How do we do infection prevention in public spaces right now, or historically? And we had a couple of pretty stark realizations that presented some opportunity for us to bring technology and innovation to this industry.”

“One of the things we wanted to do early on in the pandemic, and early on in our company’s life was take this tried and true technology that has a mountain of scientific evidence proving its efficacy, and adapt it for commercial spaces and public spaces, and really democratize access to this technology that we know works.”

“The way we think about our product suite is, we attack the different vectors of transmission for pathogen spread. So that’s air, surfaces and then human. And so all of our products treat one or more of those vectors of transmission. And we are building out our product suite to adapt for different use cases, different form factors, to be able to walk into any physical space and outfit it with installed products with mobile products, but a holistic suite of products that speak to each other via IoT connectivity. That sense, collect data about how the space is used, for example, how the traffic flows within the space, where people congregate, where the population density is high and therefore where the risk is high. But our software under the hood will actually ingest all of that data that our products are collecting and generating and it will actually quantify risk. And based on that risk that we quantify, it will send signals to the products that are installed in a given space and mitigate that risk automatically.” 

“Sick days are a massive, massive problem… 40 million Americans get the flu every year, somehow we just accepted that’s normal. And that’s not to mention all the other common pathogens like seasonal flu, common cold, E. coli, Norovirus or stomach flu, MRSA or staph, all of these different pathogens that are endemic to our customer spaces. And the CDC estimates that sick days cost the US economy about $600 billion a year. So there’s a real material ROI to any kind of organization to being able to reduce sick days, and keep humans healthier. And by virtue of doing that, increase the productivity of your workforce.”

“We know how diseases are spread. It’s epidemiology and physics. And because there are two entire fields of study around this, you can mathematically model the spread of disease. And so there are things that will increase your risk. So things like people not wearing masks, lots of people together in a small confined area, breathing for long periods of time, for example, people touching high risk surfaces and things like that. But there are also things that reduce the risks. So that’s things like using HEPA filtration or disinfection for air purification. That’s things like cleaning and disinfecting, social distancing, wearing masks all of those different things. And so essentially, what we’ve decided is that we’re going to go try to model that and build a predictive model of risk so that we can walk into any physical space, take some basic inputs, or understand the characteristics of that room. How big is it, what’s the ceiling height? How many people are typically in the room and for how long? Are they wearing masks or not? Where are they located? And if we can collect some basic inputs like that about a space, then we can run it through a machine learning model that’s built on top of a statistical infection model. And it’s got some computational fluid dynamics layered in to model airflow and things like that. But we can actually with a very reasonable degree of certainty, predict the risk of one or more people in that space getting infected under certain conditions.”

“It’s all about understanding what causes risk and how to mitigate it so that our products that are installed within a physical space can proactively mitigate risk and keep people safe. So we can actually understand the precise moment that people are likely to get sick, and do something about it in real time. And the outcome will be healthier humans, more productivity and improving the quality of life for people in our natural habitat, indoor spaces.”

“Everything we do is rooted in science. And although we know UV-C works beyond a shadow of a doubt, we had to prove beyond a shadow of a doubt that our product specifically worked under the conditions that we’re saying it works under.” 

“The people you bring on matter a ton. And that seems obvious when you say it out loud, but this being my third business, it’s really sunk in. This business is different in that the people that we have involved are incredibly talented, incredibly smart, they’re driven, they’re competitors, and they’re all motivated by the mission. And so just making sure that you get your core of early employees really, really right, it affords you a lot of flexibility, and allows you to stay really low touch, low process, low overhead, for as long as you possibly can.”

“I’ve had to evolve as a leader to provide more of a framework, more direction, and make sure we set our north star really clearly and come up with a set of principles and values by which we operate. And if that framework is done really, really right, then it will automatically get people aligned and pulling in the same direction. But it’ll be a constant iterative process to make sure that we have the right information getting disseminated down throughout the team, and we’re pushing the decision making closer to the people that are doing the work and improving increased context, increased autonomy and decreased process and red tape.”

Mentions:

The Premonition

Bio:

Grant Morgan is the Chief Executive Officer & Co-Founder at R-Zero. He was previously the Co-founder, CTO of GIST and served as the VP of Product & Engineering at iCracked Inc. Grant also spent four years at Abbott working in Manufacturing and Engineering.


Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce

 

Transcript:

Stephanie:

Hey, everyone, and welcome back to Up Next in Commerce. I’m your host, Stephanie Postles CEO at mission.org. Today on the show, we have Grant Morgan, who currently serves as a co founder and CEO at R-Zero Systems. Grant, welcome to the show.

Grant:

Thanks for having me, Stephanie. Glad to be here.

Stephanie:

Yeah, I’m excited to have you. So today, it feels like a lot of the conversations going to be all around scale with your company. So I’d love for you just to start with, what is our R-Zero Systems and when was it founded?

Grant:

Absolutely. So our R-Zero Systems is a biosafety technology company. And we exist to help our customers create safer spaces for their employees, guests, patrons to be in, where they can physically be safer, but also feel safer as well. And we were founded in April of 2020. So right at the beginning of the pandemic, very squarely as a pandemic response when my co founders and I were witnessing sort of the loss of human lives and the economic devastation that was happening on a truly global scale. And we all felt compelled to jump in and do something to help.

Stephanie:

Cool. So what problem did you all see? And then how did that look like going from idea to actually having a product?

Grant:

Yeah, absolutely. So one of the things we realized was that this is a moment in time where everything is going to change. And we started drawing parallels to some of the other historic events that we were familiar with, or that we did study. And one of them was 911. And out of 911 came basically the entire homeland security apparatus for the United States. So we hired 14,000 TSA agents, you still can’t take your shoes or water bottle through security. We founded the Department of Homeland Security, and there were many private companies that were founded to support the security apparatus. So think like the Palantir’s of the world.

Grant:

And so, we thought that there would be similar societal and infrastructural change that comes out of the Coronavirus, but that it would be focused around human health and productivity. And so one of the hypotheses that we had was, there would be a lot of lingering sort of psychological scar tissue built up in the eye and the minds of the public and that’s very much proven true. And I mentioned a little bit earlier, not only people are going to want to physically be safer, but they’re going to want to feel safer as well. And so, as we started digging in, and studying really like, how do we do disinfection? How do we do infection prevention in public spaces right now, or historically, and we had a couple of pretty stark realizations that presented some opportunity for us to bring technology and innovation to this industry.

Grant:

But one of the observations is, at the beginning of the pandemic, I think, something everyone’s familiar with, is, when you get an Amazon package, or you bring your groceries home, everyone was wiping everything down with chemicals. And we thought that was crazy. And one of the observations was that we are still using the same chemicals today to fight COVID that we used to fight the 1918 Spanish Flu pandemic. And so, this industry has been dominated by essentially 100 plus year old commodity chemical manufacturers. There’s some great companies, but they don’t have technology and the innovation in their DNA. And so we realize that there’s an opportunity to inject what we know, being technologists and kind of in the heart of Silicon Valley for the last couple decades with modern AI and data science, and machine learning models, with IoT connected hardware, and then also with software, modern software experiences that users are used to.

Grant:

And if you think about disinfection, historically, it’s been this sort of invisible process. And, somebody comes in generally at night when nobody’s around, they wipe down a bunch of tables and objects, and then they sign their name on a clipboard and piece of paper. And so not only does it happen when nobody’s there, but there’s no real execution inspection, you don’t really know how good of a job they did or what they did. And so, we decided that would be one of the opportunities to help people feel safer is obviate, like what actually happened and back it with data. So that was another observation.

Grant:

The third observation we had that was perhaps the most powerful is that chemical disinfection, the way we’ve done it in the past, it doesn’t work. And the evidence is pretty clear if you look at it. So before COVID, about 40 million Americans got the flu every year and somehow we just accepted that that’s normal. And you look at MRSA or staph infections, they kill more people every year than emphysema, Parkinson’s, AIDS and murder combined.

Stephanie:

I was just thinking about that with gyms, when you’re like, oh, you don’t even know if someone actually cleaned it or not. I always think about that every time I walked in the gym, I’m like, was it cleaned last night are not?

Grant:

Exactly.

Grant:

As humans, we’re actually an indoor species, we spend 90 plus percent of our lives indoors. And the implication is that the indoor spaces where we do spend our time has a huge impact on our overall health. And I think that that’s one of the sort of realizations that we as a society have had, and I think it’s opened the door to having conversations about well, how do we actually keep people safe in these indoor environments? What are the types of things we can do? And how do we build a better, safer normal, instead of going back to normal quote unquote, how do we how do we innovate? How do we actually get better coming out of this pandemic?

Grant:

And so those things combined with the fact that manual disinfection historically has been just that, very manual and labor intensive. Humans are imperfect. In fact, Clorox, ironically published a study showing that over 50% of surfaces in hospitals even are mixed by manual disinfection. And then you pile on top of that, that chemicals are harmful for humans and harmful to the environment as well. And so all of those things, we saw as a huge opportunity to modernize this industry and manage it with the same level of sophistication and technology that we’ve become accustomed to in virtually every other industry.

Stephanie:

Yep. Cool. When thinking about hospitals, I mean, that’s where people go in and get actually infections and get sick from going into hospitals, which maybe that’s a rumor, but I feel like it has to be true.

Grant:

Yeah, no, it’s entirely true. And in fact there’s this concept of hospital acquired infections, or HAIs, and they’ll cost anywhere from like 15 to $30,000 per occurrence. And they’re a 35 to $40 billion a year problem in the United States. HAIs are actually the sixth leading cause of death in the United States, believe it or not. So people think hospitals are clean or perceive them as clean. I think generally speaking, they are but they also have the toughest challenge to keep people from getting sick from each other, keep the frontline workers and the doctors and the surgeons safe as well. But if you think about a hospital, it’s essentially a communal gathering place for the sick.

Grant:

And so although they have issues with HAIs, or at least most of them do, they also have the best technologies that exist. They need the best tools to fight the toughest problems. And that’s actually, when we started studying hospitals, and specifically the best in breed hospitals that do the best at preventing infections. That’s actually where we came across UV-C light and the idea for UV-C light. And this technology is more than 100 years old. In fact, the 1903 Nobel Prize for medicine was awarded to Nils Vinson for the use of UV-C to treat lupus. And it’s been used in waste water treatment plants since the 1910s. It’s been used in air and surface disinfection applications since the ’20s, and ’30s. And today, it’s the gold standard in the best of breed hospitals.

Grant:

And so one of the one of the things we wanted to do early on in the pandemic, and early on in our company’s life was take this tried and true technology that has a mountain of scientific evidence proving its efficacy, and adapt it for commercial spaces and public spaces, and really kind of democratize access to this technology that we know works.

Stephanie:

So what does the UV-C light equipment look like? If I were to go into a hospital or doctor’s office, what does it look like and what’s the average cost of it?

Grant:

Yeah, that’s a great question. The average UV-C equipment is you can think of it as basically five to six foot tall, kind of tower with a bunch of light bulbs that look very much like a fluorescent light bulb that you have in your ceiling. And it’s on wheels, and you can push it into a room and plug it into the wall, set a timer and you hit go, and it will disinfect that entire room and really anything that touches. Now, one of the interesting observations we had when starting this business and actually, as an aside, the original idea for the business was actually a service business. So the idea was, Uber for disinfection so to speak and-

Stephanie:

So you’re going bring them to the clients?

Grant:

Exactly. And we thought we were going to spin up a network of independently contracted technicians, equip them with differentiated disinfection equipment and go perform service above and beyond what a normal janitorial custodial staff would typically do. And we landed UV-C light, this is the technology, it’s elegant, it’s chemical free, it’s efficient and we know it works. And we started looking at the hospital grade UV-C devices, and they were anywhere from, 60 to $125,000 a piece. And so we actually thought our idea was dead in the water at that point.

Grant:

But I’m looking at these things as a mechanical engineer and thinking to myself, this is a light bulb on wheels with a timer, there’s no way that it costs that much to make. So I kind of reverse engineered it and figured out the components that would go into making one of these devices and figured out that we could actually make a device with hospital grade efficacy and sell it for a price that’s actually amenable and affordable to organizations of all shapes and sizes. And so that’s kind of where I call up one of my co founders, Ben and it’s like, “You’re going think I’m crazy, but we’re building lights.” And he’s like, “Alright, you are crazy but I’m in.” And then we were off to the races.

Stephanie:

I love that. So what were you and Ben doing before you started the company? Did you guys have full time jobs or were you just kind of, bounced around from different startup ideas?

Grant:

Yeah, so I’m an entrepreneur. So I actually started my career in healthcare, specifically medical device and pharmaceutical manufacturing but after stints at a couple of companies, I jumped ship and got into tech. So R-Zero is actually my third company. And I left my second one to come start R-Zero, which was very, very tough decision, we had just launched our product six months ago, we were growing, hand over fist, as fast as we could keep scaling the servers. R-Zero was something that I felt extremely compelled to do because of the altruism and the ability to actually make a meaningful change during this, hopefully, once in a lifetime tragic event. And so it’s a tough decision, I’m still, got my foot in the door and helping however I can, but working full time on R-Zero.

Grant:

Ben Boyer was a venture capitalist for more than 20 years. And he actually led the Series B of my first company and sat on our board. He was always someone I looked up to, respected, wanted to figure out how to work with in the future, but never thought it would be in this capacity, I always thought it would be him investing in something that I was doing. But for this one, he jumped ship and the mission was so important that he decided to stay on the boards that he was still on but jumping and dedicate time and energy to us at R-Zero.

Grant:

My third co founder, Eli, is an entrepreneur as well. And so he had started a couple of companies, most recently one called Ecoflow, which makes large, high capacity lithium ion battery packs. And he left that a couple months before coming to R-Zero. But I also met him at my first company as well. So he was at DJI the drone company running an international DD.

Stephanie:

I have their drones.

Grant:

Oh, there you go. My first company was a on demand repair or technical services company. And so we conceptualize like a drone repair program. I don’t know, like eight years ago, maybe seven years ago, and it never materialized but we became fast friends and he’s one of those people that’s truly special and you try to find ways to work together in the future and here we are.

Stephanie:

Wow, that’s great. So do you still have one product? Or do you have more than one now at the company?

Grant:

Yeah, so we have two that are live and publicly launched, we have two more that we’re launching in the next three weeks. So four products in roughly 16, 17 months, is what we’re bringing to market but we are building more. Our first product was kind of a wedge in and will be the flagship product for sure but what we’re doing is-

Stephanie:

Was it kind of the repurposing or rebuilding that light structure? Was that your first product?

Grant:

Yeah, exactly. Yeah, so that’s Arc, that’s the six foot tall UV-C disinfection tower and then our new products. So fundamentally the way we think about our product suite is, we attack the different vectors of transmission for pathogen spread. So that’s air, surfaces and then human. And so all of our products treat one or more of those vectors of transmission. And we are building out our product suite to adapt for different use cases, different form factors, to be able to walk into any physical space and outfit it with installed products with mobile products, but a holistic suite of products that speak to each other via IoT connectivity. That sense, collect data about how the space is used, for example, how the traffic flows within the space, where people congregate, where the population density is high and therefore where the risk is high.

Grant:

But our software under the hood will actually ingest all of that data that our products are collecting and generating and it will actually quantify risk. And based on that risk that we quantify, it will send signals to the products that are installed in a given space and mitigate that risk automatically. So customers don’t have to do anything, we built this sort of continuous automated disinfection ecosystem with our products.

Stephanie:

Wow, that’s awesome. So I want to dig more into the model. How did you guys think about building that and figuring out what is actually going to transmit diseases and how to actually build something that would show you here’s the risk per room. Let’s go behind the scenes on that a bit because that’s super intriguing.

Grant:

I’ll Tarantino this a little bit and we’ll start with the end state, and I’ll kind of come back and it’ll give a little context. What we want to do, our mission as a company really is to reduce the spread of infectious disease. And what that means in most common spaces is reduced sick days. Turns out sick days are a massive, massive problem. We were talking before the show, 40 million Americans get the flu every year, somehow we just accepted that’s normal. And that’s not to mention all the other common pathogens like seasonal flu, common cold, E. coli, Norovirus or stomach flu, MRSA or staph, all of these different pathogens that are endemic to our customer spaces. And the CDC estimates that sick days cost the US economy about $600 billion a year. So there’s a real material ROI to any kind of organization to being able to reduce sick days, and keep humans healthier. And by virtue of doing that increase the productivity of your workforce and your most expensive assets as a company, or an organization and just keep people healthier. I think that that’s something everyone can get behind.

Grant:

I mentioned earlier in the interview, disinfection has been this historically invisible process and I think it’s been easy to pass the buck and say, okay, I got sick, but not at school or not at work, your kid brought that home from school, or it’s easy to kind of point the finger and pass the blame but we know how diseases are spread. It’s epidemiology and physics. And because there are two entire fields of study around this, you can mathematically model the spread of disease. And so there are things that will increase your risk. So things like people not wearing masks, lots of people together in a small confined area, breathing for long periods of time, for example, people touching high risk surfaces and things like that. But there are also things that reduce the risks. So that’s things like using HEPA filtration or disinfection for air purification. That’s things like cleaning and disinfecting, social distancing, wearing masks all of those different things.

Grant:

And so essentially, what we’ve decided is that we’re going to go try to model that and build a predictive model of risk so that we can walk into any physical space, take some basic inputs, or understand the characteristics of that room. How big is it, what’s the ceiling height? How many people are typically in the room and for how long? Are they wearing masks or not? Where are they located? And if we can collect some basic inputs like that about a space, then we can run it through a machine learning model that’s built on top of a statistical infection model. And it’s got some computational fluid dynamics layered in to model airflow and things like that. But we can actually with a very reasonable degree of certainty, predict the risk of one or more people in that space getting infected under certain conditions.

Grant:

And so that’s one of the many things we’re working on right now. And our plan is to conduct a number of field clinical studies to actually go in and predict the risk and then take the actual health outcome data, the infection data, and feed it back to our model to train it and make it more and more predictive over time.

Stephanie:

I’m even thinking about an ER room or something, so many people kind of coming in and out and ambulances and all this being able to kind of flag someone who’s leading that hospital and being like, whoa, this room has had a lot of action and people running in here without masks and whatever it is, to be able to stop that before it becomes overwhelmed. That’s really cool.

Grant:

Yeah. I mean, the premise of the idea is, there are a ton of applications for this model. And one of many is that, I think we can actually advance science and advance our understanding of the different types of activities that increase or decrease the risk of transmission. But I think that for us, it’s all about understanding what causes risk and how to mitigate it so that our products that are installed within a physical space can proactively mitigate risk and keep people safe. So we can actually understand the precise moment that people are likely to get sick, and do something about it in real time. And the outcome will be healthier humans more productivity and improving the quality of life for people in our natural habitat, indoor spaces.

Stephanie:

Yeah. Was it hard to prove the results? You’re a new company, you’re coming in there saying, “We have this new technology you can install?” It seems like it’d be hard until you have maybe six months of data to be like, “Look, here’s hospital a, they started using our devices, and here’s the outcome.” But in the early days, if you don’t have that data, what did that look like when you were trying to pitch your product to hospitals, and hoping they would buy without having something that doesn’t have a tangible like, “Oh, look, you see it disinfecting here? Now you’re good.” How did you guys go about that?

Grant:

Yeah. Great question. And the answer is multifaceted and somewhat complex. But essentially there’s a logical progression that you can kind of get to where people can wrap their heads around, like, yes, this should extensively work. And if somebody is, I’ll use chemicals as an example or baseline, but somebody walks, if you pull the bottle of Lysol out from underneath your sink, and you spray it on the surface, you can smell it, it smells like a chemical that’s disinfecting something-

Stephanie:

Yeah. You’re like that did something.

Grant:

Exactly. It’s doing something to my nose and respiratory system it’s got to be good.

Stephanie:

Must be good.

Grant:

Yeah, exactly. And then you physically wipe the surface off. And so it’s not a huge leap of faith to understand that there’s disinfection happening on that surface and I’m physically wiping it off. And so that’s the most basic example, I would say. Now, that doesn’t mean that action is correlated to health outcomes. That doesn’t mean you don’t have a direct way of saying that, that prevented the sick day for me, prevented me from getting E.coli or the flu or whatever it may be. It’s harder, if not impossible, to prove a negative, so to speak. So we have to build sort of this logical case, to say sensibly, this should do exactly what you’re saying it does.

Grant:

So what we did early on was, everything we do is rooted in science. And although we know UV-C works beyond a shadow of a doubt, we had to prove beyond a shadow of a doubt that our product specifically worked under the conditions that we’re saying it works under. And so what we did was we sent our products, we do this with all of our product, but all of our products, but Arc, specifically, we sent it off to a third party lab in Bozeman, Montana, of all places. And we tested it against live microorganisms with the same ASTM standards that chemical disinfectants are beholding to. And we tested it under real world conditions. And so we tested against human Coronavirus, E. Coli, MRSA and Feline calicivirus, which is the Norovirus family.

Grant:

And we were able to prove with a third party independent lab, ASTM standards that are standard for the chemical industry, we were able to prove that our products in a single seven minute cycle can eliminate over 99.99% of any of those different pathogens. And when we come to the table with customers in the early days, being able to explain to them, UVC works and here’s how, here’s our proof that it works from a third party lab, don’t take it from us take it from a third party lab using the same test methods that Lysol has to go through in order to make that 99.9% claim on their bottle. And so we’ve done that.

Grant:

One of the hard parts is this industry is not really regulated at all. And so UV-C manufacturers can kind of claim whatever they want to the detriment of consumers. So that’s why if you go on Amazon, you see those $5 UV-C wands that are battery powered, they say, kills 99% of germs. If you look at the marketing language on those closely, it’s disingenuous in that they are actually talking about UV-C kills this percentage of germs, not our product, because they haven’t tested it and they don’t have to, according to the current regulations.

Stephanie:

What makes a good one versus a bad one because to me a light bulb is a light bulb, what makes you know their wand, maybe not as good, versus what you guys have?

Grant:

It works with the same principles as the sun and sun burns essentially. So it’s really you’re measuring the dose that you’re delivering to a specific surface or air or microorganisms really. But if you think about sunburns, if you’re out in the sun in Cabo, in Mexico in the middle of summer, if you’re outside for 10, 15 minutes, you might get red and might get a little bit of a sunburn. Contrast that with being out in the sun in Ireland, in the middle of winter, for the same 10 or 15 minutes, it’s probably not as damaging because the sun’s less intense. So all doses is intensity times time. And so the more intense the light is, the quicker you’re able to disinfect and the higher efficacy you get effectively.

Grant:

So those wands have really, really low UV-C output, really, really low intensity. But our device was designed specifically to deliver the maximum amount of UV-C light to every surface and air particle in a given room based on how much power you can pull out of a typical three prong outlet. That was our constraint, we literally said, how much power can we pull out of a three prong outlet and how much of that can translate into UV-C energy? And we did it. So we’ve unequivocally created this thing. That our product puts out as much or more light than any hospital great product that’s on the market today but we sell it for a fraction of the price.

Stephanie:

Got it. Okay, I love that. So can people be in the room when it’s cleaning? Or is it like, okay, everyone’s got to get out, we’re gong turn this light bulb on. It’s about to blast everything away, then you can come back in.

Grant:

So traditionally UV-C light in the UV-C that our first product Arc creates, you cannot be in the room when it’s running. It’ll irritate your skin if you’re exposed for too long, or it’ll make your eyes feel like you stared at the sun. So Arc, it’s not going to kill you but our stance is that nobody should be around it. And so we baked in redundant safety mechanisms and stuff to make sure that nobody is in the room. But even though you can’t be in the room, you can actually be productive while it’s running. So for example, if you’re running a five minute cycle, you reel it in, plug it in the wall, set a timer ready to go, you can go to the next room and start cleaning and no operating in that room, which is one of the reasons our customers are seeing a pretty massive decrease in labor required to get the same or higher efficacy from our devices.

Grant:

However, we have a new product that’s coming out very soon that you can be in the room while it’s running. So historically, traditionally, UV-C light is 254 nanometers and that’s our first product. And that wavelength is harmful to human skin and eyes. So it has enough energy to penetrate the top layer, it can get to the live cells and cause disruption in the DNA and the RNA just like it does with microorganisms. But our new product, it uses what’s called Far-UV, so instead of 254 nanometers, it’s now 222 nanometers. So it’s a shorter wavelength of light and does not have enough energy to penetrate the top layer of skin or top layer of cells in your eye, and therefore it is safe for use in occupied rooms. And the implications of that are huge.

Grant:

So a, it does both surface and air disinfection in occupied rooms. But if you think about how air disinfection has been done historically, literally everything on the market right now, you physically have to move that air somewhere to be able to treat it. So whether that’s a HEPA filter that you plugged in the corner of your room or a vent that takes that air and recirculates it through filtration or disinfection mechanism in the central HVAC system, you physically have to move the air. So if you and I are engaged in conversation, and I’m sick and I’m breathing out contaminated air, it can pass by your face, get you infected on its way to the HEPA filter that’s behind you for example.

Grant:

With Far-UV, that’s not the case. So as soon as the air comes out of my mouth, as soon as it’s exposed to the light, this Far-UV light, it’s actually being disinfected in real time. So by the time that air gets to you, the pathogenic load is lower and therefore the risk of infection is significantly lower. So I truly believe that we’re going to look back on Far-UV in 25 years and consider it one of the most consequential medical advancements and discoveries of our lifetime.

Stephanie:

Wow, that’s awesome. I mean, okay, idea, an outfit with the UV lights on so then it just beams away any problems that try and come my way. Thoughts? Do you want to license it from me?

Grant:

Yeah, we’ll put it on the roadmap.

Stephanie:

You’ll put it on the roadmap. That’s great. So I want to talk a bit about scale. I was listening to another show you were on. I think you mentioned that within six months, you scaled up to $11 million, or something. Are you able to share where you’re at today and how you’re thinking about employee growth with that?

Grant:

Yeah, so we’ve seen our business accelerate coming out of the pandemic. And today, we’re over 25 million in sales. And we’ve been selling for-

Stephanie:

Congratulations. Wow.

Grant:

Thank you. We’ve been selling for about 10 and a half months at this point. And so it’s been remarkable to see the adoption of these types of products. And what we’re seeing is, not only are one of the reasons it’s driving the acceleration coming out of COVID is, not only are these businesses investing in COVID response tools and tools, and tools to fights COVID but they see the long term benefit and they understand that they have to do something differentiated, to get employees back in the door, to get guests to feel safe coming back into their business, and things like that. So they’re making the investment in the long term, an sort of reimagining their physical spaces and designing them with sort of human health and productivity at their core. And that’s, I think, why we’re seeing the rapid adoption and the acceleration coming out of COVID.

Grant:

But as it relates to employee growth, right now, the way we look at this business, is we’re really inventing the market right now. And the speed at which we move is going to have a huge impact on our long term success. And so we’re scaling as fast as humanly possible to bring more products to market, to proliferate our products into more and more spaces, and to accelerate our rate of progress as a company, and be really the first early movers in this industry and establish ourselves as the experts.

Stephanie:

So what are some lessons you’ve learned while scaling this quickly, where you’re like, I would have maybe done that a little differently, or now, I know that for next time.

Grant:

Oh, man, how much time do we have?

Stephanie:

A long time.

Grant:

I think the biggest thing for me has been that the people you bring on matter a ton. And that seems obvious when you say it out loud, but this being my third business, it’s really sunk in and it’s really like this, this business is different in that the people that we have involved are incredibly talented, incredibly smart, they’re driven, they’re competitors, and they’re all motivated by the mission. And so just making sure that you get your core of employees, your early employees really, really right, it affords you a lot of flexibility, and allows you to stay like really low touch, low process, low overhead, for as long as you possibly can.

Grant:

One of the things that I think has been challenging, and will always be challenging, and I think it’s probably a problem many, many businesses are trying to solve right now is creating the connective tissue between the team in a fully remote environment. And, I think that a lot of people have operated in fully remote environments, but most people I would guess, have not. And so we’ve had to be very, very intentional about getting employees to know that each other exists, forming those bonds so they feel not just compelled to work with each other, but they know who does what and who to go to for what. We iterated on a lot of different ideas. And a couple that have worked really well I think are one, it’s super simple, but it’s hugely impactful. But we do a thing called random coffees. And it’s just a slack plug in that on Monday randomly matches two people, pairs two people up within the company.

Grant:

And on Thursdays at 9:00 AM Pacific, we have a 30 minute time slot, it’s on everybody in the company’s calendar, and we hold that sacred and for that 30 minutes everybody in the company is meeting somebody else and having a random coffee. And we encourage people to talk about anything other than work, just to get to know each other a little bit. But it’s been incredibly powerful to just have that interaction with people and kind of recreate that water cooler talk that you missed being remote, recreate that water cooler talk in a very intentional way and help people form those connections and bonds.

Grant:

But yeah, we’ve had to do things like that for culture, but then also, be very intentional and thoughtful about the communication channels, the feedback loops and how to manage change as we scale. And we’re not perfect but we’re getting better every day. And it’s something that I think is going to be a huge challenge for a lot of businesses and the ones that do it well, I think, will have a distinct competitive advantage moving forward.

Stephanie:

Yeah, I agree. And you’re scaling up to 100 people. So that’s within a year or so. How do you go about setting up teams so that people can kind of act on your behalf and hire and vet because I’m imagining if you’re scaling this quick, and you’ve got a ton of things to do, you probably are not dropping down every single interview and having those abilities. So how do you think about setting up a team to be able to kind of work on your behalf?

Grant:

Yeah. So I mean, it takes a lot of trust and in order to trust, you have to hire phenomenal people. And we did that early on. And my leadership team is the best I’ve ever been around, especially for a company at our stage. And they’re truly special and I have to pinch myself every morning when I wake up, and remind myself like, holy smokes, look at this team of people we have. But when you hire highly capable people and you get to see them go through a couple of reps and see that they have great judgment, that they can recruit top talent, that they know what they’re doing. You have to let them run, you can’t be the bottleneck.

Grant:

With that said, I do interview every single person that gets an offer. So I’m the last line of defense, and it’s usually a very quick interview, a 30 minute interview. But, I get candidates that we have intentions and making offers for. And I’ve had to have a few tough conversations about these people not being the right fit and kind of turning them down at the end of the interview process. But I think that that has been critically important to make sure that we have consistent sort of DNA throughout the company as we go. And we look for people that are going to be autonomous, that are going to be able to make good decisions, and have good judgment in the absence of complete and perfect information.

Grant:

And so that has been really challenging, especially in today’s job market, it’s incredibly hard to find great people, but if you get it right, it allows you to again, just be a little bit more trusting, more hands off. And the team has to kind of figure it all out together, and people will self organize and make good decisions and whatnot. And along with that is, as we’ve gone through multiple phases, where early on, I knew everything that was going on in the business, especially when it’s three founders up to I don’t know, I’d say probably 20 to 30 people, you can have a handle on all of the different activities, because there’s only so much we can do as a company. But once you scale past that, it is pretty impossible to know what’s going on.

Grant:

And so I’ve had to evolve as a leader to be more, provide more of a framework, more direction, make sure we set our North star really clearly and come up with a set of sort of principles and values by which we operate. And if that framework is done really, really right, then it will automatically get people aligned and pulling in the same direction. But it’ll be a constant iterative process to make sure that we have the right information getting disseminated down throughout the team, and we’re pushing the decision making closer to the people that are doing the work and improving increased context, increased autonomy and decreased process and red tape, I guess.

Stephanie:

Yeah. And it seems like the people closer to the ground floor, where they’re kind of listening to the customers, they might actually have good product ideas too of like, Oh, we’ve been to like 20 different hospitals that are all mentioning that they want this, how do you all think about new product conception and figuring out what the market needs?

Grant:

Yeah, that’s a great question. Because this old Steve Jobs adage is very true but customers don’t know what they need a lot of the times, and I don’t mean that in any disparaging way whatsoever, it’s just that what we’re doing is scientific and it’s new. And so you have facilities managers now who are not only expected to be operational experts, but now they are expected to be epidemiologists as well. And so you get a lot of feature asks or product asks and you have to get to the why behind them. Why are you asking that? What do you think you’re going to achieve? What value does that add to you? Because there might be a better way to do it. And so, we’ve had to build a really tight feedback loop.

Grant:

So for example, our customer success team who does our onboarding and training with All of our customers and they’re probably the closest to our customers. They send a weekly update every week to the entire company. And they talk about the different customers we on boarded, different insights that we learned about, like how they’re using the product and maybe in a novel way, what value they’re getting out of it in any sort of issues that may have come up, that we might want to try to address or feature asks or future revisions as well. So building those feedback loops has been critical, sales and marketing, have another really tight feedback loop as well. But it’s all about institutionalizing that framework, that thinking, that line of thinking where like, hey, every interaction we get with a customer, let’s use it to learn something new about who they are or how they operate, what’s valuable to them, and then let’s make sure to disseminate that information in a structured, organized and pragmatic way throughout the organization.

Grant:

And then our product managers are incredible, and they do a really good job in ingesting and organizing all of that information, prioritizing it and figuring out what we want to do with it. But yeah, it’s a process.

Stephanie:

What is one of the craziest things that a customer has asked for? Or just a random person like me who wants an outfit that’s UV

Grant:

That’s a great question. I’ve seen some pretty audacious asks. I think on the more realistic or practical side, I’d say, people have asked for off road tires for our first product. And it’s funny, one of our first ever customer installations was at a dude ranch, basically on the central coast of California, and they didn’t have any pavement or anything. So we were wheeling around this device, it’s meant to be wheeled around in a school or an office building or whatever, which is, it’s very mobile, but wheeling around on giant rocks, rock walkways and stuff it was interesting. And that would have been a good use case for those wheels, but and then we’ve gotten requests for lasers, which I think some of them have been tongue in cheek. But it actually is something that that may be viable, where you if you understand somebody touched, like a door handle or whatever, you have a laser that can actually target a beam of UV-C disinfecting light at that high touch surface or whatever. But yeah, there’s been there’s been some, some funny ones.

Stephanie:

So how do you guys think about, eventually, we will be in a post COVID world? How do you think about the marketing and sales strategy? I’m assuming it could adjust a little bit when people are like, okay, we’re past that now. We don’t have to worry as much. Let’s go on with business. I mean, some people might stay where they are now. And I think there’s a lot of new habits that are forming. But there might be a little bit of a pullback too where people are like, okay, let’s just go back to how it was. How do you all think about maybe adjusting the messaging after we’re not in the COVID frenzy anymore?

Grant:

So we haven’t been selling against COVID for a number of months now. Really, when the vaccines came out, that’s when we did see somewhat of a pullback, in terms of the receptivity of customers to COVID messaging. And I think part of that, I mean, I’m a consumer as well, we’re all in this boat together. And back in April when vaccines came out, I wanted it all to end too. I was tired of hearing about COVID. I was like, okay, vaccines are here, let’s go, we’re done. But what we’re seeing is, people are becoming more aware than ever, societally, and from an organizational standpoint, more aware than ever, about the impact of indoor environments, on our overall health. And really with any type of an organization, whether it’s a business or a school, or anything in between. There’s a material ROI to keeping people healthy.

Grant:

And so that material ROI in schools, for example, schools get their funding from students attending school. And one of the school districts we’re working with right now, they get $47 a day in state funding every day that a student attends school. The year before COVID. They missed out on over $75 million worth of funding due to sick days and student absenteeism and you layer on top of that, teachers sick days cost about $190 a day for that school to hire a substitute teacher. And they paid over $22 million, that same year in substitute teacher cost. And so almost $100 million a year of annual opportunity. And that’s not to mention that sort of tangential benefits to students being in school. So when students attend school, and when teachers attend school, the quality of learning goes up. And that impacts standardized test scores, which also impact funding.

Grant:

And so it’s this sort of cyclical process. And then if you think about an organization, especially companies that are knowledge workers, these companies have spent, some of them are spending tens of millions of dollars to make their building more energy efficient and get a LEED certification, for example. Energy consumption might be five to seven percent of the company’s overall spend. But what is 80, 90 plus percent of the company’s overall spend it’s headcount, it’s people. And so if you can get, they’re paying tens of millions of dollars to cut five to seven percent of their spend in half. Where if you can optimize the 80, 90% of your spend that is headcount, and get five, 10% more productivity out of your most expensive asset, that’s a much bigger lever. And that’s not to mention the health insurance costs that are associated with it.

Grant:

So most large companies, over 2500 to 3000 employees, it makes all the sense in the world to underwrite your own health insurance plans. And when companies do that, it costs us about $22,000 per year per employee on average. And that cost is rising seven to nine percent per year. And so for the same reasons that a company might give a gym stipend to their employees, not because they like fit employees, but because fit employees are healthy employees and healthy employees cost less to insure. For the same reason that companies do that, we can also come in and become a cost savings mechanism by virtue of keeping people healthy, reducing their direct and indirect healthcare related costs, and therefore reducing their healthcare and their health insurance premiums as well.

Grant:

So I think companies are realizing that this is possible. And the evidence is that I remember reading my first article about this, actually, almost exactly a year ago, I was reading an article about South Africa who was just coming out of their flu season. And typically, they report about a million cases of the flu every year, and this past year, they reported one, one single case of the flu. So the basic precautions they’re taking for COVID were enough to all but eradicate the flu. We saw the same effect in the United States, the CDC showed that flu cases in the United States were down more than 99% this past year.

Grant:

And so I think people are having the realization that, look, your facilities manager, or the person who makes decisions about the spaces where we spend our time has a greater overall impact on our health than our doctor does. And they’re also realizing that there are huge benefits, not only physical benefits to keeping people in the seat and being more productive by virtue of keeping them healthier, but there’s also the psychological benefits as well. And I truly believe that consumers are going to change their behavior based on health and safety. And so imagine going to TripAdvisor planning a trip for you and your family and seeing there’s 10 hotels listed and some of them have an R-Zero badge next to them indicating that they employ hospital grade disinfection technology. I would personally pay five to 10 extra dollars a night to stay at a place like that, knowing that my risk of infection was less. So I think that’s how the world has changed forever. And I think it centers around that human health, that awareness of the relationship between indoor spaces and in our overall health.

Stephanie:

My one last question around this and getting kind of science-y and less commerce-y but is it true that something can be too clean? You read about environments not having enough things in it for kids to get sick, like they used to in the dirt and everything’s just like wiped down all the time. And you should actually have viruses around and stuff. I’m thinking about, if someone were to install this in their house, is that a good thing or does it make the environment to clean where it’s maybe preventing what should happen, especially to kids in the early days?

Grant:

I think that the idea around, that’s the ultimate extreme. We hear that all the time, but that’s the ultimate extreme that’s if everything was sterile. And the reality is your body is exposed to pathogens or other sorts of mold and fungi or things that stress your immune system all the time, but that doesn’t mean you get sick. And so that’s conceptually similar to a vaccine, where you have a small enough dose of a particular pathogen that your body’s immune system can actually overcome it and create antibodies for it, so that the next time you’re exposed to it, it doesn’t take over and get you actually sick.

Grant:

Your immune system it’s kind of like and this is a very crude analogy, but kind of like, a muscle. If you work it out, it’s ready to go. And that’s the concept behind kids rolling around in the dirt to stay healthy. So I think that what we’re doing is lowering the risk, we’re not completely eliminating everything, we’re not sterilizing things. And I think, extensively, we could, but that’s not necessary, it’s not practical and it’s not necessary. And so our goal is just to get the pathogenic load below that the infection threshold. So, even in environments where we are drastically reducing or even eliminating altogether sick days, people are still exposed to things all the time in that environment, just not enough to get them sick.

Grant:

And then if you think about outside of that environment, extrapolate this idea, in order for people to be completely unexposed to pathogens, every environment that you go to has to be fully sterile, which is not practical. So your grocery store, your children’s school, the line at the bank that you wait in, the gas station. It’s just not going to happen. So I think theoretically, if you’re if you’re taking that analogy all the way to its extreme, yes, I think that would probably be a bad thing. But we’re definitely not anywhere close to that as a society. And then our products do enough to keep people safe but not enough to make sure that-

Stephanie:

Sterilize the world.

Grant:

Yea, exactly. Their immune system is still getting a workout from plenty of different places.

Stephanie:

All right, a quick lightning round. The lightning round is brought to you by Salesforce commerce cloud. This is where I asked you a question then you have 30 seconds or less to answer. Are you ready, Grant?

Grant:

Ready?

Stephanie:

All right. What’s one thing you don’t understand today that you wish you did?

Grant:

That’s a great question and 30 seconds makes it harder. I don’t understand why traffic happens for no reason when there’s no accident or anything. Why people just slow down on the road.

Stephanie:

That should your next company.

Grant:

Yeah, exactly. Well, yeah, that or just autonomous drones that can transport people and don’t have to deal with traffic.

Stephanie:

Yep, that is very confusing. If you were to have a podcast, what would it be about and who was your first guest be?

Grant:

Music. I am a musician by passion I guess. I almost went to music school. My first guest on the podcast would probably be Carter Beauford who’s the drummer for Dave Matthews Band. I’m a huge Dave Matthews Band fanboy. I’m a drummer myself, and I grew up trying to emulate everything that he did. And plus he just seems like a really cool guy. So I’d love to have him on the podcast.

Stephanie:

That’s great. You need to do a custom little drum intro for us make it really unique.

Grant:

Exactly.

Stephanie:

What’s up next on your reading list or podcast, whatever you prefer?

Grant:

On my reading list there’s a book called The Premonition that I want to read it’s about the CDC and the history of the CDC, and it explains a little bit about how they’ve handled past pandemics and public policy and things like that. And one of my co founders, Ben read it, and highly recommended it to me. So that’s on the list.

Stephanie:

Okay, I kind of want to check it out. If it has a nice feature or a scary one, you’ll have to give me a give me a warning. All right. And the last thing, what’s the nicest thing anyone’s ever done for you?

Grant:

Oh, man. I could go big or small with this. But I would say just my parents putting up with me growing up. I was one of those kids that was described as having a lot of energy, which just means I was difficult as a kid, but my parents always, they recognized at an early age that they were like Grant’s going to do his own thing no matter what. And they supported me. They loved me. And they set me up to be where I am today. But I can remember when I started my first company, I was leaving the healthcare industry, big cushy job in the healthcare industry using the degree that I actually got. Left to do a start up. And I remember, my mom was like, “Oh, I’m proud of you but I haven’t changed your room. So if something happens you always have a place to come home to,” and I was like, thanks for the belief in me. But it all worked out.

Stephanie:

That’s funny. That’s a mom though. I definitely have heard similar things. That’s great. All right, Grant. Well, thanks so much for coming on the show. I’m glad we got to make this work. Where can people find more about you and R-Zero systems?

Grant:

Check us out on the web at rzero.com. That’s r-z-e-r-o.com. And drop us a note if you’re interested in seeing what it would look like to get hospital grade biosafety technology into your physical space and really establish a new standard for health and safety.

Stephanie:

Yes, love it. Thanks so much.

Grant:

Awesome. Thank you.

Episode 140