Participants: Malte, Benedetto, Anes
Malte: Great. Let's then officially start. Today I have the hosting responsibility. Henrik is out preparing some material for a board meeting next week. So instead of Henrik, we have Anes joining, who is from Cobblestone, one of our long-term clients, but someone who has upped the use of Ento lately since a quite large portfolio has joined you at Cobblestone — and therefore also Ento. And you've agreed to do an interview today about energy management and your role at Cobblestone and so forth. So, really excited to have you here.
Anes: Thank you. I'm excited too.
Malte: Great. And do you mind just giving an intro to who you are — and I called you Cobblestone already, I should have said Inna Denmark. Could you give an intro to why that is so and why you are changing names? What's going on?
Anes: Of course, not a problem. So my name is Anes. I'm head of our sustainability management department here at Inna Denmark. We just merged with a Swedish-Finnish property management firm as well. So that's exciting news, where we can deliver sustainability products throughout the Nordics. That's part of the journey we are on here at Inna Denmark. Previously we've been called Cobblestone, as you mentioned, but energy management is a big part of our services towards our clients — both commercial, professional investment firms and residential portfolios as well. I do see that the commercial aspect has a big relevance when it comes to energy monitoring. And we partnered with you guys at Ento Labs — there are many reasons for it. One of them is your understanding and the functions in the platform. Some of our clients have also chosen you before entering into an agreement with us, so that says a lot as well. But yeah, we do a lot of different sustainability services for our clients. Besides energy monitoring, we do energy performance certificates, optimization screenings, tenant satisfaction surveys and ESG reporting in general. So we have a very holistic understanding of the sustainability of buildings — of real estate, mainly.
Malte: Yeah. And just before we dive into your team's core functions, a brief intro of Inna as a company — because I think some are fully on board with what an asset manager does and what an external service company does, and for others it's quite new information. Could you describe that, and how you're working with clients and representing them?
Anes: It should be part of my pitch, but I immediately went into what I'm delivering! So at Inna Denmark we are an administration firm where we do property management for real estate, and we do associations as well — a third of our income comes from management of different associations in Denmark. We are mainly focused on Danish real estate. We have technical management and facility services as well, which is the operational managers on site, covering things like cleaning and biodiversity on the property, and we do the property management and financial management of the companies. So we have a lot to do with the tenants, and we help increase value for real estate clients. My department mostly works with the professional investors. We have big pension funds, and we have investors from outside of Denmark — the UK, the US, Germany — big international investors who have real estate investments in Denmark. So we help them manage their portfolio and work closely with the asset management. We do have asset management in-house, and we have different asset management firms that we work with.
Malte: Yeah. And there's this saying that property is the largest asset class in the world. It's where most finance is tied, and that's exactly your clients — they have a hands-off approach to the operations of the financial instruments we call buildings that they invest in, and then they have you to do the management.
Anes: Exactly. I mean, some clients don't even know what a building is — they haven't seen the buildings, but they invest in them, and we do everything in our capability to make sure they have a great investment, and we act on their behalf. Their interest is at the forefront of what we look at.
Benedetto: I have a question, because I'm always curious about this: sometimes we hear that sustainability is somewhat at odds with economic returns. Like, okay, why should we really invest in this stuff while we have this capital that we can put into other things that have more ROI — maybe sustainability is just fluff. So this dichotomy, right — are they really two different things, economic returns and sustainability, or can they go hand in hand? You're working in an organization whose goal is to make money, so I'm really interested in your take on that. How does sustainability play a role in making your investors make more money?
Anes: I think my understanding of sustainability is very broad. There's no sustainable strategy for a portfolio if it doesn't also encompass return on investment. That's one of the most important sustainable factors for decisions. And then we add on the social and the environmental aspects, because those are in high demand as well. You wouldn't have a great investment if you don't think about the tenants and how happy they are, or if they have any problems. You wouldn't have a great investment if you are not compliant with EU regulation when it comes to the environment. And if we don't look long-term — and that's the biggest sustainability topic there is — I mean, you have to look long-term for a great investment. So without a sustainable business plan, you have to encompass all the different aspects of sustainability. I think they go hand in hand. When I help our clients with strategy, I don't only look at the environmental aspect. I look at what is a great investment when it comes to return on investment, happy clients, happy tenants — you have to look at it holistically. So I don't think they are at odds, but I think it's difficult to have equal parts in every decision for sustainability, the economic and the environmental aspects. Sometimes one aspect weighs more in the decision making.
Benedetto: That's really interesting. And maybe at some point, if we have time, we can also talk about what you think is the role of regulators in that. Because I can expect that if risk and compliance take a large part in these decisions about sustainability, then different regulatory environments can turn into very different decisions. I guess in Europe, and probably in Denmark, we have quite forward-looking laws in that sense, but in other markets it can be quite different.
Anes: Yeah, and it's very interesting. I was at the proptech symposium yesterday, where we talked about supply chains and what we should expect in the future. If our clients don't look at the future aspect of climate change and how supply chains are going to affect their investment, it would hit them hard — and not even in the long future, but in the short future as well. We already see different aspects: earthquakes in Denmark a couple of days ago, a storm flood a year ago, flooding in Jutland. It affects real estate every day. And when we have tenants that can leave their building because of an electrical outage — it's going to be a deal breaker, a license to operate in the future, to have every aspect of sustainability — the environmental, economic and social — taken into account. And I think the legislation is built to move our industry forward little by little. Sometimes it goes a bit too fast for some people, and there's a lot of investment based on these decisions, but if we don't do it, all of the real estate is going to be in jeopardy in the future.
Malte: And Anes, we should also be wary of time, because I know you can talk about sustainability for hours. I've had the opportunity to work with you now for, I guess, two years — but especially during the last few months we've intensified, as we've onboarded around 100 commercial buildings together on Ento. That's been a pleasure, in a very short time.
Anes: In quite a short time, yeah.
Malte: So, last question on sustainability as a whole: how much of your effort goes into what I would classify as optimizing your own assets versus risk mitigation because of climate change? Do you see why I'm dividing those two into different views?
Anes: Could you maybe elaborate on that?
Malte: Yeah. So, for instance, sustainability as a risk — a climate risk. There's a risk that there will be one meter of elevation in the sea, and how can we assess that risk? That's an external threat. Whereas the other side, which is more what you do at Inna, is optimizing the operations and the long-term strategy for the building itself. I see it as two different ways you can invest: one is the medicine once you are ill, and the other one is the exercise before you get ill. Where do you invest your time?
Anes: I mean, we do look — and hope our clients look — ahead of time. We can all stop a bleeding in the moment, but we have to be ahead of the legislation, and also the needs from our clients and tenants. Previously in my work, I maybe had a water bill come once a year, and I'd see a big spike in water consumption — and then there had been a leakage for several months. Nowadays, with your tool, I can have live alarms when it happens. That is stopping the bleeding, but it's also, in my eyes, a long-term investment, because we reduce the operating cost for the building in the moment. And what I use your strategy module for is also to look at what we need to implement moving forward. So I think there are many benefits to the different modules or products you have in your services. Some are stopping the bleeding — maybe not for the physical climate risks, but for reducing the long-term CO2 impacts.
Malte: Okay, so on that note — one thing that could be really interesting for anyone seeing this, and for us as well, is to better understand your process of choosing Ento for the latest portfolio joining. You were evaluating different technology providers, and you also told me we are more expensive. So why did you choose Ento? What were the pros and cons? I would really love to hear that from a completely honest perspective. What was weighing in on that decision?
Anes: I think that you are a full-service provider, and that's a very important aspect. You have a lot of automations and AI that can help us do our job better, so we don't have to focus on the integration and the power of attorney part — that's your responsibility, your commitment to make sure that the data is available. And then I can focus my team's technical expertise on actually optimizing the property, on actually mitigating the risks on the property. One of the most important factors is that your functions are very much ahead of many of the competitors, and that's an important part for us when choosing a supplier for energy monitoring. I've seen portfolios where they have integrated to a lot of different utility companies, but when you look at the data, they actually don't receive the data — they maybe haven't received data in months. In your system, shortly after not receiving expected data, you get a response, and you are on it. So that's a big part of why we chose you.
Another aspect is that you calculate the actual savings that we generate on the property. That's one of the most important aspects for asset management — to be able to show the effect of what we're doing. The clients are paying you and me a lot of money for a system, for expertise, for advice. It's easy for me to say, "Oh, I saved you a lot of money because I found a leakage or because I did this energy optimization measure." But with your tool, you can actually give me a concrete number on what we have saved this past year, and whether the energy optimization measures are actually delivering what we expect them to. Theory is great, but when we actually see it in the data, that's even better — to see if the improvements actually give the return on investment that we forecasted.
And then you also offer a lot of different additional services. I can get tenant consumption as well through your system, without a power of attorney. I don't have to ask 4,000 tenants in a building for their electricity consumption — it's delayed, but I can get it for reporting. And the CO2 tenant reports I can do easily through your system. So I think those are some of the different aspects that were driving why the client and the asset management chose you guys, and why we recommended the system even though it's more expensive. In the long term, it's not that much more expensive, because I would have used some of the same time and materials to integrate with the different utility providers.
Malte: I've had quite a busy week — we've had three events, and luckily I only had to participate in two of them. One of the events was actually focused a lot on the public sector, and it's funny that the two things you're highlighting — we manage the integrations, and you can document the energy savings, which means you can communicate — are the same things they're highlighting. We're now working with 40 municipalities out of the 98 municipalities in Denmark. Let me share one example that resonated with most people at that conference. This is a case where a client is investing in a new building management system, and it costs them around €10,000. It's not a lot of money, but it's still an expense, right? An issue occurs — and you can see that in any kind of energy management system, you have graphs of consumption going up and down — but then our system is finding the problem, and the users are fixing it. Where it really becomes valuable, I don't think, lies in the data. It lies in being able to document the saving, because you can communicate those savings. So instead of it being an expense, you can actually document that this BMS system they invested in is literally a money machine. They have documented savings here of around 55,000 DKK per year in electricity and 50,000 DKK in heating savings — around €15,000 per year in savings, with an investment that, mind you, cost them around €10,000. And if this BMS system has a lifetime of 20 years, the present value of that investment is crazy, right?
Anes: It's plus a million DKK — it becomes a no-brainer. And what we also usually do is integrate the expense for our clients onto the tenants. We integrate the fees into the tenant agreements, and then we can move the expense over to the tenants as well, because they are often — at least with professional investment firms — the ones who benefit from this service. Of course, the reason why you have an energy management system is different for a municipality, because it's actually their own expenses they are paying, but as you're saying, it's a win-win situation for the whole supply chain.
What you also do — and I didn't express this well before — is that when you identify a problem, you suggest what the reasons might be for the increase in consumption. You use AI to predict what the difficult parts actually are, and just by doing that, you help us identify the problem and mitigate it. I work with different energy platforms as well: you collect a lot of data, and then you have to be very knowledgeable about energy to be able to identify the problems, and from there you have to have a lot of knowledge to identify what to do based on it. It's nice to have a feature that helps direct us to what kind of issue it is. And — that's the great part — we can log every action we take. I can send an email out to the operational manager on site and say, "Hey, there's a leakage," minutes after I identified it, and hours later we can have mitigated the issue. So I think that's one of the strongest functions in the system: we can communicate the value of our service and your product. My service would have been twice as expensive if I had to do it all by myself.
Malte: I'm super happy you're bringing that up — tremendous smiles over there. You're talking to the developer of that feature.
Benedetto: Apart from that — which, I think it's fine to get recognition for — I'm a little bit of a nerd in this specific niche, because I did a PhD specifically in the application of machine learning to verify energy efficiency savings. It's a very small niche — not many people know what this is. And in this sector, or cult, as you want to call it, one of the things that always came up in conversations was: what is the one biggest problem of energy efficiency investments compared to, for example, investing in renewables or distributed generation? And that is that renewables have a meter. Renewables have something that is telling you every hour how much you're producing, and that is directly translatable, with no uncertainty, into what you're getting out of it. Energy efficiency, on the other end — specifically if you don't have hourly data — is all a little messy. You need to do these counterfactual calculations, and investors might not get them. Investors are unsure of what they're getting out of the capital they invested, and that makes all energy efficiency investments look less appealing. On the one hand, it's a structural problem of energy efficiency — you will never have a meter that tells you how much energy efficiency is delivering. But on the other hand, I always thought it's also a matter of communicating it in the right way, because we have the math to do a good calculation. But if we don't put it in a way that is understandable, clear and well communicated, then you are not able to get that investment out, and you're not getting the savings. So I'm really glad you're bringing up the power of just being able to communicate the number to the right people.
Anes: Yeah. And another aspect is that I have had clients ask me, "Oh, how many submeters should we put up to get this information?" And that investment alone is enormous, especially when you have to expand to other buildings as well. The information, I believe, is readily available at the main metering level. And if you use AI — and that's how we should be using AI — based on the amount of historic data, we should be able to at least predict what could be the issue, and not go in and use large amounts of money on submetering every place we can imagine: one on the ventilation system, one on the solar panel system. I've seen investments of hundreds of thousands of kroner in submetering. Maybe it's not a large investment for some people, but doing it at the main metering level is significantly cheaper than having a lot of different meter readings physically on site — and it's scalable.
Malte: I'm glad that you're bringing this up and not me. I have had a lot of people say, "Oh man, you're against submeters" and so forth. So I'm just super happy that you're bringing it up — and I think a lot of the people who have invested in submeters are realizing that it is of limited value.
Anes: And for opex as well, moving forward: some of the biggest disruptions are when we don't get data because there's a defect in the submetering, and then you pay twice for the same solution. If the main metering is off, it's up to the utility company to come and clear the problem. So both your capex and opex are going to increase with that mentality towards data. But I'm not saying that submetering doesn't have its part in identifying some problems — there's a place for submetering in some buildings — but mainly it doesn't make sense when we talk about energy management and energy optimization, because the data is there, just at the aggregate level.
Malte: Yeah. And then it delays action, is what I see as well. I won't name them, but I talked to someone yesterday at the conference we were both at, and they weren't doing active energy management right now because they were installing submeters.
Anes: Exactly. I mean, the portfolio we onboarded a couple of months ago — 100 properties — within less than a month we had most of the meters up and running. For the electricity in the portfolio, it didn't take more than a couple of hours. And for the heating and water metering, we were live very fast. Usually onboarding takes three months; we did it in less than a month. If we had to do the submetering — on some properties I don't even have the quotes yet, even though I asked a couple of months ago, and then implementing it would take months again. And you don't get the historic data either, so you can only suggest improvements a couple of years into the future, once you have the data to support your decisions. There are different ways of going about it — I just think there has to be a return on investment for the clients, and quite frankly a limited amount of capex to go live.
Malte: Okay — I didn't expect us to go down the rabbit hole of submeters! One last thing I want to discuss with you — and I think we lost Benedetto for a moment; he also didn't want to talk more submeters — is something that I think you hold dearly: the integration of multiple solutions. A lot of SaaS software companies now have the capability to expand their product offering, and we at Ento have seen that as well. We talked about it briefly already with sustainability data — tenant data is now something we support, energy performance certificates is something we have supported for a while, and then of course long-term planning. Could I get you to talk a little bit about the value you see in bundling different products in one?
Anes: Yeah, I think you're quite right — there's a maturity in the market. There are a lot of different proptech companies doing a lot of different things, each with their own niches. But for us as an operational company, we need to minimize the number of vendors that we use, because there's plenty of compliance in our own house that we have to make our vendors comply with. So for me, it's quite simply a simplification of the systems. When we have integrated the EPCs in your system, why should we then use another system for the strategy module, when you have all the different integrations with the utility providers? Let's use that information when it comes to the sustainability tenant data, because then we can map quite easily where we have the integrations and where we don't. It simplifies my way of working when I don't have to have five, six, seven suppliers for these services — because then I have to export from your system and export from another system and start mapping how it fits together, and sometimes the assets don't even have the same name in one system and another. There are things that you are very, very good at — energy monitoring is your core, that's the company — and there are things that you're establishing, that we're working on establishing together, where you're moving forward. But I think you're moving forward very fast, at least with our suggestions, and can catch up to many of the competitors who maybe have had their core function at that service. That's the benefit of having it all in one system.
Malte: Any thoughts on this, Benedetto — from a developer side, or from a product strategy side?
Benedetto: Let's see if I can avoid being controversial. What you're describing is only possible because we decided to start from the difficult things. Maybe some of the competitors you mentioned decided to start with the easy things — the analysis of energy performance certificates, or just getting aggregated monthly data and giving you some level of reporting with that. That is not that difficult, and that's why we are able to catch up so fast, when we have invested years doing the hard stuff: building the integrations to get the hourly data up and running really quickly, building our machine learning models that are able to flag the alerts really quickly whenever they come up and send them in a good way, and collaborating with our customers to understand the easiest and most user-friendly way for them to get the alerts and act on them. Because that's ultimately what we are interested in. We are not interested in providing an energy management system — nobody cares about an energy management system. People care about being able to do their job, which is getting savings, limiting energy waste, reporting on the data, and planning into the future. We started from the idea of providing our users and customers with the possibility to do their job better, and we learn together with our users and customers how to do that. That is not an easy thing, and I believe it's our competitive advantage. What we are doing with you now on the strategic long-term planning and the energy performance certificates is collaborating with our users really closely — almost every day during the week — to define a solution that makes sense, that we can deliver to a large number of customers at the same time, but that also solves the specific pain points you are experiencing every day. Because in the end, an energy management platform is useless if no one is using it.
Anes: And I think that's one of the biggest problems with many of the proptech companies out there — and sometimes, maybe you have also fallen into that category — but sometimes proptech companies create solutions or needs where there's no need for it. Functions because they're nice to have, not because they're needed. I've had real estate investment firms invest in systems which they are not using, but expect us to use, and then I would ask them: but how should I use it? What's the reason? The data is being manipulated in a way that's not beneficial for me — I have to spend a lot more time cleaning up the data than if I just had the raw data available, for example, through a utility provider. So that's what I try to bring when talking to you about functionality: what is going to help us in our day-to-day? Let's identify those problems, those issues — how can I be more effective at my work — and let's see if you can create those functions, instead of you coming with a function and then telling me how to use it. I would rather have the data being right and then build on top of that, than have a lot of functionalities and estimates of consumption.
Malte: I think that's a really good place to end the conversation. There's a fundamental change in how technology is being developed, which means that speed increases, which means that we can output more software — and that has some implications. We can create more software, but we need to create the right software. Right now I'm also replying to some tender documentation for another client, and I think that is one of the cases where this is really going to be difficult, because everyone can apply to a tender basically promising exactly what you wanted according to the tender. But that doesn't mean you get good software. So I think we're entering a whole different phase, both with tendering but also with how products are being developed and co-developed. Some are of course also saying that companies could create a lot of software themselves — but then it also has to be maintained, and there truly is a skill in understanding what the described need is and what the good solution is to develop. It's almost a shame we don't have Henrik here, because that is a lot of his expertise as the CEO of Ento — forming the product. I can't tell you how many times he's asked the "why" when I come with a feature request, and he just keeps saying "but why, but how." That is going to be the difficult part, because it's truly a skill you have to learn — it comes with a lot of years of software development experience. And that's not in the vibe coding tools, and not in getting a tender specification and feeding it into software development and saying "go." That comes with iteration, with product and design, and with the use of products. So, just my thoughts on these things — and I think you brought them up really nicely, both from a customer perspective and from a technology developer's perspective.
Anes: Thank you, and thank you for hearing out all of my many inputs in the conversation. I can go off script very fast and talk about different aspects more deeply — but maybe there's a podcast for that as well.
Malte: Yeah, we'll make another one. We'll just call it "Rant," and it's rants for hours. Okay, well, perfect. Thanks for joining us — and also to you, Benedetto.
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