"Never allow anyone to tell you that you can't get it done" - Michael Brown - Founder Series #3

Michael Brown is currently leading Skyline Robotics as the company’s chairman and CEO.

Michael's journey is nothing short of extraordinary. Since the age of 12, Michael followed his father’s business closely by helping with invoicing and attending board meetings. From working with Al Gore straight after his degree in Information Technology, to capitalising on emerging trends in the coffee industry, acquiring about 60 companies, and building the largest privately held independent company for office supplies, Michael is a living example of the advantages of “never allowing anyone to tell you that you can't get it done” and “surrounding yourself with people who are smarter than you and trusting them to make your business better”.

Today, Michael is the CEO of Skyline Robotics, the world's first at-heights industrial automation company. Originally founded in Israel, Skyline Robotics grew a presence in the US and is currently focussed on expanding to the UK, starting with London.

In this episode, Michael uncovered the strategies to propel businesses to the forefront of the industry, competing with established businesses, and effectively reinventing your business while recognising the opportunities of the future.

Interviews with inspiring Founders, Investors, and Real Estate Executives will be shared weekly on this podcast series - follow the PropTech Talks interview series and stay tuned!

Connect with me on LinkedIn: https://www.linkedin.com/in/matthew-maltzoff/

Transcript

00:00:04 Matthew Maltzoff
 All right, so welcome to the next edition of PropTech Talks, where we talk with successful PropTech founders, investors and real estate executives about their journeys, where they are today, the nuances of the modern real estate industry and how to capitalise on them. We're here with Michael from Skyline Robotics. How's it going, Michael?
 
 00:00:24 Michael Brown
 Great. How are you doing?
 
 00:00:26 Matthew Maltzoff
 I cannot complain. I cannot complain. I'm very happy to be having you on this episode.
 
 00:00:32 Michael Brown
 Very happy to be here.
 
 00:00:34 Matthew Maltzoff
 Cool. So to jump into it, I think it makes sense to have a little bit of an intro from you. Tell us about your journey as an entrepreneur. How did you get to where you are today? Give us your story.
 
 00:00:45 Michael Brown
 Sure, sure. So my father was in the office supply business. He bought a small mom and pop shop in 1972 and he was in the industry for 30-40 years. I was surrounded by business my whole life. So when you're in distribution and services, you bring the work home. We would separate all the paperwork and the invoices. On my vacations, I would be in the warehouse or I'd be working in purchasing. So I really got an education and I was just very lucky. My father would literally be like, OK, I'm buying this company. I want you to come with me. Sit down next to me. Don't open your mouth, but just listen. I was like 12/13/14. So I got to just see a lot in my life. So my father and I really hit it off on the business front, and I've been in love with business ever since. So I went to Syracuse University, graduated in information technology, and that was back in the day with ISDN lines. There were, you know, this was all just the new internet.
 
 00:01:57 Matthew Maltzoff
 What year did you graduate?
 
 00:01:59 Michael Brown
 That was in 1990, between 90 and 94, when I actually worked on a project for Al Gore, who was VP at the time, and it was a lot of fun and it was new. I liked the technology, but I liked the aspect of the business side, which was how to use the technology to advance your business, who's really in the early, early stages. When I graduated, my father said to me, you had four years in college, now you'll go to work. So I started working for my father for a couple months and then I wanted to go into a different type of business. So I went and bought a coffee service company which was very similar in same type of customer where it was business to business delivering and this was the revolution of the single cup coffee. So there was a product by M&M Mars called Flavia and Flavia launched in I want to say 1995 and we were the first dealer in the United States to have that. We took that technology and really changed the whole office coffee environment for the United States. So after we did a deal later in life, we want to do a deal with Keurig and we became their largest supplier of K cups to the office market in the United States by 2003. So because we were in commodity type business, you had to bring added value. We were going up against Staples, Office Depot, these were Corporate Express, which were these billions and billions in dollars and we were doing a couple 100 million, but you could just couldn't compare. So we had to diversify and come in with a what I would call one throat to choke selling proposition where if they had any service issues, they would come to us and we'd take care of it. Most of our customers were law firms and hospitals and people that needed bundled services. So I stayed in that industry till 2018 and from 1994 to 2018 between my father and I collectively we purchased about 60 companies, did a roll up, had the United States was the largest privately held independent company at the time for office supplies, sold our first company in 2006 doing about 400 million to Office Depot. And then in 2000 I came back into the industry. We bought a company called Rent A Crate, which is like tea crate in London, which is for office moves with plastic crates instead of using corrugated boxes. Then went into shredding, then went into office supplies again and sold that in 2018. We were about 300 million at the time and they forced me to sign the seven-year non compete so I would stay out of the industry. So I was 45 at the time, 46, way too young to retire and always have been very interested in robotics and just technology. And I'm an early adopter on everything. So it's like when Oculus came out, I had it. When Google Glasses came out, I had it. You know, when Apple comes out with their thing, I'll have it. I love to to just see the new stuff and then take it and see where you can take that new application, where business is going. So one day I I was actually looking into robotics for assisted living. And then one day I was driving down the West Side Highway in Manhattan and I looked up at Hudson Yards and I said, I cannot believe they are still cleaning windows by hand. And I went and that.
 
 00:06:01 Matthew Maltzoff
 Is such an such an outrageous random thoughts to start a business.
 
 00:06:08 Michael Brown
 So I went and did a global search and looked for technology that I thought could work, looked at a couple different things and then set my sights on Skyline Robotics. Flew to Israel in 2019 on what's called the FIDF mission, which is Friends of the Israeli Defence Forces. And I was with all New York real estate people and I called and I couldn't get a return call. And I called up on and I said, listen, I'm here with some of the biggest real estate people in New York. If you guys are really serious about your business, you'll come meet me. So they came and they met me. I introduced them to, you know, some, some heavy headers and took a look at their business, told them that I thought that we could bring in fresh capital and what I would call experience management and then wound up being able to consummate a deal. I want to say finalised December of 20. And at that time, that's when myself and Ross Blum, who's our President, COO and Partner joined the company. At that time they were eight employees and they had a prototype and that was it.
 
 00:07:18 Matthew Maltzoff
 And, and what are we and what are we looking at now?
 
 00:07:21 Michael Brown
 So their model originally was to go what I, what I would say direct to the consumer. So they wanted to be a first party provider and go to every building and say hi, I'm here to clean your windows. I didn't see that model working very well. So we went on a different route. So the route we went was for the existing building environment. We went to current service providers in certain markets. So if you take New York, we did a deal with a company called Platinum. They're the largest building maintenance service company in New York City, independently owned, hungry for business and have about 160 different contracts with Class A buildings in New York City in different services. Then you take principle. Principal Clean is our dealer in London and it's a very similar situation. They have contracts, they have the customers very well regarded and they have a desire to continue to grow with technology. And in both cases, the companies have specificity for the product for a number of years so that they can roll that out. And today we've got 29 people employees in Israel, mostly R&D and some operations. And then Ross and myself are here in New York running things out of here for the rest of the world.
 
 00:08:49 Matthew Maltzoff
 Very, very cool. I mean that that story alone I would love to just pick at. I wish we had the time. The the idea of driving past a building, seeing a human and thinking that should be a robot arm to me is I think just remarkable the, you know, the level of vertical thinking and all the barriers that you might think might be in a in place of that thinking. No, the end goal is just significantly better. So just let's get to that.
 
 00:09:16 Michael Brown
 Right. And and listen, and it's and we all have these aha moments. We're like, oh, I mean, that would be such a no brainer. And that's exactly what happened. And, you know, listen, one thing I have is passion. I like to be different. I like to take on things that other people would not. And it's just that, you know, I just felt like it was a huge opportunity. And listen, I, I'm not an engineer. So when I, I started seeing it, they're like, oh, well, we'll be able to do this. We could do this. I had no clue what I was doing when it related to the technology. However, I understood the business. I understood what I thought it would take and luckily in my world, I always believe in surrounding myself with smarter people than me. So, you know, I've got my partner Ross and Ross really he takes care of everything day-to-day and I’m more strategy and more business development and some fundraising and just I've kind of been there, done that on a lot of different business roll outs and new types of products. So I kind of have that experience about what can work and what can't work.
 
 00:10:33 Matthew Maltzoff
 So it's interesting that coming almost as an outsider and not knowing the status quo can actually work in your favour because you, you know, being part of what's normal, it actually prevents a disruptive innovation. They're just coming from the outside and saying, why isn't it like this? Why isn't it like this? I'm not an engineer. Just why can't we do this? And then framing it in that way just shifts the site to go and do things that are not normal. But often, of course, the the objective is significantly better. Just one last question I have for you and that was on on something you were saying in your journey is that out of college you started working with someone I would argue is one of the best mentors you can get, which is your dad. My just a little side note, my parents had a business long time ago and I still find myself just giving the odd call saying what do you think about this? What do you think about that? How should I approach this? Really, that kind of advice from someone you can trust is just second. Second to none.
 
 00:11:29 Michael Brown
 Yeah, listen, I was with my father from 5:00 in the morning till 6:00 at night five days a week for 15-20 years. And listen, there are some fathers and most of my friends just really just can't get over who my father is as a person. But most fathers like, yeah, he's he's young. He doesn't know. My father was like, listen, you take the ball. I don't understand technology that well. I understand this, but you know this. Go run with it. And, you know, and he allowed me to find my own place. And he had a bigger ego for my success than his own.
 
 00:12:06 Matthew Maltzoff
 That is really cool.
 
 00:12:08 Michael Brown
 So he's just been a great mentor and a just a better friend then I would say you know more than a father.
 
 00:12:16 Matthew Maltzoff
 That is so, so cool and really, you know, quite heart warming to actually hear. So actually last question on this one thing. So kind of really interesting. So are you a dad now if you don't mind me asking?
 
 00:12:28 Michael Brown
 Yes. So I have a 19 year old son, I have a 17 year old daughter, I have a 15 year old stepson, and I have a 1 1/2 year old baby.
 
 00:12:42 Matthew Maltzoff
 Four new CEOs incoming.
 
 00:12:45 Michael Brown
 There you go. By the way, You know what, I wish I had like a family type business for the kids to be in. But what's been interesting is that all the kids have always been very entrepreneurial themselves. I mean, I've, I think my daughter created 16 different businesses between, you know, the slime and the this and the that, and I had business cards made-up for her and it was all fun. And yeah, I'm very excited just to continue to watch them grow and see what they get interested in and just be as supportive as I can as my parents were.
 
 00:13:20 Matthew Maltzoff
 The funny thing for me is I would find myself calling, and this is a lot, a lot in university, calling my parents with a new big idea. And they would very often say, Matthew, just get back to your studies, finish your studies. I said I don't need to, I don't need to anymore. They were ultimately they were right, But they, you know, it's funny, I think a lot of it does seem to be genetic. But we could talk about this one topic for ages. I want to talk more about real estate, more about the industry, more about the problems we're solving. So when it comes to Skyline Robotics, you guys are growing and I think the strategy of changing the distribution strategy was really it. So looking at who actually has all the clients just go to that and they'll and they'll distribute it almost for you and.
 
 00:14:07 Michael Brown
 It's not even the contracts are important, but what's the most important is having the local knowledge of the marketplace. And one of the most incredible things that I found about technology companies is they, I don't find that people bring the industry into the discussion. So some tech guys come, they say, oh, let's create this product and whatever and it's going to revolutionise the world and we're going to sell it into the market rather than hey, let's call up the people that are working in the industry. Tell us what are the biggest issues? What do we need to be looking at? What are your top priorities? And their relationships with the local regulators are imperative. So for us to be a technology company, we want to work with the professionals, what I would call it the industry leaders. They can be union, non union. Well, they are very happy to work with us because we're engaging the ecosystem rather than just breaking windows and saying here's what we're going to do.
 
 00:15:17 Matthew Maltzoff
 So when it came to gaining these partners, what would your advice be to, let's say, another entrepreneur who's a little bit more on the sales side less than the product side? What would your advice be to that persona?
 
 00:15:29 Michael Brown
 I think that every business you have to believe in the person that you're dealing with that is going to be able to deliver what they're saying they can deliver on. So listen, there are great companies with not great people and there are great people with not great companies. And what I have found historically is that great people make their company great for you because every no one's got it all baked in 100%. Everything goes well. There's always some smoke and mirrors, but as long as that person is going to get it done and they're diligent and you can go to sleep at night, those are the people that I like to do business with. So I like to do business with people that have the same sense of urgency that I have that see the opportunity that I see. I'm not looking for someone to be defensive. I'm looking for someone to be aggressive, go out there and take the market for what is available. I mean, it's just to me, I don't have any salespeople. Everything is done by contact, people, reach out to us and you know, listen, I don't want to be in the real estate business. I don't want to have a tremendous amount of employees, especially in sales because it's tough to start managing these people and then you need more people to manage those people. So from my history, my second to last comp had over 350 sales people. So and you know, to just manage their expectations, I had 350 internal customers and then they had 30,000 external customers. So every day I was in the middle. Here, the sales cycle is much longer. What's interesting is that we have to be more convincing that the technology works. So with that, we've been doing demos and proofs of concepts, but the good news is that as time goes on, once you're in a market, it's kind of like, hey guys, I've been there, done that. Like we're in New York City, it's the number one real estate difficult regulated market in the world. If it's working here, it's going to work there. So you know, it's a little bit of that. And our plan is to be in London at the end of October for our first proof of concept or first cleaning. We have two, what I'll call end user customers that are very interested in this because like my other companies where we were just selling commodity office supplies, there are other businesses that we have found that will create more stickiness to our product. That gets into the whole being able to do a Facade health profile and look at what's going on with your materials. Do you have any silicone leaks? Do you have any cracked windows? I mean, cracked windows are very easy because you could do that with optical, but we're talking about geothermal and hyperspectral cameras where we can see if there's heat escaping and we can, you know, and when I was in London a couple months ago, one of the customers said, listen, we're mostly interested in this whole entire Facade Health profile. We love the window cleaning, but the Facade Health profile sounds unbelievable. Can you look into, there's a new regulation app for lighting, and I don't recall what it's called, but it's basically like if you leave your lights on an office building at night, it emits a certain amount and you have to measure that. And I said, how is anyone going to do that? He says, we have no idea. So it's those types of conversations that then say, OK, what's important to everyone. So I can then put my totem pole of list and say, OK, here's the top priorities. So, yeah, so we think, and especially what's great about London, not to go off on a tangent, is that London, I have found walks, the walk and others just talk the talk. And when it comes to sustainability and green, I was blown away. There wasn't one building I walked into that when I was offered water, it wasn't filtered through just with a glass, wasn't bottled water and everything I saw. It seems like the adoption has been real in London and we're very excited about that. New York. It is slower, but they'll get there. But I have found London to be on the cutting edge of PropTech and experimentation.
 
 00:20:06 Matthew Maltzoff
 It's unbelievable what's happening to the skyline, we actually talked about this a little bit on a webinar today and one of the companies on it looking globally and consulting globally is that actually Europe? We do seem to have that aggressiveness and that sense of urgency when it comes to they actually feel they're behind. They actually people are behind. They are, they are, you know, going. And when we're looking at the the skyline at the the conference we hosted just a couple months ago as well, you know, people were pointing at different buildings and everyone just knew that one is doing really well. That one, you know, they're going to make this change to the HVAC system. That's what everybody was concerned about when you looked on the skyline.
 
 00:20:41 Michael Brown
 And what's amazing is that in our case, No one has the data yet for outside on the facade. So everyone's got it inside, no one's got it outside. So for the first time we're going to be able to provide people with, hey, here's what's going on with your asset. You know, the asset you spent a couple $100 million on or in some cases, you know, billions of dollars. Don't you want to know if there's a problem? And yes, everyone has gotten very behind this and we're very excited about it. I mean, listen, we're very excited about just the window cleaning for the industry. Listen, I have unbelievable respect for the people that do this job. I mean, you're 1000 feet in the air and you're harnessed, but the conditions are not great. It's either, you know, 100° or it's freezing.
 
 00:21:33 Matthew Maltzoff
 It's interesting that analytics component because you see yourself as an entrepreneur and you know, so you break yourself into the two categories, the product side and the sales side. The product side usually thinks I'm going to get the product really, really perfect. Just then that's when I'm going to have my best bet selling it. But the more sales focused founder just says, what problem do you need to solve? Hey guys, we need to do this and that and that's it.
 
 00:21:57 Michael Brown
 It's more of a consultative. It's more of a consultative sale, right? Like no one wants to have someone walk in the door and just throw up on them. Like here's my pitch for me it it's more about establishing a relationship and having a conversation, talking about what they do. Listen, it might not work out, but you know, that whole entire what's your price? What's this? What's that, that it is just not in we're doing today. My last life, it was like that. It was like, you know, everyone was a race to 0.
 
 00:22:32 Matthew Maltzoff
 Last question on this exact thing but if I'm in a London office, which actually am we'll have one day or in the near future or post October ice post, will everyone just point at the window and go wow what's that like Superman flying outside?
 
 00:22:45 Michael Brown
 That's the that's the plan, that's the plan. So we have our our first full time deployment in New York in April. And listen, we did proof of concepts in New York City. We did one at 7, World Trade, 383, Madison and Mcdurst. People are like looking up and they're like, what is that? You know? So it was, it was wild. So for us, we just can't wait to get up there and then it should kind of sell itself, you know, kind of like, oh, why don't we have this? Why don't we have that?
 
 00:23:15 Matthew Maltzoff
 Exactly. So then what's next? You're going into London, you're looking at other markets, you're always talking about the different, different use cases. It's a flexible product. What's next?
 
 00:23:25 Michael Brown
 For the existing building environment, we are focused mostly on high labour markets because those labour markets have the most difficulty in getting people. If you could imagine, if you look at least in the US, 74% of window washers or 76% of window washers are now over the age of 40. So you have in the last 15-20 years with the acceleration of all these new skyscrapers with tonnes more glass, who's cleaning all these windows? So New York, if you look at like a New York 32, BJ is the union that we work with. I want to say that their membership is down tremendously over the last call 5-10 years just because people age out and there are much better opportunities for people getting out of school to get a job that isn't going to put their life at risk. You might earn good money, but at the end of the day, people die every year and it's a dirty, dull, dangerous job that just doesn't need to be done by a human. And our whole thing is if I can get 100% of the building done, great. If I can't. That's why we have skilled labour that works with it. So it's more of a collaboration rather than here's a single solution. Because the geometry of the buildings are always different. Yes. And until there's some sort of separation between the crane and the harnessing system with the cradle and the robot, you're limited to those axises, right? And, you know, so if all of a sudden someone comes out with a flying crane, I mean, I guess that will work, But I think we're a long ways away from that. And one of the biggest reasons that I like Skyline's product was it was utilising the current infrastructure. It wasn't something new that you had to convince anyone that, hey, we need to build this on or we're just going, we're putting the robots in your cradle right now.
 
 00:25:25 Matthew Maltzoff
 So the big thing I'm also thinking is insurance, right?
 
 00:25:29 Michael Brown
 Insurance, insurance savings for the buildings will be tremendous, but it's got to start going through and passing along because what insurance providers do every year for buildings is they say how many hours are you going to have humans on the side of the facade? And then they come up with their premiums. So if we're able to cut that down by 50%, sixty percent, 70%, that's got to be a number. Eventually I'll have those numbers, but everything else is really conjecture. We do speak to the insurance industry about coming up with an unmanned insurance policy for work at heights. But it's it's tough because we're creating an industry that doesn't exist. There are really not many laws about what's going on with autonomous robots. If you look at our use case, we want to be able to clean commercial buildings at night. Because we use Lidar, we don't need any sunlight. So for us, cleaning at night is actually easier because you don't have any reflections coming off of the sun or clouds or things of that nature. And there's no regulations that's there to say you can or you can't. So it's those types of things where you have to then have the regulators who you know, it's working with the principal cleans of the world, that principal clean who knows the regulators and knows all the laws going and saying, hey, we'd like to be able to test this at this time in this market to show you that it's safer and everything else. And it's getting everyone, once they see it, it's been very kind of like, oh, I get it now. I get it. Because if people are like, what happens if the cradle gets stuck and the robot's in it? Like the good news is you don't have to call the fire department. You don't have to call anyone and break the windows to save their life. At the end of the day, you'll figure out you've got a hanging piece of furniture. And there are a lot of advantages that have not yet been seen. And we can only guess. And we can only assume there are a lot of things that are low hanging fruit that we know will work out well, but there are other things that we really just have to wait and see as we continue to roll out the technology.
 
 00:27:44 Matthew Maltzoff

That’s what makes it so exciting? It's because you don't know. It's about putting in the work to figure it out. So.
 
 00:27:49 Michael Brown
 Well, listen. And I say to Ross all the time, I'm like, Ross, well, how long will this take? He says “Michael. It doesn't exist”, so I don't know how long is it going to take for something that doesn't exist. And you know, that's his standard now. They always get it done. Yes, when you're creating something that doesn't exist, it's a lot of fun. Can be a little frustrating, but it's a lot of fun.
 
 00:28:09 Matthew Maltzoff
 Last question, and I appreciate that this interview has just flown through. The last question is quite a direct one. What would be your advice to any founder today? Now times are a little bit trickier, you know, people aren't raising capital Willy nilly anymore. What would be your advice to let's say a PropTech founder or any founder in a couple sentences?
 
 00:28:29 Michael Brown
 Well, if it's related to the capital market, I don't have great advice because myself, it's been an impossible capital market today. Now I think that will ease up and there are certain categories that are hotter than others. But I think that the number one thing I would give any entrepreneur is never allow anyone to tell you that you can't get it done. That is just using an opinion, like unless they've got facts, you know, there's so many people in my life that have been like, listen, you're really going to try to do this. You're really, yes, I'm really going to try to do this because I, I believe in it. And that's what drives in my opinion, people to want to do something different. And some people like stability, right? Some people are like, Hey, listen, I want to know that I'm working from X to Y. I'm going to go home, I'm going to be my kids and away you go. Being an entrepreneur is risky, right? Very high failure rate. No one likes to fail, and I don't know how you get through life without failing. So you know. It's fear of failure should not be why you don't do something. Don't do something because there's a good reason from a business standpoint that says this can't be done and it's staying focused. Focus is the key. Like I said earlier, surrounding yourself with smarter people and not having an ego and allowing them to because you can't run a business like a pyramid, right? You got to be. I like it flat so that people can get done what they need to get done. And if they can't get done, they're coming to me to knock over that barricade.
 
 00:30:12 Matthew Maltzoff
 You know that saying A's, high B's, B's, higher C's, but you just want to get someone better every single time the child get someone even better, you know, And if the person is better, they can find someone even better because they are smarter. That's that's, yeah.
 
 00:30:26 Michael Brown
 I like, I like hungry entrepreneurs need to not get by setbacks. Pivot, pivot, pivot, pivot, pivot. And if your plan in January is the same plan in September, you're doing something wrong because you can have an overall plan. However, time in Business Today, you've got to be. I mean, when I used to do budgets, I would have to do a, a reforecast every five months, six months, because so much is changing in the world so quickly. So I, I, I would say that you need to have thick skin, you need to have passion and it, you need to believe in yourself and you need to believe in your people for you to really get there because it's never one person in this type of startup. As an entrepreneur, you need the whole team.
 
 00:31:21 Matthew Maltzoff
 For sure, and that advice, you know, don't listen to a no based on an opinion resonates with me the most. But, and I don't know how much you know about our story, but you know, founded a year ago the the goal was super simple, host Europe's largest real estate technology conference and double the size of the next competitor. And the amount of calls of, you know, are you actually going to do that? Yes, yes, we are. We of course we are going to do that and.
 
 00:31:48 Michael Brown
 If you don't want to come on, that's OK, there's someone else.
 
 00:31:52 Matthew Maltzoff
 Yeah, exactly. It was focusing on the things that we could see could get us the results in terms of attendee sponsorship and the good speakers. This podcast episode was a lot of fun, Michael.
 
 00:32:02 Michael Brown
 Yeah, really enjoyed it.
 
 00:32:03 Matthew Maltzoff
 Can't wait to see some robots in London. Awesome. Michael, thank you so much for your time and take care.
 
 00:32:08 Michael Brown
 Thank you.