Ed Smith ran Wayfair's Canada business to nearly a billion dollars in revenue — then spent a year installing heat pumps and concluded the installation business couldn't scale, because every home retrofit is a custom manufacturing job. Now co-founder and co-CEO of Amply Energy, he builds software that helps residential HVAC contractors size, design, and sell "Goldilocks"-sized heat pump systems using LiDAR-based home scanning and digital twins. Ed and Jason get into the pivot from installs to software, the family-owned, heat-pump-forward contractors Amply serves, growing nationwide with no outside capital and zero ad spend, Ed's skepticism of private-equity "box swapping," the long-term vision for whole-home electrification design and contractor "mixed groups," and a cautious, ROI-focused approach to AI centered on internal productivity rather than core product logic.
Ed Smith ran Wayfair's Canada business to nearly a billion dollars in revenue. Then he spent a year installing heat pumps - and learned firsthand why there's no such thing as a nationwide home-retrofit contractor: the equipment is not the system. The system is what a good contractor custom-manufactures on site, home by home.
Ed is co-founder and co-CEO of Amply Energy, a software company helping residential HVAC contractors size, design, and sell heat pump systems - built on "Goldilocks" sizing and LiDAR-based home scanning and digital twins, replacing the outdated design tools (and finger-in-the-air rules of thumb) the incumbents left behind. He and co-founder Erik Fitz started Amply as a whole-home electrification contractor before pivoting to the software they'd built for themselves.
We get into:
Links: Amply Energy - https://amply.energy | The Heat Pump Podcast - https://podcasts.apple.com/us/podcast/the-heat-pump-podcast/id1747806243 | National Comfort Institute - https://www.nationalcomfortinstitute.com/
BuiltForward explores where construction is heading over the next decade — and how AI and other emerging technologies will and won't transform the industry. If this was useful, share it with someone building in the industry and follow the show so you don't miss what's next.
00:00 Show kickoff
00:24 Meet Ed Smith
02:15 What Amply does
03:08 Do heat pumps work
05:13 From installs to software
09:06 Why contracting won't scale
12:10 Private equity rollups
14:55 Ideal customer and channels
17:49 Moat and AI reality check
19:51 What Amply replaces
21:59 Nationwide go to market
23:47 Acquisition philosophy
26:40 Residential vs commercial HVAC
28:02 Defining the ideal customer
28:39 Electrification contractor vision
30:34 Software gaps in the stack
31:47 Bootstrapping vs competition
32:49 Pigs and chickens parable
33:48 Dr. Seuss and constraints
35:57 Customer community mixed groups
40:53 Remote team and culture
44:18 AI use and ROI reality
47:41 AI future in construction
49:50 Closing plugs and farewell
Jason Jacobs: [00:00:00] Welcome to BuiltForward, the podcast exploring where construction is heading over the next decade, and how AI and other emerging technologies will and won't transform the industry. I'm Jason Jacobs, a longtime startup founder, investor, and the host. Let's get into it
Today's guest is Ed Smith, co-founder and co-CEO of Amply Energy, which is software that helps residential HVAC contractors size, design, and sell heat pump systems. Before Amply, Ed was a principal at BCG, ran Wayfair's Canada business to nearly a billion in revenue, and built the carbon business at Indigo Ag.
Uh, but Ed found his way into selling into the trades, uh, which is interesting for someone like me, so I was psyched to have him on and learn more about what he's up to at Amply, where he thinks [00:01:00] things are going, and what he's learned along the way in his journey so far. It's a great discussion, and I hope you enjoy it.
Okay, Ed Smith, welcome to the show
Ed Smith: Thanks for having me, Jason. Long time listener from your previous podcast, excited to be on this one
Jason Jacobs: Yeah, well, I'm a little rusty. It's been, uh, it's been a while. Y- this is episode number one. Uh, yeah, and, um, uh, you know, I, I woke up this morning, and I, I, uh, you know, I, I, I don't get haircuts. I shave my head and beard at once with the clippers, and it had been like two months or something. So I was like Wolf Man, so I got all cleaned up for this.
So, you know, this is a big deal, Ed.
Ed Smith: You look very professional
Jason Jacobs: uh, but yeah, psyched, psyched to have you on. When I first started thinking about the tr- the trades, um, a few months ago, you were one of the first people that I reached out to because you were, uh, you know, were a tr- were a transplant, uh, who, you know, kind of grew up in, in software and, uh, and were now selling [00:02:00] into the trades for the first time.
So I was dying to learn from you. Um, and, uh, yeah, and you've been a great sounding board and, and, uh, confidant as I've been navigating. So I'm psyched to have you on and talk about Ampli Energy.
Ed Smith: Cool. Thanks for having me. Yeah, excited to be here
Jason Jacobs: Well, what's Ample Energy, Ed? Maybe we'll start there
Ed Smith: yeah, let's, um... So we help HVAC contractors size, design, and sell heat pump systems. Um, we are-- we're biased. We think heat pump systems are the best HVAC system out there, and we're focused on residential, by the way. Um, so we think H- uh, heat pump systems are the best HVAC system out there for virtually any home.
There'll be exceptions. Um, but where the technology is today, especially if you do some light weatherization and insulation, we think it's, that's the best way to go. But it's, it can be tricky. Um, talk to any HVAC contractor, and they'll tell you that heat pumps are tricky. The technology has come a long way.
Um, and so we have built software to make that easier [00:03:00] for your typical residential HVAC contractor. That's us in a nutshell. I can go deeper, but that's sort of the 60-second overview.
Jason Jacobs: So, um, so saying heat pumps are better in most cases, I'll just start there. Um, is that a controversial viewpoint? And, um, and if so, w- w- what, uh, you know, what, what would the people taking the other side of that stance, um, say if, if they were here to retort?
Ed Smith: Sure. Um, it depends on who you talk to, whether it's controversial or not. Um, we have customers in upstate New York, in rural Maine, in Minnesota who do nothing but heat pumps. Uh, maybe they put backup electric strip in, and they have done thousands of installs, and they will go to the mat saying heat pumps work in those climates beautifully.
Um, but you can absolutely find probably more HVAC contractors who will say, "Put in the heat pump, [00:04:00] electricity bills went through the roof, didn't keep up, didn't remove humidity, and don't touch them with a 10-foot pole." Um, so you can find both. But we th- we have found that... 'cause we actually started Ample as an ins- installation company, so we were serving homeowners.
Like, think of us as a contractor. We were doing whole home electrification projects. We were installing solar, heat pumps, new panel, battery EV charger, all that sort of stuff. Um, so we, like, turned wrenches, put the systems in. I didn't turn many wrenches, right, but we did and, um, we put systems in that have worked beautifully, but the key is good sizing and design. Um, you can't just oversize, and a lot of these things you'll hear a contractor say like, "Well, it's an inverter. It can scale down as much as you want." Like, that's totally not true. You want a heat pump to be Goldilocks sized. So if you Goldilocks size a heat pump system and install it well, um, [00:05:00] given the quirks of the home, we absolutely think they're the best system out there.
But, like, there's totally people who have put in the wrong size system and they'll behave poorly, but they just ha- they're a bit less forgiving than your old school furnace or boiler or whatever else
Jason Jacobs: So, um, what led you to this opportunity in the first place?
Ed Smith: Um, I... Well, my co-founder, if I'm being totally honest, so, uh, my, my co-founder's a guy named Erik Fitz. Um, he is one of my best friends from college. Um, I'm like the business guy of Ample. He is the technical whiz of Ample. He has quickly become one of the best building science minds in the country. Um, he is, he's the kind of guy who like Mitsubishi, Daikin, LG releases like a new air-to-water heat pump system.
He's the guy who on a Saturday night, like over a beer, is reading the new specs, you know, like the engineering submittal. So, uh, he's who got me into this. Um, but I had been general manager [00:06:00] of a series of business units at a bunch of startups, and they were fun. Um, I liked leading teams. I liked being in charge of, um, a product, but I was always reporting to someone, and I just had the itch to do something.
But I am not super technically minded, and so I needed a partner who was much more, had a passion for a particular topic, and Erik had it with this. Um, and so he had been at Ample, the installation business, the contracting business, for six months. I joined him and, um He quickly found I was, like, the salesperson, and we had this operation we called Operation Make Ed a Decent Electrification Salesperson.
And so he was building software and spreadsheets and, you know, like, like simple UI on top of a spreadsheet to, like, make me better, like to help me size a system right, pick the right equipment, price it, put it in the home. And, um, uh, after like six weeks of building the worst software you've ever seen, [00:07:00] we were, you know, at the local distributor talking to other guys who were, like, picking up stuff, showing them the reports we were putting together, and like, "Can we use that software?"
We're like, "No, no. You don't wanna use this software. It's terrible. It's... You know, we just built it for ourselves." And then gave it another six weeks of that sort of conversation. We're like, "Oh, that software is the solution." So then we started focusing on software and selling that. So long way of saying I came to it through my co-founder, Eric, um, but that was four years ago and one big pivot from contracting business to software company.
Jason Jacobs: Uh, and, um, should, should, should I take that as that the software pull was so strong or that there was a push because the, uh, because you didn't have the same conviction about the contracting business?
Ed Smith: Both. Very astute question. Both. Um We thought it was gonna be very hard to scale the contracting business, [00:08:00] um, and we were learning that kind of the hard way. But there was also this pull for the software. Um, and we realized, like, like there was a real need, 'cause we would... So we would install, say, a solar system and a heat pump system on a home. awesome software for solar design and sale. There's Aurora Solar, there's OpenSolar, there's Solar Gr- like, there's just SolarGraph. There's all these cool products. And then we turned to the heat pump design, and we were using software that was built in 1996, and it felt like it was built in 1996.
Um, and so it just seemed q- and HVAC is, I don't even know, five, 10 times, 30 times bigger than solar. Like some, some massive multiple bigger, and we couldn't believe how bad the software was. Um, so we did really, we felt the need and the pull. We, we felt it ourselves because we were so sick of using the existing HVAC software.
Um, but we also found that [00:09:00] the, the installation business was gonna be really, really hard to scale. Um, yeah, so it's a good question.
Jason Jacobs: And what, what about the installation business makes it hard to scale?
Ed Smith: So There are some nationwide contractors, Toll Brothers, but they build the same box five million times. Same box. Um, there is no existing home retrofit GC that's nationwide because every home is very unique. Even if you go to a development where Toll Brothers came through and they built 20 of the same box, within-- They're all facing the sun a little bit differently.
They're all shaded a little bit differently. Within a year, every homeowner in there has started to do some different stuff. This system broke, so we replaced it. We pull, we broke, we, you know, we added an addition. We took this wall down, [00:10:00] whatever. Um, every one is custom. Every one is a custom job, and we have come to think about it as you're not installing a system.
Like the equipment is not the system. system is what a good HVAC contractor custom manufactures on site. It's the ducts. It's the refrigerant line run. It's how they mount the whatever. Um, and so it's more a custom manufacturing gig than it is, um, an installation gig, and that should be very custom. It should be very nuanced, and honestly, we just didn't see a way to scale that.
W- living it, doing whatever we did, a million bucks worth of installs, man, I would just-- Everything requires real, real customization in a way that's really hard to scale
Jason Jacobs: And is that HVAC specific or heat pump specific?
Ed Smith: Um would say it's [00:11:00] HVAC specific. Um, and again, I'm talking about homes, right? Like commercial is a different ballgame. Um, so we're big fans of the National Comfort Institute. We just became members of the National Comfort Institute. Um, the National Comfort Institute is, I think, the single best voice for high performance residential HVAC out there.
Um, they would, they would certainly, I think, agree. Like HVAC is custom manufacturing, and it should be every time. You'll find contractors who do what you call box swapping. I go in, existing furnace is 60,000 BTUs, it's broken. You get a new 60,000 BTU furnace. Um That could work, but like you're probably pulling out an 80% efficient furnace and putting in a 96% efficient furnace, and so the actual BTUs being thrown off by th- by that thing are quite different.
And how that, how that airflow interacts with the existing duct system is quite different. So, [00:12:00] um, I think HVAC should be massively custom, and in the best cases it is, but it isn't always. So it depends on kinda what section of the market you pick
Jason Jacobs: Uh, h- how much have you looked into the, um, private equity dollars that are flowing into the category and how they would think about, um, this topic?
Ed Smith: I try not to look at the private equity dollars flowing in because it's, um, it's rough, I think. Um I'll just-- I'll answer anecdotally. We have a few friends and customers who have sold to private equity, and the story we hear pretty quickly is that, um, it turns pretty transactional and driven by the numbers pretty fast, and the quality of salesperson changes really fast. And when it was a [00:13:00] family-owned shop, you had salespeople who really took pride in the design and, um, to service the debt load, the private equity just loads on to a, to an HVAC business.
Like, you have got to drive the heck out of that, and by driving the heck out of that, it's by selling new systems 'cause it's 30K instead of a $2,000 repair. Um, so it's a-- They, I'm sure, are looking at it as box swapping business, but I think that is often doing a disservice to the, to the homeowner
Jason Jacobs: So, so if I'm hearing right, it sounds like you think that it is an important business for homeowners, um, because it's delivering, uh, systems that are compelling and that it's a good small business, but that, you know, fragmented with good small businesses is probably right size for the category
Ed Smith: I think so. And there are, there are markets like that, [00:14:00] right? Where, where your optimal business size is not a giant monopoly serving the entire market, where there's enough nuance region to region, town to town, whatever. Um, yeah, I think this is one where, um, I'm curious to see how private equity roll-ups end.
I've heard stories of like, there was a, there was a round of this in the late '90s, early 2000s, and the private equity roll-ups of HVAC didn't work out very well. Um, so I'm curious. I'm like genuinely curious to see how it goes. But I'll say for us, if you look at our website, all of our marketing, everything about it, we are really tailored towards your smaller family-owned business.
Um, and we have customers who have 50 salespeople. It's big, but it's family-owned. Um, private equity is much less interested in our product, um, 'cause it takes more time. It does take a bit more time, but you really design the right system
Jason Jacobs: Got it. And so getting back to Amplee, so that [00:15:00] dynamic of how it isn't cookie cutter and how it should be custom from home to home from a, um, uh, you know, from an, uh, from a heat pump system standpoint, does that same dynamic apply when you're selling software to the shops or is it much more one size fits all when you, uh, um, for the software that you guys are selling?
Ed Smith: Um, our software, we've got one piece of software. It doesn't-- We're just too small a company. Um, so as we talked to, as we talk to companies, there are companies who we're not a fit for. Um, and I'd love to expand our product such that we can be focused on different kinds of companies. But given our size and given we're not taking private equity or venture capital funding, um, we're growing organically.
We are sort of narrowly focused. Um, and so our ideal customer, who we've gotten to know, is a customer who is family-owned, um, believes heat pumps are the [00:16:00] future. They don't have to do all heat pumps, but like they see heat pumps taking more and more share of their business, and they're excited about that.
Um, they want to design systems the right way, um, and they're tech-forward. Um, they're generally already using tablets in the field, they've applied software in other places. But like if, if we hit those four characteristics, it's a good customer for us. Um, and I don't know what that is, but it's like 10% of the HVAC market or less.
But that's where we're focused. Like we're really happy to serve that section of the market.
Jason Jacobs: How do you find them?
Ed Smith: We have a podcast. Um, we partner with exceptional partners like, uh, the National Comfort Institute, ACHA, the Air Conditioning Contractors of America, um, local organizations, um, distributors who skew towards heat pumps. Like we found channel partners are, are really effective. Um, we don't do Facebook or Google.
I spend $0 on, on [00:17:00] advertising. Um, contractors are sick of being sold to. Like there's a lot of people That was my wife. Um, contractors are sick of being sold to, and so we have found the single best way is word of mouth. And so the word of mouth is either referrals from existing customers or from trusted partners, like some of the ones I just named you. A really great distributor, um, or an industry organization like NCI or ACHA, um, or our podcast.
It's a great way for folks to get to know us and our... It's called "The Heat Pump Podcast," and we're really focused on heat pump design and sales and building a business around that, and that's been a great way to find companies who see that as the future but wanna figure out how to build a business around particularly heat pumps
Jason Jacobs: Mm-hmm. And, um, from a business strategy standpoint, as the cost of, um, creating software continues to, uh, come down quickly, [00:18:00] uh, how, how do you think about, um, you know, defensibility and moat versus just, like, building a great product that, that does what it says and, and, you know, s- and says what it does?
Ed Smith: Yeah, we're much more in that second category. Um I'm just-- I'm not smart enough to figure out whatever AI is gonna do to the software world. Um, all we know is we have s- totally stumbled onto something that is really resonating with customers. Our growth is great. Our retention is great. Um, I'm sort of repeatedly both amazed by what AI can deliver and then, like, deeply disappointed by what AI can deliver.
And so we operate in a space where it's really, like, it's deterministic. Like, we scan a home, we create an accurate 3D model of the home, and then it's about appropriately creating, like, a, the twin, the digital twin of that home to figure out how many BTUs it [00:19:00] needs, and then what system's gonna fit it right.
Like, that's a lot of just, frankly, like, deep math, um, that would be very expensive to run with inference chips. Like, you just don't need that. Like, the best way to do it is, like, put in the inputs, you're gonna get an output. Um, and so we're just continuing to, like, really listen to our customers, um, hear what they want, hear where they're going, um, and we try to be...
We try to also just frankly follow our, like, hearts and guts about, like, what are we excited to build? And when we hear something that is gonna excite our customers and excite us, like, that's where we go. And that's been our playbook for the last four years, and it's been working. So, like, we're just sticking with that, you know?
And saying no to, saying no to stuff that feels like it's outside our zone of competence, where we're good, and yeah. Like, I hope that works for as long as it possibly can
Jason Jacobs: And for a customer that's excited about the promise of, of, um, your product, um, what are you replacing, [00:20:00] if anything?
Ed Smith: Uh, yeah. Um, there's different levels of what we're replacing. At the lowest end, we're replacing, um, like finger in the air. There's jokes like, you know, the old sizing system you'd be when you parked your truck on the curb, you'd hold up the number of fingers, and how much does it cover the house? Well, that's how many tons you need.
That house is a four ton, you know, as you like look at it this way. Um, it's not quite that bad anymore, but like there are totally guys who would walk into this office that I'm in right now and be like super small room, 6,000 BTUs. Um, and that's not a good way to size a system. So we could replace just kind of that, or we replace rules of thumb.
Guys take out a tape measurer, measure a home, get the rough square footage, multiply it by X BTUs per square foot. It's like a little bit better, but it's still not great. Um, most commonly, we're, we're replacing sort of the industry incumbent software for, um, sizing and design. Wrightsoft, um, [00:21:00] EliteSoft.
There's a whole bunch of these. Um, actually, I, I take that back. There's not a whole bunch of those. There's seven, I think, that are approved by the Air Conditioning Contractors of America. So it's a relatively small list, um, of industry incumbent software for sizing and design and, and that's, um, often what we're replacing or a partner to, frankly.
Um, 'cause those are really designed around new construction, and we're great for existing homes. And that was like this section of the market that was totally unserved. The, that software was really rough to use on an existing home, and that's where we're glorious because we use the LIDAR to scan a home, and you quickly get something as good as a blueprint, which you have for, uh, new construction.
We basically create that, you know, in a less than 10-minute walkthrough of a 2,000 square foot home. Um, so we're still often used, um, alongside the industry incumbents
Jason Jacobs: Uh, and in an [00:22:00] industry like this where, um, where f- face-to-face and relationships and trust are so important, um, have you adopted a regional focus? Um, and, uh, yeah, and I, and I'd love to hear about both where your focus initially, but also where you might focus in the future and, and how you might adapt or adopt as you stray further and further from home base.
Ed Smith: So no, uh, we're nationwide and, and in Canada. Um, so we've got... We're in 47 states. Um, um, we have found-- We travel for events, and that's great, and we'll travel for a good regional event, and we travel for great national events, and we meet a bunch of our customers that way. But we've found today with FaceTime, Zoom, all sorts of text message solutions, Loom, [00:23:00] we can support people from anywhere and build relationships with people from anywhere.
Um, I still do every sales call myself. Um, we have a buy now button on our website now, so people can just come and buy if they don't wanna talk to me. Um, but like there's no other salesperson. You're just gonna talk to me. Um, at some point we'll outgrow that, but we're still doing that and still having fun with it, frankly.
And I learn something from every potential customer I talk to, um, or every existing customer who calls in and, and needs support in some way. Um, so no, we're nationwide. Uh, we're not outside North America. Um, that would require some hard thought, but, but with technology today, we're able to support the whole US from our homes.
We're a fully remote company
Jason Jacobs: Uh, how big are the big incumbents? Um, you know, do they have capacity to do meaningful M&A? And even if they did and they were interested, like would you be interested? Like I-- like [00:24:00] how do you, how do you think about the goals of Amply Energy and, and how do you think about optionality versus, um, you know, really being intentional about choosing a, a path?
Ed Smith: So I worked for a successful, um, software company where I ran a large business unit that ultimately went public, and there were always rumors like, "Oh, are we gonna be bought by," like... And so the CEO would do these town halls and, I don't know, at least on half the town halls, this question of are we gonna sell to Amazon or whatever would come up, and he always had the same answer.
He was like, "It would be irresponsible if we didn't take any phone call about acquisition. Um, and so I take all of them. But the thing I ask myself is, um, will we serve our customers better if we're owned by that other person? Uh, will we, um, uh, do what's right for our [00:25:00] shareholders and create as much value, um, if we're sold to this other company?
Um, and will everyone working here, like, have as much fun and enjoy life?" And, like, those three can be at odds, but, like, generally, that's the three questions we ask. Um, those are the three questions I ask. So we have gotten a couple of calls, and the answer has been no, no, no for every single call that's come in.
Um, no, we don't think we'll serve our customers better. No, we won't have as much fun, and no, we don't think we'll create as much value for shareholders. And for us, shareholders are just employees, right? It's all of us. Um, so the answer's been no, and I suspect the answer will continue to be no, um, 'cause we are very -- we're happy to be narrowly focused.
We wanna, like... We'd rather have 1,000 wildly enthusiastic fans than 100,000 lukewarm customers. Um, so that's our model and, and, uh, that's not really part of a... You can't do that being part of a bigger company, right? Um, [00:26:00] yeah, so that's where we are.
Jason Jacobs: Uh, I wanna go back to something you said before. You said that, um, you know, you're resi-focused and that, and that, you know, commercial's quite different. Um, what is it that, that you think, uh, you know, what, um, are the biggest differences, uh, between the commercial side and the residential where you're focused?
Ed Smith: Um, I mean, a whole, a whole bunch of different stuff that kind of runs the gamut. Um, how you acquire your customers is different. A residential shop is trying to... It's B2C, like they're trying to acquire local homeowners, whereas if you're commercial, you're gonna have like these giant companies. You're dealing with procurement teams.
Like it's a completely different sales motion. Um, the nature of the buildings is different. Um, what they're made out of is different. Um, the type of equipment you install, fundamentally it runs the same way, but it's very, it's very, very different. Um, your design, like [00:27:00] there's no... There's virtually in any home residential project, there's no engineer involved, probably not even an architect involved, not for an existing home.
Um, whereas anything you're doing for a commercial building, you're gonna have an engineer probably doing like a custom load calculation, custom system design. Um, um, yeah. So, uh, I mean, those are a few of them, but we, we so rarely touch commercial, um, that I'm not even sure I could go much deeper on any of the other differences.
A- all I know is what we can do is residential and light commercial, you know, like a coffee shop. It's kinda like a house, but just it's a, you know, storefront. Um, once you get beyond that, it's not an area we, we really go into. Um, and we find that our customers very rarely do both. Um, they'll do residential and light commercial, but heavy commercial is just kind of a different, a different ballgame, and you gotta build your business around serving each of those well, and it's just a very [00:28:00] different market
Jason Jacobs: Uh, for the customers that you serve, I mean, it sounded like you have a really defined, um, uh, you know, I don't know if you call it a muse or a target customer, but
Ed Smith: Ideal customer profile
Jason Jacobs: yeah. Um, it, yeah. Oh, yeah. ICP. Is that
Ed Smith: ICP?
Jason Jacobs: Yeah. Yeah, I'm still learning all the, all the, you know, functional operating lingo.
Ed Smith: Yeah, yeah
Jason Jacobs: but yeah. But, um, but yeah, it sounds like you have it that pretty well defined. When you think about expansion, are you more likely to offer that same customer, uh, you know, help them in more ways or serve more kinds of customers over time?
Ed Smith: Yeah. We wanna serve that customer in more ways, for sure. Um, so we have a We have a belief That is based in no data. Uh, but we believe it, that there will be in the future an [00:29:00] electrification contractor. And the goal will be a homeowner in a storm and electricity goes out, they wanna know, like, they're set. And so they're gonna have backup, could be a generator, probably better to have a battery. They're, they want their roof to be a, um, power plant, so they're gonna have solar up there because electricity prices are going through the roof everywhere. Um, but really they just wanna, like, know that they are comfortable and healthy and the cost of their home is reasonable kind of in any situation.
Um, and there'll be contractors who are engaging in the, like, the, the incredible exercise of changing America's millions of homes over to that sort of model. Um, and it's gonna be really hard, and the designs can be super tricky, and you're gonna wanna get it just right 'cause you're gonna... You're not gonna [00:30:00] wanna put in one extra solar panel on that roof to cover what's g- going on inside the home.
Um, and you're not gonna wanna give Elon Musk any extra money for that battery system than you have to. Um, and so precision and Goldilocks-izing is gonna be really important. Um, and we think those guys are gonna be massively differentiated and make excellent money. Um, and we wanna help them do that. So we fully plan to get beyond just the heat pump aspect of what we do now and kind of into more stuff in that electrification stack.
Um, yeah, that's our, that's our wild, wild dream.
Jason Jacobs: Are there, um, software vendors that are doing for those other layers of the stack what Ample is doing for heat pumps?
Ed Smith: Yes in solar, no in almost anything else, and s- almost certainly no for the integration of all of them. Um, like tying it all together. There, there's great solar design, but like they don't really [00:31:00] take, you know-- They're not gonna tell you how many kilowatt hours the s- the heat pump system's gonna use. Um, there's some that are kinda trying to do that, but, um, the, the progress hasn't been great.
So, um, it's a pretty wide-open space. I'll, I'll say it's, it's a pretty... The electrification contractor doesn't really exist yet. But with the eradication of the solar tax credit by the Trump administration, we have had a big influx in solar customers who are now adding heat pumps to their quiver. Um, and so that's been very cool because that's like the first sign of, of it.
Um, but that's what we wanna do. So we wanna do more for that kinda narrow section of the market.
Jason Jacobs: Mm-hmm. Uh, and it, and it seems like, um, like you're taking the approach that we'll just put one foot in front of the other, and we'd rather just do things our way at our own pace and, you know, follow our own whims [00:32:00] than, uh, you know, really put a bunch of pressure and take a bunch of optionality off the table by overcapitalizing the company early.
Um, how do you balance that with just the worry that, um, you know, the more success you find and the more the category, you know, grows up and gets interesting, the more competition there'll be, and if you don't move quickly, someone else might eat your lunch. Is that a worry?
Ed Smith: Um If I l- in my darkest moments it is. Um, but when I like really think about it, having been at a bunch of overcapitalized companies, um, I think outside capital, excess capital does more harm than good. Are you familiar with the, um, parable of the pigs and the chickens?
Jason Jacobs: No
Ed Smith: So at a, at a, at a bacon and egg breakfast, [00:33:00] pigs and chickens are both involved. But the chickens are, like, lightly involved, whereas the pigs gave everything for that breakfast. Like, they gave their lives for that breakfast, right? So I have come, the longer I've been around and at different companies, I don't like chickens. I don't like people who, like, swoop in, aren't fully, fully invested, have an opinion, but can control things and, like, they give you their opinion, and then boom, they're out.
I like pigs. I like pigs who are putting their lives on the line to do something. And so I, I'm building a company of pigs. Anyone involved is 100% invested. We don't have anyone else who can tell us which way we wanna go, um, which I think is, is super powerful, and I also fully believe that constraints breed creativity.
Um, are you familiar with the story of how Dr. Seuss became Dr. Seuss?
Jason Jacobs: I am Matt
Ed Smith: I hope your listeners actually like this. All right, so, [00:34:00] um, uh, whatever it was, 80 years ago, children's, children books were a wasteland. They weren't interesting. People weren't doing them. There was stuff like See Jane Run, Jane, Jane Throw Ball. You know, it was like this terrible stuff. And so Dr. Seuss was at Dartmouth.
Somebody did a study. Kids of a certain age group typically have 200 words, and so there was this challenge, um, write a children's book only using those 200 words. And Dr. Seuss said, "Forget that. I'm doing 50 words. I'm gonna take the first 50, and I'm gonna build a book over the first, with the first two that rhyme," which were cat and hat.
And so because he couldn't expand his word choice to make the book more interesting, he had to make it interesting in, in other ways, and so he came up with two major inventions. One was his rollicking rhyme scheme, which is delightful and, like, you can still think of it. It's like the Dr. Seuss rhyme scheme.
So he came up with that, and he came up with another, [00:35:00] um, innovation, which was, um, two-page foldout illustrations. So there's always, like, kind of like one illustration on one page, but when you open it up, every Dr. Seuss illustration expands across both, and so it's like super engaging. Um, he only came up with those because he constrained himself from, like, the most obvious solution.
I find in software the most obvious solution is raise more money and hire more people. Um, if we cut ourselves off from that, which we have, I have found over and over again at Amplee, the Dr. Seuss thing comes true. If you take off the most obvious option, that's when creativity really kicks in. It's not about having a blank sheet of paper.
It's actually constraining yourself in some meaningful ways. Um, and we've got an awesome team who is incredibly creative and, um, I'm much more excited to build a company that way. And so I don't worry about speed. I think we're gonna make unique, very unique decisions, um, that will continue to serve us well against a better capitalized competitor.
Jason Jacobs: Um, so a few other things I wanted to, to touch on. [00:36:00] Um, one is just the, the topic of, um, convening or, or community. Uh, I mean, you've got all these customers, and you said that you learn, you know, so much from every customer call that you do. Um, is there any appetite amongst your customers to learn from each other?
Um, and is there anything that you do to, um, uh, to foster that or might do directionally?
Ed Smith: Yes and not yet. Um, yes, they wanna learn from each other. No, we don't do it yet. Um, but one of the things we're really excited to do, there's this, there's a thing in the, um, um, in the residential HVAC industry and, and actually for, for contractors broadly called, um, oh gor- oh Lord, uh, mixed groups. At least that's what ACHA calls it, mixed, mixed groups.
They'll build, they'll build a group of like 10 different contractors who aren't even remotely close to competing with each other, and it's very... It's like pretty intense. [00:37:00] Um, when someone new joins the group, 'cause someone, whatever, retired, moved on, a new company joins the group, everyone in the group will fly for two weeks to that person's company and see how it works.
And the deal is in these mixed groups, fully open book. Everyone's P&Ls, everyone's financials fully shared, and folks really get into it in each other, with each other. Um, this is tried and true in a bunch of different spaces. We would love to do this for heat pump-focused businesses and sort of electrification businesses.
So a dream we have is to do an Amply mixed group. Um, I'm optimistic we'll announce that on our podcast and, and launch it in the next 12 months. We'll start with like 10 people, 10 different companies. Um, but that is something I'm like, honestly, I'm like giddy to do. I think that's gonna be super cool
Jason Jacobs: Uh, and similar question, um, about your advisors. I noticed on the website that there's a bunch of interesting, well-placed, uh, people that are [00:38:00] involved in the company in an advisory capacity. Um, I mean, the, uh, you know, the, the traditional talking points that you hear in, uh, you know, uh, early entrepreneurship is you don't want to get people involved that are just gonna be pretty faces and fancy titles.
Like, if you're, if you're not gonna be leaning on them, then, then don't, you know, then, then don't waste your time. And, and certainly that's a mantra that I've heard from you in terms of how you and Erik are thinking about building the company. Uh, how do and, and don't you lean on your advisors? And, and then same question around connectivity.
Is there anything you do to, um, you know, to get more than one sounding board at once so that they can, um, uh, you know, debate, uh, um, you know, build on each other's points, et cetera?
Ed Smith: Yeah. Um, the contractor advisors, um, listed there, I have all of them, I have [00:39:00] been riding shotgun in their truck multiple times. Multiple times. Um, they are folks like we absolutely lean on for customer insight. What do you want? What do you need? Where's the product falling down? Um, you know, they're-- like one of them on there, like sh- she sent me pictures, um, she took her two daughters to Disney World for the first time, and so like I was getting pictures from Disney World.
Like that's not necessarily helping the company, but like we're on that level of relationship. Um, and so I love that. And then the other-- then there's two other categories of folks on there for us. Um, deep industry expert. Um, so Bruce Harley's on there, and, uh, he is orchestrating the single best heat pump, longitudinal heat pump performance test in the world.
Um, there's no one we'd rather talk to about heat pump performance. Um, so we have some deep industry experts on there, and then the third bucket is just very successful entrepreneurs. Um, maybe in the space, [00:40:00] maybe adjacent to the space, but folks who we go to for like how do you run a business, um, and how do you do it without raising a bunch of external capital?
Um, there's no like venture investors on there or anything like that. Like these are kind of brass tacks operators. Um, so that's how we, that's how we do it, and then we do a, um, every other month, we do a, a board of advisors meeting. Um, and it's not always the full group, um, but we kind of selectively bring folks in based on the topics that are top of mind for us.
Um, but that's how, that's how we've done it. And that, you know, you're seeing it now, and it's a bunch of pictures. I think when it started, it was like two pictures. And we've only-- And some have, some have come off, um, but we've really, we've really only put people on there who like we call regularly for advice on how to build a better product or build a better company.
Jason Jacobs: Uh, and you, you mentioned a, a couple things that I wanna push on. One is that, you know, you still take every [00:41:00] sales call yourself, so in some ways super small team, flat. Um, but you also mentioned, you know, exceptional team and, um, uh, you know, you, you, you, you wanna serve them well for a long period of time.
So, um, you know, what, what is the makeup of the team? I- and is it, uh, you know, all in one geography? Do you have a physical office? And, um, uh, and once you've answered kind of that context, I'd love to understand how you think about, uh, both defining and, and reinforcing culture.
Ed Smith: Um, okay. So fully remote. Um, uh, everyone is, uh, yeah, so fully remote. We have no office. Um, it is a s- we have six W-2 employees in the US, and then, um, um, Erik and I have, um, both gotten sort of these virtual assistants, um, which actually has been, is absolutely game-changing, um, which has really helped he and I scale and sort [00:42:00] of do more.
Um, but those folks are based in the Philippines. Um, the, and they are awesome. So we're in like an eight-person team. Um, roughly split right down the middle between engineering and go-to-market, which it skews more engineers because Erik wears a bunch of hats. Um, he is very much our sort of product visionary.
Um, but he also does all the customer success, um, because his building science knowledge is, is, is important for that. Um, so that's basically the team makeup. We are small, but we're very high octane and, um, like I say, everyone is on the rock face. Like no one is... There's no managers. No one is one degree removed from the customer.
Everyone is like intimately involved with the customer or the product deeply, um, which frankly is a glorious, glorious way to run a company. Um, that's team makeup. On culture, um- [00:43:00] The best-- One of the best lines I ever heard on culture is, um, "Culture is the behavior you tolerate." It's these small things of just how people act.
And so we have, we have, you know, um, values on our website, but I find, like, the most-- single most important thing is, like, in the moment, if someone does something that doesn't feel like it's in line with the culture, like, you gotta talk about it. If it happens on a meeting with the entire team, like, it's gotta happen in the moment.
And I'm not talking about calling people out necessarily, but like, God, you gotta be a steward and a guardian of the culture. And I think that's, that's a thing that Erik and I as co-founders take really seriously. And, um, one of the things we do at our onsites is we pull up our values and say, "Are we behaving in line with these?"
'Cause, like, they're not values if they're not actually dictating our behavior. Not in a way that's like, [00:44:00] um, rules and regulations and demerits, but just in a way, like, when we interact with each other and our customers, like, do they feel this stuff? Um, and so that's one I take super seriously b-because I've been p- a part of cultures that are not that
Jason Jacobs: Uh, and, um, I also wanted to ask about AI. I mean, it sounds like you're not using AI heavily in terms of, um, the, uh, customer-facing side and the product, but, um, how, how much are, are you personally using it? Uh, how much is the team using it? How much are you using it collectively as an organization? And, um, and directionally, um, you know, how much, uh, you know, how, how much do you think about that?
How much do you worry about that? Um, what are the plans, if any?
Ed Smith: We use it, um, we use it a lot. Um, we are putting in place a bunch of structures around it 'cause we're realizing-- We started [00:45:00] out, everyone just had their own Claude account, ChatGPT, and then we realized like, well, like we're building skills in Claude that, like we should be sharing across each other. So now we have a corporate account. Um, we're like actually in the process of building the set, the folder that has all of our context documents that can be called upon. Um, we're sharing projects. Um, one of the things we are not doing is, um, there's a lot of, there's a lot of commentary on right now about like, where's the ROI on AI? Like, certainly a ton of expense is going towards it, but like, where's the ROI?
Um, we, we constantly experiment, but if it's just not fit for use, like we, we, we back away. Um, and we'll come back when like a new-- when Fable comes out. Like we'll try it again with Fable. Didn't work with, um, GPT-3.5, but like, maybe it'll work with Fable. So we're always experimenting. I use the heck out of it [00:46:00] for, um, um, pre-drafting emails, um, marketing copy.
Um, I al- it always goes through my filter, but like, it's a great, it's a great first cut for podcast editing, um, for pod- for other con-content creation. Um, it is very helpful, although it took a ton. I couldn't believe how much training it took, like personal training on our end to get it to be good at customer success stuff.
Um, it's still not perfect, um, but we spend a ton of time on that. So we, we do use it quite a bit. I would say we're either skeptically enthusiastic or enthusiastically skeptical. Um, it's gonna do a bunch for us, but yeah, we don't-- It's, it, it's not the best thing since sliced bread, I wouldn't say.
Jason Jacobs: And what, uh, what are you hearing from your customers in that regard, if anything?
Ed Smith: Um, I'm hearing a lot of like singed fingertips, you know? [00:47:00] Like, I thought it was supposed to do this amazing thing, and it botched it, you know? And it's not that easy to integrate, and my field service management system just rolled it out, and the app got slower, and the quotes weren't very good, and, you know, like...
So I hear there is a lot of hype. Um, the delivery isn't always there. So it just goes back to this ROI question. Like, where is there actual really good return on investment on AI? And that's where we're trying to lean in while always experimenting like, "Oh, is this it? You ready yet?" No, but it is changing fast.
Like holy crap, it is evolving rapidly. So we, we keep our eye on it. We try it a lot
Jason Jacobs: And, um, I mean, if, if you, if, if you were to venture a guess, let's say 10 years out, um, or even five years out, um, if you look in construction, whether it's big shops or small shops or anywhere in between or commercial or residential, like, I mean, answer it how you want. Um, [00:48:00] but, um, you know, is it more kind of tuning and finding, finding efficiencies at the periphery?
Um, or is it more of kind of a fundamental revamp to, to how these businesses are run?
Ed Smith: I don't think it's... In five years, I don't think it's a fundamental revamp necessarily because the core of it will still be an exceptional craftsperson goes to a home to do a technically complicated job turning wrenches. That will be-- And, and people will be paid for that. That'll be the core of it. Um, and so I don't see that changing in five years.
10 years, maybe Optimus is out and like everyone has one. You know? Like that could be interesting. But in five years, I don't think so, but maybe I'm wrong. I do think there's a ton of efficiency to be gained in, um, in central office stuff. Um- [00:49:00] But I don't think it's a fundamental revamp. Like, you're gonna have Furman on.
Um, the core, the core of a business scaling has always been like, "I need to hire a great office manager." I still think that's gonna be the case. And that office manager is-- generally hires a bunch of people to help them do stuff. Maybe they hire a few fewer people because the AI can do a bunch of it, but you still need really good people in that central office managing the complexity of a, the complexity of a business.
And the context required is enormous. So you're gonna need the context window on these models to expand significantly in order to, in order to, um, be able to keep up with all the different nuances of a, of a trade. Um, so I don't think it's gonna be a fundamental revamp in five years, but I think there'll be efficiencies gained, for sure
Jason Jacobs: Uh, well, this has been such a wide-ranging and, and far-reaching, uh, discussion. Is there anything I didn't ask that you wish I did or, uh, [00:50:00] anything you'd like to end on? Any, any parting words for listeners?
Ed Smith: Folks interested, um, check out, uh, www.ampli.energy. No .com, just .energy. Um, and since I'm on your podcast, I'll make a plug for ours. Our podcast is the Heat Pump Podcast. People wanna ... If people are actually interested in heat pumps, um, definitely come check us out. But no, it's good to see you back behind a mic, Jason.
Jason Jacobs: Yeah. I'm excited to be back. We'll see, uh, we'll see where it goes. But, um, you know, like you with your customers, I learn so much from every one of these discussions, so I'm just excited to keep, keep cranking them out and climbing the learning curve and, you know, we'll see what happens. But, um, yeah, thanks again, Ed.
Uh, good to be back. Great to learn more about Ample Energy. It's awesome how you're going about it and, uh, yeah, wishing you every success and excited to keep in touch along the way.
Ed Smith: Awesome. See you, man
Jason Jacobs: That's it for this episode of BuiltForward. I hope you enjoyed it. If you found it useful, share it with someone building [00:51:00] in the industry and follow the show so you don't miss what's next. Thanks for listening, and see you next week