InstaHub: “Snap-On” Tech to Combat Energy WasteBy Asher Kaplan
InstaHub is a Philadelphia based internet of things (IoT) startup that is solving the United States’ energy waste problem. It creates a “snap-on” sensor device that automates light usage, reduces society’s carbon footprint, and saves property owners thousands on their electric bills. I sat down with co-founder, Michael Wong, a Wharton undergraduate, to learn more about InstaHub’s simple yet powerful product.
A Cost-Saving Solution to America’s Energy Waste Problem
Every year, the US wastes $30 billion of electricity, the equivalent of 500 million tons of CO2 emissions, on unused lighting in empty rooms. Forgetting to turn the lights off not only increases society’s carbon footprint but also represents a significant cost burden for property owners, who are paying for unnecessary consumption.
InstaHub has created a solution to this problem, developing an IoT device to automate energy use based on consumer needs and behavior. Occupancy sensors – indoor motion detecting devices used to identify human presence – already exist, and they are effective in reducing usage and lowering utility bills. A study conducted on a university campus found that installing wired occupancy sensors to control lighting in more than 200 rooms in 10 buildings provided an annual cost savings of $14,000 with a simple payback of 4 years. However, the current commercial offerings in smart lighting are imprecise and difficult and expensive to install, and these shortcomings have led to poor market penetration. According to the Energy Information Administration (EIA), only 16% of the 5 million lit commercial buildings and only 1% of the 140 million residential properties in the US utilize occupancy sensors to combat light pollution. In total, IBISWorld estimates that the lighting components market represents a $700 million dollar opportunity in the US. The InstaHub team believes that the current products’ shortcomings and the sheer magnitude of the market present a unique opportunity for a new entrant.
A New Player in the Lighting Space
Originally from Oakland, CA, Michael came to Penn with an interest in various environmental initiatives, having participated in The Green Project in high school. Late one night, while walking back to his dorm from the library, Michael noticed that the lights in many of the rooms of the university buildings remained on, despite the rooms being unoccupied. This observation led him to research energy consumption and the various devices designed to curb energy waste, and he soon discovered that while traditional occupancy sensors were effective in conserving energy, they were costly and disruptive to install and ripe for technological innovation. Michael saw an opportunity, but he did not take action until a mutual business fraternity friend introduced him to Dayo Adewole, a bio-engineering Ph.D. student with a background in robotics and an interest in three-dimensional design. The pair immediately hit it off and, utilizing Dayo’s technical skillset, created a prototype for a new kind of motion-detecting device. As Michael put it, “Dayo shares my passion for using simple ideas to solve big challenges. That’s where we really clicked.”
“Dayo shares my passion for using simple ideas to solve big challenges. That’s where we really clicked.”
– Michael Wong, Co-Founder & CEO of InstaHub
While InstaHub’s product has evolved significantly since that first prototype, the core idea remains the same. InstaHub makes sleek IoT sensor devices that “snap-on” to existing light switches or panels and automate light usage to combat energy waste. Specifically, the device detects human presence in a room, and, when positive, it physically flips the control switch to the ‘on’ position. When presence is not detected, however, the device flips the switch to the ‘off’ position, typically after a customizable delay that allows for a small margin of error.
Occupancy sensors, made by Eaton, Lutron, and others, have existed for years, and many of you likely have seen them in use in your school or office facilities. InstaHub’s product, however, differs from traditional occupancy sensors in three pivotal ways: convenience, cost, and technology.
First, in terms of convenience, InstaHub’s “snap-on” functionality makes it ready to install upon arrival, requiring no technical skill, licensing, and, most importantly, rewiring to configure. While conducting market research, Michael discovered that coordinating installation logistics within occupied commercial buildings was a primary pain-point for many property owners and managers. Installation can be quite disruptive, and it is difficult to find time without interrupting the routines of employees, hotel guests, students, etc. InstaHub’s device, however, fits comfortably over standard switch panels and can be installed in less than one minute.
Second, the ease of installation also translates into cost-savings for property owners. Retailing at $50, InstaHub’s device is priced at a comparable level to the existing commercial options, but traditional occupancy sensors often require professional electricians to install. According to Michael, depending on union designation and geography, these labor installation costs can run as high as $100 per room/switch for commercial facility managers and $150 per room/switch for residential consumers. InstaHub’s device, however, requires no rewiring and can be installed at no cost. Given that most commercial properties have hundreds of switches, the installation cost-savings presented by InstaHub’s device can significantly reduce the required capital investment and improve the project’s payback duration. Even in residential properties that may contain only 10-20 switches, the installation savings, compared to comparable products, are still significant.
Third, while most of the traditional sensors use dual infrared and ultrasonic technology, InstaHub’s device uses a customized sensor with longer range and 360-degree angle detection. Each InstaHub device also is programmed with software that contains a proprietary algorithm, developed over months of testing and piloting. Michael is confident that this combination makes InstaHub’s product the most reliable measure of true human presence on the market. In addition, InstaHub’s device stands out from its competitors in that it possesses machine learning abilities. It logs usage and behavioral data and then uses that data to become even more accurate in determining true presence. All this functionality reduces the number of false positives, a primary consumer pain-point. In fact, InstaHub’s device is so well tuned that it will turn the lights off after you fall asleep, but nighttime tossing and turning will not activate it. The lights will only turn back on when you actually wake.
Early Success Met With Growth Challenges
InstaHub has now completed successful pilots with the University of Pennsylvania and Swarthmore College, and Michael is in conversations with an international hotel chain around a more expansive pilot program for one of its locations in the Philadelphia metropolitan area. As a next step, Michael is now focused on building out a more extensive sales pipeline. While he ultimately envisions InstaHub’s device being sold to residential consumers both online and at locations such as The Home Depot, he is currently focusing on the higher-volume commercial segment. He sees schools, hotels, and office buildings as the best use cases for the product and has had the most success marketing at large-scale trade and sales conventions, where he can pitch the product to developers, property management companies, and lighting industry veterans.
Currently, InstaHub manufactures at NextFab, a hardware accelerator located in South Philadelphia, but is facing some challenges. While the team now uses a programmed machine to build the more complex components of each device, the remaining is still handcrafted, an issue that has slowed InstaHub’s manufacturing timeline and introduced questions around product uniformity. Driven by an increased interest in large-volume orders, Michael is negotiating with several partners in the Philadelphia area for a long-term manufacturing solution, but he is still weighing which partner is best for the company. InstaHub is also actively raising seed capital, looking to use the capital to fund manufacturing, build out the team, and help with UL and FCC certifications. To date, it has primarily relied on grants, competitions, and self-funding sources.
A Look To The Future
Both Dayo and Michael are working full-time at InstaHub and are committed to doing the same following graduation in the spring. They view their lighting device as just the beginning of their foray into providing a larger-suite of IoT products. When asked about his long-term goals, Michael said, “In 3-5 years, or sooner, we see an opportunity in the larger IoT space. First, we want to do this well, and then we see a huge opportunity with what some of the biggest IoT players are doing and testing out different business models – whether it’s in the security space or in asset tracking or elsewhere. We constantly think: ‘How can we transform this simple idea into a one-billion-dollar company?’”
“In 3-5 years, or sooner, we see an opportunity in the larger IoT space. First, we want to do this well, and then we see a huge opportunity with what some of the biggest IoT players are doing and testing out different business models – whether it’s in the security space or in asset tracking or elsewhere. We constantly think: ‘How can we transform this simple idea into a one-billion-dollar company?'”
– Michael Wong, Co-Founder & CEO of InstaHub