Zodhya aims to reduce energy bills by up to 30%. Rohith Pallerla and his team are on a mission to disrupt the $2.5 billion Indian industry.
The team, comprised of engineering friends, made the bold decision to forgo placement opportunities and instead contribute to a sustainable future. By doing so, they are helping to create a better future for all!
Join us as we delve into the journey of Rohith Pallerla and his team. Discover how Zodhya is transforming the Indian energy industry. Zodhya’s work is both inspiring and essential.
YC: Today, we aim to learn more about you, your life experiences, and your choices. Additionally, we’d like to understand Zodhya better.
Rohith: I was born and raised in Hyderabad in a middle-class family. Like many other Indian families, where children are commonly expected to pursue engineering or medical fields, this was not the case at my place. My parents did not impose any specific career options on me.
My father primarily worked in business and was keenly interested in learning about various types of businesses. On the other hand, my mother was responsible for raising my younger sister, Likitha, and me. She instilled in us the idea of striving to be the best versions of ourselves. Currently, my sister works in Pune.
I have always been fascinated by how things work, particularly vehicles like cars and rockets. One of my neighbours, a retired professor of physics, even gifted me a book by Abdul Kalam, ‘Wings of Fire (autobiography),’ which further fueled my curiosity about rocket science.
I was also interested in writing stories but did not develop them as a hobby. Growing up was beautiful.
During my seventh and eighth-grade years, I developed an interest in creating things, and I found myself more drawn to subjects related to engineering than medicine while studying. Although I did not have a strong desire to pursue engineering then, I was aware of my inclination.
Around the seventh or ninth grade, one of my teachers informed me about the Indian Institutes of Technology (IIT) and how it aligned with my interests. This motivated me to aim for admission into one of these institutes.
I have inherited my mother’s determination not to give up and to work hard to achieve my goals, regardless of the circumstances. While I did not have the opportunity to observe my father’s traits closely due to his busy schedule, I do recall his advice to be cautious in my actions and to plan to minimise risks.
2013 – 2017 – IIT MADRAS
I had the option to join other IITs like Hyderabad, Guwahati, or Roorkee for computer science. However, I opted for IIT Madras because it was one of the oldest institutes and had a larger campus with better facilities.
Moreover, I was drawn to the Center for Innovation, which allowed students to work on various projects irrespective of their branch. When selecting the university, I prioritised better amenities based on recommendations and observed that the faculty was similar across different campuses.
YC: Rohith, can you offer some tips for engineering students on maximising their college experience?
Rohith: I cherished my time at IIT Madras. Rather than having a definite career objective, I approached it with a curious and explorative attitude.
Umm, suggestions would be:
- During your engineering education, it’s important to explore a variety of subjects to discover your skills and interests and then focus on developing and honing them.
- Building on your skills and hobbies is essential to avoid uncertainty and dissatisfaction after graduation.
- Consider taking internships that provide opportunities to learn and gain experience, regardless of whether or not they offer payment. Keep an open mindset when approaching internships and use them to build skills and explore different career options.
- It’s advisable to seek various career opportunities during college, such as internships and skill-building experiences, since discovering such prospects beyond the confines of college can be more difficult.
YC: How did you decide, right after graduating from college, to focus on the energy industry for your startup and narrow down the problem you wanted to solve?
Rohith: At the end of our first year, my co-founders Sharath, Aditya, and I realised that we wanted to apply our technical skills to make a positive impact on society, particularly in the areas of –
- Food – It is one of the three basic human needs for survival. It is a basic necessity for physical survival and significantly shapes our cultural, social, and emotional experiences. Thus, it transcends mere sustenance.
- Energy – We should save energy to reduce our environmental impact and preserve the planet for future generations. Using energy-efficient lighting and HVAC appliances can reduce our carbon footprint and contribute to a more sustainable and livable world.
- Environment –Preserving the environment is crucial for continuing life on Earth and maintaining the delicate balance of ecosystems. As beings who are part of this interconnected web of life, our ethical responsibility is to protect and sustain the natural world for the benefit of ourselves and all other living beings.
We started working on various projects to solve different challenges, identifying them without initially considering them as startups. Our projects came from multiple sources, including open challenges in India and beyond.
Idea 1 – One of our early ideas was to create a device that could detect food quality without tasting it, inspired by our experiences with the food served in our college mess. Although we encountered technical difficulties and couldn’t complete the project, we gained valuable lessons from experience.
We then began choosing more straightforward problems, looking around and fixing what we could.
Idea 2 – We noticed that our hostel needed to spend more energy on lighting, especially in corridors and rooms, and decided to create a solution.
During this time, we learned about the concept of startups and decided to develop our idea with a small team to bring more seriousness and commitment to the project. We approached professors from different departments to discuss and develop our ideas, taking up various courses during our third and fourth years.
Energy is crucial to our field, as industries require energy-efficient processes. We designed an energy-efficient lighting system for our hostels, realising the importance of energy efficiency in various aspects of society.
Our technology – This energy-efficient lighting system automatically adjusts brightness based on the time of day and available daylight while responding to occupancy levels by dimming or increasing brightness accordingly. Additionally, the system conserves energy by switching off during the daytime. Originally designed to solve energy wastage in a hostel corridor, the system can be used in educational institutions and large buildings with high occupancy.
We then decided not to pursue placements and instead explore further opportunities, focusing on testing ourselves and developing the best solution.
However, upon entering the market, it became clear that the energy problem was more complex than initially anticipated.
Initially, we needed to familiarise ourselves with the concepts of TAM (Total Addressable Market) or SAM (Serviceable Available Market).
Goal – Our primary goal was to replicate the success of our energy-efficient lighting system in larger residential buildings or hostels throughout India, with the intention of benefiting society.
To achieve this, we conducted extensive research, consulting with experts in the lighting manufacturing industry and exploring the possibility of producing our lighting system.
Aim – Our ultimate aim was to tackle the energy problem in Indian hostels and buildings through the widespread adoption of our innovative lighting solution.
1. Following successful testing in our hostel, we consulted with facility managers of various commercial buildings, including educational institutions, IT parks, and shopping malls. We discovered that slow processes in educational institutions made large-scale technology implementation challenging.
2. Furthermore, we realised that lighting only accounted for 15-20% of a building’s total energy consumption, making a 30-40% reduction in lighting consumption a minimal impact on overall energy usage.
3. Upon identification, we discovered that HVAC (Heating, Ventilation, and Air conditioning) systems consume the highest amount of energy, accounting for 60-70% of total energy usage. Consequently, we recognised the need to prioritise the development of a solution for HVAC systems.
4. In addition, we observed that clients with multiple buildings faced challenges in identifying and monitoring energy inefficiencies.
Biggest learning – Comprehensive Solution – While identifying energy inefficiencies was crucial, we soon discovered that more than simply remembering the problem was needed, as clients struggled to implement operational measures to address the issues.
This prompted us to develop Zodhya – An IoT-based solution that identifies inefficiencies and requires no changes in operational procedures on the client’s end. This solution gives clients insight into their energy profiles and inefficiencies without additional operational burden.
YC: How has Zodhya evolved?
Rohith – We encountered two significant challenges:
Challenge 1 – Optimizing Energy Usage – Manually switching off HVAC systems may not be cost-effective, as it can result in higher bills and discomfort for employees or customers. Although turning off the system during low-temperature periods or at lunchtime aimed to save energy, it was not practical. People were reluctant to adopt such methods due to the financial burden it caused.
Solution – We’ve developed an energy-saving solution that reduces energy consumption without sacrificing comfort.
Our AI-based system uses a self-learning algorithm to determine the minimum energy required to cool any space while maintaining the desired temperature. It optimises energy consumption during 8-10 hours of HVAC operation by consuming only what’s necessary to reach set temperatures. Our solution offers a practical and cost-effective approach to achieving energy-efficient HVAC systems.
Challenge 2 – Installation – While working on energy-efficient lighting, we learned that clients were reluctant to replace their existing lighting because it meant increased capex and time for infrastructure changes.
We understood the significance of developing technology that was easily retrofittable and didn’t require complete replacement. Our current energy-saving solution in the market is retrofittable and can be installed by a technician in just 20 minutes, even if it’s their first time.
YC: Can we discuss some typical SaaS numbers?
TAM – We evaluate TAM based on total energy consumption and the potential for saving or utilising energy efficiently. We estimate the market for energy efficiency in buildings and commercial setups in India to be around $2.5 billion. If we include the USA, Europe, and Pacific in our analysis, the global market expands to approximately $30 billion.
ICP – Our product targets commercial settings such as offices, retail outlets, and the hospitality sector. These areas have high energy consumption and unit rates in India, making them ideal candidates for our product.
The product is designed to be financially feasible for commercial businesses, making it a more attractive solution for those looking to reduce energy consumption.
Price – Our business model operates on a subscription basis, offering both Saver and Soul. The Soul is an IoT-based dashboard that helps clients benchmark energy efficiency measures, which has significantly improved since its early days. Under this subscription model, clients pay a fixed amount every month.
Our approach is similar to freemium as we demonstrate our technology to potential clients. This helps them comprehend how our technology works, how it can assist them in reducing their energy costs and minimising their carbon footprint. Once they are convinced, we proceed with the actual implementation.
Competition – India – Facilio and Zenatix Modules
International – BrainBox AI and 75F
During our early days, we realised that automation alone needed to make more sense for commercial setups in terms of saving energy. Our primary focus is to reduce energy consumption and improve energy efficiency. While other companies and startups use various technologies to achieve this goal, we have developed a unique approach.
Customers – Our tool has been successfully implemented by around 20 companies across Bangalore, Chennai, Mumbai, and Hyderabad
Our clients typically have around 10,000 square feet, and the average energy bill for these spaces ranges from Rs.1.5 to 1.8 lakh per month. Our device’s performance usually results in energy savings of around Rs.30,000 to 40,000 per month. Consequently, our recurring revenue averages around 10,000 per month.
Despite these typical specifications, we have helped clients with much smaller spaces. For example, we have worked with clients who have deployed our solution in areas as tiny as 600 to 700 square feet. These clients had significant energy bills of around 40,000 to 50,000 per month, and our device helped them achieve substantial savings.
These 20 clients have head offices in. Although they usually start with the head office, sometimes they start with the best or emotionally invested stores. The product deployment is wider than specific cities as the clients’ head offices are typically in tier 1 cities.
Calculator – we have incorporated a calculator on our website, enabling clients to determine potential savings based on their business and location. This feature is readily available to interested clients and can be used within a few minutes to estimate the savings achievable using our devices.
We are three co-founders and six engineers. They focus on technology development, specifically electronics, AI, and full-stack development. Aditya and I handle sales and marketing. We want to have a better understanding of what our clients need. We are building different sales channels because traditional sales methods may not be the most effective.
Sales Channels – We are in the process of exploring various sales channels.
- Facility management service providers deal with building infrastructure like electrical and HVAC systems.
- OEMs to explore long-term possibilities for the technology.
Patent – We have obtained a patent for the current technology. We are continuously working with our patent advisor to explore other aspects that can be patented.
Target – We’ve managed to save around 50,000 units for our clients. And, over the next 18 months, we plan to increase that number to 1 million units through various channels we’re working on. It’s a pretty important goal for us, and we’re doing everything possible to make it happen.
Regarding customers- achieving our goal requires working with approximately 100 customers, considering each has a unique type and number of buildings.
Funding – We managed to secure a small seed round from Rainmatter. This has enabled us to launch an improved product into the market.
Although our current product is doing pretty well, we’re also working on introducing a new product to meet that demand.
Dealing with outstation clients – The approach depends on the situation. Typically, initial discussions and understanding with the client are done online, which has been the norm since the pandemic. Once the installation partner installs the product in the client’s city, follow a demonstration. Then, further actions are taken.
YC: Could you please elaborate on how you acquired your initial customers?
Rohith: We (founders) are currently handling sales. We are exploring various channels to improve our sales. It is crucial to personally understand the market needs as founders, as we aim to have the best product, but we have yet to claim to have it.
Interacting with clients has helped us understand their needs and make improvements accordingly. With my learnings from our experiences in the industry, we hit several realisations about the sales process.
Realisation 1 – When we started our business, we had limited connections in the industry. As a result, our primary methods of reaching out to potential clients were cold calling and cold outreach. Additionally, we contacted our alum network to connect with decision-makers from different businesses. However, despite securing meetings with various companies, we often found that we sometimes needed to meet the right person.
Realisation 2 – In B2B, conventional marketing techniques are less effective. This is because decision-making processes typically involve a group considering business needs and reviews.
Realisation 3 – B2B sales cycles tend to be longer, usually 45 to 60 days, in contrast to B2C products.
Realisation 4 – One significant challenge we encountered was identifying the critical decision-maker within a group. Each group member has a unique perspective on their business, and it’s essential to convince all of them to move forward with the product.
It is challenging to reach early adopters. Once you have a foothold in the market, it becomes easier to validate your product.
@ with team
YC: How are you solving for discovery?
Rohith: We are primarily doing three things:
1.As a startup in the building sector, we prioritise attending conferences relevant to our industry. We specifically look for events related to building or proptech (Property technology) and those that address energy and climate change topics important to our work.
In addition to attending conferences, we actively seek partnerships with organisations focused on promoting energy efficiency as a concept, not just technology. This helps us stay current with industry trends and allows us to collaborate with others who share our values.
2. Our startup employs two approaches to finding potential customers. Firstly, we aim to establish ourselves as a trusted resource in our industry so that clients approach us with queries over the long term rather than us having to approach them directly.
Secondly, we target specific chains and proactively contact them to discuss our services.
3. We have identified a knowledge gap among our clients regarding energy efficiency. Therefore, we are taking steps to build our social media and blog presence to educate people about energy efficiency + creating a community around climate change.
YC: What are five suggestions you would give to your fellow founders?
- Do not stay attached to a specific technology or product when targeting a market; be open to the possibility that it may need changes or a complete overhaul.
- Test the market with a minimum viable product (MVP) to see how it reacts and gather feedback.
- Try out different channels to reach the market, such as cold outreach, LinkedIn, and leveraging networks, and determine which ones yield the best results.
- Build on the strategies that work and make necessary adjustments to optimise them.
- Building a team aligned with your vision and targets is crucial in the early stages of a startup. It can make growth easier in the future.
YC: Why did you choose entrepreneurship over a traditional job after IIT? How did you overcome fear and uncertainty, and what advice do you have for aspiring entrepreneurs?
Rohith: I didn’t go for the usual job route because I found something I’m passionate about and love doing it. When you’re pursuing something you love, it comes naturally, and you don’t need extra motivation or effort.
Everyone has their unique journey and timeline, so we shouldn’t compare ourselves to others. Startups also have different life cycles. Some become unicorns in a jiffy, while others take years to grow.
So, instead of comparing ourselves to others, we must understand this and set realistic expectations. What really matters is staying true to ourselves and following our passions.
Book Recommendation: I have recently read a few good books, including Blue Ocean Strategy – by Renée Mauborgne and W. Chan Kim. I found it particularly interesting for founders as it explains how to differentiate your product at the start and as you grow.
Another book I enjoyed was Nawabs, Nudes, Noodles by Ambi Parmeshwaran. It delves into the history of advertising in India over the last 50 years. It highlights how the Indian customer profile has changed and how our mindsets have evolved over the decades, even within specific age groups. Overall, both books are excellent reads, and I highly recommend them.
Our conversation was genuinely enlightening, Rohith. Thank you for generously sharing your knowledge with us. We look forward to seeing your continued achievements in the future!