Episode 117: Reinventing the Clean Air Business with Mike Mayer at Windmill

When Mike Mayer co-founded Windmill, a company that completely reinvented the window air conditioner, he had no HVAC experience whatsoever. Neither did his brother Danny, the second co-founder. However, their longtime friend, Ryan Figlia, came from a family with multigenerational HVAC experience, so he came on board as the third co-founder.

The genesis of the idea came about when Mike was helping Danny to move into an apartment in New York City. Upon entering, they were confronted with a horrendous window AC unit. They didn’t know what to do with it, how to remove it or if it could be recycled. 

They called Ryan, who sent over a couple of technicians to replace the unit. They received the nicest unit on the market, but Ryan and Danny still thought it unattractive. They then went to lunch and hatched the plan to make a better-looking window unit. One that was more attractive than anything else on the market.

At the time, many other traditional products were being reimagined. The three were inspired by companies such as Quill and its toothbrushes and Casper and its mattresses. The window AC was ripe for reinvention.

Reinventing the window unit

The window AC was a commodity product made by giant appliance manufacturers. The design had been essentially unchanged for decades. Those companies also make microwaves and dishwashers, and there was no desire to innovate the window AC. They made them the way they always had and sold them to the same suppliers, repeating the cycle over and over. 

Mike and the team wanted to design a unit that they would want to buy. They wanted one that their friends and family would want in their homes. Many of their friends live in pre-war New York buildings, and they felt like there was a market for a better-looking, more efficient, modern window AC unit.

They felt that they had a grasp on the market, better than the big appliance companies. With Mike and Danny’s startup experience and Ryan’s HVAC background, they were confident that they could pull it off. 

Their target demographic was young professionals living in a major metropolitan area in pre-war buildings with no central HVAC, but their actual customers range from people in their 20s to their 80s living in Manhattan to rural Washington.

When you reinvent a product or service there are bound to be copycats, and that’s what happened to Windmill. A large company copied their redesigned window unit grill, flipped it from horizontal to vertical, and put it on an air purifier. Mike writes it off in the category of “imitation is the sincerest form of flattery.”

A filter subscription service

On the subscription side, the Windmill window AC has a filter that needs to be replaced on a regular basis. When a customer buys a unit, there is a code on the box that takes them to the website where they can select a filter subscription plan. They can buy a one-time filter, or select subscribe and save in order to get a better price per filter. 

Mike is pleased with their subscription metrics so far. They have close to a 70 percent attachment rate and customers are seeing value in the activated carbon filters that improve the air quality in their homes. The churn rate remains quite low. 

They have faced challenges with the subscription side of the business. They are finding it difficult to communicate the right message when it comes to resubscribing. Whether it is on social media or via email when it is time to renew a plan, Mike says that they almost have to remind people why they subscribed in the first place. 

However, they have worked through their messaging over time and they have become much better at educating their customers on the importance of the filters. This has helped them keep that high retention rate. 

One channel of communication they use is their app. The app allows users to control their units on their phones and is a big differentiator between them and their larger competitors. The app is easy to use and it’s easy to automate functions and set scheduling. During the hot months, they interact with many customers through the app which provides them with a touch point for communication. 

The app automatically lets the customer know when it is time to replace the filter, and in a non-obtrusive way. A small red circle appears on the app as a reminder and it keeps many customers up to date on their subscriptions. 

Mike believes that the filter-changing time is the right time to communicate with their customers. He finds it best to be subtle in their communications and to reach out to the customer when they are actively engaging with the unit and the filter. 

Their messaging centers on clean air. The activated carbon filter removes odors and fumes that are harmful to the customer’s air quality. The air quality indoors is, on average, five times worse than it is outdoors. As the world moves away from the COVID lockdown, people are thinking about their air quality more than ever.

Expanding their filter line

Mike says that 30 percent of the country uses room air conditioners, which leaves 70 percent using central HVAC units. It seemed like a natural fit for Mike and his team to expand into filters for central air handlers. 

It took a while for them to be able to crack the code when it comes to central AC filters. Like everything they do, their emphasis is quality over price. Not everyone looks at their AC filters through that lens. 

They recognized a potential differentiator — the filter industry had yet to be digitized. So they set out to be the first company to do so. They like to say that theirs is a filter that texts you. It sends a reminder to your phone or email when it is time to replace it. 

They also provide a recommendation engine on their AC filter website. It asks users a series of questions to ensure that they get the exact filter they need. The filters arrive in the mail and Windmill uses digital channels to instruct users how to install them.

The goal is to provide a holistic approach to taking care of the air in your home. They’re off to a good start. 

—

Ready to get started with Rebar?

Head to rebartechnology.com or email info@rebartechnology.com to schedule a call today.

#Saas #subscriptions #subscriptionbusiness #subscriptionservice