Episode 4: Building for the Future: How Latch is Unlocking New Services and Experiences Through Smarter Access
Behind-the-scenes at Latch’s offices, and a conversation with CEO Luke Schoenfelder.
In Episode 4, Lux Capital Managing Partner and Co-Founder Josh Wolfe sits down with Luke Schoenfelder, CEO of Latch (a Lux portfolio company). Watch the entire episode above, and what follows is an edited version of the interview transcript.
Josh: Today we’re sitting down with Luke Schoenfelder, Co-Founder and CEO of Latch, the world’s first smart access system. In 2013, Luke cashed out his Apple 401(k) and began building a smarter access system designed not just to open doors, but to reconfigure how buildings and cities themselves operate. We’ll show you how Latch combines hardware and software that eliminates keys, enables access sharing for deliveries and services, and changes the way that life works at a modern building.
Josh: So Luke, tell me why you started Latch? What was the original inspiration?
Luke: I’ve always been obsessed with infrastructure and I didn’t really know that until I looked back at my life and all the products that I’ve worked on all kind of tie back to this. When I was a kid I loved building forts, and just tearing up our farm and building stuff. Then I went to Haiti and was building houses and worked on an electricity transportation company and was thinking about it. Access is this area where there’s never been infrastructure. It’s always been one person, one key, and then beyond that it breaks down. For me it was, Latch is the combination of all the things that I care about, technology, architecture, urban planning, and creating this new type of infrastructure for cities.
Josh: Now you mention this interesting word access because there’s a ton of people out there that are developing smart locks, but you are not talking about smart locks. You are talking about something much bigger. When you talk about access, what does that actually mean?
Luke: For us it’s never been about your phone is your key. That’s a form factor change. What we care about is a value proposition change, so being able to automate everything that needs to happen in your life without having to be there anymore. They say that the average American spends two and a half days waiting at home to let somebody in, and we give them that time back.
Josh: So technologically how does this all work?
Luke: We’ve tried to take a lot of complexity and make it appear simple. What we’ve done is we’ve taken two printed circuit boards that have NFC, Bluetooth, in some cases wifi, LEDs, a camera, and we’ve put it inside this really interesting plastic enclosure. This circular enclosure is common to all of our products. It’s really the heart of all of our products. That commonality shows the user exactly what they need to do. This is the black circle that I interact with. This is the interaction module. That interaction module allows you to unlock with your phone, unlock with an NFC card that you can always carry in your wallet, or tap it and magically this, what feels like a touchscreen, wakes up and you’re able to enter a code so you never have to carry anything with you. That’s amazing for the resident when they come home and they want to access different parts of the building, but it also allows us to extend this to service providers so the service providers can use the same three ways of getting in. Whether it’s on their first-party diad device at UPS where they scan a package and see a code, or it’s an NFC card from their ID, all of those sort of means of entry are supported by Latch. Then we provide the right receipts about everything that’s happened at each door to all the stakeholders. That’s the whole system. That’s how it all works.
Josh: Now when you think about the technological components in that full stack, you made a decision rather than outsourcing the software or the hardware that you guys are doing it all in house.
Luke: Yup.
Josh: Why?
Luke: Alan K. once said that anyone who cares about software makes their own hardware. I think the sort of corollary to that is anyone who cares about experience makes their own software. Anyone that cares about software then makes their own hardware. In order to control that entire thing you have to have it sitting internally and have the same person who’s thinking through how the hardware is designed thinking about how someone on UPS is going to interact with it. That whole symbiosis of all these technologies, all these stakeholders, has to be a bunch of people sitting in a room figuring it out.
Josh: Now 10 or 15 years ago everybody would have said don’t get in cars with strangers, but alas today with Uber and Lyft we do that every day, multiple times a day. Today you would say never let a stranger in your home. I’m convinced because of the stuff that you’re doing, largely because of technology creating trust and accountability, that we will be readily letting strangers into our home. Tell me about the privacy aspects of this and what the implications are.
Luke: Well first of all I think you’re exactly right, and I also think that there’s a lot more precedent in the home because people say I don’t want strangers in my home, but I’m okay with the babysitter, the dog walker, the house cleaner, all these people that you’ve built a trusted connection with. Now we’re just extending who you have trusted connections with, like your UPS delivery person. We have a partnership with UPS to deliver inside your building. That’s the type of person that people already have trust in the organization, in the individuals that work there, and we’re just extending trust to new places so that you can enable these new experiences inside personal spaces. The way to engender trust with the users, with the buildings, with the stakeholders that are involved is by providing transparency. We think of our job as being a transaction processor for access, and we give everybody a receipt. Here’s what happened when you were away, here’s all the information you need to know about who arrived, here’s a photo of them. That makes people really comfortable to try new things to make their life easier.
Josh: Now you are just turning five years old as a company and the past five years has been exceptional, but tell me about the next five. What are you planning strategically and technologically? What are the next trends that people can expect to see?
Luke: Yeah. I think in some ways we’re a business that’s only 18 months old. We started selling 18 months ago. We spent three and a half years getting to ground truth with all of our customers, or some of the biggest real estate owners and developers in the world. Now we’ve built the products. The products are out there. We get to do the entire layer of services and experiences on top of the hardware that we’ve created now. For us, it’s almost like our app store moment where if you think about the iPhone in 2007 amazing, but there wasn’t this ecosystem of third party development and creativity. Now we’re seeing people say oh I’m going to use Latch devices to start a new leasing business, I’m going to use Latch devices to start this business. Seeing people’s creativity and now empowering them with new software tools and new capabilities to provide new services and new experiences is what the next five years is going to be all about.
Josh: If you had to suspend disbelief and imagine in a few years some crazy application that today you would say that could never work, we would never have the infrastructure or the capability or the technology or the trust to be able to do it, what might that be?
Luke: A lot of people, before they got on the subway, they’ll place their Seamless order so they can time their arrival with the Seamless person so when they get home the food arrives at the exact same time.
Josh: I am one of those people.
Luke: I think what will happen five years from now is there will be a plated dinner that will just be sitting under covers on your dining room table, and you’ll walk home and take the cover off and eat your dinner. You will have never had to interact in anything more than just pushing a button on your phone.
Josh: Now at Lux we love rebel inventors and scientists. We like people who are sort of breaking the rules and testing the boundaries. What would you say either technologically or from a business perspective what rules are you breaking?
Luke: Commercial real estate tech is really hot right now, but five years ago everyone said this is the most conservative slow moving customer base and they don’t understand or care about technology. That is just completely false. What they actually don’t care about is the noise that technology often creates. They want real problems solved operationally, and that was what we did. We embedded with these folks, became friends with these folks, understood what their problems are, and just solved their problems. It turns out when you solve someone’s problems they’re pretty excited about using your technology product, but they don’t see it as a technology product. They see it as just something that makes their life better.
Josh: Luke, thanks so much for coming by, appreciate it.
Luke: Thanks for having me Josh, appreciate it.
Josh: That’s it for us today. I want to thank the great rebel scientists and inventors at Latch for giving us a sneak peek of the future. I want to leave you with two book recommendations that were inspirations for Latch. The first is sci-fi, which is Cloud Atlas by David Mitchell. It’s really about the interconnectedness of time and space. The second, which is the sci-fact recommendation, is Ben Franklin: An American Life by Walter Isaacson. Luke actually names Ben Franklin as one of his favorite people in general. Specifically, it’s a great look at fearless inventiveness. If you want to get in touch with us, reach out at Futura@Lux.vc. We’d love to hear your crazy ideas and inspirations.
This episode’s sci-fi and sci-fact recommendations:
Cloud Atlas by David Mitchell (Sci-fi) and Ben Franklin: An American Life by Walter Isaacson (Sci-fact).
