An Introduction To The Elevator Industry With Ashleigh Wilson

Elevator Sales and installation is a huge industry. And it's also one of the most challenging industries to enter. If you're looking for an introduction to this field, this episode will give you an overview of what it takes to be in the elevator industry!

AuditMate is the first-ever SaaS company to help property managers get more from their elevator contracts. When you sign up with AuditMate, you’ll get the clarity you need to save money, time, and headaches.

For More Information Visit https://auditmate.com/

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An Introduction To The Elevator Industry With Ashleigh Wilson

We're here with Ashleigh Wilson, the Founder and CEO of AuditMate. Disclaimer, we invested in AuditMate through a VC fund. It was a heavily oversubscribed round. I’m excited to talk about the elevator industry. Before we do that, let's learn a bit more about Ashleigh. Tell us your story and what the journey has been like.

First, thanks for having me. I appreciate it. I am a self-proclaimed elevator baby. It is what I like to say. I was raised in the industry. In my family, I have folks that worked for the big four as business managers, mechanics, and consultants. My first job was when I was twelve years old, cleaning gross elevator offices and shops. I joined the industry in my early twenties during graduate school. I was obsessed with the elevator industry.

I thought I would surely be the first female CEO of Schindler Elevators, where I worked at the time. The US CEO was mentoring me. I was participating in global research projects. I quickly found that customers didn't understand their contracts at all and that skyrocketing profits directly resulted from elevator companies not doing their jobs. That's where AuditMate was born.

You're a pretty amazing person overall when it comes to the insights you have, but is this something you're passionate about?

When you’re passionate and tired of the practices in the industry, you want something to change and deliver solutions.

I'm passionate about people. When I left, I left the industry like hands up in the air, like, “I'm done. I can't do it anymore.”

Are you bored of elevators or tired of the practices in the industry?

I was tired of the practices in the industry. A friend told me, “You don't care about elevators.” I was like, “I do, though. I'm a nerd in that sense.” Operations and engineering have always been interesting to me. More than anything, I believe that humans have been an afterthought in the elevator industry. That's what I'm most passionate about.

When you left the industry, did you decide to do a company immediately and disrupt the industry, or was it not in your head?

No. I had no idea what I was doing.

Walk us through that journey. What did you think you were going to do? Did you try to work for a rival, or were you done and going to go into a completely different area?

I was down in South America, presenting a global research project to all of the CEOs in North and South America for the company I was working for at the time. I remember one of the CEOs looking at me because I was talking about empathy and who canceled contracts? I looked at a CEO and said, “Do elevators or humans cancel the contract? Why aren't we talking about humans?”

Someone looked at me and said, “Empathy would be a great competitive advantage.” At that point, I was like, “I'm done.” I was supposed to stay in the city and network with folks. I jumped on a plane and went to Rio. I locked myself in a hotel room, and I started writing. I remember calling my mom and crying. I was like, “I can't do this anymore.” Even if I become the CEO of the US, then what? What's next? I still can't sleep at night. I'm tired of convincing new people how to gaslight customers.

Humans have been an afterthought in the elevator industry.

We've talked about this. It seems like that realization of what would happen if elevator companies had empathy. What would happen to their margins? What would happen to the way they operate?

What would happen if we told clients how often we would become, how we maintain units, or what we're doing? I don't know if the clients care about the nuts and bolts, but they care about the transparency of the data. If I want to know, I want to have access. They don't all want to know, but the right should be there.

If transparency did exist in the elevator industry, what profits would keep soaring? Would margins be high? Would these elevator companies do well?

They would do well. We're for-profit. I'm for-profit. I'm not a nonprofit company, but I don't think we should cap people's profits. When we're using a lack of education and intentionally vague contracts to maximize profits, that's not okay. Even customers believe in a fair profit margin. They're all for-profit companies, but it’s so icky to me when you're leveraging.

You’re talking about misleading customers and not fulfilling the contracts. These contracts you're talking about are down to maintaining the elevators because people pay for maintenance. Believe it or not, elevators break. How do you prevent elevators from breaking? You send someone out. To send someone out, the elevator company has to pay for that person to go out and maintain it. What's happening as a result of that little maintenance and contract compliance? What happens to the customers and the elevator companies?

From an elevator perspective, it leads to breakdowns when we're not doing maintenance. When you don't maintain your car, what happens? Your car breaks down. Equipment and components deteriorate at expedited rates when we're not maintaining them. The thing about elevator contracts is they cover major and minor repairs. We're not maintaining the elevator. What happens? It breaks down more.

From a customer perspective, this leads to tenant dissatisfaction and the flow of the building. There are many downsides on the customer side. You have this broken elevator, and then what? It has to get repaired. Either it's covered or not covered under the maintenance contract. An elevator company's goal is to get you to try to pay. The customer's goal is to get the elevator fixed. They need people moving through the building, especially when you think of something like retail. There's a major retailer here that their director of operations would say, “Having a down escalator costs me $10,000 an hour because people can't get up to that floor.”

It affects profitability, tenant satisfaction, and all those things. When an elevator company comes to the customer and says, “This isn't covered under your contract.” Who knows the difference? Most clients, even the facilities’ managers, and building engineers, people don't have the knowledge to know whether it's covered or not. What's the difference between a door operator and a door restrictor? Most clients don't know that. They don't know if it's covered or not, or they say something like, “This part would normally be covered, but it's now obsolete.”

Empathy would be a great competitive advantage.

You're one of these large elevator companies. You're thriving on the fact that your customers don't have the expertise. They can't have the technical expertise because the contract will be void if they start playing with the elevator. People trust the large elevator companies to fulfill their obligations on the maintenance side.

What fascinated me with AuditMate and the industry is one of those cases where the elevator companies continue to operate at high margins and directly because of a lack of fulfilling those maintenance contracts. They keep growing. It was shocking that this is a multi-hundred-billion-dollar industry, or at least it will grow to that.

It generated $104 billion in revenue in 2018. It's going to grow to $183 billion by 2027. It's a fairly healthy growth rate, but it's not just that. How much of the revenue comes from producing elevators, and how much of it comes from the maintenance side? Maybe you can tell us that because it's a fascinating stat.

Over 30% is from the maintenance side of that revenue. Maintenance is the cash cow of the entire industry. Even if the revenue is only about a third or maybe a little more than a third, it's the highest profiting of any of the sectors. On new installation or manufacturing, you have a smaller overhead. The whole goal of the new installation is to continue to capture the market on the maintenance side.

It seems small to you, but it's tremendous when you're talking tens of millions of dollars in maintenance and that the highest portion of profit margins comes from selling maintenance contracts. You're not necessarily honoring the business of selling the maintenance contract, and the hardware is there for you to get that lucrative maintenance contract.

You manipulate the manufacturing to make more revenue in the maintenance. I mentioned obsolete earlier. Because the big four often are also the manufacturers, they can say, “We're not quite a budget. How do we make the budget this year? Let's make this part obsolete. We can go to all our customers with that type of elevator. Now they have to buy the new version, part.2.0. That's no longer covered under the maintenance contract.”

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About Zain Jaffer

Zain Jaffer is an accomplished executive, investor, and entrepreneur. He started his first company at the age of 14 and later moved to the US as an immigrant to found Vungle, after securing $25M from tech giants including Google & AOL in 2011. Vungle recently sold for $780m.

His achievements have garnered international recognition and acclaim; he is the recipient of prestigious awards such as “Forbes 30 Under 30,” “Inc. Magazine’s 35 Under 35,” and the “SF Business Times Tech & Innovation Award.” He is regularly featured in major business & tech publications such as The Wall Street Journal, VentureBeat, and TechCrunch.