“Focus on making your customers money, leveraging change as a catalyst for a profitable, sustainable transformation in real estate.” - Matt Ellis - Founder Series #6의 전체 녹취록

challenge for sustainability was that there was no no analogous way to compare carbon, energy, water, materials, health and well-being metrics. If you can't measure it and compare it, then you are lost and trying to do better. Capital B real estate business. So always the genesis and the motivation of Measurabl is to bring technology to bear there at that problem statement, a problem statement as old as the real estate business itself. Just with these new set of material metrics. On the more personal side, as an entrepreneur, where can I start other than to say at that time, 2009, 10, 11, 12, 13, which is when this business was incorporated. These observations that I'm sharing with you were not consensus observations. It actually wasn't the agreement of industry and certainly not venture capitalists or investors who back our business that these were problems that a existed worth or or were worth solving. This was still the time of cynicism and scepticism around the materiality of sustainability or so-called green in the real estate business. So I suppose that's one, you know, first, you know, reflection I can share is, you know, in entrepreneurship and I think in most endeavours worth taking, the path is not straight and it is not easy. Otherwise many people would take it and they would walk it very quickly, right? Take that as a sign that you're maybe on to something as opposed to running away from it would be some advice there unsolicited. I can share plenty of other things between that starting moment and where we're at today, which is you mentioned is the most widely adopted sustainability technology for real assets. I think the next one that I'd put out there is make sure you have a really expansive vision that is motivating to prospective employees, investors and certainly to the the industry and customers you want to serve. So if I'd gone out there and said, hey, I want to solve a data collection problem for you or I want to solve a reporting problem for you, that sounds like a nice feature or function or maybe even as much as a product. But it is not a company. And it's far from arguing for and inviting a change towards what we call for, which is sustainable real estate, the wholesale transformation of the business of real estate. So would definitely encourage entrepreneurs to think big and be bold and make sure that if you're saying something out there and it's about maybe hey, I can make your life a bit easier or save you a few bucks on XY and Z. I'm not suggesting it's not a business opportunity, but I would encourage people in the sustainability or climate business to really talk transformationally. And that's what I think we've been able to do in our business.    00:07:08 Matthew Maltzoff  In prop tech, a lot of companies have sort of come up and gone down. You guys have you guys have grown since since 2013. I was, I was talking to another founder and they were and they were telling me about how the business has gone through sort of

these metamorphosis, the things that the business was focusing on and sort of reflecting on that. I was thinking how does the how does the founder and how does the CEO go through different metamorphosis as the business grows? What you know on on day one your life is very different to today. So what might be main changes that you had to make with yourself to allow Measurabl to grow?    00:07:58 Matt Ellis  I didn't have kids in this business started. So let me talk to you about things that have changed right in the relationship that you need to have with your business to change. So first, let's just observe that change is a necessary and positive ingredient. I think that businesses should, there are some foundational things here like we're not going to give up on the statement I made earlier about driving the transformation of sustainable real estate. The how that we do that, with whom and your particular role in that absolutely should change, change all the time. You should see that as a an asset, not a liability. Your flexibility. Let's use a sports analogy, right? The most versatile players tend to be very successful. So as a CEO or pick your role, I want to be very versatile and be able to change my role at the beginning from a, a catalyst, a call to action, maybe more of an inspirational leader to maybe the middle years where it's, it's very much product road mapping, market entry capitalization and, and say the kind of, you know, bonus plans and hiring an employee relationships and so forth. Call that very nuts and bolts a business to where I'm at today, which is increasingly not as an operator of the business at all, but rather again, where I began strategist and a visionary for what's next. And you know, that feels natural to me. Not always easy to get there, but in any business that's been fortunate to be around like we have for over a decade, you would expect that, right? Maybe it's a circle or a sine wave, however you want to think about it. But I could tell you that the only problem here would be if I was exactly the same way that I was at the beginning. And I would want that for any of our employees. If you are still an intern here today, then you're probably not going to be here tomorrow if you put time in the business. Makes sense, right? We want that progress. It's not going to be linear. Our business has grown faster or slower over the years, including very, very difficult years where we didn't really grow at all The this is the business and it is life and they mirror one another. So that's my take on that just.    00:10:28 Matthew Maltzoff  Do you think the trajectory of the business and the interest of say sustainability that understanding the green element of a portfolio has tangible impact on the value of the portfolio and what that actually looks like the you know, the industry seems to understand it more and more. Is there, is it as simple as people want the product more now we make more money? Is it? Is it that?    00:11:01

Matt Ellis  I wish, I wish that were and perhaps it is and sometimes you want to overcomplicate things. But what problem are we solving here? And I can't tell you how often we miss or risk missing or our industry, the service providers risk. The problem statement here is that real estate is debt and equity. It it consumes equity in debt, ploughs that into real assets and delivers returns, we could dress that up a lot. We could certainly talk about how one of my mentors, a guy named Tom Martinez who was a long time industrial broker, said we are in the business of business. Real estate is shade and shelter for business activities. So we want to get in the mindset of what that business owner is solving for. And Tom was really on to the right thing here. So the business is not sustainability and of itself and this is one of the most significant and obvious misses that I see routinely. For example, today I made a a LinkedIn post talking about encouraging entrepreneurs and climate tech and sustainability start-ups to work backwards from what their customers solve for in their day-to-day business. I know it sounds obvious and I'm sure that is a cliche, but why do we keep talking about compliance and reporting as if that is what our customers woke up to do every day? They don't. They're trying to return yield to their investors and shareholders. They're trying to deliver a business outcome for the occupier of that space. Can we please focus sustainability there and not speak to, yes, the the sometimes pedestrian and necessary outcomes and off puts of that which include things like reporting? But I just want to really draw a big distinction. Then maybe the easy way to say it is how do you make your customers money, not just save them on time and cost. The latter is OK, but the former is spectacular and sustainability and climate tech entrepreneurs need to keep coming back to that over and over again. How did I make my customers money today?    00:13:14 Matthew Maltzoff  And is, is that something that is so fundamental to you know what, what an employee should be thinking about, even if they're even even if it feels that what they're you know what, what their actual activity is might be quite a finite task. Do they does does that really run deep within the organisation or is that a way to does that might that cause a loss of focus? What do you think?    00:13:40 Matt Ellis  If I got your question correctly, I, I, I think of it like it's a kick drum you got, you have to constantly beat on it, right? The whole band snaps to that. So in the background has to be this pulse of where did we make the customer money, how could we make them more? And we have a particular skill set and expertise around this thing, sustainability that can deliver that. So when you look at our case studies, you might look at, if you go to our website and you look at someone like a Nuveen or a BXP who is driving ROI off of our optimised product. It's an asset management tool that improves energy efficiency, carbon reductions in individual assets. It's highly granular deployment at the building systems level. And that cost savings drops through and we track it through to NOI, net operating income, which is a multiplied by a cap rate to get property value. There's your real estate equation, one O 1. Anyone in the actual business of real estate knows that equation front to back and works it all day long. Why shouldn't we? So when I talk here about optimise, I want to make sure that I talk about, yes, carbon reductions as a byproduct of a more profitable real asset. And this is something we have a ritual in our business and try to do a lot. Everyone, whether you're an engineer or a product designer or an executive, should sound like that. And it's easy to drift because playing in time with a band is hard. But that's why the drummer is there, and that's more or less my function in the business is to just make sure we keep hitting that beat in a steady way.    00:15:26 Matthew Maltzoff  I'd say under the hood and in Measurabl a little bit. I know you guys, maybe it's a bit old now, but you introduced Navigate, the modular ESG platform. You've, you guys are looking at AI as I understand it and looking at development in in AI. How does this, this, how does your, I guess the business's product development evolve as the the industry's interests? I guess of all slightly, I mean everybody wants to as as you say they earn more out of their assets, but how do you, how do you balance that relationship and stay flexible?    00:16:12 Matt Ellis  Sure. So we're talking about solutioning the customer and it's going to go back to the problem, but that's the problem statement being more profitable, sustainable real estate, right or more profitable real estate using sustainability might be a better formulation for that. Let's focus though on the product delivery. So you mentioned Navigate and then you you talked about AI, let's add to that or ESGX, ESG exchange product line for real estate capital markets. These are lenders and stock exchanges. These are things Measurabl offers in market. What is the common denominator to all of them? From a product perspective, it is data. So AI is as good as the data against which it runs. Our Navigate solution, when you actually look at the architecture, it sits on something we called Quantum. Quantum is the world's largest repository of aggregated sustainability data on real estate. That takes a long time to say it, but it's super important to say it. We've been measuring the granular details of building sustainability for over 12 years. We've done this now across nearly 100 countries, over 18 billion square feet, over 3 trillion in real estate asset value. What I'm giving you is data, a continuous assessment of what makes 1 building better than the other. Per our earlier conversation on the grain comp. The ESGX product line is a investigation of that data that we've amassed, looking for trends and

performance characteristics and making them make sense. AI would just be a tool to help us do that. AI is not interesting in itself except as it is applied to the data, the problem statement. So I hope what I've shared is a bit about like how we think at Measurabl mostly about being the source of truth the the data set that allows you to understand again one building's performance relative to, so you can lease, lend, buy, sell, insure, refinance a real asset. And that is what our product delivery does is everywhere you look at you will see a a set of data being value added in a very particular way for building operations, for lean, for lending, for Stock Exchange, etcetera.  00:18:37 Matthew Maltzoff  It's quite interesting because you making the statement AI in itself not really interesting. It's really going to come down to the the data that supports it. I mean, right now there is a lot of say AI is really in the spotlight. And I think potentially that comes down to the fact that large language models are a medium that we can we can reflect on. So that would excite us. Do you think there is, you know, real opportunity that as machine learning gets more advanced, can you know potentially have gargantuan spreadsheet that some poor intern is suffering going through now a lot of insight can come out of it previously could not have come out or is or is this all just a lot of excited hype and there's some fundamentals that don’t need to be.    00:19:28 Matt Ellis  I think it's an incredibly powerful tool to do something. What are we trying to do? We're trying to alter the equation for value creation real estate. So if I can use AI to do that, yes, please all day. And if I can use some other tools to do that, yes, please all day as well there. The ways that we are using it today are in data acquisition, the sorting and collating of large data sets, public and private. The way that we can deliver a customer experience is a huge opportunity. I think we as a software company will be right along with everybody else and trying to contemplate how do we reimagine our product experience for our customers. Can we redeliver it as opposed to through a UI in other ways? Can we integrate it into other existing tools? Look at our Microsoft has been using AI, it's copilot, it sits in and augments the existing experience, which is some Excel spreadsheet or some Microsoft Word doc, Google for search and so on. So I think we're like, we're at this moment we're, we're, we're totally getting tools out. We're, we're tech enabling technology, if that makes sense and hopefully offering a better, more seamless, more pleasing experience. Let's be there. Now in terms of the ultimate transformation of our business or any other ones like real estate overall, no doubt it's out there. AI would play a role in it. I'm sure other technologies as well. And they're building in, in the built environment. There's also some really quote dumb technology, hardware technology that brings tremendous efficiencies and gains too. One of our customers is a big, big fan of heat pumps, as they should be. We don't go on at great length on podcasts about heat pumps, but in terms of transformative impact and efficiency gains, maybe we should, right? So I think it's important to keep a wide view of the technologies the built environment can actually consume to improve. Some of them aren't that sexy or novel, but they still have a lot of room to run and and huge impact to make.    00:21:49 Matthew Maltzoff  You know what it's It's funny you say that because Speaking of my brother and my brother is a first of all, he's a genius.    00:22:01 Matt Ellis  Is he listening right now?    00:22:03 Matthew Maltzoff  I don't think, I don't think if he is listening. Hey, Peter. But he's he's very much a product and engineer guy. And the and the thing about Peter is he loves very technical products. He loves them and and more so than the problem it solves. OK. And and even for us, you know, if someone might say a a conference business is unsexy, but all I thought was massive asset class, a requirement to digitalize and lots of great solutions. That's still, you know, so to me it was sexy because there's a lot you can get out of, you know, there's, there's just a lot of activity there. What, what, what, what, what do you make of the sort of this, this, these, you know, I think a lot, a lot of investment in, in VC is going towards AI. There's a, there's a lot of high valuation there. But what would be your advice, I guess, to entrepreneurs who might be listening to, you know, to really have a successful journey?    00:23:16 Matt Ellis  Well, in Propta, so I'm not going to speak to what Sam Altman and this crew should be doing. I think one of the things that attracts me and makes AI interesting as a revolution in technology is the social and ethical implications of this technology. Now let me grab that and bring that back to what we do here in sustainability and real assets. One: world's largest asset class, 2: world's largest GHG emitter. OK, I'm interested 3: an imperative, an ethical social imperative to improve the performance of that asset class for the betterment of all. Because we all consume and participate in the built environment. We go to school there, my wife went to hospital to have her children. We certainly want the cleanest and best in most healthful environment there. It doesn't stop. This is our world today and it will become increasingly built and urbanised. So don't we want to do that well? That is to me like a profound problem statement worth really looking at. But remember 1 the clock back. Matthew, when did you start your business? What year 2?    00:24:42 Matthew Maltzoff  And a half years ago.    00:24:43 Matt Ellis  OK. You started it at the exact peak of proptech investment, right 2022 1/2 or right about 2023, right there was exactly when the exuberance in proptech probably crescendoed. And similarly, although there was a bit of

a tail around sustainability, environmental solutioning that drifted for another year or so. Where we are talking today is the new reality that property businesses are very difficult to change. They certainly don't change very fast. The data is extremely hard to work with and get. The customer is not in the technology business and is not historically used to using leveraging technology. It's relatively new and all of these things are swelling on the not to mention the the political sea change around so-called ESG. The consequence of all this is if you're a venture capitalist in this space, I think you need to underwrite very differently and set very different expectations. And you might have, I think the proptech and climate tech rebranding of a lot of firm to be those things conveniently at the peak notice the unbranding, right, that you're a proptech or climate tech fund. I encourage you go out and talk to those investors and see what they say today, how they have repositioned. So I think there's a lot that has to change and then it might get back to entrepreneurs. If you want to leverage venture capital to develop your business, that is a way of doing it, a very specific path with expectations and consequences. And make sure that those investors are highly aligned with the problem statement and economics of your business, because if the market changes and they change with it, you could be in trouble.    00:26:45 Matthew Maltzoff  What is telling is a lot of there are a few players that as the as the wind blows a new direction, they'll quick, you know, they people do reposition quite quickly. I remember even just as we were starting, I think it was actually right after this crescendo you were speaking of. So we're going to come to the funny point where marketing budgets had all just been slashed in half, OK? You know, everybody was used to half a percent interest rates. And now all of a sudden it was it was flying up to five and it was this unspeakable thing. There's no new developments. The tech companies are all suffering this buying growth, VC strategy started to get, I guess, recalibrated for lack of a better word. And and then people were telling us, don't take the name, don't go with proptech because everyone just was saying that a year ago and people feel kind of burnt by it. A lot of these companies that were heavily funded maybe not delivering. And we at the time, we just thought this is super exciting because if nobody else wants to touch the word proptech, I think you guys not believe in what we're doing. We all have. You're all in these. If you don't like what you're doing, that's fine. But we're all doing it. We, we can try and dress it up however we want, but we're all doing it. We said we'll take. We want to be the only one saying it then.    00:28:11 Matt Ellis  Well, you don't want to be the only ones. I remember when I started pitching for our business and people said, well, who's the competition? And so there is no competition and, and and the clever venture capitalist response on that was then you have no business because you're not that smart. A market is validated by the participation of a multitude of entities. Maybe you don't want too many a completely saturated market, but you certainly want to have some evidence. Now we were first mover in this category at the time. We didn't use ESG as the term. We used green building and we were first mover in bringing technology, a specific problem of measurement. And so there's always going to be one or two or three, you know, kind of very early movers, first movers, blue ocean. But you don't want to be there too long. You know, we talked about playing in a band, playing by yourself. You know, that's maybe how you get it started. But then ultimately you want to recruit, you know, everyone to play the other instruments. So I think there's something to be learned there where you don't want to be lonely, you don't want to be alone, but you need to be willing to be alone for a little bit in order to create and catalyse a category sometimes. The next place that we're going though in sustainability is I think another lonely moment because a lot of people have invested in the historical structures, the large assessments of, of sustainability, the reporting exercises and the bureaucracy that's going around that, which reduced a lot of chief sustainability offers to chief compliance officers. And we did lose sight of what is material to the business value creation. And I think the, the, the next place to go is to admit that, to admit that we didn't build the best and most durable business case for sustainability. And with fact that's OK, good college try, but definitely no time to waste on building the Better Business case. And that's what we're out to do now. And I think we will be not alone on that. But it will be somewhat lonely to say these ways that we used to make money and these things that we delivered for value are worth reconsidering. We need to get back to the highly specific ways that we create a change by a penny or a dollar a square foot through sustainability and the language that we use as an industry and expectations we have a service provider should change accordingly. I think that's going to be a, a tough, you know, adjustment because all these things that we did kept us busy, all these different reports, these different scorecards and you know, so on it went. But the best in the business is sustainability are not there. They've moved on or stayed on very specific ways that create material value or lower risk, and I think the whole industry needs to shift back to that.    00:31:17 Matthew Maltzoff  It's interesting what you're saying because it seems like the, the industry is more varied in, let's say by like a real estate business by real estate business in strategy than ever. Because some are, are really, now, you know, they, they didn't really consider the, the sustainability path until recently. Now

they know they have to do it. But you know, as soon as they started to realise it was an issue, they had liquidity issues. So they couldn't go for it. Now that they have some CapEx to spend, they, you know, they know they can increase the value of their portfolio with different methods. It's interesting you're saying that some businesses are, did you, it seems maybe moving away from that. What what, what do you think the the overall direction is going forwards?    00:32:09 Matt Ellis  I think the whole thing is equation, where the equation has a set of coefficients and variables. I think what we established over the last 20 years was that you absolutely need to have a variable for sustainability, that that variable should be defined by things like energy intensity and carbon intensity and climate risk, because these directly relate to NLY, insurability and so forth. I think what we need to move now to is like the coefficient side to what magnitude, to what degree, and how do I directly change that coefficient? Can I move it up a lot? Well, how that problem and that question hasn't been answered well. We're getting closer with things like decarbonization and CapEx and scenario planning. I think that's a very fruitful path for us to go. I think we have a lot of room to run on access to capital and cost of borrowing. So green bonds are good example, this green loans good example that because we are in an elevated interest rate environment. So like this is the The thing is it, it's, it's time to move from the generalities. We understand we've succeeded in establishing a variable for sustainability in real estate. What we don't know really well is how to moderate that coefficient to make it more advantageous to us as we underwrite a given asset or buy and sell a portfolio or fund.    00:33:36 Matthew Maltzoff  Right. So, so, so I guess if I'm getting what you're saying, we understand the green premium is there, what levers do we really need to, to, to, to.    00:33:46 Matt Ellis  Look, we all have our skills and, and in real estate, you know, the value is started to be built the second you go and you raise capital again, debt or equity. And if my cost is lower than your cost, all things being equal, I win, I outperform. So we're just going to get really good and better and better and better at each step in value creation. I'm just pointing out that one of those steps now and frankly, every step you take, you need to consider this variable and you need to think about you as a actor in the real estate business. How can you maximise each of these or or reduce depending on your goals, these coefficients, they're in the equation. How do you alter them? And we're not good at that yet. It's not a uniform and and well produced, which is exciting. It means that those who are capable have a lever that they can throw and get out performance and on goes the game. Yeah, yeah.    00:34:49 Matthew Maltzoff  Yeah, yeah. And I I'd say it's, it's yes, a nuanced time, but it's probably the most exciting time the industry has ever had because there's nuance. All of a sudden it's no longer buy a building, get ranked. It's, it's now a case of the capitalising on, on these components that aren't delivering premiums and and figuring that out. Yeah, that's it is an exciting time for sure.    00:35:15 Matt Ellis  When I got into the real estate business in in O 8, my again, my mentor, among others, said this is the best time to get in. And you're like, that doesn't make any sense. This is horrible, right? This is really, really tough to make a living. Their point was if you survive this, you can thrive in good times, right? Anyone can make money in the good times and real estate business made money in the good times. Cost of capital is low. Tenancy and occupancy were high. The allocation of institutional investors towards real assets was increasing. These are not the case anymore. Now, you could have a negative view of that and say, well, this is very difficult and maybe we should take a pass or, you know, pull back on our sustainability efforts and investments and analytics. I would argue the contrary because of what I just explained. This is precisely when you lean in because other people will lean out and you can create competitive advantage.    00:36:14 Matthew Maltzoff  Very, very cool. Last, last question for you, Matt. It feels like we could talk for quite a while, but what do you want to do? What? What's the next thing you really want to do? What's What's with everything we've been saying? What's next for you? Measurabl.    00:36:29 Matt Ellis  Well, I I told you I want to go skiing in a second.    00:36:34 Matthew Maltzoff  I won’t hold you up too long then.    00:36:36 Matt Ellis    Yeah. In terms of the business, what I want to see is whether or not we can fulfil on our mission, and it's an audacious one, That mission of sustainable real estate will long outlast me. But what I hope it does in outlast is our company. This company should be part of an an essential component of that transformation. So I will be personally satisfied when we see Measurabl become the source of truth for real estate sustainability data globally. And if we can make and we're making very good strides in that, I don't know if we can make some additional strides. I think we're that's with that's within reach. What will happen from there is many, many other things have to follow from that source of truth. Once we can compare buildings on this, once we can establish the coefficient and we know how to impact that coefficient up or down, the opportunity to run from there will be someone else's obligation in my business, I'll be an old guy at that point in time. But we will have made, I think a major change, which is we'll establish the coefficient, we'll establish a source of truth, we'll include sustainability in every aspect of real estate transactions and then we will be a lot closer than we've ever been to sustainable real estate.    00:37:56 Matthew Maltzoff  That is awesome. This has been a really good session, I do want to say a big thank you to you Matt.    00:38:06 Matt Ellis  Likewise, Matt. Thank you.