As we close out spring in the city and summer approaches, New Yorkers will be largely reliant on window air conditioners to get through the hot, blistering days in their apartments.  75% of the buildings in NYC’s five boroughs were constructed before 1960 and central air systems in buildings became more prevalent in the latter portion of the 1960s. Even in cases where a building is refurbished, many developers opt to avoid the immense cost of retrofitting central systems due to immense costs and regulations.  While window air conditioners haven’t changed much in appearance, Windmill modernizes the window air-conditioner with its state-of-the-art, wifi-connected units.  Retailing for ~$395, the company offers a powerful, efficient unit that cools rooms up to 350sq feet; the sleek casing looks more like an Apple product than a typical box that hasn’t really evolved in decades.  Windmill’s first model is available direct-to-consumer through its site and online through Home Depot; the company will be sold in PC Richard showrooms and its website soon.

AlleyWatch caught up with Founder and CEO Mike Mayer to learn more about the inspiration of the business, the future expansion plans, and latest round of funding.

Who were your investors and how much did you raise?

We raised $3M in seed funding led by Pentland Ventures, with participation from Untitled, Next Play Ventures (LinkedIn Chairman Jeff Weiner’s fund), Graph Ventures, as well as a few other funds. We previously raised capital from family, friends, and various angel investors, bringing the total raised to date to approximately $5M.

We plan to use the proceeds to expand our infrastructure and team, as well as continue to invest in air care innovation as part of the modern, connected home. More specifically, we’ll scale production and operations to meet a demand increase of 1,000%+ YoY, including orders from new retail partners like Home Depot (live online) and PC Richard & Son (coming later this spring in stores and online). In addition, we will use some of the funds to continue investing in R&D across product, data, and technology.

Tell us about the product or service that Windmill offers.

Windmill is a new company reimagining air conditioning with beautiful design, state-of-the-art technology, and an incredible customer experience. Our first product is an easy-to-install, eco-friendly, and quiet window air conditioning unit that blends right into your home decor and delivers cooler, cleaner, and healthier air.

We built a more powerful and efficient machine that prioritizes comfort, convenience, and style – without breaking the bank. To bring a breath of fresh air to the industry and solve its pain points, we tapped NY-based experts with 60 years of AC experience – marrying more than half a century of learnings with a modern approach to consumer convenience and tech-forward innovation.

What inspired the start of Windmill?

Windmill was born out of frustrations that accumulated over decades of city living – countless moves schlepping up and down NYC walkups, thousands of dollars spent on lackluster AC units, and sweltering summer heat that sleeping on an icepack wouldn’t resolve. I’ve lived in the city for over 7 years and finally had enough with the biggest pain points of shopping for, installing, and using ACs. To bring the vision to life, I teamed up with long-time friend Ryan Figlia, whose family business has manufactured, installed, and serviced AC units in NYC for more than 60 years. Windmill marries a modern, consumer-focused approach with more than half a century of industry experience to offer best-in-class products that cater to today’s discerning customer.

How is Windmill different?

Both our product and customer experience are completely different from what’s on the market today – neither of which were easy to accomplish in an antiquated industry that has unique manufacturing restrictions and nuances (hence the lack of innovation until now). A few key differentiators include:

• Modern aesthetic – The AC’s elegant exterior blends seamlessly into your home decor, with an LED display that fades after 60 seconds to eliminate distracting blue light.
• Dual-filtration and double-insulation for cleaner, healthier air – Every Windmill unit comes with a washable, reusable antimicrobial-protected mesh filter that helps blocks dust and larger air particles, as well as a second replaceable filter comprised of activated carbon that helps protect against odors, fumes, volatile organic compounds (VOCs), smoke, and more. We invented snap-in, weatherproof foam paneling that not only looks sleek, but double insulates the adjustable accordion side panels to keep out noise, bugs, and even cold air drafts throughout the off-season.
• Superior airflow + quiet design – Instead of blowing cold air at your waist (or into your face!), Windmill’s redirected air stream flows upwards and outwards at the perfect angle – maximizing cold air distribution throughout your space. At 8,300 BTUs, Windmill’s energy-efficient core is ideal for cooling rooms up to 350 square feet.
• Easy Installation + Service – The Windmill window AC unit is easy to install DIY, with a simple-to-use install kit that’s pre-assembled and ready to go out of the box. For folks who need it, we partner nationwide with TaskRabbit, which includes various options including installation plus responsible removal and recycling of old AC units. TaskRabbit rates average $40/hour with a 1-hour minimum (prices will vary based on tasker and location).
• Smartphone compatibility – Windmill connects via WiFi to a nicely designed iOS and Android app and can be used with smart home products (like Alexa or Google Home). From the app, customers can set on/off schedules, control temperature, and change the fan speed or cooling modes. Of course, there’s also a power switch that works from anywhere, not only to give you peace of mind that your AC is off when you’re not there (eco-smart!), but also help cool your home before you arrive on those scorching hot days.
• Energy conscious design and experience – Windmill was thoughtfully designed to meet the highest standards of energy efficiency, which is better for the planet and your wallet. Windmill currently uses a best-in-class refrigerant in its units called R32, an eco-responsible choice that has less global warming potential than what’s commonly used in the market today. To mitigate refrigerant pollution and reduce excess waste, Windmill’s website offers customers a recycling directory for safe disposal of old AC units based on their location, and also offers safe disposal as an option through its service partner, TaskRabbit. As impactfully, Windmill also helps offset the carbon footprint/emissions of each AC unit it sells through verified forest restoration projects using Pachama.

What market does Windmill target and how big is it?

With our first product, we are targeting the $2B+ US window AC market. Although window ACs are bought and utilized throughout the entire country, the industry is uniquely concentrated in NYC (Windmill’s hometown) and the broader Northeast, which represents the majority of the addressable market.

We intend to expand our opportunity set with additional tech-enabled products and solutions down the line.

What’s your business model?

We want you to be able to get a Windmill AC no matter how you shop. We sell DTC online and retail with Home Depot (online) and PC Richard and Sons (coming soon online and in-stores).

How has COVID-19 impacted the business?

Overall, Covid-19 was (and continues to be) both a challenge and a tailwind for our business.

Our initial launch over the spring and summer of 2020 materialized right at the height of the pandemic, so naturally, that introduced a number of variables to the equation. We were forced to deal with everything from manufacturing shutdowns to supply chain delays to strategizing contactless installations. While these setbacks required long hours of problem-solving, they have definitely made us stronger as a result. Coming out of last year and into our second season, we’ve become not only more knowledgeable about every aspect of our business, but also much more focused on better managing the supply chain, costs, and most importantly, the overarching customer experience.

On the other end of the spectrum, Covid-19 has actually helped the business by elevating and bringing to the forefront the very issues that Windmill aims to solve. The pandemic sparked a consumer obsession with prioritizing our health and the health of our home environments. As a solution aimed at improving comfort and air care in the modern home, Windmill is doing just that.

What was the funding process like?

From start to finish, it was a six-month journey involving hundreds of conversations, numerous diligence requests, and a lot of Zoom calls. While the process was arduous, it was relatively efficient and we couldn’t be happier with the investor set that we now get to call our partners. They’re all amazing, down-to-earth, sharp individuals who are completely aligned with our overall vision. Their vote of confidence in the business and our team, plus their counsel will help us grow to heights beyond those we’re able to set ourselves.

What are the biggest challenges that you faced while raising capital?

As mentioned, pitching a business, not to mention launching a business, during a pandemic was extremely difficult. A lot of funds paused investments (or at the very least, reserved more capital for existing portfolio companies) until they were able to understand what the ‘new normal’ of the world would look like. These challenges made us sharper and more focused in investor conversations – we really had to articulate our model and vision more crisply, why we are the team to accomplish it, and why now is the right time to do this.

What factors about your business led your investors to write the check?

Above all else, we believe investors saw the opportunity for us to build a healthy, sustainable, and valuable business in an otherwise antiquated HVAC category. What’s unique to the broader air care market (and ACs specifically) is that they blend smart home technology, health, data, and experience into one consumer good – providing us with varied opportunities to drive innovation across all buckets.

What are the milestones you plan to achieve in the next six months?

We are relaunching today and will be fulfilling orders from a waitlist of more than 10k customers. Goal #1, #2, #3 over the next six months is to deliver on our promise for high-quality products and amazing customer experiences for that list and new customers throughout the summer season. We intend to provide the most elegant, convenient, eco-friendly, and healthy solution. In parallel to that, we intend to continue investing in R&D across product, data, and technology to constantly be thinking towards the future of Windmill. 

What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?

In today’s competitive environment, providing an enhanced customer (or end-user) experience is just as important as building an innovative product. When we were developing our CX program and installation offerings, we didn’t just draw upon one-off experiences or institutional knowledge to deepen our understanding of the customer’s pain points – we actually went and installed a bunch of units ourselves. Getting in the trenches and actually talking to all types of customers provides invaluable intel when building a brand (and not just a product). These experiences ultimately helped Windmill evolve from a concept to a product to more of a holistic brand. That end-vision (of the brand, not the product) is what you’ll end up pitching to investors one day!

In today’s competitive environment, providing an enhanced customer (or end-user) experience is just as important as building an innovative product. When we were developing our CX program and installation offerings, we didn’t just draw upon one-off experiences or institutional knowledge to deepen our understanding of the customer’s pain points – we actually went and installed a bunch of units ourselves. Getting in the trenches and actually talking to all types of customers provides invaluable intel when building a brand (and not just a product). These experiences ultimately helped Windmill evolve from a concept to a product to more of a holistic brand. That end-vision (of the brand, not the product) is what you’ll end up pitching to investors one day!

Where do you see the company going now over the near term?

Overall, Windmill’s mission is to reimage air care for the modern home. While simple to say, there’s a lot of work that’ll need to happen to make that statement a reality, and it will take many forms. The modern window AC is just the start. We’re continuously investing time, energy, and capital to build out other tech-enabled air products and solutions as part of the connected home… all within an intentional, eco-conscious mindset.

What’s your favorite outdoor dining restaurant in NYC

My heart answered this question before my brain. On a nice spring or summer weekend morning or afternoon, you’ll find me at Grey Dog. It’s the perfect combination of people-watching, coziness, community vibes, and fun.

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Source: https://www.alleywatch.com/2021/05/windmill-window-air-conditioner-brand-mike-mayer/