Meet The Inventors: Cyrus Claffey of ButterflyMX On How To Go From Idea To Launch
Don’t underestimate the value of customer service in winning and keeping customers, even when problems arise. If you own the problems and offer solid resolutions, good customers — the ones you really want — will see that and stick around.
As a part of our series called “Meet The Inventors”, I had the pleasure of interviewing Cyrus Claffey.
Cyrus Claffey is the founder of ButterflyMX, a proptech company focused on smartphone-enabled property access. Claffey has been developing and implementing real estate technologies for more than 15 years. He currently works with some of the largest names in multifamily and CRE.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a bit about your “childhood backstory”?
I was the kid who was always asking too many questions. My parents both worked in academia at the University of Chicago, which I think sparked my innate curiosity. That insatiable curiosity meant I was always learning new things, which translated to lots of show-and-tell performances in third grade.
My curiosity about the world and how to create things of interest to other people also gave me my entrepreneurial streak. In fact, in sixth grade, my neighbor had some gambling equipment, which I bought and used to open a casino on the weekends. It only lasted two weeks before our parents shut it down, but I definitely think that was the precursor to starting my own company!
Beyond just being curious and wanting to create things, I was also the techie in my family — I very well could have become a programmer. I always enjoyed programming because I loved the challenge of maintaining several threads simultaneously in my brain and bringing them together. My parents supported that in me too — they actually got me one of the first Apple Macintosh computers when I was about 13. I was very inspired by Apple and loved their consumer-centric products that really helped solve problems and make life easier.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
One saying that’s always stuck with me is “Fortune favors the brave.” I think it encapsulates a lot as an entrepreneur and a human being — that you’ll find fulfillment by being brave enough to pursue what you want.
I’m also a bit of a history buff and have always been inspired by the boldness and bravery of ancient societies and civilizations like the Roman Empire.
Ok super. Let’s now shift to the main part of our discussion. What was the catalyst that inspired you to invent your product? Can you share the story of your “ah ha” moment with us?
That “ah-ha” moment came to me when I was living in an apartment in Brooklyn years ago. Everything about the building was modern except the intercom system, which created some major inconveniences. Since I worked in Manhattan, I wasn’t home during the day and I was always missing packages, which meant I’d have to ride my bike to the post office nearly every weekend to pick them up. I figured there had to be a better solution, some way that would let me buzz in delivery carriers when I wasn’t home.
Unfortunately, the intercom device in my apartment unit was wired to the entire building intercom system, so to replace my in-unit device would mean replacing the entire system. The wheels started turning, and I started wondering how I could make a better system.
It was about 2013, so my first thought was to use my smartphone. I knew I could stream live video to my phone, so that inspired the concept of streaming video from an intercom to my phone. The other idea I had was to use a touchscreen on the front of the building because it would make the system more intuitive. So I’d say that streaming video and touchscreen technology were the two “north stars” of my idea for ButterflyMX. I had already founded a proptech company focused on improving infrastructure in old buildings, so this idea fell in line with my experience there.
There is no shortage of good ideas out there. Many people have good ideas all the time. But people seem to struggle in taking a good idea and translating it into an actual business. How did you overcome this challenge?
I think I overcame this challenge in a few ways:
Perseverance. I never sought out shortcuts — I took an incremental approach. By breaking things into bite-sized chunks, I was able to stay productive without losing sight of my end goal.
Good people. By surrounding myself with the right people, I was able to build a strong team to execute my idea. I’ve always believed in working with people who know more than me to fill in the gaps where I’m lacking. As ButterflyMX has grown to more than 200 employees, our people have become more important than ever.
Good timing. Honestly, I think timing has a lot to do with any invention’s success — a lot depends on where you are on the technology adoption curve and what tailwind is behind you to push you forward.
Often when people think of a new idea, they dismiss it saying someone else must have thought of it before. How would you recommend that someone go about researching whether or not their idea has already been created?
You have to be disciplined and just do the research. Get online, talk to people in your network, and suss out whether people are interested in it. Rely on the people around you for additional insight, whether that’s VCs or just your colleagues or family.
In my opinion, if you’re hyperfocused on your invention, then you’ll intuitively have the insight (or at least the motivation) to research whether it has been done before. It all comes down to your mindset. If you’re going to be an inventor, you can’t doubt yourself or consistently dismiss your own ideas. Be excited about your ideas and embrace them.
Did you have a role model or a person who inspired you to persevere despite the hardships involved in taking the risk of selling a new product?
One person who has always inspired me is Charlie Ergen, the founder of Dish Network. He’s a scrappy maverick who takes the approach of only investing money where it counts. To Charlie, there’s no need to overspend on luxuries — instead, he found success by putting his money into his people and the product.
It’s also worth noting that I grew up playing a lot of war and military games, so I’m inspired by the Spartans, the Roman Empire, basically any society or civilization that persevered against the odds. I always wanted to know what differentiated the successful empires from the ones that fell. It’s important in business that you find someone more successful than you and you learn as much as you can from them, both their successes and their failures.
For the benefit of our readers, can you share the story, and outline the steps that you went through, from when you thought of the idea, until it finally landed on the store shelves? In particular, we’d love to hear about how to file a patent, how to source a good manufacturer, and how to find a retailer to distribute it.
Here’s a step-by-step outline that summarizes my process:
First, I identified the need for the product. My own experience living in that Brooklyn apartment with an outdated intercom illustrated the need, and I knew millions of other renters were facing the same problem.
Second, I created a minimum viable product by combining those two “north stars” — the touchscreen device and a mobile app. It didn’t offer all the features that ButterflyMX would come to offer, but I knew my core concept was a strong start.
By this point, I had a few people working with me. So next, we designed and built version 1 of the smart video intercom. We wanted to build version 1 as easily as possible — that is, we sourced components off the shelves and didn’t involve a third-party manufacturer. My goal was to assess costs and functionality before investing in a manufacturer.
Once we had a solid first iteration of the intercom, we had to find customers. Traditionally, the access control industry uses distribution channels, but because we were just starting out and hadn’t yet made a name for ourselves, we had to sell direct to buildings. This required different sales channels and a unique process, but it led to success.
Once we had a working minimum viable product and some customers, we then raised capital and used it to find a manufacturer that could scale along with our needs.
Finding a manufacturer isn’t easy because of long lead times (even before current supply chain shortages) and the fact that most start-ups must use a third-party contract manufacturer. On top of that, you also need to make upfront payments to prototype your product when cash is scarce.
That’s why I recommend being methodical in your approach because it’s a bit of a trial-and-error process. The key is to find a manufacturing partner and not a vendor. At ButterflyMX, we actually went through three different vendors before finding a partner who invested in their platform alongside us to help ensure that we could grow.
The good news is that the ecosystem for third-party contract manufacturers and manufacturing consultants is well developed. The knowledge you get over successive design and production cycles becomes more and more valuable.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
This is a great story — it happened after we installed the first-ever ButterflyMX intercom in West Orange, New Jersey. It was a rainy day, and after completing the job and leaving the property, the installer called me with a problem: Apparently, the intercom was randomly calling everyone in the system. All the residents were getting several random calls from nobody.
Turns out, the rain falling on the intercom’s touchscreen was essentially “pressing” buttons and placing calls to people in the intercom directory over and over, as if a person was tapping on the touchscreen.
I learned a lot from this saga:
First, that nothing ever works in the real world as well as it does in your testing environment. So you have to be prepared to tweak and improve your product a lot.
Second, your product’s manufacturer can make or break you. Choose the right one!
Finally, and most importantly, I learned that all you can ever do is solve the problem and move on. You’re going to hit a lot of bumps in the road, but the faster you can fix the wheels and keep driving, the better off you’ll be.
The early stages must have been challenging. Are you able to identify a “tipping point” after making your invention, when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?
There were a couple of distinct milestones that allowed me to finally exhale after holding my breath from the day I decided to pursue ButterflyMX full-time.
The first was making the technology work. When you have a disruptive idea, that’s great. But then you have to ask yourself: “Can I make it work?” You’re holding your breath as you go through all the stages of developing an entire platform or tech stack. After all, you’re doing something no one’s ever done. It’s a sweet, gratifying feeling when things work out, but then you’re immediately onto the next question: “Can you sell it to any customers?”
The next milestone was when we reached 300 building installations by the end of our second year. At that point, I felt like we were here to stay. Depending on market characteristics, adoption can be fast or slow — and real estate is notoriously slow-moving. On top of that, I’m wired such that I won’t rest easy with just proof of concept — I needed much more than just 10 or even 50 buildings to feel confident. So, being installed in 300 buildings after two years was an incredible milestone.
At that time (about 2016), we had a diverse customer base with large enterprise customers and — just as importantly — the incumbent brands in the space hadn’t responded. That was a sweet feeling again, and it gave me further reassurance that we were established. Now, a little more than 5 years later, we’re in almost 10,000 buildings.
All that said, I think my greatest takeaway is to keep your foot on the gas and don’t get comfortable with just the bare minimum. Keep pushing and seek more than just proof of concept before you let up.
What are your “5 Things I Wish Someone Told Me Before I Invented My Product” and why? (Please share a story or example for each.)
I’m providing 7 things, because I learned a lot throughout this process!
Things take longer and cost more than you think, so be prepared for that.
Own your mistakes. Don’t push them off on others, because ultimately this is your invention. Instead, use those missteps as evidence of what not to do the next time around.
Don’t have an ego (this is especially important in the early days when recruiting).
Build a team of experienced doers who take ownership.
There will always be uncertainty — measure twice, then make a decision and move on.
Investors have customers too, just like the company does. Take advantage of using your board (once you have one) as an effective resource for knowledge about different lifecycles of the company and handling the invariable challenges that come up — and hopefully for getting some customers as well!
Don’t underestimate the value of customer service in winning and keeping customers, even when problems arise. If you own the problems and offer solid resolutions, good customers — the ones you really want — will see that and stick around.
Let’s imagine that a reader reading this interview has an idea for a product that they would like to invent. What are the first few steps that you would recommend that they take?
The first step is to pressure test your idea. If the feedback you get from trusted friends and advisers is “that makes sense,” then you’re on to something.
Second, consider the size of the market and the value your invention will offer users. Are you developing a new tool for people who crochet, or a new way to listen to music? Everyone listens to music, so your market is inherently large. That’s not to say that an innovation in crochet can’t be a great business and a worthwhile, fulfilling vocation — it’s just that the size of the opportunity will define the value of the idea and how excited investors will be.
Finally, the third thing I’d say is love what you do. Your passion will see you through the inevitable ups and down. It’ll give you the strength to keep going when things seem the darkest. And quite often, your determination will be the critical factor to get from startup to business while competitors fall by the wayside.
There are many invention development consultants. Would you recommend that a person with a new idea hire such a consultant, or should they try to strike out on their own?
This is a tricky one as I’ve seen so many people position themselves as business plan writers and invention consultants. Personally, I’ve never used one. I do think you have to stay laser-focused on how you invest your precious resources of time and money, especially at the beginning.
I suppose if you don’t have any experience, then it can be useful to work with an invention consultant. But do so sparingly. There’s plenty of information on the web to help you determine which steps you need to take or learn how to fill in a business plan. So do your homework, then have your consultant answer questions that apply to your circumstances.
Case in point: You learn more in school when you at least try to do your homework! So, use consultants like a spice, not the gravy in your cooking.
That said, as you mature or begin to go to market, you can use consultants with specific expertise that you just don’t have on billing, sales structure, or other topics.
What are your thoughts about bootstrapping vs looking for venture capital? What is the best way to decide if you should do either one?
This all depends on the type of idea you have and the stage of growth you’re in. In fact, investors often want to see you have successfully bootstrapped your company because it’s a proxy for how smart and hardworking you are (and how good your idea is).
If you’re doing something that requires a ton of investment in basic research — like biomedical, an electric car company, or a winner-takes-all, B2C product — you’ll need a tremendous amount of capital. And in most cases, that means raising money from outside investors. If you can bootstrap the formation of the company and proof of concept, it means less dilution to you as the founder and often can mean you adopt a lean-and-mean operating philosophy.
In this scenario, you’re efficient in the use of capital and more resourceful and innovative out of necessity, which is a good thing. If you’re gaining traction in the market, there will come a time when you outgrow the resources you have on your balance sheet to fund your growth as aggressively as you’d like. Then, it makes sense to raise outside capital to take advantage of the opportunity you’ve created.
The good news is that because you’re looking for growth capital as opposed to start-up funding, you’ll be able to strike better terms because your investor is more your capital partner and cheerleader. As I said above, investors have customers, too. They are looking for good companies to partner with where they can invest money and make a return on the capital their investors entrusted to them.
Ok. We are nearly done. Here are our final questions. How have you used your success to make the world a better place?
I’m really proud of how ButterflyMX has made people’s lives easier and safer.
Whether at work or at home, everyone deserves to feel safe, and our products significantly enhance building security. With an old building entry system, you hear someone buzz your apartment and you have no idea who’s there or who you’re letting in. But ButterflyMX empowers you to actually see who’s requesting access before you open the door or gate for them.
There’s also a lot to be said about how our products add convenience and get you into and throughout a building faster and easier than ever. It’s 2022 — no one wants to carry keys or worry about losing their fobs. We do seemingly everything from a smartphone now, so why not navigate buildings with them, too? With ButterflyMX, you’re not digging for keys in your bag or getting locked out late at night. There’s always a way to get you inside safely and seamlessly.
And to add to that, life isn’t just easier for residents and end-users — building staff and property managers save so much time and money. Amid labor shortages and periods of high employee turnover, anything that can improve property staff’s experience and reduce their burnout is a huge asset. ButterflyMX eliminates the headaches of managing building access, handling package deliveries, and securing the building.
You are an inspiration to a great many people. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
I’d say the movement or understanding I’d like to inspire is twofold.
The first is the importance of education in order to advance personally or as a society. As a group, humans are initially focused on progress — and education will maximize that. We also need to realize that this will vary according to ability, so we need to adapt education to people’s abilities so they can all contribute and benefit from it.
Second, during Covid lockdowns, I had a chance to watch Carl Sagan’s Cosmos program on PBS from the late 1970s. What struck me is that there is a scientific underpinning to what all religions teach, which is that we’re more alike than we are different because we spring from the same source. So, while we may come from different social, economic, or religious backgrounds, it’s a collaborative effort. That said, we also all have different personalities, so it’s about figuring out how to make ability and personality mesh. You learn this when starting a company — the best ones figure out how the puzzle pieces fit together.
We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US, with whom you would love to have a private breakfast or lunch, and why? He or she might just see this if we tag them.
Let me preface my answer to this question with some context: I’m a big sci-fi fan. I’ve been reading and watching science fiction movies since I was a kid. In the movies, you always see the buildings or spaceships respond to the humans in an almost instinctive or intuitive manner. Think of the way the doors on the Starship Enterprise respond to Captain Kirk when he moves toward them.
I ask a lot of people whether they think that in 10–15 years the FedEx or DoorDash delivery person will use an intercom to call someone when they get to the building. Invariably, people answer no and say these delivery and service professionals will get into a building automatically. This will happen because the systems controlling building software and any visitor coming to a building will speak to each other. This already happens in the world today (think credit card payments) and now real estate is adopting it — but these are the early days.
ButterflyMX is laying the groundwork, or the digital foundation stone if you will, for this automated future one building at a time. We have the opportunity to be part of the bedrock of this sci-fi future. And it’s ultimately much more than just letting people into the building — it’s about facilitating any sort of transaction where there’s a nexus between the digital world of software and the physical world inside a building.
So, all that said, the person I’d like to talk to most understands this vision and could contribute meaningfully in some way to achieve it. Raj Subramaniam, the CEO of FedEx, let’s talk!
Thank you for these fantastic insights. We greatly appreciate the time you spent on this.