 I'm Rusty Kamori, and this is Beyond the Lines. I was the head coach of the Punahou Boys Varsity Tennis Team for 22 years. And we're fortunate to win 22 consecutive state championships. My book Beyond the Lines is about leadership, striving for a superior culture of excellence, and finding greatness, which is what this show is all about. And we are broadcasting live from the beautiful Think Tech Hawaii TV studio in the Pioneer Plaza in downtown Honolulu. My special guest today is a fantastic man with great character. He's the CEO of Energy Optimization Services. And his company is a huge positive game changer for many businesses and schools here in Hawaii and across the United States. He is Kale Flag. And today, we are going beyond energy savings. How's it, man? Good to see you. Thanks for having me. Well, welcome to Beyond the Lines. Pretty excited. I'm the big fan of your show. Well, thank you. You're a local boy. You went to Eolani School. How was your experience at Eolani? Eolani was great. It was challenging. It was transforming. And I made a lot of lifetime friends there. And it just created the character and the work ethic that I've used for my whole life. So it was the best thing that ever happened to me. And you did wrestling. Yeah. I wrestled from seventh grade through senior year. It was one of the things that helped me get into college was my wrestling success at Eolani. I also did a little water polo and a little pole vaulting. But mostly, I was a wrestler who did water polo and pole vaulting. I was just, you know, coach Schroer's, who ended up being the athletic director there. He had a phenomenal program and it was fun to be part of it. And then what college did you end up going to, Kale? I got accepted and matriculated from Yale University. I got a degree in economics and also a major in political science as well. So I like to ask this question to a lot of my guests. What was your first job that you ever had? My first job was a paper route. I was in sixth grade. I was attending Cocoa Head Elementary at the time. And so every morning it was the AM route. So it was 450 and I had probably about 160 customers. And so I'd fold all the papers, put it in the bag, put it on my bicycle, and then go down those super scary dark alleys on Portlock Road from the main street down to the ocean of dogs barking. And then we had to go collect money. It was good fun. That's tough work. It's not easy, huh? Yeah, and your hands are in black. But it was good money. I think we made like $100, $120 a week or something like that, so you're in sixth grade, you know? That's a big deal. Kali, you have a beautiful family. And your wife is a local girl, too. Yeah, Edwina is the oldest of 11 children. Wow. And she went to Kamehameha, so she's a local girl. And so we have four children together. We're very blessed. And our four children have 42 first cousins here in the state of Hawaii. That's huge. That's awesome. There's nothing better than Ohana. Well, and then it's great that you move back to Hawaii now. And I hear that your dog is on its way back. And you love your dog. Oh, yeah, he's my best buddy. My dog's name is Kohala, and he's a yellow lab. And so I get to go on, where I live up in Tahoe. So Edwin and I, we raised our kids on the mainland. And our youngest one, Kalama, he graduated from high school just this past year. He's on the East Coast now. So we've been empty nesters for about two and a half months. So we moved back to Hawaii. We just got a place out in Kulio. And so my dog is actually arriving the day after tomorrow, which I'm pretty excited about. Because I take daily walks with him in the mainland. We do about a three and a half mile loop every day in the mountains in Lake Tahoe. And so it just shows the permanence that I get to bring him over. It's pretty exciting. I'm looking forward to meeting him. No fun. Kali, what is your professional background? The best way to describe it is I'm an entrepreneur. Since the day I graduated, I washed dishes in college. That was the last time I got a W2 from a company I didn't own. So I've had some of my own companies give me W2s. But I've never worked for a company that I didn't at least partially own. And I've never owned 100% of the company. So I'm a big team guy. I've always had partners. But I've been in sales and real estate development and COO services for the last 30 years now. So energy optimization services, OK? What does EOS do? Really simply, we use technology to reduce the energy spend of our customer. As simple as that. One of the beautiful things about our business model is we can bring 100% of the capital to the table. So using a simple analogy, our customers can finance themselves. They don't need to do it through us. But if they do it through us, for $30 of monthly technology, we can give them $100 of savings every single time. We don't propose strategies. We don't propose upgrades unless we can, for this much money, $30 a month, give them $100 of savings. And our average project size is between $200 and $250,000. And our average savings is seven figures. Sometimes we hit eight figures. So we can save companies millions of dollars and it's cash flow positive, meaning that they take their current expense and we can lower it this much. And even if we come up with all the money for the upgrade, it's this much more to pay for it so they've actually saved this much money. That's our business model. We use technology to save customers money on their energy spend. Do you manufacture your own product? We manufacture our own LED lights. So we're not a lighting company only, but we start with lighting because it's the low hanging fruit. Our technology can save between 70% to 80% of what our commercial customers are spending on their energy, or two, three times more light. So the aesthetics, the facility looks so much better and it pops. The thing about LED light is it's the same wavelength as the sun, so it makes the fruit pop, it makes the colors pop, it makes everything look better, but we're using 80% less energy for more light, more controllable light. So we're an OEM, we're an original equipment manufacturer. We are component driven manufacturer. We buy components from Nietzsche, we buy components from Meanwhile, we buy components from Philips, for example. We buy components from different manufacturers, we put them together and we bring them directly to the customer. I love that, I love that. It's the beauty of the model. We didn't invent the model. I like to say that our manufacturing models like Apple Computer, they are component driven as well. They buy components from different people and put it together, that's our model. Our delivery model is a lot like Uber or Lyft or Airbnb, meaning we go directly to the customer. So the result for our customers is we're usually 30, 40% cheaper than our competitors. We're also one, two, sometimes three generations of technology ahead of our competitors. And the reason for that is because our competitors, the way that they do is they come in to the facility, they do an analysis and assessment and then they go, okay, then they go to the local electrical supply company, they go, this is what we're gonna put in there. They put their labor on it, they mark up the product by maybe a 20% and that's their bid. But when we come to our customer, we don't have that national distributor, that regional distributor, that local distributor. We don't have all those markups. So we're selling to our customer for less money than that electrical contractor is buying from the electrical supply house. We actually supply to some electrical supply houses. So we are delivering for less expense but it's better technology. It's more advanced technology. Again, sometimes one, two, three generations ahead and we've seen it be up to two years of technology ahead. And it's not because we're the smartest people in the room, it's because of our model. So they've got to sell all their 17s in the warehouse, all their 18s, all their 19s. So when new technology comes, it could be a year, year and a half before their customers can have it. For us, if new technology, when Meanwhile goes from version seven to version eight, when Nietzsche goes from version six to version seven, that can be in our next order, our next production run and our customer gets it right away. Wow. No, I've sat in some meetings with you, with some CEOs and GMs. And it's amazing. I mean, it's a win, win, win, win situation. There's no catch whatsoever. Yeah, this model was developed by my business partner, this OEM model. His name is Ted Dutcher. He was actually a two time US Olympian and he also played professional baseball. Then he had like a 27 year career on Wall Street as a national sales manager for some pension fund. And they call it, in that business, they call it AUM assets under management. He did, I think, something like seven billion dollars in sales and asset under management. And what he found out on Wall Street is sometimes the biggest ones, the biggest companies didn't perform best. It was the ones with the most versatility on the bottom that could move to get better return. When he looked at the LED model, he realized that our opportunity was they had this existing distribution system that everybody's used in America and worldwide for a hundred years, all the same names, right? So the GEs, the Philips, the Sylvanias. We make our stuff with the same components but we use the best components, not only our component. And so he developed that go to market strategy and the result has been phenomenal. We've gotten, I mean, Oracle is a customer of ours, Pepsi is a customer of ours. We've had Alliance Data, which is card services. We've had United Technologies. Huge companies. Yeah, big companies, and what they see is it boils down to the technology and it boils down to our ability to deliver it directly to better or less. Khali, I mean, you guys are so reputable with so many of these huge companies, like you mentioned. Locally, you've helped the Colani condo and some others. I wanna show a video of what your company does and how they helped the Colani condo. Cool. Khali, that's an amazing video. I mean, you're saving them $121,000 a year and you just did their parking structure and the stairwell. Exactly. And then we're talking to them now about doing all of the floors in their building. I think there's something like 45 floors or something like that and the rest of their common area. What's amazing about this technology is that, yeah, we're saving $121,000 but you can tell by the aesthetics, there's more light, there's better light. It fills the space better. It was actually better aesthetics for 70, 80% less energy output and that's what's so cool about it. You're reducing the carbon footprint in a huge way, right? Yeah, so we like to say, as you mentioned earlier, there's four wins here. The first win is for the environment. The reason that we're saving $121,000 a year is because instead of using this much energy, they're using this much energy. It just benefits the planet. The second thing is it's positive cash flow for the consumer, so they're spending less money. So the environment wins, the customer wins and we hire people to do these construction projects, right? So now we have people that are working, that are getting jobs. Local. Local, always local. And then in addition, we make a profit. So the environment wins, the customer wins, laborers are getting more work and we're profitable as well. We have people working for our company. So it's a win, win, win, win and you feel really good about that kind of stuff that helps the environment at the same time. And Kale, I know that you have a passion for helping people and you've done a ton of schools as well and I learned that, you know, your lighting, I mean, there's different levels of LED lighting. I mean, it's just not, oh, I have LED lighting. There's different levels and you have superior LED lighting and that lighting actually reduces hyperactivity in students and increases productivity and learning with students and teachers. Yes, that's another really cool thing about what we're doing. So it starts with economics. It starts with, hey, we can cut 70 to 80% of what you're spending on lighting. That's where it starts. But there's all these cool additional benefits that are just amazing. We've done a bunch of school districts in Colorado and California and what happens is there's something called human-centric lighting. Human-centric lighting, basically, if you go back to the caveman days, people would wake up in the morning and it's kind of a yellow light when the sun rise and then it gets to high noon and then it kind of mellows out at the end of the day. And what happens is your body reacts to that based upon the color and based upon the mood. Well, today, with all of our artificial lighting, people up in Alaska, they're getting no light. They need these lamps to keep them healthy, right, to get their melatonin going. So our lights with the controls that we have for them are designed to mirror that human-centric lighting. One of the things, let me get specific, one of the things for our schools is we have something called CCT technology, which is color control temperature and also step down, up and down, step down dimming. So we've been able to give our teachers in each one of their classes an app and they can change the color and the intensity of the light based upon their students. So for example, first thing in the morning and everybody's kind of tired, they might not want to shock them awake, but an hour in, they might want to make it more intense so the kids wake up or right around exam time, they might want to make it more intense. But maybe right after recess, when everybody's hyped out, they can bring it back down. So we've had a lot of teachers that love the ability on their app to control the color from real yellow to real white and the intensity from real intense to less intense for their students. And there's been medical white papers that talk about this type of light has a tremendous impact, not just in schools, but in offices as well, for the well-being of their students. Again, this is a killer cool side benefit. We start with save so much money, but the fact that, for example, kids on the spectrum and even all of us, every single person on the planet, when you have lights can really impact your physiology. So the way that your flight or fight kind of mentality, also the flickers, a lot of the old fluorescent lights that can get headaches because of the flicker, when you have quality LEDs, you mentioned that all LEDs are not equal, that's so true. When we actually manufacture to a very, very high specification, we get third party labs to test all of our stuff to make sure that the flicker rate is almost non-existent so that you don't have those negative effects so that the color is really consistent. The last quality LEDs, for example, have a much higher variance of color differentiators when you can get really fine-tuned into this quality of technology, the health benefits just add on to everything that you're getting with the, so you can tell I'm pretty passionate about this. But Kali, you know, I love your passion and what you guys are doing is amazing. I mean words can't explain, but let's take a quick break and when we come back, we're gonna continue going beyond energy saving. Awesome, thanks. You're watching Beyond the Lines on ThinkTech Hawaii with my special guest, Kali Flag. We will be back in 60 seconds. Thanks to our ThinkTech underwriters and grand tours, the Atherton Family Foundation, Carol Mon Lee and the Friends of ThinkTech, the Center for Microbial Oceanography, Research and Education, Collateral Analytics, The Cook Foundation, Duane Kurisu, the Hawaii Council of Associations of Apartment Owners, Hawaii Energy, the Hawaii Energy Policy Forum, Hawaiian Electric Company, Integrated Security Technologies, Gailin Ho of BAE Systems, Kamehameha Schools, MW Group Limited, the Schuyler Family Foundation, the Sydney Stern Memorial Trust, Polo Foundation, Yuriko J. Sugimura. Thanks so much to you all. Welcome back to Beyond the Lines on ThinkTech Hawaii. My special guest today is the CEO of Energy Optimization Services and his company provides superior products while significantly reducing energy operational costs for many businesses and schools. He is Kali Flag and today we are going beyond energy savings. Kali, you guys are more than just an LED lighting company, right? Absolutely. We focus on what's called energy conservation measures and our business model is real simple. Our business model is that for this much money every month, you can save this much. It's as simple as that. It's positive cash flows. So we start with the LEDs because it's the lowest hanging fruit. But then we have HVAC, which is heating ventilation, air conditioning that we can optimize. We have batteries that we can curb demand costs. We go in the co-gen, we go into solar. There's other things involved. We start with that and then we keep on coming back because as the CEO, if somebody said, hey, for $30, you can buy a $100 bill. For $30 a month, you can get $100 of savings. How often would you want us to knock back on your door? So that's our business model. For sure. And Hawaiian Electric Company and Hawaii Energy, they love you. We actually are partners with Hawaii Energy. They have a program where they give incentives to our customers. We worked hand in hand. In fact, last week, actually two weeks ago, we just did a presentation. My partner, Ted Dutcher, was the featured speaker. And yeah, we partner with Hawaii Energy because they want their businesses to save money and cut energy as well. So we go hand in hand. They give incentives, but they need companies like us to actually do the work. So we're partners with Hawaii Energy. And we're very much enthused about their contribution to everything that's happening. I love hearing that. And you guys, you're also a sponsor of the upcoming Hawaii Open this December 26th to 28th. Yeah, we're really excited about that. I'm a wrestler. I've never been a tennis player. I wish I was. I think that the net is too close to my height, I think, is what the challenge is. I'm sure there's other challenges. But you know what, we're really excited to contribute to Hawaii and to give back. And I know there's not, I don't know if there's any other professional events in Hawaii. And to have world-class athletes like you brought to the table here. Maria Sharapova, Changi Shikori. Yeah, I mean, that's so great. And be able to chance to meet with them and be able to chance to bring something like that that could grow into something worldwide famous for Hawaii. Anything that we could do to help Hawaii, we're really excited about that. And you just met with Lieutenant Governor Josh Green and you're helping his Kaohali projects. Yeah, so we're really excited about that too. The thing about homelessness is not just in Hawaii, but across the United States. Is I think we all, maybe in the beginning, when we're naive, we go, oh, let's just get rid of them. And their answer is, there is no just getting rid of them. And there, but for the grace of God, go I. So you got to look at these people with compassion and realize that this is not something that they chose. They might say that they chose it, but they didn't. It ended up, they're pride in who they are. But for us to be able to give that, I really think, honestly, I really think that this strategy that Lieutenant Governor is rolling out along with money, I think that their strategy of creating a community, I really think it can work on these small homes. And so we're doing our part, we're helping with the lighting, hopefully, and for their facilities, and HVAC, hopefully, and whatever else we can do. I really believe in it. And if we could figure out a formula, there's not one thing that's gonna solve everything. But if you can create these little communities where they want to be there, or can help them come back into society, why wouldn't you do that? It's a win-win. Win-win. Now, Holly, I know that you read my book Beyond the Lines. Did you like it? Loved it. I've read a lot of books on self-help. I've been an addict for self-help, really since, you know, probably, since Ilani. The idea of continuing to work on yourself my whole life. The thing about your book was it was very clear. It was very simple, it was very strategic, but it had a lot of wisdom in it. I really enjoyed it. It was a quick read, great stories. And there was a lot of places, I learned a lot. I always look at a book if I can take one or two takeaways, that's huge. I think in your book, I probably had seven or eight takeaways. And I'm not just saying that because you're here. I've given your book to all of my partners in the company. There's four partners at EOS. There's Ted Dutcher, who I mentioned before. There's Mark Oriel. There's Dan Williams and myself. And I gave it to all of them and we've shared it with our spouses. And I really believe, I love the idea of having a goal and working backwards. I like the idea of it's not supposed to be easy. The four PEs, there's so much in your book that I really enjoy. Well, you're my promoter now. So Kali, everyone defines success in different ways. How do you define success? To me, success is growth, not just of yourself but of the people around you. So you can go on and spend your whole life, I know people who spent their whole life, for example, chasing wealth. Now they have this huge wealth but they don't talk to their kids, they don't talk to their family. Is that success? And then you have people that spend their whole time in their family but they don't pay any attention to the financial and all of a sudden they have somebody who they love and they can't take care of them with the medical help they need or care that they need to end their life. Is that success? So to me, success has always been setting a goal, going after it and getting it, and pulling people up with you. And sometimes hard love is required for that type of success. Not just soft love and it's not an easy thing but I've dedicated my life that when I meet my maker in heaven, he can say, hey, I gave you these gifts, you used them all. I really wanted to be using them all, you know? So Kali, so why are you successful? The first thing, and I don't mean this facetiously at all, the first thing is his luck, you know? The brain that God gave me, the discipline that God gave me, the people in my life that God gave me, starting from Iolani and then going into Yale and then my wife and then my family, my father was very successful, my mother was always prioritized to our family. So a lot of that I didn't have any control of, right? I mean, it's just the village that I was born into. So a lot of success was luck and then I had teachers that did practice hard love and said, listen, you're not entitled to this just because of what you're born, you gotta earn it. And so my dad, I remember when I was in second grade, our soccer team won the state championships into a Hawaii Sharks and we were gonna go over to the mainland and we all had to raise money to get ourselves over the mainland and my dad said, okay, Kali, I'll pay for half, but you have to pay the other half. And I think I was in second grade, right? And so back then it was like, that's so unfair, it's so unfair, but it made me so much more prideful when I got onto that plane, you know? It was like those dollars that I contributed to the pot. My dad was smart enough to use hard love to say, hey, we're not gonna just give you it, we're gonna not just give you fish, we're gonna teach you how to fish. To me, I think that's why I had great teachers and mentors that I listened to. Yeah, I love hearing that. What's a valuable lesson you learned in life? There's a lot, right? One of the, I think one of the most valuable lessons is team, that you can do a lot more as a team than with individuals, that ideas, they can come from anywhere and you should listen, but that doesn't mean you have to listen and do everything that everybody else says. You gotta pick which ideas to use. Not all ideas are equal, right? You can tell by where someone ends up if you listen to their advice where you're gonna end up. So if somebody has a great family and you listen to them on family, good chance you're gonna end up with a great family. If they've been divorced four times and they're giving you familial advice, you might wanna think twice. So I think the lesson is to listen and be aware of who you're listening to, who you're influenced to, but to me success is you take energy and ideas and you keep on increasing your energy and the quality of your ideas and then that's always been the formula I've used for success. I like it. Now before we wrap, I wanna ask you one more thing. What's the best advice you ever received? Well, when I got married, when I got engaged actually to be married, my father pulled me aside and this is a guy who has been married since 1963, so it's 57 years now and Edwin and I are gonna be celebrating our 25th year anniversary this September of 2020. The best advice that he gave me was when we were planning the wedding, he said, listen, I'm gonna give you three pieces of advice. The first one is that separate the marriage from the wedding. The wedding is just a party. Let her do whatever she wants, it's more important to her, let her plan a great party. But don't get involved, right? You have to pay for it, but don't get too involved. That was the first piece of advice. The second one is don't go to sleep angry, right? If you're mad at each other, figure it out. But over the years, we haven't always been perfect at that. But the third thing was the biggest one. He said, listen, you wanna have a happy marriage, date your wife, date your wife your whole life. Act like you're still trying to win her. Act like you're still trying to win her hand and win her confidence. And I've used that, not only in my marriage, but in my business with our customers. I think that's the most important thing with customers. So often you make a sale and then the relationship completely changes with this company that's been selling it. They try, they work in you, work in you, then you sign the check and they never talk to you again. Our whole business model is a 20, 30 year relationship. That's what we want. We wanna be there. So we give 10 year promises on all of our LED stuff, which includes labor, it's not paraded. We come and do annual state of the union. So we're proactive. If we see something that's not working, we're gonna fix it before it's even broken. But our relationship, what we want is to be bringing technology that costs 30 bucks and gives you $100 of savings for the next 20, 30 years. And there's all kinds of new technology, the internet of things coming. So dating your customers, dating your wife, keep on, even after the sales happen, keep on trying to win them. I think that's the best advice I've ever been given. Colleen, thank you for sharing your words of wisdom and your insights. And it's great that EOS is here in Hawaii now. You opened up a new office and I think every business in school benefit hugely. We're excited. And thank you for having me on your show. I'm a big fan. And I'm looking forward to how I open. Yeah. Thank you, Kali. Aloha. And thank you for watching Beyond the Lines on Think Tech, Hawaii. And a special thank you to my clothing sponsor, Eolani Incorporated. For more information, please visit RustyKamori.com and my book is available on Amazon and Barnes & Noble. I hope that Kali and I will inspire you to strive for your own superior culture of excellence and to find your greatness and help others find theirs. Aloha.