Cadence has been operating for 54 months. We have built a team, developed a product and survived to this moment where the market has never been more ready for disruption. Our revenue model must evolve — from large programmatic contracts through relationships and credibility, toward a business that needs to prove it can create value repeatedly without founder heroics. That is the current challenge. Not proving value. Proving repeatability.
The market dynamics, owner behavior patterns, and structural gaps this strategy responds to are detailed in Memo 1. What follows is a potential path forward for discussion that breaks down how we might evolve into an organization that can address market opportunities at scale.
J-51 is a major near-term catalyst in NYC. The J-51 tax abatement program creates a significant window for multifamily buildings that are refinancing or undergoing capital improvements. For buildings with aging infrastructure already going through a financial event, decarbonization suddenly pencils out — the cost (and risk!) of doing it right, rather than replacing like-for-like, shrinks dramatically. J-51 is not the whole market but it is a repeatable entry point into it, and a pattern we can build early pipelines around.
Heat pump technology has matured. The appliance-like economics of decentralized heat pumps — predictable pricing, no exotic installation requirements in many cases, demonstrated performance in similar buildings — reduce the perceived risk of a first project in ways that were not true five years ago.
Compliance pressure is real and increasing. With LL97 in NYC and BEPS in other markets, 2030 deadlines are looming and owners are increasingly pressured to choose not whether to act but how.
The Accelerator (alone) will not succeed If we build this, everybody either loves us or at least is resigned to work with us. If we don't build this, our finanical AND trust runway is up by 2030. #
A market maker stands in the middle and quotes both sides — here is what this project will cost you, here is who will deliver it, here is what you will get. It carries the mismatch and earns a spread for doing it.
Cadence can be that party by owning the owner relationship (the demand) and, over time, the data backbone (the visibility). No one else in this market sits on both. But the ability to quote both sides with confidence is not declared once and held forever — it is earned incrementally. What changes across the stages is not whether Cadence is a market maker but how competitively it can price. Early spreads are wide and conservative, reflecting judgment-based risk pricing. Over time, data replaces judgment risk by risk — the spread tightens, our moat deepens, and more value can be delivered.
Stage 1 — Market maker with judgment-based pricing and tech-enabled process (2026–2027). Cadence begins quoting both sides. The tech-enabled process makes it possible to do this consistently across projects. But process alone is not enough — scaling requires people with the right combination of building science knowledge, judgment, and relationship skills. The process makes those people more effective and their expertise more replicable. Our pricing for owners is sufficiently conservative to reflect uncertainty around specific risks that we estimate based on judgment and market knowledge. As such, our pricing is not as competitive as it will become at some future date when more data is available. And some post-yes risks are still borne by owners. At the same time, there are a limited number of entities willing to step up to be the "one throat to choke" deliverers of projects — making our offering compelling enough to get going. Relationships also still help with early traction.
Trust us because of our process and our people — and because we're willing to stand behind it.
Stage 2 — Market maker with data-based pricing (2028–2029). Data begins replacing judgment risk by risk. Cost benchmarks, narrative data, and contractor/scope performance all feed back into tighter, more accurate pricing. Uncertainty bands tighten. Customers no longer have to know our channel partners to use us. Trust us because of our data.
Stage 3 — Market maker with competitive pricing (2030). The spread is tight enough to win at scale against the LL97/BEPS demand wave. An owner contacts Cadence and within days has a price, a team, and a path. Choose us because we're the fastest, most competitive path.
Note that inadequately addressing Pre-Yes risks causes owners to say "no" more. While getting to "No" is a perfectly fine endpoint for a specific owner, more "No's" across a portfolio result in greater broken deal costs for Cadence that inhibit scaling.
Stage 1: A structured, tech-enabled evaluation process is built. Owners get a documented pathway with alternatives evaluated and rejected alternatives explained. The process makes pathway evaluation consistent across buildings and advisors. UX is compelling but still needs human voice over for credibility.
Stage 2: Analogous building data makes the pathway conversation faster and more credible. "Here is what buildings like yours chose — and why" replaces "here is what we recommend" as the primary currency of the pathway discussion. Top of the funnel widens. Learnings from Stage 1 feed into a mass market website that engages with owners to bring in potential deals to a point where a human being can close.
Stage 3: Pathway risk is largely resolved for the defined scope. A PTHP + ventilation project in NYC multifamily has a well-understood, data-backed pathway. The conversation shifts from "is this right?" to "when do we start?" An increasing share of total deal flow comes from a mass market funnel.
Narrative Risk
Stage 1: The narrative is built into the process as a deliberate deliverable. Templates, frameworks, and documented decision logic make it possible for more than one person to give a board the story it needs. The process produces the why and the how alongside the what. But the storytelling isn't yet fully productized so still requires a human storyteller.
Stage 2: A growing library of real outcomes from real buildings makes the narrative case with authority. Owners are tribal — they trust peers who have done it more than experts who have studied it. Case studies and documented outcomes close the confidence gap faster than any analysis could.
Stage 3: Narrative risk is largely eliminated — compressing broken deal costs and accelerating transaction velocity at scale.
Financing Risk
Stage 1: A systematic incentive identification and matching process is built — J-51 eligibility, utility rebate stacking, NYSERDA program qualification, financing product matching based on mortgage holder, building type, and reserve health. Financing is integrated into the process from the beginning, not treated as a separate conversation. J-51 filing windows, incentive stacking, and financing structures interact with scope decisions in ways that must be sequenced correctly. But still not in a complete push-button way — a human is still needed to make things happen.
Stage 2: Financing outcomes accumulate across projects. Cadence knows which financing products actually close for which building types, which incentive combinations work in practice, and which lenders are fastest for a given profile. Volume creates negotiating leverage on terms. Human customer success is minimized but not eliminated.
Stage 3: Financing risk is a priced, manageable component of the spread. Better terms are available to Cadence across a portfolio than to any individual owner acting alone. And the process is as automated as external partners allow.
Supply Risk
Stage 1: A curated, vetted network of contractors and technologies is established — concentrated enough to enforce standards, broad enough to cover the relevant scopes. Fewer vendors, more volume, higher accountability. RFPs that are written in terms of delivering outcomes do the heaviest lifting to minimize this risk. Contractors or engineers must size equipment appropriately or else be liable. Years of Cadence staff due diligence on technology performance further minimize this risk. We don't recommend any window heat pumps that have inadequate post-retrofit data. Relationships also help. Just as with the 321 bidding pilot, even if initial dealflow is low… we have pastrami sandwiches with the leadership at the contractor short list so they understand what's in it for them in what we are trying to build towards, don't send the "C" team and are personally accessible to deal with any issues. This last part is no different to what a large owner or even Aurora does today. Any remaining risk is difficult to quantify but is borne by Cadence in the form of greater man hours for coordination + accountability risk (see below) and in the form of reputation risk.
Stage 2: Technology and installer selection becomes data-defensible. Which contractors and technologies perform consistently, which technologies have predictable installation costs, which combinations create coordination problems — all documented and updated with each project.
Stage 3: Installer relationships flip. Volume certainty becomes more valuable to contractors than winning competitive bids. Supply is a managed relationship, not a risk. Cadence can route work to contractors with confidence and enforce quality standards with teeth.
Stage 1: Contracts define scope freeze provisions and change order caps before work begins. Leaning into appliance-like hardware reduces the frequency and magnitude of surprises by minimizing on-site labor requirements and eliminating the need for heroic installation efforts. An industry standard contingency buffer for owners to carry is built into the project.
Stage 2: Pattern data narrows the range of what to expect in buildings of a given type. Cadence-recommended change order reserves for owners become more precise and less conservative.
Stage 3: Change order risk is well-understood and accurately priced. Conservative buffers give way to empirically-grounded reserves and Cadence can price and take this risk instead of owners.
Schedule Risk
Stage 1: The commitment is schedule transparency and proactive communication — not financial penalties. Contracts define reporting obligations and escalation protocols, access schedules, building staff obligations, and penalty provisions for non-entry. Expectations are set before work begins.
Stage 2: As pattern data accumulates, schedule ranges become predictable. The typical PTHP + ventilation project in a pre-war NYC building takes X weeks, with Y% running Z weeks over due to access issues. Ranges replace guesses.
Stage 3: Schedule guarantees become priceable if of interest to owners. Penalty provisions for egregious overruns become possible because the data supports them. Access risk is still borne by the building owner via contractual provisions since they will always be the party that can best understand and control this risk.
Coordination + Accountability Risk
Stage 1: People and processes mitigate this risk. Trades are sequenced, incentives are filed at the right moment, someone is accountable for the integrated outcome. Cadence handles incentive coordination as part of the whole — including J-51 filing timing, utility rebate capture, and NYSERDA program management. Note that some current intermediaries charge 30% of utility rebate value just for this layer. To the extent that the man hours are underestimated, Cadence bears this risk.
Stage 2: The man-hours required for coordination become predictable across building types and scope combinations. The spread earned for carrying this risk tightens into a competitive advantage. The AI-augmented deployment model begins to compound — someone using Cadence's accumulated knowledge and workflow infrastructure can do in hours what previously required days of expert judgment.
Stage 3: Coordination and accountability is a priced, managed component of the spread. Volume visibility means contractors know the pipeline, utilities can see the wave coming, and coordination overhead per project continues to fall as the system matures.
The risk-by-risk evolution above describes what Cadence is building toward. What follows is why no one else is positioned to build the same thing.
How This Is Not Tech-Enabled Consulting or Turnkey Contracting #
From the outset we commit to delivering a complete solution from planning to procurement to construction to operations. Elements of this delivery may look a lot like good tech-enabled consulting. But unlike consultants we do offer one throat to choke accountability. Our curated supply model must provide as much integrated accountability from pathway through operations as the turnkey model. But we package this offering in a slicker and more technically robust way than the current turnkey contractors serving this space (e.g. Carlton, Nova1, VRF Solutions, BES). We are a software-native company that has spent four and a half years learning to translate data into construction work scopes, integrating Mech E's and Tech E's, and shipping products powered by meaningful investments in AI tooling.
But we need to go fast in order to maintain daylight and escape velocity. Cadence, working across many standardized projects, accumulates something no individual actor can: portfolio-scale data, curated contractor relationships with teeth, and ultimately the ability to see both sides of the market simultaneously. That is the position from which a market maker operates.
More projects mean more data. More data means more projects. We don't need huge margins initially because we are effectively partially paid in data. For us at least, this is a race to a data moat, not a race to the bottom. The end state: the easiest and smartest way to get decarbonization projects done. There will still be a role for legacy firms — but that role will increasingly be through our platform.
Strategy Notebook
Earning the Position - current best thinking on a potential pathway forward
What We Have Learned #
Cadence has been operating for 54 months. We have built a team, developed a product and survived to this moment where the market has never been more ready for disruption. Our revenue model must evolve — from large programmatic contracts through relationships and credibility, toward a business that needs to prove it can create value repeatedly without founder heroics. That is the current challenge. Not proving value. Proving repeatability.
The market dynamics, owner behavior patterns, and structural gaps this strategy responds to are detailed in Memo 1. What follows is a potential path forward for discussion that breaks down how we might evolve into an organization that can address market opportunities at scale.
Why Now #
J-51 is a major near-term catalyst in NYC. The J-51 tax abatement program creates a significant window for multifamily buildings that are refinancing or undergoing capital improvements. For buildings with aging infrastructure already going through a financial event, decarbonization suddenly pencils out — the cost (and risk!) of doing it right, rather than replacing like-for-like, shrinks dramatically. J-51 is not the whole market but it is a repeatable entry point into it, and a pattern we can build early pipelines around.
Heat pump technology has matured. The appliance-like economics of decentralized heat pumps — predictable pricing, no exotic installation requirements in many cases, demonstrated performance in similar buildings — reduce the perceived risk of a first project in ways that were not true five years ago.
Compliance pressure is real and increasing. With LL97 in NYC and BEPS in other markets, 2030 deadlines are looming and owners are increasingly pressured to choose not whether to act but how.
The Accelerator (alone) will not succeed If we build this, everybody either loves us or at least is resigned to work with us. If we don't build this, our finanical AND trust runway is up by 2030. #
The Path: From Trusted Advisor to Market Maker #
A market maker stands in the middle and quotes both sides — here is what this project will cost you, here is who will deliver it, here is what you will get. It carries the mismatch and earns a spread for doing it.
Cadence can be that party by owning the owner relationship (the demand) and, over time, the data backbone (the visibility). No one else in this market sits on both. But the ability to quote both sides with confidence is not declared once and held forever — it is earned incrementally. What changes across the stages is not whether Cadence is a market maker but how competitively it can price. Early spreads are wide and conservative, reflecting judgment-based risk pricing. Over time, data replaces judgment risk by risk — the spread tightens, our moat deepens, and more value can be delivered.
Stage 1 — Market maker with judgment-based pricing and tech-enabled process (2026–2027). Cadence begins quoting both sides. The tech-enabled process makes it possible to do this consistently across projects. But process alone is not enough — scaling requires people with the right combination of building science knowledge, judgment, and relationship skills. The process makes those people more effective and their expertise more replicable. Our pricing for owners is sufficiently conservative to reflect uncertainty around specific risks that we estimate based on judgment and market knowledge. As such, our pricing is not as competitive as it will become at some future date when more data is available. And some post-yes risks are still borne by owners. At the same time, there are a limited number of entities willing to step up to be the "one throat to choke" deliverers of projects — making our offering compelling enough to get going. Relationships also still help with early traction. Trust us because of our process and our people — and because we're willing to stand behind it.
Stage 2 — Market maker with data-based pricing (2028–2029). Data begins replacing judgment risk by risk. Cost benchmarks, narrative data, and contractor/scope performance all feed back into tighter, more accurate pricing. Uncertainty bands tighten. Customers no longer have to know our channel partners to use us. Trust us because of our data.
Stage 3 — Market maker with competitive pricing (2030). The spread is tight enough to win at scale against the LL97/BEPS demand wave. An owner contacts Cadence and within days has a price, a team, and a path. Choose us because we're the fastest, most competitive path.
Note that inadequately addressing Pre-Yes risks causes owners to say "no" more. While getting to "No" is a perfectly fine endpoint for a specific owner, more "No's" across a portfolio result in greater broken deal costs for Cadence that inhibit scaling.
Pre-Yes Risks #
Pathway Risk
Stage 1: A structured, tech-enabled evaluation process is built. Owners get a documented pathway with alternatives evaluated and rejected alternatives explained. The process makes pathway evaluation consistent across buildings and advisors. UX is compelling but still needs human voice over for credibility.
Stage 2: Analogous building data makes the pathway conversation faster and more credible. "Here is what buildings like yours chose — and why" replaces "here is what we recommend" as the primary currency of the pathway discussion. Top of the funnel widens. Learnings from Stage 1 feed into a mass market website that engages with owners to bring in potential deals to a point where a human being can close.
Stage 3: Pathway risk is largely resolved for the defined scope. A PTHP + ventilation project in NYC multifamily has a well-understood, data-backed pathway. The conversation shifts from "is this right?" to "when do we start?" An increasing share of total deal flow comes from a mass market funnel.
Narrative Risk
Stage 1: The narrative is built into the process as a deliberate deliverable. Templates, frameworks, and documented decision logic make it possible for more than one person to give a board the story it needs. The process produces the why and the how alongside the what. But the storytelling isn't yet fully productized so still requires a human storyteller.
Stage 2: A growing library of real outcomes from real buildings makes the narrative case with authority. Owners are tribal — they trust peers who have done it more than experts who have studied it. Case studies and documented outcomes close the confidence gap faster than any analysis could.
Stage 3: Narrative risk is largely eliminated — compressing broken deal costs and accelerating transaction velocity at scale.
Financing Risk
Stage 1: A systematic incentive identification and matching process is built — J-51 eligibility, utility rebate stacking, NYSERDA program qualification, financing product matching based on mortgage holder, building type, and reserve health. Financing is integrated into the process from the beginning, not treated as a separate conversation. J-51 filing windows, incentive stacking, and financing structures interact with scope decisions in ways that must be sequenced correctly. But still not in a complete push-button way — a human is still needed to make things happen.
Stage 2: Financing outcomes accumulate across projects. Cadence knows which financing products actually close for which building types, which incentive combinations work in practice, and which lenders are fastest for a given profile. Volume creates negotiating leverage on terms. Human customer success is minimized but not eliminated.
Stage 3: Financing risk is a priced, manageable component of the spread. Better terms are available to Cadence across a portfolio than to any individual owner acting alone. And the process is as automated as external partners allow.
Supply Risk
Stage 1: A curated, vetted network of contractors and technologies is established — concentrated enough to enforce standards, broad enough to cover the relevant scopes. Fewer vendors, more volume, higher accountability. RFPs that are written in terms of delivering outcomes do the heaviest lifting to minimize this risk. Contractors or engineers must size equipment appropriately or else be liable. Years of Cadence staff due diligence on technology performance further minimize this risk. We don't recommend any window heat pumps that have inadequate post-retrofit data. Relationships also help. Just as with the 321 bidding pilot, even if initial dealflow is low… we have pastrami sandwiches with the leadership at the contractor short list so they understand what's in it for them in what we are trying to build towards, don't send the "C" team and are personally accessible to deal with any issues. This last part is no different to what a large owner or even Aurora does today. Any remaining risk is difficult to quantify but is borne by Cadence in the form of greater man hours for coordination + accountability risk (see below) and in the form of reputation risk.
Stage 2: Technology and installer selection becomes data-defensible. Which contractors and technologies perform consistently, which technologies have predictable installation costs, which combinations create coordination problems — all documented and updated with each project.
Stage 3: Installer relationships flip. Volume certainty becomes more valuable to contractors than winning competitive bids. Supply is a managed relationship, not a risk. Cadence can route work to contractors with confidence and enforce quality standards with teeth.
Post-Yes Risks #
Change Order Risk
Stage 1: Contracts define scope freeze provisions and change order caps before work begins. Leaning into appliance-like hardware reduces the frequency and magnitude of surprises by minimizing on-site labor requirements and eliminating the need for heroic installation efforts. An industry standard contingency buffer for owners to carry is built into the project.
Stage 2: Pattern data narrows the range of what to expect in buildings of a given type. Cadence-recommended change order reserves for owners become more precise and less conservative.
Stage 3: Change order risk is well-understood and accurately priced. Conservative buffers give way to empirically-grounded reserves and Cadence can price and take this risk instead of owners.
Schedule Risk
Stage 1: The commitment is schedule transparency and proactive communication — not financial penalties. Contracts define reporting obligations and escalation protocols, access schedules, building staff obligations, and penalty provisions for non-entry. Expectations are set before work begins.
Stage 2: As pattern data accumulates, schedule ranges become predictable. The typical PTHP + ventilation project in a pre-war NYC building takes X weeks, with Y% running Z weeks over due to access issues. Ranges replace guesses.
Stage 3: Schedule guarantees become priceable if of interest to owners. Penalty provisions for egregious overruns become possible because the data supports them. Access risk is still borne by the building owner via contractual provisions since they will always be the party that can best understand and control this risk.
Coordination + Accountability Risk
Stage 1: People and processes mitigate this risk. Trades are sequenced, incentives are filed at the right moment, someone is accountable for the integrated outcome. Cadence handles incentive coordination as part of the whole — including J-51 filing timing, utility rebate capture, and NYSERDA program management. Note that some current intermediaries charge 30% of utility rebate value just for this layer. To the extent that the man hours are underestimated, Cadence bears this risk.
Stage 2: The man-hours required for coordination become predictable across building types and scope combinations. The spread earned for carrying this risk tightens into a competitive advantage. The AI-augmented deployment model begins to compound — someone using Cadence's accumulated knowledge and workflow infrastructure can do in hours what previously required days of expert judgment.
Stage 3: Coordination and accountability is a priced, managed component of the spread. Volume visibility means contractors know the pipeline, utilities can see the wave coming, and coordination overhead per project continues to fall as the system matures.
The risk-by-risk evolution above describes what Cadence is building toward. What follows is why no one else is positioned to build the same thing.
How This Is Not Tech-Enabled Consulting or Turnkey Contracting #
From the outset we commit to delivering a complete solution from planning to procurement to construction to operations. Elements of this delivery may look a lot like good tech-enabled consulting. But unlike consultants we do offer one throat to choke accountability. Our curated supply model must provide as much integrated accountability from pathway through operations as the turnkey model. But we package this offering in a slicker and more technically robust way than the current turnkey contractors serving this space (e.g. Carlton, Nova1, VRF Solutions, BES). We are a software-native company that has spent four and a half years learning to translate data into construction work scopes, integrating Mech E's and Tech E's, and shipping products powered by meaningful investments in AI tooling.
But we need to go fast in order to maintain daylight and escape velocity. Cadence, working across many standardized projects, accumulates something no individual actor can: portfolio-scale data, curated contractor relationships with teeth, and ultimately the ability to see both sides of the market simultaneously. That is the position from which a market maker operates.
More projects mean more data. More data means more projects. We don't need huge margins initially because we are effectively partially paid in data. For us at least, this is a race to a data moat, not a race to the bottom. The end state: the easiest and smartest way to get decarbonization projects done. There will still be a role for legacy firms — but that role will increasingly be through our platform.