Management Gets Smart About Water |
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January 25, 2008 From Silicon Valley / San Jose Business Journal By Sharon Simonson The ancient Egyptians built one of the earliest and most successful civilizations -- it lasted 3,000 years -- by learning to manage the most vital resource in the North African desert: water. A Petaluma company fueled by Silicon Valley talent, technology and more than $37 million in venture capital backing wants to help the modern world do the same thing. HydroPoint Data Systems Inc. is harnessing the power of satellites, the Internet and wireless communications to help its customers nationwide -- and if all goes as planned, worldwide -- to stop wasting water on landscaping plants. The company estimates that in the United States alone, where urban lawns and greenery represent half the water demand, property owners overwater by 30 percent to as much as 300 percent, leading to lots of runoff and increased water pollution, not to mention a bunch of dead plants. The service gathers real-time data every day from in excess of 27,000 weather stations across the country, including rainfall, humidity and ambient temperatures. It uses that information to calculate what its onstaff horticulturist calls "the magical measurement," evapotranspiration, the amount of water lost from the land's surface due to evaporation and plant transpiration. It then beams instructions to its customers' "smart" irrigation controllers to tell them how much or little water to give landscaping plants that day, taking into account the soil, plant type and sprinkler variety. Its coverage area spans the entire United States, Canada and parts of Mexico, but it is being encouraged to expand to Australia and Europe and has gotten inquiries from as far afield as China and India. The company claims to have saved its 13,000 WeatherTRAK network subscribers a billion gallons of water and 1.5 billion watt-hours of electricity use in 2007 alone and to have spared the planet the extra burden of some two million pounds of carbon-dioxide emissions. "Water is essential for biologic and economic needs, but it's been ignored and not seen as a high-priority issue," says President, Chief Executive and company co-founder Chris Spain. "What we've been doing very successfully especially in the last eight months is helping customers understand that by saving water, you actually reduce energy costs and demand because the process of managing and moving water takes lots of energy." Already, valley stalwarts including Google, Advanced Micro Devices and Lockheed Martin are on board as are real estate companies with regional holdings such as apartment owners BRE Properties in San Francisco and Archstone-Smith Trust, which has multiple Northern California communities. Shea Homes is not only an early adopter, offering the system to its home buyers, but also was a first-round investor in WeatherTRAK through its in-house venture capital arm, Shea Ventures. Silicon Valley companies present a particularly attractive target market for his company, Spain says. They often have "national footprints," which means that they can influence other companies in locations outside Northern California, that they could use the remote control features that WeatherTRAK offers, and that they have lots of landscaping and territory to manage, Spain says. "They (also) have a proven record of tackling critical issues that others haven't focused on that aren't just trendy but of long-term value." Beyond that, the typical Silicon Valley company and its executives easily grasp the tremendous return on investment that can be attained through early adoption of new technology, he says. A single WeatherTRAK controller can direct irrigation for up to 48 stations; a bed of flowers is one example of a station. A controller can act as either a dumb recipient, taking in the daily information sent it and implementing, or it can retransmit its directions to the greater world, allowing a person with a personal computer in Silicon Valley to monitor the irrigation at a controller in, say, Seattle. The system gathers and produces watering directions catered to locations as small as a square kilometer. The company has focused on the new housing market for installations but with that sector struggling, it has turned its attention more fully to the commercial real estate and corporate worlds. Frank Rocha, senior manager of ground services at Lockheed Martin, says WeatherTRAK solved a constellation of problems for him at campuses in Sunnyvale and Palo Alto, which together total 500-plus acres. Both were tough to keep attractive, he says. Besides chain-link fences and lots of "moon rock," they had bad soil and sections with steep slope. Roughly a year ago, he adopted the system, attracted to its price -- between $500 and $1,000 a controller -- simplicity, and its ability to use the existing piping and other infrastructure. "I noticed that my guy was taking forever to maintain the landscape irrigation clocks, which had to be adjusted with the change of every season," he says. "I was looking for the newest, most innovative things to help." For Rocha, a good-looking campus isn't just about Lockheed's public and community relations -- though those matter -- it is also about helping the company compete for valuable talent. "With the competition in the engineering field being as difficult as it is, and Google offering (its workers) breakfast in bed almost, you have to keep the aesthetics up for employees," he says. The company estimates that with WeatherTRAK it will save about $1 million a year in unused water expenses and by avoiding water-related damage caused by overwatering such as cracked foundations and plant replacements. Since late 2004, WeatherTRAK has raised more than $37 million from venture capitalists and others in three rounds of funding, according to a company spokeswoman. Besides Shea, the company's investors include the publicly traded Toro Co. of Minnesota, which provides products and services to golf-course and sports-field managers, among others; Monitor Ventures, an early-stage venture capital firm with offices in Palo Alto; RockPort Capital Partners, a venture firm with offices in Menlo Park that specializes in energy and power-related investment opportunities; and Firelake Capital Management, which oversees a hybrid investment fund that backs both public and private firms exploiting new technologies in energy, information and materials science. Martin Lagod of Firelake says when the company decided to back WeatherTRAK several years ago its solution was the best of several offered, in part because it didn't rely on historic weather data but real-time information. "We think it can be a very big and very valuable company," he says. "We think the need to make better and more efficient use of water is crucial in both the United States and around the globe. The availability of fresh drinking water where the population growth is occuring is becoming more and more a point of stress." Nothing about the business model blocks the possibility of having millions of subscribers, he notes. Indeed, growth simply enhances economies of scale because as the company adds subscribers, it doesn't ramp up costs because it has to collect the weather data whether it has one subscriber or a million. "We're pretty excited about it," he adds. Todd Wilson of RockPort Capital says, "We are big believers that water is going to be the next big thing. (WeatherTRAK) has the right technology at the right time." The company, which has 62 employees, does not release financials, CEO Spain says. |
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