Today’s blog is the first in a two-part series on innovative water infrastructure technologies under development in Austin. FATHOM (today’s focus) and AIQUEOUS (focus of the next blog) are both relevant to the Austin SmartCities opportunity in a few key ways:
- Each furthers at least one of the mayor’s goals for advancing water infrastructure capabilities in Austin, which are: developing new conservation methods, facilitating water reuse, decentralizing water management, and evolving business models
- Each focuses on leveraging data-derived insights to empower consumers and the city. FATHOM’s data management capabilities, they argue, are generalizable to other city-scale smart infrastructure initiatives.
- Each gains from specialized strengths of the Austin ecosystem. Read below to learn about the specific, and differentiating, technical capabilities FATHOM found in Austin.
FATHOM offers a SaaS-based approach to modernizing the meter-to-customer vertical in the highly-fragmented water utility sector. To learn more about their “Austin story”, we spoke to two of the company’s leaders and first connected with the company’s CEO, Trevor Hill, the CEO. This is Trevor’s fifth startup in the water sector. He got into water a few decades ago, when he started a design-build engineering firm focused on membrane bioreactor water recycling technology: “The technology was fabulous but I found it quite challenging to sell to municipalities,” Trevor explained. “They are not particularly interested in adopting and procuring new, innovative technologies…So,” he wryly continued, “I decided to get into utilities myself. For revenge.”
The Back Story
Trevor served as CEO for two roll-ups of investor-owned water utilities. He started Liberty Utilities in 2000, and Global Water Resources (GWR) in 2003, both Phoenix-based investor-owned water utility companies. Over the course of his tenure, he aggregated over 30 water utilities into the firms. “One of the most exciting things for me at GWR was, of course, the opportunity to implement advanced technologies. We were interested in implementing smart metering capabilities but could not find the right technologies to surface the value of the data generated by these devices. If we could have bought the solution, we would have. As there were no systems available off-the-shelf, we decided to build it.”
It was at this point that GWR began to incubate the future spin-off that would become FATHOM. “We had a huge opportunity. It was like the industry had built a cash register – the smart meter – but without the software to support it.” This gap was really an artifact of the structure of the water utility industry: “The water sector is massively fragmented,” Trevor explains. “Most utilities provide service to small populations, between 5,000 and 30,000 meters. In fact, 99.5% of water utilities serve fewer than 30,000 meters. These smaller utilities have limited IT capabilities and a lack of access to capital.”
FATHOM, under incubation, made great strides: (a) it created partnerships with hardware metering companies (about eight firms dominate that market); (b) it raised funding from GWR itself, as well as from XPV Water Partners and Silver Lake Kraftwerk; (c) in the meantime, Hill published his first book, The Smart Grid for Water: How Data Will Save Our Water and Your Utility. The firm spun out from GWR in 2013 and with its budding success, began to look for the talent that would take the company to the next level.
The Austin Story
“We had a number of reasons for choosing Austin as our development center,” says Hill. “The top three were its concentration of talent, the reasonable wages compared to Silicon Valley, and the region’s strong understanding of water and water scarcity issues. We also had looked at Seattle, the Bay Area, Phoenix, Kansas City, and Chicago; some more established, some more aspiring. But Austin clearly stood out.”
Jason Bethke, who is President and Chief Growth Officer and runs the Austin office today, expanded on Trevor’s list with a technical and a more prosaic argument: “First of all, Austin has deep coding talent, of course. It’s also one of the top cities for talent in the Scala programming language and the Akka toolkit, as well as in Big Data management and analytics. Akka, specifically, is used for distributed, concurrent applications and is highly relevant to this space. Secondly,” Bethke continued, “we see less turnover in the Austin workforce than in other cities. People are more likely to commit to a company and a product and see it through. We love that.”
“It’s been a lot easier than I thought it would be to recruit talent here,” explains Bethke. “We’ve gone from 0 to 50 in under 18 months. We are looking to double that in the next 24 months.”
More about the Solution
We spoke in some additional detail about the solution itself with Bethke, who has an extensive background in water and wastewater consulting and engineering. Bethke has designed and built wastewater treatment plants and has worked in “heavy” industries for both large and small organizations, often interfacing with municipalities.
Bethke spoke in some detail about the “Total Water Management” solutions for distributed water treatment that he developed when working with Hill at Global Water Resources. GWR was able to generate significant water and costs savings by instilling a “one water” perspective on water, integrating potable water, wastewater and recycled water management. In order to do so, however, GWR found that the operational system silos needed to be broken down: “The thing that stood out to us from this work was the back office opportunity for revenue management, work order management, as well as the management and integration of AMI [Advanced Metering Infrastructure] and SCADA systems. This may all sound pretty super-technical and complex, but the point is that we wanted to simplify every interaction between the utility and the customer. The outcome, specifically for FATHOM’s utility-to-customer vertical, was automated meter readings, the first ever connection between the meter and the utility’s billing engine, and a communications network designed to support work orders, in a highly-automated fashion, with current and relevant customer information.”
Bethke argues that, “Because of antiquated systems, utilities are losing about 5-10% of their revenue – which FATHOM fixes.” One major area of opportunity has to do with errant data entry: “We’ve found highly recurrent error types in utility billing systems and have become expert at addressing them.”
Bethke explains the firm’s development priorities: “We need to continue to work towards ensuring our utilities are financially stable. FATHOM provides utility customers with near real time consumption information, including leak and consumption alerts and notifications on high or unusual bills. We’re also working on capabilities related to building and monitoring meter functionality.”
There is also an opportunity to leverage the FATHOM Store, which “provides access to utility-facing and customer-facing services that solve specific problems and that integrate with the FATHOM solution to varying degrees. The programs are developed by third parties and sold to utilities and customers. A small percentage of the revenue is shared with FATHOM.”
“The third horizon for FATHOM,” Bethke acknowledges when we press him, “is about creating a Big Data platform for municipalities that can extend to streetlights, traffic lights, and so on. We think we’ve done a lot of the database and analytics work that can act as a precursor for a generalized Smart Cities platform”
The FATHOM story is just one more example of how innovation in our city is aligning with civic needs, leveraging our hometown talent, and creating technical assets that can be leveraged for future initiatives. We hope you are as inspired as we are. . . Stay tuned for more!