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Rainwater, Inc ET CitySmart Smart Irrigation for the Future. [Karen Cheng] [Eddy Fong] [Paras Gandhi] [Julia Pashin]. Background – Water Conservation. Austin Key Measures Total Usage/Peak Day Outdoor summer water use Water Conservation Task force Conservation initiatives

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Rainwater inc et citysmart smart irrigation for the future

Rainwater, Inc ET CitySmartSmart Irrigation for the Future

[Karen Cheng] [Eddy Fong] [Paras Gandhi] [Julia Pashin]


Background water conservation
Background – Water Conservation

  • Austin Key Measures

    • Total Usage/Peak Day

    • Outdoor summer water use

  • Water Conservation Task force

    • Conservation initiatives

      • Goal: 1% water use reduction

    • Grant

      • $500,000

      • Solution for outdoor water use

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Background rainwater inc
Background - Rainwater, Inc

  • 4th: irrigation industry

    • Products: sprinkler/drip irrigation systems, basic controllers

    • Develops, manufactures and markets

  • Goal: product differentiation

    • Pursue enhanced technology

    • Utilize strategic conservation strategy

      • Grant competition as launching pad

  • Assume

    • Existing research/production facilities

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Strategy
Strategy

The Genesis Way

Current Technology

Competitive Environment

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Overall strategy the genesis way
Overall Strategy – The Genesis Way

Utility Savings

Grant & Partnership

Rebates

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Overall strategy current tech
Overall Strategy: Current Tech

  • Basic controllers – timer feature

  • ET ‘smart’ controllers:

    • Calculate optimal water need creates watering schedule

    • Methods to adjust original schedules

      • Solar/rain/soil moisture sensors

      • Real-time weather data

    • Proven successful

      • SWAT testing

      • Experimentation

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Overall strategy competitive environment
Overall Strategy – Competitive Environment

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Our solution
Our Solution

The ET CitySmart

Competitive Environment

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Our solution the et citysmart
Our Solution – The ET CitySmart

  • Expand into the smart controller market

    • Best available technology

  • Differentiate:

    • Utilize LCRA water usage data

    • Emphasize low cost to customers

      • Bigger rebates

      • Using phone line

      • Using minimal sensors

Rainwater

ET CitySmart

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Our solution competitive environment
Our Solution – Competitive Environment

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Technology
Technology

ET

Healthy Range

How It Works

Database

NRE Costs

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Technology et
Technology - ET

  • Current ET algorithms combine

    • Sensors

    • Weather forecasts

    • Landscape information

  • Calculates optimal level of water needed

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Rainwater inc et citysmart smart irrigation for the future

Customize your Water Zone

Rainware ET CitySmart

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Rainwater inc et citysmart smart irrigation for the future

1. Data is collected at home

1

Solar Sensor

Homeowner Profile

City Water Data

2

Weather Forecast

Rainwater Servers

3

4

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Rainwater inc et citysmart smart irrigation for the future

1. Data is collected at home

1

2. ET CitySmart sends data to servers

Solar Sensor

Homeowner Profile

City Water Data

2

Weather Forecast

Rainwater Servers

3

4

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Rainwater inc et citysmart smart irrigation for the future

1. Data is collected at home

1

2. ET CitySmart sends data to servers

3. Rainwater servers are updated hourly

Solar Sensor

Homeowner Profile

City Water Data

2

Weather Forecast

Rainwater Servers

3

4

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Rainwater inc et citysmart smart irrigation for the future

1. Data is collected at home

1

2. ET CitySmart sends data to servers

3. Rainwater servers are updated hourly

4. Rainwater sends customized water schedule to household

Solar Sensor

Homeowner Profile

City Water Data

2

Weather Forecast

Rainwater Servers

3

4

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Technology database
Technology: Database

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Rainwater inc et citysmart smart irrigation for the future

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Rainwater inc et citysmart smart irrigation for the future

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Technology nre costs

Software engineering:

Algorithm revisions $115,000

Web interface $65,000

Mechanical engineering:

Engineering/Circuit Development $85,000

Prototype Development $35,000

Testing: $37,500

IBM Server: $17,500

LCRA Link: $25,000

Training: $112,500

Technology - NRE Costs

Total NRE: $492,500

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Implementation
Implementation

Timeline

Partnerships

Marketing/Distribution

Sustainability

Scalability

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Implementation timeline

Partner with LCRA/Austin

R&D: Design, Build and Test Prototype

Manufacture Controllers

Sell Controllers

Target High-Water Users

Widespread Advertising

2

4

6

8

10

20

25

30

35

Implementation - Timeline

Months

15

Year 2

Year 3

Year 1

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Implementation partnerships
Implementation – Partnerships

  • Partner with the City of Austin

    • City provides:

      • $200 rebates

    • Utilities bill mailings

    • Access to usage database

    • Rainwater provides:

    • Water consumption decrease of over 1% by 2011

  • Partner with Home Builders/Landscapers/Irrigators

    • Target new homes

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Implementation marketing
Implementation - Marketing

  • Marketing

    • High vs. General users

      • High users consume over 25,000 gallons a month

      • Target High users initially

      • Extend advertising to general public after 2 years

    • Pricing

      • Controller: $249

      • After rebate: $49

      • Annual subscription fee: $36

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Implementation distribution
Implementation - Distribution

  • Sales Channels

    • Hardware stores

    • Website

    • Landscapers

    • Irrigation Installers

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Implementation sustainability
Implementation - Sustainability

  • Short-Term

    • Low price

    • Quickly and aggressively penetrate market

  • Long-Term

    • New Homes: Maintain home builders partnership

    • Communication: Include broadband/wireless

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Implementation scalability
Implementation - Scalability

  • Expand into other cities

    • Las Virgenes, CA (76.2% outdoor)

    • Scottsdale/Tempe, AZ (66.5%)

    • Walnut, CA (63.9%)

    • San Diego, CA (62.8%)

    • Denver, CO (59.7%)

    • Phoenix, AZ (58.7%)

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Risk analysis
Risk Analysis

City of Austin Partnership

LCRA Partnership

Price Match

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Risk analysis1
Risk Analysis

  • No City of Austin Partnership

    • Unlikely because Rainwater saves water and money for Austin

    • Marketing

    • Rebates

  • Contingency (No Partnership)

    • Higher Prices = Lower Market Share (3%)

    • 2008: 151% ROI

    • 2011: 254% ROI

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Risk analysis2
Risk Analysis

  • No LCRA Partnership - minimal risk

    • LCRA statistics are a core component

    • Publicly available

  • Competitors Price-Match

    • Low price is competitive advantage

    • City Partnership: Cost below Manufacture

    • No Partnership: Cost still below Manufacture

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Bottom line
Bottom Line

Rainwater

City of Austin

Consumers

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Bottom line rainwater

Net Income 2011: $2,000,000

Cash Flows 2011: $1,300,000

Bottom Line: Rainwater

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Bottom line city of austin
Bottom Line: City of Austin

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


Bottom line consumers
Bottom Line: Consumers

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


The genesis result
The Genesis Result

Rainwater

City of Austin

Consumers

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


The genesis result1
The Genesis Result

Utility Savings

Grant & Partnership

Rebates

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


The genesis result2
The Genesis Result

Utility Savings

Grant & Partnership

Rebates

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


The genesis result3
The Genesis Result

Utility Savings

Grant & Partnership

Rebates

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE


The genesis result4
The Genesis Result

Utility Savings

Grant & Partnership

Rebates

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE



Appendices
Appendices

BACKGROUND

STRATEGY

SOLUTION

TECHNOLOGY

IMPLEMENTATION

RISK

BOTTOM LINE





Appendix water assumptions
Appendix – Water Assumptions

-Percent Households – High Water vs. General: normalized distribution graph of water use by frequency (16,000 household sample); sample from Austin Green Building Program Database March 2001-2003

- Average Water Use –180 gallons per day (TWDB Water Use Survey X 3 ppl per household (US Census data) X % High Use/General

water use growth rate equal to household growth rate

-58% Outdoor Water Use – given in case

-12% Outdoor Water Saved - Study


Appendix market assumptions
Appendix – Market Assumptions

Number of Austin households: City of Austin data for 2005 and 2010, annualized for growth rate)

Market penetration estimates

General: 5%, 9, 10, 11, 12; growth rate in teens

High: 5%, 9, 10, 11, 12, 15; growth rate in teens


Appendix product cost price assumptions
Appendix – Product Cost/Price Assumptions

Product cost: $165

cost comparison of competitor products (based on 80% mark-ups)

closest product from ET Water

save about $30 from using only a phone line (no broadband) for internet access

Selling price: $249; 50% markup of cost


Appendix city cost assumptions
Appendix – City Cost Assumptions

Amount of rebate: $200: existing rebate is $100 for replacing residential controllers with smart controller equivalents

Justification: cost analysis to city of Austin: percent of water conservation budget that will go toward rebates net of savings in water bought (under 10% after 2007)

cost of gallon by acre-foot: $57.50 (LCRA website – rate for pre-bought water)

1 acre foot ~ 281K gallons

Austin water conservation budget:

Austin Statesman article: With conservation, city could delay $330 million water plant, 2/12/2007


Appendix rainwater assumptions
Appendix: Rainwater Assumptions

  • Rainwater has existing, and the new product will make use of:

    • Research facilities

    • Production facilities

    • Labor

    • Website


Rainwater inc et citysmart smart irrigation for the future

Sources

  • Irrigation Controller Report for Orange County

    • US Department of the Interior – Bureau of Reclamation

  • Water Conservation Task Force – City of Austin

    • 2007 Water Conservation Strategies Summary, rebate info.

    • http://www.ci.austin.tx.us/watercon/taskforce.htm

  • Texas Water Development Board

    • Water Use Survey 2004, Water for Texas 2007

    • http://www.twdb.state.tx.us/home/index.asp

  • Smart controller company websites:

    • http://www.accuwater.com/app

    • http://www.weathertrak.com/

    • http://www.irritrol.com/

    • http://www.etwater.com/public/index.html

  • Irrigation Association – conservation and SWAT industry info

    • http://www.irrigation.org/SWAT/Industry/