Imagine a device that shows you how many Watts you use and what it costs you. A plug-and-play device that is simple and easy to understand. And all together, it does it in real-time and connects through Wifi. A Sydney-based start-up spent 2 years to unlock the intelligent voice in your home appliances. Meet Wattcost! A group of inspired entrepreneurs with a great diversity in backgrounds from being a co-patent holder of the screen technology of the Amazon Kindle to a highly experienced professional in mass consumer electronics worldwide. I was lucky enough to meet up with David Soutar, CEO and co-founder of Wattcost.
Australia on The Crossroad of Change and Innovation?
Even after the Paris Agreement, Australia still lacks governmental commitment to reduce its carbon footprint and fight climate change. The failure of Australia’s government to not know or just deny what’s actually going on worldwide could potentially even put Australia’s entire economy at risk.
For decades, Australia’s economy has been highly dependent on its big mining industry. Australia’s economy is not particularly characterized as a service industry. You could argue that it more resembles a well-developed third world economy that is highly dependent on getting resources out of the ground. Think of the Hunter Valley in New South Wales. A region that is well known for its coal mining industry and maybe even one of the world’s biggest fossil fuel energy hubs. It actually houses the world’s largest export facility for coal, the port of Newcastle.
The Australian government has always been very effective in getting royalties every time resources are extracted from the ground. Actually, it is the mining industry that has become a moneymaking machine for Australia’s government because of their effective tax instruments. When it concerns renewables, politician’s just haven’t figured out a way to tax the sun.
Overall, Australia isn’t really known as being an innovation nation. When I was telling people back home that I wanted to travel Australia to gain insight in the energy transition and meet up with innovative companies, everyone asked me “Why Australia?”. My answer was that I had the feeling that things could change rapidly over there. And… Guess what! It does!
Australia is a country that houses much talent ranging from software engineers and physicians to highly skilled entrepreneurs. Australians are actually known as legends overseas in for example the photovoltaic industry. Think of Sungevity, a solar electricity company operating in Europe and the United States, founded by the two Australians Danny Kennedy and Andrew Birch. Or Dr. David Mills who is one of the most eminent people in the solar industry. He just couldn’t get any support for its commercial solar thermal in Australia and, therefore, left for Silicon Valley. Interestingly, however, most successful talent and entrepreneurs leave Australia to do business overseas and predominantly in the United States. Silicon Valley is estimated to employ about 20.000 Australian software engineers and entrepreneurs.
The Australian governments announced an “Innovation Statement” in December 2015. An “innovation” package believed to be worth more than $1bn that aims to create an attractive climate for start-ups with disrupting technologies and to encourage high potential talent to stay. This statement should also attract the overseas start-ups and engineers back home. This week the government launched an additional new $1bn clean energy fund to lend to, or take an equity stake in, emerging renewable energy technologies. But it was the same government that recently announced to cut 80% of its climate scientists. So what’s actually going on? Are there elections on its way?
Luckily, a strong grassroots movement of creative entrepreneurs put serious effort in reducing Australia’s carbon footprint from different angles. Each specific domain of the energy system undergoes some radical value-added innovations. Wattcost is currently focussed around your personal carbon footprint at the household level and helps you how to improve on that.
A Device that Makes Your Life Easy While Saving Money
Why didn’t the energy saving devices for residential buildings work? David Soutar researched every product on the market and was able to deduce it back to four fundamental elements.
- Too “Geeky” and complicated to understand. Keep always in mind that the average person isn’t a data scientist.
- Too expensive, which negatively influences the potential benefit.
- Installation required an electrician. If you want to be successful in the mass consumer market, make sure that he product is off-the-shelf and easy to install.
- Not WiFi direct, which means that most of the devices connected with each other through proprietary Bluetooth, ZigBee or Zwave wireless points and additional boxes.
The goal of Wattcost is to help households change their behaviour, minimize their electricity bills while maximizing value. Their technology is based on one single hardware device and two levels of machine learning software.
The hardware device has an optical sensor. This sensor gets attached to the front electricity meter. The whole idea is basically that the sensor just reads the meter and sends out the data that it consequently converts into real-time data. You always know exactly what you’re paying throughout the day.
The way it works is clever and quite genius. The moment you turn on the washing machine your electricity meter speeds up a little. The optical sensor registers this acceleration and converts it into useful data. Meanwhile, a pop-up may appear on your smartphone that informs you about behaviour change opportunities.
It will tell you for example that you’ve put on the washing machine at the most expensive time during the day. It automatically works out whether it’s a good time or not. And guess what… It actually recommends you a different timeslot during the day when it’s cheaper.
The first level of machine learning works out what appliances are turning on or off. It’s basically measuring the whole power signature of the house. Within that power signature they can see patterns of the major home appliances. The second level works out what’s important to you as a person. So based on your preferences they can actually improve on your behaviour. You just set a budget for you electricity bill and Wattcost helps you reach it.
“Our software is essentially a behavioural machine learning system that says okay you’re the bill payer so you want to know exactly anytime something is being left on or is being used at the wrong time. And how it impacts your bill. Other people might be more safety focused. So tell me if I left something on when I’m leaving the house, cause it might burn the house down!” – David Soutar
He taught me that if you really want to change people’s behaviour, you should tell them straightaway. Don’t wait a week, till tomorrow or in three months. You should inform people at that point they can act upon it.
Another important aspect of their application is the integration of gamification. They’ve got one of the worlds leading gamification scientists working on their feature. You can compete with others, friends, neighbours or even you Facebook-contacts. Research proved that in order to get people excited about energy saving you should target their emotional values. Gamification helps people to understand why certain people score higher than you do and what you should do to match their profiles.
There are three important elements to consider here. There’s a past, present and future. The past is all about you energy behaviour and data collection, the present is about what’s going on right know and the future where they recommend what to do.
There’s a space in their application called the marketplace. This marketplace provides you with tailor-made recommendations to lower your energy usage, carbon footprint and maximizes monetary savings based on your energy behaviour. It might recommend switching electricity retailer, installation or upgrade of rooftop solar, installation of energy storage, energy efficient home appliances or even a way to plant trees through a carbon offset company.
“Our model isn’t focussed around maximizing profit. Our key performance indicator is based on how much we reduce people’s carbon footprint. It’s a win-win! One of our internal targets is to save 10 million tons of carbon emissions. If we do so, that means we’ve helped our customers save over 2 billion dollars from their electricity costs. They actually get paid to help save the world!” – David Soutar
The implications of this technology are endless! Telecommunications companies, insurance companies and electricity retailers, are all interested in the potential of this technology and most importantly because of all the valuable data generated. This data actually tells you in real-time what’s happening inside a house. Wattcost is completely on the consumer-side of the fence. Their norms and values are centred on the fact that as long as the consumer doesn’t benefit from it, they won’t do any business with a third party.
“Think of aged healthcare! This technology could tell you that your mum didn’t get up this morning and have her usual cup of tea. Give her a call… The refrigerator door hasn’t been opened for three days and the washing hasn’t been done in a week… What happened? This data is really powerful.” – David Soutar
The Way a Co-working Space Proves Meaningful in Shaping Your Business
The way it all started is quite interesting! After having spent many years overseas, David Soutar decided to head back home and take a position at Honeywell. He started running a division that did a lot of automation for commercial and industrial buildings. It was actually just after the year that Al Gore launched the documentary “An Inconvenient Truth” that has been credited for raising international public awareness of global warming.
During that time energy efficiency came high upon the agenda. Therefore, Honeywell started to design systems that combined building automation systems and energy management tools for commercial buildings.
“I am a government accredited energy auditor for commercial buildings. That means I gave commercial buildings a star rating, which essentially is a rating of the amount of energy used per m2. But every time I was on my way to one of these energy audits, I passed by tens of thousands residential houses. And I started to ask myself the question, why was no one targeting these houses. That was basically the start of Wattcost!” – David Soutar
By that time David Soutar was still by himself. He decided to participate in the Founder Institute, an incubator program from New York, to get an idea of how challenging it was going to be to do a start-up in Australia. Imagine a four-month program with a dropout percentage of 66%, it was tough! Then he decided to move in to Fishburners, Australia’s biggest co-working space for start-ups in Sydney and the story continues.
The power of a co-working space is that everyone working there walked through the same front-door with an idea for change. Either they are doing their own start-up or they are just really interested in what someone else is doing. It is the perfect way to get to know a great diversity of people with different backgrounds and knowledge.
“So, this is how I met my co-founder: One morning Demetrious walked through the front door for a coffee meet up. He just wandered around asking if anyone is doing hardware projects… Turned out he’s a freaking genius! And, he’s the co-patent holder of the screen technology for the Amazon Kindle.” – David Soutar
Then, at some point there’s a moment that a company is about to pitch its idea or concept for the first time. For Wattcost it was an important moment of clarification and validation. They were pitching in front of 1000 people as part of Australia’s biggest startup event. Hardware companies are generally not eager to pitch their ideas in early stages, because you don’t want to tell people too much about a technology that still has to be developed. However, the guys of Wattcost were glad they did it! They came second and found out there was a huge opportunity lying ahead of them.
“It was pretty incredible! It was a 5-minute pitch and 3-minutes of questions. My questions went for about 15 minutes… I staggered of the stage exhausted! But then, the MC Pete asked the crowd: “Who wants to buy it?” The whole crowd put their hands up! It was amazing!” – David Soutar
Competitions and start-up events prove to be really important to continuously get that validation for your product or service. Besides that, it keeps you motivated and provides you with some useful feedback. It is an efficient way to grow your network and gather useful tools to improve your success.
Find out more about Wattcost or just pre-order now!