Adam Kingdon is looking to revolutionise network pressure management in the gas sector with new company Utonomy. This follows on from ten years spent building i2O, which brought an innovative approach to supply network pressure management to the water sector. Here he shares some of his insights into how to go about building business around new technologies. By Keith Hayward.
When Adam Kingdon launched i2O with his business partner in 2005, it introduced a revolutionary approach to pressure management for water supply networks. In short, algorithms generated on the company’s server were downloaded onto special controllers fitted to the pressure reducing valves in a network. This allowed the pressure control to be automated and optimised, bringing substantial savings in terms of leakage and burst reduction.
‘I prefer to start with a problem and then find a way to solve it,’ says Kingdon. ‘That is exactly how i20 was started. We identified the big problem of leakage and the problem of managing the pressure in the networks to reduce leakage, and then my co-founder and I set about trying to find a solution. We were very much developing a technology to solve a specific problem we identified.’
Kingdon left the company in February last year, after ten successful years. Now he is targeting the gas sector with new company Utonomy, which he founded early last year. While the technology differs from that of i2O, it is based on a similar philosophy. Gas supply networks are fed by governors, which are generally set manually and so only a few times a year. Utonomy’s system will deliver automatic adjustment, in a offering dubbed ‘Active Grid Management’. This will help drive down low level leakage, known as shrinkage, and so contribute to greenhouse gas emission reductions. As with i2O, the Utonomy solution is being developed in response to an identifiable problem.
‘There are quite a few businesses, particularly spin-outs from universities, that have a really promising technology that are then looking for an application. I would find that much harder,’ says Kingdon. But this is not just a question of personal preference; it is also about how to create a successful business. ‘You have got to be solving an important problem. It is absolutely critical,’ he comments. ‘That’s really important for customers, and it has to give them a really good return on investment, particularly with a new technology. People aren’t going to adopt something really new and change the way they do things unless there’s a very considerable benefit to them. So whatever you are developing has got to be more than just a marginal improvement.’
A clear business case
Step one then for Kingdon is to understand the customer’s problem and how they would achieve a return on investment. ‘With i2O, and probably more so with Utonomy, our first step was really the value proposition, getting the business case sorted out,’ he says.
For i2O, this meant detailed conversations with water companies about how they were managing pressure at the time, the leakage targets they had to meet, and what it would mean for their businesses if they reduced their leakage. For Utonomy, this has meant meeting with network planners who have to report to the gas sector regulator, understanding what leakage reduction means for the businesses. ‘Without a really compelling ROI and value proposition for the customer, there really wasn’t any point investing a lot of effort in developing the technology,’ adds Kingdon.
Clearly this requires early input from end users. ‘Early feedback is absolutely essential. I don’t think you can overemphasise it,’ says Kingdon. ‘It is incredibly important, because there will be things that you haven’t thought of that are important to the customer, and things you think are going to be incredibly important to them, but are not really an issue.’
This seems obvious, but it is advice that is not always followed. Why? ‘Mainly because people think their idea is so brilliant, or they are so confident everyone is going to buy it,’ Kingdon comments, but adding: ‘It is not easy. The right people to talk to are incredibly busy and haven’t got time to talk to everyone who’s got an idea.’
In this respect, the success of i2O and awareness of the company in the gas sector has been a boost for Kingdon in his new venture. ‘It helped a lot with Utonomy, because it gave us credibility immediately,’ he says. ‘It has enabled us to get to talk to all the right people, and a lot of people have given up quite a lot of time to explain to us in detail how they manage their networks now, what’s not good about how they do it now, what they think can be improved, and what the value proposition is for them.’
A technology team to develop the solution
‘Once you’ve identified the problem, you have then got to solve it,’ continues Kingdon. This makes research and development fundamental to the success of the business. ‘It is absolutely critical,’ he adds.
‘At i2O, we had a huge investment in R&D,’ says Kingdon. ‘We had to develop a lot of technology in a lot of different areas.’ This meant developing hardware able to survive being underwater, that could run on batteries, and could communicate consistently with the company’s central system. It meant developing ways to adjust the pressure reducing valves without readily available power supplies. And it meant developing the algorithms and a secure data platform. ‘There were a lot of technical challenges, and each area needed a lot of investment and expertise to put the whole package together. So we had a very multidisciplinary R&D team right from the beginning.’
Creating such a team is no easy task, and Kingdon highlights for example the challenge of securing talented software engineers in the UK as they are in such high demand. So how does he go about building a team? ‘Any really top candidates will have lots of places they could go and work,’ he says. ‘They are going to come to you if they can work on something really challenging, really exciting that they are going to be pleased to be part of. You have got to sell the company and the vision to the prospective candidates as hard as you would to an investor.’
‘We definitely built such a team at i2O, and we are making a good start building a similar team at Utonomy,’ says Kingdon. ‘You need the right skills. You need people with the right mentality, that enjoy and thrive on working on a startup where they have got to come up with solutions themselves.’
A successful scale-up
Building the business is the next step. This requires that the intellectual property rights around the solution are secured. ‘Before talking to customers about the details of the solution, it is necessary to get the IP in place,’ says Kingdon. Other factors can play an important part too. For example, last year Utonomy won a proof of concept grant worth £100,000 from Innovate UK. ‘It enabled us to get everything up and running,’ he adds.
It also means securing early contracts. ‘Looking back on it, that was the toughest challenge really,’ says Kingdon, recalling the early days of i2O. ‘Getting trials was relatively easy, because engineers in water utilities are all keen to try something new, and they probably had budget available for trials. I would say that for i2O, 100% of the trials were really successful, but going from that to significant roll-outs and significant contracts and revenue was really tough and took a long time.’
This phase for a business can present a challenge, covering staff costs and keeping investors on board. It is a phase than can be managed if the length of the sales cycle is anticipated. But Kingdon confesses to underestimating the time for take-up early on in the UK given the rapid return on investment that i2O’s technology offered. ‘We did all our trials in the UK and then it started to become clear that it was going to take quite a long time before the UK water companies started rolling it out at scale,’ he says. ‘We were new to the water industry, and the product really was a fanstastic product, so we didn’t anticipate that it was going to take so long.’
The answer for i2O was to look to other markets. The company carried out a study looking at some 80 countries around the world, ranking them in terms of factors such as the scale of the leakage problem and their attitude to adopting new techologies. Malaysia came out top. ‘We were bang on,’ says Kingdon. ‘They gave us a quick trial of three systems, and as soon as they saw it worked, they started ordering them in quite large numbers.’
This time around, with Utonomy, there is a focus on ‘selling’ to customers even before the finished product is available. ‘At Utonomy, we have started talking to customers really early, really getting them understanding the solution, so that when the product is available the takeup will hopefully be quicker,’ says Kingdon.
Enthusiasm around start-ups
Kingdon is clearly enjoying his latest start-up at Utonomy, and this entrepreneurial spirit mirrors not just what he did at i2O but also his 20 years prior to that working on turnarounds at a number of technology and manufacturing companies in Europe. The start-up phase needs him to sell to customers, investors and staff alike. ‘It’s the bit that gives me the real buzz, getting the company up and running,’ he says. This is not to suggest he is anything other than committed to the longer term development of Utonomy, and Kingdon points to his ten years at i2O, towards the end of which he oversaw the company’s entry into a new phase, partnering with global metering business Itron. ‘Right now, I’m really loving it,’ he adds.
One thing that has changed though is the technology that is available compared to a decade ago, such as the availability of IoT (internet of things) platforms. This clearly excites Kingdon. ‘There is some fantastic technology that we can use off the shelf,’ he says. ‘The technology is now available to do some really cool things.’