Abstract Engineering Inc. has developed Shower Stream, an IoT smart shower that saves hotels $15 per room per month and prevents costly steam & humidity building damage by solving the problem of shower behavioral waste while dramatically increasing guest satisfaction and enabling hotel brands to automate bathroom maintenance at scale.
Shower utility waste costs US hotels $10B annually in water, sewer & gas. Plus, water & steam related building damage caused by aging fixtures and wasteful guest shower use cost hotels 10X more in repair & maintenance costs. Studies from Lawrence Berkeley National Labs show that 70% of bathers leave their showers unattended for 2 minutes on average after their shower is warm, and 1 out of every 100 showers are left running unoccupied for over 4 hours. This behavioral waste amounts to at least 30% of the water, sewer and gas utility costs of the typical shower, resulting in $120 wasted per bathroom per year. At hotels, this shower warm-up waste problem is even worse since guests are often more wasteful in hotels than at home. The typical hotel franchise loses at least $30M per year in hot water utility costs to the warm-waste problem alone. Economy hotels spend over 80% of the operating costs on utility and maintenance bills so this problem is especially painful for them. In the U.S alone, this problem wastes 2 trillion gallons of water, 1 trillion kWh of energy and $50bn in utility costs annually. In a society where resource conservation is rapidly growing in importance; Shower Warm-Up Waste is an issue that we aim to solve while prioritizing a luxury guest shower experience, increasing hotel profitability (by slashing their utility bills and maintenance costs) and preventing a ton of hot water waste in the process.
- Greg Floyd (CEO/Founder/Software Engineer) has a BS in Computer Science from UT and has a demonstrated career working on R&D software from large SI-valley corporations to startups. Greg created real-time distributed software that is currently running at major international corporations including Samsung, TSMC and GlobalFoundries.
- Ian Howard (Co-founder/Product Lead/Mechanical Engineer), graduated from UT with a BS in Mechanical Engineering. He has led technical programs to install wind turbines in rural Africa and provide earthquake relief in developing countries.
- Priya Thomas (Co-founder/Data Scientist/ Research Scientist), has a PhD in Natural Resource Economics, has worked with data driven projects that integrate renewable energy and behavioral economics. She has a decade long experience in research projects and is well versed in causal inference techniques, choice modeling and decision theories.
- Warm Intros and Direct Sales: First we establish contact with a prospective customer via warm intros (Motel6, Extended Stay America ESA), cold calling (USNavy Suits) or inbound contact (Ascott) through our website. Hotels are quite oligopolistic, so we get the best results from warm intros (Blackstone introduced us to G6. Tom Lusk, VP at Motel6 introduced us to ESA).
- Pilot-based Customer Engagements: Next we propose a pilot. We completed a 120 unit pilot with Motel6 leading to a long term customer relationship with G6. Current pilot is with ESA and a paid pilot in place with DoD. Post pilot we proceed with supplier contracts.
- Marketing Efforts: We will piggyback on existing green building incentives and marketing campaigns, partner with regional hospitality vendors and hospitality catalogs, market at hospitality trade shows and make direct sales by cold calling hotel owners and GMs.
- Savings Model Validation: We will also work with local and state governments to bring Shower Stream’s savings model to law. We have successfully petitioned the Texas PUC to approve our deemed savings methodology. List channel partners: eg – Green building customers, regional hospitality vendors, hospitality specific tradeshows and catalogs like HD Supply.
- Partnerships: We are seeking resale partnerships with the large faucet/fixture manufacturers. Paul Sambanis (VP Sustainability at Sloan Faucets) is currently on our advisory board. We are also developing partnerships with large water utilities to enable water & natural gas rebates for our customers.
Usage Stats Q3 2024
- 173 devices installed at 2 hotels: an ESA in Austin TX and a U.S. DoD Navy Lodge in Battle Creek, MI.
- 132 daily active users took 5,972 total showers with 0 guest complaints.
- 19,187 total gallons of water saved, resulting in $7,893 of utility bill savings.
- Financial $58K avg. monthly revenue.
- $656K total revenue for CY2024. 60% annualized revenue growth (2022-2024).
- Current Customer Pipeline 45K rooms | Rob Palleschi, CEO Motel6 65K rooms | David Crider, VP Energy ESA 350K rooms | Mark Hoplamazian, CEO Hyatt 70K rooms | Mr. Aurland, Facility Dir. U.S Navy
Price Model
We have a HaaS (Hardware as a Service) price model:
- $10/room/month We guarantee our customers will “Save more than they spend” with Shower Stream’s directly metered savings that add up to more than their $5/mo subscription. This nets hotel operators an instant ROI. We are also developing a SaaS product that will be sold as options to the base price of our our hardware:
- Additional $5/room/month for real-time shower maintenance alerts.
- ASP & LTV: We expect to net at least $10/room/month in revenue as our average selling price (ASP). Our estimated device lifetime is 10 years, so each unit sold will net $1,200 in revenue in LTV.
We are seeking a lead investor for a $3M-$5M priced equity round. Our most recent valuation was an $8.5M pre-money in Q4 2024. 75% of the round will fund headcount growth to support our rapidly expanding install base and to scale up our analytics platform for increased pricing power. The remaining 25% will fund manufacturing to provide products to the contracted customers on our waitlist. We also project a 50% non-dilutive R&D funding match for any funding raised. We have a history of winning non-dilutive funds to develop our core technologies.
Funding Milestones:
- 50,000 Installs Billing @ $10/mo.
- $5M Annual Revenue (CY 2026)
Shower Stream is a high-quality IoT shower head that boosts per-room profitability by cutting utility costs for the average economy hotel room by $15 per month. Driven by patented sensor technology and machine learning algorithms, motion activation automatically eliminates costly behavioral waste while an AI-driven web-connected platform automates painful hotel maintenance tasks. Shower Stream has a first-mover advantage in the enormous 15M room hotel beachhead market by providing the first scalable hotel shower automation solution.
Hotel Pain Points
- Utility costs comprise 85% of economy-hotel OPEX.
- Low-flow showers degrade guest shower experience
- Guests often steam wrinkles from clothes, use the shower as white noise or as a humidifier.
Value Propositions
- Increases net profitability by $5/room/month.
- Prevents $10,000/yr in costly steam damage.
- Prevents negative guest reviews: Mold, mildew, indoor humidity, odor and visible water damage.
Features
- Prevents 2 min of warm-waste per shower.
- Prevents 1% of showers which are 4+ hours!
- Automates hotel maintenance.
- Ensures perfect showers in 1000’s of rooms.
Breakthrough Sensor Tech
- Universally compatible, 99% accurate human presence sensor. Major faucet fixture makers have dozens of touchless bathroom products, yet have failed to develop a robust shower sensor. We’ve already received acquisition offers!
- Modular, distributed ultrasonic sensor array. Network effect increases accuracy as installs and dataset grows.
- Machine learning presence determination algorithm enabled by edge AI.
- 3 patent awards which cover our Sensor Tech, Savings Methodology and Sensor AI Training Solution.
Investments (Dilutive)
Pre-seed:
- Family and Friends $50,000
- James Lancaster, Innovate CXO (RVF Angel Fund) $46,000
- Bob McNair Family Office $25,000
- Burnt Island Ventures, LLC $25,000
- SAFE: $20,000.
Convertible Note Seed-1: $80,000
- New Stack Ventures $425,000
- Lead Investor for Seed Round, Sachse Family Fund $150,000
- Follow-on Seed Round, Midwest Wealth Ventures $75,000
Follow-on Seed Round Seed-2:
- Burnt Island Ventures, LLC $200,000
- Post-seed Round - Exelon $100,000
- SAFE: $1,196,000
Grants and Awards (Non-dilutive)
Pre-seed:
- Longhorn Energy Club Pitch Competition $5,000
- Prize University of Texas Selig Prize competition $5,000
- Prize Techstars Blackstone LaunchPad $10,000
- Prize Texas A&M New Ventures Competition $35,000
- Prize NSF SBIR Phase I $225,000
Grant (non-dilutive)
Seed:
- NSF SBIR Phase II $750,000
- Grant (non-dilutive) NSF SBIR Phase II B $500,000
- Grant (non-dilutive) - ESTCP $750,000
- Pilot Revenue (non-dilutive) ICP $45,000
- Pilot Revenue (non-dilutive) Total $1,530,000
