It was a winter day. Rain was pouring down and Odi Dahan (who is named for his grandfather) was sitting at home enjoying the central heating. Suddenly, he heard the sprinkler outside turning on. He was shocked at its useless operation in the rain and told himself that he really ought to go outside and turn it off, because this was a terrible waste, both in terms of money and the environment. But who wants to go out in such a downpour? It is such a pity that there is no application to control the garden irrigation system from inside the house.
Dahan was at a crossroads at the time, and not just in irrigation. He had resigned as an executive at Freescale Semiconductor Inc. (NYSE: FSL) to found a semiconductor venture, but discovered that the venture capital market in 2012 was not ready to invest what the venture needed - $11 million in two years - in start-ups. In the face of the difficulties, the partners he recruited from Freescale one by one returned to a salaried position. "They are all doing more or less what Freescale did, while only I, an entrepreneur in my soul, continued to sit at home and wonder what next," he relates. He had permission from his family to find his way for a short time while his wife would be the primary breadwinner. "I didn’t want to waste this opportunity," he says, and continued to seek a start-up to found, until he found what he was looking for on that rainy night.
Dahan decided to develop an app that would dynamically control the irrigation system via a smartphone on one hand and respond to conditions on the ground and the weather forecasts on the other. At the time that he was conceiving the idea, all irrigation computers were based on "the best technology of the 1980s," as he put it. The computers were complicated, with user-unfriendly screens, and no Internet access. "In practice, no one could touch them, except for an expert, the gardener, who came infrequently. These systems were time-operated, say between 6 and 6:30 am, and operated in the same way for years, every day from 6 to 6:30 am, in summer, winter, in droughts, and in wet years," he says.
Dahan says that the product of (Smartup2 winner) GreenIQ Ltd. can save 50% of costs, depending on the field conditions, compared with the old technologies. "There are countries where water conservation is irrelevant or there is no awareness, such as Argentina or Brazil, which have abundant rainfall, where we have nothing to offer, but there are other countries with very high water awareness and where conservation is part of daily life. The US, for example, is a country with high water awareness. In some states, such as California, there can be sudden extreme droughts," he says.
GeenIQ's product initially targets home gardens, and will later be adapted for public gardens, for which municipal parks departments will be the customer. The company has already initiated sales of its first-generation product via irrigation distributors and stores, as well as by word-of-mouth. A table is located in the company's offices which shows how much water the company has saved its customers to date - almost one million liters, worth several tens of thousands of dollars. "Water for irrigation is measured by cubic meters (1,000 liters)," says Dahan. "We're waiting to see that number on the board, but in cubic meters."
GreenIQ's algorithm automatically adjusts the irrigation to weather forecasts, while users can also make adjustments manually. The algorithm, one of the most important parts of the company's intellectual property, generates an irrigation protocol on the basis of the weather, to save the maximum amount of water on one hand, without risking the garden from drying out on the other. "The knowledge needed to write the protocol already existed in agriculture, but was never applied to private gardens or municipal parks," says Dahan. His background was in signal processing, which allowed him to create a unique algorithm that can utilize weather data to maximize water conservation without drying out the garden by mistake.
GreenIQ recently added information to the algorithm. It signed a cooperation agreement with French company Parrot Flower Power, which has developed sensors that are implanted in house plants to monitor their condition. Parrot's sensors alert a smartphone of the plant's condition, but take no action, thereby creating synergy between the two companies. "This is an addictive product," says Dahan. "You receive updates from the plant, 'I'm thirsty, I'm hungry,' as if the plant is talking to you. This prods you to action, and the plants look great."
When the systems operate together, the plant says that it's hungry and GreenIQ's irrigation system automatically gives it water.
The second-generation product will be connected to even more sophisticated sensors that can send data via the cloud. Today, the homeowner with his or her smartphone must physically be home at least once a day to synchronize the irrigation system with GreenIQ's algorithm; the next-generation product will allow this to be done remotely.
The system, including the garden hardware and the app, cost $200, retail. The company has raised $450,000 to date from private investors and Entree Capital. "We made first contact with the investors, as well as with some customers, following a report on 'Globes TV'," says Dahan.
Internet of Things
"This company lies at a unique interface between the environment and the Internet of Things, two hot subjects that will unquestionably fit together in the future," says Plus Ventures CEO Dubi Lachovitz. "That is why we're interested in this company, even beyond the project." Plus Ventures, a unit of the Moldawsky Group, operates the Explore.Dream.Discover incubator that houses GreenIQ and advises the company for the project.
GreenIQ and Explore.Dream.Discover were matched at the smartup2 competition organized by "Globes" and Bank Hapoalim (TASE: POLI). It was one of the three winners, with HopOn Ltd. and Zeekit Ltd.
"We definitely see ourselves as an Internet of Things company. Our products will control by phone not only garden irrigation, but other features as well, such as garden lighting," says Dahan, who hopes to gradually enter the home too.
"To enter the extremely competitive Internet of Things field today, it's critical to find a unique niche, and the fact that GreenIQ targets the garden, which is not handled by most other companies in the field is a great advantage," says Lachovitz. "Will they succeed in coming inside from the outdoors? That's hard to know, but taking control of the home's outside space is a very interesting target in itself."
GreenIQ is also now facing direct competition, and not just 1980s systems. "Big irrigation companies are not there," says Dahan. "The main thing is Kickstarter projects to connect irrigation systems to the smartphone, and some of them have an initial algorithm to adjust the irrigation to the weather, like GreenIQ."
Pressed by Lachovitz about what differentiates the company from its competitors, Dahan says, "In addition to our professional algorithm for building an irrigation program on the basis of field and weather data, we also capabilities that others lack, such as control of garden lighting and the spreading of fertilizer. Another advantage is that we're already on the market, in several markets actually, and we're gradually learning the real needs of our customers and we're adapting to them."
Dahan adds that the algorithm is patentable, although he admits, "We haven’t patented it; we simply haven’t gotten around to it."
Lachovitz proposes a Kickstarter campaign, saying, "A campaign is worthwhile. It's free advertising, and brings in money. A successful crowdfunding campaign can raise hundreds of thousands of dollars, no small sum for a company like yours, in order to achieve customer exposure."
Asked by Lachovitz about GreenIQ's business model and why it chose to sell hardware for $200, without asking payment for services, Dahan explains, "This is what our customers are used to. We actually believe in the software as a service (SaaS) model in which payment is for the service, and that is how we will work with municipalities, even though the product is exactly the same. It's a market that has to be developed in a completely different way."
He adds, "In future, our vision is to be connected with every household appliance to contribute to the environment and save money and resources. Other Internet of Things companies mostly operate on the convenience principle, but we have a different approach. We believe that there is room to improve hot water heaters, refrigerators, washing machines and air conditioners. We will fit in everywhere that can be improved with environment sensor algorithms."
ID card: GreenIQ Founded: 2013 Business: A smart irrigation management system, based on sensors and weather forecasts, for gardens and municipal parks Founder: Odi Dahan No. of employees: Four Capital raised to date: $450,000 from Entree Capital and private investors Development stage: initial sales
Published by Globes [online], Israel business news - www.globes-online.com - on June 19, 2014
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