Why we invested in Shower Stream
You would be astounded at the behavior of otherwise normal people in hotel rooms. Hotel guests regularly leave their shower running for hours at a time to heat up the water and de-wrinkle their clothes. It’s not their water bill, or room they’re flooding. But for hotels the costs are astronomical because it’s not just the subsequent leaks, it’s the headache of fixing the leaks, insurance claims, managing contractors, rooms left vacant while restoration of water damage takes place.
The answer is NOT some involved keypad bluetooth smartphone disaster. Do NOT mess with the experience of tired, hungry, jetlagged people who just want to get clean. The solution HAS to be simple, non-touch, and invisible. But what if you could choke off almost all of the flow when the shower is up to temperature, and just release it when you KNOW someone is in the shower?
Enter, Shower Stream. Ian, Greg and the team at Shower Stream developed a next-generation occupancy sensor that shuts off the flow to showers once they’re hot and unoccupied. The water and energy savings average $30,000 per hotel and in 2020 alone they saved over 100,000 gallons of water and 100 kWh energy with just 100 units installed. We’re thrilled to announce our recent follow-on investment in Shower Stream. Here’s why we did it.
Exceptional product & process
Shower Stream’s product is exactly what we look for - low cost, easy to use and easily deployable. The $5 unit easily and discreetly screws onto the back of any hotel showerhead without interfering with guests or requiring undue hotel operations. At $5/month ($10/month with advanced analytics), Shower Stream is affordable and deployable across entire hotels - and aligned with real user savings (not to mention burnished green credentials).
Huge willingness to pay
Hotel shower leaks are anything but minimal. A single leak can spread to the two adjacent rooms, the rooms across the hall and the rooms below. That’s a loss of 4 or 5 rooms for 2-3 days. At $200 a night per room, investing in a $5/month unit is a no-brainer. Shower Stream has an instant ROI for the average hotel and the savings rapidly multiply. Customers are lining up at the door with huge orders. And it’s no surprise when the unit economics are this compelling.
MASSIVE initial customers
Shower Stream has already pulled in some of the biggest hotel chains, including Hyatt Hotels, G6 Hospitality, Global Hotel Group, Extended Stay America and Ascott Limited into their pipeline. They’re deploying in 240,000 rooms with Hyatt alone. At $5/month per unit, a 10,000 unit initial deployment yields $600k in ARR. If the client elects to add on the operations and insight software (workflow, alerts, dashboards) for an extra $5/month, then it’s $1.2m in ARR. From a single client. And the orders are already in at the higher price.
MASSIVE overall market
The global number of hotel chains, the number of hotels each of those chains operate and then the number of rooms with hotel showers…. there are a LOT of hotel showers. With a product this good, there’s no reason Shower Stream can’t become ubiquitous. And that’s even before you get to the residential market and the clear adjacencies for their proprietary occupancy sensor.
Incredibly parsimonious and resilient
The Shower Stream’s patience remains a core asset and they have been able to remain exceptionally lean, and execute impressively. In response to the global chip shortage (lead time now 45 weeks) - they wrote their own firmware from scratch to allow the unit to function with an array of chips. That’s what Tesla did. They are just putting one foot in front of the other, and making sure the forthcoming pilots go without a hitch.
Ian, Greg, and the entire team at Shower Stream, thanks for letting us be your guest in your progress to save billions of gallons of water, one shower at a time.