Why we invested in Ziptility

Ziptility Announcement Image.jpg

Utility operators hold society together. They are the individuals who make sure our taps stay on and our toilets work. In the USA, there are 145,000 public water systems. 97% of these are considered small systems as they serve 10,000 or fewer people. Given the perception of low sophistication and budgets, not a lot of companies build solutions for these systems. 

Ziptility does. Their platform allows small utility managers (actually any utility manager, but they know where they’re starting) to bring their utility online with the power of a smartphone. Combining mapping, asset logging, workflow and more, they allow the least resourced, hardest working leaders of the water industry to bring their system online and realize genuinely amazing operating efficiencies.

What drew Burnt Island Ventures to their door?

They’re building a product for an underserved market with an underestimated willingness to pay for a quality product

They’re building a product for people who should have products built for them, but incumbents choose not to because they’re incentivized to focus on the large customers that can pay them $1m+ a year for an asset management system. This leaves a wide market for Ziptility to serve  on their terms at a differentiated price and cost structure and additionally preserves the optionality to go upmarket. Their customers are absolutely able to pay the equivalent of a decent enterprise software seat as long as they see value quickly. Their business model makes sense in the area of the market where incumbents’ don’t.

They’re building a Self-Generated Source of Truth

Facebook, Twitter, Twitch, YouTube, Pinterest Boards, Spotify Playlists. User-generated content is powerful - not only are you allowing your user to build their own world as they like it on your platform, once that world is in place, their users have a unique understanding of that platform’s value to them. The sunk cost is real. Obviously, you don’t want to be sticky like Facebook, you want to be sticky because you’re really, really useful (see bullet four below). Becoming the digital representation of an analog system at low cost, and with an intuitive and adaptive interface, is inherently valuable.

They understand the value of design and story

Since meeting them in 2020, it was clear they understood the power of visual and verbal communication and interaction. This understanding manifests itself throughout the company - in the product, on the website, in customer communications, in pitch decks, in pitches. Those of us who have been in water for a while know that good design and command over value narrative is a scarce commodity, and it’s important because it’s at the heart of the value perception of the customer. Utility managers who are used to running their utilities on landlines and index cards need well-designed products. A new piece of software has to be useful more or less instantly as they have no time to come up a learning curve. Ziptility offers that premium experience at an affordable price point. You can’t underestimate how that makes their customers feel

Their customers love them

And they feel great. Ziptility’s reference calls from randomly selected clients were hilariously good. Even in their short time in business, they have become a utility within the utilities they serve. This has led to natural word of mouth virality, 30 very satisfied customers, no churn, 1.5 million assets listed, and more than 500K actions logged on the platform. Maintaining this level of customer delight is tough as you transition out of the “do things that don’t scale stage” but they’ve made a very promising start.

They’ve navigated difficulty effectively

It hasn’t all been sunshine and rainbows, and we love how they have responded to adversity. From navigating the exit of an excellent co-founder, to getting distracted by the siren call of chasing large contracts too early, they have been able to come through serious challenges. They’ve also faced the very real challenge of being under-resourced (we’re going to fix that) - with 2 people and $750k in funding they have built themselves to the edge of $200k in ARR, and growing nicely. It’s a habit to remember.

Tyler, Steven, and all of Team Ziptility - congratulations on your work so far and thank you for letting Burnt Island Ventures be a part of your journey. 

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