AlertMe (Really, Really) Understands How to Entice Consumers

Home energy management system AlertMe is partnering with British Gas, but is gunning for telecom tie-ins.

AlertMe, a U.K.-based online energy management company, announced that it has raised £15 million (about $24 million) and that the U.K.’s largest utility, British Gas, is now a strategic investor and commercial partner.

Even more interesting, is that the second round of funding may allow AlertMe to move well beyond the utility channel.

There are generally two routes for residential home energy management systems to make their way into houses: one is through a utility, and the other is through partners (security companies and HVAC suppliers) and/or retailers.

AlertMe, however, is working both paths. The agreement with British Gas will mean that it is the utility’s strategic home area network partner as it rolls out about two million smart meters by 2012. British Gas joins first-round investors Good Energies, Index Ventures, SET Venture Partners and VantagePoint Venture Partners.

The startup is also focused on telecom companies, with which it hopes to partner to offer its services as part of a bundle in the not-too-distant future. Although there haven’t been any formal announcements, it looks like AlertMe could be a system that will be rolled out by telecoms the way that Greentech Media has predicted will happen. In Australia, electricity is already being bundled in the ACT with cable, phone and internet. Pilgrim Beart, Founder of AlertMe, does not see telecoms getting into the energy business all together, but he does see companies wanting to give value-add to bundles with services like AlertMe.

British Gas joins first-round investors Good Energies, Index Ventures, SET Venture Partners and VantagePoint Venture Partners.

“We set out to be a service provider the same way that a mobile phone service is looking to be a service provider,” said Beart. “A lot of people are all about delivering products to the utilities, but we’ve always been focused on what the consumer wants, and how can you benefit the consumer whether they know they want it or not.”

There seems to be a lot of talk about giving the people what they want in HAN applications, but AlertMe delivers in ways that few other home energy management systems seem to.

First of all, there are different tiers. Yes, that’s right, segmentation. Because after all (hold your breath here), not every consumer is the same. Maybe some just want the basic package for £29.99 ($45) that comes with the portal that hooks onto your meter (you don’t even need a smart meter, Beart said).

If you want to geek out, spend a little more and go for the in-home display, or the monitoring package. There’s no smart thermostat because, Beart noted, many studies have shown that people don’t really use them to their full potential, if at all.

The hub plugs into your broadband connection -- no Wi-Fi, which means no connecting to networks. Another clamp connects to the meter. Then, something interesting happens. Even if you don’t buy smart plugs, the AlertMe analytics can tell the fingerprints of certain appliances, whether it’s your fridge or hot water heater. It can tell you if the appliance is not working correctly, or if you could purchase a far more efficient model. Based on how your house is using energy, the system offers tips tailored to you.

Currently, they’re also working on heating and cooling functions so that, instead of that supposedly tricky smart thermostat, you can use a website or smart phone to adjust your heating and cooling.

The company is also developing more in-depth comparison models. Currently, there is a 'swingometer' that shows how you compare to yourself a week ago, a month ago, etc., and also to others in your part of the country. That will eventually be drilled down so that customers can collaborate and compete if they choose to.

The swingometer is a little house that changes color, from green to if you’re doing well to red if you’re using a lot of energy. Kids could understand it; even my father, who can't figure out how to log into his email when it logs him out, would get it.

The widgets are simple and if you choose to drill down, you can. The colors are friendly, yet focused. The swingometer has a cute factor, like a Furby or a Gremlin before the post-midnight feeding.

The savings are pretty average for this type of system, about 15 percent, although Beart argued that as the analytics are continually improved, that figure could be much higher. But as a service provider, energy savings are just one part of the offerings.

“We took the approach that we didn’t quite know what people wanted, so we built in lots of stuff,” said Beart. And it’s not the swingometer that will sell people. Instead, it’s the other stuff.

When AlertMe asked its customers what they liked, the answer wasn’t drilling down into the data; it was that they could see the temperature of the room they were in with the in-home display.

Another feature people really liked are the key fobs, which come with one of the higher priced packages. You can use them to ping your home into preset 'home' or 'away' modes that you have predetermined. If you want, when every key-holder in the house has left, it can automatically go into away mode. Beart said that he and his wife found the application surprisingly helpful when trying to coordinate who would get home and relieve the babysitter. It could come off as a little too 'Big Brother' for some people, but that’s OK, too; you don’t have to pay for it if you don’t want to. AlertMe seems to be thinking like an iPhone app maker, giving people things that they don't know they need, then can't live without.

If you are more on the tech-savvy side of things, AlertMe is a Google PowerMeter partner, so any of the AlertMe widgets can live on your iGoogle page. When this reporter mentioned that it was a unique approach that this system did not require a smart meter or smart appliances down the road, or even really smart plugs, Beart said that was the point.

“Our philosophy is not to make things smart. We want end points to be as simple as possible. The intelligence should be in the network,” he said. “I think the big picture is this is all on a road to simplicity: we haven’t gotten there yet -- but we’re getting there.”