After more than two decades working his way up the ranks at GE, Jeff Fulgham took a hard look at his past achievements in the water business, and looked out ahead its future prospects. Worsening water shortages and rising water prices in ever more regions, he concluded, all meant that the typically sleepy world of water was about to start roiling.As Chief Sustainability Officer at GE Power & Water, there were plenty of ways to tap into the opportunity. But Fulgham, 52, saw another option. In mid September, he started as employee No. 3 at Banyan Water, a San Francisco-based startup that is barely a year old. He enters as the company’s chief sales officer.
A well-connected industry insider, Fulgham is tasked with scaling up a young business and guiding a team of decades-younger MBAs to build a new kind of water business. The move comes as a surprise to many in the business — it’s only the second time Fulgham has left a company. And with retirement on the horizon, staying at GE promised a future of steady compensation, healthy options and a comfortable pension.
“It’s a challenge to walk away: GE’s been fantastic. And I’m not much of a job jumper,” Fulgham reflected last week, when I caught up with him in New York City. In town for Climate Week NYC, Fulgham spoke on a panel titled “The Energy-Water Nexus” which I moderated.
In the end, the challenges of building a business from scratch won out. Compared with the pipes, pumps and chemicals approach that Fulgham knew at GE Power & Water, Banyan’s model is more 21st century, more Silicon Valley. Founded by CEO Tamin Pechet and backed by Catamount Ventures — where Pechet was until recently a principal — the company isn’t focused on developing its own technology. Instead, Banyan is buying up specialist companies already at work in the market.
Banyan then will scale up and customize those services into a comprehensive suite it can offer to big enterprises — such as universities and corporate real estate managers — looking to cut their water use, streamline billing, and lower costs.
“The idea is that we can pull in great little companies, and bring them together into one larger, more efficient, durable company, making them the part of a much stronger whole,” said Fulgham.
Typically, the experienced companies Banyan is evaluating have great technology but are hamstrung by a lack of capital, said Fulgham, and thus face a hurdle moving beyond their home markets. Banyan hopes to help, with capital, plus sophisticated sales and support systems.
“It’s a business model combining technologies and services in a field that, five years ago, probably wouldn’t have worked,” he said. “The market is ready now, though.”
“In drought-stricken areas like Atlanta, in Texas, and in California, water prices have risen by five or even ten times in the past decade. This makes new business models possible,” Fulgham said.
Not surprisingly, Banyan’s initial focus will be water-starved stretches of the southern half of the United States. Fulgham is understandably cautious to say too much about Banyan’s strategy just now, given that it is about to unveil its first acquisitions.
He offered the example of a hypothetical Texas university, facing diverse water challenges, including scores of bills for different sites, aggregate water fees in the million-dollar range, and scant knowledge of just how much water was flowing to which facilities.
To help this university get a handle on its water use, one of Banyan’s first offerings — there are more in the pipeline — will install a smart-grid style network of sensors and controllers that deliver real-time data on how much water is going where and when, notifying managers if flow rates spike at a given sensor, indicating a leak.
For the university grounds, Banyan could install state-of–the art irrigation management software that knows when to delay watering – by knowing not just when its raining, but able to use weather forecasts to delay today’s watering if rain is due tomorrow.
To finance these retrofits, Banyan aims to adapt a model used in the power sector by energy services companies, or ESCOs. The approach pays for efficiency upgrades by using the savings freed up by the retrofits to finance their purchase. This allows a client to pay for improvement from operating budgets, rather than as a capital expenditure.
But why “Banyan,” I wondered? Banyan trees, Fulgham reminded me, have adapted to thrive even in arid climates by sending out aerial roots penetrate the round, vastly extending the tree’s reach to soak up moisture. “We’re hoping to do the same thing: reach out to small companies, and connect them into a stronger, more successful whole,” he explained.
Photo CC-licensed by Jeff Howard.