Our recent articles on "broadband plumbers" generated a lot of email and we followed up to interview the CEOs of three companies that have different twists on the business.
SaVoyant - Broadband for Billionaires
Andrew Rollert, CEO of SaVoyant got our attention in his email saying that "the high end is what's exciting" about home technology management. Based in Boston, SaVoyant focuses on the ultra-high end of the market. Andrew referred to his clients as "billionaires" and sees them as "highly successful but time-constrained customers". His background is in the brokerage business, and he thinks there are strong parallels in the needs and the business model.
SaVoyant does an initial installation and then provides lots of on-call "hand holding". Each home has a "residential technology consultant" (RTC) "dedicated to managing their technology assets". Andrew told us that his customers "love this permanent relationship. It's like doctors and lawyers - one person dedicated for reselling and refurbishing assets in the house." The customer buys "RTC credits" for phone calls and house calls.
SaVoyant is focused on "the top .05% of the market". They've already done almost 1000 homes - a mixture of new builds and retrofits - and are planning to expand geographically. Although SaVoyant isn't interested in the mass market, Andrew thinks a similar model will be appropriate in a few years for people who don't want to do it themselves: "SaVoyant is a Mercedes, other companies can be Toyota".
Intelligent Home - Making Retrofits Pay Dave Olcott, CEO of Intelligent Home in Rochester, NY has yet a different focus -- specifically, home networks connected to broadband.
Dave told us they're especially interested in retrofitting existing homes. Their current ratio is 60:40 new homes to retrofits. Dave would like to see 80% retrofits because of the huge base of existing homes and his belief that the new home market is becoming commoditized: "In some parts of the country, rates for structured wiring components are being reduced to single-digit margins."
IHI works closely with the local cable operater, Time Warner Cable. Dave said that TWC has "been able to roll product out much quicker" than the phone company with DSL, and broadband "provides the need for our services." IHI installs Road Runner (TWC's high-speed access service) as part of its structured wiring installation: "Road Runner doesn't support multi-PC installation, so they direct it to IHI. We set up the modem and configure the PCs. TWC has a happy customer, and TWC is happy since the odds of changing to DSL are minimal."
Dave thinks there's a good future for this approach: "There's a whole different skill set that's involved that cable ops and telcos can't do." IHI currently operates in several upstate New York cities and plans to expand geographically and work with more service providers.
( www.twcable.com )
Homesync - Making it Part of the Builder's Process
We were recently in Colorado to visit CableLabs and spend a weekend with our son in Colorado Springs. As we drove around the area we were astounded to see the boom in home construction. Areas that a few years ago were bare fields are now large sub-divisions and signs abound for new homes.
While we were in Denver we had the opportunity to get acquainted with Homesync. They target the production builder and aim to make "broadband plumbing" a standard part of the construction process for new homes -- like kitchen counters, sinks and flooring.
Subsequent to our visit, there were some changes in the company's top management. We interviewed their new CEO, Larry Hay, by phone to understand the changes. Larry's background is in successfully growing franchised retail establishments like Radio Shack and Taco Bell. In his view, Homesync is developing systems and procedures that will make their services both helpful and profitable for production builders. In Denver and Colorado Springs, home buyers visit a Homesync "experience center" to see all the capabilities that can be incorporated in their homes. They see how much they get for their standard allowance and make informed choices so they will have the infrastructure that's needed to support services they want now or later.
Homesync currently is working with builders such as D.R. Horton, Classic and Infinity and has about 3000 homes committed for the coming year.
[For previous articles on "broadband plumbers" see the 4/2/2002 and 2/25/2002 issues of BBHR. All back issues are on our website at http://www.bbhcentral.com/report/back.html ]