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The Value Proposition

Sri's Blog

Intellihot has a unique and compelling value proposition: we cost half as much, cost less to own, occupy less space, save you money on energy costs, are more reliable, and won’t get people sick from unsafe water.

That proposition isn’t just words; it is backed up with data and facts. It started with questioning the conventional wisdom around water heating in large buildings, such as hotels, which states that everyone is going to take a shower in the morning, and therefore, you need a heating system large enough to provide enough hot water for everyone in the building to shower at the same time. However, if you really think about it, it is apparent that buildings don’t operate with 100 percent of the fixtures open at any given time.

We asked some large buildings if we could monitor their water usage with flow meters—and the results were eye-opening. We found that, at its peak, a 100-room hotel would have only 12 percent of its rooms using the shower at the same time. Then, we expanded our monitoring to measure multifamily units and restaurants. All of this data became core to developing the size of our product and our estimates of how many units a building would need. Utilizing that data along with field measurements from various applications across the U.S. and Canada, Intellihot developed a sizing calculator that drives capacity shortage risk to a minimum, while maximizing energy and space savings.

With this tool, we introduced the Intellihot guarantee: use our sizing and methodology, and if we ever fall short, we will give you additional pieces of equipment at no cost. This guarantee of reliability is central to Intellihot’s value proposition, especially in the water heating space, where reliability is so important that the industry hasn’t changed in a hundred years. For a hundred years, water heaters have worked just fine, and nobody wants to risk changing something that works—even at the expense of efficiency, space, and providing healthy water. 

Coming from outside the industry, we took a whole new approach to reliability. But reliability is only one part of any company’s value proposition; the second is cost: how much does it cost up front, and how much does it cost to operate. This is what truly sets Intellihot apart. With our system, you spend less up front, less in operating costs, and you have a more reliable system. Moreover, because you are not storing large amounts of stagnant water, the risk of legionella bacteria is mitigated. So, you are also providing your customers with good, clean, efficient, and healthy water.

This value proposition is not hypothetical; it is something we have seen in practice with our customers. We powered a 400-room Hilton Hotel outside of the San Francisco airport. With our system, they cut their gas bill by over 70 percent. The hotel’s monthly gas bills went from around $20,000 to $5,000, and we eliminated about 8,000 gallons of stored water. Now, the system only stores ten gallons of water. 

Similarly, we also powered a 62-story luxury condo building in Chicago—one of the tallest residential buildings in the city. When this building was built, it was designed to be energy efficient and LEED certified. The building had gigantic 2000-gallon storage water heaters on the 62nd floor. When we replaced them with our system, it cut the cost of water heating by almost 30 percent. Moreover, people living in the building reported that the water temperature was more consistent, and that the water tasted better!

Even in an industry as stodgy and unchanging as the water heating industry, a value proposition this significant is hard to ignore.