I write today with news that DC Water has launched a startup enterprise called Blue Drop.
By day, I run a complex enterprise with 1,100 employees who serve more than 15 million people a year. But I am also engaged to help develop a response to what I perceive as the core challenge for public water utilities across the country (and even the world) – which is a failing business model that too often has poor customer relations, inadequate capital investment and deteriorating services.
For me, developing a “business” model for a public agency that can generate significant revenue from the technology, skills and experience that have been developed at ratepayer expense is a critical element of a structural response to the inadequacies of the historic public utility model. I do think we have a very special moment to do something unique at DC Water, and have the potential of providing real relief to our ratepayers while simultaneously advancing this industry.
That’s where Blue Drop comes in.
Blue Drop is a nonprofit spinoff of DC Water. We launched it 54 days ago with the goal of marketing products and services DC Water has already developed – to generate revenue and improve the state of the water sector. The revenue will provide relief to ratepayers from rising rates.
Blue Drop’s first projects are the marketing and sale of Bloom®, the biosolids soil amendment we make at Blue Plains, and consulting services for external affairs and utility management. I’m pleased to report that the company is already doing work and generating revenue. Blue Drop is also exploring the possibility of shared services and expanding the DC Water service area.
You might recall that we’ve done some pretty impressive events. And DC Water’s Chief Marketing Officer Alan Heymann, who heads Blue Drop, is no stranger to publicity himself. But he talked me into a quiet launch. He’s wary of splashy premieres for startups, because they often include big promises from companies that fail. His preference was to establish a small track record of success before trying to attract a larger audience. Indeed, Alan is in the midst of directing Blue Drop’s very first consulting contract, and sales of Bloom® are slowly ramping up in the new year.
But then I underestimated the appeal of the Blue Drop idea when I tried it out at the American Water Summit last year. A brief interview on the topic for Global Water Intelligence became a cover story instead.
And it’s now time to lift the cover off our little startup.
We tried on several names before “Blue Drop” just seemed to fit. (The logo shares DC Water’s signature tilted blue water drop.) Likewise, we tried on several structures. We started with the idea of a for-profit subsidiary with DC Water as the sole shareholder. This is the model that EPCOR uses to our north. In discussions with our attorneys and our DC Council oversight chair, we realized a nonprofit was the clearer path. On November 3, 2016, after unanimous approval from our DC Water Board of Directors, Blue Drop was born as a District of Columbia nonprofit limited-liability company.
We are a big utility with a large footprint in our industry, but we are not the first to blaze this trail. About 20 miles outside Portland, the Clean Water Institute markets the expertise of Clean Water Services. And the idea of a nonprofit supporting a government agency is hardly new. Look to the successful Friends of the National Zoo right here in the nation’s capital – a group whose guided tours, parking spaces and stuffed animals keep the beloved zoo well-funded to the tune of several million dollars a year.
What does the future look like for Blue Drop? It’s very early going, of course. But I see amazing potential for the kind of economies of scale that have existed in the energy sector for decades. I see other utilities with expertise and intellectual property contributing to a network of peer-to-peer opportunities. And I see smaller outfits across the country benefiting from the investments that their larger-city brethren have already made.
Alan and his teammates Gloria Cadavid and Saul Kinter are the tip of the spear for the moment. They’ll bring other members of the DC Water team – present and former – to work with them for clients from time to time.
If you have a project and you think Blue Drop can help, I’d encourage you to get in touch with us. Blue Drop is also a sponsor of the upcoming Utility Management Conference in February. You can meet the team there too.