Is the Building Industry About to Witness Its First Disruptive Innovation in More Than 100 Years?

The last disruptive innovation in the building industry happened in 1883 when Warren Johnson invented the thermostat, helping to launch the entire building control industry. This was 30 years after Elisha Otis invented the first safe elevator – the disruptive innovation that unlocked the potential of the skyscraper and changed the face of the modern city. Today, buildings, though improved in safety and efficiency, do not act much differently than they did a hundred years ago. The buildings industry hasn’t seen its Netflix or Airb’n’b yet. At least that’s what Vladi Shunturov, CEO of Lucid, said in his TEDxBG talk this January. The product his company launched a few weeks ago is about to change that. 

“Buildings are a software problem”,

says Shunturov, and his company believes that it is precisely by applying software to buildings that a third of the energy consumption in the world can be eliminated. Their product BuildingOScan integrate hundreds of different devices used in buildings and provide consumers with real-time access to energy consumption data. 

The average person in developed countries spends 90% of their life in buildings. These same buildings are responsible for 2/3 of the energy consumption in the world and for 30% of global CO2 emissions. Of course, the larger part of these emissions comes from commercial buildings – hospitals, shopping malls, schools, offices. Yet, Shunturov claims, despite improvements made in construction, the buildings industry hasn’t seen a single disruptive innovation in the way energy consumption has been handled in the past 150 years. 

Why isn’t energy efficiency happening? Technology solutions offered by the “Big 4” companies on the market are prohibitively expensive for most buildings. They are complex in their design, require other companies to service them, and are thus impractical for small and medium-sized buildings, being suited mainly for really large ones like shopping malls. In the US, 94% of all commercial buildings cannot afford building automation systems. 

Here is where BuildingOS enters the playground. It is the first OS for buildings – a cloud-based platform, which can communicate with any metering device and type of technology, thus integrating all the hardware and making it accessible, easy to operate and manage. This can have profound effects on users’ behavior. The software measures energy consumption as frequently as every minute. The data provides a full picture of the energy a building uses every hour of every day, and allows for significant improvements in efficiency. Making data visible and easily accessible can drive behavioral and procedural changes which can produce dramatic results.

A startling example of the effects real-time data can have, is a competition between 10 Starbucks stores that took place in 2012 in Seattle. After the installation of the software, the store managers noticed that energy consumption at night was not much different from energy consumption during the day. Looking at the data they realized that the heating element used for the coffee machines was never being turned off, because it took 30 minutes to heat it up in the morning. When they experimented with turning the heating element off at night, the energy consumption dropped by 10%. This piece of data caused Starbucks to implement procedures to turn off the machines every night and ensure personnel to come 30 minutes earlier in the morning, in order to turn them on before the start of the day. 

In another great example, in 2012, Lucid organized the first national campus conservation nationals. The competition was held between students from over 100 universities, and included 3,000 buildings. In three weeks, the students managed to save over 2 gigawatt-hours of electricity. 

“Resources have become invisible in our daily life”, says Shunturov. “Lucid wants to make this connection visible again, comprehensible, and accounted for. This is the only way to expect consumers to change their habits. This is the future of energy management.”

photo: Dave C / flickr

You can watch Vladi Shunturov’s TEDxBG talk here. It’s in Bulgarian, but the closed captioning works okay.