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From Power Outages to Innovation: How Thread is Revolutionizing Utility Asset Management
A devastating ice storm in 2013 left an entire region without power for months. For Josh Riedy, witnessing this catastrophic infrastructure failure would later inspire the creation of Thread, an autonomous inspection platform that’s transforming how utilities manage their critical assets. In a recent episode of Category Visionaries, Thread’s founder shared insights into how personal experience shaped his mission to modernize the utility industry.
When Personal Experience Shapes Innovation
“My late paternal grandfather and my father’s older brother… had visible scars,” Josh explains, recounting how his grandfather was severely burned while working on a power generator. This incident led his grandfather to establish the area’s first power cooperative, serving as board chairman for 40 years. These early experiences with the challenges and dangers of utility infrastructure would later inform Thread’s mission to make asset inspection safer and more efficient.
The Microsoft Connection That Started It All
Thread’s journey began with an unexpected encounter with Microsoft’s president Brad Smith. “I got a call if I wanted to meet Brad after the TED Talk in almost one of those situations where you think it’s a prank call,” Josh recalls. That meeting resulted in Thread’s first $100,000 investment and, more importantly, validation from one of tech’s most prominent leaders.
Revolutionizing Utility Asset Management
Thread is pioneering a new category that Josh describes as “a mashup of ERP solutions, asset performance management solutions in particular, like SAP mashed up with robotics.” The platform enables frontline workers to perform inspections more safely and efficiently, while feeding crucial data back to engineers who might be hundreds of miles away.
The impact is dramatic. As Josh explains, “What used to be necessary to inspect a Turbine was a three person crew repelling down turbines that are 80 meters in height… today with a thread solution on Demand is a one person job in roughly 20 minutes.”
Building Trust in a Critical Industry
Thread’s approach to market entry demonstrates the importance of earning trust in the utility sector. The company established a unique co-development arrangement with Xcel Energy, one that required proving their worth before earning any revenue. “We didn’t get paid until we proved it,” Josh emphasizes. “It didn’t come overnight. It came from many years of hard work.”
The Future of Utility Infrastructure
Thread’s vision aligns with a transformative shift in the utility industry. As Josh explains, “Utilities making the pivot into renewables and making a pivot away from large opex which was fossil fuels and uranium to produce power.” This transition represents what he calls “a generational opportunity” to reimagine how utilities manage their assets.
Looking ahead, Josh envisions Thread becoming “what EPIC is to electronic medical records” but for the digitization of utilities and energy infrastructure. This ambitious goal reflects the growing need for sophisticated asset management tools as utilities transition to renewable energy sources.
Leading Innovation from the Heartland
Thread’s success challenges the notion that groundbreaking technology companies can only emerge from traditional tech hubs. Operating from North Dakota, the company has attracted investment from notable figures including Kevin O’Leary and Microsoft’s Brad Smith, demonstrating that “great companies come from all places.”
As utilities worldwide grapple with aging infrastructure and the transition to renewable energy, Thread’s innovative approach to asset management offers a glimpse into the future of utility operations. By combining advanced technology with practical utility experience, Thread is helping to ensure that month-long power outages become a thing of the past.
Actionable
Takeaways
Identify Critical Problems in Traditional Industries:
Josh and his team recognized the need for modern tools to manage energy assets, particularly in the wake of natural disasters that exposed the vulnerabilities of the existing system. By targeting a critical problem in a traditional industry, they were able to create a compelling value proposition.
Earn Customer Trust Through Co-Development:
Instead of seeking upfront payment, Thread invested time and effort to understand Xcel Energy's problems and develop a solution that met their needs. This approach allowed them to establish strong product-market fit and earn the trust of a major player in the industry.
Leverage Industry Relationships for Market Entry:
By partnering with Xcel Energy, Thread gained credibility and access to a network of potential customers in the utility space. Founders should seek out strategic relationships that can help them navigate the complexities of their target market and accelerate their growth.
Embrace the Challenge of Defining a New Category:
: As a mashup of robotics and ERP, Thread faced the difficulty of describing their offering to both customers and investors. Rather than trying to fit into an existing category, they focused on communicating the real-world results and impact of their solution.
Capitalize on the Shift Towards Sustainability:
With utilities investing heavily in renewables and setting ambitious carbon reduction goals, there is a generational opportunity for startups that can help facilitate this transition. Founders should look for ways to align their offerings with the sustainability imperatives of their target industries.
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