Irrigation system new firm’s savior

By Buck Wargo

Friday, March 5, 2010 | 3 a.m.

Editor’s note: This is part of an occasional series of stories on how Southern Nevada companies are moving past the recession.

David Drake knows he picked a heck of a time to launch a business.

Drake started Aqua Management in September 2008 during the Wall Street meltdown and what has become the Great Recession. His company, with six employees, has emerged from the tough economic times in a stronger position and plans to add employees this year.

Drake was an engineer in charge of developing irrigation control systems for Motorola in Chicago when he was laid off in 2005. That’s when he decided it was time to start his own business.

The smart irrigation systems developed by Motorola enabled commercial customers to adjust their watering to the weather. But at $3,000 to $20,000 per controller, Drake said he knew he could do it much cheaper.

Drake set out to prove that and spent the next two years living in his parents’ basement in California.

“I was with my soldering gun and computer and basically locked myself in the development of a product,” said Drake, who added he got a lot of help from friends.

Drake eventually decided to launch his company in Las Vegas. What better place than a desert where people are interested in cutting their water usage? But it wasn’t an easy transition, he said.

“For me it was a year-and-half living off credit cards and getting help from my family to pay rent,” Drake said.

He knew he needed investors and got a break when a friend introduced him to two people interested in his idea. He needed $500,000 to pay salaries, build the controllers and install them at homeowner associations.

Drake said he knew his concept would work because it didn’t require an association to spend $200,000 for the multiple irrigation controllers needed on the property. Instead, his company would give them away at no upfront cost, and his company would make money from the savings on their water bills.

“I wanted the customers to start paying us back from their savings and not hit their budget,” Drake said.

The first customer was the Canyon Gate Community Association.

But it would take time to convince people of the system’s viability, Drake said. By the end of last summer, Aqua Management had only two clients — Canyon Gate and the Metrolink rail line in Southern California.

Financial woes hit last August and continued through the fall, when the company went through the investors’ money, Drake said. Survival meant cooperation, he said.

“It was staying lean and having our employees understand when we were late on paychecks,” Drake said. “It was just we all pitched in and when we didn’t have money, we all took pay cuts for months. We all suffered together.”

When new employees were needed, they were told they were not being brought in as employees, but as partners. Some were willing to take the risk and others weren’t, Drake said.

The company’s fate would rest on showing potential customers that the concept worked. They were sitting on the sidelines waiting for the results — Canyon Gate cut its water usage by 45 percent, he said.

Since last summer, the company has gone from serving one to 24 associations. It also serves a handful of commercial customers and expanded its customer base to Arizona.

“We are taking off, and we are getting new customers every day,” Drake said. “The customers realize that the plants will stay healthy, and the water will not run down the street. The customers realize that is the smart thing to do.”

The technology has been installed on four properties maintained by Jaramillo Landscaping & Maintenance Co. It is too soon to know the results, but owner Chris Jaramillo said he’s excited about the potential.

“The technology is good with watering on weather-based data. We are expecting good things,” Jaramillo said.

Drake said his investors are patient and that it’s going to take another three to four years before they will be able to recoup their money.

“We plan on hiring five more people this year at the current rate of growth, but the main thing is we want to stay lean and continue providing the same pricing,” Drake said.

“(And) to never forget how small you were and continue to stay with that same mentality.”

Drake said there will be opportunities after the economy recovers because people have learned to be more frugal and live leaner.

“Homeowner associations can’t throw money around and commercial customers can’t throw money away. Everyone is trying to run more efficiently. If you can continue showing they can save money and be good to the Earth and saving water, that will be an incentive for them.”

The devices control the irrigation program at a homeowner association or commercial project based on weather conditions. For example, if the grass is regularly watered for five minutes, that might be cut back to four minutes if it’s cloudy, Drake said. The system ties into a local weather station that calculates the rate of evaporation, he said.

Aqua Management even programs controllers remotely by cellular technology, Drake said. If operators know it’s going to rain the next day, a command can be set to turn off the irrigation system.

Drake said his controllers cost $1,400 to $3,000, a much lower price than those he built at Motorola because of the lower overhead his company has.

“We are such small peanuts and not big enough to be a threat to anybody,” Drake said. “But the big boys have started paying attention because we are giving our products away at no cost to the customer and holding their hand the entire time, rather than just drop them off at the door.”