1 Billion Reasons Why the Connected Community Matters

by: | Aug 20, 2015

As a consumer, the concept of home automation is incredibly appealing. I look forward to the day when my home can be completely controlled from an app that lives on my phone. Or perhaps on my TV. And that home automation system starts to learn things about my family — our “context” — then does smart things like turn off lights that were left on when we left the house, manage the thermostat so it heats more efficiently based on when we’re around, turn off everything but the TiVo and the refrigerator when we go on vacation, and dial back the sprinkler system after an unexpected summer rain shower.

Cool stuff — but when it comes to home automation, there’s a bigger opportunity for those of us working in technology: to scale home automation into a fully connected community.

I recently had the pleasure of being on stage with Tom Silk, senior vice president of KB Home, at APPNATION’s recent IoT Influencer’s Summit to talk about the idea of the connected community. KB Home, as one of the top homebuilders in the U.S., has a unique perspective on building whole communities and implementing technologies at scale. Given that it is summer, and the event took place in the midst of an epic California drought, we talked quite a bit about water conservation.

Adam Fingerman on the benefit of a single smart irrigation system:

In a single connected home, for example, a homeowner might save 25 gallons a day with a smart irrigation system. But if new homebuilders installed smart water systems into 125,000 new homes over the course of a year (about 25% of the new homes built last year), those connected communities combined could save more than 1 billion gallons of water in a year. That could make a real difference when it comes to water shortages.

You can watch the whole session about the connected community on our YouTube channel. But Tom and KB Home agreed to continue the conversation about the connected community here, on our blog, too.

Q&A with KB Home: The Connected Community

Adam Fingerman: You and I have talked a lot about the benefits of whole communities that are connected. And when it comes to a drought, as an example, isn’t there a greater need/opportunity that goes well beyond that of a single home automation system?

Tom Silk: You are right — a single homeowner who chooses to create a home automation system might have an impact but chances are most of his neighbors won’t go through the same pain or cost to set up a similar system. And when entire communities are planned, built, and connected from the start, you can achieve a 100% installed base — and then the savings are exponentially greater. A single homeowner saving 25 gallons a day with a smart watering system is great — BUT a community with 500 homes, that’s 12,500 gallons a day and over 1 million gallons over the course of a summer — that can have a real impact.

AF: And how many new homes are made each year?

TS: The top 10 new home builders (like KB Home) produce over 125,000 new homes each year. So in the previous example, that would equate to a potential savings of over 1 billion gallons per year.

AF: Yes, I can see how new home builders are really in an advantageous position to drive home automation and the connected community that could benefit the entire regions, vs. waiting for this to just evolve organically in the aftermarket. What other advantages does a new home builder bring to the evolution of home automation systems?

TS: In addition to our ability to add installed base in community size chunks, there are many advantages inherent in new construction vs. retrofitting existing homes to make them connected. I’ll touch on two main areas. First, builders have easy access to the bones of the house, making adding sensors and wiring – if needed – much simpler than a retrofit. Second, in new construction, the buyer is able to include home automation features in their mortgage, enabling them to finance the purchase of connected home gear vs. paying for it in cash.

AF: Let’s bring it back to the drought for a minute. Allegedly, El Nino is going to fix everything for us in California this winter — so it might be back to normal for at least a few years. But let’s say 10 years from now we’re in a similar position. Tell me about how the connected community could be a huge advantage next time.

TS: One of the main advantages of a connected community vs. a connected home is access to benchmarking data. What I mean is that today, you have no idea how much power or water is “normal” for your home. Generally, we look at our year ago numbers to know if we are doing better or worse with power and water, for example. In a connected community, you can compare your usage to only the houses that are the same model as yours, or houses with the same number of occupants, or houses that all face south, etc.

AF: So, for example, I’ve got a family of four including two young children, I imagine I could compare against other similar households.

TS: That’s exactly right. You would be able to see how you are doing, how much you’re paying in utilities — even get tips on how other similar households are doing a better job of conserving on water or energy use.

Tom Silk on comparing resource use within a connected community:

AF: OK, we’ve talked a lot about water. There are several other intriguing benefits a connected community offers — energy conservation is another that comes to mind. Tell me about a couple of ideas that really excite you?

TS: There is certainly a host of interesting applications. Let me give you an example. Today, we can use smart phones and home automation in conjunction to make homes operate at much higher efficiency. Imagine having every AC duct in your home connected to motion sensors. Ducts in unused rooms could be closed making the AC more efficient. We can all use that today.

AF: One thing I’ve been wondering about is how this may change the social behavior of neighborhoods. Do you think living in a connected community may actually encourage neighbors to work together for various causes?

TS: It is interesting that, by having community level data, your HOA (for example) can set targets and “challenges” — goals for the community that the HOA can then monitor. It will make resource management a community effort and not solely an individual effort. One of the things I’ve noticed in my neighborhood, for example, is that I see a lot of water running out onto the curb. A connected community app could allow neighbors to help each other out by pointing out these unintended wastes and promoting positive change.

AF: As an app developer, we talk a lot about gamification and push messaging as a way to increase app engagement and re-engagement. Tell me a little more about how that might work in a neighborhood setting?

TS: There are a lot of possibilities here. At the individual level, we talked about how you can compare your home anonymously to similar homes. But you might decide you want to share your data and make it a little more competitive — almost take a fantasy football approach, where you see how you are doing against your friends/neighbors. HOAs and even municipalities could be involved in establishing both individual and group incentives. The family with the lowest water usage gets $100 credit toward their water bill. Notifications could be super useful, too. You get a message — “Your water usage increased 75% this week” — and you might want to check if there’s a leaky pipe somewhere. Or — “You are in the 90th percentile of energy use. Find out how similar homes are faring better.”

AF: There’s a lot of discussion about what the future control “hub” of home automation will look like. What do you think — is it the TV, the phone, the watch?

TS: The answer is really all of the above. Apple talks a lot about continuity and how experiences transcend devices. What that means for a connected community is that the command center doesn’t live on a single device. It’s in the air — and you can access it however you like depending upon where you are and which devices you may be using in that moment. If you’re on your TV, you could control it using your remote. If you’re wearing a watch, it’s there. If you’re carrying a phone, it’s there.

AF: What about at the community level — could there be a centralized “control center” that someone in an HOA or at the city level could manage?

TS: There certainly could be different dashboards that would allow an HOA or some other body to look at the data in different ways. For example, someone reporting to an HOA board on how the community is doing on resource consumption vs. the goals. Whether or not there’s a control element — where an HOA might be able to control something that relates to a home — that raises a lot of questions about security and privacy. I don’t think we’ll see that kind of community management anytime soon.

AF: What are the barriers right now that KB Home and other homebuilders need to overcome to get to a place where you have these truly connected communities?

TS: Frankly, there are two major issues. The first is that there are multiple competing, and not generally interoperable, platforms and protocols so consumers need to pick a brand/system first and they are then locked in to that platform. The second is that the industry is highly focused on after-market applications which are, by their nature, limited.

AF: OK, Tom last question. Up until now, the smart home has been limited to high-end custom installers and technophiles who are retrofitting their houses with a mashup of devices and technologies. As the two most dominant forces in mobile, what could Apple and Google do to help bring the smart home — and smart communities — to the masses?

TS: Well, they could give me a ton of money to develop smart communities, but let’s assume that doesn’t happen. Consumer education and demand generation are big barriers right now. My opinion is that we need to start some prototype communities to demonstrate to consumers the possibilities. I think part of the answer is in reversing the perception you mentioned that these technologies are only for the high end. By working with a new home builder that is known to serve the first-time home buyer, Google and Apple can demonstrate that these technologies are for the masses.