• Chris Peacock

Lessons from FATHOM

This is written in response to a number of requests I have gotten about the failure of FATHOM. A company where I once worked. A water industry SaaS company, born from a water utility during a recession.


These are my sole opinions, from a limited vantage point, with a focus on a few lessons I have learned before, during and after my tenure at the company. I do not claim to be an expert on the success or failure of the company, nor do I place judgement on the decisions made along the way.


Because, as those of you who have started a company know, startups are hard. Doubly so in the water sector.


There are no smoking guns. No silver bullets. No answers in this writing. This is really a mental exercise for myself to articulate insights from a company that inspired, motivated, and ultimately helped me understand how I wanted (and didn’t want) to build a water software startup of my own.  I could distance myself from the company that I left in 2016, or stay silent. But to do so would be denying some major inflection points in my own learnings.

Before a quick history lesson, I want to be clear. While FATHOM may have had opportunities to do things differently that may have ultimately changed its trajectory (or not), taking a step back, I don’t see FATHOM as ruinous to the digitization of the water sector.


I think people are quick to judge that FATHOM did not succeed (financially correct), and have since become critical because of their own historical support for the business. An indicator that the water sector echo chamber continues to ring loud - a major inhibitor to accelerating change.


While the company may have failed, FATHOM helped opened the doors to other companies in the sector, and may even have defined a new generation of companies that can learn from its successes and failures. I would suggest to anyone who is interested in building software in the water sector - learn from this failure, from the risks taken, and the successes that are not as visible.


It proved that SaaS has an opportunity to scale in the water sector. It proved that integrations across systems add value to utility decision making. It accelerated pathways to understanding smart water utilities. It helped establish the connection between revenue, data and customer engagement. It disrupted traditional thinking about water sector business models.


Below is a story of how my career evolved, and the important role of FATHOM in that evolution.


2005 - My introduction to the FATHOM executive team began early in my career – before FATHOM was even a business. When Global Water was building an entirely new utility south of Phoenix – and the company I worked for at the time was providing engineering services. Greenfield development, state of the art infrastructure, water reuse – this utility was definitely ahead of the curve.


2012 - After spending a decade helping consulting engineering firms grow, selling thousands of billable hours to the water utility sector, and starting a couple of my own companies, the early FATHOM management team reached out to me regarding a new role.  It was a position to help manage customer relationships for this new software platform they were building. It was intriguing, but did not come to fruition as I was on a different path in my career at the time.


2013 – A year after those discussions, I decided to start my third company, The Water Innovation Project. Here, we reimagined how we might better collaborate around water. We wrote an award winning book. We put together a water/energy nexus hackathon.


I was personally looking for a way to move from consulting to building a software company in the water sector.


So, I also started an industry group called H2.O. While this chapter of my career is full of insights and lessons, it was the leadership team at FATHOM that first joined, and sponsored, H2.O along with three other thought leading companies (Neptune, Eramosa, and Optimatics).


Our mission was to build a framework for smart water utilities in North America (long before it was cool.) Around the same time, SWAN was gaining traction (and ultimately took the lead in this important endeavor of helping to digitize the water utility sector.)


2014 - While H2.O never found its full potential, in large part due to my own limited time and focus across multiple projects (yes, a major lesson here), the FATHOM team once again invited me to join them on their journey, this time to lead strategic accounts.


It was an amazing opportunity to learn critical skills I would eventually need to start my own software company. And it had all the makings of a game changing business.


My time at FATHOM was intense. It lasted just less than 3 years before I left to start AQUAOSO. But the lessons learned in that short time were invaluable!


FATHOM was led by a high caliber team that had high expectations and there was little room for mistakes. I spent time managing client relationships with our largest customers. Selling the FATHOM platform to new customers. Engaging in partnership discussions. Working across our implementation, operations, support, finance, sales and software teams. Built the first customer success team. I was speaking at events and conferences. I had the opportunity to contribute and learn from every part of the business. I worked with amazing people, many of whom I consider friends.


I certainly had my share of mistakes and lost some deals. But I also had great success, great mentoring, and opportunities for personal growth.


I also acknowledge that many people in FATHOM did not have the same experience. Or feel the same way about their time there. I can not speak on their behalf, as their experiences are their own.


So, what did I learn during my experience at FATHOM? Below I have listed some of the lessons I have integrated into AQUAOSO.


1)    Clearly articulate expectations. There was never a time that I did not know what was expected of me. Nothing came as a surprise. This can create an intense environment, especially when expectations are high – but it creates a level playing field. We have attempted to incorporate this at AQUAOSO. Setting expectations is an important part of our value system. And when we miss expectations, rather than provide excuses, we find ways to learn together and move forward with a stronger core understanding for fulfilling our vision.


2)    Create and refine an operational cadence. We have had an operational cadence since day one of AQUAOSO, even when it was just me. Anyone who knows me, knows that I fight against too much process – but I do value the importance of good process and cadence. I learned about the Gazelles framework while at FATHOM, and we continue to use it at AQUAOSO. This was actually reinforced during our time at Techstars when Verne Harnish spent a few hours with our cohort.


3)    Culture strengthens strategy. I have always found strength in culture – hell, I spent years of my life studying organizational behavior. Great strategies, without a cohesive culture to support the team, will fall short. The integration of culture is hard, and something that FATHOM did not get right (at least during my tenure) - each business silo had a different culture.  I believe it is one of leaderships greatest opportunities for competitive advantage, and some of the most important work for the leadership team. At AQUAOSO we strive for a cohesive culture, understanding that it shifts with every new employee that joins the team. Which is why it is critical to hire the right people for the company you want to build, remove the wrong people quickly when you make the wrong hire, and make sure the people you do have are positively engaged in building the business.


4)    Get the business model (and economics) right – and calibrate as needed! I could rant on this all day long about water sector business models. After 20-years in the sector, I’ve admittedly gotten a bit jaded. Maybe I’ve heard the same conversation too many times. Or see too many people searching for a problem to solve with AI/Blockchain/SaaS. That’s just ass backwards. First, define the problem, then build a solution with good economics. But I digress. I learned a lot about business models while at FATHOM. About understanding customer needs. Finding the real pains that people would pay to solve. About building sales channels. About the importance of customer success. FATHOM philosophically understood this – unfortunately, the execution and/or economics of the business model broke somewhere along the way without calibration (evidenced by the company going out of business.)


5)    Build the right tech, at the right time. Anyone in software knows there is always a shinier button that could be built. Startups with venture capital have pressure to serve customers, and investors. With too many voices, and not the right focus, the right tech might be built at the wrong time – or worse, the wrong tech entirely. There are always a lot of voices and competing demands. So, find ways to build the right tech, at the right time. Build process to capture the insights, and reduce the noise. Then calibrate the business model as/if necessary.


6)    Show up. I won’t belabor this point. I’ve written about it many times. It was a core thesis during my time at FATHOM. This is where expectations, cadence, culture, business models and product get executed. And in order to execute, you have to show up. Or in the words of Scott Belsky in his book "The Messy Middle", “do your fucking job!”


So, there you go. A brief summary on the influence FATHOM has had on my career and in our pursuit to building a water resilient future at AQUAOSO.


To your continued success!


Chris

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