Heuristic Actions Inc./Bellwether
The key to safety, predictability, longevity, and efficiency is effective STRUCTURAL inspection. Bellwether automatically provides actionable information based on comprehensive, continuous, and objective sensing and analysis.
Patented Architecture — Unique Solution
❖ Bellwether™ uniquely breaks through the practicality and affordability barriers of bridge monitoring.
- There is NO like-for-like competition. Existing standalone sensor systems lack the continuous presence and advanced algorithms required to automatically produce actionable information.
- The concept and architecture are patented and have been tested and validated by the National Institute of Standards and Technology (NIST).
❖ Bellwether™ consists of a wireless sensor network, a bridge master station, and a suite of sophisticated analytics.
- Battery-powered sensors are attached to the structure. Bellwether does not require a priori information about the design, so it is independent of previous engineering and avoids costly and difficult reverse engineering. Sensors are self-aligning and self-calibrating.
- Proprietary software automatically characterizes and then continuously monitors the structure, subsequently generating alerts and alarms as appropriate.
- The installed system can be administered and monitored locally or remotely.
❖ Bellwether™ enhances existing inspection and maintenance practices. Like a medical examination, inspections are better and more economical when based on objective information that highlights critical and problem areas.
- It can provide actionable warnings in the event of structural problems caused by gradual deterioration or more sudden damage.
- It detects developing problems earlier, so less expensive repairs are required. Effective inspection leads to focused corrective maintenance, which generally doubles the safe lifespan of a bridge.
- Current structural status is continuously available, allowing bridges to be reopened sooner after an incident such as a collision or earthquake,
- Bellwether provides consistent, detailed records, aiding bridge lifecycle management and regulatory compliance.
Initial Target Market
❖ Heuristic Actions, Inc carefully assessed market potential and concluded that the heavy freight railroads were the best initial customers:
- The North American railroad industry is dominated (80% market share) by only seven major companies, each of which owns and maintains tens of thousands of aging bridges. Marketing and sales to a small number of large customers is far easier to manage then to a large number of small customers. These railroads spend half a billion dollars a year on bridge inspection and maintenance.
- Engineering practices are freely shared within the rail industry, often formalized by membership in AREMA, the industry engineering association. Knowledge of and satisfaction with Bellwether with one railroad will immediately translate to an industry-wide reputation and possible adoption as an industry standard.
- Two years of establishing customer relations with key railroad industry decision makers—railroad chief engineers and VPs, engineering firms, and rail insurance providers—has enabled us to fine tune Bellwether to customer requirements at the same time we have created brand recognition and confidence in the market demand. There is intense interest in the rail industry in Bellwether as a “game changer.”
- Once established in the North American rail industry, it will be possible to pivot into other sectors such as highway and international.
❖ Facts about rail bridges:
- The relative load of a freight train on a bridge is an order of magnitude more than even the heaviest truck on a highway bridge.
- The median age of North American railroad bridges is 92 years.
- The aggregate length of rail bridges in North America is 3 million meters. 50% steel, 25% timber, and 25% stone/masonry/concrete.
- There is not enough capital available to replace railroad bridge inventories. Excellent inspection and maintenance is critical to economic survival of the industry. Current inspection practices are less and less effective as bridges increase in age and trains are becoming heavier. Bellwether can reverse that trend.
- Often the practical answer to unknown bridge condition and capacity, especially in the face of heavier trains, is to reduce the speed limit. This has a negative impact on “system velocity,” an important industry measure of productivity. Evaluation of bridge performance based on objective information instead of current estimation techniques can allow engineers to safely raise speed limits on some bridges. Raising a speed limit from 10 mph to 20 mph is the equivalent of building a second bridge.
- There is not enough insurance coverage available to cover all rail bridges. Bellwether is looked upon by the rail insurance providers as a key risk reducer influencing where to allocate scarce insurance coverage as well as in itself being worthy of insurance premium discounts.
❖ Railroad bridge development and validation:
- Bellwether’s differentiation as a breakthrough solution is based on affordable acquisition costs, affordable installation costs, and effectiveness. To this end we have leveraged emergent sensor, computational, and battery/power management technology driven by the smartphone, wearable, and internet-of-things explosion.
- Bellwether’s sensor, networking, and analytics have been and continue to be developed, tested, and validated on two railroads in California. So far, Bellwether’s analytics have detected previously unknown defects in 33% of the bridges evaluated.
❖ Railroad industry sales:
- Heuristic Actions, Inc has signed a ten-year contract with one of the largest North American railroads. The first phase, currently in progress, involves field testing on customer selected bridges. This project is well underway and will conclude in the Fall of 2016.
Heuristic Actions founders come from a successful operational intelligence, mission planning and management background, where timely information in context is critical and avoiding information overload is vital. This development team is experienced in bringing critical technologies out of the development environment and into the real world.
Heuristic Actions has been taking the pulse of the railroad industry for over two years to tightly focus BELLWETHER’s™ capabilities on the industry’s actual needs and position it for a strong launch in the market. Direct interaction with key customer decision makers, participation in industry events and trade shows, membership in AREMA, and discussions with industry publication editors and insurance providers have established name recognition among industry leaders. These relationships enhance salability and are supportive of rapid growth after launch.
Large Short Line
Heuristic Actions, Inc. is building a International PR strategy to announce the successful delivery of BELLWETHER™ to the marketplace later this year.
1. What makes Bellwether unique in the market?
- It is the only fully automatic bridge/structural monitoring system. It provides actionable information, not floods of data.
- It has been conceived from the ground up to affordably meet specific customer needs within the framework of existing industry practices.
- It is based on an exclusively-licensed patented wireless architecture.
2. Why is the wireless architecture such an important differentiator?
- Wireless installations are quick and easy, reducing costs and reducing required “track time,” the time during which the line is out of service for installation.
- Only wireless systems scale-up well on larger bridges, whereas the amount of cabling can quickly exceed reasonable limits.
- The most granular results, and hence the location precision, depends on sufficient numbers of sensing points. Again, wireless has the advantage because of scalability.
- Cabling can be heavy, putting a load on the bridge
- Cabling is expensive compared to air.
- Cabling is prone to damage due to ice and wind.
- Cabling can create a lightning hazard.
3. How do the proprietary analytics help affordability?
- Placing sensors on a structure is only the beginning.
- Making sense of the flood of data produced is the key. The conventional approach is to mathematically model the structure in a computer and then attempt to relate the sensor data to the predictions of the model.
- Because rail bridges tend to be old and have had perhaps a dozen owners over the years, often this must be done without benefit of the design plans for the structure.
- There are two problems with this approach. First is the cost—up to $500,000 per bridge. Second is validation—there is no way to know if the modeling is correct.
- Bellwether uses a simple approach—there is no need to create a model of something that exists in reality. The bridge itself is the model, and the model is the bridge. Since the model and the bridge are the same thing, there is no validation problem.
- Heuristic Actions’ advanced analytics are capable of characterizing the bridge using a proprietary output-only, system identification process
- This process is accomplished automatically—and inexpensively—in a one-day to three-month period after installation.
- Thereafter the structure is monitored based on that characterization.
4. Is the market ready to buy?
- Yes. We have spent two years laying the groundwork.
- We have already signed a ten-year contract with one of the largest railroads in North America.
- There have consistently been expressions of significant interest from nearly every railroad decision maker we have briefed. The question we are now hearing is less “How does it work?” and more “When can I get it?”
5. When will it be available in quantity?
- We expect to ramp up sales and availability in 4Q2016.
6. How big is the marketplace?
- $800 billion
7. Is it priced right?
- We have planned Bellwether as a solution that is affordable enough to be installed on every significant bridge yet with sufficient margins to support a healthy company and profitability.
- Customers are satisfied with both prospective affordability and value to their operations.
8. How are systems installed on customer bridges?
- Railroads will use in-house bridge maintenance and engineering staff as well as contractor support. Installation of Bellwether is straightforward and should present no difficulties when supported with training and documentation.
9. How much profit do you project in four years?
- $70 million.
10. Who will own the company in four years?
- We expect a liquidity event prior to the four year point.
- Prospective buyers include systems integrators, systems companies, or possibly an IPO.
Heuristic Actions is seeking $1,500,000 for an equity position in the company.
The primary use of funds is to expand technical and field support staff. The core technical staff will continue to focus on finalizing productization and then move into pre-planned continuous product improvement. The field support staff will ensure client installation teams are fully supported from project inception through completion. The next use of funds will be to expand the technical marketing staff to allow expansion into the US highway marketplace and the International rail and highway markets
As stated above, we expect an acquisition by 2020, most likely by a systems integrator, an Internet of Things company, or by a conglomerate that collects a portfolio of system houses. Another possible acquirer would be a technical company that provides related services within the industry segment such as a major bridge/infrastructure design or construction firm.
❖ December 2016: Initial operational Bellwether systems deployed on customer bridges
❖ June 2016: Provisional patent filing.
❖ March-May 2016: Preparation of provisional patent filing for Bellwether as a system, adding to the existing patent on the wireless sensor architecture.
❖ January 2016: Signed a ten-year contract with one of the largest North American Railroads.
❖ December 2015: Completed Round 1 of investor funding to complete development of the Bellwether technology.
❖ December 2014: Obtained exclusive license to Stanford University wireless SHM architecture patent.
❖ June 2014: Second increment of founder funding.
❖ March-December 2014: Identified availability of all requisite technologies to meet customer requirements. Initiated design of the system, starting with trade studies and systems engineering and continuing to analytics test and validation, performance specifications, and preliminary hardware and software design. Applied for exclusive license to wireless SHM architecture patent.
❖ March 2014 – to date:
- Established Heuristic Actions, Inc name recognition in the railroad industry.
- Confirmed strong and immediate demand in the rail sector through exchange of views with key rail industry bridge chief engineers and decision makers.
Jim Lochry and Tim Moriarty have been working together for decades, applying technology to operational situations to substantially improve operations and create value. Their awareness of the world’s acute crumbling infrastructure problem and of technologies that could be developed into useful tools to help mitigate and remedy this problem motivated them to develop Bellwether.
Co-founder and Executive Chairman of Pharmacy OneSource, Inc., which develops SaaS solutions for healthcare organizations.
Founder / CEO of Impact Systems, Inc and former SVP at Measurex.