Imagine H2O, a startup accelerator, is mentoring a new crop of entrepreneurs. Tom Ferguson explains how they are applying the latest technology to water treatment, leak detection and other problems in the water sector.
WE HEAR PLENTY these days about breakthroughs in green energy, robotics and communications. But as everyday technologies go, water management is virtually invisible to the general public.
One organization that’s working to change that is Imagine H2O, a startup accelerator based in San Francisco. A nonprofit, it provides support to emerging companies working on water problems, helping them find investors and customers.
Every year, Imagine H2O hosts a competition to nurture a class of promising water entrepreneurs. The latest class attracted 206 applicants from 36 countries, each of them seeking to benefit from expert guidance in the water industry and from relationships with investors.
In January, the firm selected 13 finalists from this group. These entrepreneurs now begin a 10-month program that will include introductions with investors and potential customers, mentoring by industry experts, and opportunities to increase their visibility in the industry. At the end of that period, winners will be selected to receive grants of up to $25,000 to help advance their inventions.
To explain the process further and introduce some of the startup firms, Water Deeply recently talked to Tom Ferguson, Imagine H2O’s vice president of programming.
Water Deeply: How does your selection process work?
Tom Ferguson: We enlist the help of 146 experts from our network, who serve as prejudges and as a final judging panel. The prejudges give us a very wide assessment and provide a ranking of the applicants. Then the companies go to the final judging panel.
We don’t take an equity position in these companies. We’re a 501(c)3, we’re a nonprofit. Our mission is to help people develop and deploy technology, and create solutions to water challenges.
Water Deeply: Many of the companies in your 2018 class are involved in wastewater. Why so much interest in that?
Ferguson: What unifies them is all of them have identified a very specific niche in which we think there is a great balance between ability to solve a problem and also the acuteness of the problem – the degree to which the problem is felt within their specified target market.
For example, Aquam LLC has developed an energy-neutral solution for dealing with ultra-high-strength wastewater streams. Their initial niche is with a specific area of the food and beverage industry. Within wastewater, you’re looking at startup companies who are really good at identifying pain points within the market.
I used to work in wastewater and I know that monitoring tank health is crucial. If your culture in a tank isn’t right, it will throw off your whole treatment process. Another of our firms in this sector is Island Water Technologies. It’s invented a bioelectrode wastewater sensor that provides real-time monitoring of microbial activity in these tanks. It’s going to monitor an absolutely mission-critical element of the overall wastewater chain, to a point where people who want to sleep well at night can, because they will know when the pattern of health in the tank starts to change.
Water Deeply: There also seems to be a trend toward bringing artificial intelligence into water treatment.
Ferguson: That’s a really interesting one. There have been various companies that have looked at this and said, “How do we make life easier for a data-constrained water operator?” Emagin is an example from last year. It uses artificial intelligence to help people run a whole bunch of scenario analyses to fine-tune their water treatment operations.
Everybody has a membrane system in their water treatment process. And they are looking for intelligent ways to monitor the health of that membrane and, ideally, be able to clean that membrane without having to shut down the system, remove it and clean it off.
One of our companies this year, Intelliflux, is about giving the opportunity to be more precise. By using artificial intelligence, it allows people to do the membrane maintenance when it’s actually needed, rather than when the handbook is saying it’s time. It’s about efficiency and augmenting the role of the operator rather than the idea of going to a robot sort of treatment plant where the operator is going to be out of a job.
Water Deeply: One of your cohort this year, Pipeguard, makes robots to detect leaks. What’s that all about?
Ferguson: This is the work of You Wu, a really smart guy with a PhD from Massachusetts Institute of Technology. His idea is there are so many leaks in pipes, and there’s got to be a better way of doing a couple of things: detecting leaks that are already there, but also having an early warning system to detect new leaks.
His robot looks a little bit like a shuttlecock from badminton. Essentially, it goes down the pipe with the flow and provides a relatively granular look at pipe condition – regardless of the pipe material. The robot allows water companies to have more visibility into where their leaks are, especially the small leaks. The big leaks are usually self-evident – like when roads blow up. But where are the likely rupture points? We think he’s got a really novel solution and that there’s an appetite out there from water utilities.
Water Deeply: How does all this translate into benefits for utility ratepayers, or the person on the street?
Ferguson: For most of us, when we turn on the tap, water comes out with no trouble at all. Everybody just basically takes this for granted. Water is really, really cheap, and it should be because it’s a universal human right. Everybody needs water they can afford. But everybody who spends more than 15 minutes looking at the water industry knows it’s a really tough gig. And it’s practically invisible to the person on the street. It really is an unbelievable feat of engineering and dedication and everybody wanders around clueless about it.
So all of these innovations allow utilities to optimize. If you are saving money on energy or on chemicals or treatment, or if you can cut a six-step process down to two, all of those savings fall directly to the bottom line. That means there is more and more breathing space on the utilities balance sheet, reducing the likelihood of rate increases in the future.
Essentially, the benefit to the person on the street is they get to keep on taking water for granted, rather than having bad impacts on their lives.
Water Deeply: What is the market like for water innovations these days?
Ferguson: Water is still just grotesquely under-supported as an area of infrastructure and of the economy as a whole. There are a lot of headwinds. That said, for people who understand it and can figure it out, we think there are great opportunities for solid investments.
Where water entrepreneurs run into challenges is in convincing investors this is the highest and best use of their capital. In water you have long sales cycles, a conservative industry and nowhere near the kind of federal support for other sectors, like energy.
Everybody gets very excited about water when they hear as much as $1 trillion needs to be invested in water infrastructure before 2040. But the numbers in water don’t lie. I really do think it’s kind of America’s big time bomb. It’s overlooked relative to its importance in society, shall we say. It will turn. And when it does turn, the investors who have taken positions and taken time to understand this are in a position to do very well.
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