Enter your executive summary by 11/16/09 at 11:59pm pacific time at www.imagineh2o.org. Please email prize@imagineh2o.org with any questions.

Imagine H2O and Babson College hosted a successful workshop on “The Water Efficiency Startup” on Friday September 2009 at Knight Auditorium at Babson College.  The workshop was attended by over 120 students, faculty, entrepreneurs and members of the business community.  Notes from the two panels at the event are summarized below:

Panel 1 – The Water Startup

Moderated by Tamin Pechet, Catamount Ventures, Imagine H2O

What is the market opportunity?

• Market size (Heather Landis, Lux Research) – $522 B estimated in 2007
  • 74% Services
  • 12% Equipment

• Most attractive opportunities:

• • Heather Landis, Lux Research -
    • Desalination for equipment manufacturers:
      • 9.8 B cubic meters to 18.1 B cubic meters from 2000 to 2008, expected to grow to ~ 50 B cubic meters by 2020
    • Water information technologies – to facilitate recovery of lost water
      • Current market size ~$200 M

• • • Example: Derceto (New Zealand) – develops software to optimize how pumps are run, to save municipalities or companies 30% on their pumping energy costs
  • Erik Schoepke, GE Power & Water
    • Desalination growing on average 10% (17% last year), slowed slightly this year to 10 or 12%
    • Wastewater treatment & reuse
    • Energy recovery technology – example: finite element analysis to figure out how to raise efficiency (energy recovery devices)
    • Specialty chemicals/’green chemicals’/smart membrane technology

• Trends:

• • Increasing private ownership of waste water treatment facilities

What got Una Ryan, Waltham Technologies excited about starting a water business?

• Opportunity to leverage experience in health care to new markets
• Value proposition of turning wastewater into clean water and clean energy

• • Approach is to deal with wastewater sources – beverage industry in particular – treat their wastewater with cyanobacteria and produce enzymes and oils that can be transformed into biodiesel
  • Typical customer is a craft brewer with production from 15K to 2M barrels per year.  Beer industry wastes 5x as much water as they sell as beer.
  • Process reduces water treatment costs, especially fines and surcharges
  • If wastewater treatment costs a company $500K, Waltham Technologies charges them $250K – immediately saving customer 50% and making an 80% margin

Why did Eric Stoermer, Environmental Operating Solutions move into water?

• Didn’t intend to go into water – met a board member in an existing company
• EOS develops and markets green chemicals for the removal of contaminants in waste water
  • 275 customers in 3 segments:
    • Decentralized (small facilities, e.g. Gillette Stadium which has its own sewage treatment plan)
    • Municipal (largest of wastewater business, 25-30 customers including Fairfield CT, Jacksonville)
    • Industrial e.g. GE, Siemens

What is Brad Sanderson (BISCO) excited about in irrigation water conservation?

• Water management systems using smart controllers and water recovery processes

What type of acquisitions interest GE? – Erik Schoepke

• Membrane technology
• Environmentally safe chemicals i.e. chemicals that decompose in nature
• Technologies that increase energy efficiency of existing processes within GE

What problems need to be addressed by entrepreneurs? – Heather Landis, Lux Research

• Increasing efficiency of products, even if incremental – recovering more water and reducing the amount of energy required

What’s the biggest challenge?

• Una Ryan, Waltham Technologies:
  • “Getting the message across” – it makes sense to limit use of fossil fuels for treating water and to use water more efficiently
    • The limited energy requirement of Waltham Technologies’ process is part of the sales pitch
  • Early financing is difficult, particularly compared to health care – the clean energy sector has taken the lion’s share

• Eric Stoermer, Environmental Operating Solutions:

• • Slowness of adoption of technologies by municipal wastewater customers
    • Municipal customers are the largest customer segment – no one wants to adopt something first
    • Takes a while to overcome CATNAP:  Cheapest Available Technology Narrowly Avoiding Prosecution – new technologies have to prove that they are affordable and will satisfy existing regulations

If you were going to be in any water business besides your own, which one would it be?

• Una Ryan, Waltham Technologies: stay in industrial water treatment, but focus on paper and pulp industry
• Eric Stoermer, Environmental Operating Solutions: develop slow release fertilizers or technologies to reduce the water consumption of agriculture
• Heather Landis, Lux Research:  manage assets or develop holistic approaches to reducing wastewater production

Panel 2 – The Water Startup’s Customer

Moderated by Asheen Phansey, Babson College

Why are you excited to be here?

• Pete Zuraw, Wellesley College – Wellesley is essentially a small municipal community.  Need to decrease water use and maintain existing system that might be 150 years old
• Stephen Estes-Smargiassi, Massachusetts Water Resources Authority (MWRA) – MWRA approves consumer products e.g. flush toilets, faucets.  Interested in opportunities to radically change their business in the long term.  Currently in Boston, the average person uses 65 gallons per day with 2 gallons used for drinking water – it’s easy to imagine those numbers being totally different in 10 years.  Are there ways to transport drinking water more efficiently?
• Stefan Abramo, Siemens:  What channels are startups going to use to approach…?  Talking about an industry that been treating water for 1,000’s of years (that work), we’re risk averse, in certain parts of the world we’re not scared about the scarcity of water – our challenge:  how do you market your product and who do you market it to?  Hundreds of thousands of players in the market – how do you get to the right end user?

What are the major categories of water technology you buy, and how much do you spend?

• Stefan Abramo, Siemens:  Siemens is both a buyer and seller of water technologies, typically to and from larger players.  On the industrial side, Siemens is primarily a system integrator.  When Siemens creates a technology, they are always challenged by whether to sell the technologies to others or keep it for themselves.

• Stephen Estes-Smargiassi, MWRA: MWRA spends $600 M per year on pumps, pipes, infrastructure and goods and services.  In MA alone there are 361 water utilities.  Technology purchases are driven in part by rules and regulations (as set by EPA, federal, state and local government)
• Pete Zuraw, Wellesley College:  Wellesley buys equipment, chemicals, etc. to treat and move water, as well as all end use items.  Wellesley College is extremely risk averse.  It’s expensive to change things (e.g. toilets) and to change people’s behavior.

Do you see yourself purchasing higher-tech solutions?  Are purchases growing and if so by how much?

• Pete Zuraw, Wellesley College:  As a college, Wellesley is balancing the retrofit needs of an 80 to 100 year old distribution system with limited capital and interest in a sustainable approach.  Wellesley’s water use is down 25% over the last few years by switching a few easy things (but they were expensive changes and many people had to be convinced).  The improved water use was driven by the need to save energy – water is cheap.
• Stephen Estes-Smargiassi, MWRA:
  • If you’re going to sell, figure out what the local market is. Market is not uniform – the market opportunities in the northeast are very different than those in south Florida e.g. Utilities in MA are not buying desalination.
  • Non-water energy technologies are of interest to water utilities. Water is very heavy and the industry’s biggest single expense is energy

• Stefan Abramo, Siemens:  Siemens’ customers are doing everything they can to improve  energy efficiency and recyclability/reusability, and to reduce the use of chemicals.

Is there one critical problem that you think entrepreneurs should address that you would pay for right now?

• Stefan Abramo, Siemens: “Analytics of Water” – monitoring / measurement of water use data, including smart sensors for industrial or municipal applications.  Monitoring technologies would help the end user/customer/municipality understand what they’re dealing with.
• Water use is different everywhere you go; different from other utilities

• Stephen Estes-Smargiassi, MWRA:
  • Technology for finding contaminants fast
    • Utilities used to measure ppM, now ppB
    • Would allow utilities to increase customers’ confidence in water quality
  • Technology to monitor water quality on every street, instead of at the water treatment plant

• Pete Zuraw, Wellesley College:

• • Ability to quickly assess what an issue is and tools to manage that issue (e.g. what is causing the funny tasting water from a water fountain?)
  • Ways to fix/address eroding infrastructure
    • Wellesley has infrastructure that was installed when Lincoln was President

Q&A

What are the infrastructure delivery system issues and how much do solutions cost?

• Infrastructure issues are largely financial – MA spent about $7B to clean and line pipes over the last 20 years.  Upgrades involved tearing up trees, and was limited to ~2 – 3% of streets.  $2B investment still required to clean and line pipes and a complete upgrade would take decades.
• Infrastructure installed during Lincoln’s Presidency is still in pretty good shape
• Technology development opportunity:  Mechanism to rehabilitate pipes and not tear up streets
  • Any technology needs to be endorsed by public advocates and environmental leaders e.g. Public was not comfortable with recent replacement of copper pipes with plastic
  • Technology adoption requires a preliminary process for convincing a wide range of stakeholders

For buyers of new water technologies, what are the main challenges with new technologies?

• Pete Zuraw, Wellesley College: Often technologists know their product better than they know their customers.  A more effective approach would be to “Get to know a niche.” Customers are very different in different parts of the country.

• • Technology should have three main characteristics:
    • Chemical-free
    • Energy efficient
    • Have capacity to reduce or conserve water use
• Stefan Abramo, Siemens:  Technologists should carefully analyze and understand who they’re targeting.  Not many end users are really thinking about what they’re buying, they’re just looking for a solution.  Customer needs are highly fragmented.  One key is to be target a specific audience e.g. if you invent some device that will treat water of any quality coming through the pipes to residential customers, then you’re selling into big-box stores vs. to plumbers.
• Stephen Estes-Smargiassi, MWRA: MWRA buys most things by competitive bid.  They showcase the best product from a slate of at least three competitive products.  If you’re at the leading edge of innovation, where there are no competitors, MWRA will not likely be a customer.  The people who design stuff for MWRA also offer a technologically savvy ear for new technologies that MWRA may adopt (35 firms in region do ~90% of design for MWRA parts, etc.)

What is the Smart Grid for water?

• Stephen Estes-Smargiassi, MWRA: System of technologies e.g. water sensors, and regulatory codes e.g. codes that mandate smart sensor systems to reduce water waste e.g. by overwatering lawns.  Water utilities are less concerned about minute by minute variation like Smart Grid for electricity.
• Pete Zuraw, Wellesley College: Some of Wellesley’s reduction in water use was irrigation innovation, and improved ways to measure water losses in steam production.
  • In new construction, Wellesley is installing gray water collection and reuse systems.  Hard to imagine retrofitting older buildings with gray water systems – Gillette Stadium uses gray water for toilets
  • Rain water harvesting limited by aesthetic concerns – Wellesley’s residents don’t want ugly rain barrels, they want ivy!
  • Notes submitted by Conor Carlin and Patricia O’Keeffe
  • Photos submitted by Diego Rodriguez (www.diego-rodriguez.com)

IMAGINE H2O AND BABSON COLLEGE PRESENT:
THE WATER EFFICIENCY STARTUP

http://imaginebabson.eventbrite.com

What: An intro to the water efficiency startup opportunity, including panels, small table breakout sessions, and networking

How: Register at http://imaginebabson.eventbrite.com

When: Friday September 18, 2009, 12:30-4:00pm eastern

Where: Babson College / Knight Auditorium, 231 Forest Street, Wellesley MA 02457

IMAGINE H2O AND BABSON COLLEGE PRESENT:

THE WATER EFFICIENCY STARTUP: MARKETS NEEDS, CUSTOMERS AND RESOURCES

http://imaginebabson.eventbrite.com

What: An intro to the water efficiency startup opportunity, including panels, small table breakout sessions, and networking

When: Friday September 18, 2009, 12:30-4:00 PM EST

Where: Babson College / Knight Auditorium, 231 Forest Street, Wellesley MA 02457

How: http://imaginebabson.eventbrite.com

Why: Water is an often-overlooked opportunity for entrepreneurs.  This session complements the launch of the inaugural Imagine H2O Prize for water efficiency business plans.  We’re offering entrepreneurs, innovators, and the public a chance to interact with experts, market leaders and customers of water efficiency products and services.

Program:

• 12:30-1 pm : Registration, networking, drinks and snacks
• 1:00-1:10 pm : Introduction and welcome from President Len Schlesinger, Babson College
• 1:10 – 1:50 pm : Panel discussion 1: The Water Startup – Perspectives from Imagine H2O, water entrepreneurs and startup market leaders, venture capitalists and water companies
• 1:55-2:35 pm : Panel discussion 2: The Water Startup’s Customer – Perspective from industrial, agricultural and residential customers of water efficiency products and services
• 2:45-3:45 pm: Breakout Tables: Supporting the Water Startup - Startup advice from business, technical and market experts, and the panelists in a table breakout format.  Hosts include representatives from Cooley Godward Kronish, Pricewaterhouse Coopers, Imagine H2O, and more.
• 3:45-4:00 pm Networking and wrapup

Speakers and Breakout Session Hosts Include:

• Len Schlesinger, President, Babson College
• Heather Landis, Water Intelligence Analyst, Lux Research
• Eric Stoermer, CEO, EOS Environmental
• Una Ryan, CEO, Waltham Technologies
• Steve Estes-Smargiassi, Director of Planning, Massachusetts Water Resources Authority
• Tamin Pechet, Principal, Catamount Ventures, Chairman, Imagine H2O
• Bryan Sanderson, President, Bisco Irrigation
• John Hession, Partner, Cooley Godward Kronish Venture Capital and Emerging Companies Practice
• Mark Modzelewski, Executive Director, Water Innovations Alliance
• Kevin Shaw, Partner, Pricewaterhouse Coopers

Register at http://imaginebabson.eventbrite.com

Current water crisis is impacting consumers:

• Arnold Schwarzenegger, governor of California, has proposed 20% reduction in urban per capita use by 2020 (http://www.swrcb.ca.gov/water_issues/hot_topics/20×2020/index.shtml)
• EBMUD has instituted 10% voluntary rationing in 2009
• Sonoma County has banned use of sprinklers for frost protection (http://www.napawatersheds.org/news.php?display=1&oid=22493)

Opportunities exist in water efficiency:

• In drought, utilities’ budget for water efficiency can increase 30-100% e.g. EBMUD typically spends $4-5M per year on water efficiency.  Last year the budget doubled.
• 19% of state’s electricity use associated with water
• Severe underinvestment in water infrastructure (EBMUD has 4000 miles of pipe and replace 7-10 miles and 10,000 meters annually)
  • Recommended History Channel’s “Crumbling of America” program

Current water efficiency purchases:

• Agriculture (Nick Frey, Sonoma County Winegrape Commission)
  • Drip irrigation systems
  • Soil moisture sensors
  • Weather stations
• Industrial (Anne Jackson, PG&E)
  • Smart meters for irrigation
  • Lo flow/no flow toilets
  • Faucet aeration systems
• Commercial (Anthony Ravitz, Google)
  • Water efficient plumbing fixtures

Greatest needs:

• Agriculture (Nick Frey, Sonoma County Winegrape Commission)
  • Technology that delivers timely information
• Industrial (Anne Jackson, PG&E)
  • Technology to optimize cooling for solar thermal systems
    • Issue: wet cooled systems more economic but require water in often arid environments
• Commercial (Marty Laporte, Stanford)
  • Software integration for data collection
• Commercial (Anthony Ravitz, Google)
  • Technology that offers multiple benefits e.g. water and energy efficient
• Consumer (Richard Harris, EBMUD)
  • Automated water meter reading technology
  • Software that integrates water use data

Other needs mentioned:

• Commercial (Marty Laporte, Stanford)
  • “Hard-fixes” that don’t require ongoing behavior change e.g. “Landscape contractor”-proof irrigation controllers, Watermiser system on autoclaves/sterilizers
  • “Lego-block” modules for efficient irrigation systems and controllers
  • Ways to reuse reverse osmosis reject water (relevant to biotech and semiconductor industries)
• Commercial (Anthony Ravitz, Google)
  • “Landscape contractor”-proof irrigation controllers
  • No-flow urinals without the “expensive cartridge” syndrome
  • Cost effective retrofit options for existing buildings
• Industrial (Anne Jackson, PG&E)
  • Real-time water use monitors
• Consumer (Richard Harris, EBMUD)
  • Cooling towers
  • Process water
  • Medical waste
  • Food processing
  • Hospitality
  • Noted that indoor plumbing, outdoor irrigation for residential markets are well-served

Submitted by  Gypsy Achong

Water Efficiency Ideation Workshop Panel

Wherever there is a challenge, there is also an opportunity, perhaps a business opportunity. That’s the approach of a San Francisco-based startup trying to help solve some of the water shortages facing the Bay Area, much of the Golden State, and many countries and regions around the globe.

ImagineH2O, an ambitious non-profit with a mission to inspire and empower people to solve the world’s water problems, held a Water Efficiency Ideation Workshop Thursday night at the Palo Alto offices of Cooley Godward Kronish, LLP, one of the organization’s sponsoring partners. The panel and roundtable event was attended by one hundred people interested in water-related businesses, including venture capitalists, researchers, entrepreneurs and industry experts.

ImagineH2O intends to hold similar events in the future to create what they describe as a healthy ecosystem to enable water innovation. The group will also host prize competitions, beginning with its inaugural water business plan competition. Kicking off September 1st, the initial competition offers cash prizes totaling $50,000, and a water innovation incubator program to help competing entrepreneurs turn their plans into real-world solutions. The 2009-10 competition will focus on water efficiency.

Thursday’s event was ImagineH2O’s latest effort to nurture a community that connects water conservation experts and entrepreneurs with potential partners and customers in business, government and academia.

Five panelists, representing interests as diverse as agriculture, business, energy and water utilities, and academia, shared with the audience what their organizations commonly buy in terms of water-related goods and services. Of key interest to entrepreneurs, they also offered what they see as unmet needs. Tamin Pechet, ImagineH2O Chairman and Executive Director, moderated the panel, and prompted panelists to share that one thing they’d most like to see offered by a business or non-profit.

Marty Laporte, Stanford University’s Associate Director of Utilities, offered that she’d like to see better software for efficiently managing data. She shared how Stanford had reduced its overall water consumption by hundreds of thousands of gallons since 2007, even with new construction on campus. Laporte lamented, however, that her team’s efforts to further effect water conservation at Stanford are somewhat stymied by relatively limited software. She said she doesn’t really need more data, but rather better ways to integrate existing data. “It’s too one-dimensional,” Laporte told listeners.

Richard Harris agreed, explaining how as Water Conservation Manager for the East Bay Municipal Utility District (MUD), he would like to see a third-party software provider develop interactive programs that would one day let MUD’s customers monitor their home water use with on-line tools. Second-by-second water meters could allow such a detailed view, and Harris shared that the District is pursuing a pilot program along those lines. He also cautioned that sustained water conservation will require not only solutions of technology, but also behavior change by each of us as users of water.

Anne Jackson, representing Pacific Gas & Electric on the panel, said “It’s interesting to see how similar many organizations’ needs are. There’s a lot of synergy.” Another panel member, Anthony Ravitz, said that a lot of work had been done on the energy conservation side, so it’s appropriate that similar efforts follow now for water conservation. Ravitz, representing Google, said “I learned a lot at this event, personally. One of our biggest issues is we don’t have a lot of solutions for some of these challenges. Google is supportive of this type of effort and we’re happy to be involved.”

As the new niche known as “clean tech” continues to take off, Pechet is hopeful water-related start-ups will be amongst the next high-growth companies to come out of the Bay Area. “ImagineH2O is about bringing world leaders together to discuss solutions that have both a social impact and major market opportunity. We’re trying to unleash Silicon Valley’s entrepreneurial community on our world’s water problems,” he said.

How fitting that in a place with so many water challenges, the region’s best and brightest now look to turn some of those problems into opportunities.

On the Net:

ImagineH2O: http://www.imagineh2o.org/

Cooley Godward Kronish, LLP: http://www.cooley.com/index.aspx

Submitted by Greg Pepping

http://waterefficiency.eventbrite.com/
IMAGINE H2O AND COOLEY GODWARD KRONISH LLP PRESENT:
THE WATER EFFICIENCY CUSTOMER: AN IDEATION WORKSHOP FOR WATER EFFICIENCY BUSINESSES

What: a unique evening for identifying water customers’ needs, brainstorming ideas and building teams.
When: Thursday August 20, 2009, 6-8:30pm
Where: Cooley Godward Kronish LLP, 3715 Hanover St., Palo Alto, CA 94304
Why: In anticipation of the upcoming launch of the inaugural Imagine H2O Prize for water efficiency business plans, we’re offering entrepreneurs, innovators, and the public a chance to hear from and talk to customers of water efficiency products and services.
Program:

• Identification of specific market needs and opportunities by leaders in Industrial, Agricultural, Consumer and Water Utility market segments, including answers to questions like

1. What products and services in water and wastewater do you currently buy and how much do you spend?
2. What are your biggest, most critical needs that you would pay most for?
3. What should an entrepreneur selling a water or wastewater product or service to your company focus on?

• Brainstorming facilitated by the market segment leaders towards addressing those needs, with participation from venture capitalists, entrepreneurs, business leaders and technology experts.

• Expert resources for water entrepreneurs, including breakout tables with venture capitalists, Imagine H2O representatives, Cooley Godward Kronish cleantech and venture capital attorneys, and Pricewaterhouse Coopers cleantech practice leaders.

Speakers and expert advisors include
1. Richard Harris (Water Conservation Manager, East Bay Municipal District)
2. Tamin Pechet (Principal, Catamount Ventures and Chairman, Imagine H2O)
3. Anthony Ravitz (Green building and Sustainability, Google)
4. Marty Laporte ( Associate Director of Utilities, Stanford University)
5. Jim Fulton (Parter, Cooley Godward Kronish and Head of Emerging Companies Practice)
6. Steve Bengston (Director of Emerging Company Services, PricewaterhouseCoopers)
7. Harsha Prahlad (Senior Research Engineer, SRI International)
Register at: http://waterefficiency.eventbrite.com/

We are unfortunately at capacity for the 5/6 water entrepreneurship workshop at Berkeley, but please join the Imagine H2O community to be notified of our upcoming events.  We’ll do another workshop soon!

Join us for our first workshop, May 6th 5:30-8:30 pm at Cal Berkeley. See http://imagineh20ucb.eventbrite.com/ for event details and to RSVP.