Dry

Over 70% of the earth's surface is covered by water, and about 60% of our bodies are composed of it. We simply can’t live without it, yet we have a certain cognitive dissonance on water related issues in the US. 

This is at odds with my ‘save-every-drop’ mindset, while growing up in thirsty Western Australia, where we were not permitted to water our gardens on any day ending in “Y”.

When a desalination plant opened in 2006, W.A. was the first Aussie state to tap the oceans as a major water source. Today more than 40% of their fresh water needs are supplied from the sea, and much of the electricity for the plants is supplied by the wind. Progressive, right?

In December last year, the largest desalination plant in the Western Hemisphere began pumping water for the San Diego County. While this will provide some relief from the Cali mega-drought; the process remains costly, environmental impacts are questionable and transporting billions of gallons of water is an issue for the billions of human’s who don’t live near a coastline.

So, what else is being done to solve the water crisis in the US and beyond? While there have been some disruptions in the world of water, the pipeline of innovation has been dry compared to that of other industries. Here are some of the major challenges for waterpreneurs, and some areas that are emerging as our greatest hope.

A DATA DROUGHT

By many accounts, water scarcity, and the resulting agricultural constraints, is the biggest global challenge of the 21st century.

We live in an era of quantified everything, yet in the US, data on our most precious resource often isn’t available until months or years after the water has been used. In November 2014, the U.S. Geological Survey issued it’s most current and comprehensive bible of water use - for the year 2010! WTF?

This blip of data outlines a single year of water quantity and quality by state, it’s source, and end use (farms, factories or in homes). It’s about as useful as windscreen wipers on a submarine, missing the biggest moments in water in the past 6 years; the California and Texas droughts, the heavily-headlined Flint crisis, polluted water in Toledo and Charleston, and the continued dry spell in the Colorado River basin. 

How is this possible in an era where Apple, Google, Nike and my health insurance provider know exactly how many steps I’ve taken today, Facebook knows when a personal relationship is going south, and HR departments can mine data to predict which employees might get sick or quit?

The lack of transparency is one of the biggest barriers to innovation. You simply can’t ignite positive change for an invisible problem. Congress are finally paying attention and laying the groundwork for better data collation to jumpstart new investments, new technologies, and most importantly a new attitude. Tick tock, Obama Administration.

WATERPRENEURS BE DAMNED

While many entrepreneurs want to ‘change the world’, the business of water is misaligned with Silicon Valley’s modus operandi. In the VC-funded Valley of disruptors, capital theoretically follows opportunity. But water is unique. It does not behave like any other resource or commodity. For one, it’s localized pricing structure is completely irrational, with locations in dire water stress often pricing it lower than locations with water abundance. Unlike Uber, water pricing doesn’t surge when it is scarce. 

Traditional venture capitalists operate on a three-seven year cycle, yet playing in the water arena often requires larger investments and longer development cycles. This is partially due to the fragmentation of the industry. There are more water agencies than schools in the US! 

This bureaucratic nightmare is an innovation non-starter. As is playing nice with aging infrastructure. The American Water Works Association estimates that $1 trillion in rehabilitation funds will be required over the next 25 years. This equates to significant opportunities for asset owners in the muni markets, but a huge challenge for innovators, unless they are focused on monitoring or mitigating a tired beast.

MAKING WAVES

Thankfully, there are some bright spots in this rather bleak picture. US officials are now collaborating with drought-defying nations like Israel, whose holistic approach combining technology, innovative water management and education has resulted in a water surplus - even after their driest three-year period on record. Go Israel! 

Social entrepreneurs are also investing their efforts into exponential technologies that are being deployed for cost-effective water applications. Mobile solar generators can provide electricity, wifi, and clean water in disaster zones. Biomimicry is allowing us to create materials that make water from the air. And nanotechnology can kill water contaminants anywhere. Savvy start-ups in AI, social media, blockchain, and some IoT rainmakers are also jumping in. 

Accelerators such as Imagine H2O, are also emerging to support waterpreneurs in projects ranging from improved monitoring of wells, to a gel that replaces water for crops, and big data innovations for infrastructure.

Time will determine their success. But what is absolutely certain is this asset class will become more attractive when VC-approved returns can be realized. With more capital, more waterpreneurs will be funded. And with more innovators in the game, disruptive solutions will finally be bought to market to bring us closer to solving one of the biggest global challenges of our time.

 

I have recently done some work on creating new revenue models for corporate sustainability initiatives. I'd love to discuss these with you and collaborate on catalyzing profitable solutions for good. Let's chat!