Why Innovation in Water Technology is Less Important Than You Think
Water and tech might not sound like a match made in heaven, but it can be.
| Will Sarni GreenBiz May 1, 2019
Over the past two-plus years, I have had the opportunity to work with several water technology startups and growth-stage companies. I’m continuing to learn the world of technology startups and entrepreneurs, as well as how these stakeholders intersect with corporations, non-governmental organizations (NGOs), the academic community and the public sector. All of these stakeholders are essential in developing solutions to water challenges.
In our race to solve water challenges, it can feel like we’re on a quest to find the best new technology that will be our magic bullet. But we’re not — because it’s an unrealistic expectation. Many startups and entrepreneurs are relying solely on technology for success. That doesn’t work, as other factors are more important than innovative technologies.
One of the more important lessons for me is that technology doesn’t sell itself — success is driven by innovative business models, execution strategies and the team. There is a quote worth remembering when falling in love with technology: Technology is exponential, but people are linear (to paraphrase Jason Silva).
We tend to have expectations of technology adoption that often don’t materialize. An article in Fast Company on "We Need Breakthrough Business Models, Not Breakthrough Technology" by John Elkington and Richard Johnson (March 7, 2018) lays out the case eloquently. To quote Elkington and Johnson:
We favor technologies over business models, imbibing the Kool-Aid a long time before the hard slog to turn the concept into something customers will actually buy has begun. Business models are what connects a technology’s potential with real market needs and consumer demand. Simply put, business models eat the business case for breakfast.
The authors point to the example of the adoption of solar panels.
The price of photovoltaic cells had been falling exponentially since the 1970s. But it wasn’t until 2008 when the concept of "zero-money-down" solar (leased and managed rooftop solar) was introduced that we saw an equally exponential increase in the number of solar roof installations. The new model gave solar power the edge over grid energy.
So, what does this look like in the water sector? Organizations that have found success have relied on disruptive business models over purely new technology. A couple of examples are Fathom (Software as a Service) and Aquaventure (Water as a Service). These business models help facilitate the adoption of technologies in a sector that is and has been historically slow to innovate for several reasons (the responsibility of ensuring public health; the few incentives to pilot new technologies).
So, what does this look like in the water sector? Organizations that have found success have relied on disruptive business models over purely new technology.
As a long-term sustainability and water strategy adviser, I see the most exciting opportunities in innovative business models driven by digital technologies — "digital water." Again, to quote Elkington and Johnson, "As digitalization proceeds at unprecedented speed and scale, the marginal cost of delivering a whole range of goods and services will plummet. This opens up a huge opportunity to create affordable solutions to huge, previously overlooked market needs."
I’ll make one last point about the need to focus business model innovation, teams, etc. There are several water technology hubs and accelerators in the United States. They are good at identifying innovative technologies and promising entrepreneurs. However, to varying degrees (I suspect I will get pushback on this one), entrepreneurs come out of the water tech hubs and/or accelerators without much of the support they need to succeed. They most likely need support in articulating their value proposition, business model, marketing, branding, strategy, execution, etc.
A few things to keep in mind when considering launching a water tech startup:
Technology doesn’t sell itself.
What is your innovative business model to scale technology adoption?
How can digital technologies power the business model (think Uber, Lyft and Airbnb for water — innovative business models, powered by digital)?
What team members, beyond technology experts, do I need for success?
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