Venture Capital is the game-changer. We all know the usual statistics of people without access to water or sanitation - and they number in billions. Yet, if it weren't for the human lives at stake, one may be tempted to translate this quite literally into what the famous marketing guru Gary Halpert defined as a "starving crowd."
Pictured that way, the water industry sits on a marketer's dream of potential customers, in no need of the so-called "candy" or "vitamin" solution, but desperately looking for a "painkiller" - aka Water and Sanitation for All.
If Venture Capital (VC) were to jump in, it would find a couple of hypotheses to solve the issue. Equip a portfolio of startups with deep pockets and buy a Titanic-sized market share. They would then wait for one of these new companies to generate impressive profits, pay for the other's failure, and incidentally change the World (for the better).
It seems so obvious! So where's our Water Unicorn? Well... It turns out; Water Startups have a surprisingly high survival rate. This may be seen as good news - as fragmented as it is, there is a market! Yet, it may also indicate that no one dares to take a game-changing risk. Worse still, is the Water Industry really sure of what it has to solve?
When planning an investment or innovation strategy, combining those two caveats inevitably leads to safe bets and incremental improvements, or what Henry Ford famously named "Faster Horses." But in light of the challenges ahead - water scarcity, climate change, increasing population, to name a few – don’t we need "cars" if not "rockets"?
As FB, Uber leveraged Venture Capital to disrupt the way we communicate, move; we need VC to change the name of the water game. Or do we?
Hence my opening statement. As Facebook, Uber, or Google leveraged Venture Capital to disrupt the way we communicate, move, or get informed, we need VC to change the name of the water game. Or do we?
In her "Entrepreneurial State" book, economist Maria Mazzucato demonstrates how despite the urban legends, the likes of Apple, Tesla, or Google owe much more to the state than they do to venture capitalists. She also shows how the power of the investor-state was leveraged in the energy sector - often considered the water industry's twin, 15 years ahead. VC didn't drive renewable energy's share in the German mix from 6.3 to 30% in 15 years: the state did.
But if only states can afford and dare to invest in long-term risky endeavors, I can't help but wonder why it simply doesn't happen in the water industry? Maybe because, again, my statement is wrong? It's not state versus VC or private versus public. It's all about the old African saying: it takes a village to raise a child.
This all starts with a rallying call. I'd embrace Martijn Wilder and Mina Guli's suggestion to adopt "Close the Gap!" in reaction to the progress towards SDG6 running at a quarter of the speed it should. Then, it continues with picking a couple of hypotheses and going all-in to move the needle. Here are my suggestions. If 70 per cent of the world's population will live in cities by 2050, should we not rethink the urban water cycle, the water networks, and the mix of treatments and scale? And if, as Elizabeth Heidrich demonstrated, wastewater theoretically contains seven to ten times the energy needed to treat it, could we not turn wastewater treatment plants into resource factories?
Once we have a north star and a couple of rabbit holes to explore, it's time to get creative, whether on the technical level, the scale, placement of treatments, or even business models.
And then, get the village to work without expecting a providential white knight to save the day.
What is GF Piping Systems’ role in this village? We help build connections for life. We partner with all the process heroes that need a solution. We de-risk processes, treatments and infrastructure projects by guaranteeing water will always be conveyed where it should, how it should. And we enable the future of water management by supporting Process Automation.
Want to learn more or discuss your crazy ideas? Let's dare, all together!