“Water Technology Innovators in Ohio” hint: we’re one of them :)

Hey everyone,

I know it’s been a while since our last post so I thought I’d share this with ya!

Pilus was recently asked to participate in a radio show for ideastream.org’s ‘Sound of Ideas’ program. The panel of guests was collected to discuss emerging water technologies and it was my pleasure to join in on the conversation. Tune in around the 36 minute mark to hear what I had to say. Enjoy.

Cody Harrison

General Manager

 

Check out ‘Sound of Ideas’ page for this show where you can stream the audio or find the names and organizations of the other guests.

 

Or listen to the MP3 right here 

 

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Living Robots Want to Eat Your Waste, and Power the World With It

One company’s remarkable solution to a growing energy and pollution problem

By: Alan Pierce

According to the latest United Nations estimates, world population will reach 9.6 billion by 2050, with most of that growth taking place in developing countries. By this time, finding a sustainable equilibrium to help balance such population density will no longer be a hot topic of partisan debate, but a global movement spurred by the simple and urgent necessity of an unduly and excessively burdened global ecosystem.

The energy and waste management methods of your children and grandchildren living in this era will have to be sustainable and renewable. They’ll have to be efficient and powerful. They’ll have to be innovative.

Like nature, these systems must also recognize that “waste” itself is a misnomer. There is no such thing as “waste” in nature, only various forms of reusable energy. Imagine future waste management techniques which not only reduce pollution but also produce important biogases and eliminate pathogens in the process.

Maybe these systems will also utilize household sewage or the byproducts of your local brewery to produce electricity and power the grid in a sustainable way. This could very well be the technology of the future—but it’s actually here right now.

 

Technology for a Growing Planet 

Pilus Energy, a cleantech energy company championed as one of the “Five Cincinnati Companies That Could Change The World”, has developed a type of bacteria that “eat” waste (such as sewage, industrial byproducts, etc.) and through this process produce electricity and other elements key for a sustainable local and global energy infrastructure.

Termed BactoBots™, these living waste warriors have the potential to completely redefine how we look at waste, from something that’s a useless encumbrance to something with valuable and indispensable energy capital.

Here’s how it works: Organic wastes like sewage, fertilizer runoff, etc. would flow into a fuel cell developed by Pilus Energy. The BactoBotsTM harnessed by the cell then metabolize this waste, helping to remediate the substance while producing direct current electricity, hydrogen gas, and chemicals all of which can be used locally for various industrial or energy needs.

Their BactoBots™ patent represents one of the world’s first synthetic biology innovations with the potential to extract value from something like wastewater. Some of the benefits of this new engineered organism is it’s almost completely non-pathogenic and avirulent, does not emit CO2, and is resistant to heavy metal poisoning and swings in pH. The company will license the EBR and BactoBots, then provide the Genetic Rights Management consumables as well.

 

Reshaping the Energy and Waste Infrastructure

This technology gives new meaning to the term “clean energy.” The waste remediation and energy producing characteristics of this technology make it valuable not only in the industrial arena, but across any system that produces waste and needs energy. Could anything ever fall outside that umbrella?

A comprehensive BactoBotTM system could power your home, neighborhood or city, and at the same time reduce the resources needed to ameliorate the ecological and social effects of the waste that is both endemic to biological life itself, and endemic to our industrial system.

It’s hard to argue against, say, a brewery that fuels itself through its own waste byproducts. The environmentalist certainly wouldn’t object, nor would the bottom line-minded CEO. Because such a system isn’t just a green solution, it provides a highly desirable economic model as well.

 

The Business Side of BactoBotsTM

Pilus Energy plans to wholesale the consumables and accessories directly to Licensees who then deploy the reactors and retails the consumables and accessories to the end users (consumers). These consumers receive extremely low cost renewable energy and can even benefit from feeding electricity back onto the grid.

Ultimately, Pilus Energy’s vision is to create an entire renewable energy ecosystem and do so in a way in which economic value will be generated by creating incentives to adopters in each phase. In addition, by extracting energy from waste molecules, adopters of this technology not only generate revenue, but also help cultivate immense social benefits as well.

 

Overcoming the Politics of Energy Innovation

Given the stunning potential of this technology, bringing it to market may seem like a mere formality. Not true. In reality, innovation in the energy sector is fraught with obstacles. A report by the Breakthrough Institute details the struggles of innovating and scaling new clean energy technology, and places this struggle in the context of a market in which “entrenched incumbent technologies” are essentially protected by current public policy regulations or lack thereof.

With limited private-sector financing opportunities and inherent public policy obstacles to full market competition, pioneers like Pilus Energy find it difficult to bring innovative energy solutions fully to market. Often, their more efficient and sustainable prototypes don’t even have the opportunity to compete in the open market with more established energy technologies.

In Pilus Energy’s case, they also must address public concerns over developing and using genetically engineered bacteria. Is this just Monsanto dressed up in greenspeak? In short, no. In terms of the environmental concerns surrounding this issue, Pilus Energy strives to provide a failsafe process to ensure its bacteria never exist outside the fuel cell.

The BactoBotsTM are already engineered to be harmless and a genetic rights management system also provides protection from theft, cloning, and accidental discharge into the environment. Consumable non-molecular keys must be present in the wastewater (or whatever substance is being treated) and if they are not, the bacteria self-destruct.

 

What’s Happening Now 

Pilus Energy plans to partner with licensees in swiftly developing countries like China and India, as well as establish labs in the United States to help create locally based BactoBotTM driven infrastructure where the bacteria themselves are developed, and the energy and remediation benefits remain in the local community. They’ve also completed a crowd-funding campaign using IndieGogo.com to help raise money for their ambitious and innovative energy solutions.

The unprecedented rate of global growth and energy consumption calls for such solutions; from 2005 to 2030 global energy consumption is expected to increase by 50 percent, with a 95 percent rise in developing countries.

Most of this demand and consumption will come from the fossil-fuel sector. What does this mean? More drilling. More CO2 emissions. More pollution. More problems—where instead we need solutions.

As the human population of the Earth continues to expand so does the weight of our waste footprint, and the demand for energy production, which is sustainable, efficient, and economically viable.

Pilus Energy notes on their website that more than 1100 terawatt hours of energy is stored as waste molecules and transported as wastewater annually across the globe. To put that in perspective, a city of 500,000 people uses just 2 terawatt hours of energy in an entire year. The number one user of energy is water.  The number two user of water is energy production (behind agriculture). Since 5-6 X’s more energy is stored in wastewater than is used to remediate wastewater, this would create an untapped reservoir of energy for other functions behind water remediation. With that kind of energy value in the byproducts of our day-to-day life, wouldn’t we be crazy not to use it?

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Selling BactoBot-powered EBR technology

One of our potential licensees made an important introduction to a CEO of a publicly traded company.

The introduction email gave rise to this entry. I thank the partner for sharing the email. Giving me the opportunity to offer insights to the process of introducing the technology could be of value to the other community members.

I am not going to provide the original email. I am only providing my thoughts to the introductory email.

Assumptions
Most people do not like long emails.

Further, they do not like unsolicited emails.

With those two assumptions in place, I believe it is critical to keep the pitch short.

Pitching via email is designed to get to the next step; a meeting where you can listen to the customer and understand the problem. To do that, I recommend an email structure that has (1) introduction, (2) body, and (3) conclusion.

1) [Introduction] Start the email with a problem question

2) [Body] Provide your idea for solving the problem

3) [Conclusion] Ask for the next meeting to determine if there is an ROI opportunity in solving the customer’s problem.

Here is the first email pitch I recommended to our partner:


Dear, Dr. X~

Is there still a problem with a wastewater smell in your brewery? If so, are you looking for a solution?

I am aware of an emerging bacterial robot (BactoBot™) technology. This technology seeks to convert waste problems into values. Their first solution is a wastewater-to-value technology. That BactoBot cleans wastewater of carbon compounds and generates electricity, gases, and chemicals.

Might you be interested in exploring this opportunity to see if the BactoBot technology can provide an ROI in converting your wastewater into value?


Of course, sometimes you need to provide more information to the potential customer in a follow-up email (or two, or three). That is fine. Be patient! Again, provide just what is asked for and let the customer direct the need for information.

If you get to the first meeting from the introductory pitch email, this meeting is about listening to the customer to determine (or confirm) what the real problem is and what is currently done to solve it. 95% of the conversation is listening and the other 5% is affirming what is heard.

The second meeting is providing the customer with with the potential solution (the proposal). To do this, the proposal tells the story around solving the problem.

As always, honestly disclose potential pitfalls and what we do to avoid failure points.

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An Entrepreneurial Wild-West in the East

I recently returned from my first trip to China.  My crowded business schedule included meeting investors and strategic partners in Shanghai and Nanjing.  As a frequent traveler I thought this was just a matter of hopping on a flight.  During my preparations it became clear that this was a different kind of trip.

I am fortunate that my business and LinkedIn networks include a number of well placed and helpful Chinese nationals.  Board members Louisa and Raymand of the Greater Cincinnati Chinese Chamber of Commerce shortened the cognitive distance to China.  The host, OnGreen, made the trip more smooth than if left to my own devices.  In all cases, they told me to be prepared for a significant experience.  Yeah, right.

My China experience began from the airplane window portal before landing in Shanghai.  Looking down at the harbor I saw a giant conveyor belt of container ships headed to sea.  That almost prepared me for the airport.

The airport is huge.  I have never seen such an airport, both in size and cleanliness.  I guess that is why it did not seem crowded.

Heading to the taxi stand I sensed an increase in the entrepreneurial temperature.   After a taxi service tried to hustle me, I secured a ride.  I used the opportunity to see Shanghai.  Until my memory fades, I shall not willingly forget that ride.

As a result of my trip, I took 500 photos from my mobile phone.  I do not remember the last time I took so many pictures.  I rely on postcards.  That collection increased too.

The round trip Shanghai / Nanjing bullet train inspired awe.  Since I took a great cross-country Amtrak trip with my son a couple of years ago, I inevitably compared the two.  After taking my son out of the equation there was no comparison.  Every aspect of that train reinforced my believe that the US could do much better – if entrepreneurs could be empowered to make it so (I believe micro-train grids are the way to start).

Though the train ride from San Francisco to San Jose I took earlier this year was uneventful and did the job, it did not inspire me with comfort and speed.  The Shanghai to Nanjing Express silently hit speeds over 300 kilometers per hour.  The only way I could tell it was moving so fast was my inability to focus on the posts zipping by my window – were they wood or metal – I will likely never know.

During my visit I did not encounter a single rude individual.  Not one person amongst my Marriott stay, taxi, train, and ferry rides was rude; not a one.  It reminded me of the US midwest.  The difference being that in China everyone seems to be Charlie-hustle.  If I could bet on China I would certainly put my money on continued economic growth.

No place is perfect.  I am sure China has its issues.  I have no idea about political and social institutions.  I only saw one police car during my visit and I have no idea about the laws, judiciary, law-makers, and the like.  I also have no litmus on the health-care system.

Regarding the educational system, a couple of our team members are from China.  Bilian Song, PhD and Shengchang Su, PhD are great ambassadors of the educational system and China in general.  They were also instrumental in my preparations for the trip.  Their translation of investment and technical documents were critical components for the success of the trip.

The Shanghai streets are clean because they hose them down each night.  A homeless guy sleeping on a street bench was “rudely” awaken by the cold spray of a two-man hose team.

Zipping along on the pothole-free new roads or on the smooth rail, everywhere I looked, there were construction cranes in the sky above green cloth shrouded high-rise buildings.  I almost never saw any workers though.  I saw many new buildings, but in most cases, I could see right through the building because it lacked occupants.

The investors, Government officials, and strategic partners are open in their seeking technology innovators.  They collectively believe that innovation will continue the upward growth curve.  Perhaps getting innovators to build their companies in China will seed their entrepreneurial culture with innovation?  If they are able to couple a home-grown innovating culture with their work hard ethic and great customer service, their economic growth will be sustainable.  I wonder how Max Weber would evaluate this hybrid political and economic system?

Though I was mentally prepared to have a significant experience, I really had no appreciation for the scale.  I was humbled and impressed.  As an entrepreneur, the business climate is invigorating.  I felt like a kid with a limitless credit account in a candy store.  Everyone hustles and works.  It is an American-style wild-west opportunity.

The relationship building is early.  It was a great first impression.  I am excited at the prospect of returning to China and continuing my Nixon-esque learning.  And if things go well I hope to contribute to the innovation component of the burgeoning entrepreneurial culture in China.

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Statement about the Water-Energy Nexus Report

Pilus Energy Supports The Water-Energy Nexus:  Adding Water to the Energy Agenda World Policy Paper

A printable version of this release is available here.

We at Pilus Energy support the seminal report, The Water-Energy Nexus:  Adding Water to the Energy Agenda (Glassman, Diana and Wucker, Michele; March 2011).  The report is located at:

http://www.worldpolicy.org/policy-paper/2011/03/18/water-energy-nexus.

The report highlights that the second largest consumer of water behind agriculture, is energy production.  At the same time, the largest consumer of energy is water treatment and delivery.  As the report suggests, water issues should be included in all energy discussions.  Conversely, when policy-makers and business leaders are discussing water issues, energy should be included.  According to the report’s authors,

The competition between water and energy needs represents a critical business, security, and environmental issue, but has not yet received the attention that it merits. Energy production consumes significant amounts of water; providing water, in turn, consumes energy. In a world where water scarcity is a major and growing challenge, meeting future energy needs depends on water availability –and meeting water needs depends on wise energy policy decisions.

Pilus Energy is acutely aware of the Water-Energy nexus.  The Company’s electrogenic bioreactor (EBR) technology platform is designed to address both water and energy issues simultaneously.  However, the EBR adds a third component making the nexus a triad.  While remediating wastewater, the EBR generates electricity and produces economically important biogases like hydrogen, methane, and isoprene.

All three domains are linked with a single solution - the Electrogenic Bioreactor (EBR) technology platform

This Water-Energy Nexus report is a critical component of the water policy and business discussion.  As a decision-making tool, it provides a framework for linking water and energy issues that are intertwined and interdependent.  Pilus Energy supports the adoption of this report as a foundation for the water, energy, and waste-to-value triad.

As a scalable and turnkey waste-to-value platform, modules can be added to the EBR to increase functions and add even more additional values.  As a convergent technology platform, it can operate in temperatures that range from under 10 degrees Celsius (C) to over 40 degrees C.  This robust technology resists changes in pH, heavy metal contaminates, and pathogens that would shut down more sensitive solutions.  As such, it reduces costs and management requirements.

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Death, Destruction, and Renewal

Everyday I look into my kaleidoscope. My visual and auditory senses receive a dose of information. Since I keep an eye to the competitive landscape, I read about emerging developments in clean energy, biotech, and wastes-to-value. However, far too often my reading is infiltrated with stories that overwhelm my mind with sadness. In Japan the aftermath of a natural adjustment to the plates that serve as the foundation upon which our cities are anchored extinguished lives. The long-term impacts will take years to fully understand. New Zealand suffered a Japan-like earthquake a few months earlier. Australia is still recovering from it’s devastating watery deluge. And the list just grows.

In the Middle East, against the continued instability rooted in terrorism, we see the attempts of liberty to escape the shackles of tyranny. In the Ivory Coast we see a repeat of the worn out storyline of a megalomaniac’s addiction to power. It is one thing when nature creates the circumstance. It is yet quite a repugnant reflection when it is human inflicted.

Regardless, whether a natural or human cause of lost life, a book of experience is extinguished forever from our consciousness.

Our firm is maturing similar to the peaks and valleys of an emerging tweener. Our team members are not impervious to the experience of tragic losses that come with life. Recently, two members of our team experienced just such personal losses. Since everyone in a startup is critical, a diverted focus by a member can significantly impact the development of the Company. When it is two members, it can debilitate the growth. As a leader, one might feel compelled to balance the needs of the individual team members with the needs of the collective organization. However, a balance between these two needs is not the real dilemma. Making such a diagnosis may be superficial. Rather, the leadership challenge is mustering the empathy and resources to support the members.

Each of our directly impacted team members found a way to embrace their emotional experiences while continuing to support the Company. Organizationally, we could have responded better. The separation of the team members by time zones and geography underpins a virtual company. The Company is more resilient. But is it less human – or is it an evolution of humanity to a less personal collective? Will humanity’s use of electrons become a medium of quorum sensing?

Questions aside, this institutional change of humanity should make other changes to the Company easier. The days may be on the horizon where the business focus takes primacy over the science and engineering. The ethos and culture of the Company may change from being lever inventors, to lever pullers. A mature company’s leadership may take the view dictated by quarterly earnings. That is to say, from being entrepreneurial to operating. Is Google trying to revert back to this humanity with Brin, Page, and Schmidt changing their roles?

As goals of the organization begin to focus more strongly upon generating revenues, the Company must attract team members with such a focus. Change in of itself may have little value. Change when it is adapting to an environment, or when it is reflecting execution of a strategic plan to achieve growth, requires leadership best suited for that time in space.

Maybe a solution for morphing my kaleidoscope is a feature on my RSS aggregator that enables the selection of only positive revenue-generating stories?

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Raw and Pitch-Forked

During a series of trips (“road show”) presenting to investors in the USA and Europe, I was horrified at the lack of polish by some of my colleagues. At first blush, one might think this reduces competition for investment and I should stop whining. The reality is just the opposite. If the cleantech energy and water space does not put forth polished entrepreneurs, the entire space may be deemed to early and immature for serious investors. Early stage, pre-revenue firms like my own need the industry too get through its teenage years very quickly. Only when our industry is more mature, will those investors sitting on the sidelines, invest into higher risk, pre-revenue firms. Some might say, so what of the chasm between pre- and post-revenue-generating firms as the differentiator for investment? After all, that is the market at work.

The problem with this chasm between pre- and post-revenue investment is significant because many advances to clean energy and water are overlooked. With the lack of clean water and energy as it is, the very condition of humanity may be at stake.

The global community can ill afford to wait for our industry to clean and polish itself. A state of urgency must drive entrepreneurs to mature our industry more quickly. Failing to bring cleantech energy and water solutions to the world will result in species extinctions. It will result in war and famine.

Asking investors, governments, and larger companies to take the capital risk is not the answer. Before one can ask them to take the risk, we entrepreneurs need to bring that clean into our polish.

As a result of sitting through pitches that caused me to cringe for our nascent clean energy and water industries, I wondered about what could be done to help my colleagues in spite of their not asking?

My reflection galvanized the three critical components that I think early cleantech entrepreneurs must have to help them, and our industry, forward. Of course a lot more is required than just three principles. However, by focusing on just the following three, an entrepreneur will encapsulate almost everything required to successfully raise capital and grow a company. Before expressing my three critical requirements, a bit of background on the pitching process.

Pitching is generally a formal ten-minute presentation to an audience. Those in the audience are investors or influence investors. Usually the selection to pitch in a forum is by competitive selection. This process generally requires an application and a briefing to a judging panel. If the entrepreneurial story is solid enough, the firm gains a coveted pitching spot.

The pitch forum is fast paced. It requires the message to be clear and concise. It requires your use of technology. And it requires planning, rehearsal, refinement, and rehearsal again.

Selling

First and most importantly is the ability to sell. To lead a firm one must lead sales and understand its relationship to revenues. If you cannot “sell” your Company to investors, you are likely unable to sell products to customers. Therefore, pitching is a referendum on the entrepreneur’s sales abilities. Piss-poor-planning for a pitch means the entrepreneur will likely result in a piss-poor pitch. If the entrepreneur does not plan for a pitch, planning for sales is unlikely. Since investors are looking to put their capital to work in as little risk as possible, one can make a correlation between poor planning, poor execution, and higher risk.

As part of my continuous entrepreneurial professional development plan, I read books and journal articles about sales and its processes. I also talk to successful and unsuccessful sales people. Sales is a lot more than articulating a value proposition. The more one knows about the art and science of sales, the more likely an entrepreneur will successfully sell equity in the firm. Confidence during the pitch if it is approached as a sales process should materialize. This confidence links sales to the next critical component.

Books that I rely upon include:

Crossing the Chasm; Geoffrey A. Moore, 1991; revised 2001

The 25 Sales Habits of Highly Successful Salespeople; Stephan Schiffman,3rd Ed, 2008

The Language of Trust: Selling Ideas in a World of Skeptics; Michael Maslansky, 2010

Leadership

The second aspect for successful pitching is expressing leadership through knowledge, planning, communication, and adaptability. A superb planner who is able to listen and adapt to changes during execution brings confidence to the organization and investors. Just as pitching demonstrates salesmanship, having knowledge, planning, communication, and adaptability demonstrates leadership and management skills.

My favorite recommendations for leadership development are:

Influence: The Psychology of Persuasion; Robert B. Cialdini, PhD, 2007

The Killer Angels; Michael Shaara, 1974 (particularly the actions by Joshua Chamberlain)

Founders at Work: Stories of Startups’ Early Days; Jessica Livingston, 2007

Failure to plan requires the entrepreneur to plan for failure. The savvy investor sees this risk and avoids it. This leads me to the final critical aspect a pitching entrepreneur must have.

Trading Places

An entrepreneur must trade places with the investor. Good leaders are great followers. The only way an entrepreneur who is a leader can fully appreciate and understand the investor, is to walk in that shadow. That is to say, become the investor. Placing oneself in the investor’s position requires the entrepreneur to completely understand what an investor needs in order to put capital to work, and at risk. Trading places with an investor means you need a mentor, read books about investing, and go through the process of being an investor. The funny thing is that after such an exercise, not only will you better position your sales pitch, but you become a bit more understanding when an investor passes on your opportunity. You will likely appreciate the feedback much more too.

My recommending reading list for becoming an investor are:

Angel Investing: Matching Startup Funds with Startup Companies – The Guide for Entrepreneurs and Individual Investors>; Mark Van Osnabrugge and Robert J. Robinson, 2000

Investing in Renewable Energy: Making Money on Green Chip Stocks; Jeff Siegel, 2008

Mastering the VC Game: A Venture Capital Insider Reveals How to Get from Start-up to IPO on Your Own Terms; Jeffrey Bussgang, 2010

With these three important and overarching principles in place, the entrepreneur should be more successful. At the same time, s/he will bring credit and legitimacy to the cleantech energy and water space.

Pitching requires continual improvement. Improvement is facilitated by reflection and assessment. The cleantech industry requires the entrepreneur to be a professional, not just a technologist.

Books I recommend for polishing the pitch are:

Fascinate: Your 7 Triggers to Persuasion and Captivation; Sally Hogshead, 2010

The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything; Guy Kawasaki, 2004

Rainmaking Presentations: How to Grow Your Business by Leveraging Your Expertise; Joseph Sommerville, 2009

And an extra:

Harvard Business Review on Innovation; 2001

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