Focus on Smart Infrastructure Solutions, Part 1

Let us focus on the field of digital water to investigate where along the broad cycle of water we can allocate opportunities for digital innovation, and for investment.

As a matter of fact, the water industry has always been an extremely conservative and slow industry. However, for the sake of quality, efficiency and safety, water infrastructure is becoming increasingly complex and with that, more difficult to manage and control, especially when using old-fashioned, customized tools and methods. The great opportunity for startups today results exactly from this always widening gap.

The answer will not be to develop rocket-science types of innovation from ground up but to pick already available technologies from fields such as data communication and IoT (Internet of Things), big data management, social media, consumer products and tech industries like medical or mobility technology, and adapt and combine these existing and cost-efficient (because high-volume) tools and transfer them to the world of water. A vast majority of the future water business will be software and services and tools related to sensors, data communication, data analysis, reporting, control, automatization and efficiency optimization (see picture below).

There will be a fundamental shift from highly specialized and high-cost individual services as of today to a broad implementation of high-volume low-priced, highly standardized digital and intelligent systems and solutions. The startups that see these trends and prepare for this shift can expect to land in a wide open and receptive market.

Also, the water industry is driven today by buzzwords such as “smart water,” “big data,” “digital transformation,” and “IoT.” The integration of water sensors into IoT is one mega-trend happening right now.

It is not hard to predict that every device will have an IP address and will be connected to the cloud. They will talk with many other devices via the same interface. It seems a clear track, with advantages for operators and consumers, but there is still a long way to go because in an industrial environment, conditions are demanding, from security questions over energy consumption to protocol standardization.

Let us put a magnifying glass on sensors. Sensors are the backbone of any smart system. Without sensors, we are blind and cannot make any progress with the efficient and safe management of water systems. In the picture below, we visualize how rapidly tools for water-quality monitoring have already changed over the last 20 years but, also, how this trend will continue or even intensify over the coming years. Ongoing and future business will develop under the blue circle.

Compared to a modern car, for example, in which hundreds of sensors are already implemented, the water cycle is still being managed with barely any sensors at all, almost blindly. Compared to other fields of technology (such as mobility, housing and medical), why do we still use so few sensors in water? Isn’t drinking water at least as relevant from a health perspective? Shouldn’t every drop of water be controlled before consumption?

Devices and systems summarized under the term “smart” will be the answer: They will be cost-efficient, reagent-free, continuous, low maintenance, low power, intelligent, and networking, applied at the building level or even at the consumer level. Extrapolating the recent trend to “smart” and “managed” buildings, combined with ongoing innovation on the sensor- and data management side, it is without risk to predict that water sensors will be ubiquitous in 10 to 15 years, and thousands, if not millions, of sensors will be installed, helping water and building managers to operate their systems safely and efficiently.

Casagua Incubadora - An Unconventional Investment Fund

Startups offer an exciting potential for motivated young people who want an alternative to Mexico’s traditional business world, or who are determined to face the country’s economic and environmental challenges by innovating rather than leaving the country. We have experienced a high level of talent, enthusiasm, creativity and also academic education with young Mexicans. However, this potential is not reflected by the number of startups per capita, which is a small fraction of the US, for example. In the Global Entrepreneurship Index of the GEDI Institute, Mexico ranks 75th. For the “Ease to start a business” Index, Mexico ranks 107th, according to the World Bank; and national R&D expenditure stands at a concerning 0.3 percent of GDP, compared with the global average of 2.3 percent, according to the World Bank. There is a substantial lack of access to risk capital (private or institutional) and barely any relevant public support, especially in the early, high-risk phase of an enterprise. On the personal side, the biggest obstacles preventing entrepreneurial success seem to be a lack of confidence among young Mexicans in their own talents and a culture of avoiding risks, preferring careers in secure international business environments. There is also the fear of sometimes irrational bureaucratic obstacles, which makes it hard to calculate the time and effort it will take to start a company.

For all these concerns, we offer advice, motivation, and solutions.

Young Mexican companies are being supported in an early, high-risk stage to help gain momentum until they reach economic stability. The moment of our success is when our startups spread their wings and fly without our support. Other key differentiators of the casAgua incubator are: “Hecho en México – designed for the world;” support to create a strong and plausible business plan which must include generation of social and environmental value; and focus and deep expertise of the casAgua managers in the fields of water and energy. Last but not least, our goal is not casAgua’s profit but the profit of our startups.

casAgua offers four levels of support: (1) Office, lab space and infrastructure in the casAgua building; (2) Direct investment, by acquisition of shares and shareholder loans;(3) Technology support and transfer, and, eventually, IP rights; (4) Management-,  legal-, and financial know-how and support.

In Part 2 of this article, we will report on casAgua’s sustainable architecture project, including smart water and smart energy concepts; and tell about our nonprofit project, the Water Transparency Foundation, with the mission to make water data more transparent, accessible and understandable for everybody.

About the author:

After having been active in the field of online water quality monitoring for 20 years, Andreas Weingartner sold his company www.s-can.at in 2020, and partly shifted his business and social focus from Europe to Latin America and especially Mexico. Before his entrepreneurial life, he had been a researcher and university teacher in the field of water management and water treatment. Today, he combines scientific experience with entrepreneurial motivation and a global partner network to develop success stories with young Mexican companies in the green field of sustainability, focussed on water and energy.