From The Editor | October 26, 2015

In The BREW Tank, Everyone's A Winner

Peter Chawaga - editor

By Peter Chawaga

The BREW Tank was a series of brief product pitches in the vein of television’s popular reality competition “Shark Tank.” As they would in the show, fledgling innovators presented their potentially lucrative ideas to a panel of bloodthirsty industry leaders. On television, these are the visibly wealthy and accomplished likes of internet maven Mark Cuban and shopping network empress Lori Greiner. In the BREW Tank, which, geographically speaking, was the Innovation Theater occupying a corner of McCormick Place during the 2015 WEFTEC exhibition, the panel was occupied by the water industry equivalent of these reality investor savants.

The three-man judging panel was helmed by Phil Rolchigo, vice president of research, development and technology innovation at Pentair; Alex Sandu, principal civil engineer with MWH Global; and Samuel Saintoge, principal at XPV Water Partners. The judges would not offer to invest in any startups presented that day, as they might in an episode of "Shark Tank," but would give presenters the chance to answer pointed questions and defend against the potential pitfalls found in their pitches. (Following each presentation, the panel was invited to offer tips that might aid the growth of the idea they had just heard, and each time they declined to do so.)

"Shark Tank" the show doesn’t have a host or MC. In the inaugural BREW Tank, without the aid of TV magic, this position proved essential.  Elizabeth Thelen, director of entrepreneurship and talent for The Water Council, took up the introduction, clock management, and event cheerleading duties with feverish enthusiasm, at one point exclaiming, “One of the things that you’re going to notice is that these are all small startup companies among these monsters like Rockwell, ABB, Badger Meter. They need your help. They really do, because this is a legacy industry, and they’re trying to disrupt what’s going on.”

It should be noted here, if not earlier, that the “BREW” in BREW Tank stands for Business Research Entrepreneurship in Wisconsin. To reach the Innovation Pavilion stage, the contestants must have already received recognition by BREW, Imagine H2O, or BlueTech Research with their corresponding grants for innovation. In BREW’s case, this means $50,000 in funding, offices with a year’s discounted rent, and access to collaborative lab space, so it’s not just sunny optimism when Thelen assures the audience that here, everyone’s a winner. The overall program was sponsored by The Water Council, a group that hopes to draw water investment and technology to Milwaukee.

Winner One: Ashok Menon, Radom Corp.

To begin the series of PowerPoint pitches, Thelen invited Ashok Menon to the stage. Representing Radom Corporation, Menon arrived with high hopes of securing $2 million to launch plans for a portable inductively coupled plasma (ICP) spectrometer. This instrument achieves its portability by eliminating the need for the argon infrastructure that currently burdens traditional ICP spectrometers, thus shedding overhead costs and cumbersome tethering along with it. Radom has developed custom-built optics and paired them with commercial-grade microwave instrumentation to develop their ICP.

“Based on the conversations we’ve had with our customers, the lowest-hanging fruit is in the proliferation of these instruments where they cannot go right now,” Menon said. “Using our instrument, they see great potential for being able to increase the number of instruments they have and increase their production, while reducing their logistical and cost overhead.”

The day before Menon’s presentation, Radom had filed an international patent on the product. Though none was offered in the Innovation Theater, it may not be long before they find an investment.

Winner Two: Shannon Grant, President, ADI Systems North America

After her request for words of wisdom to usher Menon off the stage was met with three silent thumbs up from the judging panel, Thelen welcomed Shannon Grant of ADI Systems.

Grant’s presentation immediately contrasted with the first as he announced that ADI is over 30 years old, operates installations in over 35 countries, and provides salaries for 200 employees. But he assured the audience that the company’s anaerobic membrane bioreactor (MBR) was as novel and in need of investment as any other product in the Tank.

The product is similar to an aerobic MBR, Grant said, but, as the name implies, utilizes membranes inside an anaerobic process. It features a submerged membrane that uses biogas captured from the head space in the tank, recycles it through blowers, and scours the surface to keep the membrane clean. The advantages over popular aerobic systems include better effluent quality, up to 9 percent biochemical oxygen demand (BOD) removal, the ability to run at 2 to 3 percent mixed liquid, no limits on oxygen transfer, compact size with relatively high loading rates, and the ability to operate at thermophilic temperatures.

When pressed by a judge, Grant explained that there are already five of these systems operating and one currently under construction.

“It’s starting to pick up pace, now that we have some installations and they’re all working well,” he said. “The guinea pigs have already proven that it works well.”

Encouraged by these field successes, Thelen leapt on stage.

“I might have missed it, but did you have an ask from the judges or anybody out in the crowd?”

Grant shook his head.

“How about a customer deployment or pilot site? A sale?”

“Does anybody need an anaerobic MBR in the room?” Grant asked.

It appeared that, for the time being, nobody did.

Winner Three: Mike Slawson, CEO, Lumense

Next up was Mike Slawson, presenting a new sensing technology. Slawson immediately separated himself from his predecessors by kicking off his pitch with a recounting of the summer’s avian influenza, the Ebola crisis, and pipeline spill in Santa Barbara. Assuring the audience that he was no “apocalyptic nut,” these examples were meant to illustrate the relevance of chemical and biological sensing, which they did, before Slawson launched into the technicalities.

Lumense, based in Atlanta, offers an optical wave guide resembling a thin, cellophane binder tab. Built with a semiconductor at Georgia Tech, the guide is covered with specific coatings that are customized for the targets that clients hope to identify. It will record the instances of those targets and save them as an analytic history that can be accessed anywhere.

The product is sold for $1,000 to $2,000 and has been purchased by poultry houses for monitoring ammonia levels and Coca-Cola for identifying carbon dioxide contamination.

“We’re here because we’re very interested in water,” Slawson said. “We’re in the process of talking to partners about exactly what that water product looks like and we intend to launch our first water quality analyzer next year.”

Lumense was seeking $3 to $5 million in capital to get the water analyzer off the ground.

When a judge questioned the savviness behind making the analyzing chip as resilient as possible, Slawson explained that Lumense expects to get recurring revenue from the data it collects, not by replacing chips.

Winner Four: Mark Gehring, Business Development Manager, OxyMem

Thelen was particularly eager to introduce the fourth contestant, explaining that OxyMem is a “three time, triple winner” in that it has been recognized by BREW, BlueTech, and Imagine H2O.

Enter Mark Gehring, offering a membrane aerated bioreactor (MABR) that overcomes the energy inefficiencies of traditional wastewater treatment with direct oxygen gas transfer to the biomass, resulting in energy savings of up to 75 percent, reduced sludge production, and a smaller footprint.

Gehring mentioned that while the company was seeking $22 million in capital equity funding, he was in the BREW Tank that day in search of an American showcase installation to complement OxyMem’s international operations.

“I think that the most attractive entities are those where we have a specific water problem to solve,” he said of the ideal platform. “For instance, they can meet a nutrient standard. If we need to go to nitrification or even denitrification, or a plant that has an expansion requirement and they’re landlocked and cannot build more tankage.”

Following a challenge from the judging panel, Gehring described the product’s “peak mode” capabilities, initiated by running the MABR on pure oxygen.

Met once again by a panel of silent thumbs up in lieu of words of wisdom for OxyMem, Thelen handed the microphone to the afternoon’s next innovator.  

Winner 5: Zeev Efrat, CEO, Aquarius Spectrum

Zeev Efrat, who hails from Israel, sauntered to the stage with a dream of making the underground water network visible. Aquarius Spectrum offers sensors and software for leak detection and asset management, which can be tracked on a smartphone for remote monitoring.

“All the information is gathered in the system, analyzed automatically, and if there is a fault — which means a leak — what’s the size, what’s the probability, where to find it? The system automatically finds it and now it’s just a matter of fixing it,” Efrat explained.

The sensors detect leaks using soundwaves. Aquarius Spectrum currently monitors over 1,000 kilometers of water system with 2,000 sensors in operation every day. Their deployment includes 1,600 sensors in Jerusalem. Efrat was seeking a stateside partner and investment to extend marketing and sales into the U.S.

At around this point in the presentation, the diligent Thelen reminded Efrat that he was out of time and turned to the judges for questions.

When asked about his biggest challenge in commercializing the product, Efrat explained that his company offers support along with the sensing tools, which customers don’t always understand at first.

“We’re able to convince on technology, but the major thing is support,” he said. “It’s not just, ‘take it and work with it.’ If you go deep into the software, and we will show you, you see how the back office is supporting the people in the field.”

Winner 6: Jose Ramirez, CEO, Optik-Technik

By the sixth presentation, the Innovation Theater crowd began to thin a bit. This was not an indictment on the quality of products being showcased, but a natural result of the program approaching the 45-minute mark during a teeming industry trade show.

Perhaps fearing that continued dwindling was on the horizon, Jose Ramirez, CEO and co-founder of Optik-Technik (website coming soon), arrived enthusiastically on stage.

His PowerPoint began with a slide featuring the Ford Model T next to a picture of two clear jars cradled in a wooden frame.

“What these two things have in common is that they were actually both born in 1911,” Ramirez explained. “The jar testing method was developed in 1911, and what’s funny is, while Ford has evolved the technology of the automobile substantially, the jar tester is still the prevalent method for monitoring and controlling coagulation and flocculation.”

With that, Ramirez had arrived at his pitch. Optik-Technik had developed what he claimed to be the only reliable online method for monitoring coagulation and flocculation. Its proprietary machine performs an optical test based on laser backscattering, which generates an image for analysis. He proudly noted that the prototype was constructed with parts from a laser scanner.

“Now you can actually control very precisely the state of aggregation flocculation in the mix, and therefore, you can hook that up to a control system to achieve very tight, reliable control.”

Ramirez was seeking $450,000 in seed funding so the company could conduct field testing and expand beyond its prototype, but nobody took the opportunity to make an offer.

Winner 7: Paul Christy, Cambi

Although he was introduced as a representative from Norway, Paul Christy explained that he had flown to Chicago from his home in Pennsylvania.

Wasting no time, he explained that Cambi offers a thermal hydrolysis process that uses steam and heat to pressure cook sludge prior to anaerobic digestion at about 100 psi. He called the process “steam explosion technology,” which mainly disrupts biosolids.

“The top 10 reasons why somebody would put in a thermal hydrolysis process, number one it saves capital costs, and it also saves operating costs,” Christy said. “Say those five times and those are the top 10 reasons someone puts in thermal hydrolysis.”

You’d be hard-pressed to call Cambi a startup company, as it’s been in existence for almost 20 years and operates 15 plants. But as Christy explained, in this business “if you don’t have 20 years’ experience, you’re in trouble.”

He then offered the audience a case study in which a Washington, D.C. plant embarking on a project for 45 million gallons’ worth of digesters had gone wildly over budget. After calling Cambi, the plant began saving $20 million a year in operating costs thanks to reduced sludge volume.

When asked about energy recovery by one of the judges, Christy explained that the thermal hydrolysis process generates more energy than it uses, which will further offset the cost of installation.

Winner 8: Michael Chasnow, Director of Sales, Valor Water Analytics

The eighth and final BREW Tank presentation came from its most Zuckerbergian contestant, San Francisco’s Michael Chasnow, touting a data management software suite from Valor Water Analytics.

Chasnow opened by joking that he thought he had 15 or 20 minutes to present, which Thelen, diligently watching the timer, did not seem to find amusing.

He gracefully moved on to propose that the water industry’s revenue crisis was not a product of the Western drought, but actually a matter of efficiency.

“Part of the equation that [utilities are] missing is understanding their customers,” Chasnow said. “Who of their customers is efficient? Who is inefficient? Who is stealing? Where’s an aging, broken meter? That’s really what we’re here to help solve, why we exist.”

Valor can leverage billing data and meter management data and apply advanced science to help utilities become more efficient in collecting revenue. They offer a “hidden revenue locator” which identifies irregularities in billing.

“Typically, when we work with a partner utility, about 2 percent of their potential revenue is being missed,” said Chasnow. “If a utility has about $100 million in revenue annually, that’s $2 million that they can invest in their operations and in delay rate increases as well.”

Currently working with a dozen utilities across the country, Chasnow asked for a $1 million investment to increase Valor’s sales and data engineering teams.

During the question-and-answer portion of his pitch, Chasnow explained that Valor’s suite works with AMI, AMR, or manual reads.

To conclude the presentation, Thelen had the audience applaud the full cast of innovators as they posed for a group picture, and then thanked the judges for their participation. While nobody was leaving the BREW Tank with a public offer of investment, everyone was leaving happy. Happy to share their ideas with an industry audience, happy to have brought their innovations this far, happy to have made it through their presentation without Thelen seizing the microphone. After all, in the BREW Tank, everyone’s a winner.