Everyone I know talks about Millennials. However, I’m under the impression most people don’t fully appreciate how different they are. I was born on the fringes of Generation X with Millennials. My parents are Baby Boomers. My brother is Millennial.
One of the things I’ve observed is how different Gen X are from Millennials. I look at my brother, and it’s hard to believe we had the same parents. I have more in common with my parents than my brother will ever have. The irony though is, when I look at Generation Z, I feel the gap isn’t as big as with Millennials.
And the truth is, the shift in product usability patterns is a clear example of how disparate they are compared to my generation.
The behavioral change is tremendous, and it’s becoming one of the hardest things to design for. The reason is, key decision makers aren’t from that generation. Companies bring in Millennials; they even give them management positions. But Senior Management has a hard time going all in with Millennial ways. The only companies I’m seeing do it right are those founded, run and staffed by Millennials.
“I’m looking at an app, and I could swear it’s Instagram. I see large square photos in an endless feed. Avatars appear in round circles. You can tap a heart to like something. Inside any post, there are dozens of comments.”
The generational gap isn’t just about Millennials. The consequences are rippling over everyone. The way this generation understands products is changing not only theirs, but everyone else’s too.
“Marketing to millennials may sound overplayed, but in the interior design world, there are only a few moments in someone’s life when they actually make a lot of major purchases: The move to college, the move into the first home, the onslaught of kids, and the pared-down, empty nester life.”
We’ve gone from a product-centric approach to a customer-centric one. The change has spurred differences on how companies pursue product development. The customer’s feedback is critical, and so, product cycles are keyed into them. Agile, Lean, Scrum, are familiar terms by now.
Still, not all processes have changed. Many parts of the overall product development cycle remain the same. Interviews, feedback gathering, observation techniques. And the core should stay the same, for the simple reason that, despite generations, we’re still human.
Nonetheless, as I stated before, most people don’t acknowledge how different Millennials are. So, while the human behavior is still typical to everyone, the way to measure and detect it is different.
This is why a product like Studio Connect caught my attention. While the design team is deep in Design Thinking territory, they realized they needed a new approach to engage with their audience.
“For any goods Target develops, it takes a firm design thinking approach. By spending time working with customers, the team identifies pain points, prototypes a solution, and then it iterates with wave after wave of consumer feedback.” Made By Design is Target’s big bet on minimalism
Traditional focus groups or interviews aren’t cutting it anymore. Images and video do. Stories do. Why not use the same approach that powers the largest Millennial Social Network? Why not replicate what Instagram or Snap have achieved? Could it be used to drive the attention to problems we want to solve internally?
That’s precisely what Studio Connect has done. And it seems it’s been very successful with it. It’s a brilliant move. Bring what’s resonating with their behavior and focus it on our products.
While the article doesn’t grant much detail, I’m pretty sure the system enables powerful microtargeting and additional bells and whistles that help on the feedback gathering phase.
As childish as it might look, you can’t fight fire with the same tools of old. You also need to improve and update the internal approach to Design Thinking. I would argue that new feedback gathering tools are one field, but we’ll see others getting upgrades, like remote co-design tools.
Millennials are driving changes around product expectations. They want cheap, high quality, well-designed products. And they want them now. There is a certain entitlement element that’s driving every single design trend. From Target’s Made by Design, to things like WeWork’s office spaces. Millennials know they can complain and that their following hordes will support them. Brands will kneel, and they’ll get what they want. For free.
I won’t discuss the morals of such entitlements. The fact remains that companies are designing their products to fit the bill. They require not only quicker product cycles (Agile), but more informed feedback (Lean/Design Thinking). On top of that, they need to find ways to keep the quality but lower their production costs. This is where disruptions like 3D Printing come into play. Last, they want their products, and they want them now. Last mile delivery and robust logistics are the final nails of the Millennial-Product-Design-Cycle (M-PDC).
Those companies that don’t invest in each of these steps will find themselves at a disadvantage and will be removed from the market. The game isn’t to advance in one, but to push all four aspects simultaneously.
Every company focuses on some new aspect, but sometimes we forget the most elemental aspect. Use consumer products dynamics to aid you in the design process. I expect more companies to take a page from Target’s manual and turn to products like TBH, Snap, Tinder, Wattpad, Twitch, Venmo or Uber, for inspiration. What would a product testing Twitch look like? Would something like Instagram Stories work for employees? Could we do an Uber for physical products?
It’s all about rethinking how we do what we do, in the most engaging way for our target audience. And the target audience has changed a lot. Not only is it different, but their new behaviors are spreading, and fast, to other segments.
Our world is changing and changing fast. Some transformations are straightforward. Others are the consequence of the convergence of certain trends.
The electrification of transport and the rise of Electric Vehicles (EV) is one such evolution. EVs are, by no means new. They’ve been around for a time now. However, the confluence of three big mega-trends has accelerated its growth and deployment worldwide.
On one side, we have the continuous trend towards a more sustainable energy footprint. In this case, this means the rapid growth of renewable energies.
Despite Trump’s EPA perversion, most countries understand the need for a sustainable and clean environment. Renewable energies are becoming critical to achieving such goals. On top of that, clean energies are becoming of enormous importance in the geopolitical arena. Most countries want the break free from the tyrannic shackles of fossil fuels and the political games attached to them.
Another significant trend is one related to health. As major cities keep aggregating population and turn into megacities, traffic, pollution and air quality are becoming crucial for further growth. The need for smarter and cleaner transportation systems is one of the major challenges.
The last trend is the final piece of the puzzle, the rise of ride-sharing services and Autonomous Vehicles (AV). As ownership declines and car fleets increase, the need for sustainable fuels grows. In this case, it’s not just a health issue, but an economic one. If I need to maximize miles per day, I also need the cheapest (government incentivized) fuel for the vehicles. And surprise, surprise, those are Electric Vehicles.
As I said before, EVs existed before, but the intersection of these three global trends is supercharging its growth. The fastest adopters will be, as usually happens in innovation, developing countries. And the apparent poster boy is China.
Despite the acceleration of the industry, massive adoption is still hindered by several aspects. The first one is the lack of a big offer of EV models. If you want something semi-usable, your choices are pretty limited so far to about ten models.
The second issue is known as range anxiety. The lack of a decent driving range without the need to recharge is still a limiting factor. I recently asked a friend, and he confessed he sold his EV after a year due to this and other complaints.
Range restrictions are a byproduct of battery capacity and recharging stations infrastructure. The current infrastructure is still rather brittle, and it makes it tough to use an EV beyond your neighborhood.
Fast changes ahead
The industry, though, is evolving fast. This year and the next will become significant in terms of new models. All the major automakers will push novel EV models into the market. This new wave will dramatically increase the offering. New versions will come with better batteries (longer driving ranges), and faster-charging capabilities (from 1h charging to 15 minutes).
Battery costs are falling rapidly, and that’s allowing bigger and more densely packed batteries for every maker, not just Tesla. That’s pushing the millage of most models into a decent range, so expect significant gains next two years.
The market is already feeling these improvements and sales are growing exponentially. One of the major drives for many is the existence of car sharing EV fleets operating in their cities. The fact that you’re used to driving an EV every day is a great incentive to remove the fear of owning one. The other push is coming from China, who is making EVs a national priority.
Charging stations and general EV infrastructure is significantly improving too. The last 18 months have shown a rapid expansion of most charging networks. Not only they’re growing in terms of locations, but also regarding charging speed and available charging stands per station. These rapid improvements are the underpinnings of the quick growth the industry is experiencing.
Despite the good news, some demographic segments are still underrepresented. While EVs are becoming nice conveniences, especially in cities, they still make it hard for families. There are no present or future plans to support the needs of family transportation. That is a big chunk of long-range driving. A segment that requires, not only capable EVs, but a supporting infrastructure for kids and not lonely chargers in the middle of a deserted plain.
But not everything is there yet. Yes, it’s growing, but there are still big roadblocks for significant adoption.
The locations of most chargers for EVs is still a problem. The necessary infrastructure requires three different settings. Home chargers, which are, well, the plug you have at home. These chargers tend to be slow, which is ok if you have all night for charging.
When on the road most EVs need destination chargers. These are charging points you can use at your final destination. Think of your office, a mall, the airport, a hotel, etc. These are a mix. Most are still slow chargers, which depending on the case, might be ok or not. The time we spend in a mall is not the same as the time at the office.
The last location is what I call on-the-road chargers. These would be the equivalent of gas stations in major highways. To be able to extend the EVs range and take them out of the city, we need to have charging stations on the way to long-distance destinations. These, in particular, require fast chargers to avoid long waits and stops.
So far, big cities are more or less well covered with a mix of home and destination chargers. Many of these city charging points, though, have somewhat tricky access. Either they’re private, in hard to reach points or behind closed doors. The accessibility of charging stations should be total if the industry wants to keep growing.
When on the road, the location of intermediate charging stations is also a problem. Most chargers are located haphazardly. The reason is ownership fragmentation. The cost of some charging stations is so cheap and the barrier of entry so low, that any business can set up one. As it’s “unplanned” and there is no follow through, these stations tend to be poorly located, nonvisible and very unreliable.
Slow charging stations are excellent for home or long-term waits. But when on the road, there is a need for fast charging stations. These are expensive. They can cost north of 50.000 euros a piece. The steep price and the lack of market traction have been one of the reasons why they’re scarce. Until recently, the only reliable fast-charging network was Teslas.
Fast charging though isn’t unique to long distance drives. The nascent ride-sharing industry is one of the largest customers. The need to put the shared EVs back into operation as fast as possible is a big operational must. Fast charging is, therefore, a much-needed feature for fleet operators.
On top of the random locations and lack of capillarity, most stations have far few chargers. The average station holds two chargers. This is insufficient to serve the growing EV market. Tesla understood this from the onset. They’ve been upgrading their stations and fitting them with 10+ chargers per station. The exciting thing is, they’ve done it ahead of the market growth, not after.
Last but not least, most charging stations are emplaced in locations that don’t have much amenities. The fastest charge we can get now is roughly a 20 minutes one. Even if this was the norm, with no services around, it could get frustrating. Stations need to foster a service ecosystem around them, and this part will take time.
While Electric Vehicles consume electricity from the grid, their consumption is small compared to other energy-hungry appliances.
However, as the number of ride-sharing companies increases and the markets get flooded with EVs, things will change. One of the current worries is the overload of the low voltage grid.
Most of the home chargers connect to the low voltage grid. This network wasn’t designed to support such a load. If a rapid number of EVs start cropping in the market and pulling from the low voltage grid, they might take it down.
Fast chargers are typically connected to the medium voltage network. This gives them much more power, reduces unreliability and allows for multiple chargers without a loss of power. Nonetheless, this kind of grid connection isn’t always available. It might require permits, or it simply might not exist in certain places.
EV fast chargers might push for a need of a dedicated electrical grid just to support them. Japan’s TEPCO had to create such a dedicated network to support the growing rise of their CHAdeMO fast chargers.
One of the proposed solutions to accelerate the expansion of such fast charging networks is the use of solar energy. As stated before, EVs are not power hungry, but they draw enough to place some strain on the grid. What if we could create an off-grid energy independent unit? It wouldn’t need a connection to the electrical network. It would generate enough electricity to power all fast chargers and store the extra in stationary batteries for its use when the sun is gone.
Economics of charging stations
For many years, Electrical Vehicles and renewable energy had the economics against them. As with any disruptive technology, the initial investment is massive. As prices of components go down and efficiency goes up, the overall investment decreases and allows a reasonable return.
We are at that point. Electricity prices, EV’s rising market share and the push and drive of the underlying trends are making this industry profitable.
As with any brick and mortar business, the initial investment is still significant. For a decent fast charging stop with four charging stations, we could be looking at an initial investment of 360.000 euros. Assuming the current average electricity price (in Spain) and a 50% usage of the station, we would break even in roughly two years.
There are many If’s in such an equation, but it’s not an outrageous investment. Now, taking into account the upfront cost, it’s understandable that there aren’t that many fast charging networks out there.
There is still a remaining question. Should we charge drivers for the electricity they recharge? Tesla’s network is free for most of their users, but as many point out, that’s not sustainable. In a way, it resembles companies like Uber which subsidizes an artificial offer of drivers. Tesla has been doing the same with their stations. The question is always until how long. My prediction is that it won’t be much longer for Tesla to start charging every single user. The market is hitting the tipping point, and it’s at a place were, despite charging drivers, the cost is still half of what gas is.
Meanwhile, some startups like IMPACTsSpark Horizon is trying a different business model. Why apply the old pay per use model? Why can’t we displace the cost to interested advertisers? That’s Spark’s proposal, one that’s being received with open arms so far. It does make sense. I have the drivers attention for at least 20 minutes. Why not engage with him somehow and create a lasting impression? Not only that, as EVs are digital, it’s easy to tie a user to their online persona and create targeted experiences tuned for them.
I don’t think it will work everywhere, but I can’t shake the notion that in the future we’ll see hybrid business models operating in the space.
The rise of the competitors
As I mentioned before, Tesla isn’t the only player anymore. For all the criticism Tesla gets, they’ve done outstanding work. Not only were they pioneers in the space. They’ve set many of the behavioral standards.
One of their smartest moves was to deploy a free-for-all fast-charging network. While some debate the long-term sustainability of the system, I would refer back to what I wrote about the difference between finances and impact. Tesla might crash financially, but they’ve set up the norm. And it’s not going away. It’s their moat and lock-in strategy, and they’re winning at it.
Not only do they have the most extensive network, but they also have the fastest chargers, the best locations, and the most pleasurable designs. The whole Tesla experience is orders of magnitude ahead of anyone else.
That said, the war is on. New entrants are picking up ground, and the unsexy market turned into a new format war. The competitors are coming up with new charging standards, all different from Teslas. This standard fragmentation is turning the problem into an even bigger one.
Right now there are, at least, three different standards: Tesla, CHAdeMO (Japan) and the CSS standard.
“The CHAdeMO Association made available the specifications for charging up to 200 kW but – at least in Europe – no vehicles have been announced that support CHAdeMO charging at more than 50 kW. It remains to be seen how CHAdeMO will develop in Europe since the CCS standard is increasing its market share very quickly.”
It reminds me of the VHS vs. Betamax wars or if you’re a little younger, the HD DVD vs. Blue-Ray conundrum.
On top of these standards, the latecomers are building their charging networks to try to compete with Tesla. Companies like BMW with their ChargeNow network, E.ON-Clever’s association, Fastned Netherlands network, IONITY Consortium or the independent Porsche’s Mission E network for North America. Some are doing better than others, but what’s clear is that there’s a need for a unified established system across vast geographies.
The truth is, Tesla is still three to four years ahead of everyone else. It’s not only their superior charging network. It’s their holistic vision. Not only they have superior chargers, better driving range, and better design. They have better navigation systems, Autopilot, home stationary batteries and vertical energy integration systems through SolarCity. And this is what we know off.
But maybe, the essential asset for Tesla isn’t their technology, but their brand. A quick look at all the EV online publications shows the big truth. Tesla occupies 3/4 of all the news around EVs. That, despite all their innovation, is their biggest strength. One that’s hard to match; one that few are contending.
Electrical Vehicles aren’t just for driving, though. They are sophisticated digital machines with powerful batteries. This combination might be useful, not only for driving but for energy regulation.
An increasing number of regions are fast forwarding their renewable energy strategies. Oil and Gas dependency is becoming a costly and dangerous drag.
One of the problems with Renewable Energies though is their generating intermittence. This inconsistency creates several problems including overgeneration, under generation and very pronounced up-ramp and down-ramp effects.
“Given the intermittent generating profiles of renewables such as wind and solar, unique challenges arise from increasing renewables generation to maintain grid balancing (the matching of supply and demand), which is critical for maintaining the reliability of the electricity grid.”
To avoid such effects, there is an increasing need for stationary batteries that can hold the energy during overproduction and release it during underproduction phases.
These need for better control of offer and demand is giving rise to what many are calling the Smart Grid; an electrical network that can self-regulate itself and optimize the energy generation sources.
Smart Grid is a whole world on its own, but Electrical Vehicles might have a predominant place in it. Would it be possible to employ EVs as smart batteries? This is a concept known as Controllable Load. If instead of charging EVs in a dumb fashion (one-way), we could turn them into a two-way street (Vehicle To Grid or V2G), then we could turn them into a Smart Grid appliance.
These V2G operations could, in theory, enable us to regulate the problems arising from peaks and ramps due to Renewable Energy usage.
This space is only picking up now, but I wouldn’t be surprised if different states start incentivizing the use of Smart Grid devices. Up until now, the incentives were mostly cosmetic. Let’s save the environment. As we increase our sustainable energy footprint though, the motive becomes more of an operational one.
I expect a new wave of startups sprouting in this space with new ideas for smart grid washing machines, dishwashers, Roombas, etc. In this regard, some startups are already working in the area, including some exciting use of Smart Contracts and Blockchain technology. Keep an eye on it, because I expect many more coming up during the next two years.
The Ride-Sharing Tide
One of the most exciting convergence with the whole electrification effort is the rise of ride-sharing companies. The advent of this new consumption model is changing the way we understand transportation. We’re moving away from an ownership model and into a pay-per-use one. The optimizations are rather apparent, but the change has a broad impact on many industries.
The obvious one is the incentive to retrofit ride sharing fleets with EVs. It’s not only the reduction of fuel costs, but also the car-part simplification that EVs provide. Let’s remember that ride-sharing fleets are exposed to much higher use than a regular car. This means that the fewer parts the vehicle has, the lower is the cost of maintenance. So, ride-sharing companies have a big incentive to, not only become the largest owners of EVs but the most prominent evangelists.
The growth of such fleets casts doubts about the personal EV ownership model. While early adopters are buying EVs, I’m not sure the public at large will. Why would you want to own a car when the city is already blanketed with ride-sharing EVs? Even more pressing, is the fact that when using a ride-sharing platform I don’t care about charging issues. The fleet managers take care of recharging the EVs.
The change of model shifts the interest from Owners to Fleet Managers. So, there isn’t much need for home chargers but fast dedicated chargers for the fleet.
Renewable Energy Geopolitics
Another more significant question is how are these countries, cities, states, take care of the new power demands. As I stated before, while the current energy footprint of EVs is rather small, future expansion will be significant.
The need for cleaner energies, and more importantly, the breaking of fossil fuel dependency is high up on most government’s agendas.
The search for new sustainable alternatives is unleashing a significant shift within the geopolitical arena. In the same way, fossil fuel deposits are geographically bounded, so are the capacities for renewable energies.
Despite the need, not every country can generate the same amount of energy, and this will increase during the next few years. A good example is Japan. Despite how advanced they’re regarding sustainable energy generation, their room for improvement is small.
“Japanese telecom firm SoftBank partnered with Russian, Chinese and South Korean utility firms Korea Electric Power Company, State Grid Corporation of China and PSJC to develop a Global Energy Interconnection (GEI) system.”
The EV ecosystem is growing, but there are still major challenges. And where there are challenges, there are also opportunities. The general feeling I’m getting is that more and more entrepreneurs are finally jumping into the field. I expect some innovative approaches to many of the challenges coming up soon enough.
An obvious starting point is the software aspect. From smart navigation to traffic predictions for EVs. I already see some startups competing with Tesla’s navigation system. Intelligent tools for EV drivers like IMPACTs ChargeTrip is an excellent example of this. One, which by the way, is a perfect acquisition target for some of the new entrants.
Another space I mentioned before is Off-Grid energy generation. Over the years I’ve seen several projects in this space. Most of them were aimed at developing regions like Africa. Nonetheless, the creation of alternative grids to support EVs, Autonomous Vehicles (AVs) or drones, is a space that might drive this vertical.
Smart Grid devices, as mentioned before, is another potential vertical. The convergence of IoT and Smart Grid software will start to make sense pretty soon. The space will mature, and the solutions will turn more Plug & Play.
EV ecosystem services is a space that isn’t being worked yet. Yes, until now there hasn’t been much traction, but that will change and fast. Creating services like food delivery, content & entertainment, or family-friendly attractions could become very lucrative.
One last idea that might be worth exploring is smart renewable energy prospecting. In the same way, oil conglomerates or mining rigs have their specialized prospection teams, why not the same for renewables? Where to place an EV charging station that maximizes solar energy production? Where do we set a stationary battery park to supply energy for peak demand? And wind? And geothermal? When? Where? How? Can we take advantage of a region and then sell the electricity to a power-hungry neighbor?
As far as I know, many of these decisions are still made manually. There are plenty of AI-based optimizations that can generate better yields and accelerate the expansion of EVs and renewable energy sources.
The electrification game is real, and it’s moving fast. The tipping point is fast approaching, and we’re about to see drastic changes in our transportation behaviors. Like I stated at the beginning, Electric Vehicles don’t happen in a vacuum. The convergence of other significant trends is the driving force for the change. Don’t look at the EV market in isolation but as a needed tool to deploy other substantial and holistic strategies.
Never before there’s been so many startups cropping worldwide. Some of them will undoubtedly disrupt their markets. They’ll take innovative technologies and use them to push disruption forward. And that’s good. We need change. We need things to keep improving.
However, despite their numbers, very few will deliver solutions to humanity’s most significant challenges. One of these challenges, that of sustaining our environment, is the topic of Rachel Carson’s extraordinary Silent Spring book. Published in 1962, it brought up the dangers of pesticides to the White House.
While I was reading it, I became curious about the current state of affairs. I wondered how much we had improved since the 60s. The answer was staggering, not much. Virulent, toxic pesticides are widespread. Water, crops, forests, and animals are widely polluted. The most shocking discovery wasn’t to learn how toxic these compounds are, but that, even though we now know about them, they’re still broadly used.
“The fact that chemicals may play a role similar to radiation has scarcely dawned on the public mind, nor on the minds of most medical or scientific workers.
Although chemical manufacturers are required by law to test their materials for toxicity, they are not required to make the tests that would reliably demonstrate genetic effect, and they do not do so.”
Carson, Rachel. Silent Spring (1962)
One would think we’ve become better, and while we’ve banned many of these highly toxic compounds, similar ones are extensively used in developing countries like China, India or Africa. Let me remind everyone that most of our food, clothes or products come from developing countries.
“[…] Pesticides are responsible for an estimated 200,000 acute poisoning deaths each year, 99 per cent of which occur in developing countries,3 where health, safety, and environmental regulations are weaker and less strictly applied. While records on global pesticide use are incomplete, it is generally agreed that application rates have increased dramatically over the past few decades.”
There is an increasing body of work that links the pollution of our environment with deadly diseases. Cancer, dementia, autism, and infertility are some of the conditions related to pesticides.
The irony is, there are plenty of biotech companies developing biomarker detectors for cancer, dementia and whole startups devoted to improve your fertility. Nonetheless, there are very very few companies trying to tackle the root of the problem, toxic chemicals in our environment. And it is shocking and sad and discouraging.
While we keep on chatting away on our smartphones, our interactions with nature, water, food, and air, keep becoming deadlier. Toxicity of our own design.
One of the most significant challenges for humanity is connected with the substrate of all life, water. Water (H2O) is essential to the whole natural ecosystem. The planet can’t sustain life without it. And even if we’re ignorant of the system at large, we should be selfish enough to care about your safety.
Do you know the Coachella music festival? Last year they had to postpone camping due to a toxic cloud emanating from the Salton Sea, one of the most contaminated bodies of water in the US. The poisonous lake is just 15 miles away from the camp.
“Government officials acknowledge the daunting challenges ahead for water utilities. In the final months of the Obama administration, the EPA’s Office of Water published a report highlighting aging infrastructure, unregulated contaminants and financial support for small and poor communities as top concerns for drinking water quality going forward.”
In Europe matters are slightly better, but not much more. In 2000, Europe approved their most ambitious environmental regulation, the Water Framework Directive. The WFD goals for 2015 failed by a landslide.
“However, fifteen years after the WFD was introduced, achieving its objectives remains a challenge, with 47% of EU surface waters not reaching the good ecological status in 2015–a central objective of EU water legislation (European Commission, 2012a). During the first WFD cycle, which operated from 2009 to 2015, the number of surface water bodies in “good” state only increased by 10% (van Rijswick and Backes, 2015).”
When you look at state of the art in this space, the feeling is of dismay. For all the talk around IoT and Industry 4.0., there are very few high-tech early warning and detection systems for water assets. On top of that, there seem to be very few startups working on fast, cheap, and portable water pollutant detection devices.
There is plenty of research around this area. Many scientists are developing new ways of detecting harmful compounds in bodies of water. However, most of these, either stay in the lab or are hardly commercialized.
It’s not hard to understand the reason. Two significant factors are dragging the field. The need for research and a lack of consumer markets. It’s easier to develop a new market-place for pets than bring to market five years of research, within an acceptable price range.
For all the talk around startups, there seems to be an unwillingness to drive research into the market. I understand the allure of fast and quick flips. People do startups for the fun and glory. They want to be portraited as the next Facebook. Nevertheless, few want to get their hands dirty and do challenging things.
And that’s the key, technology’s democratization is enabling a more extensive range of actors. Still, risk-takers, pioneers, visionaries, remain in low supply. As the pond gets wider, challengers get diluted within the mass.
There is one country though, that is consistently challenging itself. And that country is, no surprise here, Israel. Their capacity to bring research into the market is unparalleled, and it’s paying off.
Out of all the water-related startups I reviewed, only one, Israel-based Lishtot, resembles anything like a consumer product. It’s not surprising they won the Techcrunch Best Gadget award at CES 2018. But maybe, the most astonishing part of it, is that we feel it’s groundbreaking. And it is, don’t get me wrong, but it should be the norm, not the exception.
When it comes to food, it’s even worse. In Europe, if you live in a city, chances are, your local water agency treats and monitors the status of your tap water. Sometimes it tastes better than others, but you know you have a low chance of getting sick.
Food is a different story altogether. Testing food for pesticides, herbicides or insecticides is hard, slow and expensive. It’s impossible to check every ingredient that gets produced with current detection methods, much less test it for all the thousands of contaminants it can get exposed too. In addition to this, add the fact that it takes years for food agencies to include new compounds on those forbidden lists. Meanwhile, you, your family, your kids, are eating slow poison. So quiet, that it might take decades to turn mortal. But kill it will.
“Most malignancies develop so slowly that they may require a considerable segment of the victim’s life to reach the stage of showing clinical symptoms.”
Carson, Rachel. Silent Spring. (1962)
There are two big fronts in the space. On the one side, you want to attack the problem at its root. You want to produce food that’s free of toxic chemicals and grown in clean soils. Here is where the big picture is essential. It’s not only about not using toxic pesticides. It’s about making sure the surroundings are free of those pollutants too. This last part is the hardest to achieve. Streams, rain, soil, underground water reservoirs, are all polluted. Growing anything removed from it is hard.
This is one point Agrotech startups are trying to tackle. We’re watching an increase of investments around sustainable and organic food producing vertical farming startups. We’re going to need many more. And soon.
The other side though is still a problem. At current consumption rates, it’s impossible to feed organic food to everyone. So far, inequality is striking the food chain again. Only people from a certain socio-economical level have access to fresh organic and expensive ingredients.
“Despite lower yields, organic agriculture is more profitable (by 22–35%) for farmers because consumers are willing to pay more.”
Beyond the ethical aspects, most farms are producing ecological food because it has a premium in the market. The motivation is, for many, still economical. The question is, could we put pressure on the producers and manufacturers from the consumer side?
That’s where food contaminant detectors come into play. If we could test our food at home, we could protect not only our health but also put a massive amount of pressure on the industry. A strain so vocal that can, hopefully, turn the tide.
There are, once again, few startups working on bringing early detection technologies to market. The reason is similar than on the water front. It’s expensive and hard to bring new detection methods like biosensors or Near Infrared Spectrography (NIS) systems to market. But beyond the difficulty of the task, remains an absolute naiveness of what matters.
The winner and finalists of the first food detection competition are impressive. On one side there is Spectral Engines, a Helsinki-based startup focused on commercializing their modular NIS system. The runner-ups were Consumer Physics SCiOScanner and Tellspec. SCiO is surprise, surprise, an Israeli startup with money, surprise, from Khosla Ventures, one of the top impact investors in the world. Their pocket size spectrometer for smartphones is impressive.
Other companies are working in the field like the Israeli’s Inspecto or the Taiwanese ITRI HS3D device. The first one isn’t still available; the former one is still quite limiting.
As I said, developing these devices is very hard, but the field would advance rapidly if more startups focused their aim on it.
Are startup seeders focusing on the right challenges?
One of the striking patterns is the difference in the selection processes of some startup seeders. Startups don’t grow out of anywhere. In most cases, they’re incubated, accelerated and invested by the ecosystem. As Silicon Valley loses their grip on the startup ecosystem monopoly, new areas are rising.
But while there are new centers for innovation worldwide, not all display the same quality. I found two accelerator programs related to food tech (there are several others too). One is Startupbootcamp Food out of Rome. The other one is the Israel-based The Kitchen Hub by Strauss, the largest food corporation in Israel.
I have no data to determine which is the better accelerator. There are many factors you could measure them against. But there is something that stood out to me, the difference in the problems startups are tackling.
An intelligent coffee brewer vs. a pesticides detector. Hydroponic urban farms vs. in-vitro clean meat growing. Smart stock management system for restaurants vs. enzymes for healthier fruit juices.
It’s hard not to see a pattern. I feel Israelisare much more grounded in research and tackling human challenges than elsewhere. I’m not against an intelligent coffee brewer, but it’s, if you wish, a nice to have, not a life-threatening problem like pesticides.
This is a global trend. Many organizations encouraging entrepreneurship aren’t targeting worthy challenges or merging research with product development correctly.
Increasing our challenge perception
I am not surprised about the lack of focus or risk-taking. There is s a global shortage of imagination that correlates closely with echo chambers. People don’t travel. People don’t read. People don’t explore. People don’t research.
We live in a frugal society where every minute, matters. Anything that takes more than two days to achieve is skipped over. On top of that, and despite the constant warnings, people keep driving a narrow view of the world.
It’s hard to connect themes, trends or challenges if your model of the world is reduced to your elite brotherhood. It’s tough to see beyond the trees when you refuse to unfocus. Heads down and constant execution is the technology mantra. And it’s excellent advice. But, as I mentioned in other articles, maximum optimization is a bad strategy. It makes you laser focused but at the cost of other valuable assets, as well as unseen connections.
The key is to be able to switch gears. Focus and execute, but also act with a systemic view of both the problem and the solution we’re tackling. Breaking out of our comfort area, hear different voices, travel distant cultures, live other lives.
One of the worst aspects of this technology myopia is the insensitivity towards other human beings. If we lose our capacity to understand what matters, what’s essential and what’s irrelevant, then we’ll never focus on the right challenges. This moral balance is lost to many.
Can corporations take advantage?
Like other chapters in human history, the saviors might come from the most unexpected places, corporations.
Corporate employees have a compelling mix. They accumulate years of education and research, with a deep understanding of their markets. Because they aren’t driven by the latest fad, or the need to be acknowledged, they have a much-balanced view of the world.
The one thing they lack is the capacity to shackle off the corporate business model rhetoric. There is an increasing number of corporate employees that, if given a chance, would jump ship and start their own company. Many have years of research under their belts, and they’re looking for a haven to put it into play. They do need guidance though. They do require startup discipline. This is why fiery entrepreneurs teaming corporate counterparts can build game-changing companies.
Another asset corporations can provide for is long-term financing. The lack of important challenges isn’t unique to entrepreneurs. It extends to many professional investors too. And there is a lot to be said about corporations behaving like VCs.
The corporation’s biggest asset is their long-term sustainability. This allows them to trigger long-term investments packed with research and significant challenges. The blend between this and startup product development approaches can deliver extraordinary results. Results that matter.
Corporate innovation is a bitch. It’s hard, for many reasons, but it is also a window into solving real challenges. While incumbents should approach startups, I feel we should be creating better connections between hungry entrepreneurs and local intrapreneurs.
The rise of Deep Technology
Deep Technology is the term being thrown around to define groundbreaking solutions to some of the most substantial challenges. It’s not a new theme. Critical voices have been claiming for this for years. Vinod Khosla started Khosla Ventures 14 years ago and currently manages over one billion dollars in assets. He was one of the most vocal voices in the innovation investment sphere. Since then, more and more funds have been focusing on impact investment. And more will join.
Some of humanity’s challenges aren’t optional anymore. It’s either finding meaningful solutions or crippling society. It’s still not clear if we’ll be able to avoid planetary collapse, but let’s hope more people start tackling impactful problems, and not makes-my-elite-life-better-please-more-Ubers kind of issues.