In this episode of Hardware to Save a Planet, Dylan is joined by Kim Baker, Senior Director of Innovation at Elemental Excelerator, a non-profit startup accelerator that works with entrepreneurs with innovative ideas and functional prototypes under a square partnership model. Kim explains the three problems facing today’s water management programs and the steps required for sustainability. She shares details of three companies addressing different aspects of the problem.
As the Director of Innovation at Elemental Excelerator, Kim helps startups grow and works alongside municipalities, corporates, and investors in the water and circular economy sectors. She is an Independent Member of the Board of Directors of Transcend and provides advisory services to several companies in the sustainability space.
To discover why the water cycle is out of balance and how companies are addressing it check the key takeaways of this episode or the transcript below.
- 24:15 – 27:05 – A multi-billion dollar problem – Kim explains that the challenges of sustaining freshwater supply fall into three distinct buckets. The first is the health of the infrastructure. The total length of underground water pipes in the U.S. equals forty-eight times the earth’s circumference; over half of this needs replacement. The second issue relates to universal accessibility, wherein, along with large parts of the world, consumers in parts of the U.S. don’t have access to fresh water. Awareness of the third issue is developing solutions that rebuild the foundation and infrastructure.
- 28:51 – 31:00 – A sensor that helps purify waste water while reducing CO2 footprint – One of the startups Kim is working with is Sentry, which has developed a sensor that analyzes bacteria in wastewater in real-time. Twenty percent of a water treatment plant’s cost is the electricity consumed since the purification process has to run at 100%. Analyzing the effluent in real-time allows the system to be run more optimally, thereby saving power and reducing the CO2 footprint.
- 31:02 – 32:24 – Pulling water from air for providing universal access – Source is another startup that Kim works with which has patented a device that converts water vapor in the air to liquid water, which can then be stored and directed to people who do not have access to fresh water on tap. The device is a hydro panel that can be placed on the roof or the ground. Over 600 hydro panels were set up for a community in rural Australia, and today the community is self-sufficient in its water needs.
- 33:11 – 34:51 – Identifying emerging contaminants to shore up the foundation – The third issue with water management lies in identifying solutions that shore up and improve the current infrastructure. To this end, Kim is working with Matter Industries, a startup that has developed technology to identify emerging contaminants in water that are potentially harmful if consumed. Microplastic contaminants like CFOS from Teflon pans is one such example.
Dylan: Hello, and welcome to Hardware to save a planet. Our guest today is Kim Baker, Senior Director of Innovation at Elemental Excelerator. Elemental Excelerator is a nonprofit that invests in companies at the intersection of climate and social justice. Having an investor as a guest is an exciting first for me. Investors are such a critical part of the ecosystem, enabling innovations we talk about so often on the show. I’m really impressed by what I’ve learned about Elemental Excelerator. Specifically, their portfolio includes many of the climate companies I’ve been learning are behind some of the most impactful innovations. I love that their core focus also includes social justice and diversity in the founding teams they support. I’ll just call out a few stats that stood out to me to illustrate that 51% of their portfolio companies are predominantly led by people from traditionally excluded groups. 45% are serving frontline communities, and 57% are working with community based partners. Their performance proves that this isn’t just gooderism. They’ve awarded 65 million or so to their startups, which have gone on to raise $7 billion in follow-on funding for climate tech deployments. So their strategy is working and it’s having a big impact. As I said, Kim is a senior Director of Innovation at Elemental. We’ll learn more about what that means, but just to introduce her quickly. While she has a broad perspective on climate change, she has also built depth and expertise through her career in addressing the water crisis in various ways. She has experience with hardware to address the water challenge, going at least as far back as a project in college where she led a team designing a water pump in Niger, Africa.
Kim: Wow, you were way back.
Dylan: I dug deep, but I think it’s cool and hopefully you can tell us a little bit about it. Kim, it’s an honor to have you on the show. Thanks for joining.
Kim: Yeah, thank you for having me. What a wonderful introduction. And I love that I’m here for the first time for everything to approach. So thank you so much.
Dylan: Making hardware to save a planet’s history.
Kim: Yes, I love it. I love it. That’s what we’re all about, finding new avenues for conversation and deployment of technology, right? So I’ll fill in the gaps a little bit. Elemental originally started as an energy excelerator to help Hawaii meet its renewable energy goal. Fast forward to today, and as you’ve touched upon, our program has expanded dramatically to touch really anything related to climate. So energy, mobility, water, as you mentioned, infrastructure, industry, circular, economy, agriculture, carbon, the list goes on and on and on. So we’ve got over 150 portfolio companies that we work with to date, which is also because we’ve seen these companies grow over the years. We’ve been doing this for about twelve years now. We’ve seen them grow over the years and as you mentioned, be able to capture not only funding, but actually market share and sort of stand up these technologies as leaders in their field. So our companies operate in all 50 states, which is also an exciting win. And recently over the last couple of years, we’ve expanded our program, providing opportunities for companies to apply from all over the world as well as deploy their technologies in locations all over the world. So we’re at 95 and counting and we’ve enjoyed about 25 exits to date as well. And so part of what we’re building is a peer to peer learning community where we understand that these problems are vast, we understand that these problems are hard and they won’t be solved alone. And so part of the thesis of integrating equity at the center of everything we do is that peer to peer sharing is that peer to peer sharing in that dialogue that other founders can approach each other and say like, hey, I have a capital intensive piece of equipment that I not only need to develop and test, I then need to go and commercialize it. And so we’re after that commercialization piece for the companies that we work with.
Dylan: It sounds like an amazing program for the startups and a ton of value for them. I understand you’re kicking off your application season for new startups, is that right?
Kim: That’s right.
Dylan: Yeah. Maybe before we get too far into it, I wanted to make sure listeners were aware of that and could hear more about what that’s about.
Kim: Yeah, that’s amazing. We like to say it’s the most exciting application season yet, the most exciting time of year. So we’ll be opening applications here shortly. This year the application cycle will be open for a number of months, which is new. We will invite companies to apply on a rolling basis, which gives us more opportunity to dig deep, to talk to community partners, investors, the team, et cetera. The list goes on and on. And we’re really excited to see what’s out there and are always inspired year after year about what each individual team is building and then understanding how Elemental can jump in and support with not only our investment dollars, but also our network and our connections and the various initiatives that we’ve launched as part of our program now.
Dylan: And I’m curious, is there anything you’re excited or hoping to see from applicants? Any particular challenges you’re hoping people are addressing or stages of development or anything like that?
Kim: It’s such a good question. It’s something we talk about in depth every year. And each year honestly, it changes. It changes because we’re growing as an organization. We’re growing in terms of the types and amounts of capital that we’re able to deploy and we’re also adding new entrepreneurs to our network every single year. And so with that are both opportunities that are market driven. So things like carbon sequestration and utilization are now top of mind that maybe weren’t so top of the list ten years ago. And so the other area that we’re really interested in is based on what our portfolio looks like today. We see opportunities in gap areas where we don’t have companies that might be filling a particular need. So for me in particular, one interest this year is rare earth metals and the concept around mining. And how do we do that in a just and equitable manner with technology at the center, but not sort of forgetting the people that are actually making that happen and possible. And so that’s all to say each year we see new opportunities come as the market shifts and evolves that we will go and seek out solutions for. We’re here talking today about the water industry. Something that is top of mind and foremost in most conversations these days is smart water. The industry is maybe a decade behind, say, the energy industry. And so how do we not only leverage the technology that we have that works, that is treating water effectively, but how do we pull that into this century? Using the lessons learned from other industries like energy, like mobility, like any smart city integration that has happened over the past couple of years, we’re starting to see that tipping point in the water industry in particular.
Dylan: That’s a great answer. I’m curious just a couple of things you said about the kind of growing interest and opportunity in carbon removal and capture. I see a few factors as I talk to people : the voluntary market for carbon offsets is growing pretty dramatically. There’s all this kind of VC funding towards those types of companies that’s just, I guess, building that ecosystem and then like the government funding from the IRA, there’s a ton of money going into that space. Are those kinds of the factors you’re looking at or is there something else that’s really driving growth in that space?
Kim: Yeah, that’s absolutely it. I’d say the other piece of it that comes a little bit across our desks is the technology readiness factor. Because we are a later stage accelerator and program and investor. We like to see companies that at a very minimum have a working prototype so that they’re ready to go out and have customer conversations at the very earliest. They can do market intelligence research to sort of incubate their business strategy and actually go out and then flip and test that model. When we invest, we’re looking for that 10x scale of growth. We may not be in it for the same financial returns as an investor on the same timeline, but what we are looking for is the ability to make a very real impact in the near term and hit some of those 10x scale levels commercially. And so I think it’s all of the above, what you just said, plus the fact that some of these technologies are now ready in a different capacity to take it to a wider audience and market.
Dylan: Yeah, good point. And when I think technology is just being biased, in my mind, it goes to hardware and some of the physical solutions to address things like carbon removal. Is that how much of your portfolio is in the physical space of moving atoms, manipulating atoms rather than pure software solutions?
Kim: It’s a good question. I don’t have the exact number, although I’m sure my team does. I am also biased, as you shared the little tidbit from the water pump in Africa experience. I come from the heavily engineered world of solutions, the industrial remediation world. So I’m used to working with hands-on technology. With that being said, I think the program lends itself naturally towards hardware companies because we’re not in it for that quick sort of three to five year return, which might make it an easier conversation with a software company. We understand that these are critical infrastructure projects. We understand that it may take a sort of highly varied source of funding to support these projects over the years. And as we mature as an organization, this is something that we’re looking at. So if you have a hardware solution, for example, we have a lime decarbonization company that is capital intensive and their buts about it. You look at their pilot and it’s multiple stories high in the air and I’m like, oh, you guys have a pilot, congratulations. There’s no debating what that looks like, but we understand that multiple uses of capital will come into the conversation to get these companies to the place where they are that market leader at the end of the day. And so that’s not a direct answer how the portfolio breaks down, but it is to say this is always something we’re looking at, and we will absolutely make an investment in a hardware company knowing that we have the capacity in both our team and also the external sort of network and marketplace to fund these companies in an appropriate manner to fill the gaps that they need commercially. So if I had to guess, I would say at a very minimum, it’s probably a 50 50 breakdown. Hardware, software, it might even be more than that on the hardware side.
Dylan: Awesome. And I want to understand your role there specifically and even a little bit about your background. So your Senior Director of Innovation at Elemental, can you tell us both what led you to that point and also what you do in that role?
Kim: Yeah, yeah, it’s a fascinating place to be. It’s an awesome position, quite honestly. I love sort of the variability of what I wake up and go to work to do every day, and I get to work with the founding teams directly, which is always so inspiring. And exciting. So a little bit about me and sort of how I came to be at Elemental. I started as an engineer by a degree as an undergrad, as he shared. And this sort of common thread throughout my early career and work there always tied back in some way to technology at the center as a solution to solve a particular problem. And it often tied back to climate, whether it was cleaning up somebody else’s mess or solving for the mess to come in a way that is more sustainable. My interest was sparked by the sustainability movement sort of early on in California when they were developing the greenhouse gas protocol. It wasn’t even a thing at that point in time, but it was the California Climate Action Registry. And I started to learn what sustainability meant and how it looked on paper and how it can be integrated into business models and solutions sort of at the forefront. And that led me to start my own company actually in industrial wastewater treatment again, prototype hardware solution. I then went on to work at a growth stage company where I was a Senior Product Manager there, balancing between the really antiquated water market and us trying something totally new that everybody thought was never going to be mainstream in the industry, which also had a hardware software sort of overlay on it. I stayed with that company about a year after its acquisition. So that was a growth stage company. So I really sort of did the whole founders journey in my own couple of steps. And that’s exciting because fast forward to today, what I bring to the companies that I work with personally is that sort of lived experience of I understand what it means to go out and ask for money. I understand what it means when your sensor breaks down and your pump doesn’t work, but you’re in the field and you need to figure that out. And I would consider myself sort of on the operator side of an investor. What I do as a director of innovation is a number of things. One is to lead the diligence process for water and companies that sit in the industry vertical. And so that means we’re constantly out in the market looking at what’s coming, learning about what companies are building, tracking them sometimes for years before we feel like they’re ready to be invited to work with Elemental and then going through this election process, which is all the things that you might imagine comes with diligence. Looking at the team, looking at the customers, looking at the finances and really testing for Fit, I think with our program is what it’s about. Are they going to be good ecosystem players? Do they uphold the principles of what we call equitable behavior? And do we believe that this company is going to grow and have an impact in the climate space in the future? Once that decision is made, I then manage the portfolio companies on the other side. So a little bit of how we work with companies probably will fill in the details here too. We work with companies currently through two tracks. So once a company is awarded a place in the portfolio, we work with our earlier stage companies in what we call the strategy track. That is more of your typical excelerator model where there’s coaches involved. We’re thinking about foundational aspects like the equity piece. We’re also thinking about customer acquisition and what a pricing model might look like, for example. The other model is what Elemental is most known for and perhaps what best fits the concept of a hardware technology startup as well is a demonstration project. And the way that I like to describe this is like, okay, let’s go put steel in the ground and let’s do this in a manner that’s thoughtful and thorough. And the funding that we release is essentially to stand up that demonstration project so that they then have something to point to. They can have their customers in their pipeline come and visit, see what it’s like, get feedback. Iterate beyond that. And those projects usually take somewhere between a year and a year and a half. And so our engagements with the companies are quite long and we’re not a short term program. Once we have companies in our portfolio, we’re working with them on a very regular basis for many years to come. I just talked to a Cohort two company yesterday and we’re onboarding Cohort 13 here shortly. So we are coaches and strategists and sometimes board observers for the portfolio. And that’s a lot of what takes my day to day time as well.
Dylan: So I never really understood that. So you’re funding these demonstration projects. You’re taking companies who have a working prototype typically so that’s at least on that second track you just described, they have a working prototype. Maybe that’s in the lab, it hasn’t been field deployed as a pilot somewhere where they can demonstrate it to customers. And you’re funding that specific kind of phase of growth where they’re taking that lab prototype and getting it to a place where they can demonstrate it in operation in a field environment. Is that right?
Kim: Yeah, I’d say so. And sometimes it skews a bit later than that. So maybe it’s a couple of steps beyond the prototype stage and they need to bring it to the US market or they need to test it with a new customer segment, et cetera. I’ll share something that we developed to help us think through what this looks like and what the opportunity is to sort of interject certain phases of growth. One thing that we’re doing is thinking about the commercial piece and especially in hardware, you hear a lot about the technology readiness level or the TRL. So what we did is we took a step back and we said the TRL is actually only sort of half of the commercialization and startup journey. The other half is actually the commercialization piece. And while those do overlay on each other to an extent, the beginning of the commercialization journey starts towards the end of that TRL journey. So, okay, great. You have a product, you know, it works. Now what do you do with it? What’s the value proposition? And then how do you grow it to become a market leader? So we developed something that we call the commercial inflection point scale, or you’ll hear us for short, say, the CIP scale. And what we’re doing is capturing major milestones sort of from that pilot stage onwards to understand where this company is in terms of its commercial development. And that’s the gap that we’re playing with, with these development projects. And so one piece of that model comes with you can have the best company ever with a well working technology at the center. But if you’re not thinking about equity in those earlier stages, so what we would say like CIP Four and five, you sort of missed the boat a little bit because it’s already too late to go back and sort of recorrect that course that you’re on. And so part of what we’re thinking about in that commercial piece is how do you center the right communities, the right partners and the right voices so that you can develop to have that stickiness and impact for the long term.
Dylan: Got it. So CIP is kind of an analog to TRL, but to measure the commercial readiness, is that a fair summary?
Kim: That’s right. And we can share that blog if you want to share it out with your listeners. We can do that in the notes.
Dylan: Cool. No, it makes sense. And just for people who aren’t familiar with TRL, I’ll probably botch this, but my memory is it’s a scale of one to nine. And it kind of starts where in each step on the scale, you get closer and closer to being ready for mass market deployment of whatever the technology is that’s being developed. So I think at nine years you’re deployed in your target environment at commercial scale.
Kim: Yeah, that’s right. With TRL, one sort of at that research level that we often hear about, maybe at a university or something of that nature.
Dylan: Got you. So you’ve mentioned some financial returns are important and impact is important. Are you doing something to measure the kind of social impact and climate impact? Is that part of measuring the performance of your fund, essentially?
Kim: It is and I’ll be super transparent. It’s not a perfect science because in that scenario, it’s very hard to compare apples to apples when we think about the environmental aspect. You can compare CO2 reduction, for example, but something that I always tell the more traditional climate investors is don’t forget about water. Water may not have the same footprints in terms of greenhouse gas emissions or CO2 reduction, but it is a really critical fit of how our ecosystem and how our world works. So not to be forgotten. So yes, we do it again, I’d say it’s not a perfect science. On the social impact side, we’re absolutely tracking things like diversity within the team and we’re also tracking things like jobs created. That’s sort of a tangible way to think about, okay, if we put a technology that’s at this local place in the US or in an additional market internationally, how many jobs can we create through this so-called sort of green solution? And are they just jobs? Are they socially just for the workers? Are they upskilling the labor force? Is there training involved? Are they safe when they’re working? And so these are some of the things we think about when you get into the more intangible aspects like unintended consequences or indirect results from how a technology may function, that gets a little bit harder. And I’d say this is something that we revisit every year. We have an equity and access team that’s working with a number of external experts in their field to understand how we can better calibrate what the portfolio is doing across the board and come up with those centralized metrics. So if anybody out there is a leader in the field and wants to talk, our team would be totally games to do.
Dylan: That is very cool. I love that because I think the social impact side of things is something that doesn’t get as much attention and all the kind of media and conversation around CLIMATEX. So I love that.
Kim: Yeah. When we’re developing the project, something that we’re thinking about, so talking about that deployment, project scope, something that we think about and that we actually do a very detailed documentation of is equity into the company and equity out of the company. So thinking about internal what’s happening at the organization as well as external what’s happening to those who may be stakeholders of some sort even if they’re not in super close proximity to the project, thinking about what are the connectivity points there and how do we account for that early on in these development programs.
Dylan: Yeah, and just to make sure I get it, the investors often talk about equity as in terms of value of the company. We’re talking about social equity in the company and social equity in the external.
Dylan: Sure, that causes some confusion all the time.
Kim: All the time and we’re starting to move more and more towards social justice for that reason.
Dylan: Okay, so one thing I typically do when we talk to founders of climate tech companies is try to help Articulate for our audience what the problem is that they’re addressing. So the carbon impact of whatever thing it is they’re electrifying or something like that, helps to kind of really help us see the problem that their innovation is addressing in the context of climate change. Could you help me, Articulate? And it doesn’t have to be in terms of climate change. But maybe in terms of the market or a business problem, what the unmet need is that Elemental is addressing.
Kim: Yeah, I think overall it’s that development cycle. It’s how do you sort of cross that commercialization value of death and how do you do that centering social justice, or as we would say, equity at the center of it. And one very tangible model that I’m happy to share and that you can find information on our website about is the square partnerships model. And so I have a preschooler, so everything needs to be super simple and crystal clear. And so that’s exactly what we did. We often show the literal square and we say who’s at the table, who is part of this development project? And the people that would sort of fill out that square at the four corners would be Elemental as the funding agent. They would be the startup or the growth stage company as the provider of the technology, they would be the customer. And the reason for that is we don’t want to invest in a vacuum. It’s absolutely imperative that we’re solving a real problem and that there is very real customer pull out there in the market. And then the fourth corner becomes the community. Because we’re doing these projects on a place based approach, a localized approach, we want to make sure that there’s a community partner centered in that equation as well as the fourth corner of the square again, so that we don’t get so many steps down the line. And then we say we didn’t consider them ten years ago and now they’ve been forgotten. And actually what they care about is not the land use, but it’s the emissions, the air emissions that might come. Or maybe it’s not the air emissions, maybe it’s the wastewater effluent that comes from a particular project. And so by integrating that square partnership’s concept at the beginning of the projects, we’re really solving for that equation of how do we bring all of these voices to the table in sort of an effective, but also efficient manner so that we can get projects delivered and reach the 10x scale that we hope to achieve through our funding dollars.
Dylan: I love that. And I know you have on your website kind of a piece that describes that model. So we’ll put a link to that in the show notes for people.
Kim: That’s great.
Dylan: I also want to talk about, because you’re such an expert in this space, the water problem specifically. And I know you have some particular focus there in Elemental and your background, it might sound like kind of a very general question, but can you help me just describe what is the water problem and how we should be thinking about the main places to be addressing it and that kind of thing?
Kim: Yeah, I’m happy too with the billion dollar question, maybe the multi-billion dollar question. I hinted at this earlier, but I’ll start by saying this is the UN’s words, not mine, but water is the primary medium through which we will feel the effects of climate change. So let’s think about that for a minute. Fires, intense weather. We’re about to experience a huge rainstorm, which will then result in flooding. We’re experiencing sea level rise. And so these are all warning signals that our water balance is not balanced. We’re completely offset here. And so it’s thinking about how technology plays a role in sort of resetting that balance so that freshwater is conserved, that individuals across the world have access to clean drinking water and sanitation services? And how do we do that in a manner that is also cost effective? I think at the end of the day, it’s got to stick around. And so that’s really what I’m solving for when I think about our water portfolio. And I like to break it up into three kinds of buckets or categories because it’s such a vast problem and not always front and center. Like, you don’t necessarily see it every day. In fact, we take water use for granted every day. And so by separating into three buckets, I think it helps us understand what the opportunity is as it relates to the problem that we’re sort of experiencing across the board. So the first and foremost is how do we support our existing infrastructure? If you see the news, you see our pipelines are crumbling and you have leaks, and you’ve heard about lead exposure in the pipelines. And so that all ties back to the concept of in the United States, at least to the concept of we have centralized water and wastewater management systems. There’s about 50,000 utilities in the US. And more or less, they do their job, the systems work, and more or less they’re doing the things that they need to do to keep people safe because it’s human health, but it’s outdated. And that infrastructure is really crumbling and is sort of at risk. So how do we interject technologies that kind of support and sort of bolster up those existing municipal systems and pipelines?
Dylan: So literally, we’re talking about pipes breaking down, pumps are old and need to be replaced. Just all of the physical bits and pieces that support how water gets where it needs to go is outdated.
Kim: Yeah, and until you’ve stood sort of outside of a rural drinking water tank, for example, you don’t understand exactly how bad the problem is because not everybody stands at a drinking water tank on a daily basis. You turn on your faucet that comes out of your faucet. Even if there’s a problem, it’s often invisible. It’s not like, oh, your lights went out. You no longer see the lights. If your water is contaminated, you don’t necessarily know until after the fact, unfortunately. So how do we make sure that we’re supporting all of those treatment systems? The pumps, the pipes, the valves, everything that comes along with it. And so the second piece of that is actually how do we think outside the box of what’s already built. So how do we extend the system beyond those municipalities that already exist? And actually, sadly, if you look at the stats, there’s a lot of people, even in the US. That we would call sort of outside of the pipe, meaning they don’t have piped water to their house. And so what does that look like? Not only in the US. But also abroad for sort of fair and equal access to clean water, to wastewater and sanitation services. And we have to reimagine what our systems look like because yes, supporting the centralized systems will help. It will not be an end all solution for us in decades to come. So we’ve got to be careful sort of not to be short sighted in that approach.
Dylan: So maybe one way to think about that is there isn’t even outdated infrastructure to fix that’s, solving some of the problems we have. We need to think about how to solve those problems even if it’s not that you can just go fix outdated infrastructure, we have to solve those problems some other way.
Kim: That’s right. I mean, with increased urbanization as a great example, what are the pressures that come with that? These centralized systems just can’t even handle that in many cases. So when you start to think about, oh, I’m going to go develop a new following a biodiesel plant, well, what if there’s not a centralized wastewater system that can take your waste? All of a sudden your business unit is at risk and then that ties to the person as well. So it’s both the individual level and sort of the industry level that’s at risk there.
Dylan: Okay, what’s the third?
Kim: Yeah, on a positive note, how do we then rebuild that foundation? So how do we integrate technologies that either restructure the system or are some kind of critical unlock for some of the problems that we face today. And so if you want, I can sort of talk us through examples of portfolio companies that have done projects with us in each of these three areas.
Dylan: Yeah, let’s do it.
Kim: All right, so let’s see if you’ll still be with me at the end of this. The first one that we talked about is how do you support the existing system so that’s that centralized system sort of think municipalities or utilities that are treating everybody’s water and wastewater. And so one company that we’re working with on a deployment project through the Square partnership model is Century. And it’s amazing, it’s this sensor that you integrate into existing wastewater facilities that acts as a diagnostic tool to help the operators understand what’s actually happening in the system so they’re not flying blind. The reason why that’s important is because treating wastewater is about 20% of municipalities electric cost, which is big dollars and big emissions and the reason for that is they have to sort of always operate, let’s call it at 100 because if they dial it down, they don’t know what’s coming into the system. And if they’re not sort of planning for the worst case scenario, a whole system upset could be detrimental to a community. And so what the sensor does is actually use the biological growth in the wastewater to understand what’s happening in real time, to then fine tune the treatment that would follow at the municipal or even at the industrial level. And so all of a sudden you have this sensor that’s providing this sort of data intelligence overlay to the treatment. So then you can optimize in real time and you’re not just totally guessing. And what optimization is in this case is really understanding the energy draw for blowers and aeration that come as part of the treatment facility itself.
Dylan: Okay, so this is actually a place where by addressing a water issue, you are directly impacting carbon footprint in some ways because you’re reducing energy usage.
Kim: Yeah, that’s true, that’s true. And in this case, you could even take it one step further in this example with the energy connection and say they can even help increase biogas production at facilities that are producing biogas because of that optimization piece. So it’s a yes. And with this one, and it’s pretty fascinating, it’s as if you were putting like a Google Nest thermostat into a wastewater facility and it helps sort of reset the whole system itself.
Dylan: All right, a good little piece of hardware doing its job. Nice.
Kim: So to jump to the next one, which is the concept of how do we extend the system, people that may not have the opportunity to turn on a faucet and have drinking water flow out of it, we need a solution there. And one of the companies that Elemental has worked with for a number of years now is Source Global. Source is a hydropanel that you can install either on your roof or on the ground that uses sunlight and air to make drinking water. Sounds magic, but it’s not. It’s an incredible set of hardware components that are able to extract the water vapor from the air. They then remineralize the water and they can deliver it either to your tap or to some sort of decentralized bottling facility. And that’s exactly what we did with them a number of years ago in rural Australia. They set up a decentralized facility with about 600 panels to enable clean drinking water to be brought to this rural community through the use of these hydro panels, pulling it out of the sky. And they developed a business model that they called a water purchase agreement to allow the community to basically afford it and get involved on the ground with the facility there.
Dylan: Yeah, I’ve heard tell of such magic wizardry, but I’ve never actually looked into this. So it’s essentially somehow controlling condensation rates and pulling water vapor out of the air through these panels. Interesting.
Kim: Yeah. It’s not magic. I’ve drank the water. It’s real.
Kim: It’s real. They’re installed all over the world. They’re, I think, in maybe 50 to 60 countries globally at this point.
Dylan: And it sounds like it can be, it can scale to a level that’s meaningful for community water supplies.
Kim: Yeah, absolutely. And we’re seeing that happen in rural areas here in the US. Again, that may not have that piped water supply. We’re seeing it happen overseas. And the concept of island nations in the Middle East, et cetera, who just don’t have that same access to water that we do.
Dylan: I’m looking it up now. It almost looks like a big solar panel installation. And actually, they use it to look like they have solar power to power the process. Cool. Is that right?
Kim: I would say it’s their own version of solar thermal technology. It’s not sort of a straight line if they’re taking solar to power it.
Dylan: Oh, got you. Okay.
Kim: It certainly looks like a solar panel. It’s about the same size.
Dylan: Yeah. Cool. Maybe we’ll put a link to that, too. Sweet. Okay, what about the third one?
Kim: All right, so new foundations come unknown, and that’s what this third company is solving, which is the concept of emerging contaminants that is a buzzword in the water industry. Emerging contaminants means a lot of things, and it’s sort of a catch all for things that we have put into our water through industrialization. So PFOS is a big one that people are now talking about, comes from Teflon on Pans. It’s now in our drinking water. There are tests that are being done. Basically, it’s in every single one of our bodies. And we don’t know another big one. That’s top of mind. It relates both to human health and ocean health, and is micro plastics. And so that’s what matter is doing. Matter would be the third example of how we build new foundations for things that are to come. And they have a microplastics filter. And the sort of amazing part of this is they are also building this with the cradle to cradle concepts from the circular economy. So how do they capture micro plastics out of our water and then integrate it then into a new product so that we’re not just creating a new waste stream of these collected micro plastics. And so they have the world’s first filter at this point in time. They’re an earlier stage company, and they are integrating the filter into domestic washing machines. So think about when you pull that lint trap out of your washing machine. All of that textile waste is sort of ridden with micro plastics, and there’s no great way to currently capture that. And they’re developing this method, so they’re starting with the household product, and eventually we’ll integrate these same concepts of micro plastic capture into the industrial. And hopefully someday the municipal markets it’s taking new spins on treatment systems like this to sort of pull us forward into what we’re experiencing as the various pressures in the water and wastewater system today.
Dylan: I like that. I’ve started to look into micro plastics a little bit. It’s pretty scary. Some of the stuff you read about it is glad to hear somebody’s after it. And yeah, it seems like if you could do that at the municipal level that could have a really big impact. Thanks for the examples. Those are awesome and all great hardware innovation stories too. We’ll put some links to each one.
Kim: That’d be great.
Dylan: Think about the future a bit. How do you see elemental evolving over the next, I don’t know, five to ten years?
Kim: That’s such a fun one to think about. It’s something our team talks about quite a bit and what I’ll say is we work with entrepreneurs every day but we’re very entrepreneurial ourselves in that we love to pilot things internally and test them, sort of collect feedback from our stakeholder groups and then launch them out into the market. Actually, I’ll give two great examples of what we’ve done previously to date. One is the concept of equity and access and the principles of equitable behavior. We started that internally with our portfolio and then we’ve since built out the program and sort of integrated it across the board. And so that comes with a lot of coaching, a lot of testing with individuals that are experts in the field and then allowing the portfolio companies to access that as a whole. Another example is it started with the policy prize which we offered to our portfolio a number of years ago. Educated, the team helped us orient what the plans and the project strategy would look like. And we now have an entire policy team. We have external policy fellows that work across the various all things climate but across the various touch points with our portfolio companies themselves. So that’s an exciting sort of new iteration of what elemental can be and what it can become as a program to capture where we’re headed in the next five or so years, we follow sort of three guiding principles so I’ll just share them with you here. The first is to invest in Startup success. You’ve heard me primarily talk about how awesome it is to work with Startup founders and give you some of the examples of the development programs that’s really at the core of what we do. We’re big believers that startup founders are wired to solve problems, fast iterate and have the highest impact and growth possible. And so what we do as an organization is just figure out how to stand them up in a sort of greater way than they may be able to do alone. The second sort of key pillar that we’re looking after in the next five or so years is the concept of partnering deeply and that means a lot of different things. It means partnering with other like-minded organizations, it means thinking about how we partner locally on the ground where we’re doing these deployment projects. And it also ties back to a core team that we have at Elemental, which is the Corporate Partnerships Team, otherwise known as the Navigator Team. And what we’ve understood over the years is that these teams have huge market influence and market pull along that commercialization journey of the companies in our portfolio. And so we work really closely with the innovation teams across various sectors and organizations. And one way that we’ve really focused on in the past and that you’ll see more from us in the next five years is innovation challenges which are led by the corporate innovation teams. For example, perhaps a water corporation comes to us and says I really need a solution for micro plastics in wastewater. Can you help? We’d say yes? Absolutely. Let’s go run a challenge, an innovation challenge to sort of surface all of the potential technology solutions, hardware likely in this case hardware solutions that can solve the problem. And so we’ll work sort of a lockstep with them on that and make sure that that technology has a home within a large organization that can be hard to navigate and has that champion to pull it through that commercialization journey. And then the third pillar, again is a bit broad but I think captures a lot of the work we’re doing around equity and access and around the concept of adjustment, transition and job creation is inspiring action. And so one example is an internship program. How do we integrate traditionally excluded youth that may have not had an opportunity to understand and work in climate within our portfolio company, within portfolio companies that may sit in our investor network, et cetera. And so there’s a number of pieces that come there in terms of how do we bring the climate conversation you’ll always hear me, how do we bring the water conversation to that sort of center point where it is a topic of everybody’s conversation on a day to day basis? And how do we sort of lead with thought leadership content pieces that highlight the opportunity that we all have to really build a future that we all want to see?
Dylan: I love that. A question I had for you just as an investor in this space and kind of having your broad perspective on things. It feels to me as a little bit new to the climate tech space and a bit of an outsider in terms of the investing conversations happening. It feels like climate change is kind of having a moment and I’ve looked at some of the numbers and VC funding is increasing rapidly and there’s all this government funding going into space as well. From your perspective, do you feel like that is a trend that will continue or do you think this is a bubble that will burst? How do you look at that?
Kim: It’s such a good question. And speaking of jobs, by the way, if people are looking for jobs, go look for a climate job because most of the climate companies are actively hiring because they’re working to hit their growth targets. So that’s a pretty awesome opportunity there. I mean, the short answer is I’m optimistic. I think that there’s so much unmet need in the climate sort of industry as a whole, if you want to think about it like that, that we don’t have a choice. We have this massive problem that we have to solve. And that’s sort of business 101 that you learn, like, don’t put a technology out into the market. That’s not solving a real problem. And when you look around energy, mobility, agriculture, food, water, pick a sector, the problems are very, very real. They’re very tangible. And we all have seen sort of the graphics of what life looks like for us on this planet if we don’t solve this massive problem. So perhaps optimistic of me to say I don’t think it’s going to go anywhere. I do think it’s an amazing place to be as both an investor and a founder and there’s a lot of work to be done. I can give you just one tangible example to tie it back to the water industry in terms of the sort of massive amount of need there. We’ve got drinking water pipes, so just pipes in the United States that carry drinking water to my home, to your home, to everybody’s home, that wrap the earth 48 times. Picture that 48 times of pipe laid under the ground with concrete and everything else, utilities on top of it, and 50% or more of that is failing.
Kim: So think about that in terms of a very tangible need. This is a problem that we have to solve. People will be harmed and the water will not be flowing out of your tap. And so that’s just one example from the water industry. We can give dozens and dozens of examples across each industry vertical that we work within, sort of in general and climate. But I think that paints the picture of we’re really solving an unmet need. And for that reason, I think this is here to stay. We’re not going anywhere. The investors are not going anywhere, I hope, because we need them. And the corporate organizations have now made all of these public mandates and sort of commitments that they have to follow up on because of the regulatory pressure that is already here today or that will be coming in the near future.
Dylan: Now, you have me curious about all those pipes that need to be replaced. What’s happening with that?
Kim: There’s no perfect answer. Unfortunately. There’s a lot of technologies out there that are helping optimize the process and that are doing inspections of the pipe so that you don’t have to just dig it up blindly. But there’s no perfect solution in that area which sort of lends me to say those companies that are extending the pipe, so to speak, that are beyond the centralized system are really a key piece of the equation of how we get everybody into this future that is a comfortable place for us all to live. Because you cannot dig up that amount of pipes at the same time that wrap the earth 48 times. So you have to sort of think about it in pieces and it’s a big puzzle that comes together to find that solution overall.
Dylan: So more of a distributed water infrastructure so that we’re not dependent on that old grid of pipes. Cool. So yes, I have a few closing questions and I ask these of everybody. The first is how optimistic or pessimistic are you about the future of our planet and why? And you just shared some of your optimism.
Kim: It’s funny that you said to me optimism in the same sentence because I am an engineer at heart. I am like the multiplied by two approach all day long, everyday. I’m usually the pessimist or maybe not the pessimist. I’m usually the realist in the room. And maybe that’s how I’ll answer the question. The reality is that we have to be optimistic because that is the only choice. Why? I mean, I have two small children. I have to believe that the world is full of good people that are looking to provide not only climate and clean tech solutions so that we can exist in a habitable space, but also in a manner where there is social justice brought to the table, where there is equal opportunity for our children. And that’s a lot of what drives me on a day to day basis.
Dylan: I love that. I relate to that personally too.
Kim: I’m sure. Yeah.
Dylan: Who is one other company or person doing something to address climate change that’s inspiring you?
Kim: I’m going to cheat here. I hope that’s allowed. And I’m going to say it’s not just one, but every year we get somewhere around 500 or so companies that apply to our program. It’s a highly competitive process to work with us, and that is not to go forgotten or unnoticed when we read through the applications and as we start to meet the various teams around the world that are building solutions, that are their passion projects and perhaps they’ve dedicated their life to these solutions, it’s super inspiring. And it makes us want to come to work as an organization and figure out how we can do more, how we can be the long term partners, how we can build all the bridges they possibly need to have success stories. And so I would say it’s really the collection of all of those entrepreneurs doing all of the various things in their corners of the world that are experts in their field. It’s pretty awesome. And it’s the story that I hope everybody gets to tell in the future.
Dylan: Nice. What advice do you have for someone who isn’t working in Climate tech today but wants to do something to help?
Kim: This is a really good question. It’s one that I think my response goes really local, which is that climate can be this big scary thing. It can also be sort of doom and gloom. And so how do we simplify that conversation? I mentioned the internship program earlier. How do you bring people into the conversation who might not be already without that scary overlay or without that super technical, complicated overlay of what is climate change? And so my answer for this is to start really local. Does it mean recognizing when your sewer drain is clogged because you’ve got debris and branches and you’ve just had a lot of rain? Understand what that means? If it were to flow into the ocean and overflow that waste and that sewage into the ocean, maybe it means going to your local community council meeting and understanding what are the environmental impacts and concerns that are happening for my neighborhood. Or maybe a neighborhood that’s less fortunate than the one that you live in and so really overlay simplify and go super, super hyper local to start learning about things that not only you’re passionate about, that you care about, but that also impact your everyday life or someone that is maybe close to you in your world and expand from there.
Dylan: I like that it makes it approachable, not quite as scary and also kind of, I don’t know, more tangible for yourself and your community.
Kim: Yeah. And don’t be afraid to ask questions. That’s how people learn. And I know this can seem like super technical stuff, but the more questions you ask, the more you learn and the less scary it is over time.
Dylan: Well, Kim, that was really fun. I’ve learned a lot. I’m really impressed by what Elemental is doing. I wish I had a company to apply with because it sounds like an awesome program and it would be a huge benefit to be able to work with you. I also have a lot of respect for your track record in Climate and everything you’ve done to support the space. So, anyway, thank you for your time today. I appreciate it.
Kim: Yeah, likewise. Many things. And maybe we’ll get some of the companies that have hardware solutions onto your show soon.
Dylan: I would love it. Let’s do it. Thank you.
Kim: All right, sounds good.
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