How would you feel about drinking a glass of water distilled from your own raw sewage? You’ve no doubt just experienced what Bill Zebuhr, founder and CEO of Nashua, NH’s Ovation Products, calls the “yuck factor”-which may present a major hurdle to market acceptance of his household water distiller. Then again, it may not. If, for example, you live in a part of the world where your drinking water is already directly contaminated by sewage (yours and your neighbors’), the distilled option is clearly more palatable, and one that might save your life. Or perhaps, if you can’t quite bring yourself to take a sip, you might not balk at watering your lawn or washing your car with the output of Ovation’s machine. Especially when you consider that distilled water is as pure as water gets.
|Elevator Pitch||Universal appliance for |
producing clean water
|Future Vision||Household distillers will be as |
common as refrigerators, allowing people to produce their own pure and safe drinking water
|CEO’s Insomnia||How to get the product out |
of the prototype stage and into
mass production before the money runs out
|Leg Up||Patent protection, engineering know-how, first mover|
Zebuhr claims that his distiller can take water contaminated with virtually anything, from pathogens to toxic chemicals, and produce 45 liters of pure distilled water each hour for the astonishing price of more than five liters per penny. The device looks a bit like R2-D2 with extra tubes hanging out, and while I’m certainly no expert, it appears to be a tour de force of thermodynamic engineering, an area in which Zebuhr specializes and holds more than two dozen U.S. patents. Contaminated water, at room temperature, is boiled into steam, and the steam is compressed and condensed into pure distilled water. Through a series of innovative heat exchangers, the pure water also leaves the system at approximately room temperature, largely conserving energy within the system. (Its droidlike appearance comes from encasing the entire mechanism in a stainless-steel dewar, which acts like a giant thermos.)
Zebuhr’s vision is that someday every house, apartment building, and Third World village will have an Ovation distiller humming away, recycling wastewater into drinking water and eliminating the need for central water and sewage treatment plants, as well as endless kilometers of connecting pipes. While the market opportunity for cheap drinking water is mind-bogglingly vast, Ovation is attacking some richer niches first.
Zebuhr explains that more than 150,000 household septic-system leach fields (the areas where wastewater is purified by percolation through the soil) fail each year, requiring some form of expensive remediation. He holds a patent on a process for distilling septic-tank waste to separate out pure water for reuse (though not necessarily drinking), effectively eliminating the need for the leach field in the first place. Zebuhr’s back-of-the-envelope calculation holds that while leach field remediation usually costs between $10,000 and $40,000, Ovation can build distillers in quantity for around $1,000 each. He places the total septic-tank remediation market at more than $1 billion annually, yielding considerable revenue opportunities if he can successfully attack the market.
Zebuhr and his team are also making a foray into cleaning industrial-waste runoff, where they believe they can cheaply remove clean water from toxic chemical solutions-enabling factories to drastically reduce the cost of pollutant disposal. The Ovation team notes that in certain situations, such as the washing of machine parts, distillation is the only viable process for separating toxins from the water in which they are dissolved.
Ovation was founded in 1996, and after seven years of development, it appears to be on the verge of bringing in its first sales from the industrial-cleanup market. Those sales, however, are contingent on successful production of a beta version of the distiller. Every startup runs a race between generating sufficient revenue and running out of money (an event affectionately known as the “splatter date”), but in Ovation’s case, the contest has hit a particularly dramatic stage. The alpha distiller apparently works, but not well or reliably enough for commercial production and sales. The beta model is well under way, but Ovation’s splatter date is rapidly approaching.
Ovation has spent about $6 million to get this far, mostly invested by angels and an anonymous strategic partner, and Zebuhr believes he has around $700,000 in new investment committed, buying six months of extra runway. He hopes to find a few more angels to provide some room for error, despite his firm belief that he’ll have his beta in production and into the hands of paying customers in early 2004. But Ovation is a bit long in the tooth to still be out looking for angel money.
Conventional wisdom in technology startups is that the “mad scientist” founder can never make a good long-term CEO, and Zebuhr takes pains to emphasize that he is open to a replacement should the need arise. But I got the distinct impression that this veteran of several startups is in fact rather attached to captaining his own ship, having had some difficult experiences in the past. It seems to me that managers accumulate business experiences like bad girlfriends or boyfriends: once they’re burned in some particular way, they go through the rest of their lives ultrawary of being burned the same way again. Nonetheless, Zebuhr has what I see as a critical attribute for an entrepreneur: he knows his own mind and sticks to his guns. Often in a startup it’s better to be decisive than to be entirely right.
For now, Zebuhr is sticking to his belief that there are endless applications for a low-cost water distiller, from the industrialized West, where a household device can pay for itself in water- and sewage-bill savings, to the Third World, where the widespread lack of safe drinking water is perhaps the biggest threat to human health. Ovation also sees a tremendous opportunity in homeland security, where the poisoning of central water supplies has been identified as a major terrorist threat against which there are currently no practical protective measures.
But like all startups, especially those that seek private investment, Ovation has some formidable obstacles to clear, most notably finally getting the product to beta and then on to production. And then there’s the yuck factor, which may stand in the way of the full realization of Zebuhr’s water-recycling vision. Would you take that sip?