Weekly Insider (Water Security & Recession's Impact on Nano)

Here are two great insights on water security in Israel and the recession’s impact on nanotech, both from Lux Research’s Lux Populi

1. Water Security Carries a High Cost for Israel’s Citizens:

Changes in Israel’s water industry are having a drastic effect on the nation’s water bills. At the start of the year, Israel’s national water company, Mekorot, which provides 80% of the nation’s water, increased water rates by 25%. Additionally, rates will increase by another 16% during this summer, and at least another 2% at the start of 2011. Currently, water rates range between $1.5 and $2 per cubic meter.

The additional money will help fund a rapid integration of desalination plants into Israel’s water infrastructure. Currently, Israel sources 80% of its drinking water from Lake Kinneret. However, recent water usage levels have caused the lake to drop 1.5 meters in the past two years, and created a total deficit of 2 billion cubic meters. In a report, Mekorot stated there is a 38% chance that the lake will drop to a level by the end of 2010 that prohibits further pumping.

Mekorot instituted a program in 2008 to drill relief wells, which reduced water sourcing from Lake Kinneret by nearly 50%. The company’s long-term water solution involves installing a series of desalination plants that draw from the Mediterranean Sea. Currently, three plants are fully operational, providing approximately 150 million cubic meters of water per year. A fourth plant in Hadera became operational in December 2009, and is expected to reach its full capacity of approximately 125 million cubic meters per year within a few months. Mekorot is planning on bringing two additional plants online by 2012, bringing the total production to 600 million cubic meters, or 80% of Israel’s residential demand. The Israel Water Authority predicts that the increased water production will end the country’s water shortage within three years.

Once completed, the company will invest an additional 5 billion ILS ($1.36 billion) to install a new east-to-west pipeline. The company will focus on reducing water loss with the new pipeline, but it has not made an estimate on the increase in yield at this time.

Even with such drastic rate increases, Mekorot’s CEO believes that the company will still endure heavy losses, and the company is already facing an $8 billion gap in the project’s funding. This indicates that the Israeli people can expect further increases over the coming years. The Israeli government has attempted to ease the impact on customers by temporarily suspending the national Drought Tax until April 2010. At this time, there are no additional plans for government funding or support of the project.

2. The Recession’s Impact on Nanotechnology

The economic downturn has hit key nano-enabled product segments hard, particularly automotive, construction, and electronics. The output of these three sectors is immense, accounting for 10% of the U.S. GDP in 2008, and 9% worldwide. Plus, because all are big end markets for nanomaterials and their intermediates, the disruption within them has rippled back up the value chain.

As a result, Lux Research has lowered its previous projections for nano-enabled product revenues by 21%: We now expect nanotechnology to generate $2.5 trillion in 2015. Hardest hit will be two nanomaterials and two types of nanointermediates.

Among materials, carbon nanotubes and ceramic nanoparticles will see the biggest impact from the recession, due largely to their out-sized applicability in the struggling automotive and construction sectors. The relatively diverse applications for ceramic nanoparticles will enable them to recover more quickly. Among nanointermediates, nanocomposites and coatings will take the biggest whack. However, both should return near previously projected revenue levels by 2015.

Weekly Insider (Bernie Marcus, Home Depot-Founder)

While I’m traveling, please enjoy this exclusive video sit-down with Bernie Marcus, founder of The Home Depot on nanotech and entrepreneurship.

Bernard Marcus, co-founder of Home Depot, free-market absolutist, aquarium builder and philanthropist is way into nanotechnology these days. It isn't that the home-improvement billionaire has suddenly become an expert in the science of manipulating matter at the most granular of levels. (The "nano" in nanotech refers to one-billionth of a meter.) But as a major donor to Georgia Tech's Nanotechnology Research Center - the university officially is opening the doors of the new Marcus Nanotechnology Building later this month - Marcus has started looking for opportunities to share his thoughts on the subject.

Click here to see the full video of his interview.

Nanotech's impact on cell phones

Instead of reading my thoughts this week, enjoy the video below from Nokia on nanotech’s impact on their future phone designs. And have a wonderful Easter holiday…

http://youtube.com/watch?v=Zto6aTZM9t0

Weekly Insider (Cynic's Conference Guide to Cleantech & Nanotech)

Last week’s nanotech/cleantech event was phenomenally well-attended. Ira Ehrenpreis of Technology Partners makes a persuasive case for “cleantech” and advocated why “green” is the new red, white and blue. Ira was joined by some prominent industry executives. Most of the prior year high-profile investors and startups were busy at work—some with breakthroughs, other falling through.

Before I give a cynic’s playbook for making the most of such events, here’s some straightforward observations:

The cost of capital for any technology for which there’s sufficiently high enthusiasm is close to zero. The two are inversely correlated. This means the marginal entrant has low barriers—which means the number of entrants grows exponentially. This characterizes “solar” today. The ecosystem cannot support the sheer number of companies competing to turn sunbeams into electrons, along the same points of differentiation: cost per watt and efficiency. Companies that got public early will use their stock currency to acquire those with interesting technologies as they postpone their own IPOs, face investor fatigue and eventually falter. It is a predictable pattern in capital markets. And the four most dangerous words are “this time it’s different”. It never is.

The same is said of biofuels—at the event there was growing laments of this arena. And despite what critics say of “Mr. Ethanol” Vinod Khosla—if anyone figures this tough field out, my money would be on him. As a consumer, I absolutely applaud all the alternative approaches being tried and think we’ll be the better for it. As I’m fond of reciting from Jim Surowiecki, “In greed and avarice, lies the hopes for progress.”

Like nanotech a few years ago, the cleantech audience is a mix of investors and entrepreneurs swimming in a sea of service-providers. Year after year the battle of attrition rages fiercer as a few legal, lobbying, accounting and boutique investment banking firms vie for position and client dollars.  Today’s cocktail party for me is paid for by tomorrow’s client for them.

The good news for them: the early ones will benefit from client referrals and positive feedback loops. The bad news: the laws of competition don’t cease. The service-provider supply imbalance means only a few remain to pin next year’s shiny translucent name badge to their lapels-- fewer still will get the privilege of affixing the coveted fabric sticker elevating them above the undistinguished masses declaring them “Speaker” or “Sponsor”.  Behold.

If you’re a service-provider, here’s your attack plan for success for any new field: for the first two years, come in full force. Senior partners, associates, secretaries—even the janitorial staff. If they can move, dress them up and send them out with business cards. Get their names on the attendee list. Try to make up 10% of the attendees. But remember your competitors might do the same thing, so send people with unusual last names—they’ll stand out more. During breaks, establish position early. Move in a swarm formation, gather in circles and spontaneously laugh. It will attract curious onlookers. Remember: some of those onlookers have investors’ money to spend and it could be yours. Do this near bathrooms and coffee machines. If there is a plate of cookies, take as many as you can, pile them in a napkin, stick them in your pocket. Offer them out to people that look like potential clients. It’s called reciprocity—it works. And everyone loves sweetness.

Sponsor a table. Again, you must stand out. Give away something amazing: like mints—in a tin can. Put your name on it so that everyone knows you’re not just any old service-provider. Try a plastic pen—a good one screams out, “excellence”.

Have a few key lines to show you’re an expert and you know what you’re talking about. If its nanotech, try this: “we’re helping our clients with some major partnerships and helping them build a really strong IP portfolio.” If its cleantech try this: “the debate is over. We need to act.” If someone asks you what debate, look at them despondently and say, “don’t you have kids?” Pull out a picture of yours. If you’re childless, use a polar bear on an ice raft with sad eyes. Mention that you’re carbon neutral, have stopped exhaling and only wash your undergarments every other week to save water—which by the way is the Oil of the 21st century.

Show thought leadership through whitepapers and dole out some witty comments on panels. If the moderator asks you a question you don’t have a good answer for—just answer one you do. The audience only remembers what you look like and how loud you talk—not what you actually say.

When your assault team returns, immediately send emails to all the new contacts you made. Send them a PDF with images of windmills, solar cells, a water droplet and multicultural people shaking hands. It will show you when it comes to cleantech—you mean business. If someone writes to you, start your email message with “Thanks for your note.” Mention that you hope to find “ways to work together”.