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Startups Aren't Solving The Right Challenges

Good morning everyone! Sorry for last week's gap, I fell down with a bug and was sick as a puppy unti
Startups Aren't Solving The Right Challenges
By Alex Barrera • Issue #31 • View online
Good morning everyone! Sorry for last week’s gap, I fell down with a bug and was sick as a puppy until midweek. Back to regular business! Speaking of which I’m thinking I’ll move the posting date for this newsletter to Tuesday so it’s easier for me to hit the date. Welcome to all the new subscribers and I hope you enjoy long reads because here we go with a good one on the difference between tackling things that matter or focusing on the next-hipster-app. Enjoy!
10 minutes read.

Startups Aren't Solving The Right Challenges
Photo by Jonathan Percy on Unsplash
Photo by Jonathan Percy on Unsplash
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. 
Water Challenges
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.
And safety is something we don’t have. In 2017, 63 million Americans were exposed to unsafe drinking water. Let me repeat that, 63 million people, in the so-called, most developed nation, are drinking poisonous water
Troubled Water Documentary by News21
Troubled Water Documentary by News21
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.”
Salton Sea by Katherine Belarmino
Salton Sea by Katherine Belarmino
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).”

The EU Water Framework Directive: From great expectations to problems with implementation
Where are the startups?
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.
Lishtot's TestDrop in South India - YouTube
Lishtot's TestDrop in South India - YouTube
Food Challenges
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)
Identification of pesticide varieties by testing microalgae using Visible/Near Infrared Hyperspectral Imaging technology. Nature Apr. 2016
Identification of pesticide varieties by testing microalgae using Visible/Near Infrared Hyperspectral Imaging technology. Nature Apr. 2016
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.
These challenges have pushed the growth of organic food production markets. Nonetheless, producing organic crops is expensive, time-consuming and very wasteful of terms of water and land use.
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. 
Vertical Farms
Vertical Farms
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.”

Can we feed 10 billion people on organic farming alone? - The Guardian, 2016.
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 European Commission, though, is pushing hard on both water and food fronts. They recently ran a food detection competition and have an open call for water monitoring systems
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. 
SCiO - The World's First Pocket Molecular Sensor - YouTube
SCiO - The World's First Pocket Molecular Sensor - YouTube
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.
CES 2018 Innovation Awards Honoree: Handheld Pesticide Residue Detector - YouTube
CES 2018 Innovation Awards Honoree: Handheld Pesticide Residue Detector - YouTube
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. 
Inspecto.co pesticide detector
Inspecto.co pesticide detector
It’s hard not to see a pattern. I feel Israelis are 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.
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Alex Barrera

The Aleph Report

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