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Winston Ibrahim, cofounder and CEO of startup Hydros, is aiming to disrupt the water filtration business dominated by Brita. Hydros sells water bottles, pitchers and carafes with a self-contained water filtration system. The founders got their business idea by looking at the wastefulness of tossing a water bottle after drinking — and developed a reusable bottle with its own filtration system. Ibrahim recently spoke to Knowledge@Wharton to discuss his business plans.
An edited transcript of the conversation follows.
Knowledge@Wharton: What inspired the idea behind Hydros?
Winston Ibrahim: The idea behind Hydros that my cofounders and I had was one about the ridiculousness of the consumption of bottled water. Over the past 30 years, it has become, effectively, a social stigma to drink water out of the tap. [As a result,] there’s been a multibillion-dollar [sales] growth in the bottled water industry. It is just astounding that anybody would buy so much of this inherently available product in a way that’s so wasteful from a monetary perspective and from an environmental perspective.
[We discovered] there was no viable filtering vessel [for people] on the go. [Meanwhile,] there was a huge demand for bottled water. At the same time, we observed the growth of home filtration systems like Brita. The idea struck us that if we could create a functional, easy to use and beautiful product that could be available at a comparable price, we might have a very good business.
Knowledge@Wharton: How big is this market?
Ibrahim: The bottled water market is easily in the $3 billion to $5 billion a year category, just in the U.S. And the market for home filtration is close to a billion dollars. Brita alone does $600 million in sales. Brita and its filters are the No. 1 selling products in the houseware section of Target, Costco and Amazon.com.
Knowledge@Wharton: If you have such a dominant player like Brita already as an incumbent in the market, what’s the opportunity for disruption that you saw in this space?
Ibrahim: Brita is not known for its design. The pricing is awkward. Our desire was to go deep with industry experts who understood consumer goods products and to try and create something very proprietary and very scalable. Our first products were actually developed out of Wharton and now we’re on the brink of taking it to the next level.
Knowledge@Wharton: Tell me a little bit about your journey so far and how you’re at the brink of the next level of take off.
Ibrahim: My cofounders and I created this business back in 2009. We were fortunate enough to get a spot in [a Wharton incubator]. We were actually sitting next to the cofounders of Warby Parker while we were developing this idea. It was a very raw idea. None of us had any real experience when it came to taking products to market. We had all anticipated working in finance. One of my cofounders was an engineer from the University of Pennsylvania and a Wharton graduate. So we had very disparate backgrounds with complementary skills. We were able to kind of bootstrap our way into creating our first product, which to our surprise did $500,000 in sales very quickly.
“It has become, effectively, a social stigma to drink water out of the tap.”
It was on the back of that that we started to get press and, accidentally, distribution. Almost without trying, we suddenly ended up in Whole Foods Market. When Whole Foods buyers approached us, we were able to get astoundingly talented people to join us on our broad of directors. We’re very fortunate to this day to have Shazi Visram, the founder and CEO of Happy Family, which is the largest organic baby-food company in America. She sold the company to Danone [in 2013] for $400 million and is still running the business.
We have Alan Sheriff who used to run investment banking for Credit Suisse First Boston, and now has an intellectual property advisory firm in the country. So we’ve really struck a nerve with some serious business professionals with our early products.
Now, as with a lot of startups, things can happen with people throughout the journey. Sometimes people lose interest and products have issues. Our second-generation product, while selling quite well, had a lot of development challenges and an inherently unsustainable cost structure. So my cofounders and I did a little bit of negotiation and I’ve bought them out. We have a brand new team of professional industry operators and have hired Nottingham Spirk Design, a consumer products development firm. Nottingham Spirk is responsible for creating over $50 billion worth of consumer products. They invented the Swiffer and the Dirt Devil. Their client companies have more than 1,000 patents.
We went to them after I did this buyout and presented them with our idea and some of our initial products. We’ve been working with them over the past two-and-a-half years. What’s unique about Nottingham Spirk is that they won’t just do a design, they will incorporate engineers, they’ll incorporate sourcing experts, and they’ll think about scalability of cost. We were making our initial products in eight different facilities around the northeast in the U.S. Now we’re going to be making our new product in one facility in China. The cost of our filters alone have gone down from $5.50 to 50 cents. So economies of scale are going to work very much in our favor here.
Knowledge@Wharton: When you have such a big incumbent dominating the market, your strategy is very crucial. What is going to be your strategy to build out the sales and marketing side of your product?
Ibrahim: Our hope to make a dent in the market is to target unique online sales initially and leverage an influencer market opportunity. So we’ve hired some of the top marketing experts. We’ve hired a very good professional PR firm and they’ve helped us develop a whole network of people who can really help to drive early consumer adoption of products like ours.
Knowledge@Wharton: And you have a patent on the technology?
Ibrahim: We have multiple patents on this technology. We have dozens of patents pending. We have been granted a few patents; several of those run back to our initial filings done at Wharton in 2009 and 2010.
“The bottled water market is easily in the $3 billion to $5 billion a year category, just in the U.S.”
Knowledge@Wharton: You mentioned you have a very strong board. That’s great. For any startup, funding is very crucial. How did you go about raising capital? And how much did you raise? And what were some of the challenges involved?
Ibrahim: It’s challenging early on when you’re a young and inexperienced team to raise money. I’d say it was just relentlessly pushing the idea. You know, there’s so many people who will tell you “no.” When you’re in that situation, you have to just keep on trying. Obviously, we were lucky to be able to leverage the credibility of an institution like Wharton, which had given us this prize and some money to start up.
All of our money has been angel money. And we’ve been very careful to only work with investors who are in line spiritually with our interests and our long-term plan. I think I’ve seen a lot of my entrepreneur friends take deals that they’ve later regretted. They seemed very good, but they were from people who were not really aligned with them. I think we’ve been astoundingly lucky to have access to really great people who’ve had the highest ethics and really believe in the long-term interests of this company.
Knowledge@Wharton: Are you able to say how much money you’ve raised?
Ibrahim: We’ve raised about $4 million to $5 million.
Knowledge@Wharton: Great. And like raising capital, the other very important consideration is your leadership team. How did you go about assembling your team? And what did you look for in that initial team?
Ibrahim: It was honestly complete chaos after this buy out, especially as I was only one of three people who had previously been running this company. Now I was suddenly inheriting all of those challenges onto my shoulders alone. And it was definitely a strong challenge.
A mitigating factor was the fact that I could rely on so many well-entrenched people as advisors and board members, and to access talent. I would say the real challenge in these types of situations is not necessarily even finding the right people, it’s being open to sharing authority with people like that. Entrepreneurs by their very instinct are doers who want to do everything according to their own wishes and whims. And it takes a lot of hard work to be able to step out of that, to really think strategically and globally about how you can offer the most value to your business.
It was clear to me that I needed the support of seasoned executives. I was very lucky to find people to help co-pilot this.
Knowledge@Wharton: Since you are getting ready for the next phase of your growth, what do you see as the biggest risks that you might face? And how would you think about overcoming them?
Ibrahim: The biggest risk we face is exactly what we were discussing a few moments ago — we’re going up against a well-entrenched, dominant incumbent. And that’s not something that can be taken lightly. Brita has been around for 30 years. They have a track record of hundreds of millions of dollars in sales and a penetration into millions of households in this country and around the world. So what we’re going to have to do is go over the top in terms of our marketing and really be able to offer the consumer more bang for their buck. What’s very lucky again is the fact that we can lean on such great and nimble manufacturing, on such great design and inherent technology, which has really been beneficial.
Knowledge@Wharton: The other big challenge, I would imagine, especially when you go up against such a dominant incumbent, is how do you build your brand. What are you thinking? What’s your idea on how you will build the Hydros brand?
Ibrahim: Branding and marketing is very important to us and we were able to engage a top tier firm in the space. We’ve spent hundreds of thousands of dollars on getting our packaging right, all of our materials right, everything on our font right, and that was all done with the mindset of how we can create something that resonates with the consumer.
Another very key attribute that we’re trying to display is our modernity as a brand, as a product. Brita may be established, but our argument is that very much like Gillette with Dollar Shave Club, it’s an old and somewhat tired product that doesn’t really excite the consumer, especially a millennial consumer who’s increasingly driving consumption of these products. We really want to appeal on the basis of our sexiness as a brand and we’ve put that thought endogenously into the design and shape of our products.
“Almost without trying, we suddenly ended up in Whole Foods Market.”
Knowledge@Wharton: What would you say have been your biggest successes so far?
Ibrahim: Our biggest success was in being very patient in putting together the right attributes of this product and waiting and biding our time. And you know, it’s very hard as an entrepreneur to sit back and let a development process take its full course. It’s gut-wrenchingly tough to have to sit there for years and years and go through engineering meetings and design meetings and sourcing meetings. We’ve had a lot of challenges in this business. We had a manufacturing partner last year who we were supposed to work with who ended up not being a viable partner. In fact, just two weeks ago we were in federal court with this former partner. That delayed us a year. So it’s really been hard to be that patient, but I think the end product has really been worth it. We’ve seen a few other entrants to this space who have attempted to come out with a substandard product faster and cover their tracks with good marketing, and it hasn’t worked.
Knowledge@Wharton: We talked about successes, what would you say have been your biggest mistakes so far and what did you learn from them?
Ibrahim: The biggest mistake that I’ve made is in not trusting my instincts about situations that seemed too good to be true. I would say rushing to do something and thinking that it will just work out, ignoring that voice inside of your head that has a few doubts is very much our biggest mistake. And I would caution any entrepreneur from ignoring them casually. It’s better to do something slowly and do it right.
Knowledge@Wharton: What’s the biggest lesson you have learned from those mistakes?
Ibrahim: The biggest lesson is to learn to be patient and do something right. To really, you know, surround yourself with a best-in-class team of people. But it’s doing that and being patient and thinking like a chef. You know, your job as an entrepreneur is not to do everything; it’s to set the stage, to assemble all the best ingredients and put them into the same environment where they can interact with each other and to harvest what comes from that. What we have now is so different from what we had before. I could never have done it on my own.
Knowledge@Wharton: If you were to look five years out, where would you like Hydros to be?
Ibrahim: In five years, I would like Hydros to be a household name and a product that everybody uses in one sense or another. We are very keen on creating an ecosystem of products that can fit every budget, every usage case. So we’re initially launching with these three vessels: a bottle, a pitcher and a carafe. They’re very price friendly. Next, we will be launching glass products because we know there’s so much demand in that category. We would like to continue to expand into different adjacencies in hydration, leveraging our dominant attributes in filtration, but also expanding on other elements in the marketplace.
This is a very creative category. We want to continue to focus relentlessly on quality as well as on price because what we’re trying to create is something that can be used by everyone.
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One Comment So Far
Anumakonda Jagadeesh
Excellent.
What rural areas in developing countries need is simple and cost effective method of obtaining potable water without electricity use.
Developed for use in Bangladesh, the cloth filter is a simple and cost-effective appropriate technology method for reducing the contamination of drinking water. Water collected in this way has a greatly reduced pathogen count – though it will not necessarily be perfectly safe, it is an improvement for poor people with limited options.
The method used in Bangladesh is as follows: an old sari is folded to make four or eight layers. The folded cloth is placed over a wide-mouthed container used to collect surface water. It is usually sufficient to rinse the cloth and dry it in the sun for a couple of hours. In the monsoon seasons, it may be advisable to use a cheap disinfectant to decontaminate the material.
The preferred cloth is used cotton sari cloth. Other types of clean, used cloth can be used with some effect, though the effectiveness will vary significantly. Used cloth is more effective than new cloth, as the repeated washing reduces the space between the fibres.
The cloth is effective because most pathogens are attached to particles and plankton, particularly a type of zooplankton called copepods, within the water. By passing the water through an effective filter, most cholera bacteria and other pathogens are removed. It has been demonstrated to greatly reduce cholera infections in poor villages where disinfectants and fuel for boiling are difficult to get.
In sub-Saharan Africa where guinea worm dracunculiasis infections are endemic, infection is prevented by use of a nylon mesh with pore size of approximately 150 ╬â•m to filter out the copepods that host the parasite.
An old cotton sari, folded, creates a smaller effective mesh size (approximately 20-╬â•m). This should be small enough to remove all zooplankton, most phytoplankton, and thus a large proportion of the cholera in the water (99%, according to laboratory studies). However, the nylon net with the larger mesh size was found to be “almost equally effective.”
The cloth filter provides less than ideal purification on its own – usually filtering is an initial step, to be followed by further disinfection. However, where there are no other options, water professionals may consider that it is “of course, better than nothing”
The cloth filter has been studied and reported on by Rita Colwell and Anwar Huq from the University of Maryland Biotechnology Institute, together with other researchers from the USA and Bangladesh. They report that:
It is common practice in villages in Bangladesh to use cloth, frequently a flat, unfolded piece of an old sari, to filter home-prepared drinks.
The researchers studied the application of this technique to drinking water, with folded cloth. They studied the pore size of the cloth, the effect of folding the cloth on the effective pore size, the ability of the cloth to remove particles and plankton, as well as the effect on rates of cholera when used in a Bangladesh village(Source: Wikipedia).
In these methods as well as Brass Vessel method the draw back is certain bactyeria are heat sensitive. Unless thermal energy used,you can’t get safe drinking water.
I designed a low-cost solar disinfection gadget which uses Solar Thermal and UV. It is cost effective and can be fabricated locally.
Here are details:
Safe Drinking for All through Solar Disinfection
Every 8 seconds, a child dies from water related disease around the globe. 50% of people in developing countries suffer from one or more water-related diseases. 80% of diseases in the developing countries are caused by contaminated water. Providing safe drinking water to the people has been a major challenge for Governments in developing countries. Conventional technologies used to disinfect water are: ozonation, chlorination and artificial UV radiation. These technologies require sophisticated equipment, are capital intensive and require skilled operators .Boiling water requires about 1 kg of wood/liter of water which results in deforestation in developing countries. Also halazone or calcium hypochlorite tablets or solutions (sodium hypochlorite at 1 to 2 drops per liter) are used to disinfect drinking water. These methods are environmentally unsound or hygienically unsafe when performed by a layperson. Misuse of sodium hypochlorite solution poses a safety hazard .
Treatment to control waterborne microbial contaminants by exposure to sunlight in clear vessels that allows the combined germicidal effects of both UV radiation and heat has been developed and put into practice .The SODIS system(Solar Disinfection of water) developed by scientists at the Swiss Federal Agency for Environmental Science and Technology(EAWAG) recommends placing PET bottles (usually discarded mineral water/beverage bottles) painted black on one side, aerating (oxygenating) the water by vigorous shaking three fourths water filled bottles and then filling them full and placing them in sunlight for 6 hours. In this method, the water is exposed to UV radiation in sunlight, primarily UV-A and it becomes heated; both effects contribute to the inactivation of water borne microbes. The use of PET bottles requires periodic replacement because of scratches and they become deformed if temperature exceeds 650C. Also dust accumulates on these bottles in the groves (provided for strength). The PET bottle mineral water manufacturers print on the label, ‘crush the bottle after use’in India. Unless cleaned thoroughly everyday, PET bottles turn brown over usage rendering lesser transmission of sunlight.
Microorganisms are heat sensitive. It can be seen that it is not required to boil the water in order to kill 99.9% of the microorganisms. Heating up water to 50 -60C (122 – ´ 140F) for one hour has the same effect.
The most favorable region for solar disinfection lies between latitudes 150 N/S and 35 0 N/S. These semi-arid regions are characterised by high solar radiation and limited cloud coverage and rainfall (3000 hours sunshine per year).The second most favorable region lies between the equator and latitude 15 0 N/S, the scattered radiation in this region is quite high (2500 hours sunshine per year).
The need for a low-cost, low maintenance and effective disinfection system for providing safe drinking water is paramount, especially for the developing countries.
Materials And Methods
The innovative solar disinfection system has a wooden frame of length 2 ft,width 1 foot and depth 6 inches with bottom sinusoidal shaped polished stainless steel (curvature slightly larger than standard glass wine bottles, about 5 inches diameter) . On the front is fixed a glass sheet having lifting arrangement with a knob (this glass enclosure will protect the glass bottles from cooling down due to outside wind). There are screws which can be used to keep the contents airtight. On the backside a stand is fixed which will help the unit to be placed according to the latitude of the place for maximum solar insolation.
In this method clear glass bottles (used wine bottles) are utilised instead of PET bottles as the former are easy to clean, lasts longer and are available at a low cost in India. Solar disinfection is more efficient in water containing high levels of oxygen; sunlight produces highly reactive forms of oxygen (oxygen free radicals and hydrogen peroxides) in the water. These reactive forms of oxygen kill the microorganisms. Aeration of water is achieved by shaking the 3/4 water filled bottles for about 20 seconds before they are filled completely.
The unit has an advantage in that the rear reflection stainless steel will pass the light through the bottles a second time, to both increase exposure and eliminate shadowing. This reflection system will increase the light intensity minimum 2 times.
It has been widely experimented and established by earlier researchers that at temperature of 50degreesC (122degrees F), pathogenic microbes are inactivated. The temperatures which cause approximately a 1-log decrease in viability with 1 min are 55 degrees C (131 degrees F) for protozoan cysts; 60 degrees C (140 degrees F) for E.coli, enteric bacteria, and rotavirus; and 65 degrees C (149 degrees F)for hepatitis A virus .Negar Safapour and Robert H.Metcalf in their extensive studies reported enhancement of solar water pasteurization with reflectors and the crucial role of temperature above 50 degrees C (122 degrees F) in the elimination of pathogens.
Operation
The unit is placed in the south direction (in India) around 10 am with inclination equal to the latitude of the place. The glass bottles are filled with water three fourths and shaken for 20 seconds to generate oxygen and then completely filled. The water filled bottles are fixed with caps and put in the groves of the solar disinfection unit. The glass door is closed and clipped airtight. Water bottles are removed from the unit at 3 pm and taken to a cool place and the disinfected water transferred to a clean vessel, covered for later usage.
Suspended particles in the water reduce the penetration of solar radiation into the water and protect microorganisms from being irradiated. Solar disinfection requires relatively clear water with a turbidity less than 30 NTU.To remove turbidity traditional methods of putting the paste from seed of strichnos potatorum (Nirmal seeds) by rubbing the seed on a rough stone with water is used. The method is effective, turbidity settles down in half of an hour and the seed are available in plenty in forests in India besides being inexpensive.
Sample Testing
Water samples from the solar disinfection unit were tested with Most Probable Number (MPN) technique. To estimate the number of aerobic organisms present in water, Pour Plate Technique has been used.. The results of Waste Water show 3 log reduction (99.8%) and 4 log reduction (99.993%) respectively.
For comparison PET and Glass bottles were placed with black background as well as in the innovative device I developed. It can be readily seen that solar disinfection of water is complete with the device compared to open.
Discussion
Eradication of coli forms from well water, bore water and waste water has been reported from test results. The results confirm that there is 4-log 10 reduction of coli forms in the waste water after solar disinfection..Maximum temperature occurs around 1 pm. Though 6 bottles were used in the system(each of 1 liter capacity),larger units with up to 100 bottles can be designed. The unit destroyed 99.99% of bacterial coli forms both in well water and waste water samples in 5 hours.
The innovative solar disinfection system has the advantages like:
1. The unit is portable,
2. It is cost-effective.
3. It can be fabricated in South India for US $20.
4. The unit incorporates the principle of reflection to increase solar intensity and has protection from wind which results in temperature rise inside the unit,
5. Larger units can be manufactured, Used glass bottles withstand higher temperatures and are available in plenty each for 2 US cents in South India, Since all the materials are available locally, the unit can be manufactured locally with local people.
6. Temperatures above 30 degrees C occur in south India for more than 10 months in a year and as such this innovative solar disinfection unit will be a boon in this region.
About Turbidity, the best and simple method is to rub the seed of STRICHNOS POTATORUM with water on a hard surface and put the paste in the turbid water. Turbidity settles down. The clear water is transferred to another container. This we practiced for years when we were in Nuzvid,Andhra Pradesh,India where we used to get water from a water tank called ERRA CHERUVU(Red Tank). Another method in use in Sudan is Moringa oleifera seeds. These traditional methods which stood the test of time need to be validated by Scientific Study.
Also Tulasi leaves(Ocimum Sanctum) are known to have water purification properties.
Impure water is the cause for many diseases. Simple Methods like Solar Disinfection for potable water will be a boon for rural areas in Developing countries.
Dr.A.Jagadeesh Nellore(AP),India