WT: Can you tell my viewers a bit about what your company does, how you got interested in water testing, and the start-up process that you went through? As someone that has actually done it successfully, we want to know, how did this go for you?
Menegotto: We are a manufacturer of analyzers for water and soil testing. We don’t do the testing, we make the analyzers that governments, treatment plants, laboratories use.
We do hardcore R&D. We have collaborations with other universities including a lab here at the University of Waterloo where we do new product development, right through to commercialization and manufacturing.
How I got into this, when I graduated from university, I had a great opportunity to start from the ground up on a product idea that wasn’t a product yet. I was just the chemist on the team, along with a software developer, an engineer, and a salesperson developing the market. It was a great opportunity, I got immersed into things I didn’t know, circuit boards, software development, and engineering aspects of product development. Over the years it turned into a little business, inside of a much bigger business.
My wife and I purchased the assets, the brand of that business.
The way we approached product development; we asked a lot of questions. We knew where we were going, we defined our niche as environmental water testing at that time. What really helped me was never being biased. I was just a student, so I didn’t know anything about the market, or who the players were. I didn’t have a thought of how it’s supposed to be done, or this is the way it’s always been done, none of that.
I asked questions, like, if a water lab wants to do a titration, like hardness, I destroy the sample when I do that test. Why not do the test somewhere else and not destroy the sample so I can do other tests. The lab wants to do more, so why don’t we add more to it? It’s just electro-chemistry.
That’s how I got into it. I found that, if you want to get into something like this, be immersed with your customers, ask a lot of questions, be curious, try to see through the answers you get to your “why” questions, to find the things they haven’t thought of, and create value from solving their pain points. In this process, we guessed right more than we guessed wrong.
WT: Do you get people saying, “You’re really successful, you are winning awards, you are an overnight success”? Do you have to point out this was a twelve-year run, there was no “overnight” about it?
Menegotto: Yes, absolutely. There’s not a lot yet of those comments, but you are right, there is no overnight success. There’s always a tremendous amount of work behind any business success; sweat and tears, maybe some sleepless nights, and wondering if you made the right decisions, and then seeing it all through.
WT: Regarding your experience working with a business accelerator, how did it work for you? You won a couple of awards, can you tell us about that experience and what people have said about you?
Menegotto: Yes, so right from the beginning we connected with an accelerator, “Innovation 12”. They were just starting up as a Crown Corp, a group supported by provincial and federal governments. This was right when we were starting out, so it was good. We got sales and marketing mentors, business operations mentors at the time, it was just in the first three years of business we had that help, we grew 54% or something like that, we were successful. We won a local small business award, we were a start-up, but they called us an SME (small, medium-sized enterprise). Innovation 12 helped us in our journey to about year seven. In 2016 we had this patented product that we won in the USA, Best New Product in the laboratory space. We took nano-technology and made that into an analyzer for pollution control. Basically, doing the test for biochemical oxygen demand or chemical oxygen demand (BOD, COD) in ten minutes, where usually it takes five days.
Then we were successful with the National Research Council of Canada, NSERC.
Just getting our ideas funded by the federal government to validate and commercialize, and we did both, it did work. It was a good investment for the government, we hired more people and revenue was up.
WT: Would you recommend this to folks who want to follow in your footsteps, the university people that are still toiling away in the lab? Do you recommend that people get their developments out into the market by working with an accelerator as you did?
I think there are two avenues.
The Accelerator can definitely help, but it also depends on your TRL (Technology Readiness Level), the level where the product is ready for market. TRL 1 is concept, TRL 9 is just about ready to go to market, pretty much commercial. It kind of depends where the product is at; the Accelerator might push back and say, “you know what, go back to National Research Council, they can help get you from TRL 3 to TRL 7, then come back to us when you are ready to start getting some revenue”.
The other solution is to connect with a company like MANTECH. This is part of our progression and our evolution. This is what we are doing right now. We are immersed in the market, when it comes to water testing, we know the challenges that are coming, we know the public or environmental health impacts. We are actively looking at academics with ideas and solutions, we add all the stuff you need to finish your product, hardware, software, data acquisition, data reporting, and all the sampling, liquid handling, to make it run autonomously.
WT: Where did you see the opportunities? How did you figure out what the labs need?
Menegotto: This comes from asking that WHY question, why are they doing that when the customer clearly needs this?
I would go to a water lab and see multiple different stations taking up so much bench space, taking extra training knowledge to learn each analyzer. A competitor was selling three different analyzers to do three different tests, and I thought, we can do all of that with one. It was that. This was the significant thing we noticed first, the inefficiency of water testing. It was clear to me, going to the water lab, that we could solve this, and that was the most significant thing we did at the beginning. This was such a sustainable green impact with financial benefits at the same time.
WT: Now that you made it through this and you have a hit product, can you tell me a bit about your top five products, what they do and why you want one?
OK, so I’m a busy lab with 100 samples coming in every day, I need full automation, hands-free, put one sample tube there and it gives me five results, that’s the premium product, MT100.
I am not as busy lab, but I still have lots of parameters, that’s our next level down, that’s the MT30.
I am a drinking water treatment plant for a 20k population. I don’t have a lot of samples, but I have all these parameters. I have zero scientists, but I have to run all these tests to treat my water. We have a nice little walk-up, touch the screen, hit go, go out to the plant, the results are emailed to me right from the analyzer directly. That’s a good snapshot of our water analyzers.
Then we go to another couple of products based on pollution control, whether a factory or a brewery. I have to send samples out because the government says I have to, but it really doesn’t help me because I don’t get results back for five days. I put in a MANTECH analyzer and then I get the results in ten minutes, I know what I’m doing today.
PeCOD Analyzer, MANTECH
WT: A lot of WaterToday viewers are studying or have issues around blue-green algae. We know how annoying it can be to wait five days for results when you think there is an issue now. Do you have an analyzer for blue-green algae, where someone can sample a lake and get an immediate test result? Is that what you are working on, the simplicity, automation, the rapid turnaround?
Menegotto: Right now we don’t have a specific analyzer for blue-green algae or cyanotoxins. It’s all at the laboratory level. One of the things you need to know is the food, if you can measure the carbon, the organics in the water, this is the food for an algae bloom. That is what we have right now, community accessible, simple to use, lower cost, to give you that carbon level. If you can monitor the carbon levels, this gives an indication of future algae conditions.
What I am getting at, we have the last bit of the food chain covered, the food element that starts (algae blooms), detecting those changes week to week, month to month.
WT: We see sensor data daily in our watershed reports, whether Ohio, New York, or Georgia; you say that you are not so much in the sensor space, you are in the analyzer business. Can you clarify, what is the difference between a sensor and an analyzer?
Menegotto: Sensors are usually an optical measurement, a light shining through the water to a detector, or a reflective mirror back up into a detector, using different wavelengths. Different wavelengths are characteristic of different organics or compounds like algae absorbing these wavelengths. These are not empirical tests, they are surrogates, there is an implied calibration or you have to do a separate calibration to have any meaningful results. It can change if a big storm comes through the calibration no longer works.
We make analyzers that use chemistry to measure the analyte of interest, there is no question about it.
WT: You are a real credit to this space. Can you talk about what the global size of the market for analyzers is?
Menegotto: We have two types of customers, we are selling directly to laboratories now, and getting out to the field and selling to factories too.
The market with labs is in the hundreds of millions, two or three hundred million. Selling to the field and factories, that’s where we get to the unicorn level, the billion-dollar level. One of the tests we are replacing is the COD by chromium method; that’s a hundred million vials sold per year globally at about four or five bucks a pop, that’s half a billion just for the vials, not including the analysis. It's a billion-dollar business.
WT: Robert, this is very good, thanks for doing this.