An article by Slobodan Ocokoljic
When I was a child, I loved to build dams on mountain springs and rivers. As I lived in a remote mountain village, there was plenty of water all around. Even now, when I play with my son close to the water, building dams with look alike turbines is our favourite game – alongside with throwing stones into the water, of course.
Why am I telling this to you? Because the article you are about to read deals with an innovative water flow regulation valve that actually works the same way as the dams I used to build as a kid. But, of course, this valve harnesses the energy potential of the urban aqueducts.
How cool is that! Small dams beneath our feet built on the city water supply pipes. Finally, some startup with a truly great and green idea. So, without further adieu, Sigma Infty presents you the company behind this game-changing solution: LOCLAIN.
Zero emission energy efficiency
Water is the resource of the future, and green energy is the present objective of our society. Innovative solutions in water management systems and green energy are surely to be profitable and everyone is ready to invest in the R&D of innovative solutions in this field. This should be obvious having in mind that the potential of the smart city market is huge.
Smart city market is estimated to grow from USD 312,03 Billion in 2015 up to USD 757,74 Billion by 2020, at a Compound Annual Growth Rate of 19,4%. Moreover, according to the New Climate Economy (NCE), investment demand for sustainable infrastructure is estimated to be around USD 6 trillion annually over the next 15 years, up from some USD 3 trillion invested in all types of infrastructure today. Finally, as people from Loclain told us, the control valves and water services sector amounts for 18 bn USD and has an annual growth rate of 5%.
All this should mean that the startups trying to innovate in this field can easily find financing. I took an interview with a local startup from Imola, Italy, that was awarded as the innovative company in the 2016 Bologna water technologies fair ACCADUEO in the category pumps, machines and plant design. Their story is highly interesting and gives a completely different insight, as it proves that it is not so easy to find the financiers of good ideas, even in a steadily growing sector.
A self-explaining infographics. Source: OECD Science, Technology and Innovation outlook 2016
Research and development as an investment
Before being awarded as an innovative startup, they also won a prize for their patent. Yet, they struggled to find investment for their business plan. No bank or regional institution were willing to help during the startup development process. They found the solution for funding their research and development activities and flow testing machines only by selling 20% percent of their founding capital to a business angel from northern Italy.
Once their half a million EUR machine for water flow testing was installed, and all necessary certificates acquired, they were ready to hit the market. They also wisely chose the market entry point. Bologna International Water Exhibition is one of the leading fairs in Europe and it is only 30 km from Imola where the startup is based, so they really felt like home.
And this is where I met the Loclain team. I was working as an interpreter for a Serbian delegation at the Fair. As soon as I saw the name of the innovation prize winner, I ran to their stand. As I am also from Imola, and I was launching the Sigma Infty think net, a startup as well, we noticed that we had a lot in common and agreed to meet for this interview.
So, these are the Q&A from our last week interview with Loclain executive assistant Alessia Bernardi.
Loclain executive assistant Alessia Bernardi. Image by [Personal Gallery].
LOCLAIN srl – company ID
About the product: LocPower valve
Q – What is the innovative part of your product?
A – We have integrated two previously separate solutions of the flow/pressure control valve and energy harvesting turbine into one product, the LocPower valve. Thus, we have decreased the price of production, the physical space for the installation of the valve, and the number of necessary permits for the installation. At the same time, we have increased the energy recovery level. The LocPower system converts energy dissipation into mechanical power and then into electric energy. All this with zero greenhouse gas emissions. The annual produced energy from one installed product is enough to create the energy 67 average italian households would need. Also, by using LocPower valve, 66,5 tons of greenhouse gases are saved from emission into the atmosphere.
LocPower valve. This image is copyrighted, and used with permission. Image by Loclain.
Q – How did you get the idea?
A – Lorenzo and Claudio, the founders of Loclain, have a background in the control valves sector, as they have both worked as consultants in this field. This gave them an excellent insight into the potentials and problems of the sector. They have joined their entrepreneurial and engineer capacities to make a valve prototype.
Q – How did you get the funds for the realisation of your business plan?
A – We did not get any financial help from bank, nor from regional or national funds for startup support. We have fundraised enough for financing the business plan by selling 20% of our share capital to a business angel from Milan.
Q – What were the key barriers: administrative/operational/technical/financial?
A – The key barrier was the financial one. We needed to invest around 500,000 EUR in the construction of the flow test plant. When we made our hydraulic flow test plant operational, this was already an enormous step forward. You see, this is maybe the biggest difference between the ICT startups and the industrial startups. Industrial startups are capital intensive and they need much more financing in order to start the business.
LocPower energy harnessing valve is ready for installation. This image is copyrighted, and used with permission. Image by Loclain.
Q – If any, how was the support from the development institutions/agencies?
A – We did not receive any help whatsoever from regional or national institutions. However, we do care about the territorial aspects of our company and our strategic choice is to always look first for the suppliers and partners inside the local area. However, if we cannot find the necessary components locally, we look for them elsewhere.
Q – Are you a part of some cluster/incubator or do you have plans to make public-private partnerships?
A – For the time being, we are not part of any incubator nor cluster. Our strategic focus is on the partnership with universities. Since we have an area of 600 sq.m. for R&D where flow tests are performed, we would like to make this space available for university research. We just had our first undergraduate intern that conducted the tests for his graduate thesis in our laboratories. Starting from this year, we will host postgraduate interns. The partnership with universities is important for us, because it allows us to stay in contact with the most promising students who, if they perform well, could get employed in our company.
Q – Do you plan to apply/have you already applied for HORIZON 2020 entrepreneurship/innovation support programs?
A – We did not apply for H2020, as this program is more focused on supporting basic research and innovation, while we are focused on applied industrial research and innovation.
Loclain headquarters. Image by [Personal Gallery].
Management and consultancy
Q – Inhouse or outsourced business consultancy/grant application management?
A – We look for outsourced consultancy and grant application management only when we are not able to do it by ourselves. Consultancy firms cannot have a better insight on our products and needs than ours. We have our inhouse pull of experts that is responsible for these types of activities. It is composed by a lawyer, an accountant and myself. I am an economic development expert. Right now we are working on the application for the 2017 POR FESR regional fund.
Q – Are you planning to internationalize Loclain?
A – Yes, but starting from 2018. First, we will need to collect the feedback from the Italian market. In this moment, all our suppliers are from Italy. During the first two years, our strategy is to develop and implement the product nationally. Then, during the third year we will start looking at the international markets. We are very interested in foreign markets, as our patent and certificates are valid in more than 50 countries.
Q – Do you already have partners in some of these countries/markets?
A – The Bologna fair was very important for us. It was our platform for creating worldwide partnerships.
Loclain water flow test laboratory. This image is copyrighted, and used with permission. Image by Loclain.
Q – What is the aftermath of the Bologna H2O fair innovation award?
A – The award did not have any impact on our activities. It has increased a bit our visibility, but the presence at the fair was even more important than that. A lot of contacts have turned into orders and contracts. So, we can say the fair was a springboard for us. We thought that the award would increase our chances to access regional funds. However, our recent application was rejected.
Q – What technologies, business models, and trends will drive the biggest changes in your industry over the next two years?
A – Energy efficiency is a global trend driving companies towards constant improvements. Loclain’s objective is to be a forerunner and to anticipate the latest trends. If possible, we would like to have the first-mover advantage over our competitors.
Q – How has innovation become engrained in your organization’s culture, and how is it being optimised?
A – Innovation is the Loclain’s asset. As far as the technical aspects of the innovation are concerned, we have a production area of 3600 sq.m. and 600 sq.m. of space for R&D, and our first product has already won the innovation award. As every innovative company, we are trying to organise our management processes in innovative ways. This is best seen in our organigram. We have introduced the position of “innovation director”, so as better to emphasize the importance of innovation for our company culture.
Q – What can your company offer for free that no one else does?
A – Well, the answer is energy recovery. Having in mind that our product is a dissipating valve with an integrated energy generating turbine, this will allow customers to have the chance to harnessthe energy of the water flow from their conveyance water pipes without additional investments.
Image by [Knowledge@Wharton].
Slobodan Ocokoljic – FOUNDER AND CEO OF THE PROBLEM SOLVING PULSAR THINK NET Researcher / Manager / Translator – Constantly on the move and in pursuit of missions impossible to accomplish. Slobodan studied Political Science and Local Economic Development. After 6 years of working both as a researcher and project manager, in 2016 he started working as a freelancer. He lived, studied and worked in Belgrade, Trento and Budapest. Two years ago, he moved with his family from his homeland to Italy. Thus, he is interested in connections and influences between places and people, economic development and human development, environmental protection and human rights, as well as urban/regional development and business innovation. He firmly believes that no other force has stronger gravitational pull than knowledge, that’s why he chose the name Sigma Infty, as a synonym for the infinite thirst for knowledge.
Sara Polidoro – LANGUAGE SUPPORT (Italian A | French B | Russian, English, Serbian, Croatian C) Freelance Conference Interpreter – Sara has been pursuing her dream of becoming a conference interpreter since her childhood. She has earned an MA’s in Conference Interpreting from the Advanced School of Modern Languages for Interpreters and Translators (University of Bologna), and she has lived, studied and worked in Brussels, Moscow and Belgrade. Her career as a freelancer started in 2008, and since then she has been travelling for events and conferences regularly. Her professional activities include consecutive and simultaneous interpreting, community interpreting for healthcare facilities, as well as interpreter training. She is an instructor of Russian>Italian liaison and consecutive interpreting at the University of Macerata and a language tutor for Russian>Italian consecutive and simultaneous interpreting at the University of Bologna.