HN Explorer

Launch HN: NextDrop Technologies (YC S17) – Water Marketplace for Urban India

114 points by anusridharan ↗ HN
Hi HN,

I'm Anu, the Co-Founder and CEO of NextDrop Technologies (https://nextdrop.co). We are a water marketplace for urban India- we connect water buyers with suppliers.

There are 400M people living in Indian cities today, but only 200M of them get reliable access to the public utility water. The other half have to buy private water, often from water trucks!

Water buyers have a problem because surprisingly, people are paying more for their water than for electricity. My friend who lives on the outskirts of Bangalore, India (a major urban city) paid $50 for water and $40 for electricity last month. The price of water has tripled in the last decade and is on track to continue. What’s worse is that since water is getting so expensive and scarce, water trucks are starting to source water from dodgy sources like highly polluted surface water and really deep wells.

Water suppliers have a problem because they service demand as it comes in. They lose money due to bad scheduling and inefficient truck utilization. Many people think that all water suppliers are part of a “water mafia”, but the interesting trend we are noticing is that there are a lot of micro entrepreneurs popping up in the last few years who have their own water source, buy a truck, and start selling water.

Our marketplace fixes the problems for both water buyers and suppliers. By installing our smart metering devices into consumers water storage tanks and transmitting data to our platform, we can predict when someone is running low on water and schedule a delivery. We track the the water from the filling source to the delivery using GPS, giving users confidence they received clean water. Qualified water suppliers make more money and buyers get clean water and transparency into pricing.

We just launched this summer and are piloting with 3 apartment complexes with 11,000 people. We have devices installed and transmitting data to our platform. By next month, we should have enough water data to start automating water deliveries.

We'll be around to answer questions and discuss water management and are excited to hear your feedback and experience in this area!

56 comments

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iamalchemist
Looks interesting.. When will you guys come to Chennai?
anusridharan
Oh man, we're hoping to get there as soon as possible!
kk58
Great stuff. Just curious do you have any background in environmental science?
anusridharan
I have a background in environmental engineering actually- I did my bachelors and masters in Civil Engineering from UC Berkeley. In undergrad I focused on environmental engineering, and for my masters I focused on sensor technology and how it's changing our built world. It's been a wild ride.
scdoshi
Looks like a really good idea.

How do you plan on scaling without becoming part of the water mafia (or at least enabling them)?

After all, there are only so many independent suppliers with their own water source.

Would love to hear you thoughts on this.

puranjay
I thought of this too. Water is a tricky thing to deal in because it isn't like any other resource. When you sell water to someone, are you also depriving water to someone else?

This can easily turn into an ethical minefield if you aren't careful.

anusridharan
This is true- and I'll rephrase what you're saying. What are the environmental impacts of groundwater withdrawals? If someone is withdrawing, who else isn't getting water? These are exceedingly tricky issues, and the sad part is that right now, nobody knows the answer because there is no data to answer these important questions. The first step, which we are implementing from day 1, is to use IoT devices to monitor groundwater withrdawals from our sources. The next critical piece on our product roadmap is creating IoT devices to monitor groundwater levels and using algorithms to estimate groundwater aquifer health. Given that we will be aggregating demand and understand withdrawals, this second piece will be able to estimate our natural resource health in a city for the first time. This technology advancement is critical for not just India, but the world. Once we know which aquifers are depleting the fastest we can try to recharge and use a different aquifers. This is the only way we think the world can start managing groundwater and ensure everyone has enough clean water to drink.
anusridharan
That's a really good point. We've had to think long and hard about this one too. There's one interesting stat that is less known. Aboout 80% of India runs on groundwater, and in cities, we have estimated that about 50% of the people have their own private water source. BUT- less than 1% sell that water. Now imagine we've used devices to aggregate all demand (phase I). Phase II would be to introduce new supply into the market. Enabling anyone with a borewell to sell water to anyone else. The biggest cost of private water right now is diesel transportation costs. When we implement Phase II, we want to enable more micro entrepreneurs to sell water hyper locally, driving down water costs. We'll have to do this carefully, but that's the only way we see not becoming the mafia and doing our part to make clean water more and more accessible to people.
ceejayoz
> Enabling anyone with a borewell to sell water to anyone else.

What happens when the neighborhood loses its water sources due to overuse?

anusridharan
Yup, that's something we have to monitor carefully. That's why the backbone to our business is actually IoT devices that transmit data to monitor different aspects of water. We're starting with data around water withdrawals, and moving to using devices to monitor groundwater levels. We think we can collect enough data from our devices to model groundwater aquifer health, something that very few people are doing due to lack of data and overall costs. Once we can monitor aquifer health, we can make sure that we are not overdrawing, and recharging effectively.
scdoshi
Monitoring aquifer health seems like a good approach to start with. Great to see you have thought about the issues.

Water is an ethically challenging area to start a business in, but the status quo in India is pretty bad, so I hope you do well!

chappar
>>we have estimated that about 50% of the people have their own private water source. BUT- less than 1% sell that water.

I appreciate that you are trying to solve this important issue. I was wondering if individuals selling bore water is legal in India

puranjay
Congrats for spotting this massive opportunity! This looks very promising. The sector is extremely disorganized and lack of competition is jacking up prices.

My question is: you're essentially serving a market whose need is not being met by the government.

Slowly but surely, the government will step in and solve the problem.

The problem is compounded by the fact that your target market - urban populations with smartphone access - will likely be served by governments before rural populations.

Happened in Jaipur. All my friends used to routinely get water tankers every week. Now they get municipal water.

Eventually, it will happen everywhere else too.

What then?

anusridharan
Hey- that's a great point, and I'm glad you brought it up. Our previous company actually sold water data to governments so we've been working quite closely with city municipal corporations. The problem is that urbanization is happening much faster than cities can keep up. Stats put it at 200M people added to cities in the next 10 years. What city municipalities are doing is actually hiring private companies to service the extra demand. It's still part of "the government" but India is trending towards more public-private partnerships. We actually WANT the government to start to sell water on this marketplace. We would have already laid down the IoT data collection infrastructure to help them keep their loss rates low and ensure the right people get good quality water (which is one of the biggest problems they have today). We see this as the next eventual step for governments not just in India, but in many emerging markets.
codegladiator
> We actually WANT the government to start to sell water on this marketplace.

I hope this never happens.

Mafia of water tanker already operator exists, and you want to capitalize on that. Great strategy for biz but bad for end users.

gt5050
Congratulations on the launch! A lot of households also use water cans, and very often you cannot control the quality, are you planning to address this as well ?
anusridharan
Thank you! And yes, we've definitely thought about this market segment as well. We are actually of the opinion that water can delivery will eventually die out. If you do the math, it's actually more cost effective to buy a water filter for drinking water. Water filtration technology is getting cheaper, more people are buying in home filters, and we're trying to get them the cleanest water possible to their homes.
vishald
Superb idea. India needs this!
anusridharan
Thank you! My co-founder and I quit our jobs and moved to India 6 years ago, and we've been working in the urban Indian water space since then. We really felt that something needed to be done and we've been on a journey to figure out exactly how we can change the status quo. We appreciate all your support- it means so much!
arekkas
It's almost unimaginable to not have access to clean water sources if you're living in Europe, and especially in Germany where tap water has the upmost quality. So I believe that any solution for this is awesome.

One problem however is that big companies like Nestle or Coca Cola are putting a ton of money in marketing bottled (usually plastic) water which is a gigantic, unecological, unnecessary, and expensive money machine. While I have not been to India myself, I have seen documentations on bottled water in countries like yours. Companies advertise it as the "clean" (despite not so great quality) water, the one you buy when you have money.

Do you have any plans, ambitions, or visions to counter this trend - in particular relying on plastic bottles to ship water? I think you have the opportunity, and maybe soon the market share.

anusridharan
That's a really great point, and bottled water is actually the fastest growing segment of private water in India (growing 30% year over year). My co founder and I have been living in India for the past 6 years and we both own personal home water filters and carry around a reusable water bottle. We are fans of companies like Unilever who are trying to produce low cost water filters for emerging markets. We think that if we can get the cleanest, cheapest water to people, and by eventually partnering with water filter companies, we can tackle the bottled water problem.
pfarnsworth
This sounds interesting, because as someone from the West, I have no concept of what it means to "buy" water. We completely take for granted the fact that every single house has access to clean water. One thing, in SF I am also paying more for water than electricity, it comes out to about $60/month for water and $45/month for electricity.

How do you protect customers from sellers who have poor quality or poisonous water who try to game your system? Do you do water testing as well?

anusridharan
That's a great question. Right now we manually take water samples and get it tested in a lab. Over time, as IoT devices get cheaper, we believe the water quality testing will be done at the source, online, and in real time. This makes it much harder to game the system.

Additionally, we track the GPS location of the truck with the water to make sure clean water is filled up at the source and the same water is delivered to the consumers.

pfarnsworth
What's to stop another truck with bad and cheaper water from coming and filling up the truck that's being tracked? I imagine if the prices are higher, there's a lot of incentive to commit fraud, especially on something as short-lived as a water supply.
ada1981
Perhaps randomized sampling / testing. You'd want to be a highly rated supplier so as not to compromise future sales.
vthallam
Great idea, Anu. Congratulations on the launch.

How much does the devices cost? I assume since this is mostly used by apartment complexes, it should not be a problem to convince them to pay one time device cost. But independent house owners would not be willing to pay the device cost, are you also planning for a 'Uber for Water Tankers' style ordering in this scenario?

anusridharan
That's a good question. Actually, we've spent time figuring out how to drop the cost of the device to sub $30, at scale.

For frequent users, we would give the device away for free. For people that are on a public water connection and only use tankers once in a while to supplement their water usage, it would probably be like you mentioned- order tankers on demand, when you need it.

skdjksjdksjdk
1) I remember reading about you some years ago. I think you were working on telling people/govt(dont remember which one it is), when water is being released. SMS based I believe. How did that work go? Was it profitable/scalable? 2) Can you comments on how profitable it is to sell data to Indian government organizations? Is it VC-level business or Lifestyle type of business 3) I believe you have to be in Bay area for 3 months as part of YC. For a business like yours(which requires on the ground presence), how does being in Bay area help? 4) Most important, how do you expect to take on politicians who control water mafia?
anusridharan
Yes- the original company NextDrop has been around since 2011, but we shut that down about a year ago and started this new version of NextDrop recently.

At a high level, you're correct. For the past 6 years we were essentially selling water data to consumers, governments, and global brands. It was actually a profitable business but we decided to shut it down, not because we didn't have enough demand for water data, but because we were crowdsourcing water data and that was not very scalable or reliable. Back in 2011 IoT devices were way too expensive. When my co-founder and I noticed that devices were pretty cheap, we decided to start a company around water data again.

YC was great about us spending time in India- we split our time between India and the US because all our users were in India and they knew that. Honestly, to go after a big opportunity, sometimes it helps to be on the ground, and then step away and get advice/feedback from people who will listen to what you're saying and help you see the best way forward. That was how we used the time in the Bay Area, and found it very valuable. It was also useful for us because we were still in the launching stages. Had we been further along in the business, it may have been much harder to do what we did.

The water mafia question is definitely a super important. The only way we can see taking on the mafia is to add more water supply on to the market. The only way we can do that is to enable micro entrepreneurs to sell water. As you probably know, about 50% of urban Indians have their own borewell, but less than 1% sell water. Phase I is to aggregate water demand using our IoT devices, and Phase II is to enable hyperlocal selling of water.

skdjksjdksjdk
Thanks for all the great answers. I wish you the best.

>>The water mafia question is definitely a super important. The only way we can see taking on the mafia is to add more water supply on to the market. The only way we can do that is to enable micro entrepreneurs to sell water. As you probably know, about 50% of urban Indians have their own borewell, but less than 1% sell water. Phase I is to aggregate water demand using our IoT devices, and Phase II is to enable hyperlocal selling of water.

Thats an innovative idea with potentially many social ramifications(positive and negative). I will be watching it closely!

anusridharan
Most definitely- we will also be diligent, and we'd love feedback and thoughts as we progress!
coolswan
Forgive my ignorance but is there actually enough water in and around India to make up for the shortage, but right now it's just not distributed efficiently? Or after solving for all these inefficiencies, there'd still be a shortage? If so, what are other sources they can leverage down the road?
anusridharan
That's a really good question with a not so straightforward answer. I'll start with some stats. Public water utilities lose 50% of it's water due to leakages. During monsoons, India gets enough rain to fulfill it's drinking water needs (but as you can imagine, it's hard to store that water for the year). As energy gets cheaper and cheaper, technologies like desalination will get more affordable, and pumping water will be very cheap. (Just as a reference, California currently spends 3% of it's energy on pumping water!)

Overall, with the confluence of technological interventions, we think that India (and the world for that matter) has enough water- and can harness it. But right now, we see a lack of water data in the ecosystem, and we're using IoT devices to start tracking water in different forms. We believe that humanity can solve it's own problems, but it needs the data to do it. That's what we're starting to do in the private water sector, first by tracking demand, and withdrawals, and next with using data to model aquifer health. That's how we want to contribute to making sure all 9B people on this planet get clean water- make sure humanity the data to make the right decisions.

coolswan
Interesting, it makes sense solving the first problem is metering than. Good luck!
samblr
>> Public water loses 50% of its water due to leakages

Can you please quote source for this.

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(comment deleted)
sirius87
Interesting. I like the idea of smart metering devices. A lot of people, especially in Mumbai, don't track consumption at all. Do you see changing the mindset of people w.r.t. conservation of water particularly challenging? Some areas in Mumbai receive stable, 24x7 water supply while others barely receive a couple of buckets twice a day.

Quite a few areas and apartment complexes utilize a wide range of hacks to ensure their area receives adequate water supply. Distribution of water from the authorities is anything but uniform because of devices such powerful water pumps and larger than sanctioned storage tanks. Much of this, although illegal, is with the blessings of local political leaders.

Any insights on how these issues could be addressed? Much appreciated.

anusridharan
Yes- we actually started out going down the road of conservation via smart metering devices. We quickly realized that we would be facing an uphill battle if we kept trying to start there.

Also, as a point of clarification, no city in India receives 24x7 water (except Jamshedpur), although many cities have pilot projects (Nagpur is the closest to Mumbai). The Bombay Municipal Corporation (BMC) is probably the furthest ahead as far as public water utilities go, and many people think they have 24x7 water, but they just have a very reliable, but intermittent, source of water. The BMC has done a very good job of trying to reduce inconvenience to residents.

We actually think that, ironically, as water gets more expensive for the higher income groups, they will then start turning to water conservation mechanisms. That's the pull we are seeing in Bangalore, and what we think will be the pull in the future. Lower income communities already do a pretty good job of conserving water since they tend to pay a higher price. It's amazing what market forces do for water conservation.

We are also encouraging communities to introduce slab billing and try to do individual apartment metering. By raising water prices for the highest users, people are becoming more price sensitive and trying to use less.

sirius87
> many people think they have 24x7 water, but they just have a very reliable, but intermittent, source of water

This is true. A lot of complexes have larger than reasonable storage tanks. If a new complex pops up next to your apartment building, you immediately see an effect in your water supply levels. It'll be interesting get a heatmap of the disproportionate distribution, but unless some authority gets involved, this may not happen.

> encouraging communities to introduce slab billing and try to do individual apartment metering

Agreed. Price affects behavior.

Thanks and good luck!

indiafoodie
Uber for Water!
anusridharan
haha kind of, with a slight automation twist. We use IoT devices so we automatically detect when your water is low and order it for you :) We've realized that for people who have to order water often, it's kind of a pain to do it manually every time. That's the IoT version of it.
fairpx
That's what I was thinking
pranavpiyush
I remember this pain point vividly from 20 years ago, growing up in Delhi. This is a massive long term problem and a great opportunity. Good luck!
Abishek_Muthian
Hey Anu & team, congratulations. You're addressing a definite need-gap.

Query:

How do you ensure safety. Do you make your suppliers follow certain safety protocols designed and tested by NextDrop, if so would you be making that public?

Boiled water - We & travellers to our country are constantly advised by experts to drink only boiled water; even when if it's 'purified' by the supplier to remove contaminatents, sub-par packaging results in dangerous contamination. Assuming you have customised dispenser to record data, how to you plan on addressing this need.

whocanfly
Congratulations for the launch, team!

Living in Bangalore, this is one of the biggest challenges I see. We notice the dying lakes and water supply shortages. It would not be wrong to say that a mafia of water tanker operator exists.

A friend from Jaipur mentioned how their city handled this situation better & how Bangalore seems to be struggling despite good rainfall.

The other night we saw a man refilling water cans from an ordinary hose and prayed for the recipients' health.

Are you launching a service or product for domestic users? Shout if you need beta testers.

MarkMc
> We track the the water from the filling source to the delivery using GPS, giving users confidence they received clean water

I wonder how easy it would be for water suppliers to cheat such a system. Perhaps the supplier will send the GPS device to the clean water source on a motorcycle, and send the water truck to the dirty source. I'd recommend you occasionally sample the consumers water tank and test the quality of the water.

samblr
>> Qualified water suppliers make more money.

This single line shows what NextDrop's malicious intents are underneath snake-oil salesmanship.

Who decides about a qualified water supplier and how ? Im sorry to say this - how is this not snake oil salesmanship ? Water quality is a gargantuan regulatory challenge that no civil body takes easily. The sheer scale of this even in a small city/country is a lot. And NextDrop lay (fake) claims to solve this for India delivering water trucks! Right ok.

From other comment-threads it can be gathered that commercial water supply is already an illegitimate business. So NextDrop wants to make most of this illegal business by helping clients with more gadgets. And they are doing in grand style of selling vision of "Securing India's Future One Drop At A Time" in their landing page. Wow, unbelievable. That reads like a hollywood line - "Securing earth's future one ______ at a time".

The disappointment gets worse when I learn that OP appears to be a bright kid having studied in an institute of repute. https://www.linkedin.com/in/anu-sridharan-b24a016/?ppe=1.

Sometimes solution to even pressing needs as this do not solve the problem - instead they further widen the wounds. NextDrop and likes will stand testimony to these facts.

I see somebody pointing out this to be Uber for Water - uber actually stands for fighting regulatory. NextDrop and likes will stand for aggregating-and-being-a-proxy for web of illegitmate business! Huge difference.

navalsaini
Hello Anu.

Nice to see you here.

My question is - what do companies serving a market far flung from US (as India), get by going to YC. It is indeed a great achievement; but how does it help the company. I can see a direct advantage in being able to hire talent or approach a global pool of investors.

The other I can assume is that it would help going global and aiming to serve other markets. Is that the correct assumption too?

Congrats. Wishing luck.

amjd
Pleasantly surprised to see this launch. I interned at NextDrop a couple of years ago. Anu and the team are a passionate bunch trying to solve one of the biggest problems in a developing country like India. My best wishes to the team. :)
nav
Congrats Anu and team!
mindhash
You could create a new system by delivering water to each home in a complex through smart metering .. kind of own the inventory... I live in a complex and have no idea why we pay so much for water..my consumption is quite low.. micro managing with this sort of system will help reduce consumption.. I was told a society spends on 60 trucks of water every day..that's huge for a society..
Squareplums
We at Square Plums (www.squareplums.com) manage hundreds of co-living homes in Bangalore and we are looking for a reliable solution to this problem. Will be happy to do a trial at one of our properties. Contact us at founders@squareplums.com if you wish to discuss.
[dead] vithlani
This is a shameful project and hustle. To think that a 10, 000 year old culture that is heir to such marvels as Mohenjo Daro, Sanskrit and the Mahabharata cannot provide it's ordinary citizens with a daily supply of reasonably clean water -- how far have we have fallen, o ancestor.

It is astonishing how the Indian public continues to tolerate these scams and hustles that go against their basic civic rights. Modi got elected from UP while promising to clean up "Mother Ganga" -- and 3 years on, the filth is still as bad. It is a completely hopeless culture.

God save us from these tricksters, blackguards, greedy businessmen and politicians.