The Future of Ocean Technology May be Shaped by Silicon Valley

Looking at the landscape of oceanographic companies, one quickly sees something is afoot. The companies of the 1970s, ‘80s, and ‘90s, most of which started in the proverbial garage, have been mostly rolled up into larger conglomerate structures.

In Europe, this was a corporate world from the beginning, as exemplified by Kongsberg’s “Subsea and Marine Robotics” department. Over the last 20 years there has been a “reforestation” of small, modern companies, but the business model is the same as it was 30 years earlier—build brick-by-brick, stay small and nimble, fuel development based on customer needs, and live and reinvest based on the cash generated by the business.

Over the last 10 years we have seen two new trends emerge. One is the acquisition of anything “autonomous” by large military contractors. The valuation of these uncrewed vessel companies, to the rest of the community, seems influenced by a strong FOMO (“Fear Of Missing Out”) component, but the acquisitions are not irrational when one looks at how large Navy programs like PMS406 are progressing.

The other trend is more confusing and began with Liquid Robotics, founded in 2007. Their USV, the “Waveglider,” was an interesting and fun vehicle that saw strong interest both from scientists and the operational market, but the jaw-dropping $82 million in funding came as a surprise to everyone outside the company. We all sat there with our calculators trying to understand the case and more than one CEO could be seen snickering as we all wondered how investors could be duped into entering our little market space with the promise of favorable market-based returns. However, our sense of superiority disappeared in a hurry when Boeing in 2016 walked in and put $300 million on the table.

OCEAN TECH INVESTMENT

The Liquid Robotics acquisition is now recognized as the moment when Silicon Valley entered the world of ocean technology. And entered they have, bringing about the same post-dot-com transformation seen in the Valley. Technology is not something that the customer uses; rather, the customer is part of the ecosystem. Innovation no longer sits with the small and responsive, but rather with those with the largest data sets, which are themselves responsive. Almost $200 million has gone to Saildrone—a company developing and producing autonomous sailboats equipped with 3rd party environmental sensors, which send data to the cloud in near real time, often from remote locations or in challenging marine conditions. Sofar Oceans—a manufacturer of small buoys equipped with motion sensors and pursuing ambitions of creating a “data-abundant” ocean—have also secured significant funding, to the tune of $46 million. Is this trend here to stay?

Generally, people rationalize these investments in three different ways: 1. “Silicon Valley is mad—they simply have too much money and it can never hurt to add sustainability to the portfolio”; 2. “Well, it worked for Liquid Robotics, so why not for others?”; 3. “Silicon Valley re-engineered the digital world. Is there a chance they could change our concept of ocean technology as well?” This begs the question: Are we, the ocean tech industry, going to become part of the "Metaverse?"

THE SILICON VALLEY APPROACH

Let us think about this a little closer. What is the method they use to gain dominance, whether they are Tesla, Uber, or AirBnB? It is not simply that people between San Jose and San Francisco are smarter or more motivated than everybody else.

The method:

1. Build for scale. If you cannot envisage becoming world dominant, do not even start.
2. Get something out there so people can see. Talk about it incessantly. The marketing department is not an intern that makes brochures; rather it is a group of professionals with the same status as your engineering department.
3. Build alliances. These include customers, suppliers, and stakeholders. Make sure they all have a vested interest in seeing you succeed.
4. Pivot. It will never be right the first time if the user is part of the development process, so be ready to come up with a new approach.
5. Have an almost infinite amount of money. You will not get a lot of attention from your vendor if you only buy one or two units—you need to show them that your successful future will bring them substantial reward. Further, you cannot plan to pivot if it is uncertain the money will be available. If you want to get your message across, that video you were able to place on CNN is not free.

This is how they work. Still, given the conservative nature of our business, the long lead times for testing, the horrors of corrosion, biofouling, and limits in communication and power, will it suffice to simply approach the market “the Silicon Valley Way?”

LOOPING IN AUTONOMY & AI

It is my hypothesis that the answer is “yes,” if we can add intelligence and operational autonomy to our effort. In the classical approach to ocean technology activities, the process goes deployment (platform), data collection (sensors), data download (human), data interpretation (human), and result (action or knowledge). This is true for both science and most engineering problems. We sometimes add, at great cost, a human in the loop, for example for ROV operations, or we send a feeble amount of data home to make sure everything is working. Still, the basic paradigm holds true for a large section of ocean technology or ocean science projects.

If we modify to a loop which goes data collection (platform with integrated sensors), intelligent automated data interpretation (AI/ML), actionable information (cloud), things change. Costs would come down, the operational complexity and the need for human domain knowledge would be reduced, and the information could arrive in time to make a difference. All of this points to an expansion of the number of potential users for the same product, which is really what we mean when we say “scalable.”

So, what happens under water or on the data collection platform will decide where this goes. And when Google takes ownership in an ocean technology company, there can be no doubt that the ambition is there. Let us hope it will not be driven by a “Winner-Takes-All” attitude, another aspect of Silicon Valley we should be acutely aware of.

For more information, visit: www.nortekgroup.com.

This story was originally featured in ON&T Magazine's Special December 2021 issue. Click here to read more.