How PortXL Is Readying a New Generation of Maritime Startups
As SeaAhead builds out our ocean innovation hub in Boston, others around the world are also focusing in on startups at the bleeding edge of Bluetech. PortXL, an accelerator that was born at the Port of Rotterdam in the Netherlands, recently expanded to Singapore, and is now looking to bring its startups program to the U.S. SeaAhead recently spoke with the organization’s founder, Mare Straetmans, about PortXL’s focus, and the state of the maritime innovation ecosystem.
Straetmans, who subsequently announced that he would be stepping down from his post at PortXL, spoke about innovation challenges in the shipping industry, and why so many college grads choose to make pizza apps instead of solving ocean-related tech problems.
Tell me a little bit about PortXL’s vision and how you got started. What was the thinking behind it?
I started this when I was working at the Port Rotterdam Authority — which is the responsible organization for the leasing of the land and all the sea traffic and the road traffic. I came from outside and I saw that there was a need for an influx of innovation. There were many organizations that had an innovation agenda, but not on the ambition level that I think was needed.
I started setting up some things in that role. I’ve been on the base of setting up a venture capital fund for 40 million, which is now the Rotterdam Port Fund. I set up the first hackathon in maritime, I think, worldwide, about six or seven years ago. And I also saw an accelerator somewhere else and decided that’s something I think we should do in maritime as well, or in ports sector. And in my role as Port of Rotterdam Authority I was a strategy and innovation manager.
I started setting up this accelerator. and as soon as we actually found enough traction to do so we founded a company and I volunteered to become the founder and managing director of that organization.
So that is a little bit how this came to practice. I think maritime is changing rapidly with the challenges it has been facing. It had very old-fashioned culture of competing and innovating, and luckily that’s now changing very quickly,
As you talk about innovation in maritime, is the problem that the maritime industry is so far behind and so that it needs to catch up — or is it that the sector is closed and not willing to sort of share information and technology between companies?
All of the above. One of the major things, I think, is that the maritime sector is pretty far away from the end consumer.
If you’re Facebook and you don’t have the latest AI technology or VR technology, you have serious damage to the company within half a year or year, right? If you are drilling in the North Sea for oil and you don’t know the latest VR, AI, or whatever technology you’re fine. Nobody’s got you as a client for that, and your profits aren’t going to drop for that.
So I think it’s distance to the end consumer that makes it a little bit more difficult to get the innovation into companies quickly. There’s not so much pressure on that as for a consumer company and I think that is one of the main reasons why it’s been the way it is.
These companies have extremely high, capable, intelligent people on board. I see some companies like offshore dredging companies. They have engineers who outsmart me easily, but on this huge project — sometimes multi-billion dollar project — they have this one problem. They solve it. It’s fixed, and they go on to the next project.
There’s all this capacity, this knowledge, and this smartness is being used to solve this one problem — and if you’re lucky they solve it and use that knowledge again within the company, but nobody’s thinking about making it a product or integrating it into different things.
There’s a lot of innovativeness in the core of what we do, but they don’t use the knowledge and capabilities of suppliers, or startups, or anything else that’s outside.
But it’s also that if you’re a student and you come freshly out of your university you don’t feel like designing a new pipeline that is more flexible when it’s on four-and-a-half kilometers below sea level. Instead you think about building a pizza delivery app.
So it’s a bit both ways. The sector doesn’t find the direct and direct doesn’t find the sector.
Are there particular maritime issues that get outsized attention from startups that are looking to make an impact and are there certain issues within the maritime industry that are hot in that they could attract young people out of university to big interesting problems?
I’ll give you two answers.
The first one is the simple answer. Yes. Blockchain is very hot, and reduction of emissions is very hot. Digitization of logistics is very hot. So, these are all things that are hot and up-and-coming at this moment.
The big, more complex answer is that a lot of companies look at challenges like: “Oh we have this company saying ‘we need wearables because our people work out in the field they have to keep papers in their hand, and so they cannot work and use their hands, so we need wearables so that they can see and have their hands free while they work.’” So they come to us with the challenge and we try to find a startup for that.
In the meantime, we find a startup that has a smart magnet. The problem with the magnet is you don’t know the force of the magnet on each surface, because each surface has a different thickness of coating, and fouling. You have rust so you don’t know the force of the magnet on each surface. So, this startup has solved their problem.
We found out that the large oil company, for example, spends $70 million on scaffolding building and they pay by the cubicle meters. They can reduce that $70 million per year by 50 percent if they use this magnet because then they don’t need a big pyramid of scaffolding, but just one line of scaffolding.
So, this is never something big corporate comes up with as a challenge: “We pay so much for scaffolding building.” That’s never going to be a challenge. But we did find a startup. So we have this struggle all the time where yet we use these challenges for communication purposes, but a lot of the solutions we’ll find are in a total different area.
And how do you identify what is this kind of big, money-saving solution that companies don’t even know that they need? Is it just an entrepreneur who has this idea and you have to just sort of gather them together and push them towards the use case that makes sense?
What happens is the average age of our startup founders is 40 years. We had this lady that worked 15 years on the oil platform in the Gulf of Mexico, mariner, engineer, super-smart. We had a guy that’s been for 30 years a U.S. Coast Guard Captain, saw a problem and now is solving it. Generally, we don’t have to tell our startups what their market is or what their sector looks like. What we do is challenge them on the right markets. Should you go to this market; is there maybe an easier entry market? Is there maybe a bigger market? And what kind of business model do you need for that? Generally they come with solutions that they really, really know are valuable.
We had one guy who came with a MIT technology. It was a sensor that measures bend over a longer extent of meters. So, he started this for shipping — he wanted to measure the bend of the hull of the ship so that the ship owner company knows the wear and at some point, maybe it’s going to be repaired. Now, through us, he found out that the shipping companies don’t look at that, and they don’t want to look at it. There’s no money behind it because there’s nothing happens with the hull until it breaks — and if it breaks, it’s broken so there was no money behind it. So he switched to offshore windmills because he found out if you measure the bend of a blade of the windmill you can actually measure how much more power you can have on the blades. In other words, how quick you can have the windmill turn. So that is kind of like a challenge that we brought to him and he pivoted.
Do a lot of people come from within the industry?
99 percent, yeah.
Is there anything being done to recruit these people who would otherwise be making pizza apps to come to make solutions for the sea?
That’s not our job. One of the reasons we’ve been able to grow so fast is that we focus on our job and that’s just, finding startups that are there and that are ready to go to market in the IPEC sector. I think there is an opportunity there, although, you know I think you know the big disruption comes from university.
We don’t focus that much on this total disruption. We generally focus on things that you can implement in the world so that clients can buy tomorrow. Sometimes we have the big ones, but it’s like a bit more and disruptive ones, but so I don’t think that there’s the biggest opportunity in that.
Which stakeholders have been the most receptive to what you’re doing? And do you work with the big companies to innovate within their companies as well, or is it mostly startups accelerating on the outside?
We are on the balance there. There’s a lot of accelerators that started consulting groups to do that there because corporates out there have difficulty innovating and they find it out through the program. We tend to stay away from that because I haven’t seen that happen very successful consulting groups. There might be a tech startup that wanted to accommodate our different lead as far as I’m concerned, so I don’t compare myself to them, but other ones I’ve seen try to do startup consulting. I’ve been in consulting. I know it’s a specific trade — it’s not something you just do.
We do actually open up some workshops in our program for startups. We opened them up for corporates so that corporates and startups are in there together because the startup struggles to get all the regular stakeholders in the corporate on the same line to sign the final contract and then to scale up in the company — but the corporate struggles there as well. So, we kind of brought them together to together design a pilot for startup and together to get the company on the same page.
In searching for the thousand startups you vet, have you sourced them through universities or other accelerators, or do people generally come to you?
Maritime is a difficult market and as difficult are the corporates, difficult are also the startups. So, no we don’t have thousands of startups calling at us every year. If we’re lucky we’ve got 100 or 200 and that is because people in maritime are not connected to the startup sector, so they don’t always know about PortXL.
Of course, our name is growing so more and more know to find us. If you’re a startup like a pizza delivery startup, what do you do is you go straightaway to an incubator where you can find all the accelerators around the world.
If you’re a maritime startup you start from your company or you take a working spot somewhere in whatever city, and you’re not connected to the startup community at all. So our basic source for startup searching is Google and of course our network is expanding so we know them and now we have a database of one thousand so we have a basis where we work from, and we have a network. So, we do grow what we get automatically, but it’s also still basically a lot of searching.
If you search 100 startups, if there’s one or two that’s relevant for port-related business you’re already lucky.
What prompted Singapore as your new locus for expansion?
Singapore’s the most accessible, most innovative English-speaking hub in Asia so for us it was obvious. In ports it’s, after Rotterdam, or together with Rotterdam, the leading port.
We’re also looking at the U.S. There, the location is a bit less obvious. Most logical one for us would be Houston, but we’re also looking at L.A. and New York.
We don’t have government grants. We build this all on the commercial payments of the corporates that are looking for new technologies, so we also knew as we would be a bit opportunistic in saying hey, you know, which one or two real corporates stand up and say we need this here and want to build this together with us in the U.S.
David Hirschman is SeaAhead’s VP of content. This interview has been edited for length and clarity.