After vendors repeatedly ignored her feedback and requests for product improvements, Heather Clarke and her husband (and co-founder) decided to build their own solution for salmon fisheries in need of high-quality technology.

They searched through startup funding programs, but came up against another issue: most capital wasn’t allowed to be used for materials.

But building novel aquaculture technology is easier said than done. The Poseidon Ocean Systems team needed to conduct research on the viability of its solution, build prototypes, and launch the product into market. Poseidon did all of this amidst a backdrop of changing federal government regulations that severely reduced customer investment in new solutions.

Speaking with BetaKit, Clarke explained Poseidon’s journey, how she stumbled upon her big opportunity, and how she managed the process of commercializing two products globally.

Having a co-founder is like being married (no, really)

A Toronto native, Heather met her husband Matt, a BC native, while she was living in Vancouver. After getting together, they decided to move to Vancouver Island to be closer to the water given their love of the outdoors.

Despite both working full-time jobs, the duo started their first business on Granville Island: a boat charter business for wakeboarding enthusiasts. Matt drove the boats, owing to his coast guard experience, and Heather coached new wakeboarders.

“It was our way of having our cake and eating it, too,” Heather said.

Then they bought a house on Vancouver Island on a 20 acre farm where they started their second business: running the farm (Heather said they had cows, chickens, and pigs). After the couple had kids, the two changed course and opened their third business: a land development company to develop their farmland after they closed down the farm.

While running the farm and subsequent land development company, Matt was working full-time in the aquaculture industry and noticed the operational challenges that aquafarmers were having. He spotted an opportunity, talked about it with Heather, and the two decided to start Poseidon Ocean Systems together as their fourth business, building infrastructure to help salmon farmers keep water clean, keep fish healthy, and ultimately increase farm yield.

Heather said Matt is very extroverted and took on the “face of the business” tasks, while she is more introverted and focused on the organizational elements of the business like operations, hiring, and financial planning.

“I create the scaffolding of the business while Matt is the innovative brain behind our new technologies,” Heather said. “The different educational and workplace backgrounds we had before starting companies together serves us very, very well.”

An ocean of opportunity

During the process of fundraising and launching their first product—floating cage infrastructure for salmon farming—in late 2020, the two noticed another opportunity. Not only did salmon farmers need cages, but they also needed aeration to help keep algae blooms out of their farms and oxygenation to keep water quality high for the fish. At the time, Poseidon was reselling some equipment for this purpose, but it wasn’t doing the job properly. Heather and Matt brought these concerns up to their partners, but Heather said they “fell on deaf ears.”

Heather and Matt tried to raise some capital to build the products themselves, but found a strong current fighting against them. In December 2020, just after Heather closed the company’s first capital round, the department of fisheries and oceans (DFO) announced it was pulling back fishing licenses in the Discovery Islands off the Vancouver coast, which dealt a huge blow to investments being made by big salmon farming operations.

“Basically, all capital froze overnight as a result of that announcement,” Heather said. “As a technology provider in the industry, you’re first on the chopping board when it comes to how they reduce their cash spending for the year. They couldn’t invest in new technology.”

They searched through startup funding programs, but came up against another issue: most capital wasn’t allowed to be used for materials.

“Many funding programs are for payroll only, so when trying to commercialize a product that can be a hurdle for a hardware development to not get access to funding for materials,” Heather said.

A few months later, in May 2021, Heather got great news. Poseidon had been admitted for—and won—the inaugural Aquaculture Innovation Awards from Innovate BC. Even better: The award came with $150,000 in capital which could be used for materials. Heather said this money went to fund the production of the Flowpressor, a product that significantly improves aeration in water farms.

“The Aquaculture Innovation Awards were a great way to showcase the countless innovations being created by B.C. businesses throughout our province,” says Raghwa Gopal, President and CEO of Innovate BC. “With innovation at the forefront, industries like aquaculture can lead the way with advancements that will benefit our local communities and our economy.”

In summer 2021, Poseidon was selected for the Innovate BC Fast Pilot Program in partnership with The National Research Council of Canada Industrial Research Assistance Program (NRC IRAP). This came with additional capital that Heather said was used to build the Oxypressor, a second product to help with oxygenation of water on the farms. With these new products, Heather and Matt could think about selling a full solution to salmon farmers globally.

Salmon farms throughout the world either use square cages or round cages. Poseidon builds square cages, so its international expansion plans involve markets that use these kinds of products for now. The company has already expanded to Chile, with Scotland planned for this year.

Within Canada, Poseidon can serve the two sides of the country—Vancouver on one end and Atlantic Canada on the other—from its offices on Vancouver Island. Heather said that the new products the company has in-market are part of a big push for international expansion, with nearly half of the company’s revenues coming from outside of Canada.

“We’re thrilled to see the success of Poseidon’s sustainable aquaculture innovation, especially when it comes to their reach into global markets,” Gopal said. “Not only does extending their business to overseas markets give exposure to potential new clients, but the diversification of markets also helps create a safety-net for revenue streams.”

Learn more about how Innovate BC helps entrepreneurs and innovators bring their ideas to life. Become an Insider today!

Photo courtesy of Poseidon Ocean Systems.

The post How Poseidon Ocean Systems pivoted internationally when domestic opportunity dried up first appeared on BetaKit.

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