CASE STUDY: Falcon Waterfree Technologies

THE COMPANY

A water shortage spurred the idea. Perhaps 5 percent of fresh water is literally flushed away in urinals around the world. There had to be a better way—so thought Ditmar Gorges, co inventor of a water-free urinal. Now, thanks to his company, Falcon Waterfree Technologies, the little cartridges that absorb urine without the need for water are becoming a staple in male restrooms across the globe.

It took more than a good idea to build a successful business and a patented product, says Gorges, a mechanical engineer by training who went back to school for a master’s degree in economics. “We began,” says Gorges, “with the intent of retrofitting toilets and saving users a lot of money in water and sewer fees. Water is scarce and becoming scarcer in many parts of the world, and it’s too costly in economic and environmental terms to flush it down the drain.”

From these small beginnings, Falcon Waterfree now has offices in Grand Rapids, Michigan, and Los Angeles, California, where the research and development are done, and its products sell in 48 countries worldwide.

THE CHALLENGE

Falcon Waterfree began selling in foreign countries in 1995. The company has two competitors in the United States, six in Europe, and so far none in Asia, where it is hurrying to take advantage of an open playing field: a 100 percent market share of retrofitted waterless urinals and infinite growth in public restrooms. Gorges said Falcon Waterfree’s number one position seems secure for the moment because “our technology is different than the competition’s, and customers tell us that ours is easier to use.” Falcon Waterfree’s sales worldwide are bubbling up smartly at about 140 percent per year.

But Gorges is far from complacent. “Our technology seems bullet proof at the moment, but we need to constantly improve. We are working to make the cartridges last longer and to be 100 percent recyclable. That’s the next innovation—within the next few years.”

THE SOLUTION

Gorges credits the U.S. Commercial Service with helping a small firm like his enter and find buyers in multiple markets around the world. For example, when Gorges targeted the Philippines, he received word from the Commercial Service office in Manila that the McDonald’s franchiser there wanted to overhaul bathrooms in all the Manila restaurants. “Somehow, the Commercial Service got wind of this, knew our product, and called us with the lead,” says Gorges. “Meetings were arranged for us, introductions were made, and it wasn’t long before we had the contract.”

Other benefits followed. The McDonald’s put a sign over the urinals touting their environmental friendliness. The owner of a five-star hotel in Manila was so impressed that he ordered them installed in the hotel’s public restrooms.

And that wasn’t all. The McDonald’s chain asked if Falcon Waterfree could put the gold arches logo on the urinal ceramic bowl. Gorges said, “Why not?” And soon male customers were asking if they could buy the golden arches waterless urinal at the counter along with their Big Macs. They couldn’t, but the importance of word of mouth and the market intelligence capabilities of the Commercial Service were not lost on Gorges.

Gorges signed up with the Commercial Service office in Japan for long-term technical assistance that included research on building codes, meetings with government officials, and introductions to the best people to talk to in companies that could make suitable business partners. “Companies in Asia and elsewhere in the world seem to respect the U.S. government presence in our meetings. You get the sense that they are on their best behavior,” says Gorges.

A Commercial Service representative attended 24 meetings between Falcon Waterfree and a Japanese urinal manufacturer that became the leading suitor. In the end, a deal was signed, and Falcon Waterfree now has a strong foothold in this important market. Says Gorges, “The Commercial Service was invaluable to us. They gave us insight on the business culture and how the Japanese viewed the terms of the contract. They had unbelievable market intelligence. In market after market, they knew. No one else did.” Gorges was particularly pleased when his Japanese partners told him later, “The Japanese government doesn’t provide us this level of assistance. When we go to places like China, we are on our own. You Americans have the edge. You are lucky.”

But Gorges knows that he has the edge only if he uses it, and he aims to—everywhere he can. His product seems to be cleaning up in some surprising places, including India’s Taj Mahal, where a solution was needed that didn’t require installing piping in ancient walls, and the Austrian Alps, where he had the distinction of outfitting the highest restroom in the world.

LESSONS LEARNED

Gorges finds that adapting his product to new markets has been among the most useful lessons he’s learned. Different cultures have different “bathroom cultures,” and recognizing these differences was key to adapting the product. Gorges explains that urinals are round in European countries and square in Asian countries. Also, different cultures clean toilets differently. Europeans use sponges and cloth wipes, but Japanese prefer to keep their distance from the cleaning surfaces and tend to use brushes. These differences are important when writing instruction manuals for use of the products.

He also learned that different cultures have shorter time horizons for getting to know you and deciding to buy. In Europe and some Asian countries, this process can happen quickly. But other places take more time. In Japan, for example, it took Falcon Waterfree five years to make its first major sale.

A final lesson is how quickly and profitably a small company, which has grown to 167 employees, was able to generate sales in international markets. Gorges says of his company’s many accomplishments, “With a small team, you can accomplish great things.”

ACTION

How can your company accomplish great things? Here are some ideas:

  • Let the Commercial Service help you find international partners. Visit www.export.gov/tradeleads.
  • Research the countries. For more information about best prospects in Austria, China, India, Japan, and the Philippines, consult the Country Commercial Guides in the Market Research Library at www.export.gov/mrktresearch. In addition, you can link to the Commercial Service Web sites in these and more than 80 other countries at www.export.gov.