The Fundamental Molecule The Fundamental Molecule with Tom Ferguson, Burnt Island Ventures

It's important to have people you look up to in the industry you choose. And by "look up to," I mean to be consistently, wildly impressed by what they're building, their intellect, their clarity of thought, their track record, and how they comport themselves. Reinhard Hübner is one of those people for me. As the CEO at SKion, he has built an undeniably impressive platform, yielding $700 million in global revenues and with no signs of slowing down. They know exactly how big their opportunity is. And he and his partner, Dirk Brusis, have built an interlinking set of companies, solutions, and technologies to really go after it. Please enjoy my conversation with the excellent Reinhard Hübner.
Subscribe to The Fundamental Molecule here: https://www.burntislandventures.com/the-fundamental-molecule
For the full show notes, transcript, and links to mentioned content, check out the episode page here: https://podcasts.apple.com/us/podcast/the-fundamental-molecule/id1714287205
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Dr. Hübner delves into the strategic layers of the water industry, tracing his ascent from wastewater treatment to leading SKion's global expansion. They explore operational dynamics, the significance of human capital, and the complexities of mergers and acquisitions amid economic flux, emphasizing strategic growth and valuation discipline. Hübner discusses startup challenges, underscores direct customer relationships, and the necessity of a unified, innovative culture within SKion's network. Today’s discourse reveals SKion's strategic direction and ethos, imparting insights on adaptability, collaboration, and leadership vital for navigating the water industry's ever-evolving global challenges.
Episode Highlights:
0:00 Start
0:49 Introduction
1:39 Dr. Hübner’s career to date
3:45 Lessons learned from manufacturing and logistics experience
5:06 His experience in leakage
6:52 Drinking water vs wastewater reflections
8:56 Being headhunted to work in the German water industry
9:45 Learnings from the first deal that didn't work
14:18 Structural shifts that are enabling the faster adoption of new products
17:04 SKion and its relationships with business
23:40 M&A and the current market
27:26 Is water countercyclical?
28:40 Structural comparison of the European and US markets
32:03 The evolution of Dr. Hübner’s job
35:27 His thoughts on earlier stage investing
37:47 FIDO and leak detection fun
39:19 His partnership with Dirk Brusis
42:18 The pros and cons of Dr. Hübner’s public speaking
44:47 His most important piece of advice for aspiring water entrepreneurs
Links:
Burnt Island Ventures:  https://www.burntislandventures.com/
SKion Water:  https://www.skionwater.com/en/
Quotes:
"There's no such thing as life before water."
"You can't eat services...Somebody has to produce something from something."
"It's a conservative sector, and on the municipal side, they don't take risks."
"We don't want to be the biggest. We want to be the best."
"Forced collaboration is like forced labor...it doesn’t work."
"You need to be patient, which is not always my strength."
"We have been very disciplined in not overpaying."
"Water is full of passionate people. Nice, passionate people."
"I mean, the reality is drinking water is, technologically and asset wise, much simpler than wastewater."
"Don't try to do it alone. Find partners also in the industry."

Anthea Sargeaunt is the CEO and Co-founder of 2S Water. Multivariate, real-time non-contact sensing is one of the holy grails of water management. Getting it right will allow all stakeholders to understand what is in their water in real time. And if we can get it really right, this knowledge will allow a host of improvements in water management, including reduced chemical and energy use, reduced pollution, reduced fines, improved health outcomes, improving the pace and cadence of experimentation with new technology. The list is very long indeed. Anthea and her team have taken a fascinating pathway from problem selection to massively leveraging their equity through grants. She is an exceptional founder and person and one of the best founder communicators I have met. I loved her insights into the importance of public speaking as you're building a company. Please do enjoy my conversation with the excellent Anthea Sargeaunt. 
Subscribe to The Fundamental Molecule here: https://www.burntislandventures.com/the-fundamental-molecule
For the full show notes, transcript, and links to mentioned content, check out the episode page here: https://podcasts.apple.com/us/podcast/the-fundamental-molecule/id1714287205
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Anthea's entrepreneurial journey, spanning from early ventures to the oil and gas sector, showcases her problem-solving prowess and industry acumen. Today, she and Tom explore partnership complexities and grant acquisition, stressing understanding partner expectations and grant funding's role in startup growth. Anthea's insights emphasize genuine connections, adaptable communication, and infrastructure investment for streamlined product development. This dialogue not only underscores innovation's transformative power but also offers guidance for aspiring water entrepreneurs, marking a pivotal moment in industry evolution.
Episode Highlights:
0:00 Start
0:49 Introduction
1:50 Anthea’s career to date
6:10 2S Water’s genesis
8:30 Its product and the problem it solves
10:43 Understanding the problem
14:39 Establishing early customer relationships with large companies
16:50 Pros and cons of this early engagement
18:19 Crossing the Chasm and Anthea’s implementation of it
21:11 Navigating partnerships
27:00 Funding with grants
29:19 Key skills in writing grants
32:48 What surprised Anthea most about the water sector
34:32 What she has learned since joining it
35:19 Anthea’s advice based on these learnings
37:05 Her experience in the Lithium market
39:52 Working with family
42:24 Anthea’s speaking and presenting skills and their value
46:01 Her most important piece of advice for aspiring water entrepreneurs
Links:
Burnt Island Ventures: https://www.burntislandventures.com/
2S Water: https://www.2swater.com/
Quotes:
"I've always been surprised at water treatment operators. They're such a special breed of people. They do it because they love it.”
"In the mining sector, when we look at it, there is no other real path to the market than through the large multinationals."
"If you don't have that kind of insight coming from the other side of the table, it's hard to get it anywhere else."
"Partnerships are completely fundamental... cultivating them is vitally important."
"Writing a grant is much like any other sales process... understand what the grant organization is trying to accomplish."
"The lab isn't the field... get out into the field as fast as you can."

When I started Burnt Island Ventures, I needed help. I needed help of all kinds. But one of the things I needed most as a first-time fund manager was credibility in the decision-making process. Alongside Ivy Nguyen, David Stanton agreed to become a member of our investment committee, and he put a crucial brick in the BIV credibility wall. In this episode, you will see why. David is deeply experienced in startups, growth companies, and corporates, and he now runs Cleanwater1, hired by Baird Capital after they purchased UGSI in 2022. I have learned so much from David, from management tactics to market assessment, and I know you will too. Please enjoy my conversation with David Stanton. 
Subscribe to The Fundamental Molecule here: https://www.burntislandventures.com/the-fundamental-molecule
For the full show notes, transcript, and links to mentioned content, check out the episode page here: https://podcasts.apple.com/us/podcast/the-fundamental-molecule/id1714287205
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David Stanton shares profound insights into the nuanced evolution of the water sector, from the consolidation era of the '90s to the contemporary landscape shaped by digital transformation and rate alignment. Delving into themes such as entrepreneurship, sales dynamics, and M&A strategies within the industry, he uncovers the intricacies of navigating structural dynamics and fostering operational excellence. With an emphasis on the paramount importance of sales in driving business growth and the imperative of building resilient virtual teams, today’s engaging dialogue offers invaluable insights into effective entrepreneurship and team management strategies. Ultimately, through past experiences and future aspirations, the episode illuminates the path towards sustainable success in the ever-evolving water sector landscape.
Episode Highlights:
0:00 Start
0:49 Introduction
1:53 David’s career in water
5:47 How water utilities are allowed to make money
10:57 David’s key learnings in entrepreneurship
14:23 How to do M&A well
19:39 Private equity 
23:40 The importance of the nomenclature used within the industry
26:12 Client and customer terminology
29:11 The role of consulting engineers
31:14 Clearwater1’s dual incentive structure
33:28 Changes in the water sector past, present and future
36:41 The industry’s public narrative
41:07 Hiring and managing teams
43:02 David’s one piece of advice for aspiring entrepreneurs
44:18 Christine Boyle’s “Why Deep Pain Leads to Great Products”
Links:
Burnt Island Ventures: https://www.burntislandventures.com/
Cleanwater1: https://cleanwater1.com/
Quotes:
"The industry really has been driven by what I would call the macro trends of the decade or so that were affecting the industry."
"For most businesses, the issue isn't, 'Does my product work and is it good?' It's 'How do I sell it at scale in a market that's so fragmented and disenfranchised?'"
"Our job as the leadership team, to be quite blunt, is to take advantage of the best path through the financial industry to meet the end or means that we’re trying to achieve."
"The number one killer of good ideas is valuation. If you sell your business at a stupid valuation, I mean, it's what killed my startup in 2012."
"Teams are virtual now... You want to solve for this. It's really, really an important skill."
"The revenue doesn't happen without sales, and the business doesn't happen without the revenue. What could be more important?"

Adam Tank's trajectory, from early leadership roles at GE to his entrepreneurial endeavors, offers a wealth of profound insights into the critical trilogy of water, technology, and entrepreneurship at the heart of this podcast. His experiences navigating the dynamic landscape of the water industry, as shared here today, offer valuable perspectives on the challenges, triumphs, and pivotal decisions that have shaped his extraordinary career. Together, he and Tom explore the importance of understanding customer needs, building trust, and effective communication in driving success in the water sector. They also review the strategic decisions, intellectual architecture, and relentless innovation which have propelled Transcend to its current role as an industry leader guided by the inspiring leadership of Adam and his talented team.
Subscribe to The Fundamental Molecule here: https://www.burntislandventures.com/the-fundamental-molecule
For the full show notes, transcript, and links to mentioned content, check out the episode page here: https://podcasts.apple.com/us/podcast/the-fundamental-molecule/id1714287205
Episode Highlights:
0:00 Start
0:49 Introduction
1:45 Adam’s work history
6:58 Key stage gates in his career
14:20 Working with utilities and consulting firms
22:49 Transcend and the value it provides
27:47 Adam’s role at Transcend
28:52 His thoughts on marketing
31:29 Speaking the customer’s language
33:52 Company building as a ‘spin-off’
35:18 Starting with the ‘why’
37:52 The power of foster parenting
41:20 Adam’s most important advice for emergent water sector founders
Links:
Burnt Island Ventures: https://www.burntislandventures.com/
Transcend: https://transcendinfra.com/
Water We Talking About?: https://www.wateronline.com/solution/water-we-talking-about
Quotes:
"I stumbled into water... It's just an unbelievably compelling industry for so many reasons."
"What you think may be the thing that's valuable to the customer may not actually be the thing that's most valuable to the customer."
"The presence or absence of water not only impacts how much food you can produce…but it also has a significant impact on the safety of the food."
"The worst thing that can happen for an entrepreneur is to spend a year, two years, three years and all of Burnt Island's money building this thing that no one is willing to pay for."
"We need more people from outside of the sector, no question. But I will say that part of the reason that innovation is a bit slower in this industry is that we have had people come in that are not water experts, that have said, 'I can solve all of your water problems,' but they're coming with a different lens."
"Listen to your customer.”

John Bertrand is our kind of founder, a wastewater engineer who has operated inside and outside the utility fence - he understands his market upside down. What he saw in his time in the utility world led him to wonder if the messy world of managing the constant stream of incoming data from utility customers - calls, text messages, 311 alerts, voice messages, web forms - could be automated, freeing up the dedicated professionals who traditionally handle this work to focus on more important tasks. And so, teaming up with his co-founder Ryan, they started Daupler, which now serves more than 85 customers - not only water and wastewater utilities, but full municipalities, police and fire dispatch, power companies, and restoration companies. There is a giant opportunity here to build the field operating system for the built environment. And John is consistently impressive, not only in pushing the company to the verge of 5 million in bookings, but the originality and logic of his thought. He really is a diamond. Please enjoy my conversation with John Bertrand.
Subscribe to The Fundamental Molecule here: https://www.burntislandventures.com/the-fundamental-molecule
For the full show notes, transcript, and links to mentioned content, check out the episode page here: https://podcasts.apple.com/us/podcast/the-fundamental-molecule/id1714287205
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John Bertrand, Daupler's Co-founder, takes a deep dive into the intersection of technology, utility management, and entrepreneurship as he shares his company’s transformative journey, offering valuable insights for emerging founders in the water industry along the way. His narrative illuminates Daupler's strategic evolution, focusing on aligning technological innovation with utility needs to revolutionize response management. Today’s episode also explores Daupler's role in enhancing operational efficiency and customer satisfaction, while discussing key aspects of technical and commercial expansion, providing a comprehensive view of the future landscape of utility management.
Episode Highlights:
0:00 Start
0:49 Introduction
2:01 John’s history with the water industry
2:39 Working for the utility vs as a consultant 
3:25 Consultants as ‘gatekeepers’ in the water sector
7:14 The problem Daupler solves
10:34 Daupler’s CTO and Co-founder, Ryan Rosenbaum
12:10 What Daupler does
14:36 Learning from an early misstep
16:47 Comparing Daupler with PagerDuty
18:56 Building Daupler customers’ operating systems
21:40 Moving into adjacent sectors
23:59 Creating a critical mass of customers throughout the US
25:58 What John has learned about marketing his product vs sales
27:33 Daupler’s moat
29:23 AI and its role in Daupler
32:04 The critical mass of data within water utilities
34:37 The current and future state of utility management
37:32 Going international
40:15 The one lesson John would pass on to emerging water founders
Links:
Burnt Island Ventures: https://www.burntislandventures.com/
Daupler: https://daupler.com/
Quotes:
"For most municipalities, that has the most pain, being the water or wastewater department.”
"You need to monitor the data, watch your trend, and then take appropriate action.”
"The data will be the real value."
"For most utilities, they are thinking about things in a proactive and preventative way because those are places of comfort where they can have control."
“Don't sell vitamins, sell painkillers. Change their life.”

People always bang on about disruption, and usually it's meaningless. Some very rare founders should bang on about disruption because they're actually doing it, but don't. I like to think it's humility, but more importantly, it's because they decided to go and solve a real, deeply felt problem in the market, usually in an overlooked sector, and happened upon a deeply powerful pathway of company building. Tyler Henke, CEO of Ziptility, is one of those founders. He and his team noticed that the market, and especially the software market, didn't build, excuse my French, anything useful for the people who make the small communities of America function - the utility operators. They were forced to run these systems according to whatever needed fixing that morning with post-it notes, bits of paper, and if they were lucky, a 1997 Dell PC. Tyler correctly saw the potential for an excellently designed, mobile-first, user-generated operating system that could help these amazing professionals do their jobs easier, better, cheaper, more collaboratively, and reliably. He's an amazing guy, and it's an amazing platform.

Subscribe to The Fundamental Molecule here: https://www.burntislandventures.com/the-fundamental-molecule

For the full show notes, transcript, and links to mentioned content, check out the episode page here: https://podcasts.apple.com/us/podcast/the-fundamental-molecule/id1714287205

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Tom is joined by Tyler Henke, Co-Founder and CEO of Ziptility, and together they explore Ziptility's groundbreaking journey in disrupting the water technology sector, addressing the challenges faced by small water and wastewater utilities across the United States. Tyler shares insights into the vast market potential within the US, highlighting Ziptility's focus on smaller to mid-sized utilities and their approach to trust-based sales, emphasizing genuine relationships and tailored solutions. He also unravels the layers of Ziptility's mission, focusing on such themes as understanding the utilities' world, building better tools for change, and fostering customer engagement and innovation.

Episode Highlights:
0:00 Start
0:49 Introduction
1:59 Tyler’s journey to, and with, Ziptility
4:48 Small water and wastewater systems
7:06 Developing Ziptility
11:41 Customer contact
14:40 Ziptility’s function, benefits, and market
20:37 Acquisition, and lifetime value, of customers
23:15 The stickiness of Ziptility’s customer relationships
25:51 Ziptility’s customer loyalty
29:45 Customer success now and for the future
31:58 Lessons learned about assembling a team
35:27 The future of software and other products for utilities
37:33 Tyler’s lesson for the next generations of water founders

Links:
Burnt Island Ventures: https://www.burntislandventures.com/
Ziptility: https://www.ziptility.com/