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

-----------

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?"