The Fundamental Molecule

We all know about the CEO in a company. When the company is small, the CEO does everything, and when it's big, the CEO sets the vision, hires the right people and makes sure they have what they need to be successful. But what about a layer deeper than that? Guillaume Clairet is a fascinating example of a world class COO. Now he's too modest to be known as the power behind the throne, but he's the guy that makes sure what needs to be done gets done. And it's an interesting time for him after both the $395 million delisting of H2O Innovation by Ember Infrastructure and their acquisition of NextEra’s Distributed Water business. Along the way, H2O Innovation have done things their own way and have built an exceptional business and this is a fascinating insight into the practicality of that journey. Please enjoy my conversation with Guillaume Clairet. 

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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H2O Innovation COO Guillaume Clairet shares his insightful journey through the world and business of water. He discusses navigating the complexities of public markets, mastering M&A strategies, and building robust recurring revenue models. Guillaume also details H2O's transformative acquisition of the NextEra’s Distributed Water business, a strategic move towards owning water assets and offering diverse customer solutions, and finishes up by offering his invaluable advice to aspiring water entrepreneurs.

00:00 - Water Technology & Entrepreneurship

01:50 - Erin Brockovich Inspiration

03:45 - H2O Innovation Origin Story

06:12 - Early Roles & Company Growth

07:30 - Value of Full-Cycle Experience

09:23 - Navigating Public Markets

11:42 - Transition to Recurring Revenue

15:16 - M&A Process & Integration

19:03 - Successful M&A Integration Strategies

21:01 - COO Role: Serving & Problem-Solving

21:53 - When to Hire a COO

23:04 - CEO Sequencing Operations

26:18 - Going Private with Ember Infrastructure

29:25 - NextEra Acquisition & Future Strategy

30:30 - Holistic Water Solutions Provider

36:14 - Advice for Water Entrepreneurs

Links:

Burnt Island Ventures: https://www.burntislandventures.com/

Guillaume Clairet: https://www.linkedin.com/in/guillaumeclairet/?originalSubdomain=ca

H2O Innovation: https://www.h2oinnovation.com/

SM Material

Key Takeaways:

"The CEO sets the vision. The COO makes it happen. It's a partnership of vision and execution."

"When you're a startup, you wear many hats. You learn every aspect of the business from sales to operations."

"Public markets teach resilience. They keep you on your toes, driving for performance and accountability."

"In acquisitions, integration is everything. It's not just about buying a company, but making it part of your own."

"A CEO should look at their strengths and hire to fill their weaknesses, making themselves obsolete in those areas."

"Being a COO means being accessible. It’s about serving your team and solving problems."

"In the water industry, patience is crucial. Progress is slow, but it's accelerating. Be ready for the long game."

"Focus on customer relationships. When you earn a customer, keep them by meeting all their water needs."

It's always worth paying attention to top-level consultants as crucial advisors to their usually enormous clients. They have their finger on the pulse of the practical needs of the market and are responsive when they see critical mass in an area. Sarah Brody runs the North American water practice of McKinsey, which she has restarted in response to considerable client demand from mega-cap corporates to private equity firms. The mainstreaming of water advice for major clients is a very interesting leading indicator of the increasing attention being paid to the fundamental molecule. Sarah is a proper intrapreneur and has done exceptional work building the business on behalf of her clients. She really elucidates the role that firms like McKinsey play in this sector, and she has an excellent water origin story. Please enjoy my conversation with Sarah Brody. 

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

The idea of an Overton Window when the conditions around a political issue change that in turn changes the nature of what is politically possible, is a useful one in assessing businesses. Sometimes conditions change enough in a market or sector that there is suddenly a significant window of opportunity for a founder to run through. We think that is the case with Michael Rigney, CEO of Cala Systems. They're building a next generation heat pump water heater, and if they're right, they could save billions of gallons of water, reduce US national emissions by 3%, and save domestic energy consumers about $23 billion a year. We talk about the nature of the water heater market, competing against entrenched incumbents, and rebuilding a well known consumer product from the ground up. He has major game in this segment and Cala are in a fascinating position. Please enjoy my conversation with Michael Rigney.

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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Cala Systems CEO, Michael Rigney, shares insights on the future of water heating with his company’s next-generation heat pump technology. He explains how predictive control and intelligent design are set to revolutionize the industry by optimizing energy efficiency, cost savings, and user comfort. Rigney also discusses the importance of strategic partnerships, the role of branding, and the urgent need for decarbonizing residential water heating to reduce global emissions.

00:00 Introduction

00:50 Overton Window and Market Opportunities in Water Heating

01:47 Why Target the Water Heater Market

03:21 Recognizing a Unique Market Opportunity

05:40 Early Steps in Building Cala Systems

07:15 Building the World’s First Intelligent Heat Pump Water Heater

11:02 User Experience and Intelligent Water Heating

12:42 Customization and Integration with Home Systems

13:29 Branding Water Heaters: Lessons from Nest and Opower

15:37 Designing Cala Systems’ Website as a Brand Statement

17:29 The Impact of Decarbonizing Water Heating

20:17 Building a Strong Team

22:17 The Importance of Hiring Slowly and Thoughtfully

24:02 Practical Innovation: Balancing Thought and Scrappiness

25:48 Building the Company You Need for the Future

28:01 Balancing Customer and Installer Needs in Product Development

30:32 Geographic Focus for Early Deployment

35:24 Transitioning to Founder and CEO Role

36:44 Advice for Future Water Entrepreneurs

Links:

Burnt Island Ventures:  https://www.burntislandventures.com/

Michael Rigney: https://www.linkedin.com/in/michaeljrigney/

Cala Systems: https://www.calasystems.com/

It's nice to have friends in high places, and in water, there are few places higher than the presidency of the Water Environment Federation, the core trade body for the wastewater industry. Ifetayo Venner and I got to know each other in 2017 when we both spoke at the opening session of WEFTEC, WEF’s annual gathering for the wastewater world, and we spoke in a cavernous room filled with about 5000 pros talking through our stories of how we got into water. Ifetayo’s was a lot better than mine, and no surprise. She is an enormously accomplished professional, Past President of WEF and a Senior VP at Arcadis, the massive engineering consultancy. She has led the creation of some very serious projects in wastewater, and I wanted to have her on The Fundamental Molecule to help us understand the role of engineering consultancies in the sector, what the world looks like from her point of view, the opportunities in infrastructure renewal, and of course, her own path through all of it. She really is great. Please enjoy my conversation with Ifetayo Venner. 

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

If I was to write a list of all the tricks we’re missing in water, it would be a lot, and somewhere near the very top would be lobbying - engagement with government on the federal and state level. I recognize we've made a lot of progress in the last five or six years in terms of securing capital for the required infrastructure renewal in the US, but there is a hell of a long way to go. But I look over the fence at energy, both legacy and renewables, healthcare, insurance, biotech, down to the gun lobby, and I can't help but think there is a massive gap between how effective we are in water and how effective we could be and how much more support for the fundamental molecule we would get if we were. Mae Stevens is a specialist lobbyist for water at Banner Public Affairs, and she recently joined us for our Founder Forum in DC alongside fellow lobbyist and longtime friend of BIV, Dan Kidera. She and he, they were both so good, and I wanted to have her on The Fundamental Molecule to help demystify this murky area of water at scale. Please enjoy my conversation with Mae Stevens. 

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

Jorge Richardson - Water Access, Reliability, and Selfies with Bono

Sometimes businesses pop up that take a bit of time to make sense. HOPE Hydration is one of those businesses. When I first met Jorge Richardson in 2021, he was chock full of confidence, like a lot of entrepreneurs in 2021, with an admirably aggressive plan, but I couldn't quite see it. And, fortunately, I was wrong. Make no mistake, this is an exceptional early company with the potential to transform a very large legacy part of the water sector. Jorge is also exactly the right person to build it. A rare combination of smarts, charisma, and a down to earth way of looking at the journey that can only come from a very specific blend of experiences, both positive and negative. We think they can be a huge part of the solution to the public water access problem, and this is a fascinating look into the early stages of building that solution. Hopefully, you'll get it faster than I did because we are seriously excited. They were our second investment in BIV Fund 2. Please enjoy my conversation with Jorge Richardson. 

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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Jorge Richardson’s journey led him to create Hope Hydration, tackling the broken water access system with fresh ideas. In 2021, he pivoted to focus on event-based water stations, quickly learning how to make a big impact with limited resources. By combining a smart, ad-driven business model with B Corp principles, Hope Hydration is redefining what it means to offer free, high-quality water everywhere. For Jorge, success is all about having the right people, a clear mission, and staying true to your values.

00:00 Start

00:49 Introduction

01:53 Jorge's Unconventional Path to Water Sector

02:18 Mission and Vision of Hope Hydration

04:50 Problems with Traditional Water Access Models

08:00 Transforming Drinking Water Infrastructure

11:10 Key Learnings and Pivot from 2021 Onwards

16:46 Understanding the Ad Business Model in Water Tech

20:45 Balancing Ads with Mission as a B Corp

25:27 The Power of Networking and Partnerships

29:43 Scaling Across Multiple Vertical Markets

35:38 Building Sustainable Competitive Advantage

41:53 Global Impact and Scaling Hope Hydration

45:23 Advice for Future Water Entrepreneurs

Links:

Burnt Island Ventures: https://www.burntislandventures.com/

Jorge Richardson: https://www.linkedin.com/in/jorgerichardson/

HOPE Hydration: https://www.hopehydration.com/

There's an old saying from east London: “Where there's muck, there's brass.” Essentially, what this means is that the management of the dirtier side of life is invariably an opportunity for a decent business. Sewers are a big business. There are a million miles of them beneath our feet in the US, and about 300 million of them need to be inspected and cleaned every year. A serious undertaking. Matt Rosenthal, along with his Co-founder Billy Gilmartin, is building SewerAI in order to massively improve the process, efficiency, and accuracy of completing these inspections, and much more besides. As you will hear, he thinks as clearly about the fundamental job of an entrepreneur and leader as anyone we work with, and his pathway to building SewerAI was as entrepreneurial, honest, and compelling as any you will hear. Fitbit's loss was US sewer infrastructure’s gain. Please enjoy my conversation with Matt Rosenthal. 

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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Matt Rosenthal, Co-founder and CEO of SewerAI, shares his journey from a chance entry into water tech to leading a company that is revolutionizing sewer inspection with AI. The discussion covers the challenges of scaling a tech-driven business in the water sector, the critical role of providing real value to customers, and the complexities of working with municipalities. This episode offers valuable insights into how innovation and AI are transforming essential infrastructure.

0:00:00 Start

0:00:49 Introduction

0:01:56 Matt and Billy’s entry into the sewer inspection industry.

0:04:00 Inefficiencies in traditional sewer inspections.

0:07:53 Market analysis and early mistakes.

0:11:02 Technical challenges in sewer inspection.

0:13:35 Combining skills to build the company.

0:18:19 Effective division of responsibilities.

0:20:50 Competitive edge through strong execution.

0:26:57 Leadership changes and hiring importance.

0:31:13 Series B fundraising strategy.

0:39:56 Thoughts on AI’s role and value.

0:43:54 Vision for expanding Sewer AI’s solutions.

0:46:31 Matt’s single most important piece of advice for future and aspiring water entrepreneurs.

Links:

Burnt Island Ventures:  https://www.burntislandventures.com/

Matt Rosenthal: https://www.linkedin.com/in/matthewrosenthal99/

Key Takeaways:

"The easiest way to raise a round is to build a kick-ass business. End of story."

"Provide value to your customers. Everything else just follows from that."

"If you can answer ‘yes’ to generating revenue and doubling it yearly, you're pretty good."

"AI is just a part of the value we provide. It's the whole stack that matters."

"We make people better at their jobs. That's what we do as a company."

"Extreme honesty and openness build trust and show success."

"Don't worry about building the business. Focus on providing value."

"My job is to make my employees as productive as possible so they can make our customers productive."

"The bar for excellence has never been so low. Do what you said you were going to do before it became inconvenient."

Peter Fiske has packed a lot into his career, from being a rare successful academic to entrepreneur crossover to his current role as head of NAWI, the National Alliance for Water Innovation. He's just someone who loves building stuff, and he's done a lot from building and selling PAX Water Technologies to setting up the infrastructure for the radically improved coordination of US research into water technology. He's also one of the most energetic people I know - game recognize game - and one of the best communicators. Please enjoy my really fun conversation with Peter Fiske. 

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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Peter discusses his journey from academia to entrepreneurship, applying academic research to solve real-world water issues, lessons from his first sale, and the future of brackish water desalination. He also highlights the need for decentralized water infrastructure and draws parallels with the energy sector's evolution. Emphasizing empathy, data, and collaboration in addressing water industry challenges, he notes that, as climate change impacts water resources, innovative solutions and industry cooperation are now, and will continue to be, vital.

0:00 Start

0:50 Introduction

1:31 Peter’s initial path into the water world

7:51 Moving from academia to entrepreneurship

19:56 Peter’s first sale and the lessons learned from it

22:46 Applying academic findings to relieve pain points

26:52 The future of brackish water desalination

28:34 Why doesn’t the US have a Department of Water?

29:51 Our main water problem

31:46 Public understanding of water issues

36:31 Water technology in the context of the S-Curve

40:30 Peter’s reflection on selling his business

43:57 His single most important piece of advice for aspiring water entrepreneurs

Links:

Burnt Island Ventures  

NAWI

Key Takeaways:

"Entrepreneurship is first and foremost a personal choice and a career choice."

"PhDs can be outstanding entrepreneurs. They are used to working extremely hard and are enormously resilient."

"Empathy for your customers is crucial. Truly hope that what you have makes their life better."

"Successful entrepreneurs are not risk takers. They analyze an environment and wait for the right opportunity."

"The water industry is an unusually cordial and collaborative industry. Seek ways of synergy."

"If you don't have data, you just have an opinion. Bring data to frame technical performance."

"Our climate is changing, and the principal delivery vehicle for those effects will be the water cycle."

"The future is already here; it's just not uniformly distributed."

It's well documented that we at Burnt Island Ventures love founder-market fit, but we really love it when it leads us to a founder and company that represents that fundamental leap forward in the operation of that market. Josh Mackanic is one of those founders. His two decades of experience in infrastructure has led him to build a platform people have talked about in the industry for a long time, but he and his team have been the ones to bring it to life. His deep knowledge of the infrastructure world is obvious in our conversation. We cover everything from the identification of the problem to how he thought through his fundraising process to how he sees the role of CivilGrid in unlocking a huge amount of friction in the wholesale infrastructure upgrade that the US requires in the coming decades. Please enjoy my conversation with the excellent Josh Mackanic. 

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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Josh Mackanic, seasoned infrastructure expert and founder of CivilGrid, shares his journey from managing large-scale construction projects at PG&E to creating a revolutionary platform for infrastructure management. He discusses his unique insights into utility operations, the significant challenges faced by the construction industry, his team’s design expertise, and the crucial role of meticulous planning in successful project execution. Explaining how CivilGrid preemptively consolidates vast amounts of site-specific data, our guest notes that this results in streamlining project design, and reducing costly errors. Finishing up, Josh shares his thoughts on the future of infrastructure, the impact of the Inflation Reduction Act (IRA) on the industry, and his advice for aspiring water entrepreneurs.

0:00 Start

0:49 Introduction

1:56 Josh’s journey to starting CivilGrid

5:42 ‘Dig ins’ and the potential issues with them

8:23 The problem he and his colleagues decided to solve

10:23 CivilGrid and its impact

14:25 Acquisition of a critical mass of data

16:20 Understanding your areas of strength and weakness

17:22 Learning about selling

19:24 The CivilGrid team’s exceptional understanding of design

23:25 Josh’s insights on fundraising

27:28 His perspective on the IRA, infrastructure, and the future

31:03 Retaining and ingraining values in the team members

30:31 Josh’s most important advice for future water entrepreneurs

Links:

Burnt Island Ventures: https://www.burntislandventures.com/

CivilGrid: https://www.civilgrid.com/

Quotes:

"Running a complex construction project is like orchestrating a symphony in an unstructured environment."

"90-92% of projects go over schedule or budget. Your biggest impact is at the design and planning stage."

"If you don't have customers, you don't have a business. Start with the customers and work backwards."

"Fundraising isn't just about money. It's about building the team and getting the right people aligned with your mission."

"Prepare yourself mentally and physically. The road is longer and requires more resolve than you expect."

We talk a lot about founder market fit. It's a crucial component of founder selection because of the simple fact that founders who really understand their industries are very unlikely to build something that people don't want. There is no gap between the perceived reality of their market and the actual reality of their market. An awful lot of venture funding is burned bridging that gap. Alongside his co-founder, Glenn, Paul Vacquier has built Beagle Services, a new generation of plumbing company, in direct response to his experience in attempting to roll out IoT units in the market, and it's going rather well. He is a powerful combination of litigator, salesman, and leader, wrapped in a cloak of relentlessness that is required for his market. And his market is rewarding his approach at increasing scale. You'll see why. Please enjoy my conversation with Paul Vacquier. 

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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Paul recounts his journey from litigation to launching Beagle Services, and discusses the importance of founder-market fit. He also highlights the challenges of innovating in regulated sectors, the strategic scaling of Beagle, and the value of applying lessons from his law career to navigate the complex water industry. Our highly esteemed guest concludes today’s remarkably informative and entertaining conversation by offering crucial advice on resilience as well as market insight for budding entrepreneurs in water technology.

0:00 Start

0:49 Introduction

1:56 Paul’s path to water

3:51 Law profession lessons and advantages

8:34 His experience with Contract Cloud

11:23 His time at Flo

14:25 What led him to Beagle

16:32 Beagle’s work and its importance

21:04 Beagle’s status now and in the future

22:53 Its ‘virtuous circle’ with the market

26:14 Beagle’s contact with underwriters

27:44 Managing Beagle’s level of scaling

31:03 Retaining and ingraining values in the team members

33:26 The sustained position of Beagle's business over time

35:36 The role of data in its business

40:13 Governmental and utility action of water efficiency

43:51 The advantages of Paul’s personal shift over the years

46:10 The importance of maintaining trust

46:49 What frustrates Paul about the funding market

52:03 Paul’s most important advice for future water entrepreneurs

Links:

Burnt Island Ventures: https://www.burntislandventures.com/

Beagle Services, Inc.: https://www.beagleservices.com/

Quotes:

"Every part of my law career taught me something valuable about deep diving into complex problems."

"The real job isn't just starting something; it's about continuously optimizing and adapting."

"In entrepreneurship, your ability to learn and adapt is as crucial as your initial idea."

"We need to bridge the gap between technology potential and practical application in the water sector."

"Being comfortable in uncomfortable situations has shaped how I approach business challenges."

"Innovation in water technology isn't just about conservation but also about infrastructure resilience."