How Gradiant Became the First and Only Water Tech Unicorn

The journey to becoming a water tech unicorn is no small feat. Simply put: it had never been done… until Gradiant achieved that billion-dollar milestone last year. Today, we’re exploring that journey and the learnings that we can all take out from this:

with 🎙️ Prakash Govindan – Co-Founder and COO of Gradiant

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Resources:

🔗 Will Gradiant succeed with H+E where SUEZ, Stulz, and Rena failed?

🔗 Gradiant’s website

🔗 The Global Water Awards 2024

🔗 Prakash Govindan’s LinkedIn profile

🔗 The 3 VCs that made money in Water Tech (the greatest success being… Gradiant):

🔗 Prakash Govindan on My Climate Journey

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Full Video:

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Is Gradiant the Water Company of the Year?

Gradiant’s approach, which diverges from traditional paths in the water tech industry, has not only led to a billion-dollar valuation but has also set a new standard for innovation and growth.

What does it take to rise to the top in the competitive world of water technology? Gradiant’s success can be broken down into seven key strategies, each contributing to their remarkable rise to prominence.

By the way, as we prepare for the Global Water Awards – where Gradiant is nominated as contender for Water Company of the Year – it’s worth taking a closer look at Gradiant’s approach, especially as they stand out among the frontrunners.

Insights to copy, paste and repeat!

This article doesn’t just recap their achievements. It’s a practical guide distilled from the insights of a leader whose company has seen double revenue growth, significant acquisitions, and the establishment of a strong global presence – all in a span of a decade.

For entrepreneurs and industry veterans alike, Gradiant’s story is a blueprint for success. By adopting innovative business models, focusing on rapid technology development, and fostering a strong company culture, they have charted a course that others can follow.

Join us as we delve into the strategies that propelled Gradiant to unicorn status and explore how these lessons can be applied to any company aspiring to make a difference in the water sector.

1 – Innovative Business Model & Focus on Proprietary Solutions

Gradiant’s path to success was paved by a distinctive business model, which prioritized innovation and tailored solutions over generic offerings. With a staggering 60% of their projects being sole-sourced, Gradiant’s strategic approach is clear: develop unique solutions that address the specific needs of each client without facing any direct competition.

This model is a departure from the norm in the water technology sector, where services and products can often become commoditized. Gradiant’s decision to create bespoke solutions from the ground up has not only differentiated them in the marketplace but also enabled them to build strong, trust-based relationships with their clients.

The Competitive Edge of Customization

By focusing on proprietary solutions, Gradiant has moved beyond the constraints of the typical bidding wars that define much of the industry. This has allowed them to command a premium for their services, reflecting the specialized value they provide. More importantly, it has positioned them as innovators in a field that is critical to sustainability and public health.

Innovation as a Business Strategy

Gradiant’s emphasis on innovation is not just about technology—it’s a holistic business strategy. It influences their approach to market analysis, customer engagement, and project management. By continuously seeking to understand the evolving challenges of water treatment and management, they are able to anticipate market needs and develop solutions that are not yet available anywhere else.

Long-term Sustainability

In the long run, this innovative business model is not merely a profit mechanism—it’s a catalyst for sustainable growth. By delivering solutions that precisely fit the complex demands of their clients, Gradiant ensures a lasting impact on their operations, promoting long-term relationships and a consistent demand for their expertise.

This section of the article would continue to explore the nuances of Gradiant’s business model, examining case studies where their innovative approach has led to successful project outcomes and discussing how this model has driven their growth.

2 – Rapid Technology Development: Embracing the MVP Concept

Gradiant’s ascent is in part due to their mastery of rapid technology development, centering around the concept of the Minimum Viable Product (MVP). This strategy bypasses the conventional perfectionism that can stall technology deployment, instead favoring a dynamic, iterative process that brings solutions to market swiftly.

Bringing Solutions to Life Quickly

Gradiant’s approach prioritizes functionality and speed over perfection. By focusing on creating technologies that are ready to address the problem at hand, they have been able to implement and test their products in real-world conditions much faster than competitors. This not only accelerates the innovation cycle but also allows for prompt customer feedback and subsequent refinements.

Real-world Feedback for Refined Technology

Deploying an MVP does not mean compromising on quality. For Gradiant, it means having the core components of the technology tested and improved upon through direct application. This real-world feedback is invaluable, providing data-driven insights that lead to better and more efficient solutions.

The Competitive Advantage of Swift Innovation

The speed at which Gradiant moves from concept to field implementation gives them a formidable advantage. They can iterate and improve upon their technologies while others are still in the development phase. This agility has been a crucial factor in their growth, allowing them to outpace competitors and solidify their position in the market.

This part of the article would further elaborate on how Gradiant has applied the MVP concept to specific technologies, showcasing the tangible benefits and exploring the broader implications for the water tech industry.

3 – Attracting and Retaining talent through Generous Incentives

Behind Gradiant’s innovative breakthroughs and business acumen lies a fundamental recognition: the true value of a company is in its people. Gradiant sets itself apart by not just attracting brilliant minds but also by retaining them through generous incentives.

A Stake in Success

Allocating 7% of the company’s equity for employee participation, excluding the founders, is a clear statement of Gradiant’s commitment to its workforce. This strategy not only attracts talent but also fosters a sense of ownership and investment in the company’s future. Employees are not just working for Gradiant; they are, in a very tangible way, partners in the enterprise’s success.

Beyond Compensation: Building Loyalty

This ownership mentality extends beyond financial gains. It engenders loyalty and motivates employees to go the extra mile. With a stake in the company, employees’ personal achievements and the company’s milestones become intertwined, driving performance and innovation.

Setting Industry Standards

Gradiant’s approach could be seen as setting a new standard for the industry. By sharing the fruits of success with those who help achieve it, they are not only building a dedicated team but are also sending a message across the sector: to retain the best, you must invest in them genuinely.

This section of the article would delve deeper into the ways Gradiant’s incentive programs have impacted their growth and how it reflects in their employee satisfaction and retention rates. Additionally, it would offer insights for other companies looking to bolster their talent management strategies.

4 – Building a Strong Company Culture and Team

A pivotal element of Gradiant’s success is its emphasis on cultivating a powerful company culture and assembling a team that’s not just skilled, but aligned with the company’s core values and vision. The dedication to nurturing a cohesive and driven workforce has been instrumental in their rapid rise.

Cultivating a Cohesive Workforce

Gradiant understands that a strong company culture extends beyond mere employee satisfaction. It encompasses a shared ethos that drives innovation, accountability, and performance. This shared ethos has helped Gradiant attract individuals who are not only top performers but who also resonate with the company’s mission to transform the water industry.

Aligning Values and Visions

The alignment of personal and corporate values fosters an environment where team members are motivated to contribute to the company’s goals. Gradiant’s leadership ensures that their vision for the future is not just understood across the organization but is also embraced as a common goal. This unity in purpose has proven to be a powerful motivator and a catalyst for collective success.

More Than Technical Skills

While technical expertise is crucial in the water tech industry, Gradiant places equal importance on the compatibility of team members within the company culture. They look for individuals who can contribute to and thrive within the company’s dynamic environment. By doing so, they’ve created a workforce that is agile, collaborative, and innovative.

In the broader scope of the article, this section would include insights into how Gradiant has developed and maintained its company culture, with examples of team-building activities and internal initiatives that reinforce their values. It would also highlight testimonials from team members about their experiences working within such a culture.

5 – Leveraging Acquisitions for Strategic Growth

Gradiant’s strategic approach to growth has been significantly augmented through targeted acquisitions. Unlike the traditional path of organic expansion, which can be slow and fraught with challenges, Gradiant has skillfully utilized acquisitions to rapidly scale its capabilities and market presence.

Strategic Expansion through Acquisitions

The decision to acquire rather than build from scratch has enabled Gradiant to enter new markets and enhance their technological offerings at an accelerated pace. Each acquisition is carefully selected to align with Gradiant’s core values and strategic goals, ensuring a seamless integration that maximizes the strengths of both entities.

Preserving and Incentivizing Talent

A notable aspect of Gradiant’s acquisition strategy is their focus on talent retention within the companies they acquire. Recognizing that the success of an acquisition goes beyond mere financial transactions and synergies, Gradiant prioritizes the integration of teams, offering incentives that ensure key personnel remain motivated and engaged. This approach contrasts sharply with the traditional view of mergers and acquisitions, where the focus often shifts to cost-cutting and downsizing.

Creating Synergies, not just Cutting Costs

Gradiant’s acquisitions are not just about expanding their footprint or diversifying their portfolio; they are about creating value through synergies. By merging their innovative culture and technological prowess with the specialized capabilities of the acquired companies, Gradiant has managed to enhance its overall offering and market competitiveness.

This strategy of leveraging acquisitions for strategic growth underscores a broader lesson for the water tech industry: growth can be accelerated by embracing the strengths of others and fostering a culture of collaboration and innovation. By doing so, companies can not only expand their capabilities but also solidify their position as leaders in the industry.

6 – Adapting Business Models to Market Needs

Gradiant’s remarkable growth trajectory is also a result of their agility in adapting their business models to meet the evolving needs of the market. Their ability to pivot and embrace strategies like the Build-Own-Operate (BOO) model showcases a deep understanding of client needs and market dynamics.

Embracing Flexibility in Business Strategies

The BOO model, originally borrowed from their customers in the Oil & Gas sector, exemplifies Gradiant’s adaptive strategy. By not just offering technology, but also taking on the operation and maintenance of water treatment facilities, Gradiant aligns closely with the operational realities and financial objectives of their clients. This approach has opened new revenue streams and solidified client relationships.

Learning from the Market

Gradiant’s success in applying the BOO model and other adaptive strategies is rooted in their willingness to listen to and learn from the market. By understanding their customers’ challenges and objectives, Gradiant can tailor their business models to offer the most value. This responsiveness to market needs is a powerful tool for building trust and loyalty among clients.

Creating Win-Win Situations

The adaptability of Gradiant’s business model goes beyond just meeting client needs; it creates win-win scenarios that foster long-term partnerships. This approach has proven to be a key differentiator in the competitive water tech landscape, enabling Gradiant to maintain a leading edge.

Gradiant’s ability to adapt and evolve their business model in response to market needs is a testament to their innovative spirit and customer-centric approach. This strategy not only ensures relevance but also drives sustainable growth and competitiveness in the fast-evolving water technology sector.

7 – Emphasis on R&D and Innovation Centers

Gradiant’s commitment to leading the water tech industry is exemplified by their strategic investment in Research and Development (R&D) and the establishment of innovation centers across the globe. These centers are not just hubs of creativity and invention; they are the heart of Gradiant’s operation, fueling the continuous development of groundbreaking solutions.

The Role of Innovation Centers

Gradiant’s innovation centers are strategically located in key markets and sectors, allowing them to stay at the forefront of technological advancements and market trends. These centers serve as a bridge between research and real-world applications, ensuring that Gradiant remains a step ahead in developing solutions that meet the evolving needs of their clients.

Driving Proprietary Technology Development

At these centers, teams of experts focus on the next generation of water treatment technologies, from PFAS removal to Direct Lithium Extraction. By investing in proprietary technologies, Gradiant not only enhances its competitive edge but also contributes to the global effort to address critical water challenges. This dedication to innovation ensures that Gradiant’s solutions are both cutting-edge and sustainable.

Global Local Leadership

By establishing innovation centers worldwide, Gradiant adopts a “globally local” approach. This enables them to leverage local expertise and insights while maintaining a global perspective on water challenges and solutions. It’s this combination of local understanding and global innovation that positions Gradiant as a leader in the water industry, capable of addressing the nuanced demands of diverse markets.

Conclusion

Gradiant’s journey from a promising startup to the first water tech unicorn is a story of innovation, strategic foresight, and unwavering commitment to solving the world’s water challenges. Through the seven key insights shared by Prakash Govindan on the (don’t) Waste Water podcast (see the episode on this page and the full transcript below), we’ve uncovered the pillars of their unprecedented success: an innovative business model, rapid technology development, a strategy for attracting and retaining top talent, a strong company culture, strategic acquisitions, adaptability to market needs, and a relentless focus on R&D and innovation centers.

These insights offer more than just a glimpse into Gradiant’s achievements; they provide a blueprint for water entrepreneurs and companies aspiring to make their mark in the industry. Gradiant’s approach demonstrates the power of combining visionary technology with strategic business practices to not only thrive commercially but also contribute significantly to global sustainability and public health.

Let me close by encouraging you to listen to the full podcast episode for a deeper understanding of the strategies and philosophies that have guided Gradiant to its unicorn status. The detailed experiences and examples shared by Prakash are invaluable resources for anyone looking to navigate the complex waters of the water tech sector.

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My Full Conversation with Prakash Govindan on Building the World’s First Water Tech Unicorn

These are computer-generated, so expect some typos 🙂

Antoine Walter: Hi Prakash, welcome to the show. Hi Antoine, very happy to be here. Thank you for having me. I can’t tell you how excited I am right now to have you because how often do you have the chance to interview a unicorn? If you’re in water like me, there’s only one and it’s speaking with you. So I’m super pumped up, but I like to identify your special source.

When I looked up your path, one may think that your special source is in your 250 patents, your 10 proprietary technologies, your rapid growth to 90 G turnover. Your status as the first and only water unicorn, your seven company acquisitions in just four years, or your 225 million Series D, which are topics I all want to cover today, but I think that’s still not your special sauce.

I would believe that your special sauce is your business model. Am I wrong?

Prakash Govindan: It is definitely in the mix. That is unique. I have a strong opinion on this, uh, you know, if you ask different people in Gradient, depending on their role, they might give you slightly different answers. What are our secret sauces?

For me, it’s the people I have technically and surely in terms of company culture and attitude, the best group of people I could have possibly assembled for me, that’s Gradient’s secret sauce. Not everybody gets to see it because a lot of these people are internal, not necessarily client facing or.

external facing, which is just a pity. I hope to expose a lot more people to the outside world over the next few years. So if you mentioned people, how many people are working for Gradient today? I got a comment about a month ago, about 1100 plus, which is scary. It was just two guys in a basement lab. 77 Mass Ave at MIT and, uh, 1100 people can believe it.

Antoine Walter: 1100 in 11 years, so that makes a crazy pace. We’ll go into the M& A part, but how many of those people come from your M& A moves and how many are the organic growth of gradients? Do you have figures or do you read, never separate those two?

Prakash Govindan: In terms of organic and inorganic, let me talk in terms of turnover revenue.

It’s easier that way. Towards the end of 2023, Gradient did its largest acquisition, H plus E variant, which you covered in a nice video and podcast. I think the title of the video was, will Gradient succeed? where Suez and all these others have failed. I love the title, by the way. Thank you. We will succeed.

But that was towards the end of the year. So not counting for H plus C, we did about 200 million in revenue last year. And about 87 percent of that is organic revenue. So only 13 percent is inorganic revenue.

Antoine Walter: Which will bring me to the question of why you did the M& A nevertheless. But I’ll keep that for later in the conversation.

Because for now, I’d like really to understand what the word look like when you started and what made you think you can change that? So what was the first thing you identified and which you said, that’s what we solve?

Prakash Govindan: One thing you have to understand about Gradient is, uh, it was started by two guys with little to no experience.

I have at least worked for GE on the combined cycle power plant site, but mainly new products. That’s my core forte is I develop really good products. So that’s my passion, solutions and products. Anurag very proudly says he’s never worked anywhere outside of Cranium. When we first came in, we saw a big opportunity.

in oil and gas in the U. S. because hydraulic fracturing was taking off in the U. S. The hydraulic fracturing method requires a lot of water and a lot of it was unknown and was ripe for a new company with new technology and fresh ice. To come in and disrupt at one point in our peak, we were owning and operating 25, uh, water treatment plants for Chevron, Exxon, ConocoPhillips.

But what we realized in that journey is we are really good at developing technology and solutions, especially bespoke solutions to solve exact problems. Second, our expertise is applicable way more than just oil field in the U S. Third, oil field is tied to factors which make it difficult to build sustainable companies in water, just focusing on the oil field, just on the U.

S. So we diversified. And after six years of just focusing of oil field in the U. S., Anurag and I started traveling to India, China, Singapore, and we won projects there. In flue gas desulphurization waste water. We won projects in pharmaceutical industry with black soul Smith clean. We won projects in textile in India and where, you know, others have went in, we could do better.

This was eyeopening for our clients. They didn’t think. The cost of water could be brought down for, for example, for zero liquid discharge systems in textile in India, which, which is a very difficult market because it’s a very price driven market, but we made a difference. So then we thought sky is the limit.

Antoine Walter: Sorry to cut you, but there’s a lot to unpack here and I’d like for you to take the time to unpack it. So before we go into this unpacking, I’d like to take just one step before, which is I’m nearly 200 episodes in. I’ve always said it takes time and all my guests have always said it takes time in that business.

And still, you are at MIT with Anurag in 2008. You start your PhD, 2012, you end your PhD, 2013. You found Gradient, 2023, you’re a unicorn. Between the time you start your PhD and the time you were a unicorn, there’s not even 15 years, which is crazy fast in this industry. I’d like to understand. The root of that, I’ve heard you speak about how you met Anurag at MIT.

What I’d like to understand is at what point do you think, Oh, that humidification, dehumidification technology we’re working on is so cool that we have to spin it out and we have to become entrepreneurs.

Prakash Govindan: We both have a natural inkling to be entrepreneurs. In fact, if ever we have to work for someone.

It’ll be very difficult to supervise us. We are self reliant, motivated, highly opinionated and risk takers. It’s one of those things, you know, sometimes you have a kid and you know, he’s going to be a musician. Ever since childhood, I have started. Out of my house in Chennai, I used to read a lot. The people who normally know this, I’m kind of a geek.

So I read a lot. I had all these books in my house in Chennai and I started a library from, from my house making some pocket money when I was a child, this was eight, nine years old, always had an inkling for this Anurag exactly the same. During our PhDs, we really hit it off. We wanted to work together. He developed a really cool technology, which was selected by Scientific American at that time.

It was one of the game changing ideas of that decade or something like that. Directional solvent extraction for concentrating brines. And I was working on this humidification, dehumidification technique, which on paper is much less difficult. Sexy than directional solvent extraction, but we are practical people.

I was able to, even during my PhD scale up the technique, I had some funding from the oil field to treat their produced water. I gave them reports. They were very impressed. And they said, why don’t you pilot this? Anurag and I had by that time decided we will do something together. So I went to Anurag and said, these guys want us to pilot this.

Should we raise some money? You know, we have never raised money before. Uh, Anurag, uh, Went and talked to everybody he could in the Boston ecosystem, MIT ecosystem, and a couple of MIT alumnus, Arunesh Cheshinesh, who was on the MIT board, gave us a check and said, here you go. Here is a million dollars. Do what you can just out of beliefs that these guys will do something good and we’ll treat him well.

And boy, was he right? He continues to be one of our largest. investors even today. So we went from strength to strength. We do have a vision and the vision is broad and bold and where the water industry frustrates me, honestly, is that lack of vision. The people who are sending people to Mars. are making electric vehicles are able to inspire and sell a dream to the general public.

Whereas something as important and fundamental to life as water, why is our industry not able to inspire others? We treat water as a life. to parts per quadrillion level purity. As microchips are getting faster and faster and the feature sizes are becoming smaller and smaller, we have to treat these waters to not parts per billion, not parts per trillion, parts per quadrillion level purity.

Now that is cool science. We at the same time also have to deal with waters which are so contaminated, such a complex matrix, which can only be created by artificial industrial processes. That range of the science that’s involved in the, in the range of purification that happens, it’s much more than dumbed down.

When people think of the water industry, somehow we have projected this image that we have some membrane or some filter which filters everything out. You and I know it is the farthest thing from the truth. We have, as an industry, failed to inspire and elevate water, which is our mission at Gradient now.

I’m an honest guy, I’m not gonna sit here and lie that. This is where we started. We had this big vision. No, we wanted a job. Okay. We had a person who offered us a pilot, but as we understood the industry and as we build a stellar team around us, the vision has grown to elevate water and ensure water for generations to come.

And fundamentally, everyone in the water industry, whether Sometimes we compete with them or not, should support us because this elevates the valuation of the entire industry and not just really,

Antoine Walter: you mentioned your first vertical, you mentioned this oil and gas, which somehow, and that’s a part of the story I didn’t have, which is that already in your time, during your PhD, you got signs that it was getting traction and that you had something and you had to go out and to spin it out.

At the time I was working for Suez. Produced water and shale gas fracking water was one of the topics where we looked into it. And then the decision was taken to say, Oh, you know, it’s not that much water and, uh, it’s a short time. So you can’t really do CapEx sales because they won’t want to buy your stuff.

We gave up on that. Would you say that we were wrong on that understanding? Or that simply we didn’t get that there was a huge opportunity in what you just said, that you owned and operated those plants. And that was the trick. Somewhere in between.

Prakash Govindan: I wouldn’t say you were completely wrong because, uh, as a large company, looking at all that you were doing and your expertise, it’s very different.

Uh, decision making compared to a startup, you know, people talk about the valley of death and technology development and getting it to see the light of the day. Focus is one of the keywords in ensuring that a solution gets to market and gains traction and is implemented practically. I’m not one to boast, but you know, how many PhDs Actually become products where it sees the light of the day.

Sometimes the reason is there is lack of focus and we wanted a market where we can focus. And this was it, this oil and gas market, right in our backyard, full of execs who were out of MIT, so we could connect with them easily and a whole bunch of other factors just drove us to go after that market, but we didn’t let it go.

The it’s not a perfect market. There are ups and downs. We picked a business model that. The client like, if you take our ENP customers at that time, they don’t own the rigs. They don’t want any of the equipment. They just have the mineral rights and they explore and produce. So why would they own the water assets?

That’s the reason we went BOO, not because of a big Eureka moment where we figured out that for the entire water industry, the BOO model works. And since then we have selectively used the BOO model in other industries.

Antoine Walter: But you mentioned industries and that’s the second part, which is, I don’t want to give the impression I was an executive at Suez, not at all.

I was the entry junior guy just starting the company at that time. And actually when I spoke with the senior guys, they told me, avoid the industrial space like the plague. That’s the thing you should not venture into because those guys don’t pay, they don’t have that much money and they’re short term.

Really, Go to municipal. You do exactly the opposite. And even when oil and gas starts to cool down in the US, when you branch out, as you mentioned, and you go to India and you go to China, you still focus industry, you don’t go into municipal. So what did you see there that the traditional players didn’t see?

Prakash Govindan: Less competition in combination with Our business model, especially at that time and even today, less competition and, uh, faster traction coupled with our ability to innovate and deliver bespoke solutions to each market. It was ideal for Gradient. I would have never survived if I wanted to compete with the suesses of the world at that time.

Today I do. Successful at that time on municipal treatment plans. First of all, municipal treatment is in many ways simpler. Whereas for example, zero liquid discharge. I have this t shirt, you know, Anuradh gave me back in the day. It says gradient on top and then it says variability. In the middle and in the back is, is, is the hallmark of industrial water or produced water.

It might have said produced water. I still have the t shirt somewhere. We could deal with that. You know, with municipal sewage and stuff, there is hardly variability. But if you take a pharmaceutical plant, right? Let’s say they are producing some kind of penicillin drug. They run the operations in batches.

And they use different solvents in different batches to optimize their operational costs for their production reasons. What that means to a person dealing with the wastewater is, you get wildly different water. In each batch and each batch is only eight to 12 hours long. So you have to build a water treatment plant, which can deal with both and adapt itself.

One of the fundamental tenants of gradient products, which makes us unique is the. Smart, adaptable nature of all products. Artificial intelligence being a part of it is, has been from day one incorporated into, and that’s why I got my PhD. I came up with a non dimensional number, which helped me deal with variability when it came to operators, humidification devices.

Antoine Walter: I’m jumping in the timeline. I’ll come back to here, but just because you mentioned artificial intelligence, you just, Branched it out of the main gradients, creating Turing. Can you explain to me what that is? So what happened is

Prakash Govindan: I started developing these methods in carrier gas extraction for continuously being able to deal with variability in water quality and quantity.

We developed methods, my team developed methods, which made it far superior than mechanical vapor compression and multi effective operation in those variable situations. Then I thought, why not apply it to membranes? And I started to do that. And at some point I met Mike Dixon who I knew at MIT, but I didn’t know what he was exactly working on with Cyanota.

And he had developed some of those things already. So that’s where our acquisition journey started. We went and figured out a way to join hands with Cyanota. And then Cyanota came on board. And there’s another company in Singapore called Space Age Labs who were doing really cool stuff with water networks and sewer overflows and preventing them.

So we brought them on board also. And at that point I had 60, 70 people. Working on the software side, the AI side of the business. And increasingly I was hiring software engineers and AI engineers and machine learning engineers and their pay scales are nothing like my chemical engineers and it became difficult for me to have all of that in the same company.

And also it required specialized. Leadership to focus on the software aspect of the business and the existing gradient investors who were interested in funding that separately. So we spun that out.

Antoine Walter: Let me go back to the timeline. You mentioned you’re branching out to now new industries because you’re entering textile, pharmaceuticals, uh, in Asia, mostly at that time, do you still have that, uh, single core technology, this gas carrier humidification, dehumidification technology, or do you also expand the technology at the same time?

So you expand in all the dimensions at the same time.

Prakash Govindan: We did. Carrier gas extraction was our flagship product for about a year of creating. That’s it. When we built the first, uh, produce water, zero liquid discharge plant in Pioneer Basin in Midland, Texas. We use the carrier gas technology as the core of it.

Even today, we deploy many carrier gas extraction systems, but even then we diversified into physiochemical systems. We invented CFRO, the first auto technology that can go to. up to saturation of salt. CFR, which is for the muggle, counterflow reverse osmosis, right? Yes. Yes. Some, some call it the osmotically assisted reverse osmosis.

I find that name to be confusing. So I use counterflow because, uh, regular auto membranes are crossflow and I’m a heat exchange person. So I wanted counterflow reverse osmosis. And we developed a ROI, which is semi batch. GWI put it the best when they said in one of our award nominations from previous years that nobody in the last 10 years has brought more innovations and technology into the water industry than Gradient.

I think that’s really true.

Antoine Walter: How many years of these 10 years have you not been nominated for an award?

Prakash Govindan: It’s not my fault. So 2012, when I was still at MIT, Town Pankratz called me and said, there’s this thing called Tech Idol. I said, sir, I can’t afford tickets to Sevilla and pay your registration fee. He said, okay, we’ll buy you tickets.

So we’ll pay your registration fee. And I won that Tech Idol award. That’s the most special because it’s the first award I ever got. Everyone, but then we build the zero liquid discharge plant for pioneer natural resources in the Midland Basin and that got nominated for industrial water project of the year.

And there were some really solid nominations that year, but we somehow still won that award. That was in Paris. We won. water technology company of the year. I think also last year one desalination company.

Antoine Walter: We’ll come back at the end to your nomination for this year, because I guess finally you’re in the main event.

So before that, I really want to understand your path. I’m coming back to, to that timeline. When you arrive in Asia, you don’t go at it the traditional way, which I don’t like. somewhat was to be expected from Gradient. A normal company would open a sales office and start pushing what was developed from the headquarters and then build from there.

You built a regional headquarter, which is almost your second headquarter in Singapore, which is also now your R& D center. So basically you said, not only do we want to be there, but we also want to develop there. What was the rationale for that move?

Prakash Govindan: At the core of what Gradient has to offer is my innovation centers.

They are more than just R& D centers. They are where I do application work, where I develop bespoke solutions for my clients. And while through the sixth year of Gradient, Anurag and I were every month traveling from Boston to China, India, and Singapore mainly, and setting up operations and winning projects.

It was a huge toll on our families. So we were thinking perhaps one of us at least should relocate to Asia. And I was thinking India, to be honest, that’s where I’m from. I’m from South India. For me, there’s no better place than Chennai in the world for all its flaws. So I was thinking of moving there, but the Singapore government at the global water summit, when we won the industrial water project of the year, they had a representative from their prime minister’s office and they approached us and said.

You guys are a very exciting company. You should come to Singapore and build an R& D center. At that time didn’t make much of it, but then later on, they followed up with us. They visited us in Boston. And they made a presentation of how this might work. So they gave us an incentive grant to develop an innovation center in Singapore.

So that’s why I moved there because at that time, uh, in gradients history, I was not necessarily involved with the business development side. I was focused on technology. And delivering solutions to my client. I would go for every single installation and commissioning. At the time I spent six months straight at our first serial liquid discharge plan that won that award that I mentioned.

And my wife’s was getting quite frustrated with me at that time. But my role has since significantly evolved because when I got to Singapore, I was the only person there for Gradient and I went out and started selling myself and I brought a core R& D team with me from Boston. Leaving some of my R& D team there to develop the center here.

And we have just gone from strength to strength because we had that R& D center. We can do things for our clients that Veolia and, uh, Suez back then and others cannot, because we, we can develop a bespoke solution about 60 percent of gradients. Projects even today are sole sourced for that reason. 60 percent of Gradients projects has no competition because we developed the solution from scratch for our client.

And we are following that same model again. Uh, we received a very generous incentive grant from Abu Dhabi investment office. So you, I’m talking to you from Abu Dhabi now, I moved again.

Antoine Walter: That was going to be my follow up question. When did you move to Abu Dhabi?

Prakash Govindan: Yeah, Singapore has grown from 1 percent to 120 people.

The Asia Pacific region, including Australia has. So I moved here now because I have people who are excellent at running that and I’m building an innovation center here. They already have projects with the local tannery and the TSA polishing industry units.

Antoine Walter: I have to pick on that one. You mentioned 60 percent of your projects don’t have competition because you’re developing the solution for the customer.

Yes. Does that mean that purchasing departments hate you? Not necessarily. They always want to go to offers, three offers, that parts of their job description, so you’re, you’re killing their job.

Prakash Govindan: I haven’t come across purchasing people who necessarily hate us. We work with them on terms and. Our pricing is reasonable.

And for one, we take away their capital concerns in many situations. Like, you know, we do a lot of build and operate. So we bring the capital to the table. In some ways, we are the favorite of these purchasing people because we are not taking away from their budgets. They only pay over a period of time.

I’ve never been asked that question. Very interesting.

Antoine Walter: These 60%, is it like a picture as of now? How’s the trend evolving? Because I could imagine, here’s what I would figure out. I would figure out that when you. Start out in oil and gas produced water coming with the BOO, which you said you stole from your customer as a concept, which is a super clever idea.

I could imagine nearly 100 percent of those deals must have been proprietary, but then as time goes and you enter into the larger ocean, the larger markets, you start competing with the others, which means you don’t only go on the projects you’ve cooked, but you also go to the ones which are a bit more open, where you can bring your creativity or technology and your potential.

excellence in operation. So I would imagine that those 60 percent number is doomed to go down with time.

Prakash Govindan: It will go down, but it’s not going to get to 5%. Let me put it that way. It will go down to ideally 50%, then no more than that 40%, maybe. I’ll give you some examples to highlight why it’s sole source.

GlaxoSmithKline, I have permission from them to talk about this. They came to us. with a problem. Uh, they had an amoxicillin production facility. This is a 30 year old facility in Singapore. And over time, their solvents have evolved and, uh, become different from what they were using before. The salt content in their wastewater had significantly increased.

So their existing plants did not work. By the time I got to Singapore, they had already done an RFP. Three companies, all of whom you will know, large companies in water, all of whom you have interviewed in this podcast forum. I’ve listened to their nice interviews. You can give names. I don’t want to say anything bad about anyone.

If there’s one thing we like to put out good vibes only. They had given proposals. for zero liquid discharge systems and minimum liquid discharge systems to eliminate this issue, but nothing fully solved their problem. Because as part of concentrating this water, some combination of solvents was precipitating out as a tar like substance.

So I got there late. I didn’t participate in the RFP. I didn’t know about that message. But Shankar Natarajan, who was our global head of sales today, who was at Siemens at the time, said that Siemens did not bid on this. I knew him, so he came to me and said, you’re here. Why don’t you go and talk to GSK? So I talked to GSK.

They were not happy with any of the bids. They said they’ll give me a sample. They, I said, I need a throat of water. And I brought one of my CGE units from the U. S. I set it up within a month of me arriving there and I started testing myself at the end and a couple of other people had moved at that point.

And then I brought them in and I showed them the results and I showed the star like substances precipitating out. They asked me, what are you going to do? We chemically developed a solution to Delay the formation of the same. And we build a larger scale system in the lab by that point. And I tested again and I showed them and then they said, uh, can you engineer a large scale system, a 15 million system to treat this water zero liquid discharge, and I said, I have to be paid for that.

So they paid me some amount of money. I engineered the system, then loaded and, uh, I use my U S engineers at the time, but we are this funding has started hiring in Singapore and building the team out. From there, I had a full blown set of engineers at the end of it. And they gave us the order for the 15 million system.

No other company was invited at that point. Uh, I’ll give you another example. Also, there is a semiconductor client we are working with in the U S we bid along with others on the effluent treatment plan for the semiconductor, but what gradient did was we proposed, uh, complete recycling, 99 percent recycling of the waters to the extent.

that becomes fee for the Ultra Pure Water. So because we proposed that and our life cycle cost of water was lower than others, not only did we win the wastewater, but we also won the UPW as a consequence of that, because then they have one neck to squeeze, as some of my American friends like to say, because we would produce the fee to the UPW, we would operate the UPW and deliver the Ultra Pure Water.

Antoine Walter: What’s the barrier here for others to do the same? Is it your 250 feet? Patents or is it the people? It’s the people and the solution capability.

Prakash Govindan: The patents are from the people. So it’s, it’s just a byproduct. It’s the people. I have the best solution development team in the world and nobody leaves Gradient, our company culture is such that all the top people I’ve hired, the first six people who left MIT and started Gradient are still at Gradient.

It’s one thing I’m very proud of. Gradient leaves a positive impact in the life of our employees.

Antoine Walter: I have a question to which I would understand if you don’t answer. So I’m just curious. Do you also give participation in the company to your employees? Yes.

Prakash Govindan: So a company like us in tech, for example, in the Silicon Valley, which has raised about 400 million.

Total to date as a unicorn has done series B level funding, normally would have one to one and a half percent owned by employees. We have 7 percent and that doesn’t include Anurag and me, of course, as founders. We own a huge chunk also. We believe in our people. We have been always good at giving stock options.

Antoine Walter: You mentioned huge chunk. How, how huge is that chunk, which you still own with Anurag?

Prakash Govindan: Well, we’re fine. Let me order it that way. We don’t need for anything.

Antoine Walter: As we are on the money raising topic, I had a discussion on that microphone with Brian Iverson from Simra Capital, who said that venture capital Doesn’t have a proven track record of working in water.

And he challenged me to look into which VC in the world might contradict that thesis. And to give him credit, it’s pretty difficult to identify one which would really food the bill. Yet. One of my hypothesis is that Keith Wilson, who’s on your board from Cranberry Capital, who invested in Gradient in 2013, I’m making really wild assumptions, but I would assume that by now, and I know it’s fictive because you haven’t exhibit, so it’s still valuation money, but she would be around 20 to 25 x on his initial investment.

Prakash Govindan: Oh, much more than that, .

Antoine Walter: Much more than that. Okay.

Prakash Govindan: Much more than that. Uh, Keith is the partner of Arunas Chesanas, the person I mentioned earlier, the MIT alumnus who started PayTech and is one of our mentors till today and who gave us the first check. He is in my opinion, the only successful VC in the history of the water industry.

You might have fun having him on the podcast. I don’t know,

Antoine Walter: I reached out, they haven’t answered me yet, but maybe you can help me with that. If you have the proof that one VC is the successful one, then that’s the one I want on the podcast. So on that funding path, you’ve raised last year, your series D for 225 million.

I think is record breaking. Pretty obviously in that sector, I think your series C was already a record breaking with the 105 million. What’s next? Is it a series E, which makes you a dick at corn? Is it an IPO, which might be challenging because of your initial business model, even though you said it’s not the only one, but which is pretty cash intensive.

Are you still a size where a major could acquire you or are you already too big?

Prakash Govindan: We are unusual. In the sense that Anurag and I have never dwelled upon and sat and strategized how we will exit. You might think this is not music to the ears of my investors, but it is. The investors we have brought on board, without exception, each and every one of them, want us to, Build the most impactful water company in the world and the exit side of it for, for them will naturally come.

That’s what they believe. That’s what Gradient believes. We have done IPO readiness. That doesn’t mean we are IPOing in it in the interim. See Anurag and I are entrepreneurs and you know, SOPS compliance and these things are not very attractive to us. Anurag often jokes, I’ll get fired shortly after we IPO, which might or may not be true, but, uh, We want to be a process driven company and have excellent internal financial controls and processes.

So we brought on board Govind Arappan, who was the CEO of Evoqua for this Asia Pacific division, and he has built this gradient growth engine around which he is building these processes to get us super organized. And not snobby in any form or shape as a company internally or externally. We have invested in IPO readiness.

There is tremendous interest because every fund from BlackRock to the smallest fund in the world wants to put money in water and the opportunity to put equity in companies is very, very less. Especially they want to invest, you know, a billion dollars. And there are not many companies that they can put that money into.

Of course, there are projects they can invest in, but the economics and the upside of projects are very different. The risk profiles are very different to equity investments. So the equity focus funds want to put that kind of money in. Gradient, we’re very fortunate in a way that. We have become a natural first options for, for those people.

The decision around fundraising will be purely business based. One of the gradient growth engine initiatives is to build a centralized manufacturing center of excellence. which is produce most of my water treatment systems in one place, not just systems, but also produce components store and also produce some components.

For example, we make our own CFRO membrane. We buy our own membrane and we modify the surface to make CFRO membrane. And we are into chemicals also at this point. We want to produce that in one place, test the systems, their disassemble, send it to site. and assemble at the site. So that’s going to be a big initiative for us.

Uh, we are picking the location. There are multiple offers on countries coming forward to offer us incentives to centralize this in their place,

Antoine Walter: obviously

Prakash Govindan: for local employment and economic growth reasons.

Antoine Walter: Would you branch out at that point into municipal or would you stay in your industrial lane? You’re based in Abu Dhabi in that region and having a technology which earned you the title at some point of desalination company of the year, one would think that one natural evolution would be the municipal market.

Prakash Govindan: We have multiple CFRO units in desalination plants in this region. We are taking seawater auto brine. And we are producing fresh water until the brine reaches 120, 130, 000 milligrams per liter. We are able to do that at roughly the same cost of water at Seawater Railroad. The advantage, of course, being you don’t have to build new pretreatment.

You don’t have to build intakes and outfalls and permitting. It’s easier. We don’t want to do anything undifferentiated. I don’t want to compare. See, Metito, for example, great company and also nominated for Water Company of the Year. Other than competing for that award, we hardly compete with Metito on nothing because I don’t want to be another Metito, I don’t want to be another Veolia even.

Gradient, for the lack of a better analogy, is the Google of the water industry where we are building differentiated solutions which make an impact for our clients.

Antoine Walter: Okay, you’re the Google of the water industry. At some point, the founders of Google We’re no longer the best executives to run the company.

Do you think that might happen to Gradient at some point? Would you be ready for that? And what would you do at that point?

Prakash Govindan: Absolutely. It will happen to Gradient, but Anurag and I have core strengths, which can contribute not just from a CEO, COO perspective, but, uh, you know, uh, from other perspectives, we already have handed off the P& L responsibility globally.

To go in there and open, we have brought on board and then put the Norbin who used to be CFO of a division of GE water, and then he was CFO of a part of Siemens, Evoqua at some point also. So we have brought on board people who are day to day running the company, but at the same time, Manohar and I are not just evangelists.

We have core strengths where we can, I am developing markets. So this whole region is under me. I’m developing this region, but also involved in technology and product development. The next product PFAS. And, uh, we have a pilot, which we are currently operating on that direct to lithium extraction systems.

I have a product roadmap, which I don’t want to fully reveal.

Antoine Walter: But I want to discuss it because I heard you mentioning PFAS. and lithium. And if you look at, I mean, still follow the money, look, uh, where investments are going. PFAS and lithium are two verticals, which right now are very healthy investments, also pretty out in the market.

I see it as a natural step for you to go into PFAS, because you’ve been into AOPs from the early stages of the company. So that sounds like a natural field to go within. I was a bit more surprised to see You branching out and pushing into DLE. I acknowledge that there’s a ZLD element inside lithium, but that would be lithium refining.

You’re interested in the direct lithium extraction, which is this early step. Which one do we take first? PFAS, lithium, you pick and explain to me what got you attracted there and what you can reveal and what you cannot. I respect that.

Prakash Govindan: Very interestingly, like a lot of product development at Gradient, It came via customers coming to me with problems.

SlumberJay, who we have worked with extensively in the oil field when we started the company, they came to us and said they have this SlumberJay new energy division and they have bought assets. in Nevada and South America for developing cellar brines, lithium brines. And, uh, we have an exclusive arrangement with them where we mutually exclusively deploy Gradient technology for them.

We’re first using their own DLE vendor. There were challenges with piloting of that vendor. Gradient, uh, you know, that way we can do better, sorry, not to be arrogant, but we have core expertise. around removal mechanisms, which are similar to capturing lithium in other areas. So we got into that and we are currently piloting our own method for direct lithium extraction.

Antoine Walter: So Clayton Valley in the US?

Prakash Govindan: Clayton Valley, yeah. I’m connecting the dots. You’re too well connected. Maybe I shouldn’t say so many things to you. PFAS, our microelectronics client came to us. They have been under scrutiny from. Local municipalities. Microelectronics by the way, is the largest vertical at gradient this year.

We have about 550 million in signed contracts at the beginning of the year. And about a third of that was microelectronics, including a very, very large project in the U S which I briefly described earlier. So they came to us and said, you know, how come you guys are not in this PFAS thing? So we got into that.

We didn’t, uh, thorough review of the landscape and one of our genial R& D guys developed the method to destroy PFAS very, very efficiently. And we are the requisition of H plus C. There is the aqua crotox technology that Carl Michael Miller had acquired several years ago from Ireland into H plus C into Aquarian that fell in our lab.

And David McGarry, who will be presenting at Tech IRL at GWI this time, is the one championing that for about a decade. And that’s perfect for PFAS world also, the structure.

Antoine Walter: That means that for PFAS, you’re going down two alley, either electrochemical routes. And, um, I don’t know what’s the latest with Aquacritox, if it’s oxidation, but those are the two alleys you’re going.

You’re not picking a champion and saying that’s the one who will win.

Prakash Govindan: So I believe in two things when it comes to product development, minimum viable products are super important. If there is one thing Gradient has been successful in the field, it is getting technology to market fastest, faster than anybody else has in the water industry.

The reason is the philosophy of minimum viable products. Even if it is not perfect. If it can sufficiently solve the problem, get it out into the field and test it. The second is I believe in optionality. This is how I live my life. I like optionality and everything. I never begrudged subway for asking me to select between 16 breads and 17 different types of vegetables.

That’s what I like. When it comes to product development, nobody has a crystal ball. There are people who. Can predict better than others, but nobody has a crystal ball. And one of these technologies might not work in a pilot. So how,

Antoine Walter: I guess that exemplifies your analogy to Google, because that’s exactly Google’s approach, which you’re, you’re using here.

If I continue on that analogy. Google is sometimes pushing out products which end up not meeting their markets, and then they are very strict with that and they cut them. So which products did you have to kill?

Prakash Govindan: If there are not restraints put on me, I can go crazy. So the killing happens internally and most of the time by a Iraq

I, I, I, I would like to publicly say, I’ll be great him for this, doing this to me, but I had this excellent idea. I had a. A friend of mine who joined Gradient, she had this amazing idea to use the maple seed design to develop a hydro turbine. You know, if you talk to Tom Fankhurst, he’s seen a prototype of this for tidal power applications.

It is bi directional, but it’s totally business wise, doesn’t make any sense for Gradient to have developed it. I still developed it. I don’t regret it, just to be clear. I didn’t spend much money also. That friend of ours is now. Doing it on her own outside Gradient. We wish her luck. But we screw up. That’s what you’re asking.

Antoine Walter: I’m not asking if you screw up. I’m just asking if you know a lot of entrepreneurs stay with their ideas a bit too long. I guess it’s also good business acumen to be ready to say we’ve tested it. It’s probably cool technology, but it doesn’t meet what needs to be for the company. So we had to cut it out.

So that was just the aim. I wasn’t asking you to, to reveal the skeleton in your, in your coffin.

Prakash Govindan: We have a, a committee based decision making mechanism for product development, because I fully recognize I have my blind spots, but I have these experienced people in the team and I have Anurag who is the best sounding board.

Together we’ll decide to move forward with something. Whatever goes to market. What other we have piloted, per se, is a hundred percent so far.

Antoine Walter: That’s what one important topic I’d like to cover with you. With you is your m and a. You mentioned Sinoa and and Space age Lab. I think those weren’t your first moves because your first moves are back in 2020.

when you acquired CRS Water and Sigma Water Engineering. Yes. Most of your acquisitions have been in Asia, and we’ll also discuss the European one later. But when did you realize you had to go that inorganic route? How do you start the process? And what do you learn on the go?

Prakash Govindan: We came to that realization around, uh, just before the pandemic.

We had worked so incredibly hard to get our India and, uh, China divisions. And then Singapore up and running organically in terms of ambition. Sky is the limit for the founders of gradient. So we wanted to be in other applications and be in other countries. We realized it’s impossible to get into everything organically.

I’ll give you a specific example, right? In my backyard at the time I was living in Singapore, right in my backyard, at the time, there was some very, very good zero liquid discharge products being paid out. In Malaysia, but we couldn’t, uh, win the first two or three that we participated in. And the reason had nothing to do with our technology or solution capability, but rather that we were not there.

And for me at the time to have started organically another division in Malaysia would have been too distracting. Even though Gradient is in 20 countries, we’re still a very focused company. We’re still a startup in that sense. We met this, uh, genial, extremely likable gentleman, Tanjore, who had previously sold one of his companies to H2 Innovation in Canada, and he was running a very neat little operation out of Kuala Lumpur, Sigma Water.

We figured out a way to, and we don’t acquire like others do. We don’t have the arrogance. To say that we know how to buy a company and take it from here to here without the help of the, uh, people who build it already. So in all of our m and a, we find a way to keep the people who build the company and we incentivize them to make the company go from here to here.

Uh, Sigma order again is a great example. When we bought them, they were maybe six to 7 million in sales. Average project science was somewhere 800,000 to a million dollars. And today they are. 30 plus million in sales. I would average project size is 5 million. We incentivize them. We give them readiness and excellent balance sheet, as you can imagine.

So we, we give them the ability to get a debt so that they can get bid bonds and performance guarantees, which they previously could not from their own pockets. We give them technology. So more than ever, Sigma water is deploying zero liquid discharge technologies in Malaysia and every one of our acquisitions have been super successful in that way.

They have all grown tremendously. H plus C being the most recent and my favorite.

Antoine Walter: How do you deal with H& E? H& E has that. Super long history. And as you mentioned in my own YouTube video about it, I had to underline how it’s not the first time they got acquired and, uh, so far it’s never succeeded, but also my conclusion was that if someone was to make it happen, that’s probably you.

So you see, I’m rather positive on that story, but I’d like to see what’s your feedback some months down the line.

Prakash Govindan: So we have cleared all the debt. Of HPC. We have brought in a huge project semiconductor, the largest project in their 80 year history as a company. And even though they had the technical expertise and the people, oh, the people, fantastic technical people at HPC equal to gradient.

There is none of the other stuff we have done. The technical people have been equal to gradient. For example, there is Michael Winch who, if you ever wanted to talk industrial water and technology and process. 30 plus years at HplusE, fantastic. So they had that capability, but they were going to lose that project to, I think, Ovivo because the balance sheet was quite weak and they had not paid off their suppliers.

So Govind Bhargavan, the global P& L head of Gradient stepped in, went and met the project management company, went and met the end user, and he figured out a way to use the Gradient balance sheet to get a surety bond, which helped HplusE. And we won that project. The winning projects. They lost people in the past, very unfortunate, very good people who stayed for 10, 20 years plus to Veolia and Obivo and others, they’re coming back.

If any of them are hearing this, uh, podcast, uh, you’re all welcome to come back to Hplz because they loved the company, but they couldn’t stay because of the financial risk in the past. There’s no more financial risk. We have paid off all the suppliers. There is no debt in the company. We have 120 million in order backlog and hopefully signing more through the year.

Antoine Walter: In your strategy, when you’re opening a new geography, usually you also open a new center, which might be center of excellence, if you were mentioning, or innovation center. I mean, what you did in Singapore and Abu Dhabi. Now that you have H& E on board, which to me indicates that Europe is of interest. Yes.

Does that mean that you plan on opening something the like in Europe?

Prakash Govindan: Yes, we are discussing with German and Dutch, uh, government groups, uh, to support, uh,

Antoine Walter: I wanted to guess Germany and Netherlands, but yeah, it’s the obvious one usually,

Prakash Govindan: but we also have started quite a partner with the local company who I can’t name yet because the deal is not announced quite a wonderful look.

really well put together integration, uh, workshop, manufacturing center in Itu, outside of Milan, where we are planning to be producing for H plus E.

Antoine Walter: So that means that your M& A spree is not over. You will further do inorganic growth.

Prakash Govindan: Yes, but, uh, it’ll be different than before. We no longer need to acquire to enter markets.

There are other strategic angles. Uh, where we want to go deeper. So we are looking at some, my team is, uh, flat out integration wise. Uh, we have an integration manager for each of these projects. And we also just implemented SAP across the company. I don’t want to overburden them. So I’m not buying anything for a few months, but then you can never keep me down.

Antoine Walter: Usually the point where you implement SAP is the point where you’re no longer a startup because now you’re into that. But that’s my vision, which is really personal because to me, that’s, that’s That’s the kind of software, which is,

Prakash Govindan: it’s not cheap. Yeah, it’s a, it’s multi million dollar investment. Uh, and it requires the processes to be set in place.

Not just, uh, ERP, but we are also implementing HRIS. Uh, we’ve always had a good CRM system.

Antoine Walter: So. enjoy a lot speaking with you. I have to manage your time though. If the people who listen to that are not yet convinced that you’re the water company of the year, and I don’t get why they wouldn’t be convinced at that stage, but now you have to give them three super strong arguments.

What would them be?

Prakash Govindan: We elevate the industry. That would be my first and foremost argument. That is going to be. More and more unicorns and water. There’s going to be 40 year old family companies, uh, which are going to get to a billion dollars in valuation, not to be arrogant, but, but realistically speaking, riding the coattails of gradient.

So we are good. We are good for the industry. If you don’t want to vote for gradient, this is the second time. We have some of the nicest, friendliest people who deserve this recognition, even more than Amarav and me. A good example is Hipli, the nicest guy in water, but, uh, CTO of Osmo Flow previously, and so many others like him.

Loyal, hardworking, competent to be extreme. The third is, um, Oh, we are nice people, work for us.

Antoine Walter: That’s a good one. That, that’s honestly a good one. I, by the way, take the opportunity to apologize to Hippley because he was in a webinar with me around the time when you acquired H& E and I really pushed him because I wanted to have some insights.

And of course, it was in a phase where you’re not allowed to give anything. So I was really, the bad French guy in that. So apologies to you, Hip, if you’re listening to that. No, I push him all the time. So it’s okay. We are in the same, same place. Prakash, thanks a lot for the openness in your sharings in this deep dive.

It’s difficult for me to take position and to say who should win and who should not and who am I to say something like that. But is there another, Unicorn in the water space. Today, no. When did you become a unicorn in 2023? So if the aim is to crown the company of the year in 2023, without giving names, I don’t see who else would qualify.

So that’s just my two cents. If that’s fine with you, to round off that interview, I have a set of rapid fire questions. Absolutely.

Prakash Govindan: Before we go into rapid fire, I want to say I really enjoy a podcast. I don’t do many of these. I’ve only done one of these before with. Uh, my climate journey, because I, I found that podcast to be really good.

Uh, you have interviewed pretty much everyone else except Gradient before. And the reason is we are quite shy about this, but you do a really good job. I really enjoy listening to you on Spotify and stuff. So, uh,

Antoine Walter: really appreciate it. And I, I will link to the podcast you did with My Climate Journey in the show notes, because I listened to it.

It’s a really great one in preparation for our conversation today. And they raised a question, which I didn’t as on purpose. It’s a really. Cool episodes. I recommend it. It’s in the show notes. I propose you the rapid fire questions, which are a new set, which you haven’t heard yet, so you can’t be prepared to, to those

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Rapid fire questions:

What is the toughest challenge in your opinion for a water tech startup? Commercial attraction. What would be your best single piece of advice for the founders and managers of the about 1000 early stage water startups? Focus. What’s the drop of knowledge you wish more investors knew about the water sector?

It is extremely important. Don’t they know that already? That it’s important? Knowing it and knowing it. That’s a very good one. What was your most unexpected partnership and what did it bring you? SlumberJay, uh, lithium. It got us into the lithium market. We are now one of the market leaders. We have to, to, to follow up with that at some point.

I took some notes, but you can’t share everything about it. I understand that yet. Super short, profitability or growth? Growth. I’m American, sorry. What’s the next profile you’ll hire? A global head of manufacturing. When you hire, are you looking for sector experience or startup experience? More than those two.

Attitude. Which makes fully sense with what you said about what’s the special source of great in the people. I guess now you have to find the people who fit with the people. If not, you’re destroying your special sauce. Opening new markets or doubling down on the current ones? Doubling down on the current.

What’s the That tool nobody speaks about, but you couldn’t live without. Artificial intelligence.

Prakash Govindan: And to be more specific. There are three tenets to Gradient, sorry to take a longer answer. Solution oriented listening, listening to the customer and solving their problem, not throwing stuff that we have at them.

System wide expertise, which others have, but Gradient has specialized system wide expertise and artificial intelligence. This is the third tenet of Gradient.

Antoine Walter: What’s the single piece of insight your ideal customer profile needs to hear right now? What are you desperately needing and want to raise an open call for right now?

You? Gradient? I don’t desperately need it, but I can’t think of anything else. I see and what can and should I do for you? Come back and talk to me in you. I enjoy the chat. That’s a good one. My calendar is open in one year, so I’ll send you an invite. . Prash, it’s been a pleasure. Thanks a lot for the openness and for everything you shared today.

If people want to follow up with you, what’s the best place to redirect them? Uh, www dot G-R-A-D-I-A-N-T gradient. So as always, the links to the website are in the show notes together with your other appearances. I just. Notice that you’re usually the media spokesperson. And if I get it right from your interview with My Climate Journey, Anurag is more the, the guy who speaks with investors.

Is it true or how did that come, come up?

Prakash Govindan: It is, my wife finds it extremely weird that I am the media spokesperson because I am, I’m not articulate or, Any of the things you want, uh, I am the anti Steve Jobs. And Anurag is way more articulate, but he’s more shy. Investors are his thing. Customers are also. It just

happened.

No particular reason.

Antoine Walter: Well, I look forward to, to see you probably in the flesh at the Global Waters Summit, and to have the SQL interview to this one in one year. To, at that time, check how you’re a dick at Korn by now. Looking forward. Thanks a lot. Take care. Thank you.

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