How to get Water as a Service, Below Utility Prices, with Zero Money Down

with 🎙️ Matthew Silver – Founder & CEO @ Cambrian Innovation

💧 Cambrian Innovation is a revolutionary provider of distributed wastewater treatment and resource recovery solutions.

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What we covered:

This is the second (business) part of our first interview, that addressed the technical topics (check it out here!)

🍏 How starting a venture in the water industry is much harder than what one would think

🍏 How even when you can prove a new solution to be better, market adoption is not a given

🍏 What’s behind the scenes of the AHA moment that changed Cambrian Innovation’s destiny: introducing Water-Energy Purchase Agreements.

🍏 How Cambrian achieves to deliver top-notch treatment performance while providing back clean water and energy below utility prices.

🔥 … and of course, we concluded with the 𝙧𝙖𝙥𝙞𝙙 𝙛𝙞𝙧𝙚 𝙦𝙪𝙚𝙨𝙩𝙞𝙤𝙣𝙨 🔥 

Resources:

➡️ Send your warm regards to Matthew on LinkedIn

➡️ Visit Cambrian’s website

(don't) Waste Water Logo

is on Linkedin ➡️


Full Transcript:

These are computer generated, so expect some typos 🙂

Antoine Walter:

Hi Matt. Welcome back to the show. Thank you very much. It’s going to be back since our last discussion. Don’t think I’m obsessed, but somehow I’m obsessed with the fact that your company’s headquartered in Watertown. And I think that is such a coincidence to be in such a talent. I mean, Watertown that I had a look at, I wanted to find something crispy about about the city. And I found the least, which was listing there, the worst places to live in, in Massachusetts. And I was hoping for what a town to be there so that I would have something bad to say. But unfortunately it seems to be one of the prettiest place. So it’s really at the bottom of that list. So I kept on seeking and I found out that actually Eliza Dushku is born in Watertown, which probably people, everybody forgot about her, but she was one of these vampire slayers in Buffy the vampire Slayer. So I thought I know someone in what it sounds, but that’s still not these crispy anecdotes I’m looking for. So can you tell us something about what it’s on at? I don’t know something which is a bit, you know, a bit different so that I can stop this stupid obsession.

Matthew Silver:

Oh, can I tell you something about Watertown? I don’t have anything great. Other than I mentioned last time that there is a water company that was founded in Watertown. That was pretty well known for awhile called Ionics. And they were acquired by GE. And what I think was the largest water acquisition or close to it at the time by GE water when they were building out their water business. So there’s a history of water innovation in Watertown, which is itself ironic. Other than that, I don’t know. It’s right by Cambridge. It’s getting to be a pretty interesting place. I think it’s got a number of historically I think there was a high percentage of Portuguese immigrants if I’ve got my facts. Right. So that’s kind of interesting. That’s about all I got,

Antoine Walter:

Let’s put my city obsession in eyes. And if we talk again in five years, I guess if I go back to Wikipedia to the list of famous people, which achieve something and what a town, I hope you are going to be there, and then you are going to be my crispy anecdote.

Matthew Silver:

What it sounds right. I don’t know about that

Antoine Walter:

To start today. What would be interesting is to understand what happened before you arriving in Watertown? I mean, you created a company, you created Cambrian innovation, you didn’t didn’t do that alone, did you?

Matthew Silver:

No, I had a co-founder and a lot of folks helping out.

Antoine Walter:

So I was wondering, you know, I’ve done a water engineering studies and I have to admit that over my food engineering path, it never crossed my mind to create my own company. So what is the mindset you had to start with that to start this venture?

Matthew Silver:

Yeah, I think probably if I had done water engineering, I would not have started a water company. Maybe that’s what I say, but it was an evolution for me to start the company. I, I had worked in aerospace and specifically on, you know, asked what’s called astronautics and space systems design. And I had worked at the Canadian space agency and it was really cool project to build a greenhouse on Devin Island in the Arctic to do sort of plant growth, autonomous plant growth. And that was fun and went to MIT to, to, and was in the space systems lab, the space architecture group, and then the space systems lab, and did some really cool stuff for NASA. And I think that at the end of all that working in aerospace, I decided that I think I had a job offer at JPL, the jet propulsion lab, which would have been great.

And I just decided that it, that I’d rather start my own thing. And there was a lot of places like MIT or Stanford or this place that does a lot of people talking about startups and innovation and all of that. And I was particularly interested in synthetic biology and biotechnology because it was kind of a new way to think about bioengineering using a more engineering approach and systemic approach. And, you know, it was, was convinced it had enormous potential to be applied outside of where biotech is traditionally applied in pharma. And so I started digging into that and someone made me aware, I forgot who have this, this technology is bio electric chemical systems. And it just seemed really cool. It seemed like an interesting technology because it was at the intersection of electrochemistry fuel cells, biology, and had application in a number of areas.

So we, you know, formed a little company to do applied R and D around it. And that was really the start. It was no grand scheme of like where you’re going to take over the water industry was more like, this is a very interesting technology with a lot of applications and let’s just see where it goes as we got into it. I did learn that what I didn’t know at first, which is that water challenges are enormous, that a lot of folks are looking for better solutions and it’s very important for the world and for the environment to develop them. But it’s very hard to do. And I think I’m, you know, in fork, maybe unfortunately you’re drawn to difficult challenges cause I like to try to solve them. So it just was a good mix. Good problem. And an interesting potential solution.

Antoine Walter:

Actually, there’s kind of a pattern in the water waterworks. If you look at the university, is the schools, there are many kind of innovations in how, how you could treat water, how you could be almost disruptive with the way you addressed it, the water challenges, but then there’s the other side of the coin, which is when it comes to the industrial size, the real word, if I might say, so it gets much more difficult to come with a new ID and to not even disrupt, but slightly change how people do thing. And I think the sentence you hear the most is we’ve been doing like that for 20 years and it works. So why do, should we change some things? So as a newcomer in that industry, how difficult was it to get you your first foot in the door?

Matthew Silver:

It was very difficult. I’ll be honest. And it was harder than I thought it was going to be. And you have to be pretty determined to make it happen. The thing I’ve said in the past is that industries like it or, or, you know, pharma, biotech, they benefit from, you know, there’s a lower number of uncertainties. So it’s never really a question. Whether you can complete a software program, it’s just really a business model question, whether it’s sticky or not. And similarly in like in pharma biotech, there’s never a question of whether the market’s going to adopt your drug if it works. So it’s really just an R and D effort and usually with a very known large market. And whereas in some of these other areas, you know, when people now call hard tech energy water, those kinds of industries, they’re trying to come up with a new process.

You have multiple stages of uncertainty in a very conservative market that may not even adopt the solution, even if it’s better. And so you have to show something works at a small scale, you have to scale it, which itself may not work. Then you have to convince someone to do a demonstration plan, which you know, that may or may not work over a period of time at scale. And then if that works, you need to make sure that the thing is adopted and accepted by industry, which we talked last time about the challenge of conservative consulting engineers and conservative customers and everything you said. So it is a real challenge and it requires, you know, combination of different things to get it right. And I think it’s very easy to get wrong.

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Antoine Walter:

So, you know, when I was preparing for the episode, I was trying to do some reverse engineering and thinking you have this water energy purchase agreement, we should tease last time in which I would like to go in depth today to understand in the last detail how that works. But the reverse engineering aspect came from, I was thinking, how did you come with that ID? And I was thinking, you have this eco volt, which we saw last time as a product and under such an agreement, it gets eco volt as a service. And I was thinking, I’ll probably you have done that because that was a way to get a better market acceptance because you are just breaking the entry barrier to that new technology. Am I fully wrong with that assertion? Or what was the background? How did you come with this idea of delivering water as a service?

Matthew Silver:

You’re not wrong. That was a part of it. When we finished one of our demonstration installations and several years ago I was speaking with a customer and they said, look, this sounds really interesting, but I think it looks better than the alternative, but you don’t have enough of a track record for me to be convinced. So can you install it? And then I’ll pay you if it works. And that got me looking into that and thinking about it. And I did look into, you know, at the time some of the really successful solar companies like Sunrun and SunEdison and some of these other companies, and obviously some of them got ahead of themselves a little bit on the financing side, but but the model worked. And so I thought of it as a way to make things less risky for the customer to make a big decision around the technology. In developing the model, I realized that it’s also just a generic problem in the, in the distributed water space, SED and distributed industrial water space. Although even in sort of small scale municipal, that that folks don’t have a lot of operating expertise and don’t really want to. And so it’s just better for a lot of customers to make it our business, to manage the whole thing and provided as a service. So there’s a lot of value there beyond just risk reducing the technology. So

Antoine Walter:

I have a hobby in that podcast is that every one or two episodes, I figure myself that’s I’m running an industrial sites and then I can be the customer. It’s, it’s a good thing. Cause when it’s pure theory, it doesn’t cost much. But with my eyes, as an operator of that industrial facility, I was having a look at your brochure and for everybody listening right now, here’s what you offer. So it’s a zero money down, zero operational burden, straightforward payment structure. It grows with the facility because that’s what we discussed last time. There’s this modularity of your system. You maximize the sustainability and you give me a peace of mind as to just teased it because I don’t have to care about my waste, what to treatments and you know, I have to be the skeptic at some point. So isn’t it a bit too good to be true. Can we deconstruct it piece by piece, starting by the zero money down aspect. That means you come and install something. It doesn’t cost me a penny. Everything you need from me is a bit of space. Yep. That’s exactly right on top of that. If I got it right, I get back from your facility, energy and water below the utility price. How’s that even possible?

Matthew Silver:

Well it depends on the site and, and it depends on what you need, but if you take the all-in cost of water, so both the input cost, which is usually pretty low, although depending on where you are, it might be higher. The cost per gallon you’re paying for, for clean water. And then the treatment side, a lot of industrial manufacturers have surcharge fees that can be very high or they’re not on a sewer and they need they need to treat something just in order to be in compliance. And so if you put those together and then you add the value of the clean water and the clean energy and the treatment services, it doesn’t make any sense for someone to do this unless it’s below those costs. And, and often significantly below. The other thing that a lot of our customers are seeing is that the rates for disposing of wastewater and the relative ease of accessing clean water are changing and on the first one, and they’re rising faster than inflation it’s I think it’s like 6% per year nationally in part, because we haven’t invested enough in our water infrastructure so that they’re seeing those rates go up very quickly.

We can cap that rise and give them sort of a more certainty on their, on their costs as well. And there’s other people where the cost is much higher than that, even because, you know, they’re on a small, small utility and they’re overloading the system and they need to get something done. So, so it’s a great value proposition for them because it’s usually not their core business. They usually have hurdle rates, even for the larger companies that have easy access to capital. They usually have hurdle rates for investment that are two to three years and maybe a water project doesn’t have that return, but for Cambrin, we can still get a good return ahead of where we need to be by operating ourselves on top of the margin for the product. So it just, it’s a, it’s a good one. When you mention

Antoine Walter:

Last time that you have 22 references, if I recall, right, how many of them are under Wippa

Matthew Silver:

To date the bulk of what we’ve done? Our capital sales. That’s just been the way we do it. And it’s actually relatively recently that we put in place the water energy purchase agreement and got everything together. And I think there’s been sort of a process there, but there’s been several that are repose. We’re going to announce a couple more soon, but it’s not the bulk of those 22 plants.

Antoine Walter:

So for the new ones that you would be adding in the future, is it something that would offer every time or is it really case by case that sometimes it makes sense and sometimes not,

Matthew Silver:

It’s really case by case. It’s the focus of our company in that is a good value proposition for the customers. And it’s good for Cambrin and it’s a new model in the industry, relatively new. I mean, depending on what part of the industry you’re in, but if folks want to buy our equipment and operate it themselves, they can do that. So

Antoine Walter:

That means that you turn the waste water treatments into a monthly fee. What am I exactly paying for? Is that the fact that you treat my water is it’s a performance space? Is it a fixed fee? Is it’s depending on how much I discharge, is there a minimum, how does that work?

Matthew Silver:

We have a little bit of flexibility there, but generally speaking, if you’re treating and reusing water, we generally have folks pay per gallon that we’re sending back to them and it’s a price per gallon. So it’s a reuse loop, generally, that’s the approach. And if we’re generating power, we might just give that back to them and, and wrap the pricing into the cost per gallon or in my charge per kilowatt hour, depending on the customer and the you asked about a fixed fee, there is kind of a minimum, you know, under any PPA agreement you, you have, what’s called a taker pay. So there’s like a minimum taker pay below, which if there’s very little water going to our system, so we can’t make that much water, we still need to be able to support the operation. So there, there is a minimum taker pay on the, on the Callan sent to us.

Antoine Walter:

And what is my commitment as a customer? Can I subscribe a weapon? And then for whatever reason, three months later I changed my process. I don’t need water anymore. That would be surprising, but, but, but why not? Do you have like a fixed minimum or you’re so flexible with your modular equipment that you can afford to move your things around if needed?

Matthew Silver:

Well, the modularity of the equipment enables us to remove a good amount of the planet. And that is actually part of our competitive advantages that we can drive down our cost of capital because a lot of the equipment can be removed. And so we don’t have to take as much, you know, we’re not as concerned with what’s called counterparty risks, the risk of the, of the off-taker in terms of the, the, the timescale, you know, we’ll do seven to 15 year agreements, but folks can have a buyout option. So they’re not wedded to operating under a weep. Once they started now, they can buy it out or terminate. If they terminate, we can potentially buy the equipment, keep the equipment, but that’s not something that we’re expecting. Or that is typical. I would say though, you know, folks who are using this as a model are, are folks who are already looking at purchasing capital equipment. And so there’s a similar dynamic there of if their process changes, do they still need that equipment while they’re usually not banking on that?

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20 chapters featuring 19 experts, each one addressing a specific chunk of the water industry cake

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Book Cover: Don't Waste Water Podcast, Season 1 in a nutshell

Antoine Walter:

Let me ask a financial question. A couple of years ago I was working for Suez at the time. And we were investigating about investing in a couple of containers that would be leasing containers, that we would bring to some specific sites and in a much less innovative way than what you’re doing here, but in the same kind of spirit, we would be doing that external wastewater treatment or process water production. And the reason why, why Suez didn’t go for it at the time is that that was too intensive in capital investments, because that would mean that you, you become somehow a bank. So you see that maybe because it’s a conservative giants, but still Suez is kind of a beast and didn’t go that route and you are a new entrance on that market and you go full gas in that direction. So I’m just wondering, what’s the equation of Suez couple of years ago, fully wrong, or did you find that a golden nuggets and the way to make it much more to balance much better the risk and the capital risk on your end? Yeah,

Matthew Silver:

Well, usually a decision to go in a given direction business-wise is very influenced by your sunk costs and your fixed costs, although, and sort of your current way of doing business in your established sales channels and your customers. You know, this is a classic kind of notion of a disruptive innovation that brings together a new technology with a new business model that maybe changes the value proposition. And I do think there’s a little bit of that going on with us because when you look at some of the larger companies like sweats or Veolia, they’re principally, usually selling to municipalities and to the municipal market, which is bigger, usually dependent on larger jobs to be profitable. So the smaller jobs are a little bit less interesting. And then the model you mentioned of acquiring a bunch of equipment and then leasing it out as kind of a leasing company model, which is not what we’re doing.

So we’re selling to, you know, small, medium to large range industrial customers. And there’s a project which will get created when a contract is signed. We don’t have the equipment sitting around prior to that. So we just have to look at it as putting together the capital side, the solution, which in our case is proprietary and low OPEX and the operating side of it in order to price out a price per gallon, rather than just lease equipment per se. And the returns are there. They’re really good for our partners and our investors. The risk return profile for the customers is really good. It’s not just a lease, it’s a, it’s a service. And so they’re getting maintenance, they’re getting variable pricing as a function of their production. They’re getting a lot of benefits. And for us as a business, we’re increasingly set up this way to do projects as a service, and then our cost structure and overhead is appropriate to that. So I think all of that makes it a good business proposition, but I do think it’s challenging for a large company, which has a different sales channel to, to attack to that quickly.

Antoine Walter:

Yeah, that’s awesome. Those two names you gave, and I think my French citizen sheeps allows you to say that, you know, they’re, they are very French in their approach. You don’t disrupt that first such JNC, even they are. I put it equal merger is, is a good, a good sign of that. But, but that’s another topic. You mentioned that the operation, that means that as an industrial player, that would hire Cambrin innovation to come under a weapon to, to treat my wastewater and to provide me water and energy, I don’t have to touch at all your containers. That’s just something on my lens somewhere, but I don’t touch it. Never

Matthew Silver:

Not, if you don’t want to. Exactly. And it’s a different process, it’s requires a little bit of different expertise and that’s been one of the things that I think slows adoption in the industrial market. I mean, so if you’re, if you’re making a soft drinks, you, you’re not necessarily wanting to make clean water, those are two different skillsets. So you don’t have to worry about it if you, if you don’t.

Antoine Walter:

So how do we operate them? Is it fully remote, or do you sometimes go to the site or how does that work

Matthew Silver:

Combination of remote and onsite? We’ve got ongoing operations, big part of what we look to do, whether it’s a capital sale or a, a water entry purchase agreement is drive down our operating effort by substituting, you know, people for data. That’s just a trend that’s been going on in cross-industry. And increasingly in the water industry, we have, you know, an ability to look at the plants in real time, as they’re operating, we’ve got sensors set up. I mentioned last time we’ve got this process. We call flow logic, which takes into account sensor data together with operator input together with if needed operator and put together with some of the unique data that our, our plants generate in order to optimize input. And so that all of that, a good portion of it can be can be done remotely. We can remote into the plants for more, you know, wherever we are in order to update controls. And whenever we’ve got a Weipa, we, we will you know, we wrap in controlled updates and improvements into that over the longterm. So it’s a combination, but a lot a large and increasing part of it is is remote.

Antoine Walter:

I’ve read somewhere in your literature. That that’s a way to see it is what you described is to be creating a renewable micro utility. And we’ve talked last time about verticals, and you said that on the food and beverage, it’s a strong vertical where you’re present and you’re aiming to enter a new one that you didn’t reveal last time. I’m not going to take my chances that time to force me into that. But when you’re calling, it’s a micro utility, it lets me think that I actually that’s exactly what it is. And and in a decentralized grids, they are much more opportunities than just industrial sites. So is that your mid-term to long-term vision to be extending this, this Weipa a bit everywhere with your systems and using them to become like a decentralized utility, a utility without network UTT without assets?

Matthew Silver:

Yeah. Well, we can own the assets or our partners do, but yes, and think about like solar that’s what some of these companies are that are doing CPAs. They’re distributed utilities in a way to the differences. We’re expanding it to the water industry. There is an interesting overlap between water and energy and might be something that you’ve gotten into in the past, I don’t know, in your podcast, but there’s a huge amount of energy. That’s used to create water, whether it’s clean water or treat wastewater or pump water. And in some cases it can be large fractions of a, you know, a state’s budget or a country, even a country’s budget, depending on, you know, where they’re located and their geography. There is similarly a larger amount of water that’s needed to produce energy. So, you know, what I see us doing is kind of doing for the water industry, what the PPA did for the solar industry, helping people adopt the technology that may be unfamiliar with it and have them purchase it in a way which is similar to what they’re used to with utilities. And there’s a huge opportunity there. And it’s an interesting mix of energy and water. In our case,

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17+ hours of tips, technical advice, business hints, entrepreneurial inspiration, and market insights condensed in a MASSIVE 94 PAGES INFOGRAPHIC

20 chapters featuring 19 experts, each one addressing a specific chunk of the water industry cake

An evergreen source of Water Expertise at your fingertips to support you through 2021 and the years to come

Book Cover: Don't Waste Water Podcast, Season 1 in a nutshell

Antoine Walter:

I mentioned the solar as an example, which triggers two kinds of reactions in me, to be honest, one negative reaction, which is, I don’t know if it’s different in the U S I don’t know at all, to be honest, but in Europe, there, there was this wave of solar under this kind of energy purchase agreements, but that was strongly incentivized. And when the subsidies just disappeared, many company who just went broke. So that’s the negative reaction in me. And now the positive reaction in me is that, that sounds like the typical path of hyper growth of any kind of startup. You push it to the markets might be cash negative at the beginning, but you raise a huge user base. And once you get that huge user base, then the path is sets and the road is all yours, and you can then leverage on that and, and become profitable. So I’m just a bit, you know, I have these two sides in me. I think if you’re referencing that’s of sorta example, then the story might be better in the U S than it is in Europe,

Matthew Silver:

Probably. So I think that at the end of the day, any business needs to stand without subsidies. It’s an unfortunate fact that many businesses, more than people realize are effectively subsidized, but I think government in different ways, even established industries, you know, like oil and nuclear and, and things like that, you know, some loan guarantees and nuclear and all, it’s actually incredible when you actually get into it. But I think in our case, in the U S you know, my opinion is that the PPA was definitely accelerated by the investment tax credit, the ITC it’s called. And there’s a pretty big industry of folks investing in that, and even taking the tax attributes out. So there’s tax equity investors, and then, you know, the regular infrastructure investors and all of that, but that’s kind of part and parcel of infrastructure investing. I think within our side of things, we have some incentives.

So would we benefit on the energy side water generally doesn’t have as many incentives otherwise, and there are examples of companies that are, have done. I mentioned other parts of the industry, but they do, they do well with water as a service. You know, my neither one of them is for example seven seas, which went public under Aqua ventral holdings and then was purchased I think by collagen recently. And they’ve got a reverse osmosis desalination business as a, as a service system very well without any subsidies per se, although it depends probably on the, on the given site. So I think the subsidy question is generic to a lot of infrastructure across the board. I don’t see it as positive or negative person.

Antoine Walter:

Then I could imagine that there’s maybe a bit more sun in Arizona than in the South of Germany, but

Matthew Silver:

I have been amazed at the fact that like solar has expanded in Canada and across places like Massachusetts, I’ve friends who are developing projects in Maine, it’s crazy that it can still be profitable, but some of that is the subsidies, but, you know, the panels are getting much cheaper because of that, so that there is a real societal economic benefit to it.

Antoine Walter:

Yeah. There’s a flywheel aspect, which is a bit what I was mentioning with this hyper-growth aspect. I don’t know if hyper-growth is something which is achievable in water, to be honest, but let’s just imagine maybe that’s what you have in mind and you’ll tell me, but if you could raise a couple of million dollars just in a series, a, B, C, I don’t know where you are, where you stand right now, and you invest that money just to, to populate the market everywhere with with your technology. And you start launching that flywheel. And at some point everything gets even more competitive in terms of costs. And then you just disrupted this market, which is impossible to disrupt.

Matthew Silver:

Yeah, no, but that is a, I think fairly established strategy among venture funded companies to purchase market share effectively by, you know, starting off with a lower price. And there’s, there’s a number of companies that have done that successfully. There’s a lot companies that I think have done that not successfully. So you have to be careful on that, but I wouldn’t say that’s our strategy per se, you know, market share via venture venture funds or investor dollars, but it’s a, the idea of the exponential benefits of an installed base. I definitely agree with you on that. And it’s why I’m excited about where Cambrin is because, you know, we’ve worked hard over the years to get with a completely unique technology and a conservative industry, an installed base that is now, you know, it’s, it’s getting larger, it’s international and we’re improving our delivery, our analysis, our understanding of how to most benefit our customers and, and all of that. And we’re, we’re really thankful that some of the early adopters that worked with us in the early days, and we did have our lessons learned Jerry knows, and, and I’ve grown from that. So you’re right. That the more that you get installed, the more you get sort of exponential benefits. And, and we’re excited about, about continuing that,

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17+ hours of tips, technical advice, business hints, entrepreneurial inspiration, and market insights condensed in a MASSIVE 94 PAGES INFOGRAPHIC

20 chapters featuring 19 experts, each one addressing a specific chunk of the water industry cake

An evergreen source of Water Expertise at your fingertips to support you through 2021 and the years to come

Book Cover: Don't Waste Water Podcast, Season 1 in a nutshell

Antoine Walter:

Talking about your next steps. You’ve been selected to join the elemental accelerator I’ve had on that same microphone lingo from there a couple of weeks ago. I think you are in two very different places in terms of business maturity is at the very beginning of his venture, very exciting and very promising path, but you are, you seem to be more advanced, you have achieved your product market fit. So what do you expect from elemental? What is elemental going to bring you and where is it going to bring you in the next six months to one year?

Matthew Silver:

We’re extremely excited to be part of the elemental accelerator. It’s been already a lot of fun, really interesting, great smart people. And it’s just a great platform for us. And, you know, I think you mentioned earlier on that, that idea of the conservative nature of the water industry. And I think, although we have 22 plants and we’ve got product market fit established, I think you compare us to you know, some of the bigger water companies out there, and we might seem a little early still. And so we can still benefit from all the help we can get in any way, shape or form with the accelerator. The, the, the key thing for us is what we’ve been talking about today, which is the opportunity to change a bit of the business model and distributed water to the customer’s benefit through a Weipa. And we’re in early days with that, we’ve got, you know, most of our plans to date have been capital sales. We have some great and exciting opportunities that they’re helping us move forward on to look at new verticals and new geographies for expanding our business model. So that really is the focus, and that’s what we’re hoping to get out of it. We’ve already gotten a lot out of it and we’re really appreciative.

Antoine Walter:

So it’s the opportunity to present your product and solutions to new types of customers. So those famous new verticals, that’s I’m really now looking forward to discover that is what you, because at the mental has this very ambitious target to say that the company which are joining the shall do a multiple on what they’re doing, it’s not like doing a growth of 20 or 30%. It’s about making it two times, three times, 10 times, what you, what you’re doing today and this within a pretty short path. And they have a proven track record of companies that achieve that. So is that what you’re setting yourself for

Matthew Silver:

Two times three times? I’m not sure, actually, I haven’t seen that on their website. I haven’t talked to him about that. I mean, our goal is impact, you know, it’s not fun unless you’re having an impact. And, um, I think we can have an impact. We talked last time about how doing this approach of really what’s, you know, used to be called industrial ecology, but now is, is called circular economy and doing it practically. And cost-effectively, it’s like a win-win and has multiple benefits for customers and for the world. And the more that we can get our systems out there, the more water footprint we’re reducing waste, we’re eliminating and carbon we’re removing. So every sale is a chance for a long-term benefit. And so for us, that’s, what’s motivating, and it’s cool to try to change something in an industry, which is really hard to change. You know, it’s a big challenge and why not tackle big challenges so that those are the kinds of things that motivate us. I think we’re going to see a lot of growth going forward. I’m really excited about where we are now. And as you said, things tend to be, or implied things tend to be exponential. Once you get the product market fit together and you get the flywheel going,

Antoine Walter:

I was impressed as well with with the track record of, of elements that, you know, the first quarter they’d have a decade of history. What’s impressive. There is that when you look at the profile of those companies, usually when they get out of business, it’s not because they get out of business, but because they, they make an exit or the founder make an exit, or the company gets sold to another market player. So you know, if I use my crystal ball, I would say in five years, or in 10 years, you have two possible path. You keep striving for that impact and you do something really big. And Cambrian becomes one of these really impactful companies. And I really think you have a great product to do that, and a great approach to do that. Or there is another market player, which things that organically, he cannot achieve these kind of amazing things you’re doing because of your agility and your, your new, I almost disruptive I on that market. And he makes you an offer, which you cannot refuse. If you had to make a bet, what would be, you are your intended path?

Matthew Silver:

I have never, you know, myself and the, the managers and the executives, and co-founder at Cambridge, I’ve never had an eye to one or the other. There’s some people who start off saying, they’re gonna set the company up to be acquired or set the company up for IPO. We were always just focused on validating, proving our technology in a big market, growing top line revenue, increasing gross margin and making customers happy. And that’s always been, it’s always been the, and so, but you know, if you’re asking me to bet, you know, I, I see something like an IPO is as a way of accessing different pools of capital as a company grows. So probably more likely that than anything else, if I would think about it, but there’s nothing in the plans right now.

Antoine Walter:

I think that was three episodes ago. I had a NASDAQ listed company on that podcast. And I think that was the very first time that heard of a water company, which is listed on the NASDAQ, but maybe by discussing with you, I was already discussing with the next one to be listed there. So if you had asked me six months ago, if Suez and Veolia were going to get closer, one day, I would have laughed and said, that’s not, that’s not good. So, you know, you, you never, never say never on that market, but it’s interesting to see that you use try first for the impact and as soon as it stays as a tease and you, you have fun doing it. I think that’s, I don’t want you to say, did you say it in a silly way, but it’s pretty impressive to what you just described and you said it much better than what I brought you to sensitize with a much more wordy sentences. Sorry for that.

Matthew Silver:

Well, I don’t know about that. I, well, it’s nice to you to say, you know, who knows? I think the important thing is, is to make things interesting, have a successful company and have a positive impact. And, and there’s different ways to get that done.

Antoine Walter:

How many people do you have right now working for Cambrin? Linkedin was telling me 31, but I was wondering how accurate LinkedIn is.

Matthew Silver:

That’s about right. We outsource some manufacturing. I think if you include our, the total impact of that, it’s higher than that. And then we work with a lot of consultants on installation of our different projects for site engineering and permitting, and we’ve got construction partners as well. So if you expand the footprint to our total impact, it’s it’s pretty, pretty much higher than that, but the, those that’s that’s right for the core company, which is doing the sales, the engineering, the it, and the R and D,

Antoine Walter:

Which kind of manufacturing do you outsource? What do you do in-house and what do you outsource? If I might may ask some of them

Matthew Silver:

Very core stuff, we do ourselves, you know, on the electrode side and on the sort of sensor side and integration and some of that, but some of the other stuff like the tanks and basically surrounding equipment we’ve got partners to manufacture that.

Antoine Walter:

And you mentioned R and D you’ve brought with [inaudible] something really new, the cobalt reactor. Then you revamped the MBR, making your, your own, taking your own take at, at somehow already a best seller in that market. What’s next?

Matthew Silver:

Well, we also have bio Viper, which we are very excited about. That’s an aerobic anaerobic product, which is very simple and very robust and produces very little solids as a by-product of the treatment process, patent protected and proven. And we’ve got a lot of effort going into the data side of things. So we, we, I mentioned flow logic as a key component for all of our sites that we continue to invest in and improve upon. We have some other things in the works. I wouldn’t get too much into them, but there’s some other market opportunities that are that we think are pretty big and we can get into wrapped under our model that we’re currently investing in. We were lucky to get some additional grants recently to do some of that work, and we’re investing in some of it ourselves. And I’d be happy to talk to you about that when we’re ready to,

Antoine Walter:

And we’ve, we’ve talked a bit about MNA, but with you potentially been acquired in, in a decade or so, but actually the other way round, you acquired best foods less than one year ago. So what was the racial there? And how are you set with integration of a company?

Matthew Silver:

The rationale was a lot of things that we’ve talked about. So because we are a solution provider and all sites are different. We benefit from being able to provide more solutions and equipment to create a solution. That’s what systems also fit very well with our water and energy purchase agreement, model and strategy in that they have a very low operating cost compared to MBRs, which is a bit of a competing technology there. They’ve got lower solids production and lower energy use. So you know, they’re, they’re comparable and costs may be a little bit higher, but the life cycle cost is significantly lower. So if we can finance them, we’re going to benefit from those lower life cycle costs. So it fits well with the Weipa model and they were in a complimentary set of verticals to us fixed film, biological process, which we were familiar with. So there was a lot of complementarities and it just made a ton of sense. So we’re very excited about that acquisition.

Antoine Walter:

So actually that’s a good way to wrap it up for the parts. I have to say, I’m really, I’m curious to have a discussion with you in a, in a couple of years or three or five years, just to see how much this really interesting and promising business model, which you have with the whip agreements, how that takes foods in the water market. Because it is really, it sounds like obvious in software software as a service is everywhere, but I know it has been tried in the eighties and in the nineties, in the, in the water world, when some gas providers were trying to enter the water word, but at that time, probably the technology wasn’t there. So there wasn’t a technological fits, but today you, you seem to have something really promising and yeah, I’m looking forward to discovering more of that in the future. Yeah,

Matthew Silver:

I am too. And I’m excited to see that it’s growing, there’s other companies that are offering it now as well. So we’ll see where it all goes. It’s, it’s all, you know, gonna be based on how excited the customers are about it. And we think they’re pretty excited based on what we’ve seen. So I’d love to talk to you about it. Okay.

Antoine Walter:

How your calendar in January, 2023

Matthew Silver:

I have to check and get back to you. I, I’m not sure

Antoine Walter:

If it’s fine with you. I propose it to switch to it, to the rapid for our questions. Sure.

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Rapid fire questions

Antoine Walter:

So, you know, the rules, but I changed a bit the rules in the sense that you, you get my second set of questions, which is the owner for my guests, which make a second appearance. Okay. Sounds good. So what is your favorite part of a project

Matthew Silver:

You were part of the project is commissioning complete.

Antoine Walter:

Is there something that you’re doing today in your job that you will not be doing in 10 years?

Matthew Silver:

Fundraising,

Antoine Walter:

Is it a burden?

Matthew Silver:

No, it’s a distraction. Definitely not a burden part of the job.

Antoine Walter:

What is the trends in our industry that you would like to see ending and disappearing forever?

Matthew Silver:

The trends in the water industry that I’d like to see ending and disappearing forever in the last four years, the rolling back of environmental regulations or enforcement of them.

Antoine Walter:

And my last question for today, can you name one thing that you’ve learned the hard way?

Matthew Silver:

Only one thing, one thing that I’ve learned the hard way probably would say to be sure that if you make a investment in demonstrating something that you’re going to have something secured on the backend, if you do demonstrate it because things can change, people can change all of that. So, you know, be careful of corporate change.

Antoine Walter:

Do you have a bad story here to tell

Matthew Silver:

It’s not a bad story, but it’s just, it was a real lesson learned when we first demonstrated our one of our technologies. We invested a lot in, in a pilot plant, like a large-scale pilot plant with the tacit assumption or the expectation that should we prove it, it would be scaled the full scale. And, and when we did prove it, the company we’re working with sort of had different priorities at the time, it went a different direction and, and that had a chilling effect on our ability to sell elsewhere because a lot of folks said, Oh, well, it must not have worked. If those folks didn’t buy it. And the answer was no, there was just a change in corporate priorities. So we got over it, we got through it, did it just slowed us down for a bit. But but it was a big investment and it was a disappointment. But the pilot was successful and that was the main thing. So we’re here now,

Antoine Walter:

How do you prevent it? Do you tend to something in your process to prevent this kind of accidents? If I may say so

Matthew Silver:

It’s about being a little more careful about where you invest your time and your money, or having that recognized through something, you know, an agreement, some kind of FairPoint,

Antoine Walter:

Matt, you’ve been an awesome guest. I was really happy to talk to you again, I’ll check your calendar and make sure that you have some time in January 20, 23. And I like to see where, where that’s heading, because it’s a, I think I mentioned it a couple of times during our talk today, but it’s a refreshing way to see our industry. So thanks for that.

Matthew Silver:

Yeah. Well, thank you very much for having me. I appreciate it. I’m honored to be in two time participant in the, you did a, you did a great job. Thanks. Great. And we’ll yeah, I’ll send you an invite 20, 23. Wonderful. Thanks. Okay, bye.

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