🗣️ Water Infrastructure, USP & Governance

Hosts: Will Sarni & Tom Freyberg
Guest: Dr. Reinhard Hübner | CEO | SKion Water
Category: 🗣️ Opinion

Podcast’s Essential Bites:

[3:50] “SKion Water […] is providing drinking water and wastewater solutions to municipal customers, and freshwater and wastewater solutions to industrial customers around the world. It's roughly 3,000 people and 800 million US dollars in turnover.”

[5:21] “Municipal water and wastewater […] is an asset intensive industry. The vast majority of the value of the assets sits underground in pipes. Because digging in pipes and making all that network work is more expensive than the treatment part, and also more capital intensive. So […] digital helps a lot and there's amazing digital solutions also for network operations. But in the end, we still have to build assets that last at least 100 years. […] We can't afford to replace stuff that's 50 or 60 years old, because the reinvestment amount is less than 1%. That means it has to last more than 100.”

[13:15] “We also learned to be very careful in the startup business model. And that's also why whenever I talk about investing into startups or venture capital in water, I say, if you really want to do the startup route, do it, but think about whom you partner with. Because if you try to do it alone, the threshold is so high to make it and if you partner with established players, you can just derisk it so much. You might not make it a unicorn that becomes the glorious exit, because that partner will want something in return for helping you. But the statistical failure rate of startups in water is so high, also for good technologies. […] It's not as sexy maybe as having a unicorn. But how many unicorns were there in water, hardly any.”

[16:44] “The water industry is a people business, because we live off the experience of people. We don't have […] sexy products like an iPhone or something like that. So at the end it’s the knowledge of the people to solve the problems of a water user. What I have experienced is two types of issues […] with people. One is in innovators who are too protective of their idea, because they're afraid somebody will steal it, copy it, whatever. And hence, don't collaborate enough. But try to just close it off. And then people lose trust in the idea or people don't get the economics rights, or economics aren't explainable. And yes, I can understand this. But in all fairness, I have hardly ever seen any patent in water that you can circumvent. All the patents are process patents, not product patents, and all are pretty weak and pretty easy to circumvent. You don't win on protecting your IP. You win on having references.”

[18:13] “The other one is not being open enough to constructive criticism. Sometimes people are so convinced this is the best thing since sliced bread, that they don't listen, when you tell them […] there's five others who are almost the same as you. […] You need to make your USP convincing. And I always cite […] the 30% rule. You need to be 30% better or cheaper than the existing solution, because for 5 to 10%, nobody takes the risks.”

[28:16] “The challenge in most developing places is governance. It's not technology. […] The government doesn't care, or there's corruption, or interest, because the people who sell the bottled water or who sell the water from a tanker, they make shitloads of money. And they hate it if somebody puts up the water kiosk.”

Rating: 💧💧💧

🎙️ Full Episode: Apple | Spotify (Original Title: "It’s All about the People")
🕰️ 38 min | 🗓️ 11/05/2021
✅ Time saved: 36 min

Additional Links:
Water Foundry