Entrepreneurs for Impact (EFI) Podcast: Transcripts

#174:

Alex Rappaport⁠, CEO of ⁠ZwitterCo — Biggest Series A VC Investment in Water Tech. Industrial Water Efficiency. Water Shortages for 75% of the World. Climate Resilience. Near-death Experiences.

Podcast Introduction

Chris Wedding:
My guest today is Alex Rappaport, CEO and co-founder of ZwitterCo. ZwitterCo is a VC-backed water tank company that uses Zwitterada chemistry. Yes, that's a real term, an extremely fouling resistant membranes to reduce industrial water use, save energy and reduce chemical inputs.

Alex turned a startup boot camp during his Master's of Science degree at Tufts University into an award-winning business and the largest Series A investment in water technology to date. In this episode we talked about how 2/3 of the world is projected to be experiencing water shortages by 2025, which somehow is next year, why water costs are rising faster than we think and what that means for solutions like his near-death experiences with water. Maybe a love-hate relationship here, how their filters don't plug even in very dirty industrial environments, tips on telling your company story more effectively, the link between water security and climate resilience, and a whole lot more. Please give Alex and ZwitterCo a shout out on LinkedIn, Slack or I would say Twitter for fun. But anyway on X by sharing this podcast with your people.

Finally, one last request before we get into it. Hop on over to Apple or Spotify now or right after this episode to rate, review or follow this podcast as you know and hopefully appreciate. I don't take any sponsors for this podcast. So this little gesture of support, maybe a minute or two, means a lot to me and the guest and helps more people find these guests and hear their inspiring story, you know, in a world with lots of less inspiring news in the headlines. Anyway, thanks so much and hope you enjoy it.

Podcast Interview

Chris Wedding:
Alex Rappaport, co-founder and CEO of ZwitterCo. Welcome to the podcast.

Alex Rappaport:
It's great to be here, Chris. Thanks for having me.

Chris Wedding:
So clearly I'm having you here because you all are growing so quickly, right, that Twitter is being forced to change its name to X. Is that right?

Alex Rappaport:
You know, it's a tragedy. For the last five years, I have had this great dinner party punchline of the fact that my lawyers told me at some point, if you get big enough, you're going to get a CIS letter from Twitter and the joke doesn't land as well anymore. So I had to really change course the last time that I tried using that. Now that where we've lost Twitter as a name brand.

Chris Wedding:
Well, I tell you, I'm not a lawyer, but, you know, speaking in front of thousands of folks to pretend to be one.

Alex Rappaport:
Right?

Chris Wedding:
That sounds pretty crazy that Twitter would care about ZwitterCo. But anyway, that's for a different podcast, perhaps. Let's go to a more. More fun. Another fun topic. So I believe, if my research is correct, that your experiences, perhaps you will elaborate in whitewater rafting, are a reason that you founded this company. If that is true, can you please elaborate in gruesome, adventurous detail? Alex?

Alex Rappaport:
I absolutely can. I'm not sure if this is the authentic truth or just the retrospective narrative that I'm going to write, you know, whenever it's time to sit down for the memoir. But I was a river raft guide for about six years before I went to college. So I studied environmental engineering at Tufts University. But that was all because I grew up on the Potomac River. It wasn't actually just whitewater rafting. My primary sport that I would take adventure camp counselors or children down was whitewater stand up paddleboarding, which is actually far more crazy and far more fun going down Class 4, sometimes Class 5, Whitewater, standing on a paddleboard. But rafting, kayaking, all sorts of fun adventure sports was really some of the strongest foundational experiences I had growing up.

It really gave me my sort of love for nature, my desire to be working on technology that could have an impact in the world of sustainability. I did drown once on the Potomac river or came very close to it. I have a healthy appreciation for the power of water, but it is kind of a phenomenal connecting of threads in my life to now how water is such a dedicated feature of my profession.

Chris Wedding:
Well, I'm not sure it's healthy that we're laughing at you drowning. We are. I'm also listening to, you know, stand up whitewater paddleboard, and I think, oh, well, clearly the signs were there early on that you're born to be an entrepreneur. All right?

Alex Rappaport:
The risk taker. It's actually safer. I would put someone on a paddle board before I put them in a kayak. A kayak. You got to know your combat role. You got to know how to wet exit paddleboard. You just fall off. You get right back on. Super easy. You fall off a lot, though. There's a lot of falling.

Chris Wedding:
Yeah, see? And now I would also double down on the fact that you were trained to be an entrepreneur because you've created a story, right? A story. A marketing angle here, right around your product.

Alex Rappaport:
That's right.

Chris Wedding:
Yeah. It's way safer. You just fall off a whole lot in quickly moving water with boulders and downed trees. Super safe.

Alex Rappaport:
Long as you don't fall on the boulder.

Chris Wedding:
But that's exactly right.

Alex Rappaport:
The storytelling arc is. That's a key feature of the job.

Chris Wedding:
Okay, so what was it about these water adventure experiences that made you realize, oh, wait a second, we have some massive water quantity and quality issues that need dealing with?

Alex Rappaport:
I don't know that I could fairly say that I understood the magnitude of the problem. The path that we sort of globally were on and the kind of resource crises that were going to appear. All I knew is that it was a beautiful set of opportunities and experiences I had, Getting to spend so much of my time during the summers out in nature. A lot of my. My. My friendships, my really developmental experiences, the things that made me feel like I sort of loved where I was at and the activities I was pursuing was because I got to do it out in the wilderness.

And I think the more that it became apparent to me both how lucky I was and how potentially at risk, these pristine environments and the otherwise simple access to the beauty of the environment is something that could come under severe jeopardy if we don't find better ways to protect water, soil, air. There's sort of an overarching theme of what is wonderful in this world should be protected. And where we have ingenuity and innovation that we can bring towards resource challenges, can we try to do what business does best, which is at times, create impact and do Good. And do so in a way that folds into the profession and the skill sets so many people are trained to be excellent at. So it was a convergence of the idea, the sort of creative spark of engineering, developing new technology.

It was this growing, perhaps foreboding sense that were, you know, not necessarily on the path to being a sustainable society and how we have been growing for the last, you know, hundreds of years. And could we use the motivation that I feel, and I know that so many people of my generation feel to put their life pursuits, put their will, but their energy towards not just, you know, creating things for the sake of creating them, but creating them because they give our planet a better future.

Chris Wedding:
Yep. Right on. Okay, let's. Let's jump to what probably will be the headline for this podcast. Haven't decided yet, but I read that you're all, I believe Series A was the largest ever Series A in. Is it water tech? Would that be the category?

Alex Rappaport:
Yeah. And in the water treatment industry. That's correct.

Chris Wedding:
So describe that in more detail what maybe led investors to believe so strongly to invest this kind of dollar amount in ZwitterCo?

Alex Rappaport:
Yeah. So if we sort of think about companies in the different chapters, especially hard tech hardware companies, as they are going through fundamental invention through to scale up and commercialization and what milestones really matter. There has been a long history of hardware companies really struggling to get first product to market, being able to demonstrate in an industrially relevant environment the value being received by the end user who at the end of the day, there's no reason that technology should be developed if we're not going to be able to actually deliver value and deliver impact. So being able to see that complete logical arc of what you thought the technology could do, seeing it happen at scale, seeing people using it, seeing people want to buy, and knowing that's working well for them.

That's a very important set of techno economic validation that is very challenging for hardware when so often the cost barrier to get something to scale, both the cost it takes to build, the cost takes to scale up the amount of R&D dollars the personnel required to support technology implementation. It is a high hurdle. And so what were able to do is not only had we mastered at that point a repeatable process to make our products at scale, and not only had we completed a series of pilot trials using, call it meaningful scale, commercial prototypes that could be demonstrative of what full scale implementation would look like, we had delivered, I believe, one commercial plant that was up and running and we had about five or six others that had been ordered and were planning to be commercial installs within three to six months thereafter.

And that series of proof points very quickly puts you in a new category of risk profile. And then looking at the size of the market opportunity and how much water has been an underinvested sector in the sort of the world of clean tech and knowing that new technology would have to come to market to try to solve water and wastewater challenges, there haven't really been a lot of great success stories or clear options of technologies that were already well along that commercialization pathway.

Here comes Litter co who has not only groundbreaking performance of their technology, but they have it running and installed in certain locations and they've got, you know, the beginnings of a world class team that can see around the corners of the next chapters of growth and can begin to prepare how the company's going to need to scale from its current position. That I don't know what the count there trifecta quartet that series of de risking milestones meant. It was much easier for someone to look at the long term trajectory of global water and wastewater treatment, global industrial water demands and say this technology has a lot of potential. And I already see enough reasons why providing this company with a lot of cash means they could really expand the product platform and move a lot faster and really begin that global commercial introduction.

Chris Wedding:
And was it 33?

Alex Rappaport:
Yeah. So 33 million in our series. A total capitalization to date is about 46.

Chris Wedding:
I'm with you. Okay. All right, let's go to what maybe what listeners are most curious about. Unless they read the podcast summary in parentheses. Please read the summaries, give us the pitch on what ZWYDECO does, sells, produces, etc. And in that process link it to what I think many of our listeners, maybe all of our listeners expect. Which is okay, I'm here to learn about climate tech. Yeah, go for it.

Alex Rappaport:
So the simple narrative is we make filters that don't clog. We make industrial filtration and separation technologies that we deliver to industries and agriculture that make our food, our energy, our manufactured goods and services, and we help them treat and recycle their wastewater. Or we help them access more challenging sources of water so they can have the clean water that they need to run their plants, expand production, do so sustainably. And our long term hope is to try and help industry and agriculture get off the water grid. Right. Build as much water security and water independence so that as climate change continues to affect the cost and availability of water, as A critical input to manufacturing. These industries that have their own infrastructure for reuse have as much resiliency to those impending changes as they can.

Chris Wedding:
So I just want to stress or highlight rather the way you started your answer to my question, which is wind, make filters that don't clog. It's like, how can all of us get our value proposition down to as few words that a sixth grader would understand? Right. Or the kind of mother slash grandmother.

Alex Rappaport:
Yeah.

Chris Wedding:
God bless our mothers and grandmothers, our fathers and grandfathers. Anyway, you understand what we're doing, right?

Alex Rappaport:
Yeah. I mean, the, the need to be able to communicate at many different levels and many different scales is, you know, it's a terrific skill that you only learn by being in the hot seat of trying to build a company and having to talk to, yeah, your parents and your relatives over Thanksgiving, as well as your tier one venture capital investors, as well as your customers all across the country and all around the world. You have many different audiences and you're trying to help them understand in as clear terms that are built from their experience in life why you should exist and why they should be excited.

And it's been probably the greatest joy of my professional career to be able to share with as wide of an audience as we have what we really hope to achieve, the impact that we're driving for, and how cool we think the technology is, and how excited and proud we are of the partners who have already signed up with us to start implementing the technology. Getting to share that story is certainly a delight.

Chris Wedding:
Well, that's why you're here. It must be why you're smiling so big on this. Anyway, so I'm gonna go next to the source, like the source of the innovation which you all are commercializing. But before we go there, how to just kind of relate to your ability to tell your training almost with feedback, to tell the ZwitterCo story at different levels of detail. And I think back to. Well, no, that's. I just think back to when I was getting my PhD. Yeah. Oh, so what are you studying? And early on I would give them like the freaking dissertation. And I was like, oh, why are people walking away from me with these weird faces so often? And I was like, oh, you know what I need to start with is like a sentence. And if they ask questions, cool.

Now we get maybe three sentences. And if they're interested, then we get closer to a, you know, 20 minute conversation. But in general, one sentence will be sufficient for that anyway. Great, great training that you've gone through, you know, kind of pitching ZwitterCo. over the years and I think a great advice from you to the listeners and telling your story in different levels of detail. Okay, back to ZwitterCo. So where did the tech, the innovation come from for filters? Industrial filters, water filters that won't clog?

Alex Rappaport:
Yep. So let's actually take the historical arc back several decades to really think about even why someone wanted to invent this in the first place. Membranes became a fairly well understood technology, call it in the 60s or 70s. It's been about 50 years since they have been introduced to what you might call conventional water applications. This is your municipal drinking water, wastewater, a lot of water purification, groundwater treatment, now, you know, growing volumes of seawater desalination all around. How do we take streams that have salts, contaminants, impurities, and how we get them to be functional for clean water? And in the wide world of water treatment technologies, membranes are one of the best selections for getting you to pristine quality effluent.

Meaning you can throw biological or chemical treatment or mechanical treatment, but if you really want to get the highest purity grade water, you almost always have to use a membrane because membranes give you such a fine and precise selection of taking these contaminants out of water. So you know, 56 years ago, as membranes were starting to be introduced, there were these original applications, but there was always a wall that the membrane would hit, and as soon as it hit that wall, the economics would start to blow up. The reliability of the technology would really be in question. And you rarely would see membranes push beyond that zone of comfort for their use case. And where that wall came in was the presence of industrial byproducts or the presence of more challenging contaminants that would clog the membrane. Right.

Membrane fouling, the term we call it in the industry, is the Achilles heel of direct filtration technologies. As soon as they are seeing even infinitesimally small amounts of oil or protein or grease or biological material, those contaminants, they very quickly stick onto the surface of the membrane or they plug the membrane pores. And that fouling is what leads to end of life conditions. Either because you just can't get more water to flow through it, or because you have to spend so much time trying to chemically clean and regenerate the membrane that eventually just wear down the materials. The example here is like take a coffee filter, right? Coffee filter is a membrane, semi permeable barrier. Water passes through Coffee grounds are retained. You can make membranes of different sizes.

Some coffee filters might retain bigger grounds, some will, you know, take out more fine grounds. But whenever you take your coffee filter, if you tried to smear like bike grease or canola oil on your coffee filter and put in your coffee pot, you're not going to get a lot of water flowing through it. It'll sputter out the top and be a mess. That's because that rate of permeation through the membrane is blocked when the filter's clogged. And now you don't have a functional filter anymore. So because membranes are so susceptible to fats, oils, grease and other organic fouling, or the biology that can grow eating and consuming that organic material and then forming a biological fouling layer on the membrane, it's been very difficult to try to push membranes outside of what we call conventional water. Now let's try to define unconventional water.

We are projecting, well, let's say the World Economic Forum really is projecting something like 40% freshwater shortfalls by 2030. Right. We have a growing industrial demand. We have more urban and public uses for water. We have growing population. But we are drawing down our freshwater resources to depletion. Right. We have the Ogallala Aquifer and the Colorado River Basin facing severe water stress. We have major cities around the world that have a ticking clock for the availability of water for their public and urban use. You have the cost of water that's been going up 8% year over year for the last 20 years in municipalities throughout the United States. Sort of all the signs are pointing to the water supply we think we have is going down. And how are we going to make up that deficit?

One position, one of the things I think we at Zwitter company very firmly believe in is this idea that more of our clean water is going to have to come from unconventional sources. These are your more polluted rivers, your industrial wastewaters, your sewages, your biofouling prone seawater. These unconventional waters that have often been too fouling prone to use a traditional membrane. Well, what if you had a membrane that didn't foul, it didn't clog? What if you were able to apply the precision and reliability of separation but know that your membrane is going to last for years because you could clean it and restore it and it would be a simple process of maintenance and you weren't going to be throwing away membranes every day or wasting a ton of chemicals trying to keep them alive.

That was the initial genesis of could we solve fouling in membranes? Could we make brand new materials that actually inherently refused to stick to the very contaminants or compounds that they were filtering out. And if you could have that material and you could make it in a way that was both industrially robust and commercially viable from an economic standpoint, could you now create a class of membranes that widen the membrane market, that unlock all of these new applications, all of the industrial streams or agricultural streams or challenging waters, so that we could have the tools that would help us resolve the freshwater deficit, the freshwater shortfall from only relying on simple easy waters. That's why someone said how do we make fouling resistant membranes? Now how we solved that was not simple. And it wasn't. We, I, I certainly didn't solve it.

I like to say that I'm a pretengineer, I cheated. I didn't actually invent the technology here. I, I was incredibly lucky to get connected to the researchers who actually were the original authors and inventors of the innovation. About 10ish years ago, a group at Tufts University, my alma mater, a group out of one of the chemical engineering labs. A PI principal investigator named Dr. Ayse Asatakin, who was a membrane expert, did her doctoral work at MIT. She was a chief scientist at a membrane company for some time and then she became a now tenured professor at Tufts. She was working on zwitterionic copolymers, these really special materials that happen to be so non stick, they're very hydrophilic, meaning they really love water.

So when you make a membrane out of something that really loves water, it only sticks to the water molecules, it refuses to bind to the contaminants that are in that waste stream that you're filtering out. And she managed to not only take this new material that was invented, but also find the methods of manufacturing it so that you get even distribution of pores and you get very full complete pore channels and it's something you can repeatedly manufacture.

And that imagining of this brand new breakthrough material that you could turn into a porous membrane that would have these water loving non stick properties that was originally invented to Tufts took about three or four years I think with her and a number of her PhD students to really refine the process and see just how effective it was in high oil or high organic or high fouling streams before I even got involved. So I, I got involved in 2017 when I was in a master's program at Tufts. I was basically doing a one year startup boot camp where were given the opportunity to work on building a business plan around any idea that we thought was interesting. And I really wanted to work in water or sustainable technology and I was not going to invent something of merit.

So I went to the university office of Technology transfer and I picked these patents off a list. And I knew Dr. Rasatakin and I was like, this would be so cool. What if I work on your membranes? What if we figure out what they're good for? And she was like, that's a great idea. I was never going to find a way for this to get commercialized if there wasn't someone to take the baton and actually work through the really hard problems of understanding business development and understanding investment and commercialization. So we partnered while I was still at university on the sort of technology commercial combination that could yield a successful business. And then when I graduated, we founded the company and we got the exclusive license the technology and we've been working to commercialize it ever since. That was a long answer to your.

Chris Wedding:
Question, but no, that's totally insane. I mean it's funny, just this morning I was meeting with an early stage investor friend in climate tech and describing how I really like this particular model and I was using Remora as an example. And I may get it wrong, but I believe that the co-founder and CTO of Remora was like whatever, worldwide expert in mobile carbon capture and the CEO was, you know, a young hungry entrepreneur. Maybe he's not young, I don't know, but that's my recollection. And it's like, huh, let me go find an amazing tech to commercialize. And it appears to be working quite well. It's also interesting because I was just telling my Duke class on ESG investing. I said look, techstars is hosting a sustainability oriented startup hackathon of sorts boot camp, I think it was two weeks ago here in Durham.

I said please go right and no one really kind of raised their hand. Okay, look, I'll give you extra credit if you go right. So like I think maybe five folks went. But this idea that you through a boot camp during a graduate degree went to tech transfer at the university, found this solution. Professor was gung ho. Because professors can a professor, right? That's their job is to professor.

Alex Rappaport:
That's right.

Chris Wedding:
What an amazing story. I'm so excited by that.

Alex Rappaport:
And I should say there was a wonderful moment as were nearing the end of that graduate program. We won a couple of business model competitions, started to get some interest from early angel investors. But the story would not have happened had Aisha the Inventor had the incredible foresight to say, hey Alex, I think you need a technical co-founder because you don't actually know how to make memories yet. I remember walking to her office one day holding an organic chemistry textbook, saying, all right, just, you know, show me where I need to read and I'll figure it out. That's nice. You need to find a text. So she introduced me to Chris Drover and then through a series of mutual connections, we eventually got connected to Chris Roy and the three of us found the company.

Chris Drover is our chief technology officer who had been at a company called Oasis Water, was an R&D manager there and led the scale up and successful commercialization of, you know, breakthrough membrane technology in its own right. Chris Roy was from industry. He had been a field engineer at Veolia, working in challenging streams that ceramic membranes were used in. And so the three of us really at that point had sort of the applications, technical, commercial unity between the three of us that there was actually a rational path for us to be able to put dollars to good use. it certainly would not have been possible had I not had my co founders to get going.

Chris Wedding:
Well, that's a great point you make. And also a good sign of CEO is to make sure, right. The co founders or other team gets a call out. So good on you. Clearly a good team. And I'm thinking back to your professor who you're showing this organic chemistry book to. And in my brain I'm picturing her like patting you on the head like really nicely.

Alex Rappaport:
Oh, she had a nice little bowl of like candy and chocolates that she'd be on her desk. So whether, if it wasn't the head pad, it was sort of like, here's a Tootsie Roll, like yes.

Chris Wedding:
Yeah, yes. That's, that's also a good story. You referenced some of your partners, I believe earlier. Whether these are like go to market partners or like early customers, maybe describe for potential listeners, I don't know who they are. Slash who your ideal, say channel partner or customer is.

Alex Rappaport:
Yeah, 100%. Membranes are a component, right? Sort of intel inside model. They are the technology that performs the separation. But you can't just dump a bunch of water on top of membranes and hope filtration happens. Right. They have to be engineered into systems. Those systems have to be controlled. They have to be integrated with other water technology processes to get to an actual answer for a customer. And if I'm a manufacturer in the food and beverage industry or in a landfill or in A an oil and gas produced water site, I'm probably going to deploy a combination of technologies to take out big stuff and then take out some of the hard organic stuff and then take out the salt and then concentrate it all or maybe even valorize some of it. So water treatment is a puzzle.

And the stakeholders in the value chain of water treatment that solve the puzzle are your systems integrators. Systems integrators or solution providers are the ones who sometimes have some of their own proprietary technology, sometimes they're technology agnostic, but they do the heroic work of piecing dealer solutions, figuring out the economic model and sort of the cost equation, doing the equipment selection, costing, fabrication, project delivery and supports. They're the ones who are typically bringing all of this new equipment to market with membranes being a very high value component inside one of those systems. So for us there's actually two elements of our business.

One of them is where what we refer to as new membrane processes, and this is a very channel driven model because in a new membrane process where you're using now filtration in spaces where it never could be used before, that means someone has to build all the equipment around it and someone has to say, hey, because your membrane is fouling resistant, I can do this new thing, I can use membranes where before I was using a chemical process, or I can hit a higher recovery, which means my waste volumes go down or I don't have to clean it as often. But every one of those new changes create second order effects on other parts of the process. And the systems integrator has to be able to understand the whole economic picture of trying to bring new technology into their process.

So what we've done is when new equipment is required, when you're trying to go from a manufacturer who's today just hauling 100,000 gallons of wastewater away by truck, and now they're going to use a multi step filtration process to generate clean water and to minimize concentrate volumes. You and your system integration partner are going to need to understand well hauling is $30 per thousand gallons or more and it has this bad carbon footprint and people don't like the nuisance violations of lots of trucks coming in and out of their township. Instead they have this much floor plan and they're going to build this number of systems and it's going to cost this much and the membranes are going to make all of this easier or possible. And we work together on that process development.

So a really strong channel partner for us is a integrator who has a zeal and a process for new technology introduction. And that works very closely with us on not just ideating how the technology can be used for that specific application, a dairy plant, a poultry plant, a landfill, but also is involved in committing the resources. And it does take resources of their team and their equipment. Sometimes our team and our equipment and our best minds are coming together to go validate the process so that we can really understand all the assumptions and we can scale it up and then we can sell that as sort of a packaged offering.

And once you go through that initial investment of figuring out the process, now you have this highly differentiated solution that your integration partner can help go take to a whole bunch of other customers, either they have or that they've been interested to try to just sell to. And now they have something, a unique arrow in their quiver that can make their solution more successful. That's where our partnerships are strongest and we try to really focus our efforts. Because we're still a young company, we try to have a limited number of partners that we spend a lot of time with because it's very easy to try to build relationships with or to please too many different companies all across the world in the vast diversity of different water applications.

We found it much more successful to go long and go steady with a limited number of folks where you don't just have one person at ZwitterCo who knows one person at that company, but at the executive level, the manager level, the engineering teams, the sales teams, the operations teams, everyone knows each other, is communicating, is working together and you have much tighter and more aligned of a process of how you go to market. That's where new equipment is required. Other forms of our products are actually just a drop in replacement, a plug and play retrofit. And in those applications, it's less required to have a partner, it's less required to have new equipment or new integration that's required.

And in those applications, we actually work directly with end users and we say, hey, you're trying to make clean water for your boiler, or you're trying to create processed water from that kind of contaminated river. You've got a system installed that's doing purification, but if it's struggling, replacing those membranes with our membranes might give you much better uptime, lower cost, the actual capacity that you need. And so that's that retrofit opportunity is a little more direct in the sales process.

Chris Wedding:
Okay, I'm totally with you. I think maybe just to summarize the, let's say climate and cost benefits of ZwitterCo and then we'll switch to the last kind of part of our pod on spotlight. Right on your face, Alex. So, all right, you've got less cost in say the trucks or the fines and moving wastewater off site. You've got fewer filters being manufactured and delivered in the old fashioned way, which is the whole life cycle cost of the energy and related carbon there. Maybe you've also got filters as they foul. Probably takes more energy to get the water through them, I'm guessing. Yeah. Okay, there's that. What about not listing there in kind of the GHG and cost saving buckets?

Alex Rappaport:
Let's start with cost. The simplest way to try to identify where is there going to be a economical way to deliver a new water treatment solution. The bare bones I think you're always competing against is the drain, right? The cost of doing nothing, cost of just discharging your wastewater. So today across the United States and various municipalities, the cost of buying freshwater and the cost of discharging wastewater to a sewer can range between 3 and $24 per thousand gallons for an industrial customer. And if you have well water or some of your own access to water, sometimes it can be even cheaper than that.

But 3 to 24 is a pretty wide range and that can be the difference between hundreds of thousands of dollars a year or tens of millions of dollars a year, depending on how much water you need in which location that you're in. So when we think about delivering filtration equipment that can yield clean enough water that it can offset your fresh water needs, that's the first place you go to try to get a gut check is what if we could make it for $8 a kilo gallon? What if all in amortizing the cost of the equipment and all the operating expenses to run it. If you're currently buying and discharging water for 10 or 12 or 15 a kilo gallon, we can provide you a multi stage filtration option that will produce you clean water for $8 a kiligallon. And that can be $8.

Regardless of how the world of water scarcity and water access continues to change, you're going to have that on site, it's going to be reliable for you and you can trust that it's going to be there and that we're going to be here to help you maintain it. So you know, there are certainly other cost things that can show up. Hauling is very expensive. Surcharges on discharge are very expensive. Honestly, just compliance and regulation. There's a Couple industries right now that are having their effluent guidelines changed.

And so while people have been focused on just doing the minimal amount of pre treatment to make sure they don't get fined, as guidelines change, as new rules and regulations come out, that creates a massive hammer that people have to frantically scramble to try to figure out a new solution to get to a totally new water quality in their output. So compliance can be a big one. The other one that is probably bigger than all of those in and is growing and it's magnitude is just what happens if you don't have enough water to run your plant? What if you think your groundwater wells are drying up? Or what if your water that you projected is going to be there? Well, as you've grown and grown your plant, you actually don't have more water that you can tap into in order to grow.

So we refer to that as license to operate. Right when you are hitting the end of your capacity because your water access is going down or your production needs are going up, sometimes you just can't get more water in which case reuse becomes the only option. And it's not even about what is the, you know, the dollars incentives of it all.

Chris Wedding:
It's a great list. It's almost like you've given that list.

Alex Rappaport:
Before, Alex a couple times. Once or twice, yes.

Chris Wedding:
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All right, let's switch from Zwitterko to Alex. Now Alex, the first question I would normally ask is advice that you would give your younger self. Now yesterday the podcast I recorded, you know my friend guess was I don't know, 50 years old, plus or minus. You are not 50 years old. I'm guessing based on your description of your career path here. So I don't know, maybe it's advice you give your five year olds. No, I'm just kidding. How would you like to, how would you like to answer this part of our podcast?

Alex Rappaport:
I'll, I'll say one of the lessons I think was most important as an early entrepreneur. I refer to entrepreneurship as a very apprenticeship model. You kind of learn how to do it right by just putting yourself on anvil and having really smart people hammer away at you over and over again until you start to actually have some lessons, you know, filter into the brain cells. I was so lucky really early on to find a, a cohort of mentors and advisors. Some of them were university professors, some of them were early angel investors, some of them were folks who joined my board of directors, but serial entrepreneurs and operators who had the experience to understand the challenges that any early stage company goes through. You know, I knew that I came into this business as somewhat of a blank slate, right?

I, for the listeners out there, I'm 28, right? So I started this in my grad program. It took, I think, two things. Not trying to assume I knew things I didn't because there was a lot that I didn't know and I didn't try to pretend otherwise. I tried to. Whenever there was decisions or key strategic efforts, I would synthesize as much information, almost hub and spoke style from many of my advisors. And that much meant I had to have more patience and more discipline about reviewing the details of what were trying to do and putting them in front of as many smart people as I could who were willing to give me, you know, sage feedback and advice.

And I often found that just the process of getting that feedback made me smarter, made me closer to folks who became key supporters of the business and having both sort of the humility and the charisma to go out and share the story. Here's what we're trying to do. Here's how we're solving this problem. Here's how the business is evolving, okay, now tear it apart and just over and over again that constant process of deconstructing your strategy and having different perspectives feed how you are, you know, informing the business's growth. That's how you gain, you know, 10 years of experience in one to two years of operating, because you just have to get. It takes a lot of time. It takes a lot of emotional energy.

You don't always see your friends and your family as much as you'd like to, but it Meant that I accumulated a very wide network who was very enthusiastic about the success of our business and in my personal success, and that was able to help me answer tough problems very quickly and eventually became sources for funding or new team members or other things that gave me more of the confidence and experience to have more and more specialization and more hard problems that the team can consume and manage internally.

Chris Wedding:
Well, one thing is for sure is that in most graduate programs, folks don't come out super eager to say, great question, I don't have any idea what you're talking about, or like, let's figure out what I can say. That sounds pretty smart because I'm used to being graded on this stuff. Yeah, I think it was so liberating for me earlier to be like, oh, yeah, you know, I don't know. But I'll tell you what, here are the three things I'm going to do to get you answer to your question, you know, by next. By next Wednesday. Right? Yep, Quite liberating. I think you also bring up another great point of humility. I guess it's related to the first point, but to say, look, I don't have all the answers, and guess what? There are people who do.

And you listed several categories of people that you've been leaning on for advice. So huge fan of that as well.

Alex Rappaport:
Yeah, I got pretty good at the phrase, let's unpack that. You know, classic mba, you know, business school speak. Help me understand, you know, I hear the creed. I want, I want to understand. Let's hop on a whiteboard. Let's actually. And that's for so many people who have been through the ringer in their own professional career. That's what they really want to do. Right. They want to be able to. They've got so much knowledge accumulated and so much experience accumulated. But, you know, they maybe don't want to be in the trench warfare themselves anymore. So it's very helpful for them to get to impart that wisdom in, you know, select advisory sessions and workshops and discussions. You just gotta be, you gotta be receptive to it.

Chris Wedding:
True, true. Okay, how about next, tell us some habits or routines that may involve water. I'm guessing that keep healthy, sane and focused on this path.

Alex Rappaport:
Yeah, relating to water. Probably taking longer hot showers than I should. The probably number one habit that I would not have expected, but became crucial for me, and this is almost just perhaps a frame of my personal brain chemistry and how my psychology works. I read fiction every night before bed. It's the only way to shut my brain off. So I will. And they're often not good books either, let me tell you. It's this garbage fantasy and other fun stuff just to have some, you know, altered the anxious sort of racing mind that's just chewing on so many questions on so many different multi dimensional problems that cannot be easily answered, can work itself up into. Into quite a. A difficult to rest, difficult to get some peace, difficult to get some emotional distance that is necessary sometimes from problems.

So I found that actually just having a quick switch I could flip with, you know, opening up a Kindle app on my phone and reading a little before bed was a. The only way to get a good night's sleep and helped me not get too sucked down in the vortex sometimes when things are hard and things are often hard.

Chris Wedding:
Well that's maybe the first time out of whatever 150 episodes so far as we're recording this that someone said, yeah, I read bad fiction before.

Alex Rappaport:
It's not respectable. And I will not tell you any of the books that are on my library. Not a chance.

Chris Wedding:
Well, I'm not going to ask you, but I will ask you the next question. Some other books you would recommend. But that's a good one. I don't know here too. I was just asking the CEOs in our climate CEO peer group community. I was like, hey, what if we all went to bed at night listing things that were amazing about our day know, 5, 10, 15, whatever versus what often happens when we lie down, which is let me unintentionally rehearse the f ups, you know, from the day. Right. So. But yours is just as effective in so many ways. Right. As to interrupt that negativity bias that we can often have to replay things that didn't go perfectly.

Alex Rappaport:
Yeah, I think that's, that's well put. Certainly, you know, moments of gratitude are, are key. I would say many of my warmest feelings of gratitude are to those who have supported me and who worked tirelessly at the company to make all of this happen. I mean my wife is not the easiest thing being married to a company. Not to say that, you know, we don't make time for the things that matter in our relationship, but either it's hard and she knew what it was like to have a dream even before I had met her. And she has only ever encouraged me to work harder and to push harder and to be, you know, stable amidst the often tumultuous journey of venture development.

And so she, you know, my co founders, my family, and just the incredible team at Switterco who it would be hard to understate how committed and how dedicated, how much just sort of joy and passion you see from folks all owning a piece of the story of what we're trying to do. So I'll reserve the vast wealth of my gratitude just for those in our orbit that are making all this happen.

Chris Wedding:
Well, what we should end right there, but we're not because I have one more question to ask you. What what are some books or maybe podcasts, I don't know, tools, quotes, something tangible that listeners could take away to learn more based on what you've found useful.

Alex Rappaport:
This is going to be cliche, but I'll say it's a thought that has often continued to create value for me is if you ever read Clay Christensen's Innovators DNA, there's two concepts, both the sort of curve of disruptive innovation. Again, dare I use the cliche disruptive but just thinking about the non linear path that you often have to go through to start to carve out niche applications and build early adopting customers and how you optimize and an imperfect product or solution over time as you gain market traction and you can bring costs in and you can better understand the use cases. Understanding just the non linear process of technology introduction gives you some comfort when it feels like, you know, how is it possible that anyone brings innovation to market when it's so challenging and things are never perfect as you first get going.

So knowing that's actually a pattern that the most successful companies have to sort of work through that can be both a model and a comfort. One of the lessons I got out of Christensen's work is also just the idea of associational thinking that one of the chief examples of rarely is the art of generating a new idea, something that happens within the four walls of your own mind. A lot of times it's transposing answers tough problems in other industries or other scenarios, figuring out how you can apply them in new ways into your context.

And that ability to cast a wide net for insight and be the engine that turns that into utility for your current needs is a very it both breeds creativity and curiosity and sort of gives you a reason to always stay really open minded about where you can find insight. But it is the engine that powers I think a lot of the most impactful things that the humans have ever created is Just constantly being part of that iteration, that associational thinking. And I've tried to cultivate that. And I know some of the most successful members of my team are masters at that process because there's so many technical disciplines that are working on difficult, different problems. But the best answers come when you sometimes from places you least expect it.

Chris Wedding:
It's also a great reminder that those folks who are either emerging professionals or career switchers into climate tech, although they lack kind of whatever, decades of experience in clean tech, climate tech, sustainability, the cross sector skills, learnings, models can be super useful. Yeah. All right, last minute here, Alex. What's a final, I don't know, call to action message? Maybe it's the kind of, I don't know, customer or partner you want to hear from. What's the final word? My friend, the final word is, and.

Alex Rappaport:
I'll say this just to the generic audience, whether it is, you know, young kid trying to work on an idea, whether it's customers or partners who hear what we're working on and want to get involved is it's always a lot harder than it feels like it should be to try to actually make something happen. But it's 100% worth it. The determination that comes from seeing your effort, your willpower turning into impact and solutions. You know, it almost doesn't feel right if it doesn't take a little bit of elbow grease and a little bit of grit. And I think we find the most pride and value in solving hard problems and knowing that we don't shy away from hard problems. And we love to work with partners and friends who embrace the chaos and creativity that's required to solve our problems.
So give it a try. It's worth it.

Chris Wedding:
Awesome. Great spot to end. Hey, Alex, we're rooting for ZwitterCo's success. No pressure, but the world depends on more and cleaner water.

Alex Rappaport:
I appreciate it, Chris. Thank you so much for having me.

Chris Wedding:
Thanks for listening. And if you want more intel on climate tech, better habits and deep work, then join the thousands of others who subscribe to our Substack newsletter at entrepreneurs for impact.com or drop me a note on LinkedIn. All right, that's all y'all. Take care.