Ten Years Hence: Innovation, Part 3: A (different) Innovation Journey

Episode Topic: A (different) Innovation Journey 

Join John chroeder, Executive Vice President of Retail, Foodservice and Water Groups at Marmon Holdings, for a discussion about how companies with a wide variety of brands and businesses functioning under one umbrella like Berkshire Hathaway, Inc. can innovate better by bringing entirely new things into the world that serve to critically improve life—radical transformation that requires courage, wisdom, and inspiration.

Featured Speakers:

• John Schroeder, Marmon Holdings

Read this episode's recap over on the University of Notre Dame's open online learning community platform, ThinkND: https://go.nd.edu/24c25f.

This podcast is a part of the ThinkND Series titled Ten Years Hence: Innovation. 

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Transcript

Introduction and Initial Anecdotes

TYH25 Ep. 3 Speaker - John Schroeder _ Marmon Holdings_ Inc 0:06

Morning and welcome. This is 10 years ahead. Our focus this morning moves from collaborative, intelligent to a different innovation journey. Our speaker, John Schroer. John Schroeder currently serves as executive vice president of Responsible for retail food service. Prior to this role, John held a variety of executive roles in Marmon, including Executive Vice President of Food and Beverage, president of the Water Group, president of the residential businesses, and the Water Group President Ofr Technologies. Prior to Marmon, John served as founder, president and CEO Hydro Globe, a technology startup company in the water industry that subsequently sold to Marmon. Previously, he held executive roles in engineering research and operations with cyber chemicals and UOB chemicals. Additionally, he served on the board of director for in the company. Several degrees, including a Bachelor of Science in Engineering, a master of science in chemical engineering, and a master of management science. All from Stevens Institute of Technology in Hoboken, New Jersey. Ladies and gentlemen, please help me welcome to the Mendoza College of Physicists, John Sch Boston. And so originally Jim asked if I would do this, he started talking to me about all the people who have been here and done this. And there were all these famous people. And I said, I don't wanna go too many famous people here, but stop here. And I got the introduction to Jim because my company, what My Water Company, and Jim mentioned several, a lot of work with the Not Dame Futures group right now innovate. You wanna know Scott in the back in charge. It involves hundreds of our people, and we indeed are learning a lot about how to innovate better. Uh, Mary introduced me to Jim, as I said, and, and, and here. I'm, I'm not sure the formality, how it works here. Feel free to interrupt, ask questions. It'll make me feel better that you're listening and know what I'm saying. And, uh, I'm gonna be asking quite a few questions at you, so you might as well ask some. So some students here, some not students. And the, uh, one of the questions that I have, because there's a little bit of technology in this presentation, how many of you have a technical background as well of some kind and any, like a chemistry area? All new? Uh oh, okay. I can say anything I wanna, so that's good. Um, sort of a final, uh, start of the day. Any of you. So I had a, I had a five today and, and so I hope gets better, but I, I only mention it because it's innovation and so it, wordle just really got started in 2021. In 2023. It's the only time I find stats, 4.8 billion plays int So it's innovation, it's a different kind. So, uh, bit of what I'm gonna talk about. I'm talk about my company commercials. I do, I'm gonna give you, uh, examples of innovation mar talk about my story. Uh. So I wouldn't be here at all, regardless of Mary or anything else, except in 1999, I had a daughter who graduated from here and, um, graduated the government in Spanish. And, uh, we turned out to love Notre Dame. My trip here today was a walk across the street from the condo we bought here, which is, uh, right behind the Fairfield being so, uh, still cold lock. I was in West Palm Beach yesterday and it was 80 degrees. So, um, but whatever, uh, I, I'm, I'm gonna talk about the marman, the standpoint, and Jim said Executive Vice president in Marmon. That means that we run several groups. Marvin organized 11 of, and I would be running three different. And again, as Jim said, I have pretty varied background. Not, not only in industry. He, he mentioned a lot of that. I've also served, uh, on boards of lobbying organizations. I've been involved with my town from the standpoint of the planning board, from the standpoint of a utilities authority. So a, a lot of different things. And Cyron Chemical for the MBA students I think be interesting if Cyron was the first leveraged buyout that ever occurred. And then we leveraged, bought out the chemical piece of Cyron, uh, from, from Cyron. So I was an owner of a company, part of, of our company and got involved with a lot of really interesting parts of that from the, the standpoint of even being listed on a stock exchange at one point. I gotta ring the bell one morning of the American stock exchanges. So some pretty cool stuff. So I talk about Marmon. How many of you heard anything about Marmon or know what Marmon is? Oh, you did raise your hand Indeed. Yeah. Why do you know? Um, they do the, there's like, and we just did one. Yeah. And two years ago did you win second. So we're a, a, a diverse company, as I said, about$12 billion today and, uh, and really are set up as autonomous companies. For those of you that haven't heard of Marmon, I'm gonna guess you heard of Behi Hathaway and Warren Buffet and, uh, and that's one of the operating companies under, under Berkshire. So there's a. Up we build railroad tank cars, then we lease railroad cars. So really, really diverse in the past that Jim mentioned this, I directly run the business, the food service business and the retail business. And then through the executive vice president role, the electrical business. So why wide variety of the utility banks? So Marmon is our kind of company. That's, that's something Warren said, but I think, um, and, and again, he, you told me if he spoke here at one point, well, Don Keo said he should, and he called my dean, Jack Kane. Jack called me and said, go find this guy. Uh, this was in 1990. I could not get 25 people into the boardroom of the Hay Center. It just didn't happen. They thought he was too boring and, and not particularly famous. The second time we invited him, we had him in Jordan Auditorium, which holds 3 75. There were four 50 I would think, in there on the steps and on the rug and so on. It was a really good event. The third time I invited him, the folks in development, sort of like the Marine Corps, the fire department, I know we need them. I still wanna be one of them. The folks in development took over the event and moved it to Percell Pavilion, 11,000 people, jumbotrons, uh, a network television news anchor, interviewing him. Um, I went back in my office. So, uh, I, I really do appreciate. Such as this in which we can get an opportunity for questions. By the way, though, that fellow said something in Jordan Auditorium that I still quote to this day, and NBA stood up and said, uh, Ms. Buffet, what do you think we should invest in? Now? He sat down, I think he thought he was gonna get a stock tip, right? What Warren Buffet had said was, invest in yourself, improve your skills. He said, I'd start with running and speaking. Yes. He said, I would start with those skills that move with you from job to job and place to place. He said, the stock market will always be there. It'll go up, it'll go down. It'll always be there, but your skills are unique to you and you've gotta work to make them better. I've never forgot that was a really good line. So one of the other things he said. I think again, appropriate certainly for, for the, uh, management students. And he said, Charlie Munger really said it. He said, stop buying fair businesses at wonderful prices and instead buy wonderful businesses at fair prices. I could say that again. Stop buying fair businesses at wonderful prices by wonderful businesses at fair prices. And that's the philosophy he's followed. And of course, I think we all know how rich he's, and then right now Berkshire has three$25 billion in cash that it doesn't know what to do with because there are no wonderful businesses available, bought fair prices, something, and. We have operations, 600 different facilities in 20 countries, and we sell everywhere in the world. And one consequence of the 33,000 employees even at normal turnover rates. And that's about what we have. We have about 5,000 jobs over every year. About 2000 salary jobs are open right now, and I'll give you some data on that later as well. So the history of Marman is indeed a history of innovation was formed by two brothers, Bob and Jay Pritzker outta Chicago, who bought a, their first manufacturing company in in 1953. As an aside, JB Pritzker, who is the governor of Illinois, is the nephew of those two guys. They got the name in 1964 and obviously built this into a huge conglomerate. And then in 2008. Sold it to Marmon and then Berkshire Hathaway. So, uh, you know, a lot of stories around that time. The grandchildren at one point, and again, grandchildren of Bob Ache, sued them because they thought we should get our inheritance now, and they won, which is absolutely credible. So each of 16 grandchildren got$1.5 billion. There were two half grandchildren, they got half of that. So pretty, pretty amazing stories when there's that much money. And that was one of the reasons that they had to sell off Mark because they needed money. And the name comes again from, from this first Marmon motor car, car company. And they made the Marmon wasp, which is the car you see there, which, which actually won the first Indianapolis 500. Again, why do I even bother to show this? Because it's a story of innovation. Back in that day, race cars would have two people in that little cockpit. One would be facing backwards because they wanted to know where are the other cars, what are they doing? The innovation that that drove this to win was a rear view mirror again. It's just absolutely incredible. Something that simple could, could be an innovation. The other innovation was that actually how they ran the race, they ran slower to win. Why? Because tires were out really fast and so they ran at a certain speed such that they ended up, Chay tires went West High, but everybody else, so they went. So right now there's a movie actually being made about the marm and wasp. It's really being made about the first Indianapolis 500. And uh, the interesting thing for the people in this room is the producer of the movie is an Indiana guy who produced Hoosiers and Rudy. So this is his third Indiana movie. So again, I'm, I'm gonna ask questions. Hopefully. So what do you think is innovation anyway, you a better way of doing something? Yeah, that's good. Alright. I hopefully for more response to my future questions, but I, I'm, I'm gonna quote what Mary told me. Innovation, because we got involved in, in the, uh, work with the futures group. It's bringing entirely new things into the world that serve to critically improved life and inspired as sometimes radical transformation that requires courage, wisdom, and inspiration. So again, a lot of different things. In fact, most of say it just, it means new things. It. Marvin does innovation in a variety of different ways. We have a corporate innovation officer guy, Jeff Galacia, who you would've met then at the Innovative, or at least seen Jeff. And he has a staff, both marketing and and engineering types of people, automation people. And we have 150 person group in Bangalore, India that does process work. Pretty much some core innovation work, some IT work other things for us as well. So at Tampa level, Marmon has a bunch of stuff. Then in these different 11 groups, we tend to have other things. So in the water group, I have a guy that's VP of Innovation, and then we also have a 10 person group in Shani, India. That's still pretty much more fundamental research. And then the businesses themselves, the under businesses do some innovation as well. So we have innovation at a lot of level. I think it works. It's pretty efficient. Okay. I'm, I'm going to say 80% of you have on your person right now something that Marvin, and it's because you are gonna have an iPhone or smartphone of some partner. I really wish we made a smartphone. We don't, but there are some really tiny screws in that phone. We don't even make the screws. We make a little bit of a speckle material that keeps the screws in place. So it, it, it, it, we're ubiquitous things. Things are everywhere. As far as the house itself, how many of you have a water softener? Okay, that's good. What, what sort of things do you like or. 40 bags down. So we know this, we the manufacturer in the world, but we know down pollution, all these sort of things. So in, in our India lab right now, we have four different projects going on that could soften water without using salt. And that's the sort of things we look at. Yeah, we, we own the market today. Not quite, but we we're pretty strong, but we're still doing work to improve it and to do better, we make wire that you would find in your oven because it's special, high temperature types of wire. And then we'd find wire that you make, that you find in the, and the odds are we made. At McDonald's as well, and I, I, I single out McDonald's a bit here, but, but many, many other of the QSR restaurants that use our products. And just wanna talk briefly about two because they're, again, innovation stories in a way on the, uh, right hand side's. Number seven, we have something we call the saber king and, and the saber king slices, tomatoes. This sounds like, how could there be any innovation in this? But people slice tomatoes law by, they just had a knife and they, we sliced tomatoes. And guess what happened? People cut themselves, they got hurt. We invented this device that you just plug the tomato in, come down, no possible contact the way it's designed and innovated to get. And so it's a really big deal and it's really saved a lot of accidents on the bottom right. Item nine. We have something we call the A BS Automatic Automated Beverage dispenser. So if you go to a quick serve restaurant, turns out that today 55% of the orders at a quick serve restaurant occur through the drive through. And so you go to the drive through, there's a point of sale type device, you talk to somebody, you do whatever. And the way that this machine works, you get the order directly from the point of sale to this machine, and it's pouring continuous drinks as people go through. Why is it important? Well, right now the biggest problem in the quick serve industry, many industries, is finding labor to actually work the. The turnover to quick serve restaurants, hundred percent per year, which is just an astronomical sort of number. Typically might be 15% somewhere else. So this helps them by saving some labor. Maybe they need a little bit less from a people sense they can keep running, but second, I said 55% of the orders, if there's a drive through. Their most important thing is how fast you can get through the drive through. Right now, typical if you saw six cars, this is what I know from the industry stuff. I get six cars in line. You won't go, you'll just stop. You'll go somewhere else. They want to get some through the drive through in 20 seconds. So this is what helps do it. So again, innovation at a really significant level. John, to what extent is AI engaging any of that? I remember an experiment with McDonald's where they had people at remote locations in Idaho somewhere taking orders and punching them in, come up on a screen at the restaurant. It would seem to me that artificial intelligence would be right for that kind of a task. It, it, you know, it probably is. I can tell you from the standpoint of monitoring their competitors, we're starting to scratch the service of, of what AI can do or what types of things we can bring to a McDonald's. But I, I think you're absolutely right. It'll, again, transform how these places operate over the next few years. And then finally, one other example, which is, I say in the sky, if you've flown recently on a, uh, fairly newer aircraft, you'll know almost every seat back has a video of some kind. There's plugs and power at every seat. So, so more and more getting that way that takes a really special kind of. Because they don't want the electrical current to disrupt the plane's avionics. So we make those kind of wires, we produce them and, and we're in probably almost every Boeing plane sits out there for that. So gonna switch gears, gonna talk about my experience relative to entrepreneurship. And so when I earlier said, okay, I was at these company Sidewalk Chemicals, we actually sold it. I didn't say that and I was out looking for something else to do. I was probably not the most normal person from the standpoint of where I was in my career to become an entrepreneur. I mean, I could tell you that roughly I was about 50 when I started that, which, uh, you know, you might not think is normal. I'm talk more about that later. And I wasn't deliberately looking for an entrepreneur job. My network, me there. And something that I won't ever regret for sure. So the startup and I, I have a couple slides that are high level that I'm gonna go back and go into it. So the startup of the company was named Hydro. It was a university based. The opportunity that existed in that has to be a marketing opportunity for these types of things was the EPA had lowered in the US The limit for arsenic in your drinking water from 50 parts per billion to 10 parts per billion sounds low, but even at 10 parts per billion, there was a one in 300 lifetime cancer risk if you were exposed toic at that level. So I think everybody here knows kills you, but very few people know the really more endemic issue is this cancer risk. Arsenic is pretty commonly occurring chemical. Strangely, it's the 12 most, uh, occurring natural chemical in the, in the us. So another question. What do you think is the most common element? Hydrogen. I'll get to that. Not, not, not it. Hydrogen actually the most common element in the universe. So now let's talk about earth. Well, uh, no close. It's funny. You are all breathing it. Yeah. So oxygen is, is actually the most common, but not way you think is you're breathing it. That was false. It's the most common because the earth core is iron oxide and it's the oxide in that, that, that makes it the most carbon element. So, but, but very common. It is generally in, not generally always in groundwater from wells, not for the arsenic, not in, not in the typically rivers and and lakes. Uh, so, and then I did a little bit of look because I thought it'd be nice to know what's the water in South Bend like. And so I can tell you that in South Bend, the, the, the, the town publishes a report every year says, here's what's in your water. That 3% of the wells that be up taps, because they actually do this at the tap in South Bend, have lead at greater than the minimum contaminant level that you're supposed to have in the tri. You've all heard of the forever chemicals, I'm sure the, the p and so the capon derived chemicals, and it's present at a level of about one to two parts per trillion from the samples that they analyze. Four parts per trillion is the allowable level. Um, so there are things in water below the EPA can tap in the well, but, um, but still there. And then again, as we, before we talked about water softeners. The water in the center is incredibly hard water, a lot of calcium in the water, so you really need water softeners. We, uh, we looked at the, uh, approaches and again, technology developed at a university. Uh, eventually we evolved a technology. And just upfront, the, the realities of doing something like this is that it's ups and downs, it's a rollercoaster, emotionally and in a lot of other ways. I looked at some stats. One out of 10 roughly. Entrepreneurs succeed at doing something like this. And I mean, succeed. Some sta actually a couple out of those 10 break even to give up and stop the rest fail. Um, bcs know all this, so they buy, they get portfolios of this stuff. They don't just try to invest in one, they wanna invest in a hundred because they'll, they'll work the odds and get to where you, uh, actually make some money. So Hydro was the name of the startup. As I said, it was named by three professors. And, and I'll talk a bit about how that came about. Who invented some technology and saw an advantage in it for arsenic. Now part of it was a humanitarian reason. I mentioned the US and, and, and the, the decent amount of arsenic in the us but India, Bangladesh, China had far, far worse situations. So they were really trying to solve a problem in those type of countries where it wasn't only cancer was killing people, but there were skin diseases and all kind of other things. So they, they did a lot of work to try to develop a technology that then they could dumb down to a point where it was easy to use for people in those type of situations and got it to the point where you injected a little thimble full of chemical into a bucket of water, pour the bucket through sand and got rid of the arsenic. So, but that was really more their motivation and then they saw, well, maybe there could be something here that would actually be AC company. So Stevens was working on this, this approach back, this is in the mid to late nineties of what they call techno techno. Which blended science and, and engineering education with innovation and then with nurturing new high tech companies. And it wasn't all that normal back then. Today. I think there's, there's a lot of incubators and this sort of thing. They were committed to this approach and they were trying to learn how to make the model a success. So Helo was the third company that they tried to put through this. So the driver was arsenic. Again, groundwater really prevalent. 10% of all the wells in the United States have arsenic above this level that the EPA a was saying could be an okay level, which we, that wasn't even an okay level. And so one thing about arsenic, and again, this gets back to chemistry. Sorry about this, but it's really, really interesting. Arsenic is a cation, but that's not how it exists in nature. It exists as what they call an oxy, meaning only that as an oxygen molecule and an arsenic it in two different states, guys could take notes, become chemists after this. Um, and, and, and so one is a valence state of five and the other three, the only thing that that means, and it's to the whole thing of what we were trying to do is five, was I, you can do certain things to remove it from water. Three is neutral. It's much more difficult to remove from water and they both were not easy to remove economically. And again, EDA is really searching for technology. Nobody knows how to do this at this point, but we got a new standard, we've gotta do something. So again, they found it hydro glow. Unlike many startups, there was no money. So this is not a great way to start off a life like this. They were doing some work with darpa, with the government, defense, high tech, uh, research the government. They got a little bit of grant money from that, they set up the company in interesting way. Each of the three professors, they gave 10% ownership to, excuse me, um, with somewhat of a unique model. They brought me in, gave me 10% of the company, and Stevens remained owning 60% of the company. Despite that we had no money and we were still being charged rent to be having space in their, in their building. So. So the early months were crazy. I mean, they were absolutely crazy. We were housed in a building on River Street in Hoboken, New Jersey, but only really other important fact about Hoboken is this was just a few doors down where, from where Sinatra lived and was. Um, and, and my very first job was to buy a desk from IKEA and assemble it. Uh, so you really did get to do pretty much everything. You still working on that? I did. That desk is still there. No, it's gonna break that Tesla. Pardon? Um, the, uh, the, the, we to try to get some, some idea what the market thought did care about the sort of technologies we had. We did, um, in a lunch learn with, so. You go to an engineering company, they give you, you, you buy pizza for their engineers and they are forced to listen to you for half an hour. But it was good. We started to get to figure out, you know, was anybody caring about this? I had a lot of contacts from, uh, my previous life at that point, especially from this lobbying group in mechanical industry, a lot of different environmental engineers. So we ended up going and, uh, I would, they would let me come and talk to them. I ended up getting a consultant as, as one of the guys that I had known from the industry. And again, did, just did a lot of work trying to get their interest. We did get a little money. We got, we're doing some trials. I'll talk a bit more about this later, but, so this started out as arsenic, but we did this trial at, uh, one of the technologies at Arsenal in New Jersey for a lead removal, uh, project. And so, um, it, it worked okay. Uh, but this technology was perfect for it. I, something, it was a little scary. So the, the reason that there was a lead issue at the, the arsenal was they had a big berm that they would do firing exercises into, and if they hit the berm, it was fine. The lead, the bullets were sort of contained. They changed the burn out periodically. If they were short and it hit the ground, the leg would eventually leak into the groundwater. And the lake was really, that was, was really polluted. I a little bit disturbed by how lot, and the bullets actually missed the burn, but, uh, but yeah, something that, uh, just turned into a nice trial and a little bit of money. Didn't get any other grants, but particularly, and again, barely, barely paid the rent. But you get all kinds of unique experiences in, in these kind of things. Stevens had a relationship with a US congressman named Bob Franks. And so he became a consultant to my company, which again was interesting because we didn't have any money, but he was a consultant to the company and there was a lot of government money in theory. So I gotta go through the halls of Congress a couple of times, talking to senators, congressmen, and Senator Cetera, trying to pitch the projects. Again, didn't ever come to any fruit from the standpoint of money, but great experience. Something that that helped us out. Two technologies were called Ferme and Active Met Ferme was pretty simple. Little bit of a high chemical called chloride. Pump it into the water and give it a little bit of tie, give it some sand to sit on and it would precipitate out the arsenic. And so, okay. Pretty good stuff. Active was much more complicated. It just took plain iron violence and vibrated them because if you didn't vibrate them, I think everybody pretty much would guess what iron and water and oxygen leads to, which is rust. And then completely, IM, so you wanted to pass stuff through this iron. So again, pretty neat technology from the standpoint of, of, of innovation, but a lot of different difficulties that we saw in, in, in terms of how are we gonna make it work. So we did get some trials of these. We went to a town called Hope well in New Jersey, and, and looked at a ferment trial to removing the, uh, arsenic. So if you look on the left, you got a couple of tanks. So they contained the ferric chloride solution and the well house and housing, the town's well there. And then on the right side, you could see at the very bottom on the left. There's a pump that was metering in the, the ric chloride, and then the, the lock electrical tank is a, is the sand filter where we removed the, uh, the sand. So it really worked. It did, and it was up pretty cheap, about 50 cents, a thousand gallons to be able to remove the arsenic. Keeps people safe. Sounds good. Um, but 50 cents might not have been good enough. So, okay, another question. How much does water cost you? Anybody have any idea what they forget? You, your water bill, they need 50 or hundred a month. So we would look at how much does it cost you for a thousand gallons of water? So. There's no better market than life, lemme assure you, but 50 cents more or a thousand gallons, this technology is gonna cost. It was too expensive so people weren't gonna do it. Jen, just a, a brief picture on the other technology active Matt, if you look all the way where far left, you have a stainless steel tank that housed iron filings, just little iron shavings. And then those two little wet things are vibrators that end up vibrating the tank so that in fact it wouldn't freeze up the, uh, the iron, inter rust. Interesting process. Um, and it worked. Absolutely worked. In this case, it worked for beyond even arsenic and, and others. It removed chromium and it removed nickel and a of other metals, but too expensive. Wasn't, wasn't gonna work. I, I've been here now six months at this startup, and I'm really looking at these things and saying, this isn't gonna work. The, uh, the processes are good, but too expensive for whatever reason. So, yeah, interesting being the university set up and I had full access to the professors that had had invented the technology, and as I went around and talked to the professors, I found in the lab, in the SCWorks, something else, and it really looked interesting. It was, it was a, a product that was way more similar to some of my early experiences and what I had been involved in selling and businesses I had run prior. So, and, and, and, and similar in a bunch of ways. But one was in the form at which we buy this product. So I put Eureka, but in fact it saved the chance to even have a startup in a. It was material based on titanium dioxide that we trade named Meor. Um, and clearly was gonna be something that was good for our removal, but it's in the lab and maybe a few grams were being made. So this is not gonna be, uh, easy either. As you do these things, one of the things you wanna do and make sure is nobody else can come and steal the ideas from you, right? So we, we looked at what do we do? Do we patent it? Do we keep it at as really, uh, keen, uh, trade sequence? How, how do we approach this? A combination of both perhaps. And the, the material was, was pretty unique. So we thought a patent route was probably the right way to go, but then we would keep, as I said, some of, some of the items as trade secrets. Has anybody here ever been involved with the patent process? Yeah. And actually copyright also interesting because getting the trade name Meor was quite a treat because you think about it, Meor sounds like something anybody would think of, but we were able to, to get it. But as, as far as the patent process, the way it works, um, now in the United States is if you are the first person to file, you won't. But back then it was whoever thought of it first, they could prove they thought of it first, could actually get, get, invalidate even a patent. But we thought, okay, this is important to do. So we filed in 2001 a provisional patent application. And again, with a provisional in the US what happens is you file this thing, he's got a bunch of stuff about what the, what you're doing. You got one year to file a real patent. So went one day. Short of that one year, we, we filed out real patent in, in 2002 and, and then continue the process. So the way the process works in. You know, you bill your file, you get office actions. I questions back from them and they say, this isn't right, that doesn't work, whatever. So a a a lot of different work. One thing I learned during this process is, you know it better than anybody else, and patent attorneys are great. They're really smart. They understand the patent process. They might even understand a little bit about what you do, but they don't understand as much as you do. So I learned, I, I was involved in every step of the way, and, and most important was really to find some of the white space as to where there was a possibility to really get the patent because people knew about titanium and that it worked, but it was all different kind of ways. So, sorry. Okay. Here's the for, for later. Um. So there were certain reasons why this worked and, and again, I know this is sort of crazy, all this technology stuff, but the real reason it worked is that you formed a crystal when you process this. But this crystal had a primary size and you just have to think of this as sort of a, just a little thing like this. The primary size of the one side of that little crystal was six nanometers if it was gonna work. And a nanometer is 1000000000th of a meter, so you have to sort of wrap your mind around this. It's obviously really, really small, otherwise it wasn't gonna work. So we found that it, it did work. Not only remove arsenic and other materials at this size, but obviously really special material if it was 11 nanometers. Everybody knows white paint. What makes white paint white is titan and dioxide, but. A bigger size. Bigger. So bigger we made it and we would've been made it too big of a size wouldn't have worked, but we could have sold it for white paint. But that wouldn't have really helped us. Well, so lot of hire, as I said. Uh, definitely, uh, that was white space. We could have claimed the material itself, we didn't, but just as important was specifying the method by which we made it. So we ended up saying, okay, you gotta make it in this exact way, in that exact way, and it'll end up doing what it's supposed to do. Um, the, and again, we looked at both temperature history, that was part of the process. If you made it too hot, the white paint so and so on. A lot of things we learned as we. Nonetheless, hydro was gonna move forward. It was gonna move forward on the basis of Metso and the Metso technology. Fer and Active met at that point were each in history. Again, we found that it could remove other materials. The one that we found that was really important was lead. So it could remove arsenic and lead. And again, really unique because I'll go back to this ENI and cation thing. Arsenic is an led a cation. Yet this material removed both couple of different processes by which it did that chemically, but it was unique, but still a lab dream. So I need to do more. Again, professor's making it in grants. I gotta do more. I to build a done that before. So I contracted a retired industry guy that I knew. And he was able to put together the equipment and so forth and outfit the lab with all the equipment we would need to make and test the product at, at least on a somewhat bigger lab scale, a hundred grams. So anyway, at that point I said, okay, I got a lab coming. I'll show you a picture of that in a minute. I'm not good at lab work either. Don't really like it, don't do it. And so we hired a grad student to do it at the time, 10 an hour, doesn't sound, do the inflations. 20 today, maybe 25. So not too bad. And he was supposed to, uh, do the lab work and, and then fact did a, a great job in doing that. So we were able to start doing a bit more than we had done before. So I, I'll let you of this picture. It really doesn't look like much. And believe me, Gil was not, it was, uh, home, however, for us, and we were able to, uh, give us, take that space that Stevens gave us they needed and do what we needed to do. And we needed to find again that we could make a hundred grams. The process would still work the same, that it would still take our stomach out. And so indeed, we were making hundreds of grams, still not very commercial, hundred grams for sure. So we got it in the lap. We need a product. We need tens of pounds, hundreds of pounds, tons of material to really be able to go out and do this. And again, I'll warn you only for a minute, this was a complicated process we got. I was amazed how many people, if they thought you were doing something for good. And I, this is a big deal here. I know this. They would help you. They would do stuff that people wouldn't do otherwise. They would charge you. But people help me. So people make titanium dioxide in plants that make hundreds of millions of pounds per year. We needed a stream from the middle of that plant and we needed drugs of material. And the first one I went to, they said, you're outta your mind. We're not doing this. So you have way too much trouble for us. Yeah, we're not gonna make any money, but we gotta the right people. And indeed, they put a system in to give us drums of material. I found a guy would do the next step, which was turning it into a fine powder by drying this liquid. And again, really, really inexpensive able to do it. And so, yeah, again, absolutely amazing. And then, then, then the next step in the process, we had to take tiny power one. So 1000000th of a meter and we had to turn it into something that you could actually use, that water would flow through. And I had known a guy that, uh, that found manufacturers. That was his job. And he said, I'll do it. I'll just find them. I'll help you out. Don't worry about it. You ever get any real business, you'll figure out. So way to compensate. We thought it was a small company up in Green Bay, Wisconsin that would do this next step for us. And again, they weren't making any money. It was really, again, tiny for them. In fact, so tiny that their normal business, this company was to make big equipment that would make fertilizer. And those things get big processes, big stuff. They happened to have a little pilot plant where they would test out stuff for the customer.'cause our equipment really were, and they, you know, one of the ones that would be common to everybody. Then they tested half there to say, we big equipment. But the equipment wasn't perfect. It was really perfect for what we wanted to do. So again, they put their people on it. They let us use the equipment and, and, and again, charting us almost nothing. And a couple side benefits too. Uh, so I, I was doing everyth. I was out there. I was by the end of the day, I would be blind. I know it's white even though it's not white. And they, they got know me well enough, like me well enough that they said, here's the key. We're not here on the weekends, but you can come in. You wanna do, you need to do some lab work. You need to do this, so that great. Do it. So I got to do that. Better story for any, the football that that might be out here is, they also had a box at Lambeau Field, so I got to attend several games. Uh, I'm, I'm a big fan. See, the Green Bay Packers wasn't all that much fun, but it was still nice to see you. Found a way to get, eventually people are gonna start charging for, so we gotta do something. And so, you know, I I, I then at that point, they didn't have enough money to pay, so I was getting stock. So now that was a pretty good thing in the long run instead of being paid. But we needed funding to now get, make, make enough product to be able to really get it out there to marketplace, see what it would do, that sort of thing. So funding's a whole other exciting area that I didn't know anything about. And so I talk to people and they say, eh, sometimes you go to your friends, you maybe, whatever. So I ended up finding seven friends who would invest in the company. Seven friends invested$300,000 in, in the company. But you wanna talk about pressure. There is no more pressure than your friends giving you money, no matter how many times you told. You got 80, 90% chance of losing every penny. Now the pressure's on for sure. I found a group of angel investors who were willing to, to put some money in. And after the angel investors did, all, all sudden a boutique BC said, oh wait, there's something here. Let's, let's get into. So, um, we were able to raise a total of about one and a half million dollars. Again, not a lot of money, but enough to let us get going, to be able to make some product, get some stuff out there, get some product tested and see how it goes. Now I could actually hire some people too, which was nice.'cause it's pretty much still, I was doing everything other than the lab work, so we needed to be able to do production. Yeah, it takes a certain kind of person. Um, I hired an engineer, had a perfectly good career, Atter and Gamble, but he was excited to be part of a startup. Wanted to see what that felt like, what it, what was like. And of course he got some stock options that, that was nice for him too. Good salary. I had a second guy who was in the industry and, and in a company called Englehart. Englehart owned the market for a material that you could put into, uh, products such as carbon to take out lead. And so that was, we knew lead was gonna be important to what we were doing. Well, and he had the best motivation'cause they had terminated his employment and he wanted regained. So I, now I have a four person team and then we're really ready to go. We went out, we, we had this material, we were doing more testing. You can see the little, uh, uh, the canisters, cartridges of, of, uh, titanium dioxide there that, um, and we're back at another government site this time, depleted uranium. That probably should scare you less'cause the uranium is actually present. A lot of ground water as it turns out. But, uh, it. Unfortunately, again, no money, no sale. We couldn't get the government, they government doing what it would, they plead the uranium in the ground for site. So didn't happen. So now we're getting to the point. We really do need customers. We got money slowly being used, but, but we really need customers. And from my past life, again, I had known Brita. Did anybody here have a Brita picture? That's great. Um, does anybody here buy a long last filter? So it's lasts three times as long. Please do. Because that product today, net sort was eat that product today. They're long last Brita filters. Um, in any event, that wasn't the product we worked on. They developing end faucet. And it would remove a lot of stuff. And two things they wanted it to remove amongst others were leaded and Mercury. So they were working with a Japanese company using hollow fibers to remove a bunch of stuff. They needed a material to remove these metals. And I, I knew them. I had been talking to them prior. They remembered this guy called on us. So he called me back and in the end we worked with them to develop the product and to be able to put it into the center. Tap builder wasn't easy. Brita is a big company. I had four employees. Brita has standard procedure manuals that were hundreds of pages long. I didn't have time to read them much was to do with them. So they helped. They came, they came to my facility, they, my ed facility in Green Bay, and they made sure that this worked. They waived some requirements that they had. They, they made sure that. They would be able to use the product and indeed, pretty amazing at this point. They actually started buying product and, and they, in 20, in 2004 bought over a million dollars worth of product, which was a lot of profit for us. Started to help again, give us, give us a bunch of money to be able to keep going. And uh, now we even need things like warehousing and shipping and production, typical production stuff. Again, FICO, that the company, they helped out a lot, but we were able to continue to go and start to build credibility out there.'cause you gotta customer like a Brita people saying, Hey, you must be real. There's something here, you know, was hell on us as we continued to go out into the marketplace and talk to others. But further validation, Dow Chemical, which was Dow Chemical back then. Now it's part of DuPont and what, and pretty much spread to the winds. They wanted product, and I knew Dow really well. I had done a lot of business with them in my prior life again. And so they were both a customer, they were a competitor, and they were a supplier. The, in my life and past life, they wanted this technology badly. So we ended up negotiating with them the, and, and finally worked out an agreement where only Dow and Hilo could manufacture the product going forward. But it was a licensing agreement where they had the right to use our technology to make and sell the product, and really worked out extremely well. We, the, the deal included minimum royalty. So even if they didn't use the technology, they had to us some money every year. And that was good. I, I always bit ironic because. This huge company. The reason they bought it is they thought they could make it way better. They, this is great technology. We're gonna really figure this out and we're gonna, we're gonna win the world. They bought the product from Hydro for 10 years. They could never figure out how to make it themselves better than, than we were doing it as this little startup company. But again, a lot of money more important, a lot of credibility for the company. And again, it just, it hasn't showed sort of how the product looks. You know, it's, again, pretty small particles. Um, a 16 mesh article is three 50 microns. Remember Micron, 1 million of a meter and so small, but water could float through it, around it. It was all we needed. And we had a few different grades of product. Today there's more, but we had a few different grades of product and basically could remove a lot of chemicals and you could see the list there. And I didn't include, I should have on the side mercury, because mercury cannot be pretty important for people as well. It's present in a lot of groundwater. So, but a, but a lot of different ways and a lot of different applications for our product worked extremely well and we were making some traction, a variety of different market marketplaces. Um, e especially in, and I talk about carbon, carbon blocks are used in a lot of the different water treatment that you'll see. If you have an under the counter water filter, there's gonna be a carbon block in there if you have a refrigerator filter. There's a carbon, carbon almost nobody just does carbon. They put an additive like Ed, so into it. So it removes other stuff like icic gas, like mercury lead. Is there a market for those things you're removing? Is there a secondary market? Can you sell the boron, uranium, selenium, or it, it would be really difficult to take it outta the, the carbon really tightly it. Oh, so it's cash. It's, it's in very tightly bound to the, to the carbon. Um, so yeah, unfortunately no, uh, no secondary market. But again, being sold in a lot of different applications at that point, not in quantities. So, so my guy, Bob Russo, this is this guy I hired that, uh, from Engelhart who wanted the revenge. He knew a lot of players in the industry that made cover blocks or did other things. And so we were making sales calls on everybody. And so in 2004, middle of the year, we called out a company called Graver Technologies and, uh, division of Marmon Water. And based on what we were telling them, they loved the, and so I thought, okay, we're gonna sell some stuff here. It's a really great, the next day, uh, this director of called me and said, we love the product, we buy the company. And so, yeah, really, really interesting, uh, for us, uh, I wasn't so sure my investors would love it yet, but reasons that they should. So indeed, we said, let's talk, let's figure it out. So six top months. And, and, and I say that because we pretty much decided we're gonna sell a company. We really running outta money at this point. We could got more from the investors, but you know, at this point, same time. A university. Stevens had never sold a company. I mentioned we were the third company. They, they brought in, selling a company was a skill they didn't have. And so they, they bought certain things and unfortunately, what they thought was really important because in all the different stock agreements, so they got signed over time, each getting more complicated. Every time I had brought in another group of investors, they retained blocking rights to a sale of the company so we could sell the company. And at that point they owned less than 50% based on all the dilu that had happened. If they didn't wanna sell, we weren't selling wasn't happening. So we ended up really back and forth. They wanted to keep IP future rights. So they, they meant that if they're chemists, their lab professors, et cetera, develop newer technology based on this technology, they would up it not us as, as, as Marvin. And obviously not acceptable.'cause that would mean they make one good advance on everything that we just paid for. Out the window wasn't worth. So again, I learned things I'd never even imagined I would learn during this process. I had to go back to every investor now, not that that was that many at this point, seven friends and family, 10 angels, myself, I Beasley talked to the professors, professors and, and basically 20, 25 people, I had to get them all to agree to give up some of their money when we sold the company to the university. So they eventually all agreed they would give up 20% of their money. Finally, Stevens was happy, all good and, um, and a lot of trauma. I had one phone call when they were trying to figure this out with, uh, a guy at, at, uh, Marmon, graver Technologies, a guy named Angelo, the president of Technologies Today. He's the CEO of Marmon. Largely because he did his deal on, no, not really, but he, uh, he was talking to the Stevens negotiating person. Uh, we didn't have Zoom back then, so it was actually a phone call. And I was in the office of the Stevens person. He was found in, in Delaware. And he, I called him, I had called him before, be really nice. This person has never done this before and gotta be nice. And he wasn't, he got on the phone, the first thing he said is, I've never dealt with such an unprofessional organization as yours of my entire life. He's, he could imagine I'm in, it was up, Helene was news to you. So I'm in her office, she gets up, doesn't hang up the phone walks outta of her own office. Like, well, I never, so I'm left there with the enclo on the phone, but somehow we got through it. The investors got two and a half times their money. Basically 1.5 years of having invested. So they were, they were pretty happy. And Marin's been pretty happy too. So shows us, you know, initially we spent some money, they did, uh, to improve the product. They spent several million dollars the first couple years to improve the product performance. Um, but it's been nice, steady growth. Today it's about a$10 million a year revenue product. Our product to survive this long is actually pretty interesting. But no other technologies come along that's done better. And during these 20 years, as far as lead removal, we've been number one or number two in the market in terms of how has performed. I did a calculation at one. We did good. We did good. And so the return on investment, at least at this point of the history, is about 20% for them. So pretty decent return. Who are your main customers? Who buys this from you? Yeah, so Rhythm is, is still a, uh, a big customer. And, and then there are another, there's about 10 companies. Some people would earn like a pent air and, um, o other companies like that, that make 3m, that make carbon blocks for refrigerators would, would buy our, our stuff. Uh, town. There are towns that buy it for their systems for removal of arsenic. So it's a pretty eclectic mix of different group of, of customers. Does zero water use it? Yeah, zero water's a great thing now. So Zero Water uses an iron exchange. Resin mixed. I'm sorry, engineer, I just did this, but. What's called a mixed bed ion exchanger. And they're interested not because that's good. Mixed bed ion exchange takes out only minerals, cation, and ions. Doesn't take out anything else at all. And, uh, but zero water is the most clever, innovative company in our world because they put this little device on that measures something, but nobody even, I almost nobody know what to measure. All it does is measure whether or not there's dissolved solids in the water. It's a conductivity meter, but that means you'll go out and buy another cartridge when it clicks down to, you know, bad stuff. Um, so very, very clever. We, we don't provide that with our product, but another division of Graver Technologies provides that with about 50% of the eye exchange that they use. So, ended up, their cleverness served us to, we were able to, uh, to, to get some business. It seems to me that there are two industries that have very high needs for water filtration. One of course would be carbonated beverages, Coca-Cola, Pesco, so on the other is the silicon chip industry where the water has to be incredibly pure. Yeah. Um, are you engaged with those folks? Yeah, both to different degrees. So in the carbonated beverage industry, and again, I run the food service business, we sold beverage dispensers. If you go to most, probably about 50% of beverage dispensers in the United States come out of our food and beverage business. That water has to be pretty uniform when it goes into those kind of machines. So all, all of them have carbon block filters and a lot of those, because they mainly wanna take out chlorine, honestly, because chlorine and the taste of water. Yeah. But they, they would prefer to, wasn't arsenic and lead, but water to the cell. They, uh, they, they buy our prominent, um, semiconductor's a little bit different. So semiconductor requires, you said, a, a credibly pure water we would've used to say is 18.3 mega. Why? Because it's a lot of resistance. Water, you can fast current through water more the easier. It's so they measure how the water is by how much voltage takes to. It's mostly reverse osmosis and that type of thing. They'll have a carbon filter to take out some stuff, but reverse osmosis will take out some of these arsenic and other things as well. So tends to be more that type of technology. So I had a lot of learnings during this. I've alluded, oh, so I'm sorry. Go ahead. Um, I'm an engineer. I was with Exxon Research and Engineering in New Jersey. When you were doing your work at Stevens and, and a related subject, there seems to be a lot of talk about microplastics. Can you say something about, are you doing anything that area? Is it something con a concern for the average person? Um, okay. Those were two. But, uh, let answer the first. Yeah. So, uh, again, we do with these carbon blocks and other types of filtration technology, we have the, some, um, polyethylene propylene type cartridge filters. We have other filters that use, uh, nano filtration types of Technion technologies. And we are always looking at those because we know that's gonna become an issue where even if it's not a particular health issue, it's gonna be an issue for the public. They're gonna want this space. So we're working on it from that standpoint, the same as we're working on these forever chemicals and a variety of other, of the newer contaminants that are starting to become concerns for people. I, I, I don't think they know enough on microplastics yet to know what level, if any, is harmful. Uh, but it's ubiquitous, again, like the chemicals, it's everywhere. And so they're gonna, I'm sure, do a lot of work to find out what. We all have refrigerators. Are you in that business? Yeah, global. Um, so great question. Do you know that in the refrigerator filter market is only a US market? No other countries in the world actually do that. So, um, however, anybody who sells refrigerators in the US will do this. So Samsung, LG from, from South Korea, for example, are big players in the refrigerator market in the us. So the, the broad answer to the question is, yeah, so we make all the way to a, a filter encased in the plastic exactly as you would put it into your refrigerator to, for some companies we just make that carbon inner and then they put the plastic on it. But I would say we are in. Of the refrigerators one way or the other. In the United States, we sell to every major refrigerator and every one of those blocks has met in because they all wanna be able to claim it takes out when another engineer or a chemist, uh, sorry, I've done about block and this past year, you're the first person who has owned that. You did some lobbying. I, I'm curious, how did you get into lobbying? So has it helped you as a business leader? If so, how? And then do you see anyone using AI with respect to what? Um, so I, I got into it because I was in the chemical business in, in New Jersey. It was obviously a, a state where there was a lot of environmental regulation, um, and a lot of things that wanted to make sure you were right. You also wanted to make sure you didn't have to do things that didn't make sense. So the chemistry, uh, chemical industry as a nationwide group, New Jersey had its own group and I just became a representative of our company on that group, but eventually grew to becoming the chairman of the group. And yeah, again, what we tried to do is just make sure the balance of economics and environment, right. Um, I don't know about the ai. Uh, you can tell you a small subset and, and you know how many environmental regulations are, there's a Jill. And so in our company we have a lot of, I'm gonna call it own regulations. We call standard practice instructions, and we're using AI right now to be able to allow people to easily find things they need out the hundreds. I could see something like. And as your career as a lobby, alban a lobbyist, has that helped you as a physical leader? So a, I wasn't really a lobbyist, but I was head of the lobby group. Uh, but I, I, you know, it did because of the interaction with the types of people I got interactions with. So I was talking to regulators, I was talking to politicians. Every point of view helps form you in terms of being somebody knows a little more, can do a little more. I think you mentioned that like one of the biggest problems at the beginning when you doing research was having a economically feasible product. How did that come down over time? Was it the manufacturing processes and what was like the end point that you ended up at? Was it 50 50 cents per a hundred, a hundred gallons or when did it get back to Right. So absolutely crucial. And it got better as you made more. That's true with most things. Right. So that. When we were making brands, it would've cost ridiculous amount of money. But as you started to make pounds and then tens of pounds, you got to an economic point. So what I was talking about was the actual cost of water in that. But I'll give you a different sense. So if you buy a refrigerator and filter today, I'm gonna guess it costs you 40 or$50 to buy a refrigerator filter. We sell the refrigerator filter to a whirlpool or somebody like that for$5, and we couldn't do that. This met cost the next, I mean, because our cost is$3. So it, it got the point where it was 5 cents for refrigerator filter for the land. Uh, it's absorb the media, but that took volume. We couldn't ever done that if we didn't get to the volume. But the other answer to, to the question, don't tell this to anybody who buys it from us, but we make about 40%, uh, profit on the stuff that we sell. So. So it worked out. Do you have any biochemists in your group? Uh, interestingly enough, the guy who did all the carbon block part was a biochemist, but in general, not something we have a lot of, you may be interested to know that on Monday this week, the Washington Post trial article, very short article about some domestic biochemists and microbiologists who've discovered a micro multicellular organ that thrives on arsenic. Have you read that? Um, I don't need to read that one because back in 1990, they were folks doing that. So is there possibility to get microbes to eat arsenic? Absolutely. Okay. To put it into a product that you could sell again, that would be starting all over. I can only tell you this, I'm not gonna do it. So anyway, I wanted to just put some of the overall learnings here for you to, to think about. Um, my past experiences weren't crucial. Last week in the Wall Street Journal, there was an article by a guy named Ben Cohen. He actually said something, none of you are gonna believe, but here's what they found. When they look at how do you get a successful deal going with, with a startup, it has to be people who have connections, credibility, industry, experience relationships, know the rules of business and know how to break them. And a group of economists from Mi t and Penn had done a study that he drew on the average age of his. A successful startup entrepreneur is 45. So it's not just when you go outta college, it's, it's when you got these experiences, obviously you need to wear a lot of hat traction. Getting business obviously crucial on a lot of fronts focus. We ended up, we had with our website thousands of opportunities and you really had to figure out which ones am I gonna, am I gonna work on? Because we had four people, five people at the end. Credibility, crucial. It was hard. Again, top of the faint of heart. And, um, I, if I looked back and said, if I knew all this stuff, would I have done it? Maybe not. Um, and then eventually the, uh, the, the resources from Marmon, they were crucial to, so a lot of different things went into making a, uh, a successful business. It's a small one, but it's, it's a nice niche business for, uh, for. Uh, generates profit and does a lot of good as well at the same time. So, other questions? We have a few minutes here. So did this, um, look like when the company was bought by Marmon? Is that when you moved over to the company or was that Okay? So yeah, I'll make that a very long story short. So I ended up going to help integrate the startup into Marin and then again I mentioned this guy, the layout and he, would you run this other business for me and would you run this other business? And so over the last 20 years, but I've been in Marin 20 years, I just more and more responsibility for much every year. So it, it's pretty cool ride for sure. Can you talk working in entrepreneurship overall, how. I think everybody should do it once is the way I'm gonna answer this. I think it teaches you so much, but learn some stuff first, then let it teach you some of these other things. But it's big business. There's a lot of things happen every day. The balance of things be pretty positive if you're doing a good job. But you know, we have a big staff team and all that. Um, the negative here is when bad things happen. Like what do you do? Like I, I mean, I like Daisy, I, this is not gonna work. So Yeah, you don't necessarily have a playbook, right? There is no. Or something like this. No. Yeah. He asked about your opinion on microplastics or he asked about microplastics. He said you'd give us your opinion. Um, my opinion is it's not a problem, not at the levels they're at today. There's no evidence that I've seen that suggest, but it's my opinion. Does that include the uh, blood brain barrier? They found microplastics penetrating that as well as they found P FOAs and every single the BE blood. It's just questionable. IT level doesn't really do anything. So you mentioned that like 80 to 90% of startups fail. What were some of the factors that you think helped you get from the one of the less likely? The less likely, but still successful startups? Me, obviously. So the technology was really good. It needed a lot of them nurturing and so forth and so on. I mean, the technology didn't work, it wouldn't have ever worked. So the technology was, I think the prime reason. It was a really, really good technology and the few people I hired, they were really dedicated. They worked really hard, really hard. Okay. One more question. Huge this slide, the students, that special agent, because I said we have 2000 open job. Thanks, expertise.