Founder Interview: John Phipps, ALBON

John Phipps is the co-founder of ALBON, a wastewater treatment startup for the agri-food industry. We caught up with John to speak about how he landed his first pilot, how he’s approaching scaling up hardware systems, and his experience bootstrapping the company.

You went through a pivot earlier — can you talk about the moment when you realized it wasn’t working out?

I think it was when we put it together on the spreadsheets. We had just finished up on a competition called Hult Prize. We had a lot of mentor discussions, and the big things to come out of those were around like, “Who’s willing to pay? What pain point are we actually solving?” And with carbon credits, not only was it not financially viable to justify the capital expenditure for all the biosystems work we were proposing, it also wasn’t solving a pain point.

That was kind of our “aha” [moment] — like we need to figure it out, we can’t keep going on like this: numbers financially don’t make sense, what we’re hearing from customers doesn’t make sense, and the business model itself just can’t stand. And fortunately, we were able to find out that wastewater was something we slot into.

How did that happen?

We pulled together family and friends who were in industry, just to bounce ideas off. One of them happened to sit on the board of an abattoir, who was able to connect us with this problem. And it’s really been very, very sticky. We’ve got a pilot facility with a dairy this November, and then a pipeline of about four other facilities who are interested in the results from that.

You’ve done a trial with a local council. How did you approach convincing people to try your product out when you only had a prototype?

We started at a very grassroots level. So our approach was ask for the problem, and implement the solution after. I signed up for quite a few cleanup events along the river. Tom (co-founder) would come with me sometimes as well, and we’d just pick up trash, talk to the community. Around the 3rd or 4th cleanup, I started mentioning I was also working on ALBON to clean up wastewater.

The head of The Mudcrabs — what the clean up group’s called — put me in touch with the environmental manager for the Canterbury-Bankstown local council. I told him about the project I was doing, and about the research we were undertaking at University of Sydney. He had this pond over Wiley Park that was experiencing algal blooms seasonally. It just smelled awful; birds were dying from how toxic it was. We were like, “We could pop the system up here over a year and see how it does.” It was an unpaid pilot, but it worked out both ways: They got some good press out of it, and we got a trial system.

How are you approaching scaling up?

I don’t know what this is like for other hardware. I know specifically for our hardware, de-risking is the most important lens, even beyond the investor standpoint. For clients, risk is everything. They can’t afford to have any downtime. So when it comes to scaling up our system design, one of the biggest design criteria we have is keeping as many variables consistent.

I can give you an example: our original system design was a suspended system. Basically a big tank. The problem with scaling that from 1000L to 70,000L is that so many variables change. Almost nothing is transferable when you test at that scale, because now in a 70,000L tank, hydraulics are different, and how the bacteria and algae interact is different. So we had to design something that was scalable.

Effectively, the way we grow algae now is quite different. It’s on membrane sheets, and that lets us know exactly how the biology behaves on a square meter — extending that to 500m², it still behaves the same way. And we haven’t succeeded yet. We should be very upfront, we could very much fall flat on our faces. But from what our advisors have told us, we see this has been a much better approach.

What’s involved in getting a yes for a pilot? How do you approach framing that sort of agreement?

This carries over into other industries, but the relationship is quite important. For us being uni students with no experience in wastewater, it’s kind of hard to say like, ”Hey, we’ll replace your wastewater system that you’re going to rely on.” We had to come at it from a research angle and leverage the University of Sydney name.

Also our sales cycles are inherently variable — wastewater systems only need replacing once every 15 years. Really the only thing that spurs that on is license tightening — that’s once every 5 years — so our customer pipeline is very long. We had to start approaching them two years ago, letting them know we were doing research with the University of Sydney and asking, “We want to reach out to you to figure out what your problems are, so we can develop our system for exactly what you have in mind.”

Then over the course of those two years, [we would] touch back pretty frequently with results and wins we have achieved. And that has built the trust to the point where they’re like, “Okay, these guys are on a shoe-string budget, they’ve got a council pilot, they’re still working their asses off, they’ve built the team, they’ve raised money — these guys have enough runway to deliver something that’s not going to be bad.”

That’s probably the hardest part, getting the first pilot. And then every subsequent facility we have in the timeline is waiting on results from this one. So it’s a long trust game for a lot of these guys.

So they want to make sure it works before going ahead?

Some of the big facilities we’ve talked to deal with significantly more wastewater. So they need to know that they can operate and be resilient. A big allure for a lot of these buyers despite the relatively high risk, is the access to organizational matched funding. So there’s the AMPC (Australian Meat Processor Corporation) that does matched funding, the MLA (Meat and Livestock Association). Agrifutures is doing a poultry open call for research projects, so we’ve applied for one there. So this pretty much gets us through the door and helps with the risk. Organizational support in the Australian space makes a huge difference.

Why are you working on this problem?

Definitely still [about] protecting the environment. The beauty of the wastewater is we’re still solving another environmental problem, while still getting to do our original mission of carbon capture. And I think what underpins a lot of my motivation and drive is, as I’ve said, I love to hike. I love to spend time outside, something that is very important to my mental health and I’m quite passionate about, and I want to share, and keep preserved for my kids and their kids in the future.

It’s how we survive as a species, and I find that very, very important to what I do. So I think it’s important to you love what you do, but also protect what you love. So in a sense, this is a bit of an extension of that. So if I can work and pour my energy into building something that can protect that, then it’s a bit of a no brainer for where I want to pour my time.

And beyond that, I like working with STEM and the engineering side of things, which I think is so cool. So it’s a pretty good marrying of both the philosophy and practical sides.

You’ve been bootstrapping so far. How has that been for you?

It’s been very, very challenging. The first year I was working at a vertical farm for a while, then a bar for the second year of my company. And I was working 8 a.m. ‘til 5 p.m. on the startup and then 5 p.m. to 12 a.m. at the bar, just to pour money into the company. The second year we were getting very small grants, so the business itself stayed afloat, still not covering any salary. But I was working ridiculous hours just to fund myself.

So I took a leap of faith — I quit my bartending job and had a month to really pull together some investments, and that was able to cover rent. It’s a little bit below my means; I still pick up odd jobs here and there to cover the company. But it’s very fulfilling to be able to get to this point where it’s got some serious legs, and we’ve got enough funding and a roadmap to get where we need to be for our pre-seed.

How are you balancing everything?

Yeah, I think everybody has their own way. For the most part, I love exercising. I love being outside, rock climbing, swimming, snorkelling, diving, pretty much everything to do outside.

So every weekend, at least one day a week — I usually get my whole weekend, sometimes I just have a Sunday or Saturday — but most weekends I reserve for spending time outside. I get my social time in through exercising with mates at the gym pretty much every day after work, sometimes with a friend, sometimes by myself.

You’ve spent time overseas as part of startup competitions. What has that experience been like?

It’s so unbelievably formative to how Tom and I run this company. Being able to talk with other people in the startup ecosystem, different countries, different types of startups, their strategies for managing their teams, talking to investors, talking to clients, what they use for their CRM — everything. ‘cause these are all people in the same space who are either one year ahead of us, or one year behind us.

Right now our team is 20 people, including myself, and a lot of the systems we use have come from those conversations and trial and error.

Do you have tips for founders also working in the environmental space?

This was advice that was passed on to me, but it is very true: it’s follow the money. As much as the mission is ultimately what drives what I do; as much as it is important to preserve the climate, nobody’s going to pay for that. If you’re not solving a real pain point, you don’t have a company. So as grim as that is, the world does revolve around money.

How has your cultural background informed or helped your journey in doing a startup?

I think it’s given me a unique worldview, as well as outlook on life. My mom is from Taiwan and my dad’s American. I had the opportunity to grow up in Singapore and spend my childhood there before moving back over to the US. So traveling around, I’ve never felt beholden to one country. Like the sense of nationalism isn’t there? It’s much more of a species view of like, “How can we as a species survive?”

People across cultures and countries are very similar. It’s very cliche, but we all have the same motivations and same drives, so ultimately, I think being able to secure that for people as a whole is a lot more important than protecting national interests.

So that cultural background has helped a big part with bridging differences when it comes to a leadership positio. And running ALBON as a CEO is trying to figure out how we can splice all of these various disciplines to create the single solution. But also keeping in mind that the overarching mission doesn’t really change amidst all of that.