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5/17/2024

WT Staff

Meena Sankaran, Founder, CEO of Ketos
Entrepreneur beats the odds in the water sector with a new business model

May 17, 2024 1052 am EDT


WT Ė Meena, thanks for doing this.

Meena Sankaran: Absolutely, thank you so much for having me, appreciate the opportunity to connect.

WT Ė I want to turn this into a two-part interview. One about your company, and then two, Iíd like to present to a billion entrepreneurs out there what happened with you and how it happened, where did you get the idea for Ketos?

Sankaran: My story, my experience is definitely not rare, a lot of developing nations go through (this same) experience with water. I grew up in Mumbai. We would get water tankers for an hour a day. The tanker shows up, you pump water in. For the first fifteen to seventeen years of my life this was just common, it was the norm.

My mom was incredible in terms of how she managed consumption and usage around the kitchen and all of the utilities in the house in that hour we stored water. So, we learned a lot, how to not waste, how to use efficiently. We couldnít afford a filter back then, she boiled the water, you know, thatís the basics. We have come along way since then. I also encountered maybe fourteen or fifteen waterborne illnesses before I was even fifteen (years old), so I built a pretty robust immune system. I was` very lucky compared to many who donít make it.

The water relationship was kind of subtle. I would say it just kind of stayed there. For me the bigger driver coming into the (USA) was very much the American dream, going for a higher education, making something of yourself but more importantly building impact and purpose in the world. I think I get that from my parents who have always been very driven about giving back to the community, building a legacy and making an impact, whatever you do is not just for you but for the community around you. That was something engrained very early on. I think that made a huge difference.

After fifteen years in technology and in a much better financial place, where Iíve taken care of my parents and other things, I felt I wasnít going to remain in the grind of just making tech better as an engineer. I felt very strongly compelled to leverage technology, to really work on an idea that was not only lucrative but had to solve a major, complex societal issue and have a broader impact.

Making a difference in water, wanting to make a difference in food and air quality, these were things that were brimming to the surface. Water was an undercurrent with me for decades that just kind of rose to the top. From there it was unstoppable in terms of really diving in and trying to get into the research of it; whatís out there, whatís missing, why is the industry behaving the way it is? Why canít people have safe drinking water? Why donít we understand this? Just ask a thousand questions and then start digging in, what is it that you specifically can solve? Get into your "Ikigai Matrix" to find your purpose, solving the problems that are out there.

People are flooded with exciting ideas that fizzle out in time. Sometimes you wake up with a great idea, but is it really such a great idea that you would pin the next decade for your life on it and make a massive sacrifice? For me I wanted to test that out, I pushed myself before investing my entire life savings into the idea and to making a business of it. To drive a business and solve water problems, I thought to myself, am I really serious, am I "All-in, all-in?"

It's incredible when the universe tells you what you are meant to be. I was backpacking in Nepal in 2015, I was one of the people stuck in the earthquake when it hit and six or seven days on the mountain close to the base camp boiling snow for drinking water. It all came together there. Any shred or miniscule amount of questioning that remained in my head was just gone. When I came back from that trip it was just clear as any possible thing I could imagine, I had found my life purpose. I knew I wanted to pursue this with every ounce of energy I had.

WT: What does Ketos do that's different than some other company with a sensor?

Sankaran: A very important question, and important for me to answer for myself very early on. I donít want to build a solution just because I want to be an entrepreneur, and a "Me-Too".

What you realize about sensors and solutions all these years, (the technology) is an afterthought. Letís say you are at a treatment plant and have a nitrate issue. Typically, whatís available is a nitrate analyzer. If they want to measure a few other things they use all these handheld probes. It's unfortunate if you think about it. We're in the 21st century and making incredible innovations in space, biotech and medical fields. When you think about sensing techniques and the sensor systems, we're still decades behind because weíre expecting that customers will individually purchase one parameter by system for each contaminant they are interested in. Then they will hire a bunch of people to become data analysts to extract all this information and make sense of it. Then you expect some other labor or resource in your organization to walk around cleaning and calibrating this equipment. You want all these folks to learn how the equipment works pretty much overnight, all this expectation when they arenít engineers, they are water (plant) operators. So, it's really cumbersome, most importantly extremely manual, static processes, even though we have a concept that it's an online analyzer. More importantly (industry) has made the entire instrumentation market and system so cost prohibitive that it has made people shy away from wanting to measure water data.

If you donít have this excitement for what you want to measure, how are you going to act on it? You donít act on what you donít measure, so if you donít even understand what the problem is, how are you going to act on it unless something drastic and dire has already happened?

I fundamentally wanted to change behavior. I did not start with "Iím going to take two sensing techniques and just put a system together." My understanding and passion for what we want to build in Ketos is, "What do I want to accomplish for the user?" I want the user to (be seeking) more water data. I want the users to think, "What could water data do for me in my organization? Can it help get more plant up-time? Can I prevent plant down-time? Can I recycle my water 100%? Can I get to a better net-zero goal? Can I prevent an actual catastrophe or dire public outbreak if I had discovered this anomaly sooner?" My answer, "All of the above."

How can I get more visibility and more real-time data at a very affordable price? How do I build credibility with instrumentation because people have lost (confidence) over deteriorating data, not enough accuracy, not enough sensitivity and the expense. One of our first (and enduring) customers brutally said this to me in 2017, on my first call with him, "Meena, this market is full of snares and snake oil salesmen. If you tell me how this solution works and if you actually can deploy it for me, I will know in one month if you are part of the clan or not." This was incredible because he had seen it all and he had heard it all.

What Ketos wanted to address is these five Aís:
Accuracy. Actionable. Autonomous. Affordable. Accessible.

The first A being Accuracy, as in, how can I help build credibility from lab data to instrument data? Second, actionable intel. How can I help users feel comfortable giving them actionable intel vs dumping raw data? Often the customer is left sitting with some log in the middle of nowhere trying to get connectivity, needing to go buy another IT device for connectivity. This is not their job.

Service providers need to have better accountability for how we deliver solutions to the utility operators or industrial customers. It is on the users to hold service providers accountable here. Every business model has been "Sell the damn device!", so everybody sold the device, users just got stuck with so many physical pieces of hardware. By the time utilities purchase a system, the system is already obsolete because the technology is obsolete. So how do you demand that you and your utility and your public constituents deserve the best? Itís not only about technology innovation. It's innovation on the business model along with the technology that drives a different mindset.

The third A is building an autonomous nature of operations. This means I donít need a human being walking around just to go check the system and calibrate it, clean it then wait for it to deteriorate before I calibrate it again. No! We're not doing that! Our philosophy is this system self-calibrates and self-cleans. Thatís the bar we have set and the sophistication of what we have built. The fourth A, most importantly is, how do you make it affordable? We decided the ownership is on us. Ketos has to own, maintain and service the equipment so the users can really feel confident about the data they receive, focus on the data thatís driving action for them and not about "is this device on warranty? Do I have to repair it? Do I have to go buy repair parts? Really taking a thousand headaches away so they can focus on their constituents and their own organization, on things that are more important to them, where they are also the experts. The fifth A is accessibility. Ketos should be responsible while working with the customer on where you deploy, whatís the connectivity so we can make it accessible on a global footing. So those are your five Aís.

The reason why I gave this background context is because itís important to know this is not just a tech company where a few engineers built a product to serve one feature-gap in the market, but really a fundamental shift in how we wanted to come to the market to serve the users. Ketos' mindset of technology innovation, and also serving where the design the tech are coupled appropriately with the business model for the future.

WT: You have had investments from different companies, different people, how did that happen for you? I know from years in this business that it's not easy to get an investor in water. What are you doing different?

Sankaran: Easy is out of the dictionary for water! You know, it was really an eye-opening lesson for me very early on. I come from the tech sector, the dataset world. This is the fourth start-up Iíve worked with. (Previous) start-ups I worked for, people got really incredible amounts of funding, north of thirty million, before they had revenue, before they had product to market, before the product was even commercially viable in the market. So, the bar is so different (with water). What Iíve realized is first things first, if youíre a person whose really trying to fundraise in the water sector thereís already a whole wave of things going against you. Regardless of whether you are building a solution like Ketos which has robotics, AI and material science, and it's an innovation, intersectional, (prospective investors) donít consider you a robotics start-up or an AI start-up, they consider you a water start-up.

As an entrepreneur it starts you off on a disadvantage. Regardless how incredible your innovation is, it starts you off on this footing, like wait a minute, youíre a water start-up. They start thinking about comparables, because. Investors always want to look at exits. Then they see that there has never been a rich water start up. Which water start-up IPO'd? What kind of valuations do they have? So, youíre starting with disadvantage after disadvantage. And then if youíre a water start-up like ours that is actually manufacturing and building hardware, forget about it, you have another check box against you. So, what I realized very early on is the check boxes were mounting against me and not for me. So, I would say there are a handful of water investors because the risk profile is high. I didnít think, all the investors who talk the big language about sustainability and climate, most of them donít include water in the equation. So, it's fascinating to me that a lot of folks talk about all things planet and sustainability, climate have the least amount of focus on water.

Iíve been talking about 8 years ago. Even five years ago, water did not have that mass following. A lot of conversation has been changing, people are having different conversations in the last 18 months. Two things for any entrepreneur who wants to consider water: you have to be absolutely relentless, and feel comfortable about getting rejected. You must continue to persevere no matter how much you get rejected, just knowing you are going to find an investor out there. The person you're talking to now may not be the fit for you but take every "no" as a lesson and figure out what you can do differently. What I did in Ketos early on is I was able to form a huge community of angel investors who believed in what we were doing, the mission, the vision, the purpose, the impact, the customers, the book of business, and most importantly they ended up pulling in a lot of sustainability impact type of investors. Then after some milestones and significant recognition, I started pulling in clean tech investors, then with more recognition and customer referrals, got customers talking to investors. Those were my strongest pillars for me throughout the years, the champions talking to the investors and saying, "You need this company to survive, their solution needs to see the light of day, it needs to be globally adopted". There's no stronger reference for you than that conversation, especially from an investor's standpoint. That is the only conversation that can help you get ahead of the curve in that market checklist that investors look through, thatís your best foot forward. As long as you have successfully deployed happy satisfied customers, youíre doing something right and you just have to keep doing it.

More importantly you have to remain very creative about how you run your team, how lean you can be, how you can keep getting funding because water is not like other technology. You do not have the same luxury; you do not have the same bar. There's no point whining about it or getting upset about it, which Iíve seen in a lot of entrepreneurs and fellow CEOs. It's best to figure this out, this is what it is. How am I going to work with what I have, know the cards have been dealt and crush it; carve a path for yourself. By doing that you start looking at Ketos, from sustainability investors to cleantech investors to then pulling in some data-centric investors and then having someone like Concentra coming in as a core strategic tech investor was fantastic. Then sort of pulling in where now we are pulling in more from a growth stage, who are the operators? How do I bring in more of the operator-centric people who have been there done that, grown companies to multibillion-dollar scale and taken enterprise to the next tier of scale and profitability.

The ultimate thing for water entrepreneurs is to build a sustainably-operating business. Itís not about how much you fundraise, but how quickly can you get to sustainability in operating the business. That is the victory because the moment you are less dependent on all the folks you need to capitalize, the more you can also lean on raising debt that you can essentially work with from a non-dilutive equity perspective. Thatís your best shot for long term survival. It's really hard from an investment standpoint because a lot of water start-ups have not survived. Believe it or not, I wonít give the name of the company, but at year two I had a very large corporation thatís very successful in the water industry that everyone goes to, they said "Oh youíre in year two, we'll talk to you after you survive year five". Most companies wonít make it two years, so congrats for making it to year two, we will talk to you after you make it to year five. Now they are working on being a partner.

WT: Most water industry websites are what I call "facing out". In other words, hereís our product, hereís our guarantee, hereís our address, if youíd like to sign up for newsletter, sign up here. Yours is the first water site Iíve seen that says, "if youíve got a good idea, if you're interested in a partnership, contact us. We work with lots of people." I see all the partners youíve had in the past listed here. Can you talk to the entrepreneurs out there about doing that, looking inward as much as pushing out?

Sankaran: Absolutely, that is an important part of our philosophy and model, and it's not new, weíve been commercially deploying for 5-plus years and we're in nine countries now. If you think about what do customers know? When you walk in to see a customer in any environment, they have so much history. They know all the different types of systems they've tried. They understand a lot of the issues they've faced, anomalies they have missed or detected, permit violations they have encountered, any types of fines theyíve had. They have a wealth of knowledge. This can be such a missed opportunity. Some basically just put up a website and go hereís my sensor, hereís my solution, deploy it in in this water, good to go, send me the PO. You know I just think that when youíre looking at this as a data play and a data strategy, it has to start with a partnership. There is no other way.

To me the beginning of that data partnership is a conversation to understand deeper, "Where are we creating value for the customer?". How am I helping them on their operations saving from a cost structure, where am I helping them from a cost avoidance and most importantly after this primary and secondary layer of impact, what is my tertiary impact? Does the company start having sustainability goals, especially in the enterprise sector? Do they have some reporting they have to do, are they now reporting on carbon reduction? How do you get water to become a more important topic in this and not just at a plant operator level? Itís a steep uphill battle and Iím still fighting that battle. It is not a done deal, we still have our work cut out, but somebody has to do it and the more companies that start doing it, and the more companies that bring that to the table the better, you are no longer that instrument that measured arsenic at 5ppm and thatís it. You are now taking the conversation to wait a minute, because Iíve measured these 20 things for you Iíve increased your visibility in less than 3 months by 300 percent by the way Iíve reduced two thousand metric tons of carbon, wow wait a second does that change the conversation because what did I do with your risk mitigation, did I help you with a certain anomaly, how much could that have costed you if you left that undetected? Or what could have happened if itís a city utility and that water was distributed for drinking? So, I think the onus is on us, where we challenge the status quo, we change the conversation, not that the conversation happening before were not important, but it's not enough. So, starting all of this as a partnership where you have the sense that Iím accountable for delivering the solution to you, Iím accountable for creating that value, and remember thereís also risk because Iím driving a non-hardware sales type of business model Iím in it to win it, which means that this is the mutual partnership not a one-time transaction. So, itís an ongoing process of consistently making sure the consumer is deriving value from the solution, they are satisfied, and you are building that layer of integration into their environment in a way that your solution is constantly improving based on their needs. Thatís what I believe will be quintessential when entrepreneurs out there are there trying to design, define and build their product.

WT Ė Meena, thank you for your time. Thanks for doing this.







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