Over the last five parts, I interviewed HP to extract the full significance of his innovation. After all, Reverse Osmosis and Osmotic Power are not exactly my own core competency areas, so I needed him to walk us through the market landscape, the ROI factors, and the general business eco-system dynamics.
As I did that, however,it made me very curious about the man himself. I knew that HP had built up a Norwegian investment bank before he got involved with ERI. And even before that, as HP told me laughingly over breakfast one day, “he was born with a silver spoon.” In reality, HP is from an old entrepreneurial family in Norway, and the value system he was raised with, most certainly had to do with, one, entrepreneurship, and two, how to harness science and technology into commercially successful endeavors.
SM: Well, who are you, HP? How did you get into all of this given your finance background? How is it you know so much about osmotic power and water desalination and all these esoteric things that none of us know anything about? HP: Well, How did I get into this? I think my answer to that is friends, because everything starts with a network. I had a friend and a colleague in New York, Harvey, and he is really one of the best analysts I have come across.
SM: Before we get into your friends can you tell us a little about where you come from, your background? Do you come from an entrepreneurship background? HP: In a way I do. I am a Norwegian citizen and I spend about 50/50 of my time here and back in Norway. I am involved in several of the ventures here in California as well, in addition to the activities I have going in Norway. Among other things I am into cod farming. So hopefully in the fall of 2008 you can buy organically grown cod fillets at Whole Foods here in the U.S.
SM: That is going to come from your cod farm in Norway? HP: Which is likely to come from my farm; I am not a 100% owner, but, I am a major owner, but yes it will come from the cod farm.
SM: OK, so ERI. How did you meet the founders of ERI or the technologists behind ERI? HP: That’s Harvey. He called me one day and said, “I’m into this, it’s possibly big, and I am out of money. I know you have some money and it is your turn to start writing the checks”. You may argue that what we did then wasn’t Venture, it was more of an adventure, with huge risks involved. This was back in 1993-94, so 13-14 years ago we started funding the inventor. At that time playing with the same concept but in metal. As you know though, today we are in ceramics. So we have come a long way since then.
SM: At the time the company was how large, and who was involved in the company? HP: At that time it wasn’t large at all. It had two employees at that stage. It was a pure R&D venture. We had a group of four people pitching in monthly checks to keep the inventor and his family alive and to make sure he had sufficient resources to continue with the experiments. Then we hit snags because we realized it could not be done in metal just because metal expands as it gets warm and we realized we needed to move into ceramics.
Then we visited Oak Ridge National Laboratory in the early 90’s, came with our specifications, and the answer was pretty much the same. Guys it can’t be done, please go home. So then there was an urgent conference call to see what we do. What do we know about ceramics? We had to confess that we didn’t know that much about ceramics. But, two years later, after studying a number of books and going to the library in and out, the inventor was able to come up with the ceramic PX. So we have crossed a lot of unknown territory to get to where we are today.
SM: Territory which traditional venture capitalists would NEVER allow you to cross. They would have pulled the plug on this venture long, long back. But as you rightly qualified your foray into venture capital as “not venture but adventure” …