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Innovating In Sustainable Building Materials: Hycrete CEO David Rosenberg (Part 3)

Posted on Friday, Jun 12th 2009

SM: Did any of the DOTs respond to your value proposition after the bridge collapses?

DR: People have said that they have never seen a technology get traction so fast. Within a short period of time we were getting into projects with many DOTs. Most were in demonstration projects. To get into habitual business they put us into a category as “Material Approved for Adoption”.

SM: Didn’t you have to finance some production along the line? How did you do that?

DR: I outsourced manufacturing to my families company.

SM: That allowed you to produce all of the necessary materials to manage the pilot projects?

DR: Yes. My Uncle was able to help me. There was not a lot to finance because they had existing infrastructure to manufacture the material.

SM: Did you get paid at all for the pilot projects?

DR: They paid us for the materials used in the pilot projects. We did not get a lot of revenue but we got some revenue when these projects came in. What I learned from a business plan is that selling durability was a very tough sell. There is very much a “buy IBM” mentality within the DOTs. There has been aversion to taking risk and innovating. People like doing what they are used to doing and it was a very tough process.

We would be put into a bucket of “As Equal” and contractors would just take the cheapest material in that bucket. We were trying to raise the bar of performance and raise standards. It was very hard to get sales. I got a government grant from the New Jersey Economic Authority for $500K which allowed me to hire employee number 1 and 2.

I then got venture capital money and very quickly took the company in a complete 180 shift. Seeing that the infrastructure market was going to take a long time to adopt, I had to adopt as well. We had a material that made concrete waterproof. What the customers want is waterproof concrete construction. We had a liquid material that you could poor into the concrete while it in liquid form in the truck which would make it waterproof. I realized that we could develop a system for waterproof concrete construction. Concrete cracks, so how do you address it? If you have a pipe penetration that is a vulnerability, so what can you do? There are a lot of areas that are vulnerabilities to construction.

If we had a way to remove those problems then we would have a deliverable that removes the biggest pain in construction. Waterproofing is the most litigated pain in construction. Everyone hates the water proofer. We have developed a system with our technology and service of removing that whole step of constructions. Typically, because concrete is a hard sponge, you poor the concrete and then you wrap it in a membrane or coating that acts as a water proofing. We have addressed that flaw and covered all of the other issues such as cracking and pipe penetrations.

Construction is very sequential. You cannot do step C until you do step B. We have, in essence, removed step B. Our value proposition went from making bridges that would last 100 years to faster construction, lower cost by removing a process, and a higher quality of construction. In the commercial space that works very well.

There is also a clean tech value proposition. About 11% of our landfill is concrete. The exterior high toxicity wraps we put on concrete make them very difficult to recycle. Our system makes it more sustainable. There are a host of environmental reasons why our system is better. One of the mantras of sustainability is “do more with less”. I can’t think of another product or technology that eliminates a whole step from construction.

Since we have figured out this piece for commercial construction our business has just taken off.

This segment is part 3 in the series : Innovating In Sustainable Building Materials: Hycrete CEO David Rosenberg
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