What is it about Water that Can Make You Wealthier?

Hey, it's Mark Podolski, the land geek with your favorite niche real estate website, thelandgeek.com and on this week's roundtable podcast, the gang's all gone. Because it's July. It's just me and our guests. And I promise you, by the end of this interview, you could be way smarter, way more conscious about what's going on in the world of, I don't know, the thing that kind of keeps us alive and possibly way wealthier. My guest today is Riggs Eckleberry. Now you're not familiar with Riggs. He was once a happy tech executive taking a software company public and achieving several tech exits during the dot com boom. He has always had a passion for the most abundant but threatened resource on the planet, water. Now Riggs is the CEO of a public company working to disrupt industrial water, a huge but slow moving trillion dollar global market. He is at the forefront of sustainably transforming the water industry with tech forward solutions like investing to offset one of the biggest threats to our economy, inflation. Riggs is uniquely qualified to disrupt this industry, having learned management in the nonprofit space and captained on ocean going ships and a personal passion for rowing crew. So he really likes water. Rick Zuckleby, welcome.

Thank you, Mark. It's a great pleasure to be on board.

Okay, let's just rewind the tape. What's going on with you and these tech exits? And then when you woke up one day, you're like, you know what, let's just disrupt the one thing that keeps us alive. It's a bit, you know, they always think of like the big market. Is there a bigger market than water?

There's no bigger market than water and there's no more slow flowing market than water. So because, you know, it's very static, I actually kind of backed into the water industry. I was, as my bio says, I was happily taking a software company public. Got it helped getting onto the nasdaq. I was the number two. Now every single number two in any company in America thinks he could be a better number one. And that was no exception. I thought the CEO, he does not get it. So I called up a fund that knew me and I said, listen, I think I could be a good CEO. And they said, yes, but we're not doing technology anymore, we're doing green. And I said, okay. They said, in fact, we want to turn algae into the next biofuel algae. And I said, that's cool. Turned out that I have a brilliant brother who had a technology that could be used. And we launched A public company that was called at the time Origin Oil, meaning the original oil being algae, which fossilized into petroleum 200 million years ago. And we had a wonderful time promoting algae. As long as the price of crude stayed high at 100 barrels, the minute fracking came in and crashed it to $50 and below, algae became a science experiment. And all of a sudden.

I had.

To do something because.

When you have.

A public company, you're a steward of people's hopes and dreams and you got to do something. So we actually figured out that our technology for harvesting this algae mass from the water was a great. A technology for harvesting sewage from water. And we did a sideways move into the water industry. Now in algae, I'd been like, you know, the toast of Hollywood. I was on all the TV shows. Algae, who knew, you know, And I was called algae man, all this good stuff. But it changed instantly when I got into water because what I learned was that everybody thinks water is important, but they're not too interested in the details of sewage.

Like why, why is that? I, I think sewage would be fascinating.

Like that's that concrete cement thing down by the river that does mysterious things with the water. And so people just flush the toilet and move on. And that actually reflects in the neglect of water infrastructure by our federal government for many years now. It started in 1961 that we started spending more money on operations and maintenance than on building new water systems. And we're falling behind every year. One research organization, Lux Research, estimates it's around $75 billion right now. Every single year that we fall behind in America alone. Which brings about the problems with Flint, Michigan and Compton, California and all kinds of different places. But so it was kind of like, well, maybe if we wish for better, there was just no real solution. Well, we came along, we said, okay, there's gotta be a solution. And I was eventually converted to some this idea that all water treatment is going to go to the edge. People are going to treat their own water. I'm talking about businesses, mostly housing developments, businesses less so individual homes. That's, that's kind of a stretch that the city can take care of that. But it has a hard time dealing, because of the broken down infrastructure, has a hard time dealing with breweries that all of a sudden are generating vast amounts of effluent. And they literally say, no, we don't want your dirty water. It's got to be treated. And all of a sudden that brewery is in the water treatment business, which is, that was not in their business plan. So There's a decentralization process going on that's forced by the underfunding of central water. And what's great about this is if we start having more treatment by the people who make the water dirty, which is logical, then these central systems don't have to do as much. They don't have to do as much heavy lifting. When you think about it, this whole idea of giant central systems is a sort of a 50s army corps of Engineer concept. You know, Hoover Dam.

Big stuff.

Right. You know those giant empty rivers in la.

Right.

Concrete monstrosities. That is passe. You know, they've been talking about building a high speed bullet train in California for years now. Well, they'll never happen. Why? We already have freeways, so we'll just have the Google self driving car and that'll be that.

Right, right.

Because we have freeways.

So.

And it's convenient because you can go from your home to your home and that's that. So you know, there's a new trend which is away from the huge, more towards the edge, towards the self help mode and it actually works really well because you've noticed, I think we've all noticed that there's a trend towards this myth of the global economy is kind of falling apart. Right. So the globalization is happening and there's a wonderful thinker called Peter Zehan who gets it very straight in my opinion. He wrote a book recently called the Beginning of the End of the World which is out on Kindle and Amazon. And he says, look, inevitably things are going to go back to take care of your own self. And so, so that's happening on a macro basis planet wide, but it's also happening in cities. We're seeing for example, that trend by people leaving the megacities toward, more towards secondary states and cities where life is a bit more manageable, where they can know their friends. I'm speaking to you from Clearwater, Florida. We moved here in June 2020 from LA because it's like it was not working. Louisiana was not coping well with what was going on. And now we have a community, we have friends, we have access to. You know, somehow the, the food supply chain falls apart. Well, there's fields around here with people selling food directly to us, so it feels more survivable. So there's a trend I think in general of people wanting to have more security, be more survivable. And it also includes water.

Yeah, yeah. I mean you're really, you know, preaching to the choir here because we're a land community and we buy and sell raw land and we make a cash flow. But worst case we could go and do something else on that land and, and survive on it. So you know that personal responsibility piece, the decentralization piece, these trends are very interesting and I think ultimately more positive not just for the individual but also the global community. So this is a hot topic. We'll just call it the I word because it's affecting everyone. Inflation. So where is inflation going and what are the threats within your industry with water?

Well, because water has been a government monopoly, mostly that's changing. But water rates and sewage rates have been rising much faster than the rate of inflation which was already rising. And so people don't realize that the water rates are not really regulated and the municipality can set whatever prices they want. And in some cities that's grown quite high as a percentage of people's take home pay. Now businesses really are aware of the problem and they. Well, I'll give you a concrete example. There was a brewery called Russian River Brewery in Sonoma county, very good brewery. And they were being completely taken hostage by the local county which was demanding huge fees and not really serving them so forth. And they said, well the heck with it, we're just going to get our own water treatment system. And they eventually got one that takes care of it all. And now they have control over their water treatment. And what's especially important about it is they get more than one turn out of their water. Because in America we don't recycle water and yet we complain about running out of water, but we throw it away. The reason is we have a very adequated water infrastructure grid that only goes one way. From my business or home to the treatment plant to the river or ocean treated. It's not dirty anymore, but it's wasted. America's recycling rate reuse of water is around 1%. Israel is around 90%. So how do we get better recycling rates? Well, we're not going to change the LA sewage system to run back uphill to Glendale to be reused. No, the place to reuse it is right where you're treating it. You have it, you paid for it, you have to clean it. Well, now it comes right back. For example, in that case of a brewery, they can easily reuse 50% of their water even without reusing it for beer, to wash down equipment for steam vessels on all the usual secondary uses. So that improves their bottom line tremendously. And it also helps with the big water problem which is growing in America. You know, there's a, there's a Look at what's happening with the Hoover Dam. The Lake Mead levels are just plummeting. And, you know, I don't know if. If you're old enough to remember that. That cartoon where it goes right down to. And there's a sign. Last drop.

Right?

Last drop.

I do remember that. And unfortunately.

So we're coming down the last drop. And there are things that can be done, such as recycling, that are not being done. The other big elephant in the room in a place like California, of course, is the big users are not people. The big users are agriculture and industry. Especially in California, you have a $20 billion industry called agriculture, which I think it something like five gallons of water to make one almond or something crazy. So you have huge amounts of water being used. And unfortunately, it's a cash crop and it influences Sacramento and kind of stuck in that mode. What can we do about it? Well, we can bring about this revolution of decentralization. Literally. This morning we put out a brag announcement. We were bragging because it turns out that several cities in America are legislating that large new buildings have to recycle their own water. And we're like, yes, yeah. And we've been doing it, and we've been doing this for a long time. So the real thing here is to continue to push decentralization. What are the weapons we have at our disposal? The first one is we have a product line called Modular Water Systems, which is these drop in place water systems in a box. Thank you very much. So that brewery, for example, does not have to have some vast excavation project. They just receive something from a semi trailer, plug it in, and problems handled. That's number one. Number two is something that we started realizing during COVID because we had our moment of truth with COVID We're like, we gotta figure something out here. Because everything. Everything was re. Sort of accelerated in Covid. Every single chronic problem became acute. And if you were gonna go out of business, you were gonna do it in Covid, right? So we looked at all this with this huge backlog of business and like, what's going on here? How come it's not going through? It's so slow. It turned out it's the money, stupid. If you can make it possible for Mark, the owner of a brewery, to get a water system just by signing a piece of paper. No capital comes with water experts fully maintained. I'm like, okay, thank you very much. Next problem, right? So we came up with, over time, this program called Water on Demand, which is water as a service, which Is you're now treating your own water well, you'd rather just keep paying on the meter, right? Why not? So we'll make it possible for you to have a water system of your own, but you're still paying on the meter and people are loving it. And it's become a big win for us.

I love it. I love it. Is water the new gold? I mean, why should investors invest in this? Because I don't think you can invest directly in water projects, can you?

Well, this is exactly the problem. And how many people have talked to me about the big short? You know, and Mike Burry at the end of the big short, what's the next thing he's going to do? Water. Very few people know the rest of the story. He went on to water and found that big water is highly politicized, very entrenched, and he bailed. He went, actually, if you look at what he's done since, he's gone into agriculture, which is an indirect water use and has done very well. But he just said, you know what, I can't handle it. So there's this big. The world of big water is highly centralized and resistant to change. And it's also a dwindling world because again of being infrastructure dollar starved. The recent $1.2 trillion Biden infrastructure program only gave $55 billion to water. That's less than one year's backlog. So it's just not happening. And so water is new gold. If you think about the coming trend, which is a lot like what Uber did and Airbnb did, which was leverage the asset in a new and interesting way by bypassing the way it's done. We're not going to, nobody's going to spend here in Pinellas County $2 billion on a new water treatment plant. First of all, there's no land for it. Secondly, what neighbor wants to have a water treatment plant next to them? And thirdly, where's the money? So instead there's a lot of this self help going on. And that is the new thing. And what's so cool about it is the big water companies, they're not structured to do it. For them, a million dollar project is too cheap. They can't make money. They're structured for these big overhead projects. And so more nimble players like Origin Clear and there's a number of us out there, you know what the, the company that did that, Russian river project, for example, Cambrian Innovation, is another company like us that does these investor funded water systems that people pay for on a service Contract. So we have these, this new breed of water, of water company that actually solves the whole problem for the user himself. And that, as you say, until now, people not. Could not invest in their own. In, in a water project as they can now with water on demand.

They can. That's amazing. Well, Riggs, this is, this is fascinating, but we are at that point now in the podcast where and your mentorship has been invaluable. Like, I'm really interested in water now. Not that I wasn't ever interested in water because it's just such a big part of our lives, but I was just in Bali and you don't even appreciate just the infrastructure, which granted is not great in the United States, but how much worse it could be and how it could be trending to that point when you go to a third world country.

So it's terrible in those third world countries, forget about it.

Oh, it's terrible. So, but I do, I do want to ask you for your tip of the week, like a website, a resource, a book, something else actionable for the auto passive income listeners to go improve their businesses, improve their lives. What have you got?

I'd say the book that, that I really, you know, there's a great book called the Innovator's Dilemma, which is fantastic. Why? Because it, it shows how new things arise from the belly of the legacy businesses that basically have blown it off. Right. Clayton Christensen was brilliant. In fact, the CEO of Intel, Andy Grove, read that book and out of that came the celeron chip because he realized that he was missing the boat. And Unlike many, many CEOs, he really did internalize that lesson. That's happening. So look at what happened with Airbnb, for example. They did the rounds endlessly in all these visas, mattresses in a loft. Big deal. A few got it and made some ridiculous. I think the Y Combinator people made, was it 400,000% on their money? It was ridiculous because they said, oh yeah, this is cool. So if you can like see the next trend and go, yeah, that's something new. Water. Water has been a governmental asset. It's been managed by the government. And the big water companies serve the government. It's a whole big mafia now. It's being broken up and it's falling. It's kind of like going the way landlines became cell phones, right? It's all being pulled apart and becoming very decentralized. So now it's becoming an asset that can be monetized and that ordinary investors can invest in. Well, guess what? If there's anything that's going to beat inflation, it's going to be a hard asset, not a risk asset. A hard asset that earns money on money. That's going to be it. And the good news is water is just beginning. It's not way up there like oil and gas is. I can't invest in oil and gas. The the slightest news about Gazprom and it crashes. I can't not invest in things like oil and gas. They're so politicized, right? This is true of most commodities. Another problem, right? They were going up, up, up and then, you know, demand destruction cut in and all of a sudden they're down. So why not, why not go with a, an asset that's not going to crash? Water is always going to be more dirty is how it is, and it's at the beginning of its run. Origin clear. I'm going to tout origin clear. We're a penny stock. Not a bad choice if you're going to invest in something is to either invest in the penny stock itself through Ameritrade or whatever OCLN is the stock symbol, or if you're accredited, you know, click on that Invest now button on originclear.com and learn about an asset protected investment that you can make in this new water demand thing. This is the beginning of something really kind of cool.

I love it. It's so cool. And I really like the analogy because you've seen it in so many different places from, from taxis to hotels to, I mean, you know, even just your, your local UPS store. How long has that been? I mean everything is getting decentralized from the government and, or, you know, all these older industries and the innovators Dilemma is a great book to read in a classic and rest in peace, Clayton Christensen. He was absolutely brilliant. So my tip of the week though is unlike the Invader's Dilemma, possibly going to make you a lot of money, which is originclear.com check it out. And Riggs is really generous with his time and information. Riggs, what do you do on the website with your talks like a fireside chat about water.

So every week, every Thursday night, 5pm Pacific, 8pm Eastern, we do a Zoom briefing. It's about 40 minutes long. You sign up for it just by doing. Well, the shorthand is oc.goldceo or just go to originclear.com and find the CEO briefing and you know, go ahead and sign up for that. If you can't make that time slot, of course we send you the replay. And every single week we tell it like it is. I put stats up, I interview people from our organization and I also, we do commentary on what's happening out there. And it's, it's. We think it's. Of course we think it's a good show, but it's a lot of our investors follow it because as I like to say, we're the most transparent public company in America. This is number. This Thursday is going to be number 171 in the series. And you know, we put a lot of work into it because it, you know what it does an interesting thing, when you have to talk about the company, you tend to figure things out. I don't know if you've noticed, but when you have to express ideas, you learn things like, well, you know what I just said something that wasn't half bad put things together. So we actually ourselves learn a lot from it. And when I interview people for my, from our organization, Dan early, the brilliant chief engineer of modular water, you know, and about that did that a couple weeks ago and he showed how those things work is fascinating. We make water fun and, and we think it's going to be incredibly profitable. People coming in now are the founders. It's the early stage, so it's. I think it's a no brainer. But again, again, I'm the CEO, so you know.

Yeah, of course, of course. Well, you know, obviously do your due diligence, but I do think that it has tremendous potential in the future and whenever you can get access or just awareness of something at the ground floor and it makes sense to you, it's, it's really a tremendous opportunity. So Riggs, thank you so much for taking time out of your, I know, extremely busy schedule.

Yeah. Do you know who I am? I mean, come on.

Exactly, exactly.

So it's been such a pleasure, Mark, I love, you know, having these great conversations. So thank you.

Thank you so much. And before we end, is there anything I should have asked you? I didn't ask you.

Well, you know, I think we've covered it pretty well. The, the interesting thing is that it really is important for people to look to the, the things that have not changed a lot. Right. Because they will change. Everything is set to change. And I think that's the example. One of the things that popped up at us during the COVID was human migration. We started getting a lot of contracts for housing developments, off the grid, trailer parks, et cetera. And that I think is a trend and we're serving it so that a housing developer can have a community without paying millions of dollars in sewage. And I think that's going to be a mega trend. I think the trend to follow is people moving away from the big cities. And not just water, but all kinds of other things will come out of it, in my opinion.

Absolutely. And as people move away from the big cities, you, dear listener, in the land investing business are also going to profit from it. And if you're not a building capacity of income right now in your land business, Today's podcast is sponsored by Flight School. Just go to the landgeek.com forward/training schedule call to learn more how to quickly, safely and efficiently start building that passive income without renters, rehabs, renovations or rodents. That flight school tuition, by the way, ain't gonna cost you nothing. Guaranteed you're gonna make it back 180 days or less. Just show us your work. The landgeek.com forward/training. I also want to thank you, dear listener, and remind you that the only way, the only way we're getting the quality guests like a Riggs Eckleberry from originclear.com is if you do us three little favors. Follow rate Review the podcast, send us a screenshot of that review. SupportTheLangic.com I'm personally going to send you a signed copy of Dirt Rich. It's not worth as much as water, but it's worth something, so you might as well do it. Riggs, are we good?

Marcus, such a pleasure. Thank you. And you know, let's check in in six months or so, see how it's been going.

Absolutely. Thank you and let freedom ring. Thanks everybody.

Thanks for listening to the Art of Passive Income podcast. Are you ready to learn how you can start building a passive income without renters, rehabs, renovations or rodents? Schedule a free consultation at thelandgeek.com forward/training let freedom ring.