Solving the water crisis out of thin air with Brian Sheng of Aquaria

Brian Sheng is a self-funded entrepreneur and co-founder of Aquaria, a company that seeks to create resilient water infrastructure by extracting water from the air. A former venture capitalist who started his own VC firm at 18, Brian transitioned to the operational side of startups with the onset of the pandemic.

Here's what we talked about in our half-hour chat:

💦 Brian's company, Aquaria, seeks to create water infrastructure that doesn't need any pipes or construction
🏝️ Aquaria's water harvesting technology is ideal for residential communities, especially those off-grid or in locations with limited access to clean water
🌊 Aquaria's $26 million project in Hawaii to service a community of 1,000 homes
🧑‍🤝‍🧑 What it's like to have your brother as a co-founder
👨 Several reference to Tatooine from Star Wars (this emoji is Luke Skywalker, obviously)

#WaterFromAir #SustainableLiving #TechInnovation #ClimateTech #Tatooine

Transcript

Ryan Grant Little: 0:06

Welcome to another Climate Tech Podcast interviews with the people trying to save us from ourselves. Brian Sheng is a hugely successful investor turned founder. He started Aquaria, a company that makes clean water out of thin air, in 2021. We talked about how water is underrepresented in the climate change conversation, how their products work and where they're being deployed, and what it's like to run a company with your brother I'm Ryan Grant. Little Thanks for being here, Brian. Welcome to the podcast. Hey, Ryan.

Brian Sheng: 0:36

Really glad to be here.

Ryan Grant Little: 0:38

So, together with your brother Eric, you've co-founded Aquaria in 2021. What's the 30,000-foot elevator pitch? What does the company do? What problem did you start it to solve? Sure.

Brian Sheng: 0:51

So I think a lot of people are thinking about climate change nowadays, but I think that water is one of the most overlooked challenges of climate change. It's one of the main effects of climate change. When we talk about rising temperatures, that actually directly affects our clean water supply, because that leads to increased bacterial blooms. When we talk about the ocean rising, that leads to the ocean coming inland and then destroying our freshwater resources. So I think people have always known that we have a global water crisis and that concept is very well known. But I think people have always known that we have a global water crisis and that concept is very well known. But I think what people are starting to realize now is that the frequency and severity of the effects are impacting us more and more, and so we need more options to be able to deal with these changes and disruptions to our clean water. So that's what we do at Aquaria. So we're building resilient water infrastructure by harvesting water out of the thin air and open up a new option for us to produce water.

Ryan Grant Little: 1:56

I mean it's interesting, you know that really clicks when you say that that of course water is so fundamental. But it does feel very overlooked in the climate discussions where we're talking about CO2 all the time, we're talking about extreme weather events and these types of things, but water is so core and so interesting that you're focused on drinking water. And I want to ask this maybe seems like a very basic question, but what happens when I remember, you know, 20 years ago, being in Spain and just kind of reading the signs about droughts and minimizing your water usage and stuff like that, I thought, ok, but that's really just relying on kind of people's best behavior and stuff like that. And if it eventually runs out in a city I mean, I'm imagining there's like cascading forms of collapse what happens if a place runs out of drinking water?

Brian Sheng: 2:44

So it's, first of all, it's not just running out. Right, there's so many different flavors of this, like imagine just turning on your tap it could be running out. That's pretty obvious. That we just talked about what happened is like black or it's salty.

Ryan Grant Little: 2:55

Or it's like you say flavors, flavors.

Brian Sheng: 2:59

Literally flavors right and it's, you know, like a personal story, like I was very aware of this from very early on because, you know, I'm first generation American but my parents came from China and so I would visit when I was a young kid, going back and in the hometowns, like the water was very problematic, it would not be available all the time, sometimes it would be slightly yellow, I mean, that was me growing up. But now, actually, right now, as we speak, mexico City is having a huge problem. 22 million people and people are starting to protest and imagine 22 million people on the verge of running out of water. I mean that's a huge crisis coming up, yeah, I mean.

Ryan Grant Little: 3:39

So I wonder specifically what that looks like in cities, right, I mean it would be chaos, and I mean Mexico City is the biggest city in the world, I guess, so that's a very bad place for this to be happening.

Brian Sheng: 3:50

I don't want to do this to be like fear mongering or anything, you know, because I think when this happens, the people that get affected the most and first are the ones that are more economically disadvantaged, because it's not equal, the effects aren't equally felt by everybody, right? So really, a big part of it comes to access. Even as our water supply is getting disrupted, people with more resources will be able to get more water. So then it's like how can we make access more available, more secure, so that when these you know unexpected crisis starts to happen more frequently, are we prepared? Do we have a resilient way to bring water to you, no matter what?

Ryan Grant Little: 4:29

I like that. I think access in all topics of climate change is something that we need to be looking at very closely. This is a climate tech and climate change podcast, so a little bit of fear mongering is always welcome. So you mentioned Mexico City, but it looks like Hawaii is kind of the first dot on your company's map. You've got an LOI for an astonishing $26 million order to supply a community of a thousand homes with drinking water, so congratulations on that. That's an awesome early order. What's special about Hawaii? How did this deal come together? Just talk us through it a bit Sure.

Brian Sheng: 5:04

So the thing to understand about water is that it's very geographically specific the challenges so it's not evenly distributed. So even when we look at the water problems in the US, depending on where you're at you're in a Western state or a Southern state or one of the islands you'll experience different types of water challenges. So Hawaii, I think actually you know I don types of water challenges. So Hawaii, I think actually you know, I don't know, Ryan, what do you think? Have you ever thought Hawaii would be a place that have no water or have a water issue.

Ryan Grant Little: 5:31

I mean, it's funny because just these places that are surrounded by ocean, you never assume we're going to have water problems. But of course saltwater is no good for this. So you know, and I want to ask you a question also about desalination kind of if you looked at that and how this compares. But the short answer is no, that I didn't imagine that Hawaii would be a place that would have water issues.

Brian Sheng: 5:51

Right, you know, like you said, you know it's tropical, it's wet, people think of it as humid, which is true, but actually so this is where it's like.

Brian Sheng: 5:59

It's a part of the reason why people are not paying as much attention, because what intuitively might make sense is not mapped to the reality of how water works, right?

Brian Sheng: 6:08

Actually, all islands and almost all coastal areas have freshwater challenges because, like you mentioned, it's all saltwater and so freshwater dependency is based on rainfall.

Brian Sheng: 6:18

So, for Hawaii particularly, it's not just a freshwater issue, but it's actually also a community issue, meaning Hawaii has a very it's not just Hawaii, but Hawaii has a housing shortage challenge, which is exacerbated by the fact that how do you get water on top of the island, and so the next best alternative might have been to build a large desalination plant somewhere near the ocean and then pump it up, which would take tens of millions of dollars, and on top of that, it would take a lot of time to be able to improve, build out piping, build out additional infrastructure. So when we looked at it, we said, okay, well, this place we can develop a community, supply all their water and be able to bring about a more affordable, actually community for Hawaii, and so all of that, combined with the fact that Hawaii is hot, it's humid, it's got the prime conditions for making water from the air, and so that's just one of the areas that materialized for us as a company, as an opportunity, but really there's lots of other communities like this.

Ryan Grant Little: 7:24

Does this have anything to do with the wildfires and kind of rebuilding or building back better in those affected communities as well? It is, it is related.

Brian Sheng: 7:34

Resilient water infrastructure is what we're building and you know people look at the fire. You know when the fire melts away the infrastructure. How long does it take to rebuild that Like what are your options Right? And it's actually the estimate I think was three to four years to be able to build power transmission lines, to be able to build out, rebuild. You know the water pipes Like it's a whole big project that rebuild the water pipes, Like it's a whole big project.

Ryan Grant Little: 7:57

So let's just get back to the technology for a second itself. So you're taking humidity from the air and turning it into drinking water. It sounds like magic. Just maybe explain how. What does the equipment look like? What does the process look like?

Brian Sheng: 8:11

Yeah, we're actually providing not just drinking water but actually holistic water for the entire community. So drinking water is a part of it, because the water we produce is very high quality. It passes all EPA and WHO standards. But what it looks like is, I think you would think about it's like a battery box, it's like a Tesla power pack bigger or smaller, and it can become as big as a 40-foot container. And that's what it looks like, so you will be able to go up or down in size for the different communities, depending on the volume of water you need. And how it works is, essentially, we have built novel materials that are able to manage heat exchange, heat dissipation, so that we can produce water in large volumes using very little energy. Because essentially, if you think about like on a hot summer day, you take a can of beer out or drink out of the fridge, you know water droplets form. So the science behind it is how do we?

Ryan Grant Little: 9:10

do that at scale, amazing. Okay, so I think I've got part of the answers, because the energy requirements are quite low, but just wondering how that compares to. So desalination I think I've got part of the answers because the energy requirements are quite low, but just wondering how that compares to desalination. I think of us being very high energy, having very high energy requirements. What do the economics look like of this Sure?

Brian Sheng: 9:27

So definitely, desalination comes up a lot when we look at it as a water solution. I think it's also a great solution. I think the thing, too, that usually our customers and partners look at is well, how much money do I have and how much time do we have to actually build this project? Some people actually build both desalination and use our products. We have a project partner on the island of Roatan in Honduras, and when they were building out the infrastructure, they decided to go both with our units as well as building a mid-size desal plant. So it's really about size, how much capital you have, and it's not a one-size-fits-all solution. So you need only a couple of thousand dollars to be able to buy our product and you don't need to be next to the ocean. But if you're next to the ocean, then DeSalle might be the solution for you if you're trying to support a city of 100,000 people. So I think it's a scalar comparison. It's a capital capex how much money you have, and that's how the comparison works economically.

Ryan Grant Little: 10:28

Okay, so these are also good solutions for kind of off-grid living or that type of thing as well. I'm sure Zuckerberg will probably be knocking on your door to get one at his bunker in Hawaii as well.

Brian Sheng: 10:40

It's great for bunkers.

Ryan Grant Little: 10:42

You know I think it's funny.

Brian Sheng: 10:44

In the early days we had, you know, we were working on like figuring out who, to you know, bring our products to, and we definitely had a lot of doomsday preppers and, you know, their great community calling us and asking us for a lot of really interesting questions and solutions, no doubt.

Ryan Grant Little: 10:59

So you mentioned they come in different sizes. I just want to give a shout out to the names of the products, because you have HydroPixel, HydroPak and HydroPakX. Did you come up with those names? Because I think they're awesome. I didn't.

Brian Sheng: 11:12

My co-founder and my brother did.

Ryan Grant Little: 11:13

Eric did, I did not come up with those names.

Brian Sheng: 11:15

Yeah, co-founder.

Ryan Grant Little: 11:16

And my brother did, eric did. I didn't come up with those names. Yeah, they're very cool names. So are they just different sizes or do they do different things?

Brian Sheng: 11:21

Well, first I have a question Ryan, do you think they're memorable? Do you like those names? It sticks to your mind in a way.

Ryan Grant Little: 11:31

Yeah, I mean, it sounds also like something that I could strap to my back and fly with, potentially, but no, I really like it. It sounds very cool.

Brian Sheng: 11:36

Which one should I buy? I think the HydroPixel is perhaps most suitable for you if you're just one person, but if you want to supply water for your entire home or if you're off-grid, then the HydroPak would be the best. But between these products, what the names are alluding to is both the volume of the water production, but then also the use case as well, because some customers just need drinking water. Some people just need drinking water, and others are looking for more of like a holistic water solution where their entire home like the off-grid home, for example would use our water to power their entire home or community.

Ryan Grant Little: 12:19

So we have communities that might have a lack of access to clean water. We have the Preppers and Zuckerberg's bunker. Who else Do you have? Corporate clients? Do you have governments? Could these work in refugee camps? Or I'm thinking also as someone who's involved a lot in Ukraine, you know, and places that are rebuilding there.

Brian Sheng: 12:38

Yeah, so right now we're primarily focused on residential communities, helping people in communities get water. But you know, in the longer term, our bigger goal here is to make our technology so good, so scalable, energy efficient, that we can actually create water infrastructure that doesn't need any pipes or construction. So think about what happened if all the tap water around the world't need any pipes or construction. So think about what happens if all the tap water around the world can flow from just the air. That's really our grand vision here, but we've got to take one step at a time. So right now, mostly residential communities.

Ryan Grant Little: 13:09

It looks like you're okay on the supply side as well, because I read that the Earth's atmosphere holds 37.5 million billion gallons of water. Is that possible? Is that a real number? That is a very real number. Okay, I've never. I mean, a million billion is new for me. That's spectacular.

Brian Sheng: 13:28

So if we use another system, I think maybe an easier way to picture it is like it's roughly 14,000 square kilometers and humans on average use about 4,000 consumption wise 4,000 square kilometers. So the key here is that the earth naturally recycles this amount every seven days. So that's 37.5 million billion for our American listeners. Right Like that recycles every seven to nine days, naturally. Thanks, I mean, so we have it in gallons for American listeners and kilometers for the rest of the world, so that's well covered and very appreciated.

Ryan Grant Little: 14:06

I'm also really interested in you as a founder because you have a really interesting background. You're actually the second founder this month that I've spoken to on the podcast who's gone from the investor side to the founder side, the other being Jennifer O'Brien, and I'll ask you the same question. I asked her what have been some of your surprises, to put it mildly? Maybe pleasant or otherwise to be on the other side of the pitch?

Brian Sheng: 14:32

Hmm, I think there are actually so many. I think my investor experience also is a little different than others, because I actually started the VC firm as an investor because I wanted to actually work with entrepreneurs who had way bigger ideas than I had and that are changing the world. I was 18 at the time. I actually I dropped out of Princeton to start this firm to work with founders who are much, much smarter than I am and I was trying to figure out what my value add was and try to be helpful, but then also learning from a lot of other investors were giving kind of these advice to founders.

Brian Sheng: 15:10

So at a certain point I thought that, okay, well, there's all these isms, there's all these you know kind of philosophies that you kind of impart as an investor to founding teams and like what you should do in the early stages and or you know, here's how you should operate, focus at, you know and prioritize at all costs.

Brian Sheng: 15:26

They're like all these isms right, but once you jump to the other side, these isms all of a sudden are not as concrete as you thought they were. As in like you would think I've been repeating this as an investor for many years. It's like, of course I'm going to follow these isms that have been baked into my brain forever. But that's not the case. You're faced with the daily fire drill and all of a sudden it becomes apparent yeah, you have to focus, you have to prioritize, and there's very few things you can do in any given quarter. And you know, building the culture of the team. You know, that was very surprising for me, like I had to like relearn it, even though, as an investor, it's like the most obvious thing you think about, but I mean just the number of decisions you have to make a day, right, that's as a founder.

Ryan Grant Little: 16:12

It's crazy. And so, as on the investors, I'm a founder by background and I look at kind of that experience versus the investor experience. And the investor experience, as you say, you can kind of have these isms and you can kind of put everything, organize it into kind of categories and themes and make sense of everything, whereas when you're a founder it's you could look back and you know I made 210 decisions today. It's very hard to put that into like a lexicon or kind of a canon.

Brian Sheng: 16:38

Yeah, absolutely. And then it's like that balance of finding the right, you know, partners and team members so that you can effectively build together and make sure the ship is sailing in the right direction and make the right decision on a daily basis, and that compounds so the execution part of building the business in the early days. You know, I think that was something that I spent a lot of time reflecting on, going from an investor to an operator.

Ryan Grant Little: 17:04

Yeah, building the team is so clutch, it's so important, but you don't have to look very far to find your co-founder. So your co-founder, as you mentioned, is your brother, eric. What's that been like? Have you two worked together on other things before Like? What's that been like? Have you two worked together on other things before, does it? What are the again sort of challenges and opportunities, pros and cons of working with your brother?

Brian Sheng: 17:24

Yeah, this is the first company that we've worked together as co-founders. We worked on a lot of other projects before. Eric previously founded a actually a robotics company, and I was like a founding advisor to my brother. So we've worked together before, for sure, but this is the first time we worked together as co-founders of the business. Well, let's see, as co-founders, this is actually quite recent. Last year we were part of this deep tech residency in San Francisco called HF0. And so the idea is this was founded by a friend named Dave Fontenot. I've known him for more HF0. And so the idea is this was founded by a friend named Dave Fontenot known him for like more than a decade, and the whole idea is for the earliest stages of the company. You need so much focus to be able to execute that. What happened if you had a place where it's like a monastery? It's the archbishop's mansion in San.

Ryan Grant Little: 18:14

Francisco and everybody gets together. It's actually a monastery.

Brian Sheng: 18:16

Literally it's a little bit meta, but actually it's a gigantic mansion where you're essentially hacking nonstop for three months straight and they provide all of the resources for you and just try to make it as easy for you as possible in the early stages of the company's life, given there's already so much pressure and risk and things you got to figure out Right.

Brian Sheng: 18:38

And there was a moment where we had this, you know, in the early days of that program in the residency, where you know the partners got together and broke down to teams and had kind of a chatting session. It was like, you know, cause we weren't the only team there and there were other teams there and it was like you guys should have a hard conversation with your co-founder, because many early stage companies break up because of founder conflicts, because of founder breakups, et cetera, et cetera. And so we were given this exercise to talk among ourselves for about 10 minutes and then share that kind of experience. And I just remember working with my brother, we kind of looked at each other and then we're like, yeah, we don't have anything to discuss.

Brian Sheng: 19:20

We don't have anything to like we're not going to break up and like we're passionate about this, super passionate about this, and like, yeah, we're going to do this, it's going to be hard, but like there's nothing to talk about. It's just kind of what it is, and I think that really stuck with me. It was like a very poignant memory of mine, you know, starting a company with your brother.

Ryan Grant Little: 19:36

That's amazing. That's amazing, okay so that it sounds like all pros so far.

Brian Sheng: 19:41

Yeah, I think cons I haven't seen much yet. You know, in early stages of a company there's so much, there's so many problems right and having somebody that you've known your entire life to share those with and tackle the problems together, I think that outweighs anything. I haven't seen any cons yet. I can't say that I haven't seen any cons yet.

Ryan Grant Little: 20:00

Yeah, I mean the other thing is, trying to be a solo founder is very, very lonely place. So I mean there's yeah, that's if you can find someone that you can build something together with and it works, that's the ideal situation. Were you a solo founder in your previous company? I've done both. I've done both. Actually, most of the time we've had kind of a triumvirate, like three founders of the things that I've done, which has its own dynamics and sometimes works well and sometimes can be more challenging, of course.

Brian Sheng: 20:27

Was it like the perfect split of like CTO CEO like you know, or like that kind of archetype or?

Ryan Grant Little: 20:34

Yeah, a little bit. So I mean, you know, when we would pitch, I would say like he's the guy who knows how the stuff works, like the engineer, he's the money guy and I'm the guy who's going to be like running around trying to sell the stuff, and people you know. So it's better than putting kind of the logos and the degrees and stuff like that. People get that pretty instinctively and pretty quickly that kind of divide. So yeah, I mean, in that sense it always worked out quite well. In other senses, it didn't always work out as well. You recently raised a round I don't know if you count this as pre-seed seed or whatever, but 5 million bucks, which is a healthy round, and I'm just wondering since maybe you can talk a little bit about that who the investors were and a little bit about kind of what the horizon looks like. A lot of our listeners are climate tech investors and I'm sure some of them would be interested to hear what's next.

Brian Sheng: 21:30

Sure. So actually up to date, the company has raised in total almost $8 million, and the lead investor for probably 90% of that is me actually. So I personally, luckily as an investor previously, when I founded the firm, I had made some successful early investments that have gone public, and when I was thinking about jumping to become an operator, this was right at the beginning of the pandemic. Like I want to say, this is December 2019, right at the beginning of pandemic. So obviously the whole world shut down. So I actually put the money in myself and basically I'm going to build this company. I know hardware, I know the technology behind it, I need to go put together a team, and so it's.

Brian Sheng: 22:17

Actually. The company has been bootstrapped pretty much up until this point and we came into the market only about five months ago. So all of the customers and everything that we thought about, you know, building up to this point is now coming to fruition, and so you know, I actually don't know. I know we have a lot of international audience members, but I feel like, isn't there like a SEC thing around, like talking about fundraising on public podcast or something like that?

Ryan Grant Little: 22:49

You can talk about when your raises are coming up and stuff like that. That's OK, don't worry, this is for all of our listeners in the United States. This is not investment advice. This does not constitute investment advice. Past performance is not indicative of future. What did I say? Something like that.

Brian Sheng: 23:05

Yeah, something like that.

Ryan Grant Little: 23:07

Future returns. Yeah, okay, but anyway. So you've bootstrapped yourself, which is well done and maybe not surprising if you started a VC when you were 18, that all kind of scans, so that's some pretty amazing bootstrapping. So, for people who are listening, who want to follow your story, where's the best place to find you online?

Brian Sheng: 23:29

LinkedIn. I'm very active on LinkedIn. I'm trying to become more active on Twitter this year. That's one of my goals for this year, but I would say that LinkedIn is definitely the big one.

Ryan Grant Little: 23:38

Okay, I mean normally I've been hearing people saying my New Year's resolution is to get off Twitter, or ever since the change of ownership and change of things happening there and stuff like that.

Brian Sheng: 23:51

But that's true, I should say X and X, of course, right, yeah, I actually think that. You know, when I think about Aquaria and as I've built this company over the past five months, the biggest thing I realized that was that when I talk about what Aquaria is doing building resilient water infrastructure, pulling water from the air I get one of two typical reactions. One is, oh, is that actually real? And then two is like oh, when is that going to come here? When is that a solution? I've seen this in Star Wars 20 years ago. But planet tattooing, water harvesting what is that real and when is it coming to me? So actually I do want to be more active, because there are so many people and communities that need our solution today.

Ryan Grant Little: 24:35

Yeah.

Brian Sheng: 24:35

Never have heard of what we're doing. Never have heard of that. There is an option to help them solve this.

Ryan Grant Little: 24:40

Totally. Yeah, I mean, it's almost market building and that type of thing. I work a lot in alternative proteins and I'm invested in a company that can turn CO2 into amino acids, which are the building blocks of protein. So they can literally turn CO2 into food like you know, healthy food and that's I mean a similar kind of you know, market building and kind of awareness of, like you know, maybe also something that they were doing in Tatooine back in the day. So I definitely definitely get that and I think it's an incredible story, incredible what you're doing, definitely something that is needed now but will be needed more and more every year, and a great way to, with low energy, harvest some of that 37.5 million billion gallons from the atmosphere.

Brian Sheng: 25:26

Yeah, I appreciate you, ryan, for hosting the podcast. A lot of the newest technologies that are being funded today or over the past couple of years, technologies that are being funded today or over the past couple of years. I'm actually very optimistic about where we're heading to, despite all of the challenges that we face as a society, whether that's politically or climate or economically. I think there's a lot of challenges, for sure, but at the same time you look at some of the technology breakthroughs and new technology being invested in today. I think they hold a lot of potential and more information, the speed of education you know what you're doing and educating our global audience. I think that's really a great mission and I appreciate you doing that as well.

Ryan Grant Little: 26:08

Thanks a lot. Yeah, I mean, it's all about telling stories like these. Brian, thanks so much for being here. Thanks for taking the time and thanks for all that you're doing. Thank you so much, really glad to be here. Thanks for listening to another Climate Tech podcast. It would mean a lot if you would subscribe, rate and share this podcast. Get in touch anytime with tips and guest recommendations at hello at climate tech podcom. Find me, ryan Grant Little, on LinkedIn. I'll be back with another episode next week. Bye for now.