Host: Welcome to Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs. And on this podcast I talk to the people who do it. Would you ever consider acquiring a septic pumping company? Because maybe you should. After my conversation with Dan Sprachlin, I literally went to Biz Buy Sell and started searching for septic businesses for sale. This conversation with Dan was an education, but I want to call out a few of my favorite takeaways for you to listen for. First, how acquisition was a way into an industry that Dan himself would otherwise recommend people not start a business in. So acquire a business. A septic pumping company? Yes. Start one from scratch? No. Second, how much and how quickly Dan and his wife grew revenue at the company they acquired. So if their experience is any proxy for the opportunity to acquire a mom and pop septic pumping company, it's a very enticing prospect. And then lastly, we start talking toward the end of the episode about the path that Dan is on now. He's still operating the septic pumping company, of course, but he's also investing a lot of his time and resources in a new process to treat sewage. So he's kind of emerged as a pioneer in sewage treatment. So it's a very interesting story, an interesting guy and conversation. Here he is, Dan Spracklin. Dan Spracklin, thank you for joining me today on Acquiring Minds.

Guest: Thank you for having me, Will.

Host: So you acquired a septic services company with your wife from her parents that had been a family business, an 80 year old business. So this is classic small business acquisition and, and where it's taken you since then is really interesting. So we're going to spend our time talking about that, that story of the acquisition first and the industry that you acquired into and where that's led you. By way of introduction, why don't you just give us your kind of quick two minute history, professional history on yourself and what led you and your wife consider this acquisition and then to move forward with it. What's the story with that?

Guest: Okay, so I started out my career actually in corporate America. I worked in insurance and financial services companies as a business architecture. So I took people, process technology and made companies more efficient. So I've had background in six Sigma, Lean manufacturing, continuous improvement methodologies, so on, so forth. Was not really happy working in corporate America, got bored with it and always knew that I wanted to be an entrepreneur. And we had toyed around with the idea for about five years buying the family business. My wife is One of three daughters. None of them really had an interest in buying the family business, even though it had been around 84 years. So it was founded in 1929, the Great Depression. It's called Gray Brothers. So it was my wife's grandfather who started it and then his brother, when he came back from World War II, joined and they changed the name to Gray Brothers as we know it today. Okay. So we decided in 2013, my father in law was really aging out of the business, so to say he was getting older, looking to retire, looking to sell someone else. And we just looked at each other and said, well, you know, we've been talking about this for five years. It's a recession proof business. You know, how hard can it be? So we decided in 2013 to go ahead and purchase the business of Gray Brothers. And there it's been history.

[3:59] Host: And just for those who don't know exactly what it means, you know, if they're urban dwellers and they've never dealt with septic systems delicately, spell out for the audience exactly what the business is. And if you want to use your moniker, your X for Y, go for it.

Guest: Yeah. So at a high level, the septic industry really is Uber for poop. What we do is if you're typically in a city, your toilets are all connected to a sewer system that takes it to a wastewater treatment plant. Right. But typically if you're in rural areas or there's tough geography, there's a lot of hills and stuff that putting in a sewer line can be very expensive. And so you're stuck with what's called an on lot sanitation system. So it's basically a septic tank. So a tank is anywhere from 1,000 to 2,000 gallons that holds the solids that hold your poo. And then the liquids go out into a place in your yard and they go through the soil and they get remediated. And ultimately that water ends up back in the water table, but those solids accumulate. So every two years you call the Uber for poop. The that the company come in, we open up the tank, we suck it out, and now it goes into a big vacuum truck. And then we take that material and then we offload it at a wastewater treatment plant for further processing.

Host: Okay. Okay, great. And so can you give us a sense of the size of what Gray Brothers was when you acquired it?

Guest: So Gray Brothers was doing around a million dollars a year when we acquired it in 2013. It had had some peaks and valleys. The septic industry is pretty, pretty consistent. But there are things that you Know, depending on what you do within the septic industry. So what I've described is really just pumping and those have been called honey dippers or pumpers. And that's strictly just a logistics and trucking industry. Yeah, there's also the inspections, maintenance and construction side of the septic industry as well. So when we bought the company, we were really just a pumping company. We had one guy who'd been with us for 40 years that worked, you know, till 2 o' clock in the afternoon, and then he would install septic tanks. And that's about all that he did.

[6:10] Host: This one guy was your sole driver? Was he essentially the.

Guest: No, he was, he was the operator. So he would operate the backhoe and he would put in new tanks. So septic tanks are concrete. Typically they last for about 30 years. But what happens is as the waste material goes in and degrades in an oxygen free environment and it releases what's called hydrogen sulfide, which is that rotten egg smell that you can definitely tell it's septic. And then that promotes bacterial growth. And you have what are these nasty bacteria called? Theobacilli. And what they do is they eat hydrogen sulfide and they excrete sulfuric acid and that sulfuric acid eats away at the tank. So a septic tank, when it goes in, should last 30 or 40 years.

Host: Okay.

Guest: After it's done its business and it's been there 30 years, it degrades and now needs to be replaced. So what we do is we crush those in abandoned them, fill them up with stone and put in another tank in it, you know, next to it or adjacent to it to be your new tank. So when we bought the business, we only had one operator and he did probably, you know, 10 tanks a year. So we really saw that as an opportunity to expand our services. And so first year we bought it, I really just went around, you know, meeting with customers, working with my father in law to understand the ins and outs of the business. And then we decided we wanted to grow, so we grew our services rather than grow through acquisitions of other competitors.

Host: Why was that? Because it was easier to upsell existing customers than.

Guest: Exactly. We have a customer base of. Yeah, we have a customer base of 22,000 customers in the Main Line in Philadelphia. So if you've ever been to Philadelphia, it's basically Gladwin, which is a very exclusive neighborhood. It's very expensive. I think it's second to Beverly Hills, the most expensive zip code in the United States. And it stretches all the way out the main line, which Follows the original Amtrak train line. So Villanova would be another area you may have heard of in the Philadelphia suburbs. We do a lot of business there. So we already had 22,000 customers. A nice customer base was repeat. So we expanded our service offerings to those customers to help grow our business rather than go and acquire more customers and other businesses.

Host: Sure. And did that strategy then work?

Guest: Yeah, that strategy worked. So we had tripled the business a little over two years. We now had, at that point we had three crews going in and putting in new septic system, two inspectors. We had five pumping trucks and five pumpers. So yeah, it helped us grow, triple the business in about two years.

Host: That's. That's pretty phenomenal. The idea that you can make a $1 million business, a 3 mil or an almost $1 billion business, a $3 million business in such a short amount of time just kind of, I assume when you say upsell your existing customers, it was mostly just, hey, customers. We now offer X, Y and Z service and taking calls after that.

[9:04] Guest: Yeah, exactly. That same customer is calling you for everything. So now we become a one stop shop for that customer. So instead of them calling us up and say, hey, I'm selling the house, I need an inspection. Say, oh, we don't do inspections. Call one of our competitors. Right, that does inspection. And then you see the customer sort of walk out the door. Because in the septic industry we're very sticky. You know, you don't often shop.

Host: I'm sorry the puns in your business are too much.

Guest: They are. We could do it all day with puns. But the stickiness of the customer and that they stick with you. And typically we maintain that customer even though they sell the property. So if they sell their property, the new buyer comes in and you know, who do you use for your septic? And it's oh, we use great brothers. So they're our new customer.

Host: And so why is it. So I assume if it's sticky, that's because it's not very competitive. Why isn't it more competitive like other service businesses like plumbers and electricians and the rest, where, you know, there are a lot of plumbers out there I

Guest: could choose from because palmers are typically, it's a one time thing. So, you know, I my toilets broken, my sinks broken, I'm going to call plumber to get it fixed and once it's fixed, it's done. Yeah, you're talking about, this is more like a garbage collection. But instead of coming every week, we come every year, every Two years.

Host: Yeah.

Guest: So, you know, you don't often shop that. And we really play. It is a competitive industry. So we have about five or six competitors in our marketplace. We're all pretty evenly priced. It's not a, it's more friendly competition than it is cutthroat. No one's out there slashing tires or anything like that. We don't really poach customers from each other. It really comes with brand recognition and goodwill to the customer.

Host: Okay.

Guest: And the reason is because a lot of every home is custom. So where your tank is is different in every house. Where your drain field is different in every house depends on the actual property that you own. If you have a flat lot or if you have, you know, slope or bushes over here or there. So everyone is unique. It's like treasure hunting and finding gold.

Host: Okay. And just going back to how, how easily you were able to turn on $2 million of revenue at the risk of having you step in it with your in laws. Why do you think they hadn't expanded more aggressively or just tacked on more services if it was that, if it was that straightforward?

Guest: So I think it was a, it was a lifestyle business for my father in law. You know, he had afforded him to put three girls through college. They went through two weeks at the store every year, lived in a nice house and really didn't have any aspirations to grow it beyond that. Right. He wanted to hang up his hat at 3:30 or 4:00 clock every day and go home and not have to worry about it.

Host: Okay.

Guest: So one of the things that we did that really paid off as we started doing emergency services as well. So that got us into, you know, not only individual customer work, but commercial work, municipal work as well, which pays much better than a commercial. You know, if I come up to your house and pump your tank, it's going to be around 300 bucks. If I go for an emergency on the township And I have five trucks, each truck is filling out 500 bucks an hour and we're there for 24 hours. It's, you know, it's a $30 day or $30,000 day for you.

[12:17] Host: Yeah.

Guest: So those services as well as tapping into the real estate market by doing septic inspections and what you do is every time there's a transaction, a lot of banks require it. You get a septic inspection, you find out if there's any defects with the system. If there are, they've got to be corrected before that transaction can go through. So instead of someone saying, oh well, I'll get to that. I never worry about it. It has to be done right away. And then, by the way, we also offer the services that we can quote you exactly what it costs. Repair, it's specifically guided. So there are guidelines that we have to follow that are managed by the state. We're not going up and making excuses for us to get work. We're not getting other work we did that we wouldn't really have the relationships we do with a lot of real estate offices and agencies. So they're a big promoter of ours, the real estate agents, because, you know, hey, I use Gray Brothers. They're honest, they're straightforward guys. This is what they found, and they took care of it right away.

Host: Yeah.

Guest: Great.

Host: And so it was a family business, your wife's father and his father and uncle. I assume she maybe knew something about it. Just picked up something by osmosis over the years. I assume you knew nothing about the septic industry, so correct me if I'm wrong. So tell me about, like, how that felt to acquire a business in an industry that you, I assume, knew nothing about.

Guest: Yeah. So she worked on in high school, just, you know, doing filing, answering phones, doing, you know, billing or invoicing. But she never really got in the nitty gritty of the business and what the actual front end is doing. She was always focused on the back end.

Host: Yeah.

Guest: And I knew nothing about septic. I was a city kid. I grew up, had sewers all my life. The first time I ever saw a septic tank was the day I started with the company as a new owner. So I really stepped into it, but my corporate experience had really helped me there. So as a business architect, I would go into an industry that I know nothing about, and I'd learn the ins and outs of all of it. So whether that, you know, annuity payments on retirement accounts, it's workman's comp, disability claims, you know, and I go in and I'd work with those units to find out every step that you do along the way. So I was very good at absorbing and quickly identifying and understanding how businesses operated.

Host: Yeah. Do you feel that for those who don't have the same experience that you did in business analysis, essentially? I mean, as you just as you just described that it would be. How difficult would it be for them to come into the septic industry not knowing anything, like an acquirer, somebody listening to this podcast right now who might not know anything about the industry and acquire a company as you did and make it go?

Guest: So I think, you know, There are system general abilities that you have. As long as you understand marketing, you understand customer service, even if you have maybe a trucking background or a logistics background, those are very tangible and transferable skills. If you don't know that, you know nothing's going to fall apart on day one. Especially if it's a mature business like it's been around for 84 years. It's like a challenge of how can I break this thing? Right.

[15:15] Host: Yeah.

Guest: So you can learn on the job. But it does take at least some fundamental understanding of how businesses operate to do it. And this is unique that it's sort of all these businesses wrapped into one. So you have the trucking and logistics side or the pumping side, and then you have the more of the real estate transaction type, you know, insurance claim stuff on the repair side, and then you have the construction side. So when we go and put in new septic systems, either for new construction or an existing home, you know, you've got to get permits, you got to go through all that process. So, you know, we were lucky in that we started small. And I knew nothing about the permit process for onlook septic systems, but I learned very quickly. And the nice thing is it's just repeat, repeat, repeat, repeat. Right. So essentially you're performing the same service for every customer. But really this is a reactive business. So can you think on your feet? Can you come to solutions? Can you quickly organize folks? That's really where I think you'll differentiate yourself. No one calls me on the day where they say, hey, I just went to the bathroom, wanted to tell you it was great, I flushed and everything was fine. They call you on their worst day, they call you, oh, my God, my basement filling up with poop. And can you get out here? What can I do? And they're panicking.

Host: Yeah.

Guest: And so, you know, it's always an emergency that we've got to kind of react to. We're very much a reactive business. You know, you can't plan for what we're going to do next Thursday. You can do that on the construction side, but you can't do that on the pumping side. The pumping side is, hey, we've got our day planned out and let's see, when does it all go to hell? Because all these emergencies happen, and our

Host: emergencies pretty common

Guest: on an individual basis. No.

Host: Right.

Guest: So individual homeowner maybe hasn't happened once or twice to them during their time that they own that home. And I'm talking 30, 40 years.

Host: Yeah.

Guest: But to us it happens every day. Because with 22,000 customers, you know, every day someone's having a problem. Yeah. And one of the famous things that everyone says to me is, oh, I've lived here 50 years, you know, we've never had a problem. And I tell them that everyone says that until the day that they do have a problem. And something will go wrong eventually. Just like your H Vac will go out. Right. Or you'll need to replace your boiler system or your air conditioning or, you know, your roof or a window. This is a thing that has to be paid attention to.

Host: Yeah.

Guest: And then often with routine service, you can make sure that, you know, no emergencies happen. So if you're getting your septic tank pumped every two years like you would in oil change, you'll. You should be okay. But if you go buy a Corvette and don't change the oil for 10 years, you're going to have a problem.

Host: Sure, sure. Okay. Okay. You, you had said you were doing. The company was doing almost a million dollars. How are the margins? How were the margins of that of, of Gray Brothers? And if you're uncomfortable with that, can you just give the audience a general sense of what margins are like for a, for a mom and pop septic company?

[18:13] Guest: Yeah. From, from a mom and pop perspective, they were pretty low because they've been reluctant to raise rates. So they hadn't raised rates in eight years when we bought the company. So you were looking at 10 to 15% margins.

Host: Okay.

Guest: We came in, you know, we got to know the business. And then after the first year, then we decided, okay, now it's time to raise rates. And we, you know, checked in with our competitors. Where are they at? We didn't price ourselves out of the market, but we came up into, instead of being the low cost option, we came into being the middle to the higher end of that pumping.

Host: And I assume that was also part of how you got to $3 million. It wasn't just new services.

Guest: Right. That and just being more efficient. So, you know, the way that it was run was, you know, with five trucks on the road, every time a guy got done with a job, he'd call back in the office and they would tell him where his next job was. Whereas what we did is we came up with schedules, we allowed, empowered our drivers to kind of build their own routes because again, you have the day planned out, but then emergencies happen. So you may get two thirds through your day. And I'm calling you saying, hey, we gotta rush over to this site because something's going on. So Empowering the employees to sort of make their own routes. We had divided the area up into the cardinal positions, you know, north, south, east, and west. And so they got to know their area. They knew every street, they knew where every house was. They probably been to the house two or three times now. So it wasn't like it was new. We were able to turn jobs faster that way. And then just doing things like, you know, getting GPS on the trucks so that the trucks could be identified and we could tell where. Where the trucks are at any given time. Not to necessarily spy on the workers, but to say, if I got an emergency and you're right there, you're two blocks away, you're the one that's going to get the call rather than the guy that's halfway across the county. And it's going to take them 45 minutes to get there. So those were some of the efficiencies and then just really, you know, expanding service offerings as well, and then just really driving efficiencies home. So we were able to do with three trucks what he was doing with five because of those inefficiencies, and then we had five trucks. So we were actually able to perform way better and over perform what he was performing prior to.

Host: So when you got to $3 million in revenue, what did margins look like at that point?

Guest: They were 30 to 40%.

Host: $3 million septic company. What? An efficiently run $3 million septic company's

Guest: margins look like they could be anywhere from 30 to 40%. Really? So, yeah, I mean, it's not. And it depends on the mix of the company as well. So in that 3 million, maybe 800,000 to a million in construction, those margins are much higher than you're pumping. So. So your typical pumping is going to be 15 to 20% margin. But as you mix that all together, you come up with an Overall margin around 30%, 35%.

[21:10] Host: So every small business, small business industry has its pros and its cons. Other than the fact that you're working with poop, I'm failing to see the cons in this business. It seems like a pretty attractive for, you know, an acquirer out there who is considering a landscaping business or a plumbing business or maybe septic business. It seems like there's a lot to like about this industry. Disabuse me of that. What are the. What are the bad things about it?

Guest: Well, the bad things are everything's reactive, right. So you never know what your day is going to look like when you go in and dealing with Poop. So again, I'm not a truck driver. I don't, I don't pump the subject takes. I go in and I inspect them. I, you know, I've been out with the guys on, on jobs, but my job is not to do the work. My job is to actually go and make sure that we have work to do for them six months from now.

Host: Yeah.

Guest: So I work on the business, not in the business to sort of use that analogy.

Host: Sure.

Guest: So the idea of working with poop, you know, I tell lots of funny jokes. I've had lots of tons at parties. Everyone wants to talk to me because they're like, how does that work? You know, I thought originally buying into it was, you know, are going to look down upon because, you know, we're like the garbage men. But then they look at and they realize the, the money that you're making, consistently doing. Yes. Yeah. So, you know, that's one of the big cons is everything every day is different.

Host: Okay.

Guest: One of my famous saying is, you know, same day, different shit. Because it is the same day you're coming to the office, you know, you're handling these problems. But every day is slightly different even no matter how well you plan things out. And we've got this and we should be doing, you know, this job at this time. It's like, stuff happens and it's a lot of, it's beyond your control. But it's a really good business, profitable business. And, you know, it's not seasonal. It's every year people poop and they continue to poop no matter what. So it's recession proof. You know, I don't care if you're worried about, you know, making your car payment, but you've got shit flowing out on your lawn. You're gonna pay to get that shit taken off your lawn. Yeah.

Host: Is it geography dependent? I mean, obviously it's geography. What I mean is, are you only gonna find this in more semi rural and rural areas? So if I'm in downtown Philly, like, this wouldn't be an opportunity for me.

Guest: No, downtown Philly, it wouldn't be. But it's suburban Philadelphia, obviously. So one of the things we have is geography that, you know, there's a lot of rolling hills and large small mountains that doesn't allow for efficient use of sewerage. And so again, where you've got these very, you know, 5 million, 10 million and $20 million houses that are on septic. And it's not a monetary thing. It's that, you know, in order to buy A house like, or put in sewage like that in that area, you're going to have to buy properties to put in a pump station every time there's a, a peak or a valley. And so when these properties are selling at $3 million a piece just for the land, you're Talking about a 400, 500 to a billion dollar sewage system. That's just not going to happen. So it's really geography based like that. Primarily it'd be suburban and rural. But if you're living, you know, downtown la, no, probably not going to be a lot of septic businesses. What there will be is sort of a spin off or a side business which is a grease trap business. So restaurants, food manufacturers all have grease traps. Those grease traps typically have to be cleaned out every year. So you're going in with some much smaller trucks. You probably have a 2,000 gallon truck rather than a 4,000, 5,000 gallon truck that we have. But those businesses happen in center city Philadelphia, you know, in la, in San Francisco, any Chicago, any major city you can think of.

[24:59] Host: Okay, okay, okay. So you got it in pretty very short order to $3 million a year then. Did you see that as a ceiling? So if you wanted to expand even further, it was going to mean acquisition.

Guest: Yes, that's you know, about the amount that you can grow it organically with that customer base. If we wanted to expand even further, we would be required to do acquisitions and basically buy more customers and buy other out competition. But it's a very fragmented industry. So there's 3500 septage or you know, septic companies in the United States and they vary in size but primarily, you know, the vast majority of them are in that million dollar to $2 million family owned business. And that's why it's been very tough to and fragmented business that hasn't really rolled up like you saw with the traditional sanitation with waste management coming in and doing a massive nationwide roll up strategy. So there's lots of competition. A lot of it's mom and pop again. The guy's probably been in it, you know, 40 years. But they're also, you know, there's diversity within the septic industry as well. So I have competitors that just do pumping. Yeah, I have competitors that do pumping and poured potties and that's it. I have competitors that do just pumping and they do grease. I have competitors that do, you know, just installation, repair, maintenance.

Host: Sure.

Guest: So there's niches within niches in this niche industry.

Host: Sure.

Guest: But this niche industry is, you know, a $25 billion a year industry, it's very large and that no one really knows about.

Host: And why do you think it, why do you think like private equity types haven't come across it or. I'm sure they have, but why do you think they haven't tried to do roll ups of all these many, many million dollar mom and pop operations?

Guest: Well, I think they are trying and I've seen it within the last five years or so more of an uptake in acquisitions through PE companies. I think part of the reason is that, you know, these are really local companies. You've got to know the area, you've got to know the clientele, what you can charge. And typically these companies operate within a 25, 30 mile radius because any further than that it gets expensive and it doesn't get. It doesn't pencil out to actually drive 100 miles and go pump a job for 300 bucks. And you know, it's a very asset heavy business. So that's the barrier to entry is every pump truck that I have, a brand new pump truck is $200,000. So to replace my fleet, that's a million dollar investment. Obviously we don't do it all at once. We kind of roll them in and out. But you know, it is very asset heavy and that's sort of our moat or our barrier to entry. Why? You know, I would never start a septic business on my own. Yeah. From scratch. Because a, you don't have the customers, it's very difficult. You got to acquire the customers. You got to go in and buy this $200,000 vehicle or you get a used one and you buy it for $75,000. But now you're putting every year 25, 30,000 into in repairs. Because the reason it was sold is the owner didn't previous owner didn't want to deal with those repairs.

[28:09] Host: Sure.

Guest: So it's not something that would be lend itself to be a startup. Then the acquisition side again, you've got a lot of mom and pops and those guys. Hey listen, it's a good lifestyle business. If you want to make 200 grand a year, you can do it in this business and you can do that for the next 40 years. Yeah. So why would you sell at 55? Why not keep it for another years until you're 65 and sell it? If you have it operating nicely, why not hold on to it until you're 80 years old? Yeah, that's a part of the reason is that these mom and pops, it's their lifeblood, it's their Income stream.

Host: Yeah.

Guest: Unless you're going to come in and pay 4, 5, 6 times EBITDA, they're not going to sell it.

Host: And that's what you see them selling for is 5x or higher if you

Guest: want to buy them. Yes. Because the sellers, the owners don't want to sell it. Right.

Host: To a big roll up that it's a great business, basically.

Guest: Yeah, yeah. But to a roll up strategy. They don't want to sell it. The corporate America. But you know, if you're a young couple coming in and you know, replacing this mom and pop and we want to carry your name and your legacy forward, that's how you can get them to sell. Typically it'll sell for three times EBITDA or SD or one times revenue, but mostly it's. It's three times ebitda.

Host: Okay, okay. Which is basically, you know, kind of a ballpark for many SMB, for many industries.

Guest: Yeah, yeah. But the thing is, you know, there's not a lot of active sellers out there. Again, because it's a business you can hold on for a long time as long as you have, you know, the employee, the workforce to do it.

Host: And on that point, how difficult is it to find people who, who can run the pump, do the pumping and use all the equipment, the actual people doing the work? Is it hard to find those folks?

Guest: It is. And it's gotten progressively harder. So right now we're in the trucking industry right now and there's something like 600, a shortage of 600,000 jobs in trucking. So as you drive around, I know in Philadelphia, everywhere that does any sort of hauling or trucking has a sign out hiring.

[30:09] Host: Yeah.

Guest: And that's just because there's no one really going into the trucking industry anymore. That's more of the difficulty of it is finding those guys. And then we pay very pretty well. We pay a lot more than you would say over the road trucker, so. And you get the benefit of being home every night.

Host: Yeah.

Guest: You know, and to be honest with you, I've had children. I don't know if you've had children, but I would much rather stick my head in a septic tank all day long than to change a fresh diaper. The degraded poop is much more tolerable than the fresh stuff. So if you change the diaper and you didn't throw up, you can handle this.

Host: You can handle it.

Guest: It's fine.

Host: Okay, interesting. Well, I want to. We're at 30 minutes, so we only have a few more minutes. But possibly One of the most interesting parts of your story, which all, all of this has been very interesting to me already, is, is what this has led to. So give us, if you, if you can really condense this into three or four minutes like where the acquisition of Gray Brothers has taken you now. What, what is, what is somax?

Guest: Yeah. So getting into this industry, I realize that there's no pun intended, a lot of waste in this industry, that there is value of recoverable compounds in organic waste and no one was doing it. So I wasn't smart enough to figure it out on my own. I went to Villanova University School of Sustainable Engineering and said, hey, I have this problem, I think we can make value out of this poop. And so we've worked with them, fast forward for the past eight years, fast forward now. We've actually sponsored six master students to produce thesis on this. We've identified a technology called hydrothermal carbonization. And we're actually now building the first hydrothermal carbonization plant in North America at the Phoenixville Wastewater Treatment plant where we will take 15,000 tons of biosolids, which is human waste, and we'll convert that into about 6,000 tons of what is essentially coal. We do it in 30 minutes and now we have a solid coal that we can burn for energy. We can put it into building materials like concrete and asphalt for carbon sequestration. And what we're doing is solving a long term issue that most municipalities are facing with what do you do with biosolids and what do you do with poop after you treat it and separate it from the water?

Host: And what are they currently doing? What are municipalities currently doing with it?

Guest: Typically they'll sell it to a middleman who then go land, apply it on agricultural land. But the problem with that is there's all these pollutants in it. So we're actually polluting our soils with our own poop. And it's not necessarily the poop that's the problem. It's everything that goes in. It's the pharmaceuticals, it's the chemicals. Because you got to understand that everything that you use in your house, in your shower, your shampoo, all those chemicals, antibiotic soaps go into and accumulate at the wastewater treatment plant. So it's like a super concentrated form of all the waste that you're generating, all the chemicals you're generating from your house, we're putting on that to land which is degrading that land. And then there are things like, you know, pharmaceuticals that are getting absorbed into the food that's Fed to cows. And then so next thing you know, you drink a glass of milk and it's got an antibiotic or an antidepressant that you didn't know you wanted.

[33:32] Host: Yeah.

Guest: So they do that, or they incinerate it or they landfill it. So this way we cut off that entire supply chain and say, let's put this material to give use. So this municipality was spending around $2 million a year of disposing of this biosolid. And what we did is we said, hey, we can turn that into energy. Dad also made 100% renewable energy pledge. And we said, instead of going out and building wind turbines and solar panels, we could take your food waste, we can take your biosolids, we can convert that into coal. We gasify that coal so it reduces the emissions and it creates energy. So we can create 153% of the energy demand of this wastewater treatment plant. So what used to be the biggest consumer of energy in the municipality is now a power generation station. It's putting out half of the energy that it consumed before as excess energy that can be used by the municipality. And there's nothing special about this municipality. Don't take me wrong, anyone from Phoenixville, but there's 15,000 other Phoenixvilles in the United States. This can be replicated all over the country. So you're creating renewable energy. You. You're also sequestering carbon. You have zero emissions with it, and you're solving the crisis with. With poo and what to do with it. So we're avoiding putting that on land and degrading agricultural land as well.

Host: That just all sounds really amazing, and I think it deserves its own. Its own podcast episode. But what turned you onto this? You said when you approached Villanova eight years ago, you said, I have this problem. What was the problem? That you. You didn't have a place to dispose or you just recognized?

Guest: No, we just recognized. So I haul 40 million gallons of sewage a year, and I don't do anything with it. I just dispose of it. But I realize that there are compounds in there, right? There's energy in there. There's phosphorus, there's nitrogen, there's all these, you know, beneficial things that are going to waste. Because what happens is wastewater treatment plants treat it, and then they just dump that to the rivers. And so when you see what's going on right now in the world, if you look at, you know, the algae bloom outbreaks in the Midwest, you look at the dead zone in the Gulf of Mexico, all that has to do with Nutrient pollution, there's too much nitrogen being spread on farmland. And we add that by, you know, not necessarily cleaning up the waste stream as much. So can we extract value from that? And that's the problem I posed to them. They came up with an elegant solution and now we are actually commercializing that and implementing it at a municipal scale.

[36:00] Host: And this science that's being used here, and as this process, did these thesis, these graduate students writing their theses, these six students invent this science, or did they kind of uncover it, find it, and apply it to your problem?

Guest: So the process itself was first identified in 1916 in Germany by a Nobel Prize chemist. Some things happened in Germany in the early 1900s and it sort of got lost to history. It was rediscovered in 2006 at the max Planck Institute for Colloidal Science at the Potsdam, Germany. So as a process, it's relatively in its infancy. It's only about 16 years old. But it's very simple. What you do is you apply heat and pressure. You mimic the natural coal formation. So when we go and dig up coal from coal mines that's been sitting there for 250, 300 million years, but we're able to speed that up to process and produce coal, a biocal within 30 minutes for sewage sludge, an hour and a half for food waste, and then two to four hours for agricultural waste like corn stover, sugar cane, the gas, anything like that. And you can make a lot of really cool things. I mean, I could go on for hours. I know we're pressed for time, but, you know, it's, it's, it's, to me, it's been fascinating and something that, you know, I graduated with a degree in English. I had no science background. I think I got a D in chemistry. But I knew I had to understand the science, so I dove in. I didn't take classes, but I learned from these students. I learned from absorbing papers. I read probably 20 academic papers a week.

Host: You got the periodic table there framed over your right shoulder.

Guest: Yeah, yeah, exactly. So, you know, without being a chemist, I'm actually, you know, have taught myself to be an expert in this, in this process and this technology and the chemistry behind it, and then building these plants, you know, you've got to have mechanical engineering, electrical engineering, all that. So I really dedicated myself, you know, over the last eight years becoming a world class expert in this process. So instead of taking those, you know, profits from Gray Brothers and going out buying a beach house or, you know, acquiring other things, as I use that to leverage, you Know what I want to do in my life. And to me, the game is not to amass the fortune, as big fortune as you can. It's to live an interesting life.

Host: Yeah.

Guest: And so it's allowed me to do things like I had a vertical farm going for about three years just as a hobby and decided that, you know, everyone else is playing in that space. So I'm not going to do that anymore. I'm going to switch to this thing so I'm able to fund, you know, odd things that I find intriguing and go after them. So I built, you know, a world class laboratory here in our facility. You would never know that the septic company would have a world class lab that we do. And it's just, you know, I'm a unique guy and not a unique solution.

Host: Well, certainly on your, on your Twitter thread that's noticeable. I mean, as I went through your tweets, I said to myself, this doesn't sound like the tweets of a guy running a septic company. A lot of big biology and chemistry words in there. So that, that pivot you've made, clearly, you clearly made it so well.

[39:21] Guest: One of those that I would never have made if I didn't go into and buy a septic company to begin with. So you never know where you're going to end up.

Host: Totally, totally. Very interesting story, Dan. I want to leave it there, but maybe we'll, we'll do another round one day. But speaking of your Twitter thread, where, where can people follow you on Twitter or elsewhere online?

Guest: Twitter and LinkedIn are the two things I'm probably most active on. And it's my name, Dan Spracklin. So it's either an Spracklin on Twitter or dan spracklin on LinkedIn or you can search Hydrothermal carbonization. I'm about the only person in the world talking about it. Pretty lonely out there, but I think, you know, 10, 15 years, a lot of people be talking about. So bit of a pioneer in the space.

Host: That's really cool. Hydrothermal carbonization.

Guest: Yep. Or HTC for short.

Host: Or htc. Okay. Or Uber for poop.

Guest: Uber for poop. Yep. That's the septic industry. Right? Right.

Host: All right, Dan, this was awesome. Thank you very much.

Guest: Thank you.