helioz

Martin Wesian, founder of Helioz, is perhaps the best known social entrepreneur in Austria. Helioz has developed Wadi, a solar-powered electronic device for enabling individuals to safely disinfect drinking water in PET bottles, using only the sun’s energy.  This brilliant and efficient portable device has earned Helioz multiple awards and recognition, as well as venture capital to develop the product.  Now at the cusp of mass production and international distribution, the Wadi is poised to take Helioz and Wesian to a higher level, as well as help millions worldwide live healthier with potable drinking water.  If only the profit motive won’t get in the way?

Martin Wesian, founder of Helioz and Wadi. Credit: Ian EhmUpon first glance, Martin Wesian may seem like a nerdy scientist who has been holed up in a lab for half his life.  But it doesn’t take long to realise that the 38-year old is a well-rounded, socially adept and energetic entrepreneur – one filled with idealism to provide socially responsible developmental aid for the so-called “bottom of pyramid” (BOP) emerging market, the largest but poorest socio-economic group living in developing countries.  

Wadi purifies water using only the sun’s energy. Water is exposed to the sun in PET bottles with Wadi installed on top. Once a smiley appears on the indicator, it is safe to drink. Credit: Eugen KollerIt turns out he’s not a scientist at all.  Rather, he worked previously as an independent arts & culture project manager, responsible for projects such as the visitor welcome centre at the Austrian parliament and Vienna’s Mozarthaus.  It was only after he read an article about solar disinfection of drinking water (Sodis) that he came up with the basic idea behind Wadi.

From Philosophy to Industrial Engineering, from Vorarlberg to Venezuela

Raised in Vorarlberg, Austria’s westernmost province, by a plumber father and a working mom, Wesian didn’t get to travel much as a kid, outside of the typical bourgeois Austrian summer holidays in Italy and Greece. But his work in arts and culture management allowed him travel extensively in Europe. It also afforded him the money and time between projects to travel throughout the world.  He spent two years in remote regions of Venezuela and Columbia as well as long stretches in Asia and Africa, where he encountered first-hand the poverty of the people at the socio-economic bottom and he became involved in development work.  

Via Berlin and Switzerland, he ended up in Vienna, first studying Philosophy, unhappily, and then moving on to Industrial Engineering, eventually writing his Masters thesis on how to invent, market and distribute Wadi to the millions who stand to benefit from it.  Finally, he saw a way to combine all his interests, inspiration and idealism into one enterprise that would make full use of his creativity and his management skill. He started to shop the idea around.

“They all warned me it would be a big mistake and that I’d lose everything”

Then came a critical decision in 2009.  He received a call from Doctors Without Borders asking him to take on project management for handling water and sanitation at one of the world’s biggest refugee camps in Kenya.  The next day, however, he learned that his Wadi idea had won the Energy Globe Award. With such recognition, he could now consider seriously forming a company to produce and market the device.  After taking the weekend to consider his options, he decided on the latter and hit up his parents for some seed money, which they provided without really believing in the idea (perhaps his plumber father was excited that his son was showing at least some interest in water).

Indeed, none of his friends and colleagues were convinced it was the right decision. Wesian recalls, “they all warned me it would be a big mistake and that I’d lose everything.  But as I stood on the stage at the Energy Globe Award, in front of the TV cameras, the audience gave me such positive feedback and many asked me how soon the product would be on the market.  I started to think it would work.”

Wesian thought R&D would take only a couple of months. “Wadi is actually a pretty simple device, but it required so much testing in the lab and the field to prepare it for serial production. Luckily the Austrian government is a very good provider of financing for this stage of development.” He secured financing from The Austrian Research Promotion Agency (FFG), Departure and the Vienna technology promotion agency (ZIT).

Getting the message out – with no budget

The Helioz “corner of fame”. Credit: Michael BernsteinDespite having enough R&D money, Helioz had no budget to speak of for marketing and PR.  But then a strange thing happened.  Wadi/Helioz kept winning awards and competitions. Wesian realised that this created a useful loop: the awards brought media coverage, which brought more attention from potential customers and business partners, which brought more invitations to competitions.

“The awards were not only important as a source of financing – about 70.000 euros in total,” Wesian says as he points to a stack of oversized novelty checks in the corner of the room, “but also as an inexpensive source of international PR. A few months ago I got a call from a businessman who needed a water-purification solution for remote areas of Brazil. He had read about the Wadi in a newspaper in Brazil!”

Issues with investors

The first Wadi units were (and to this day continue to be) made by hand in the cellar of Helioz’s office space, often by Wesian himself.  Increasing demand made it clear that Helioz would need venture capital investment to mass produce Wadi at an affordable price. According to Wesian, “many investors loved our business plan, because there could be a good return on investment [ROI], as well as PR benefits of being a humanitarian investor.”

Wadi in use in Egypt. Credit: Martin WesianWesian wanted not just money, but contacts and management expertise as well.  Unfortunately, such “expertise” included one interested investor who didn’t get the “social” part of the product and rather acted like a corporate raider.  “He told us that if we would reduce Wadi’s lifespan to two years from our planned five years,” through planned obsolescence, “we could generate financial ROI in three years time.  I protested that this isn’t our business model, but he just didn’t understand this concept.”

Eventually Helioz entered into an equity partnership with a major Austrian industrial company.  At first, it was perfect.  He received great support from their well-connected board and young, enthusiastic CEO. The initial funding came in and all was set for an August 2012 market entry.  According to Wesian, “already in May, we had confirmed orders for about 80.000 units and letters of intent [LOI] for a million more.”

A large Austrian manufacturing company, who were also supportive of the humanitarian goals of Helioz, was contracted to mass produce 200.000 units.  Suddenly, the investor hesitated, insisting that Helioz first obtain confirmed orders, not just LOIs, for the entire production run.  Despite receiving another 100.000 confirmed orders from Pakistan in October, production couldn’t begin and Helioz had to break the news to its customers, hoping they wouldn’t jump ship to a rival product such as PotaVida (who, Wesian believes, may have infringed on Wadi’s patents). 

Worse, the investor is showing no signs of giving up its equity stake easily, and this is discouraging several other interested investors from stepping in. “It’s really a pity,” understates Wesian, in a way that tells you he is more concerned about all the people who won’t be drinking clean, affordable water than about his own profitability (Wadi retails for about 10 euros per device on the BOP market. According to Wesian, it would be possible to sell it for less, but he believes lowering the price would lower Wadi’s status, thus making it less attractive for potential customers).

Optimism: an essential quality of the social entrepreneur

“There are some in the social enterprise startup community who have similar issues with their investors.  Some of them have folded their businesses, started over from the beginning and have succeeded by doing so.  I’ve considered this, but for a R&D firm like Helioz in Austria, it’s not a good idea.  We count on obtaining state support for R&D in the future and don’t want to risk it by defaulting on our government loans.”  Wesian is still optimistic that he’ll reach an agreement with the investor to break the production logjam.

Optimism is, after all, an essential quality of the social entrepreneur.  Giving up is not an option.  Success is not strictly measured in terms of break-even points, but in the humanitarian benefits.  To Wesian, entrepreneurial success is achieved when the company earns enough money to pay off its loans and interest, and then builds a nest egg for future R&D.  He can foresee Helioz not just developing its own devices to satisfy the BOP market’s clear needs, but to leverage the distribution channels developed for Wadi to market products made by others as well.  Then as soon as the company is self-sufficient, he’ll be ready to move on to other projects, but always staying in the Social Entrepreneurship field.

Now that he’s gained such international experience and broadened his network, Wesian can’t foresee ever going back to the arts & culture project management.  As an elder statesman on the Austrian social enterprise scene, Helioz is well-positioned to lend its advice to others.  Wesian already receives many requests for advice and is busy interconnecting people within his network.  He considers it a responsibility of achieving some measure of success, and yet another way to leverage social enterprise.

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