Meet WaterChain Advisor David Metzler
David Metzler is one of the most recent advisors to join WaterChain. He has an incredibly diverse background, and he lives his life and conducts business according to a simple yet beautiful set of standards. I’ve gotten to know David over the last few weeks since he’s joined the team, and we sat down to discuss his background and why he’s so passionate about WaterChain.
Taylor (WaterChain, Head of Communications): David, I’d love to learn more about your background and how you got to where you are today, working as an entrepreneur, investor, VC, and blockchain advisor.
David Metzler (WaterChain Advisor): Right out of high school, I joined the U.S.Navy, and I spent 5 years in the service, first as a rescue swimmer and then as an air traffic controller. As a rescue swimmer, I blew out my knee, and I had the option to leave the Navy, but I wanted to finish the commitment I’d made, so I became an Air Traffic Controller. It was a fascinating transition. I went from this job that was incredibly physically demanding, being a rescue swimmer, to something that was mentally rigorous.
In Air Traffic Control, your job is to prevent planes from crashing, and that’s really where some of my entrepreneurial lessons first came from. You’re taking all this chaos, planes moving at different airspeeds and at different vectors, and you’re trying to instill some order to them and put them into patterns. I loved seeing something in my head turned into a reality, and my entrepreneurial spirit came from that passion.
While there, I also learned that good leaders stand up and say something when they notice something is wrong. There was once a plane that was about to hit a car on the runway, and I stepped over someone more senior than myself, told the plane to wave off, and we avoided the collision saving 4 pilots lives.
In that moment I learned a great lesson: just because you have more seniority doesn’t necessarily mean you know more. The people that take action and will act on what they see are the ones that end up changing the world.
Taylor: That’s a fascinating story. I spent some time in Israel last year, a country that just so happens to recycle the most water in the world, and while I was there I learned about how nearly every young person spends time in the military, and their power structures are a bit different than ours. They are encouraged to challenge seniority rather than blindly following orders. When they get out of the service and go into business, they make great entrepreneurs and build incredible teams in part because they are constantly challenging one another and evolving their ideas based on merit rather than position.
David: I agree because after the Navy I went to Columbia University, and there I met some former Israeli soldiers who shared that insight with me as well.
After getting my undergraduate degree, I went into Investment Banking. I started in the technology group of CIBC World Markets, looking at middle market companies between $500MM — $1BN in market cap for leveraged finance deals. So I helped advise buyouts and or M&A transactions in the defense and aerospace sector where they used me and my military background and financial experience to do business development.
Working 100 hours a week wasn’t what I wanted to do forever, but it was an incredible learning experience to understand both the financial side and the interpersonal side of big business.
Then, I moved back to San Diego and joined a VC firm, Mission Ventures. We had about $600M under management, and our investment thesis was a Series A investment in technology companies in Southern California, where a typical deal was a $5M investment on a $5M valuation. There I got a sense of what early stage startups looked like: how do you found them successfully, and how do you create the fundamentals necessary to get funding. That got me close to the driver’s seat without having to actually drive and I subsequently got to learn some valuable lessons observing mistakes companies made. As an Investment Banker, I was working with CFOs and controllers and dealing with the financials. As a Venture Capitalist, I was working with the CEO who started the company and the senior management team, and you get to understand how the company really works and what makes them successful.
I learned that what makes up success is the quality of the team: have they worked together before, and is there a lot of passion behind what they are doing? Startups are hard, and you need passion to get you through. That’s one of the reasons I love WaterChain: the team is incredibly passionate about what they do and many of them have been working together for years.
I went on to become an entrepreneur and started my first company in 2006. At the time, Myspace was still thriving, Facebook was just coming into being, and we decided to create the first HIPPA secure social network where people with chronic diseases could share what they were going through. We initially focused on the recovery community, and we found that through social networking, game mechanics, and clinical interventions, we could change the relapse curve from an 85% failure rate to a 67% success rate in helping people to stay sober. That statistic is one of the things I’m most proud of having accomplished in my career.
Since that first company, I’m always looking to start and work with companies that have a strong social consciousness about them and a double bottom line. That’s another reason I’m so thrilled by WaterChain. Their fundamentals are solid and at the same time they are solving a real problem that can improve the world. Water is life after all.
My next company was in the fitness and health space. The social component was to help kids that had lost their PE programs. Every time you worked out, we helped a local kid that lost a PE program get an hour of fitness, and it was incredible to connect the good feelings of working out and exercising on a personal level with the broader feeling of giving back.
While there, I got to work with amazing companies like LuLu lemon, and we raised $4M for that company and mission. That process gave me another chance to see what it takes to raise capital from the inside, and to learn once again what a good team with really talented people are essential for the success of a mission.
My modus operandi when starting a company is to go talk to the smartest people in the industry, which is what I did before jumping into WaterChain. They’ll have told me what they know from the water industry and the potential blockchain solutions, so I looked at the project from the most intelligent way possible. They all told me it was a great idea, that no one was doing it in the crypto space, and if done right, would be a needed solution to the trillion dollar industry.
What I love specifically about WaterChain is the elements of blockchain, which I think is just a fascinating evolutionary change in technology, maybe the biggest thing to happen in our lifetime (and I witnessed the internet come online and mobile phones revolutions so that is saying a lot). At the very least it’s the dot com reborn. I saw how billion dollar companies were born in the dot com. What this looks like for me is that we are similarly in the early stages where we will get some really good companies with ideas, but there are not many companies that have solid fundamentals. WaterChain is one with the fundamentals to back up what they are trying to do.
The reason water projects get funded in the $1B range is because Water is the most valuable resource. People spend those big capital investments because the ROI will always be there. Water is always valuable, it’s a finite resource, it’s life, it’s more precious than gold. Taking the same concept and bringing it down to the modular level is fascinating, especially as the industry is requiring decentralized smaller onsite solutions.
Right now about $5B a year in projects are being built that are decentralized. But it’s going to grow exponentially because all these municipalities are forcing projects to treat their own water onsite. That means decentralize water generation projects of $500k — $1.5M will be the new norm, and they will all have the same value and predictable returns that the huge projects are getting. That trend is perfect for crypto because it is all about decentralization; hence, as a VC I immediately saw a ton of value and capital creation potential in WaterChain.
We’re basically taking a very stable industry, Water, and allowing average accredited investors and get access to those returns. If we get 10% of that $5B Total Addressable Market for decentralized water projects, that’s $500M a year company plus interest. That’s a great company, and we think it can be much bigger than that.
WaterChain has strong fundamentals, a really strong double bottom line, and we can do a lot of good across the world by giving access to scalable resources.
It’s a double bottom line story which is what attracted me to it: “Anyone can make a widget, but why make a widget when you can make a widget that makes the world better.”
Taylor: What an amazing story, and I love your passion for the double bottom line. How did you get into Crypto/Blockchain?
David: I got intro to Crypto about a year ago when I spoke at the Crowdfund Investment Summit, which is now the Crypto Investment Summit. My friend Rees Morgan, the number #53 engineer at Microsoft, came up to me after I spoke and told me BitCoin is going to mint more billionaires than anything we’ve ever seen before, even a skeptic like me is excited about a statement like that.
More importantly, back in 2015, I became fascinated by the JOBS Act, which passed in 2012 and allows for Regulation A+ companies to raise up to $50M, and Title III companies to raise up to $1M. The last time that was legal was in 1933, so it was needless to say a game changer.
As an Investment Banker in the age of Facebook, I thought this was just an unprecedented development and it would radically alter the way that companies think about raising money in the future and the way that investors can access early stage investment. I started studying the JOBS Act, and was involved in helping companies secure bridge loans, between $10k — $150k so that companies could use that money to go market out their offering.
While this new type of crowdfunding was legal, it was moving along slowly and Crypto came out of nowhere. I was watching Crypto explode, and then slowly saw that the space is shifting to where an ICO is going to look a lot more like a company that raises funds through the JOBS Act and issuing security tokens instead of or in addition to stock. That’s definitely the future in my mind, and I’m thrilled to be working with WaterChain, one of the earliest companies to work towards that type of raise in the blockchain sector. It means you can trust companies that take this approach because the SEC has looked at them to make sure they are legitimate solutions and not scams.
Taylor: Aside from WaterChain, what’s your favorite blockchain project and why?
David: I think Lightcoin has a lot of potential because of the transactional speed, but Ethereum is still probably the most interesting because every company out there is using it. I helped a travel company build an ERC-20 token. Almost every company out there is an ERC-20 coin. They’ve created a market for themselves especially with smart contracts, and most decent smart-contract out there is written on Ethereum. Having a huge brand like they do is hard to disrupt.
Taylor: What are the biggest challenges faced by blockchain and crypto companies?
David: Most of them don’t have business people at the table, and most of them are just really smart technical people. It would be the equivalent of your CTO and tech team building a business. They don’t think about how to go get salespeople to go sell into it your market sector or how to wisely spend the capital they raise. Most don’t think like VCs and how do you get consumer adoption once you’ve built this new incredible technology? Not enough blockchain companies are thinking that way and it’s hindering mainstream adoption without those business fundamentals.
Taylor: Well David, it’s been awesome learning more about your story, and I want to thank you for your time, In closing, what’s the most memorable drink of water you’ve ever had?
David: Wow, one of the most memorable moments in my life involved a drink of water. I proposed to my wife in 2016 after running the NY marathon together. We trained the whole year and ran it together, and I wanted to propose after we finish. Marriage is like a marathon, you have to stay in it together and keep pushing to get to the finish line. Like anything in life it takes a lot of commitment.
So we’re running the marathon, and I had the wedding ring in my pocket the whole time. During the last 2 miles, I’m rehearsing everything I’m going to say in my head, but I didn’t want to drink any water incase I screwed it up there at the end. We get across the finish line, and some other runner hands me a paper cup, I drank it all quickly just so my mouth wasn’t dry, and got down on one knee. She said yes, we got married last August and we now we are having our first daughter in 3 weeks in May 2018.