Epiphany Solar Water Systems stretches in many directions to find focus

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One day earlier this month, Tom Joseph, CEO of Epiphany Solar Water Systems, gathered his executive team and asked a shocking question.

Some of the chosen six sitting before him had come on board only a few months ago. Some, he'd been cultivating much longer. After years of developing his solar-powered water purification system, Mr. Joseph finally had a pioneer and funder -- Consol Energy Inc. -- and his company finally had a path to commercialization.

So it was a surprise to hear him ask, essentially, "Are you sure about all this?"

It's something he's been doing with his research and development staff for years -- waiting until something is figured out and then asking them to rethink the whole idea.

With these executives, the question landed like an anvil.

"They were actually angry at first," Mr. Joseph said. " 'What do you mean?' they asked. 'We can't question this now, we're already going (for it).' "

Indeed, interest from the oil and gas world, specifically from Consol -- which announced in June 2012 it would pilot Epiphany's solar-powered water purification technology at a Marcellus Shale well site in Greene County and invest $500,000 -- is the first major bite Epiphany has had.

When he launched the company in 2006, Mr. Joseph's promise was to provide cheap, portable and fuel-free water purification units to third-world countries. That garnered some generous hype but little cash.

Then the Marcellus Shale drilling boom came along, with its millions of gallons of salty wastewater begging for an innovative treatment solution.

At first, he ignored the industry and focused on the global water problem. Then, he began to see it as a vehicle. It became a strategic tangent -- a way to prove the technology, gain high-profile customer supporters and bring in enough money to fuel the international ambitions.

"Our long-term vision hasn't changed," he said. "We want to solve the global water crisis."

The question he posed to his executive team earlier this month was whether the current oil and gas strategy is the best way to get there.

The strategist

It might seem premature to question a company's long-term trajectory before it has sold any of its products. But Mr. Joseph says it's the exact right time to do it.

"Once you start down one path, you preclude some others," he said. "And the further you get, the more windows close."

In April, Mr. Joseph appointed William "Guy" Pagonis as his chairman of the board. Mr. Pagonis is a retired Army general and logistics tsar of the Gulf War who later served as head of supply chain at Sears.

Last month, Mr. Pagonis brought in a strategist to interview Epiphany's staff and synthesize a plan that he hopes will get a unanimous vote at an executive meeting scheduled to hash out the company's future in late July.

The options are as follows: One extreme would be for Epiphany to sell off its gas-focused unit right now and refocus on its original, global mission. Conversely, it could funnel all of its resources into the gas field project and make that its primary offering.

Mr. Joseph anticipates the consensus will land somewhere in the middle. But the details will be helpful. If some executives want to stick with gas for the long run, he will know that when it comes time to spin off or sell that business, C-level talent will be part of the package.

The real reason he might seem eager to move on to the next big thing is that his end game isn't actually solving the world's water problem. It is having a NASA-style lab where teams of researchers attack many challenges of global importance, spinning off companies, selling and licensing products, and reinvesting the money into more research and development for the next big thing.

That's the vision for Epiphany Labs.

Everything Mr. Joseph has done up until now has been with that goal in mind, which might explain why the company is helping to launch a San Francisco-based software start-up even as it is getting ready to manufacture thermal-powered phone chargers.

In February, under the banner of Epiphany Labs, Mr. Joseph launched a Kickstarter campaign for the PowerPuck, a coaster-shaped phone charger that would draw its power from a hot cup of coffee or an iced drink on its surface.

The goal wasn't to bring thermal phone charging to the masses, although the company raised $130,000 and hopes to start manufacturing the pucks by early next year. The goal was to drive interest in the Epiphany name, to spur a few hundred Google searches and rustle up some investors.

Let's say a large retailer picks up the PowerPuck. Maybe that retailer has factories in Third World countries. Maybe those factories could benefit from cheap and mobile water purification.

That's how the wheels spin in Mr. Joseph's head.

Purposeful side project

Now consider his latest tangent -- a three-day launch party for a mobile app called Suaree.

Suaree (pronounced like the word for a evening party, or soiree) was developed by New Castle native Sander Bogdan. It's a smartphone program based on location and time that lists events and promotions in five cities, including Pittsburgh. Its emphasis is on immediacy -- no events listed are more than three days in the future -- and the point isn't to get users to spend a lot of time with the app. It's to get out and meet people face to face.

Mr. Joseph has been helping Mr. Bogdan with a marketing strategy. He likes the idea of social media being used to actually make people more social. It's one of those global problems that would make sense in the context of Epiphany Labs, Mr. Joseph said.

But the more immediate strategic strand behind his involvement is to make Suaree successful enough to be snatched up by a generous buyer, freeing up Mr. Bogdan to come work at Epiphany.

The duo became friends during middle school problem-solving competitions in New Castle where they conspired to build the tallest building out of gum drops and spaghetti, or engineer a way for an egg to survive a two-story fall.

"Part of it was actually solving the problem," Mr. Bogdan said. "Part of it was the thrill of trying to figure out what was the right combination of people to bring into these events to win."

Mr. Bogdan, who works in software, is the abstract thinker. Mr. Joseph, an engineer, is a "bottoms up kind of guy."

"At a high level, we've always had this vision of, gee whiz, if we only had enough money, this thing that we enjoy doing so much, we could do full time," Mr. Bogdan said.

A driving energy

Two months ago, Epiphany moved from its original office in New Castle to a standalone building in Lawrenceville where Mr. Joseph now sleeps in a room that would be his office were it not for the bed.

The walls inside are painted blue, yellow and green -- water, sun and green technology. Vincent, Mr. Joseph's dog, gallops through the office, its fully stocked kitchen and the shop floor to the sounds of Bob Marley on the sound system.

It's a start-up, Mr. Joseph explains, so people are there all hours of day. Food, coffee and music are a must.

There's an energy about him that attracts everyone from young engineers to seasoned businessmen, and no one here seems to doubt that Epiphany Labs will one day be solving the world's problems.

Ron Pettengill, who founded several successful tech firms and took one of them public, joined Epiphany as head of its oil and gas division last year. Mike Broeker, former president of Sierra Without Wires, an IT service company in Robinson, came on as CFO this spring.

Mr. Pagonis, who also sits on the board of Blawnox-based Genco Inc., has been advising Mr. Joseph for more than a year and is confident both in Epiphany's technology and its CEO's end game.

"His dream of a lab and all that, that's his vision," Mr. Pagonis said. "But he's also realistic enough to know ... you can't do that unless you have cash coming in."

The end game

In 2008, Oakland-based Innovation Works, a state-funded program that gives start-ups funding and guidance, invested $200,000 in Epiphany, back when it seemed that deployment in Haiti would be its test run.

Frank Demmler, vice president of the entrepreneurial executives team at Innovation Works, said the organization challenged Mr. Joseph on how he would turn his vision into an executable business, but in the end was satisfied the technology would have numerous pathways to achieve commercial success.

"One of the cliches in our business is you don't know what business you're in until your customers tell you," Mr. Demmler said. "Quite often where the customers find value may be very different from what [the entrepreneur originally envisioned]."

Epiphany's market, at least for moment, turns out to be oil and gas, and its pioneer client is one of the region's largest energy firms. "That's sort of got teeth on it," Mr. Demmler said. Now investors can look to the Consol experiment to legitimize their interest.

But Mr. Joseph is cautious about going too far in one direction. He wants to be a cross between Thomas Edison, who he regards as a brilliant and enthusiastic inventor and a lackluster business man, and Henry Ford, who sunk all his ingenuity into a single product, made a fortune at it, but didn't reinvest it into tackling other needs.

"I'm not proposing that we change the whole business plan," Mr. Joseph said. "What I'm proposing is that we reassess."

He's fairly confident the company is on the right trajectory, but in the back of his mind is a question he heard years ago at a business seminar. It asked: "What does it feel like to be wrong in the seconds before you realize you're wrong?

"It feels like being right."

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Anya Litvak: alitvak@post-gazette.com or 412-263-1455.


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