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MARCH 2006

	McGourty

Tapping a New Source of Water Project Financing
By Carrie McGourty
March 27, 2006

Next time you take water to drink, think.

Whether it comes from faucets or bottles, from the Dept. of Public Works or the beverage center of a supermarket, water costs money. An expensive infrastructure of civil works puts water where we need it for free. An expensive system of bottling and distributing puts water where we can pay for it in bottles.

In many developing countries, the poor have no safe drinking water so they spend part of their meager resources on the bottled stuff. It isn’t right, and even some of the kingpins of bottled water and fashionable consumerism understand that.

So it’s a strange paradox that when Starbucks-goers grab a bottle of Ethos Water (the coffee giant’s own bottled water company) along with their iced lattes, they’re paying for projects to end dependence on bottled water by the world’s poor…with bottled water.

Charging $1.80 each, Ethos Water promises to donate five cents of every bottle sold to finance water projects in developing countries. In 2005, Ethos invested $250,000 in sustainable water programs in Bangladesh, the Democratic Republic of Congo, Ethiopia, Honduras, India and Kenya. Partnering with non-profits and Non-Governmental Organizations, Ethos’ projects focus primarily on well construction, water treatment and sanitation and hygiene education.

The need for such projects was ardently discussed at last week’s Fourth World Water Forum, where global experts squabbled over the lack of public water systems in the developing world. They also discussed the increasing reliance on private bottled water companies to compensate for basic water needs where safe drinking water was unavailable.

Inadequate or missing water treatment facilities plague many parts of the world; 1.1 billion people (nearly 20 percent of the world’s population) lack access to safe drinking water, according to Water Aid, an organization dedicated to providing safe water. UNICEF, the United Nation’s Childrens Fund, reports that in 2004, unsafe water led to 2.2 million deaths worldwide; nine out of ten of these were children under five years of age.

Worldwide, bottled water is a multi-billion dollar industry and often the only form of drinkable water in countries lacking water-treatment infrastructure. The Associated Press reports that bottled water sales in China jumped by more than 250 percent between 1999 and 2004. They tripled in India and almost doubled in Indonesia.

So it made sense that during the forum, the president of the World Water Council, Loïc Fauchon, called for huge donations to rebuild water systems in the poorest nations and largest cities.

Back in the U.S., Ethos Water has found a way to address global water challenges by targeting the “consumer with a conscience.”

“That water-for-water link just seemed to click,” Ethos Co-founder Jonathan Greenblatt told the New York Times last February.

Co-founders Greenblatt and Peter Thum formed Ethos Water in 2002, after witnessing the world water crisis first-hand on their jobs. Thum was inspired to start Ethos after working on a six-month project in South Africa for consultant Kinsey and Company. And Greenblatt worked for the Clinton Administration and the U.S. Department of Commerce, where he toured the world and was exposed to the global scarcity of water.

Starbucks bought Ethos for $8 million in 2005, making it available at 5,000 locations. Starbucks and Ethos plan to raise $10 million for water projects by 2010.

But that will only pay for an infinitesimal fraction of what’s needed.

So next time you drink, think.

A Chat with Constructware’s
Scott Unger
By Carrie McGourty
March 8, 2006

For many, the idea of owning a business is a life-long dream. But for Scott Unger, the CEO of Constructware, the online collaboration company that is being bought by Autodesk for $46 million, entrepreneurship is an unyielding mindset.

Scott Unger

At only 42, Unger has taken his Alpharetta, Ga.-based company from infancy to the final stages of its sale to Autodesk, the publicly traded, San Rafael, Calif.-based design software giant. Founded in 1994, Constructware has helped promote the use of online collaboration and project management systems. It counts many contractors and government agencies and school systems as its customers.

I had a chance to chat with Unger, who reminisced about everything from his contracting company's first job painting sorority houses to his future with Autodesk. His advice to future entrepreneurs: start early, don't rely too heavily on outside investors, keep your focus and don't get discouraged. In the beginning, "We were laughed at," he says.

CM: You were recently acquired by Autodesk. What does this mean for your future personally and professionally?

SU: From a professional standpoint, I will be employed by Autodesk. I see that as a great educational opportunity for me to learn within a large corporate environment. It's an extremely large company compared to Constructware. It's also an opportunity to further develop my leadership skills. It will be a fun challenge to put the two organizations together.

CM: What can we expect to see in the future?

SU: Technology in construction is in its infancy. There are a lot of efficiency opportunities that can be done now, but there will be a tremendous number more down the road. It's all about making things easier, faster and cheaper for our clients and providing them with efficiency and productivity. We're in the infancy of what we'll be able to provide our clients. Five years down the road, what we will be able to do will be mind-boggling.

CM: What's the best part of your job?

SU: Dealing with the people, employees and clients. It's also rewarding to build relationships and solve problems, and work as a team to move forward to create greater efficiencies. I love engaging our clients to get them to help us help them (laughs).

CM: How did you start your career in construction?

SU: I started a business while I was in college (along with my partner, another student). We were a subcontractor for a specialty trade that included painting and wall-covering projects for buildings in Atlanta. We painted hotels, office buildings, retirement centers, condos and apartments. Our first job was actually painting a sorority house at the University of Albany.

CM: How did you manage running a business while going to school?

SU: For the most part it was something we did during summer and winter breaks. During our senior year, we ran a crew year-round. It was very challenging. After I graduated, I continued the business full-time. You can imagine that when I first got out of college and started running a paint business, we were laughed at. I was only 24-years-old and I was going for large jobs. But we kept pounding and driving and going along-and we built a fairly large business.

CM: How did you get into construction software?

SU:: I went to Tulane University and majored in computer engineering. In 1991, I was hired for a project by a company that knew my background in engineering. During that time I saw a greater opportunity for document and data management of the construction business as a whole. So Constructware was incubated in our painting and construction company. We were very forward-thinking and progressive with our technology; we saw it as a marketing tool for our clients.

CM: How did people respond to your ideas?

SU: We introduced Constructware at a "computers for contractors" show, and we were laughed at. People said, "We will never run our projects over the Internet." At the time, I was also laughing because I knew they would be doing it. I had a strong belief and continued down that course.

CM: It seems like you became so successful because your background in both computers and construction gave you foresight into the industry's future.

SU:Yes, it was an unfair advantage and I knew that I had it. I understood the market, and I knew I had the technology. In 1994, there wasn't much technology. So we were able to attract some of the best people with technological backgrounds.

CM: What advice would you to young people starting their careers?

SU: I would say, start your own business sooner rather than later. The younger you are, the easier it is to take the step because you have fewer obligations (personally and financially). Also, minimize any and all financial investments needed to move forward with your own business. A tendency is to think you need a lot of money to start a business. The reality is that there are other ways to move forward-the strongest businesses are the ones that don't rely on external capital. It's important also to have real focus-to have a sort of hedgehog mentality. We were considered a dot.com company, but our focus enabled us to survive; we focused on project management collaborative communication solutions- and we never went off course.

Related story:
Autodesk Boosts Collaboration Market Share with Buyout of Constructware

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