Black & Veatch are known for their focus on innovation, and as part of that they've created a unique position for a contractor - Entrepreneur in Residence. Ilya Tabakh brings his experience as a serial entrepreneur to construction to help Black & Veatch structure the approaches and networks that are needed to truly lead in innovation. For a company focused on delivering the critical infrastructure for tomorrow, this deep commitment to innovation is critical.
Learn more about Black & Veatch's climate tech accelerator at https://www.bv.com/ignite
Ilya Tabakh
[00:00:00] Hugh Seaton: Welcome to constructed futures, I'm Hugh Seaton. Today I'm here with Ilya Tabakh entrepreneur in residence at Black and Veatch. Ilya, welcome to the podcast.
[00:00:10] Ilya Tabakh: Thanks Hugh. It's great to be here.
[00:00:12] Hugh Seaton: So let's start with some context here. What is an entrepreneur in residence?
[00:00:17] Ilya Tabakh: Yeah, it's a, it's kind of a funny term.
I think the most entertaining thing to me is most people don't know what it's supposed to be, especially at a engineering procurement construction company. But initially it came out of a risk venture, so venture capital, when entrepreneurs were in-between ventures. So they would sit next to venture investors, help vet deals. And it really created like a really healthy conversation from an operator perspective on what's investible, trends, things like that. Then it turned out that that like viewpoint in that skillset was useful in, in other places. And so dell is pretty well-known for having an entrepreneur in residence that really served to bring the perspective of entrepreneurs as clients.
And then beyond that lots of entrepreneurial insights have gone to other places. And so my role at Black and Veatch, I sit in the innovation and strategy group, and really help kind of that group and our various business lines bridge the gap between the perspective of entrepreneurs and emerging companies and ultimately kind of what the business is trying to do, and a few other things, but it's a really, really exciting and sort of adaptive and innovative role.
[00:01:26] Hugh Seaton: So you're bridging different areas of business and startup and innovation and kind of moving the business forward, right?
[00:01:34] Ilya Tabakh: Yeah, absolutely. When I first started in January of 2020, I was kinda thinking about, what insights can an entrepreneur bring to an organization like Black and Veatch, and really what I focus on, you know, I assume I've always, my entire career have assumed the best teams are always key.
And so kind of putting that aside, I really focus on three things. One of them is, you know, accelerate progress their networks. And so really thinking about how our innovation and various market ecosystems connected, and really lean into that connectivity. The second one is really understand how and why organizations make decisions and ultimately buy things because it's really important.
And for startups, especially, that's how you get product market fit. But generally that's how you move quickly. And then the third one is really understanding your unit economics and where you sit in the value chain. Uh, and so from a startup perspective, if, if you don't understand your unit economics, you run out of money and die.
But ultimately kind of knowing, what you're offering and how valuable it is really critical for any initiative. And so those are the three things that I normally involve in the things that I do.
[00:02:48] Hugh Seaton: Yeah, that's really cool. I love the idea of helping people to maybe understand what they offer to the person who's buying it, because it is sometimes the case, right? Where people really, they have a really inward facing view of what they're doing and they don't always understand how they're being bought or how they're, how they're adding value or, or not from the people who were buying what they're, what they're selling. Let's talk a little bit about kind of sticking with a context theme here.
Let's talk about what Black and Veatch's though. Most people who are listening to this will know that Black and Veatch is a contractor. Can you talk a little bit about what Black and Veatch does specifically?
[00:03:28] Ilya Tabakh: Yeah, absolutely. So Black and Veatch delivers critical human infrastructure.
And we do that in a number of markets, including power. So a lot of history in, in building power plants, renewable generation, transmission, doing a lot of work in decentralized assets. And so as the grid is transforming, we're helping it transform, and a lot of things having to do with the power grid and serving a bunch of the utilities around the world, and in north America. Large water and wastewater practice and really delivering a drinking water, wastewater to municipalities, and also practices and industrial water and other places like that.
A pretty significant telecommunications group. Uh, one of my favorite Black and Veatch stats is that you know, the telecommunications group was involved in somewhere around a quarter, maybe more of the U S telecommunications grid. And so if you think of like 1G, 2G, 5G, you know, lots of the cell towers and cell buildings and things like that were really delivered by the Black and Veatch telecommunications group.
And it's really cool because that built a capability of doing light construction in many different places, across big programs. And so it gave us some really interesting skills. And then there's lots of other areas like data centers, and mining and practices like that. And, and newer groups like next generation agriculture which is doing a lot of really exciting work in cell-based protein and some of the newer categories of food. And then we've done some really awesome and exciting things in the world of gas fuels and chemicals. And so thinking about process technologies and various energy infrastructure and things like that.
And so, you know, critical human infrastructure, over the past 106 years. The way I described the company is, you know, about 7,000 concurrent projects on six continents at any one time.
[00:05:35] Hugh Seaton: And very heavily EPC, right? I mean, that's the sort of center of the company is, is, is EPC as an approach.
[00:05:43] Ilya Tabakh: Absolutely. We are definitely an EPC firm and do a lot of EPC work. And so, you know.
[00:05:50] Hugh Seaton: I mean, you just described a bunch of EPC work, I just figured I'd put a tag on that.
[00:05:54] Ilya Tabakh: Yeah, no, for sure. But I mean, you know, we are, if you look at a lot of engineering companies will point to their ENR rankings, right.
And so we actually have very high rankings in our design work across a number of the disciplines I just named. We definitely do EPC, but EPC has many forms. The way that I kind of talk about EPC is ultimately at the end of the day, we have the capability to engineer procure and construct and develop, you know deliver an asset turnkey.
If that makes sense, and we can kind of do that in a At-Risk structure, if it makes sense as well. Right? So you can kind of tell us what you want and we can take pretty much that entire scope on and deliver that for a firm cost. The way that that model really plays out in the most powerful way though, is figuring out what's kind of core to your team.
And, you know, do you have some of the procurement or do you have some construction capabilities? And then how can we sort of augment your team to achieve your goals? And so EPC is actually like a bunch of different structures to where it doesn't always have to be capital E capital P capital C right.
That's actually, one of the ways that that we're continuing to innovate is really thinking about where is the core for our clients and the various markets that we're in. And then how can we compliment, and support and help deliver better results? And it's not always through a capital E capital P capital C arrangement.
[00:07:25] Hugh Seaton: And how do you think about innovation as Black and Veatch the broad picture. And that's a leading question. Cause you know, as you and I discussed, it's baked into your DNA more than most companies. I mean, you just, it's unavoidably part of how you approach everything, but talk a little bit about how that works and how it relates to what you do.
[00:07:45] Ilya Tabakh: Yeah, absolutely. So I guess first of all to kick that topic off. It's really cool to actually have like a strategic directive to be the most rapidly evolving and innovative company, in the E & C space. Right. So we are actually committed strategically to doing that. And I think that really comes from some of our history of doing a lot of first of a kind things in the engineering and construction world.
But it's, it's really exciting to sort of have that be a thing that, that we state, as a desire to achieve, not, not just something that we do, but something that we are.
And so the way that that actually connects to my work is the growth accelerator the, the corporate level strategy and innovation group, where I sit is charged with helping facilitate that at the organizational level.
And then we also partner with various market groups and business lines to, to help them kind of think through and implement some of their views. And so that's kind of the internal facing view. And then externally we also have a external accelerator. Where, you know, we're not just working with our ideas and, you know, our, I won't say how many millennia of expertise, right.
But our, our, our deep experience in the company, we're also thinking about who's doing really innovative and exciting things and, and how can we connect and partner with them. And then I guess the third consideration is we also have an internal incubator where we are incubating our own ideas.
And so, in many cases, looking for ideas, concepts, and some cases like very early stage commercial offerings and putting some extra resources, and horsepower behind those to allow our people to step out of their daily operations role or where they are in the company and really build these ideas.
And so that's a lot of like capacity and innovation muscle, when you really think about you know, working with our established business lines and groups to, to make sure that we're enabling them to execute, giving some ability for really anybody at the company to raise their hand and say, Hey, I see a way that, you know, the world is changing or that we can do something better or different, and change our markets and create opportunities for clients.
And then really thinking about, you know, how do we pace ourselves? Other folks that are running at our speed. And I think kind of those three things together are super powerful.
[00:10:13] Hugh Seaton: And, so something you brought up a minute ago, I really like, and that is this idea that somebody inside the company that sees an opportunity or sees a better way of doing something can raise their hand and get some support.
How do you do that in an organized way.
[00:10:27] Ilya Tabakh: It's a process and an art and a little bit of a science. So we have a number of different mechanisms that help folks really take their observation and develop it into an idea and develop it into a concept.
We have other things that are... really give folks more time. And so it's really about finding, the right amount of resources and support to enable folks to be met where they are. Right? Because in many cases, it's really about kind of mentoring and helping people think through their concept. We have the capability to give them some kind of limited resources, whether it's in time or, you know, materials that they may need to really take their observation or idea and develop it into a little bit more of a concept. And then we have more formal mechanisms to take them into our incubator portfolio. Um, and then there's also some ways that our incubator portfolio really turns into collaboration with other market players. And so it's not just us, you know, sitting within the walls of Black and Veatch, thinking about um, you know, what can we do?
And so I think the right answer is sort of meeting people where they are and having kind of different ways, for folks to become aware, to build a network, to learn and kind of educate and prepare themselves, and then ultimately as they develop their ideas, and, and think about how they could turn into ultimately offerings or, or something that can go into the market having maybe more formal, both resources to support them as well as programs to help them run faster.
[00:12:07] Hugh Seaton: And do you think some of what makes that work is this undeniable commitment to innovation, right? Is people feel like, "it's all right for me to have ideas I'm expected, well not expected to, but it's, it's normal at Black and Veatch to be thinking like this, as opposed to, I've got to go find someone to stop thinking the way they think and look at me differently.
[00:12:29] Ilya Tabakh: I think two things actually, one is I would point to the fact that we're an ESOP, right? So we're employee owned. And like this whole idea of being an owner, right. And, and seeing that, Hey, we can do this better. And ultimately we're, we're all kind of affected by that is really a part of the culture. Which is pretty exciting because, I think that being an owner and really just kind of that cultural view of, you know, we need to be involved and can get better, is a pretty powerful tool.
And then I think it's really important to say, you know we aspire and it is our strategic goal to be rapidly, evolving and innovative, right. And so that drives from kind of the top down, but ultimately motivates people to think about how they can contribute to that. And so I think I would point to it, probably those two things as giving folks, maybe an extra impulse or, or an extra kind of drive to get there.
[00:13:26] Hugh Seaton: Yeah, it makes sense. And I liked that you talked about resources, not only being money, but also being people like you. I mean, people that, that Black and Veatch has chosen to bring in who can help someone think through what an idea might mean and like how to think it through all the way. Cause a lot of times insight doesn't come with the skills it takes to think to fully commercialize or fully develop something, right. Like, and it shouldn't need to, it's nice if someone who is deep inside of a process, but may not know how to make products per se can still make their innovation and their insight come to life.
[00:14:01] Ilya Tabakh: Yeah, absolutely. You know, we started the conversation with, I always assume that you got the right team. Right. And part of what it means having the right team is kind of having the the right perspectives to be able to, you know, do the strategy, understand the need, execute be aware of the kind of constructability and like all of these things, right.
That's really hard to have in even a, a couple of people let alone one person. Right. And so those perspectives and kind of that team composition is, is really critical to success.
[00:14:35] Hugh Seaton: So I want to talk about some of the more formal things you're doing. You you've mentioned this, in fact, on LinkedIn, I've seen some really great advertising for an accelerator that you stood up, that's pretty focused on, on climate tech. You want to talk about that a little bit?
[00:14:49] Ilya Tabakh: Yeah, absolutely. So, so we've run a, an external accelerator program for three years now. This is going to be our third year. Uh, the first year it was a clean tech accelerator and we had some really dynamic and exciting companies come through, focused on a bunch of really important topics in tech whether it's a kind of automated construction or remote sensing, or, you know, how to produce, nutrients in novel ways. And it was a really good experience. We brought the five companies for an in-person residence experience where they got to meet each other, collaborate work with the different parts of the businesses. And it was just a great program, where many of the companies are still doing awesome things after that program.
Then last year we were going to do it again, we were really happy with how it went but then COVID hit right as we were getting ready to launch. And so we actually repositioned our accelerator to be the COVID-19 response accelerator, and really, you know ate our own dog food on being a rapidly, evolving, an innovative and thought about, you know, what can we do with what's going on in the world.
And so really cool things came through that program as well. We looked at almost 300 different kinds of concepts at various stages from really ideas to operating companies, but a couple of highlights, and not to say this is the only outcome, but we supported a company that had a really exciting technology for sampling environmental contaminants and difficult matrices. And so they were doing a sampling pipette that was able to test for, and enabled testing for COVID, which was super exciting. Cause you know, wastewater testing was a really scalable approach to see kind of what was going on. And we were excited to support a pretty early company that was doing some exciting stuff there.
we also supported some third-party independent testing for a system that was able to kill 99.9% of COVID in free air through an HVAC, air handling system. And as far as we know, it's still the only kind of third-party verified system to do that with live virus.
And so it was just a lot of... and these are not necessarily markets that we, you know, as Black and Veatch have traditionally been strongly involved in, but I think it really spoke to kind of the value of a program where you can think about, you know, what are we trying to do. And then who's doing some really interesting things in those space and let's really reach out and collaborate.
And so I think that kind of speaks to the core of the program. This year we just launched, and are taking applications until November 10th, the climate tech accelerator. And so it's sort of an evolution of our clean tech accelerator, really focused on a variety of topics around climate tech and decarbonization.
And so we're super excited about the potential and already watching kind of applications come in. But we really think that there's a lot of strong opportunities as Transportation continues to electrify, as heavy industry and process industries really think about what are we going to do because they have much harder choices to make.
And we're doing a lot of work in those areas, but we're excited to kind of find the right partners and explore how we can accelerate that progress. And so that's kind of the program here. Taking applications until November 10th and then kind of we'll work through the rest of the year to get our group of five companies and kick off kind of the programming early next year.
[00:18:22] Hugh Seaton: Really exciting. And you guys view some of this, I mean, you mentioned it, not all of it is industries or activities that you're heavily involved in. Some of this is I'm assuming bringing in new ideas, cause you don't know what they're going to spur, but also just kind of visibility of what's going on in the wider set of industries and areas that you guys operate.
Right. I mean, it's a strategic goal as much as it is. Any, anything financial.
[00:18:46] Ilya Tabakh: Yeah, I think it's definitely that, but, but I think the biggest lever we have is to kind of take these, promising technologies, promising entrepreneurial teams, and connect them with areas that we understand. And so I think if you look at our power business, for example, we've built a significant part of the power grids, in north America, in parts of Southeast Asia and generally around the world.
And so like in north America, for example, there is quite a bit of focus on, you know, how do you take a technology up the kind of technology readiness level curve? Right? So from like a scientific concept to a prototype on the bench to kind of a pilot, to something that's ultimately ready to deploy.
And so our biggest lever really is to partner with the right folks to, to think through what's going to have to happen as these things scale. And so for the climate tech accelerator, you know, one of the core questions that we ask is, you know, in 12 weeks with us, what can we do together? That's meaningful for both you guys, as well as, you know, something that we can help you with.
And so I think this time we're really looking at, you know, who are the right teams and, and what are the right kind of technologies to where we can really see a path to making a impact and really accelerating towards zero.
[00:20:10] Hugh Seaton: You mentioned tech readiness in there. And I want to talk about that for a minute. Cause it seems like one of the benefits that you might be offering to whether it's in an accelerator or some other way that you're interacting with an early stage company is to give them a framework for what that even means. Of course they know that they're not as mature as an IBM or a Microsoft, but that doesn't mean, you know, what to do about it, or have a more granular understanding of what what's between you and a billion dollar company.
Is that one of the areas that you find you're talking to people about is that you're saying. This is actually what the different levels are, or at least they way a framework way of thinking about different levels of, of, of technology readiness and kind of help them think through how to get moved further along on that process.
[00:20:56] Ilya Tabakh: Yeah, absolutely. So context is everything here. But in each area, whether it's a process technologies or the power grid or data centers, there's kind of a little bit of a different expectation of what proven technology looks like, but generally there's this concept of technology readiness levels.
So like TRL, and in each of those areas... so like for a chemical process, you can think about, you know, have I proven the science and can I repeatedly make a liter of this stuff? Right. And so that may be like a TRL level two. Right? You have a prototype you're able to make a liter lab bench scale, right.
Then you install a pilot and maybe you're making a thousand or 10,000 liters. Right. And you're being able to do that consistently, you're doing it in a kind of industrial pilot setting. It's out of the lab. Right. And it's performed for a period of time in various weather conditions, things like that, that, that gets you a little bit more kind of up that curve.
Once you're talking about making a million liters, right. And doing it for years that's a very different place. Right. And in each one of a kind of the areas has that consideration. If we're working with a kind of a partner that has a technology, or is thinking about scaling, you know, a component of the grid or a process or maybe a data center technology.
I think for software, it's a little bit of a different, you know, consideration, but, but having that background on, on what performance looks like in the field what the difference of expectation is in like a mission critical application, like a data center, you know, versus a batch process or something like that, gives a lot of context on how do you prioritize your development and what is ultimately necessary to get this technology to scale. And so I think that, in my you know, I'm on my second year as entrepreneur in residence and from a startup perspective, that's awesome. Right? Essentially, you have a bunch of strategic consultants sitting around you that understand how your industry works.
Uh, and that's, you know, in many times like a priceless thing.
[00:23:09] Hugh Seaton: That's what very expensive advisers can sometimes be. So I want to shift gears a little bit and introduce this idea that you, and you mentioned before we started recording, and it's this idea of almost an inverse relationship between the maturity of a contractor or the buyer and the maturity of the provider.
And I think that's a really interesting perspective, both for contractors who are listening, but also providers, whether it's a software company or someone else, The idea that early on when the provider is or the vendor is still a little immature, it takes a more mature buyer to be able to handle that because they've got controls in place they've got people like you were describing earlier that kind of understand the situation and the context and kind of make up for it. You want to talk a little bit about how you view that.
[00:23:57] Ilya Tabakh: Yeah, absolutely. And I think kind of introducing maybe the difference between digital and IT versus physical and tangible, we'll peel that apart a little bit, but yeah, I guess, you know, thinking about what the technology is and who the team is, and then who the buyer is. I really like to think about having an understanding from both sides, right? Like, what's the objective and what's the goals. And what are the capabilities of, of kind of the earlier stage company, whether they're a vendor, whether they're building a capability in the market, really just kind of understanding where they are, you know, and kind of what helps them reach their goals.
And then really thinking at the same time, you know, for their constructor, for their engineering partner, the same set of questions, right? Where are their core capabilities? Where are they good at and how do you make a win?
So I think the first step in that journey really is sort of aligning incentives and understanding what's important to each, because that kind of creates a stable relationships.
But then to sort of answer your question more directly, if it's like a digital project or something where there's a software technology piece, the larger constructor player really has to be in a place where they're able to accommodate testing and evaluating a hypothesis. So their kind of digital strategy and their digital capabilities actually have to be pretty good in order for you to establish and build the value prop before you go and scale, because in many cases if you haven't developed to a maturity level where you can kind of peel those two things apart, then that really takes a lot of the things out of the equation that you can test.
Right. And I'm not necessarily suggesting taking earlier stage concepts out into the field, but if there is no way for even in a sandbox or in some kind of contained environment for the earlier stage company and the larger company to have a discussion that really limits on kind of who you can partner with and how you can work with various pieces of the ecosystem.
[00:25:59] Hugh Seaton: Well, I also think it speaks to how, how many risks even the software vendor should be able to make. And by that, I mean, There are some features and functions that you're probably going to be pretty good at. And there's some that are going to be, you've just rolled them out this quarter or whatever it might be and understanding who your counterparty is and how open they are and how able they are to deal with things that are 80% there, or 90% there I think is also important. And I think people have a tendency to lump contractors broadly in the same area and even irrespective of where they are on the, on the ENR 400, that isn't necessarily an indicator. I mean, obviously if you're larger, you have more overhead and you have more ability to support things, but that doesn't mean people have chosen to.
[00:26:43] Ilya Tabakh: Absolutely.
[00:26:43] Hugh Seaton: I mean, so, so some of this is strategic. I mean, you guys are a great example of that is innovation and pushing barriers is baked into how you operate, but that isn't everybody's strategy with some other companies who you'd think might be great at this may not be.
[00:26:57] Ilya Tabakh: Yeah, I couldn't agree more.
And I think to, you know, the thing I heard you say in there is kind of making choices and also understanding how you make each other win. I just want to kind of punctuate that point a little bit more, is kind of alignment, and really looking at how both partners win is really important. You know, my biggest disappointment as a technologist in my career is that the best technology doesn't always win.
And between kind of earlier stage folks and constructors and engineers, you know, we often really fall in love with the technology, with the engineering. And it's a critical piece, right? Like if the physics don't work, the physics don't work. But there's many different physics approaches to solve the same problem.
And I think as you take a wider view and really understand what you're trying to solve together, you're more likely to be successful.
[00:27:52] Hugh Seaton: Yeah. I love that. And I'll round it out with something you said a number of times is, you know, it really is the team that you're where you're bringing to it. And the team that you're going to write on both sides of the equation that really determines what you can get done.
Well, Ilya, this has been great. I've loved hearing about what you're up to and your way of viewing the market and how innovation is happening. Both in Black and Veatch and more broadly. So thank you for being on the podcast.
[00:28:18] Ilya Tabakh: I have absolutely enjoyed the time and this is one of my favorite topics. So you know, I can wax poetic, but I think we covered a lot of territory in our short time.
[00:28:26] Hugh Seaton: We'll have to get you back. Thanks again.
[00:28:28] Ilya Tabakh: Happy to do it. Thanks.