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ENTREPRENEUR JOHN VAN DYKE TALKS ABOUT THE WATER BUSINESS



JOHN VAN DYKE'S WATER SYSTEMS VENTURE could be called a miracle of modern science.

Using a relatively simple technology, Van Dyke provides people in fourteen countries with clean drinking water for only pennies a gallon. The necessary equipment is often no bigger than a desktop, and clients are not charged for machinery or maintenance­they simply pay for the water.

The water business–and running a start-up company–are new to Van Dyke, ’69, who ran a group of family-owned banks in Sioux City, Iowa, for twenty years. After the banks were sold to Norwest in 1988, he moved to the Bay area, met up with a friend working with water purification, and launched Dakota Water Systems in 1989. Dakota’s approach of charging clients only for the water used came from a sense that a narrow focus would lead to a more effective, profitable business.

“We want to do one thing and do it well,” explained Van Dyke, who serves as president of Dakota. “We realized that we could make more money, and do a better job, by selling water as a utility rather than selling equipment.”

The San Mateo, California-based company must be on the right track. In the nine years since its inception, Dakota has signed on 35 clients in 14 countries, usually in areas where the water is polluted, brackish, or salty. Clients range from governments to resorts, hospitals, and industrial and bottling companies. Most of the initial work is completed at the company headquarters, but a staff of fifty around the world provide on-site maintenance and support.

Dakota’s systems purify the client’s water through chemical treatment and reverse osmosis. Intense pressure is used to force the fresh water through a thin, semipermeable membrane. The potable water flows through the membrane; minerals and impurities are trapped on the other side.

The equipment is installed on the client’s property and can produce between ten thousand and one million gallons a day, depending on its size. The largest would fit in a forty-foot container, and the smallest would fit on a desktop. The cost of equipment purchase, installation, and maintenance is figured into the cost per gallon paid by each client.

One of Dakota’s initial contracts was providing water to Culebra, an island off the eastern coast of Puerto Rico. When the contract began in 1989, Dakota provided 100,000 gallons a day to the island; the daily output in now more than 200,000 gallons. The Culebra plant has an impressive record; the plant resumed operations within 24 hours of Hurricane Marilyn’s appearance in 1996, and the water quality is consistently within World Health Organization standards. Buoyed by their Culebra experience, Van Dyke and company began to expand, and they now have a booming global business with plants in China, Thailand, West Africa, Antigua, St. Martin, and other locations.

“The most growth has definitely been in the Far East,” he says. “In China, there’s almost more business than we can do. We don’t even advertise.”

Although running Dakota is “completely different” than running banks, Van Dyke loves the pace and challenge of guiding a new venture. “I’ve always been an entrepreneur at heart,” he says, “I thoroughly enjoyed the opportunity of starting a business from scratch as opposed to running a business that is matured and developed.”

In addition to the challenges of keeping a new business afloat, Van Dyke enjoys making some impact on world water problems. He’s speaking in May at a conference on small water systems sponsored by the World Health Organization and World Bank, and hopes it will open discussions on water issues.

“It’s a gigantic problem,” he says, “and there is a lot of talking about it in macro ways, but not a lot in the way of solutions. And that’s a good place to start.”


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