Richard Ettl On Building A $600 Million Business By Transporting Medicines At The Right Temperatures

In the world of entrepreneurship, few stories resonate as powerfully as that of Richard Ettl, a young global leader recognized by the World Economic Forum. Born in Austria, Richard’s journey is a testament to the transformative power of vision, resilience, and a commitment to sustainability.

His venture, SkyCell, has attracted funding from top-tier investors like Catalyst and M&G Investments.

In this episode, you will learn:

• The entrepreneurial journey from a rural farm in Austria to a global leader underscores the transformative power of resilience and global perspectives.
• SkyCell’s success story in pharma logistics demonstrates the pivotal role of sustainability, reducing CO2 footprints by 50%, and aligning with the evolving values of the pharmaceutical industry.
• The fusion of innovation, technology, and commitment to sustainability propels SkyCell’s mission to revolutionize pharmaceutical logistics, as evidenced by their 20x more effective solution for temperature-sensitive products.
• SkyCell’s recognition in the World Economic Forum’s Global Innovator Program and Richard Ettl’s inclusion as a Young Global Leader affirms the company’s impactful contributions and commitment to sustainable practices.
• Beyond a physical product, SkyCell’s evolution into an IT company highlights the critical role of software and IoT in monitoring and ensuring the safe transit of pharmaceuticals on a global scale.
• The entrepreneurial journey comes with unpredictability; Richard Ettl emphasizes the importance of thoughtful investor selection and the invaluable support system from co-founders and family.
• SkyCell’s ability to navigate challenges during the COVID-19 pandemic showcases the company’s resilience, with a renewed growth trajectory post-pandemic, securing substantial funding and positioning itself for continued success.

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About Richard Ettl:

Richard is the CEO and Co-founder of SkyCell; SkyCell delivers a system-critical service to secure the distribution of medicine and vaccines worldwide to doctors, patients, and pharma companies while reducing the CO2 footprint of the shipments by 50%.

Before SkyCell, Richard helped to build up the Institute for Value-Based Entrepreneurship “IVE Institute” in Switzerland, which provided more than 3500 students with business plan creation classes and leadership insights from top CEOs free of charge.

He co-led the Alumni Organization for more than ten years. Richard holds a Bachelor of Arts in Management from Université de Fribourg.

Richard is married and lives in the Zurich area with his two daughters. His hobbies include skiing, sailing, and coaching startups pro bono.

Connect with Richard Ettl:

• Crunchbase
• RocketReach
• LinkedIn
• TheOrg

Read the Full Transcription of the Interview:

Alejandro Cremades: Alrighty hello everyone and welcome to the deal maker show. So today. We have a really exciting founder. We’re gonna be talking about building scaling and financing I mean they raise quite a bit of money but what they’re doing is pretty remarkable. You know they’re all about sustainability with our business. You know our founder joining us today. He’s also a young. Global leader from the world economic forum and they yeah I mean we’re gonna be talking about everything that you can think of and then also you know his journey is quite inspiring so without farther. Do let’s welcome our guest today Richard Eddo welcome to the show.

Richard Ettl: Hello Hi Alehando Hi everyone.

Alejandro Cremades: So originally born in Austria but you were you know on the countryside you know more than anything so give us a walk through memory lane. How was life growing up.

Richard Ettl: Sure I was lucky enough to grow up on a farm that’s outside of southsburg my mother sort of has also some forest there and it was great to grow up there but I was lucky enough that my father owns I was a business in Vienna so at the age of 10 I was sort of moving to the city. And then my parents also thought that english is an important asset to have and so I went to an american international school and so that that really opened my scope onto what the world could be.

Alejandro Cremades: now now obviously in this case, you had the lens of seeing what the world could be. You also had your father you know, having his own business to so I guess 2 questions here that come to mind right away is what do you think opened up. By being in a international school right? away you know having that worldview and then also having your father you know also a businessman you know someone that you could see someone that you could see the ups and downs to of you know the business you know, ah positives and negatives.

Richard Ettl: Yeah, obviously my my father had a business. Um, that was very successful advising pension funds but he then also dabbled into sort of investments and and sort of bought various things that didn’t work at at all so at an early age I was part of helping him look at.

Alejandro Cremades: What was that for you.

Richard Ettl: How to restructure a fitness studio. Um, also how to help close it down so that was really some early negative negative experiences there but it’s also showed me that if you do it right? What it can be and so that sort of always sparked my interest in entrepreneurship I originally wanted to study in the Us. Stanford and um, but then I decided to study in Switzerland my father also studied in Switzerland despite being austrian and originally I wanted to study mathematics like my father who was a professor doctor in mathematics. But I’m not that good and give this with my sisters um with my sister, my brother. Um, and so I studied in french entrepreneurship in freeble and that’s also where I met my co-founder today and but also more important at the beginning my mentor and he sort of really moved me on to the topic of entrepreneurship and values. And so I joined and an initiative. He did to found an institute that promotes entrepreneurship value-based entrepreneurship called ive which I helped to build up onto 10 universities more than 3500 students have attended those courses financed mostly by entrepreneurs. And also those that gave back in those courses.

Alejandro Cremades: Um, and when you study entrepreneurship. What do you study.

Richard Ettl: Well, it was called business management but I sort of turned it into my own entrepreneurship program sort of what I thought that would be needed in the future example in my original curriculum. There was very little marketing So I Really forced myself to find marketing courses that were in other domains. Example in the psychology department of the University and other areas.

Alejandro Cremades: Now in your case you know like after after University it was time to get to work I mean obviously you you did help them too with building their institute that they had for founders and that also gave you the opportunity of not only having free dinners but then also meeting. Some of the top and leaders there I mean what? what were some of the things that you got from being able to engage and interact with people of those caliver.

Richard Ettl: So sure. So we organized next to the course is how to build business plans also dinners are actually at first ah sort of a speech by by the top ceos and entrepreneurs in Switzerland so some of them really the exciting ones are actually the smaller organizations.

Richard Ettl: Sometimes family owned businesses but they were the true champions in that domain. For example, one company is one of the leaders in installing ski liftfts and so this person was telling how do you install ski lists for example in Brazil onto the cocovado or how do you build ski liftfts in Tehran in um. Iran for example, so really a diverse field and also sort of give an insight into what it what it means to lead a global organization if whether that’s only a 200 person organization or 1000 people. But then also it was the larger organizations at the Thousand plus and so I was lucky enough to that 1 of the dinners. My first employer was there. He was the incoming seal of a swiss stocklisted but family ownned manufacturing company and I was able to join him as an assistant but it turned out I was not such a good assistant and so I got sort of the first task was find out how we can contribute to this organization. So like a lot of freeway into the organization into identifying. What could really benefit the organization and be identified that lean manufacturing was really something that could move the company forward initiated the project and it saved 120000000 Swiss francs over the course of the project.

Alejandro Cremades: Wow and that is the phone call from your cofounder now at the what you’re doing now with this guy. So so so tell us what happened on that phone call.

Richard Ettl: And then I got a phone call. Yes.

Richard Ettl: So niko and I stayed in touch. We were not that close over a couple of years but he gave me a call and said he wanted to talk and because he had an idea. He’s a civil engineer and he did the management buyout of a civil engineering firm that he repositioned onto building very. Large structures mostly farmerar plants in Switzerland and he said these large structures. Yeah know that’re badly insulated and also nothing is is sustainable. Why don’t we team up you with your manufacturing insights and weesign the first sustainable high-per performance insulation material. And so we we sat together and said yeah this could work ironically, this is manufactured on partly my old employer’s machines so sort of there is a reason why he picked me and um, we pitched it then for for one of the big farmer guys in Baseel Switzerland and they said well that’s all nice, but. Could he design us a new packaging to transport on our pharmaceutical products and that became the journey into skyset.

Alejandro Cremades: So I mean it’s a big big deal for you now because here you are and I’m you know stock listed the company and they obviously you know, kind of like the the the safety net that you have there I mean I’m sure that saying hey you know what? I’m just Goingnna give my notice and. And go at it. You know into the unknown I mean was that a tough decision for you.

Richard Ettl: Um, no, it wasn’t because I was fired I didn’t make a lot of friends because I I think at the time I was 25 um, 25 26 and I initiated one of the most important projects that brought in significant amount of savings but it had also impacted the way the organization did a lot of things from purchasing production, etc and all of a sudden this 25 year old comes along and changes the way all these forty Fifty year old guys were doing stuff and obviously that that I didn’t make a lot of friends. It produced a lot of savings so I got a nice bonus and so after some sort of really difficult moments I sort of saw the opportunity and enjoyed niko on that idea.

Alejandro Cremades: So they and tell us what were the early days like at sky cell.

Richard Ettl: Well, the first two years were pure r and d so we had to figure out to design a completely new way of doing insulation. So insulation materials 2 minute x course is a random material so it’s a foam or a fiber pressed into a format and usually used for buildings but also insulating trucks. Etc so my co-founder had the idea what if we do a structured approach to this so. It’s not a firr but it’s and it’s not a foam so we had to create sheets that we would form into certain structures hence the machines of my previous employer and with a special nano coating. We had to develop otherwise it wouldn’t work. We had to develop a lot of things we had a lot of setbacks but we were also quite lucky that some of the things were just made possible at that time so we developed a nanocoding that reflects 96% of radiation and so we can. Ah, reflect visible and invisible light and this is part of the magic of our technology and that would have not have been possible if certain machines would not have been developed at that time and so it became affordable. We brought down the production cost from a thousand dollars per square meter or than to 70 and all of a sudden it became even feasible. To do what we wanted to do so some luck.

Alejandro Cremades: So I guess for the people that for the people that are listening to really get it. What ended up being the business model of skycell. How are you guys making money.

Richard Ettl: Yeah, yeah, so we’re we’re not doing insulation for buildings anymore we decide we will go all in and we will design packaging for the pharma industry specifically to help them transport temperature-senive ah products and so farmerma products. Why are this so temperature sensitive. Because it’s almost like a living organism that sleeps at specific temperatures. So it’s like milk but the problem is with pharma’s usually usually clear see through liquid. You can’t tell optically over smell that something is broken so the temperature around that product is critical for 2 aspects one is the so-called efficacy the performance. And the second aspect is the shelf life and so the pharma companies have proved not only to themselves and their ethics but also to the regulators that whatever they manufacture store and transport has the full efficacy but also the shelf life now what had changed twelve years ago is the pharma industry started to transition. From a chemical industry like an aspirin to a biological industry so like cooked in big tanks over weeks and months so it became a lot harder to make these drugs but they are extremely effective all of a sudden we are able to cure cancer. We were never able to do. We’re able now to do diabetes drugs. So the latest generation of weight loss drugs. That’s all biologics as an example and before we were not able to do that. But the the flip side of that coin is very difficult to manufacture very difficult to store very difficult to transport hence a new solution was required.

Richard Ettl: And that was the opportunity we seized with skyset.

Alejandro Cremades: So Then as you were doing all these say R and D and looking into it looking at ways of of really bringing this solution to Market. What was what was that point where it was like a turning point event where. Finally, you guys bring this to live and you’re like I think we’re into something here.

Richard Ettl: Yeah, so third year into the project and we we had the first meetings we had first prototypes made we showed this to the fi pharma companies and we thought wow they’re just going to rip this off the shelves and this was unfortunately not the case at the beginning because pharmas old for conservative. They would rather lose 2 to 5% of products per year than the switch to a new startup. So this is unfortunately something we we sort of didn’t see coming but we kept at it and so we finished the product we then started to show it at major fares to potential customers and then everyone was like wow this is really cool. Who else is using this but we’re just getting started. Okay, come back when you have 3 customers and everyone kept saying that there was ultra frustrating and but we had this breakthrough moment when a japanese pharma customer said well this is so much better. Let’s test it and they tested it and it came out to be 20 x better than the. Previous generation of packaging and I said okay, we’ll we’ll put you into every packaging above $1000000 now that sounds like an insane amount of money but a pallet of pharma is usually a million dollars plus now sometimes it’s 10 to 15000000 so in essence we help pharma companies transport their revenues. From production sites to distributers around the world and we obviously save a lot of money there.

Alejandro Cremades: So I think that for you guys Obviously Covid was ah was a really big moment. You know why.

Richard Ettl: Yeah, so everyone thinks covid was huge for us and yes, we did our part we helped to transport one point, 2000000000 covid shots actually the raw materials of those covid shots and but actually that was the slowest growth of the company’s history. So that sounds crazy because. We already did a lot of vaccines and all of a sudden. The vaccine distribution went down because most countries didn’t vaccinate their children the yeah but the elderly anymore against flu because everything was focused on covid so we grew because we did what these one point two billion shots but um the other business sort of slowed. Really slow and so we only grew 20% during covid and now went back to our 40 to 60% growth per year.

Alejandro Cremades: So as you’re thinking about a growing this you need money. So how do you guys go about raising money. How much capital have you guys raised too late for the business.

Richard Ettl: So we raised more than 220000000 equity and then we also have access to really cheap debts in Switzerland you don’t get any debt or you get debt when you don’t need it somehow he get debt to 3.2% an interest which is insane and and to get us ah a fast growing company. And um, so that’s how we grow our assets. So what’s our business so we manufacture this design of containers that we’ve made these are air freight containers and we rent them out to the global pharma industry. We rent it out as a service they don’t want to own it. They don’t need to own it. Um, and we monitor how it’s used. So. It’s a heavy user of software. And Iot so in 2013 we noticed when we rent this equipment out to pharma companies. How do they actually use it the right way. What if somebody screws this up um usually farmers made in the western world but shipped to more than 100 countries by air. How do we know that when something arrives in Brazil. And Sao Paulo airport that it’s and when it takes two weeks in costumes that it stored the right way and that we can prevent spillage like this is the case with our major competitors and so Iot and software became the key aspect here and so I always joke skyes is now an it company that has hardware on the side. Because this I idea has become such an important value I just did some math here and we have probably invested more than two and a half million man hours into developing software. This is a key part of our organization.

Alejandro Cremades: Wow! So I guess say as you’re thinking about the the structure of the organization I know that sustainability and as you were saying now I T is a critical part of it. Why both of those say aspects are are big pillars for you guys.

Richard Ettl: So when we decided to fund our business. We said we we were we are strong believers that sustainability will be key differentiate in the future. That’s why we started to look into sustainable high performance insulation material in the first place because we believed at some point. It will be business critical if you’re not if you’re a polluter you will be out and so that’s what we believe ten years ago it took a little bit longer than we expected and to be fair, most pharma companies only started to kick into motion last year but now for some actually sustainability has become a hard fact to give an idea. Um, 97% of a C O 2 footprint of a pharma company is scope 3 so that means also that’s massive but it’s also a massive potential to reduce we on average reduce the co 2 footprint by 50 so that’s on average Eight tons per use. So per palette moved around the world that’s eight tons and um to then further, bring that to 0 to 0 It requires only five cents dollars euros Five Euro cents to bring it to a complete issue to neutral supply chain. So that’s very affordable and very little money. And when we were able to prove this to to pharma companies all of a sudden this moved it to the top pile of the whole organization. So we’re talking to some pharma companies now that are saying can we move half of all of our volumes in our containers. So that’s really really a change in direction.

Alejandro Cremades: And why is it so difficult to do something like this with large corporations and and then also how do you guys go about it.

Richard Ettl: Yeah, so pharma organizations. You know they have ten twenty sometimes 100000 people working for them. Um, very risk averse because everything is about not screwing up because otherwise it could impact patients’ lives and so they would rather have a known risk of let’s say 2 to 5% losses versus trying out something new. So when you do something you have to prove to them with a lot of data and a lot of I would say also bought credibility. So for example, the the organization exists of 2 kinds of people with a lot of gray hair and that’s with salespeople business development. They’ve worked with these pharma companies for so sort of ten plus years they bring the credibility. They would not join an organization like us they would put they would not put their career on the line but the second part is the the sort of the young entrepreneur thinking mostly engineers. They can actually develop then the solutions that are. Unfortunately you have to be multitudes better than what is out there but today and so I think that’s the winning formula adding the gray hair and then also the the young spirited and sometimes they don’t even know that it was tried but didn’t work before kind of attitude.

Alejandro Cremades: And and and also I guess say when you’re when you’re working with them. You know with with these players when you are raising the money that you’ve raised to building the team. You know, obviously vision is a big one on I Guess as you’re thinking about vision. If you were to go to sleep tonight and you wake up in a world where the vision of skycell is fully realized what does that world look like.

Richard Ettl: So interesting enough. Um, when you look at my strength profile profile which is actually posted here on the wall. It says number one is futurist so I feel very at ease living in the future imagining. Actually how such a future looks like I actually dream also about the future. Which is sort of makes it very easy then when you wake up and sort of say okay, that’s what we’re going to do and um, that future has 2 aspects one. We have proven to our customer that we are the most solution but with the most the safest solution everywhere and we’ve become the market leader. Ah, today we’re the number 3 in the market. So that means becoming number one. The will I think it will take us another four to five years until with a clear number one but the second piece is we can scale this technology in size. So today we are moving palettes so finished semifinished products sitting on a palette moving into our containers flying around the world. But we can bring this down to the size of your airports case for example or earportds. Whatever you’re using and we can transport 1 vial imagine you’re going to the pharmacy you’re picking this temperature sensitive product. Whether that’s um, heart medication or whether that’s a weight loss drug. You’re picking that up. How do you? then actually go on vacation because I made a lot of effort to bring it to you to the pharmacy but on all of us and you bring it home in the elastic bag. So we think that there is a missing link and the question is how do we help patients um bring this on vacation. How do they go on business trips because there will be more medication like this that you take.

Richard Ettl: And a very frequent basis and temperature unfortunate affects the performance and it could even kill you if it’s not within the temperature range.

Alejandro Cremades: And what about the yeah, the industry as a whole where do you think the industry is heading.

Richard Ettl: So we’re lucky that our industry is expanding massively so we’re experiencing massive growth of fifteen twenty percent per year. Um, so that means in absolute numbers from two and a half billion spent to five point five billion spent on coaching packaging now 70% of that today is throwaway solutions. So I think all these throwaway solutions. There will be replaced if not by me then by my competitors so that’s a massive market opportunity and um.

Richard Ettl: Yeah I think that’s ah yeah, it’s a combination.

Alejandro Cremades: How how would you say that? Also you know like getting nice recognition like becoming are you on global leader with the world economic form. How do you think that all this stuff you know like gives you.

Richard Ettl: And.

Alejandro Cremades: Kind of like awareness and and exposure you know I’m sure that was pretty wild to to get that.

Richard Ettl: So yeah, my company’s council. It’s very lucky that we were recognized in our contribution on the covid nineteen vaccination campaign. So so we were selected to become um, global innovators part of the world economic forum so they select around 100 companies every year. That really can contribute to big causes at that time there was vaccinations and so they’ve got us into the global innovator program today. The focus of that program is also on to sustainability. How can we make green cement. How can we make green steel so these are the companies that are now following us. On this program path but I was also lucky that I’m below 40 I was asked to join the young global leaders organization. Sorry every year also roughly a hundred people are selected um that the forum invests a lot of time and and resources to educate give resources how we can help other companies or governments. And to do better.

Alejandro Cremades: So imagine you know we were talking about to the um, the future earlier I Want to talk about the past but doing so with a edge of reflection imagine if I was to put you into a time machine. You know right around that point where you were receiving the call from your cofounder and friend and let’s say you had the opportunity right when you hung up.

Richard Ettl: And.

Alejandro Cremades: Phone and and you were pumped about you know, doing something about this. You know imagine you were able to just stop your younger self right? there on the spot and say hey Richard have a seat and you’re able to give that younger Richard one piece of advice before launching a business. What would that be and why given what you know now.

Richard Ettl: Actually it’s always not good to know the future because then all of a sudden you tell if I had known that this takes 10 years to become successful I may have done something differently. So sometimes it’s good also not to know that it will become difficult. Um, but what I would have done differently I think we would have been more thoughtful on selecting our first investors because at the beginning beggars can’t be choosers so we picked any kind of investor we could find but at a certain level It’s very helpful if you have well-connected investors. And so that’s definitely something I would do differently today.

Alejandro Cremades: And how do you go to? I mean you you were saying that you’re a futurist so you’re really living into the future and obviously that’s a strength but on the other end you know as you said it takes time you know it took you guys 10 years. You know as you were saying you know, But how do you deal with the. Frustration Perhaps of ah you seeing the future by you seeing that you’re not there yet. What does that look like.

Richard Ettl: um um I think that’s an excellent question and it really helps if you have a co-founder if you I think I have a lot of respect for founders that are alone because they need to get that support that emotional support either from within the organization from investors board members or but also family and. Have to say I’m really lucky that I have a co-founder here that I was able to share that burden with because obviously there were very difficult moments in time. Um, unfortunately. Also a lot of times related to fundraising in the earlier days when it was difficult to find investors or they would not pull through on on terms. Um, so that was big difficult at the at the beginning and obviously I’m also very lucky that my wife is very supportive and she is also a founder and Ceo today of her own company and so she sort of she gets it and she always supported me in the right way.

Alejandro Cremades: That’s amazing. So Richard for the people that are listening that will love to reach out and say hi. What is the best way for them to do so.

Richard Ettl: Um, reach out on Linkedin. Um, or if you have my email address then obviously happy to to to to help. Um I sort of invest time into giving back into helping fellow founders. Um. Sort of tackle difficult questions. Um, one of my bigger hobbies has become sales marketing and fundraising on fundraising obviously I’ve I’ve developed a sort of methodology so have to to to pass that along.

Alejandro Cremades: Amazing! Well hey Richard thank you so much for being on the deal maker show. It has been an honor to have you with us.

Richard Ettl: Thank you Alecondo and thanks everyone.

*****

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