Aquion leaves Pittsburgh for China, but it doesn't want its employees to follow

Aquion is moving to China. The manufacturing line at the bankrupt company’s Mt. Pleasant factory is being packed up and loaded onto trailers. On the other side of the world, it will be reconstituted and used as a model for a bigger production facility.

Another way of looking at it is that Aquion is staying in Pittsburgh.

Its core research and development team — 10 members of it, at least — continue to work on the saltwater battery technology and will remain in Lawrenceville for the foreseeable future.

But the region, which has invested a lot in the company through incentives and support, gets another consolation prize — some pretty smart people who have tasted failure and, presumably, can now help refine the recipe.

When a decade of hype and promise, $190 million in funding, and some genuinely rave reviews from customers showed up on the bankruptcy docket in March, more than 100 people lost their jobs. Many have remained in Pittsburgh, feeding into the growing talent pool of Google, Uber, (Amazon HQ2, maybe?) and pulling from it to start new ventures.

Matt Maroon has a vested interested in you seeing it this way because as the CEO of a brand new company, he’ll need to draw on some of the same people and organizations that propped up Aquion.

The economic argument could be that, of the $190 million Aquion raised during its existence, more than half was reinvested into the local economy, he said.

But it’s clear that Mr. Maroon’s real point is this: “The smart people that were hired now are living here.”

“I know people are super bitter that it didn’t work out,” he said. “I’m here. I intend on staying here. We’re hopefully going to take advantage of the same community support.”

Mr. Maroon had come to Pittsburgh in 2014 to lead Aquion’s product management efforts. He and his wife bought a fixer upper in Lawrenceville. Their 10-year-old daughter has just started a new school. 

On March 8, he lost his job.

After spending the evening spilling the communal pity party from the backyard of Aquion’s Lawrenceville lab to most of the bars on Butler Street, Mr. Maroon woke up the next morning and probably (he was hung over so he can’t remember exactly what happened) headed back to Aquion’s office as a consultant to help prepare the company for a bankruptcy sale.

This wasn’t his first bankruptcy. It wasn’t even his first battery company bankruptcy.

He knew that when he began to probe his network for job openings in late March, there would be a lot of post-mortems on Aquion — “Everyone wanted to be a coroner,” he said.

He also knew that more than half of the people who he called were either Aquion investors or creditors, and that they weren’t likely to hold a grudge.

As everyone who has either been part of a startup — especially a failed one — or funded one likes to say, investors expect to hit it big on only 10 percent of their investments. Most of the time they expect to lose.

“No one feels hoodwinked,” Mr. Maroon said.

Business failure vs. technical failure

Certainly not Jeff McDaniel, executive-in-residence at the state-sponsored seed funder Innovation Works, which was an early backer of the battery company and is currently backing Mr. Maroon’s new venture called Watt-Learn.

It was Mr. McDaniel who introduced Mr. Maroon to the founder of Watt-Learn, an artificial intelligence software firm for grid-connected batteries. The company now has an office in AlphaLab, a start-up accelerator in East Liberty.

Mr. McDaniel considered Mr. Maroon to be a catch, not in spite of his Aquion experience, but because of it.

“We use the term serial entrepreneurs as a compliment and not as a criticism,” Mr. McDaniel said. “So if a venture doesn’t work out and there are employees of that venture who are now looking for their next opportunities, our hope is that they decide to make that opportunity here.”

As for Aquion, “You have to be able to separate business failure from technical failure,” he said. 

Aquion’s technology, while it is still being improved to drive down costs and increase function, was, by all accounts, sound. Yet the appetite for environmentally friendly batteries at Aquion’s price point shifted over the past five years, as competing lead acid and lithium ion batteries dropped in price.

The young company needed to raise more money to continue to scale up so it could try to catch up with its competitors’ falling prices, but it couldn’t find pockets deep enough to survive.

Still, the people who worked on those batteries in Pittsburgh still have intellectual reserve to spare. Mr. McDaniel hopes they spend it here.

Speaking as someone older than he actually is, Mr. McDaniel recalled a time when failing was easier, when large companies had large research and development labs where people could try things and fail within the comforts of bountiful resources and little outside attention.

Now, as more companies shed those functions, researchers and entrepreneurs organize into small clusters and take on the risk of discovery and actualization.

They still need room to fall on their face, Mr. McDaniel said.

“When I’m assessing their capabilities and skills, the ones that have tried and failed but then tried again always get an extra mark,” he said. That’s the prevailing attitude in the tech world, he said.

Moving into other businesses

Aquion alumni have already fanned out across Pittsburgh’s energy and tech scene. Several went to another Pittsburgh startup Hyliion, which is working on electric trucks, following another Aquion engineer who paved the way in years past.

A few landed at Argo AI, a self-driving vehicle company founded late last year by high-level defections from Uber, Google and Carnegie Mellon University, and which is clamoring to hire 200 people by the end of the year

Even Don Smith, director of the Regional Industrial Development Corp. of Southwestern  Pennsylvania, which is owed, “Oh, a lot,” by its tenant in Mt. Pleasant isn’t bitter about Aquion’s batteries headed to China.

“Disappointed, obviously,” he said. Strung along for months with little detail? Sure.

“On the other hand, we have a space that is now a really nice manufacturing space,” he said. “We still think very strongly that this was the right thing to do. That it was a good deal and a good investment. It’s just a good investment that went bad.”

Then there’s Mat Stone, a recent Aquion departure who, along with another Aquion colleague, Mike Dudas, has just started a heating, ventilation and air conditioning business called Home Mechanix.

The venture is so lean it doesn’t yet have any employees except for the founders and so new that they “almost have T-shirts — we’re just waiting for them to be printed.”

Mr. Stone came to Pittsburgh because of Aquion. Technically, he came here because of Mr. Maroon.

The two worked together at a previous battery start up in Peoria, Ill., which ended up filing for bankruptcy and being taken over by a new owner from India. Mr. Maroon left but Mr. Stone stayed in the reconstituted venture for several years. At some point, he didn’t like what it had become. 

In 2014, a job opened up at Aquion and Mr. Maroon called Mr. Stone.

“Pittsburgh? Isn’t that like Detroit?” he asked.

Aquion flew him out for the interview and Mr. Maroon took him to Grist House in Millvale, then to the Strip District to clinch the deal.

Mr. Stone said he could see the writing on the wall for Aquion at least a month before the official bankruptcy filing.

He was asked to stay on but he worried about reliving the trajectory that drove him from Peoria. Plus, he’s always wanted to run his own business. When Mr. Dudas, who was doing maintenance at Aquion, approached him to start Home Mechanix, he figured it would be his best shot. 

Aquion’s rise and fall still looms large in his thinking.

“I’ve come from two bankruptcy start-ups and Mike came from one now,” Mr. Stone said. “We’re not going out and buying new trucks. We’re not taking out loans.”

Last week, Mr. Stone was back at his old stomping grounds in Lawrenceville. He hopes to sign Aquion as an HVAC client soon.

Anya Litvak: or 412-263-1455. 

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