TerraCycle’s Szaky gives advice to mission-driven businesses in a chat – NJ Tech Weekly
In October, Tom Szaky, Founder and CEO of TerraCycle, was interviewed by James Barrood, former head of the NJ Tech Council (now TechUnited: NJ) and advisor to Technical advice for companies (Mountain peak).
TerraCycle is a Trenton-based company that is disrupting waste management through its business model and technology. The company has been in existence since 2003. It is a global company with three independent divisions, all of which deal with recycling issues.
The First Division channels what Szaky calls “non-linear products,” which are products that are normally thrown away – like diapers, cigarette butts, and toothpaste tubes – into a circular system. “We collect items and make sure they can be recycled on a large scale. The company manages recycling waste streams for thousands of items around the world, he said. For example, cigarette butts are collected, recycled and turned into park benches.
The second division answers the question: “How do we put waste back into the products?” Allowing products to be made from certain recycled materials reduces the risk of attracting new materials, he said.
Less than two years ago, TerraCycle took it one step further by creating its third division, Loop, a company that dates back to the 1950s when people drank milk from reusable bottles, Szaky said. Loop focuses on eliminating availability. According to a company press release, “Loop enables consumers to purchase products in sustainable packaging that are used, cleaned, refilled and reused, then fully recyclable after 20 to 100 uses. It enables brands to develop more valuable and distinctive products and packaging and provides consumers with more beautiful, functional and “model of the milk man” return / return packaging. To date, Loop has enrolled over 100 brands worldwide and offers over 400 products.
TerraCycle recently announced that it has completed a $ 25 million Series A capital increase for Loop. According to the company, investors included: P&G (Cincinnati), Nestle (Vevey, Switzerland), SUEZ (Paramus), Aptar (Eatonville), Sky Ocean Ventures (San Francisco), Impact Assets (Bethesda, Maryland) and Quadie (Geneva, Switzerland).
Advice for founders of mission-oriented businesses
While Szaky spent a lot of time during the chat describing what TerraCycle does, he also answered questions from online audience members about his entrepreneurial journey and how to be successful when running a business with a double. outcome – one based on profits and the other based on the company’s mission.
Szaky said, “I faced all of the normal pitfalls you would have in a normal entrepreneurial journey. What I would say is that the incremental unique piece is how to tackle the idea of being a for-profit for-profit organization. “
It’s a double-edged sword, he said. Its beneficial purpose is incredibly powerful. “It allows us to attract incredibly talented team members, not just through simple cash compensation. This opens doors for us with partners that would not normally be open. This allows us to be attractive to the media. And TerraCycle has been written about. On average, there are around 40 articles per day every day on this organization. And there are so many other positives, ”he said.
“But you also have to manage the goal. You may need to change what you can do. And it is important that you claim it. … So that’s the real thing I learned along the way.
” I am going to give you an example. When we started recycling and invented something like diaper recycling, we said, “Isn’t that amazing? Diapers represent 3% of landfills. Let’s go to all the diaper companies. I’m like, ‘Aren’t they going to be so excited that we can offer them the opportunity to solve this very important problem. However, Szaky noted, “We might have a little bit of programming or something like that, but nothing on a real scale like the way we’re now heading towards diaper recycling.”
“And we realized that if we lead with determination” when selling to a business, “we’ll go in the front door, maybe we’ll get a little something, but it’s not the right one way to do it. This is a huge problem in all sustainable businesses. We say the goal is the reason [for a customer company] do something, ”he explained.
“And then a client was like, ‘We’re going to do your program because it’s the right thing to do.’ Now the lesson I’ve learned is that when someone tells you this, especially if you’re running a mission-oriented organization, that’s actually the code for: I’ll do it for the moral imperative, but it there is no other reason I can justify doing so. It won’t show up on my P&L [profit and loss statement]. It will not make the business money, whether it is more profitable or larger. It’s just the moral imperative.
Reframe your selling points
What sustainability-focused companies need to do is reframe the argument and empathize with the customer. “Take diaper recycling, for example. Think about what you know and empathize with what diaper makers really want to do. They want to increase their market share, they want you to buy their brand of diapers, not someone else’s. People won’t buy more diapers because people only buy the diapers they need. But you can buy the A brand versus the Y brand. And when we framed diaper recycling like this and showed how it can increase market share in a really authentic way, then companies started to lean .
Szaky noted that as soon as her company realized this path, it began to sign bigger and more substantial agreements. “This is how we were able to start recycling with Pampers in Holland. And now it is spreading all over the world. And this is the critical lesson I learned in the companies that make sense. You have to convince someone in business. The customer, the consumer, someone must always be convinced that they are giving you money for your product or service. It’s a truism in business. The goal opens up a lot, and it’s amazing, but don’t make it the reason someone should be doing something, ”he said.
“A good example of this is organic food. The people who created the organic food movement did so to help birds, butterflies and bees. I mean it was for better regenerative agriculture. But if you ask consumers, the main reason they buy organic food today is entirely because it’s better for your personal human health. It is not about birds, butterflies and bees. So, it’s important to accept that and play it, and understand that this is how these kinds of chess pieces move on the chessboard. And that has been a great lesson for me in starting and scaling a mission-driven organization.
Watch the video of Barrood’s interview with Szaky here.