“What I think is really special about the US is the way the US encourages business and then is not shy of failure. Probably the latter being more important than the former.” – Tom Szaky, Founder and CEO, TerraCycle
KissMyCountry had the opportunity to talk with Tom Szaky, Founder and CEO of TerraCycle, which manufactures products from non-recyclable waste. It’s a fascinating and exciting company that reflects the energy, creativity and commitment of Tom Szaky. Enjoy this frank and information-filled conversation with a true business genius who is committed to saving the planet.
KissMyCountry: Tom, it’s an honor. You’ve done what many dream of – starting a company at a young age and making it a huge success. ‘Revolution in a Bottle’ talks about the challenges you faced, and how you simply kept going despite setbacks. It’s a great story. But lots of college freshman have an idea, and lots fail. Why did you succeed when so many do not? Is it really as simple as not giving up?
Tom: I did fail actually earlier on. I started six businesses that all failed before TerraCycle. I think it’s most likely when you start a business especially as a young person – and maybe as an older person, but definitely as a younger person you’re just going to fail. The trick is just doing it again and again and again. And doing it as long as you’re excited about it, doing it as long as it’s something really interesting and exciting. But failure comes first and it comes big.
KissMyCountry: TerraCycle has created a huge network of people, many of them schoolchildren, connected to the company through your Brigades. They collect the trash you upcycle and earn money, but they also learn about business and work in the meantime. What do you want schoolchildren to learn about business by being part of your Brigades?
Tom: I think that they can make a difference. The big thing with the environmental movement and green in general is that it almost feels like it’s too big for an individual, especially a child, to really make a difference. Who knows how much of a difference whether it’s a juice pouch or a candy wrapper that’s going to be saved from a landfill, but it is a difference. I think that ability is something really important. Having the product that they’re literally helping to build end up in major significant retailers all across the country really shows them that they are a part of a process. And I think that’s the beginning of getting excited about potentially building a process like this on your own, whatever it may be.
KissMyCountry: You’ve built a great base of loyal TerraCycle supporters through this program. Do you have any plans for keeping your Brigades connected to TerraCycle as they grow older?
Tom: Sure. If you look at our total demographic each waste stream we collect has a different type of consumption and a different type of collection. If you look at certain waste streams like juice or candy or chips that’s primarily schools, and we are now into over 40,000 schools and that’s a pretty big number. With that said we also have coffee waste streams, it’s all offices. Depending on the waste stream it completely depends on where people collect, and I think that what will happen is that as an elementary school student you get older and when you get to high school maybe you’ll start collecting energy bars, maybe it’s yogurt. It all depends not so much where people are but what they consume is what they end up collecting. And as long as they can keep in that mindset of collecting, we win.
KissMyCountry: You’ve said you’re not an environmentalist, which some might find surprising. What do you mean by that? How is an EcoCapitalist like yourself not an environmentalist?
Tom: The way I’m not an environmentalist is that my consumption is representative of the average. I think that at this point the average does care a little bit more about the environment than it used to. The average does maybe look at an organic product a little bit more than it used to before. That is how I view myself because my goal is to change the average. I love the fact that I can make money and help the planet at the same time. But making money is number one and that drives everything else. It’s just been a blessing really to find a model where it really clicks together in that way. But I think that if you come to it without money as your primary goal then you risk not being able to scale because you need profit to be able to scale pretty quickly. And if you don’t have profit then you may end up in the position that a lot of non-profits are in which are doing fantastic work but don’t have the ability to become a global entity.
KissMyCountry: Tom, you’re a very creative entrepreneur. You’ve built a unique company and brought a lot of new ideas to the CPG world. Many people admire you for good reason. But who are your heroes and who do you draw inspiration from when it comes to business?
Tom: That’s a good question. Some of the people who I look up to are obviously the guys in the space that have succeeded whether it’s Ben Cohen from Ben and Jerry’s or Gary Hirshberg from Stonyfield. These guys have built a couple hundred million dollar businesses and that’s amazing. And they’ve built it within a twenty or twenty-five year span. And then also the big thinkers in the green space like Paul Hawken who wrote ‘Natural Capitalism’ – that was a really inspirational book for me when I began. These are the types of things that I really like seeing and draw good energy from.
KissMyCountry: Lots of people talk about upcycling but you’ve brought it to new levels at TerraCycle. Of your many products which one or two are your favorites?
Tom: I’ll absolutely tell you. The important thing of course is you know I’m a 28-year old male so that’s my mind set and how I look at these products. It all depends on who you ask. The things I really like are the bag we make for Target called the ReTote which is the first time plastic bags have been really put into a new product and upcycled and that was a really exciting one. For me the material in there is something I really like. Our first plastic product we’re launching hit the shelves in April. Usually on our web site or in general we do a lot of branded products. But with the volume of waste we’re collecting we can’t do that all – the amount of juice pouches we collect are over a million a week just from consumers – and there’s not enough demand in the world for that many juice pouch tote bags. But we’ve been able to turn a lot of these waste streams into plastics and so you’re going to see a cooler launching very soon that’s made from 100% chip bags and that’s a very exciting piece as well that we’re very jazzed about.
KissMyCountry: You’ve also been a pioneer in Sponsored Waste, another great concept and an example of your skill at partnering with CPG giants. What are some of your most successful Sponsored Waste relationships? Why are they such a success?
Tom: What makes a sponsored waste relationship a success is the brand really getting behind it, and then time. It’s sort of funny, you just need time. Without time it’s impossible to get scale. So if you look at some of our biggest programs which I would put synonymous with successful in this case, Capri Sun’s a very big one. With Capri Sun we’ve donated almost a half a million dollars to charity just directly on that program. We’ve collected hundreds of millions of pouches, I think around 38,000 million in the US alone. And now that program has expanded into Canada, we have the Koolaid which is the Capri Sun of Canada and they’ve opened up, and we’ve also expanded into Latin America with Tang. In Mexico and Brazil we collect Tang which is basically the equivalent of Capri Sun. That program is almost our gold standard if you will for scale. It’s also been around for four years so that’s why time is important. Some of the programs that are coming up that I think will turn into that sort of program is chip bags with Frito Lay. That program has done incredibly well and is now also in Brazil with the biggest chip brand there called Elma Chips in Brazil but Frito Lay owns the company. What else? Mars with candy wrappers, that’s one that’s looking at that too. It’s basically ones where the brands really expand. On the flip side what I find the most interesting from a personal, maybe professional position are the really unique crazy ones. We’re now working with a feminine hygiene company to collect the tampon wrapper but also the used tampon applicator. That’s going to launch hopefully soon. That’s a pretty interesting one from a challenge perspective. We’re working with a big razor blade company on collecting used razor blades. Now you’re talking sharps, blood, all sorts of unique things that make it a little bit more challenging.
KissMyCountry: Where do you see upcycling and Sponsored Waste going for TerraCycle? The possibilities seem endless. Do you see TerraCycle sticking with consumer packaged goods, or might you move into other areas like housing or automotive?
Tom: I agree with you for sure. It is absolutely endless. Our goal now is to expand into as many countries as possible. We’re now operating in five – the US, Canada, Mexico, Brazil and the UK. I hope to open six or seven more countries this year. The main are going to be in Europe with Argentina the one exception. Either way we’re really focused on growth, scale and getting as many waste streams as possible. That’s our goal is to try to become the equivalent of recycling for everything – and at that scale – that is non-recyclable or hard to recycle. And so far, so good. That’s what we’re driving towards and everything is thumbs up. It’s different what TerraCycle is known for with the public and what actually happens. One example that surprises a lot of people is that this year we’re projecting that about only 15-20% of our total volume will be the branded type products, while 80% will be turned into plastics and more materials. They’ll still be turned into consumer products – like a TerraCycle trash can if you will. We are collecting the suits that people wear every day, and hair nets, beard nets that are disposable and thrown out every day. Medical waste is another one that we’re starting to talk about collecting disposable devices from hospitals. So there’s a huge opportunity on the industrial side too. It just may not be as talked about as collecting juice pouches from schools.
KissMyCountry: You’re originally from Hungary. Eastern Europe and the former Soviet republics often call on successful émigrés for advice and sometimes even political appointments. Any phone calls or emails from the Hungarian government? Have they recognized you or reached out in any way? What about Canada?
Tom: No, not yet. In time I’m sure it will happen, you never know, but not yet. But there has been recognition. Let’s see, last year I won the Hungarian–American of the Year award. That’s happened. We have offices in Canada and all these countries and we are there in some capacity with people and there are local jobs and all that. People understand and just want more of the programming and that’s what we try to focus on and bring out as many additional options as possible. Keep checking in and hopefully it will keep coming.
KissMyCountry: You’ve been very positive about America, especially when it comes to business. The business world is globalizing. In your opinion, is America still a land of opportunity when opportunity seems to be moving to other parts of the globe? What does America offer to entrepreneurs in a global business environment?
Tom: Oh, by far. By far there’s not even a close second still. There may be down the line. What I think is really special about the US is the way the US encourages business and then is not shy of failure. Probably the latter being more important than the former. There’s a good book out there, something about the Immigrant Entrepreneur I think is what it’s called, and it talks about how in foreign countries the rate of entrepreneurship is very low. For example in Germany if you open a business and fail you can’t open another one. You’re barred. To fail here is no big deal, it’s not a big deal to have failed and gone on and started something else. I don’t think anyone would look down at that. One of the reasons TerraCycle has been able to go global so fast is because of leveraging the multinationals, and the fact that they’re global makes it incredibly easy for us to open globally as well. So there’s this irony of globalization having actually helped us grow in a very, very big way. But really if you look at it the real virtue of the United States is its ability to support business in every way, from how incorporations are done, to how money is raised, the culture of it. That’s the key is the American culture is all about, it almost defines itself in a way by the ability to live the American dream which I think is to start a business and become really rich. That’s one way to look at it, and that probably may be the more stereotypical way.
KissMyCountry: At KissMyCountry we talk about the places we love. Tom, you’re from Hungary and Canada, and your company is in New Jersey. That’s a lot of places to be connected to. What are some of your favorite places? Where do you love?
Tom: That’s a great question. One of my favorite places is Holland. It’s one of my favorite countries in the whole world. From the little subtleties – like for example there’s a bike road beside every main road, it’s built like a normal road, things like that. The people there are unbelievable. So I think first Holland would be up there and then Brazil is something that’s become amazing recently. We’ve been very blessed by having an office there and moreover being able to spend more time there.
KissMyCountry: Is there a place you’ve been that surprised you in any way – good or bad? Why?
Tom: I’ll actually hold on the bad. There has been bad but I don’t want to knock a country negatively. The good is really in developing countries we were incredibly surprised by how much more the people are into business. We thought it would be very difficult to get going and the whole thing, and it was amazing. So Brazil was a great case study and we were actually encouraged in Brazil because we thought it would be a much harder road to climb and there are obviously bigger issues than saving a wrapper and so on.
KissMyCountry: You seem to appreciate urban areas and urban life, and accept things about cities – like graffiti – that most people want to change. That’s interesting. What about urban life appeals to you?
Tom: I think that what really strikes me about especially the American inner city is how it’s all opportunity really. It can only go up, it’s very hard for it to go down and it’s just an amazing opportunity for business. And what I love is when you can do something – this is what makes it even more compelling – because when you can do something and make total financial sense, even almost more than normal, but then still do the right thing – help society, help the environment, then it’s the ultimate and you can’t lose. And I love that that opportunity exists right here in Trenton, which is an hour away from New York City, an hour away from Philadelphia. It’s not even in the middle of the country, in some random city. It’s right here.
KissMyCountry: TerraCycle is in Trenton, New Jersey and you’ve lived and worked in New Jersey for a number of years. Do you have some favorite places in New Jersey? What about Trenton? Any suggestions for someone visiting or passing through?
Tom: In Trenton one of the things to always do is pizza and there’s a little joint famous for its pizza. It’s called De Lorenzo’s and it’s really world famous. I’ve tried pizza all over and if you’re in Trenton you have to treat yourself. You have to try De Lorenzo’s. I’d stick with pizza in Trenton.
KissMyCountry: Tom, thank you very much. It’s exciting for us to have had the chance to talk with you, and we’re hoping to stay in touch with you.
Tom: Very, very nice to meet you and nice to talk to you guys.
Article appearing courtesy KissMyCountry.