Learning Lessons from Garbage

Sustainability is one of the most important issues of the day. That may explain the success of TerraCycle, which transforms hard to recycle garbage into useful items. Tom Szaky, the founder and CEO of the company, visited the University of West Georgia campus recently and spoke to an enthusiastic audience.

“A problem like the problem of garbage can be solved through unique entrepreneurial ideas,” Szaky told a packed house in the Townsend Center for the Performing Arts.

Developing a green business “is a great opportunity for people to get involved and create an idea that solves a problem,” he said.

It’s a timely issue for consumers and industry. Szaky “came across as a businessman who understands sustainability and has a genuine interest in the issue,” said Dr. Minna Rollins, an assistant professor of marketing and a member of UWG’s green committee. Dr. Hannes Gerhardt of the Geosciences Department formed the committee last fall.

“My students were very excited about this presentation. It’s a real issue,” she said. “It’s about green buildings. It’s about recycling. It’s about creating less trash. …Sustainability starts from the individual level choices.”

Szaky's presentation was part of the BB&T Lectures in Free Enterprise Series.

From the start Szaky and his crew have looked for creative solutions to problems, including how to keep the company afloat. He told members of the Townsend audience that he entered TerraCycle’s business plan in several contests, winning seven cash prizes.

While it is an unusual form of financing, it’s a good way to get advice, Rollins said. The contest process is challenging and the questions asked of would-be entrepreneurs can prompt them to look at their business plans in new ways.

“It’s a good way to get feedback and to network,” she said.

Szaky started the company by selling worm poop as fertilizer. TerraCycle’s first purchase order of $250,000 for poop packaged in soda bottles was from Wal-Mart. Since then it has spread globally, recycling things like drink pouches, potato chip bags and chewing gum.

TerraCycle’s scientists and designers look at the garbage coming into the company to figure out the best way to transform it. Cookie sacks and drink pouches become tote bags; vinyl records are reborn as clocks and coasters; and bicycle chains transform into picture frames.

The company turned a small profit in 2011, Szaky said in an interview before coming to campus.

TerraCycle’s marketing has been as innovative as the new products developed from waste.

The company’s mantra is a simple, clear message: Collect, Solve, Promote. That is: collect the garbage, solve the problem of what to do with it, and promote the new use.

Szaky and company developed what he calls “negative cost marketing.” Why pay for advertising, when you can charge the companies whose products you are transforming for the stories generated? The coverage has been generous: spots on local and national news shows; a regular blog on the New York Times site; and segments on National Geographic’s Garbage Moguls. It has inspired trash collection programs around the world and TerraCycle is a sponsor of the Trash Tycoons game on Facebook.

“I think a lot of marketers would agree, his approach is very impressive,” Rollins said. “It’s great marketing. Timing obviously plays a role too. But he’s very creative.”

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