How I Built This with Guy Raz – Making garbage useful with Tom Szaky of TerraCycle

Intro

In this episode of “How I Built This with Guy Raz,” Tom Szaky, co-founder and CEO of TerraCycle, shares his journey of turning waste into raw materials that can be used to make other things. TerraCycle’s mission is to eliminate the idea of waste and create a more sustainable future.

Main Takeaways

Turning Waste into Raw Materials

• Tom Szaky and his friends discovered that food scraps turned into worm poop could be used as fertilizer for plants.
• TerraCycle started as a fertilizer company, using worm poop as a raw material.
• TerraCycle’s founders set up a worm composting unit in their dormitory and wrote a business plan to explore the idea.

Scaling the Idea into a Big Business

• The goal was to see if they could scale the idea of turning waste into raw materials into a big business.
• An investor called in after Tom went on a local radio station to talk about the idea, saving the company from going broke.
• TerraCycle’s founders dropped out of Princeton to pursue the company full-time, which initially worried their parents but eventually became successful.

From Fertilizer to Recycling Facility

• TerraCycle shifted their focus from fertilizer made from worm poop to becoming a recycling facility.
• The decision to pivot had challenges, but ultimately aligned with TerraCycle’s mission to innovate and solve waste.
• TerraCycle’s first partnerships were with Stonyfield, Cliff Bar, and Honest Tea, who paid TerraCycle to create a national platform for non-recyclable packaging waste to be collected and sent in for recycling or reuse.

Transitioning to Reusability

• TerraCycle’s goal is to transition from disposability to reusability through their third division, Loop.
• Loop partners with major consumer product companies to create reusable versions of their brands.
• Transitioning to reusable containers is a big transition that will take time, but it has the potential to create more jobs and revenue than recycling.

The Importance of Consumer Responsibility

• The foundational flaw in waste management is that manufacturers have no responsibility over the end-of-life of their products.
• Businesses and consumers need to take voluntary and mandatory actions to invest in sustainable solutions and reduce waste.
• Shifting buying habits to be more sustainable and conscious can make a significant impact on the environment.

Summary

Turning Waste into Raw Materials

Tom Szaky and his friends discovered the potential of using food scraps as fertilizer, which led to the creation of TerraCycle. They set up a worm composting unit in their dormitory and wrote a business plan to explore the idea further. This initial focus on turning waste into raw materials laid the foundation for TerraCycle’s mission to eliminate the idea of waste.

Scaling the Idea into a Big Business

After going on a local radio station to talk about their idea, Tom received a call from an investor who saved the company from going broke. TerraCycle’s founders took the leap and dropped out of Princeton to pursue the company full-time. Their persistence in reaching out to major retailers like Walmart and Home Depot eventually paid off, leading to their first purchase order and further growth.

From Fertilizer to Recycling Facility

TerraCycle’s shift from fertilizer made from worm poop to becoming a recycling facility was driven by their mission to innovate and solve waste. They formed partnerships with companies like Stonyfield, Cliff Bar, and Honest Tea to create a platform for recycling non-recyclable packaging waste. This transition allowed TerraCycle to expand its impact and drive change in the industry.

Transitioning to Reusability

TerraCycle’s third division, Loop, focuses on transitioning from disposability to reusability. By partnering with major consumer product companies, TerraCycle aims to create reusable versions of their brands. This transition involves designing containers that can handle multiple reuse cycles and creating a system where customers return the containers to be cleaned and reused. This shift has the potential to create more jobs and revenue than traditional recycling methods.

The Importance of Consumer Responsibility

TerraCycle highlights the foundational flaw in waste management, where manufacturers have no responsibility for the end-of-life of their products. To address this issue, both businesses and consumers need to take voluntary and mandatory actions to invest in sustainable solutions. Shifting buying habits to be more sustainable and conscious can have a significant impact on reducing waste and creating a more environmentally friendly future.

Conclusion

TerraCycle’s journey from a worm composting unit in a dormitory to a leading recycling facility showcases the potential for sustainable business practices to make a positive impact. By turning waste into raw materials and promoting reusability, TerraCycle is driving change in the industry and inspiring consumers and businesses alike to take responsibility for their environmental footprint. Through conscious buying decisions and investing in sustainable solutions, we can create a more sustainable and waste-free future.