Tom Szaky, the recipient of the College’s 2nd Annual Award for Innovative Leadership, may be the creator and CEO of TerraCycle, a Trenton-based company pioneering an international movement to help save our planet — but he hasn’t always been the conventional role model.
Not to say that Szaky’s multi-million dollar business is necessarily “conventional.” Based on the innovative idea that new products can be developed entirely from waste, his business is currently one of a kind. So unique in fact, that TerraCycle’s exploits were deemed interesting enough by The National Geographic Channel to be regularly featured in its reality show “Garbage Moguls.”
However, just eight years ago, Szaky’s business interests seemed to be leading him on a slightly different path. As soon as he began his slide-show presentation for the students and faculty crowded into the Mildred and Ernest E. Mayo Concert Hall at 6 p.m. on Oct. 13., Szaky made this clear with a personal anecdote about the origins of his business, which began as a fertilizer company.
“My friends and I were growing pot in our basement,” said the 28-year-old Princeton alum Szaky, recounting a summer just before college in his native Canada eight years ago. “I was the designated gardener.”
Surprised audience members laughed as Szaky recalled how he and his friend’s discovered a natural “worm poop fertilizer” to treat the plants that would one day become TerraCycle’s first product. But, more importantly, Szaky explained, it was in this moment that he first started thinking about “waste” — and the fact that it doesn’t really need to exist.
Strapped for cash, Szaky and his dorm mates used the decaying food-waste at Princeton to create massive supplies of worm fertilizer, transferring it into used plastic soda bottle containers that otherwise would have become garbage. Why? This was cheaper than buying new, unrecyclable bottles — and far cheaper than buying environmentally conscious recyclable and compostable bottles. Thus, the concept of “up-cycling” was born.
These revelations would ultimately amount to the theme of the evening’s talk, during which a frank Szaky offered aspiring entrepreneurs plentiful personal insights and practical tips on how to deal with some
unexpected pitfalls of starting a new business. In particular, Szaky proved to be a master of the art of turning negatives into positives — making what seemed to have nothing to do with the respectable business world (like marijuana and waste) into something marketable.
“Garbage, in the natural system, doesn’t even exist as we know it. The outputs of one system are the inputs of another,” Szaky said.
Garbage, he realized, was cheap — it was “the only material people pay to get rid of.”
Szaky used a PowerPoint presentation to explain the simple economics of “up-cycling” and how he turned a small dorm-room operation into a virtual international monopoly. The story was one of both determination and a string of lucky chain reactions.
Eventually, according to Szaky, persistent phone calls led the college students to broker a Walmart deal that, when successful, led to the distribution of TerraCycle gardening products, sold in “up-cycled” containers, in all the major chains. The real breakthrough, though, was when the heads of three environmentally-conscious companies — Honest Tea, Stonyfield Farms and Clif Bar — approached the young Szaky asking for his help in creating new uses for their unrecyclable packaging, and licensed him the right to reuse their products. Other major companies, like Mars and PepsiCo, followed.
Today, TerraCycle is paid by these companies to collect the waste generated by using their product, sell the waste back to them as raw materials, and license them the rights to use this waste to make a new product. (Concerned individuals can also donate waste by following TerraCycle’s online instructions.)
“It turns out the world’s most eco-friendly way to package a product is also the cheapest,” Szaky announced confidently, after seeing all the hands in the room raised when he asked who would buy the eco-friendly product “every time” if it were cheaper than the environmentally irresponsible alternative.
While there has been some skepticism — about the energy needed to create Szaky’s products, among other things — Szaky seemed to be on to something big. The applause he got from the College audience after his talk was highly approving. Most students and faculty seemed ready to honor Szaky for both his environmental insight and his refreshing candor about the pitfalls of business.
He offered humorous asides about his friend’s night in prison after they were caught collecting soda bottles from Princeton recycling cans (“By the way, it’s not legal to do this”), and the unconventional process of hand-bottling Walmart’s first ten thousand orders of fertilizers in the Princeton dorms (“We thought they’d start small — you know, a couple of bottles…”).
His humorous attitude seemed contagious.
“As is our tradition, the certificate is printed on 100 percent recycled paper and the frame is a part of a barrel for Jim Beam Bourbon,” said Dean of Business William Keep as he handed Szaky his award, taking the presentation — which began with a revelation about how the use of an illicit substance can launch the framework of a better idea — full circle.
On the whole, Szaky offered a very encouraging and optimistic outlook for aspiring businesspeople. With each problem, Szaky explained how he adapted and responded. For example, he used social media to avoid the potentially paralyzing legal fees associated with the questionable lawsuit filed by their original competitor, Miracle-Gro. And after learning about a Trenton graffiti problem, Szaky encouraged all local graffiti artists to use the TerraCycle warehouse as their new canvas.
“I’m not an American … A lot of people, if you grow up in a context, don’t quite realize it. No where else in the world is it as easy to raise money if you have an idea, and go for it,” Szaky said.
Laura Herzog can be reached at email@example.com.