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From trash to treasure: Szaky found business model to make it work You know the concept

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Tom Szaky, CEO and founder of TerraCycle.
Tom Szaky, CEO and founder of TerraCycle. - ()

Tom Szaky recounts traveling down a heavily polluted Delaware River on a canoe in 2001, as part of an ice-breaking activity for freshmen at Princeton University.

He was stunned by all the litter he saw: discarded electronics, slightly torn garments and half-drunk beverages.

Szaky, who was born in Hungary and lived throughout Europe before moving to Canada with his parents in 1987, treasured each of the few possessions he had.

“As I moved more toward the West, it was really surprising to see how many amazing things people throw away,” he said. “Garbage is a luxury. In the poorest countries, there's much less of it.”

Soon after, while still at Princeton, he and classmate Jon Beyer started TerraCycle, a company that takes generally non-recyclable waste — drink pouches, chip bags and even circuit boards — and turns it into consumer products such as bins and bags.

Szaky, 32, and Beyer began with a composting system that turned organic waste into fertilizer through the crude conduit of worm droppings.

Exactly how much TerraCycle has flourished since then can be captured in a few ways: the 11 straight years of revenue growth, the worldwide network of waste-collecting volunteers that has grown to 60 million or the ever-increasing scope of recycled materials (cigarette butts is the latest addition).

Szaky is hoping the business will grow ten-fold by 2024. He's unsure what that would look like, as there's nothing static about the business model. For example, TerraCycle moved away from manufacturing to licensing all of its products a few years ago.

“The unique thing about garbage,” he added, “is that there are no TerraCycles out there. There's no dot-com equivalent to waste.”

Filling an industry vacancy has allowed TerraCycle to do work in as many as 26 countries; that's after only working within American borders as recently as 2008.

Szaky's goal is to stay true to the company's eco-friendly emphasis on finding new use for trash — trash that would otherwise be incinerated, which is reported to have a negative impact on the environment due to carbon emissions.

One needn't look further than the look of the office itself — crushed cans on walls, clear-bottle curtains and wine cork cubicle dividers — for evidence that it's a mission Szaky feels strongly about.

That aesthetic is one that Szaky intends to preserve throughout each of its global branches. It's a small part of his grander ethos that he expects will be a thread running through the company's past and future.

“The way to solve garbage is by not assuming that it's garbage,” he said. “You have to look at it from a completely different perspective. You have to imagine what something like a pen would be to an alien. Think of other functional uses.”

E-mail to: brettj@njbiz.com
On Twitter: @reporterbrett

THE BIZ IN BRIEF

Company: TerraCycle
Niche: Repurposing hard-to-recycle materials into consumer products
Location: Trenton
2014 revenue projection: $23 million
Employees: The Trenton office has 45, plus about 65 abroad

LESSONS LEARNED

When Tom Szaky advises young entrepreneurs brimming with ambitions, he encourages them to “just get started.” In his view, preplanning is only useful to a certain extent.

Striking while the passionate iron is hot is what he did with TerraCycle. It’s also what he did with six dot-com startups he has had. All of them eventually failed. But like garbage, that failure has a lasting quality.

“I learned so much in the process,” he said. “That’s something that’s important. In the approach of trying things first, there’s going to be more failure than success. You have to be good at dealing with that emotionally.”

Brett Johnson

Brett Johnson

Brett Johnson covers a wide array of sectors as a general assignment reporter. Before joining NJBIZ in 2014, he lived on the West Coast and wrote for a newspaper in Davis, Calif. You can contact him at brettj@njbiz.com or @ReporterBrett on Twitter.

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