Tom Szaky started TerraCycle to help 'de-junk' the world

His company now is an international leader in 'recycling the unrecyclable.'

Difference Maker

The lobby of TerraCycle’s global headquarters is far from what might be expected for a company that reported $18.7 million in revenue in 2014.

Mismatched couches and a row of aged bowling alley chairs surround a shipping pallet-turned-coffee table. The company’s logo on a wall is created from recycled juice packets.

Above, light fixtures are enlivened with used product containers and bottles. The floor is covered in used artificial turf.

While the ambiance of TerraCycle’s Trenton, N.J., digs might be more appropriate for a basement start-up, it is actually an indication of the company’s core mission: reducing waste.

“Everything around us will become waste,” says Tom Szaky, TerraCycle’s chief executive officer. “Our focus is on anything that you cannot recycle today, and that is 75 percent of all objects in the world.”

Mr. Szaky founded TerraCycle in 2001 while a freshman at Princeton University. He and another student fed dining hall leftovers to worms and liquefied the worm compost, creating an organic and highly effective fertilizer. Lacking the money to package their product, the duo used soda bottles they retrieved from recycling bins as containers to peddle the worm poop.

“That was the inspirational moment,” says Szaky, who decided to drop out of Princeton to pursue TerraCycle as a full-time endeavor. “What got me very excited was ... waste as a business idea.”

Today, TerraCycle is an international leader in “recycling the unrecyclable,” building off the worm compost idea and using other waste materials to craft new products. With eight offices around the world and some 125 employees, TerraCycle runs recycling programs in more than 350,000 locations in 22 countries.

TerraCycle engages with partners willing to invest in making their products recyclable. They include consumer product companies, retailers, factories, municipalities, and even consumers themselves.

Szaky and his team devise a plan to deal with each type of waste, and then process the waste through refurbishing it into something useful or through reprocessing it for recycling.

One of TerraCycle’s initiatives awards points to participants who then can redeem them in the form of charitable donations to schools and other nonprofit organizations. These contributions have surpassed $10 million to date.

Some collected material can be combined with other waste to be recycled into new products, ranging from tote bags made from used Capri Sun juice packets to desk clocks made from vinyl records. Waste can even be turned into larger products such as picnic tables and rain barrels.

Tom’s of Maine, which makes natural personal care products, is one of TerraCycle’s long-standing partners. 

“TerraCycle helps us look at everything from new ways to package our product to what consumers can do with it once it’s in their home,” says Susan Dewhirst, the company’s public relations and goodness programs manager. “TerraCycle has had an enormous impact on Tom’s of Maine packaging choices and how we demonstrate our environmental commitment to our consumer.”

A recent visit to his Trenton office found Szaky had just finished phone calls with a tea company and an industrial safety equipment manufacturer exploring ways to recycle or repurpose their waste. That had followed just hours after his return from a meeting in Europe with a major coffee company.

Sitting at a conference table consisting of a recycled slab of wood propped up on two wine barrels – which, along with his desk, is partitioned from the rest of the office by strands of clear, empty soda bottles hung from the ceiling – Szaky discussed the entrepreneurial nature of TerraCycle.

“We are not a start-up ... anymore, but you need to maintain that culture because that is how you get hyper innovation,” he says. “The only way to win is to constantly be disruptive, and to constantly disrupt yourself.”

Szaky grew up in Budapest, Hungary, prior to the fall of communism and has been intrigued by entrepreneurship ever since he arrived in North America. He sees the world of business as a vehicle for positive social change.

“I think business is more powerful than war, and more powerful than politics,” he says. “It transcends borders very easily, and it is much more lasting.”

He rejects the paradigm that businesses are intended only to generate profits, and that only charities can do good. His goal is to find a way to overlap those missions.

“It requires a really strong focus on purpose, and fundamentally deprioritizing pure profit to a degree,” Szaky concedes.

While TerraCycle is a for-profit enterprise, its focus on also doing good is seen not only in the millions of dollars it has contributed to various causes, but also in the effect it has had on the actions of consumers and corporations regarding waste and its environmental impact.

This commitment is evident in the property TerraCycle occupies in Trenton – a rehabbed warehouse that had been abandoned and fallen into disrepair. TerraCycle has added four adjoining buildings, adorned on the exterior by graffiti from local artists who return almost on a weekly basis to reinvent the facade of the buildings.

This sense of purpose is what motivates Szaky, he says. “Man is it fun to come in and feel so freaking good each day about what one does,” he says, smiling.

John Replogle is CEO of Seventh Generation Inc., which makes environmentally friendly products.

“Tom is one of the brightest guys I have ever met; he has both an analytical and a creative mind, and his ability to think differently is what I admire so greatly,” says Mr. Replogle, an investor in TerraCycle since 2009 and a former member of its board. Szaky has an incredible drive to improve the way the world operates, “to de-junk the world, if you will,” Replogle says.

TerraCycle has experienced its share of false starts and setbacks. “I know there have been many ventures that Tom has tried to undertake that haven’t worked,” Replogle says, “and he has done what every entrepreneur does: He has taken the learning from that and reapplied it.”

Szaky has also encountered some materials that, at least so far, cannot be recycled. Among them are sandpaper, which is difficult to process, and expired medications, which are required by law to be incinerated.

Another challenge: persuading partners to invest in recycling. “You have to delight people into the answer,” he says. “It is not about scaring them into complying.”

Szaky has written a book about TerraCycle, and the company even has its own TV program, “Human Resources,” which airs on the cable channel Pivot. The “docucomedy” provides viewers with an entertaining program, Szaky says, while also getting the word out about TerraCycle.

Despite redirecting nearly 2 million pounds of waste per week away from landfills, TerraCycle is not the ultimate solution to waste, Szaky says. “We cannot solve the garbage problem, partly because we are a reaction to the problem,” he says. “The cause of all of this is rampant consumption.”

His biggest hope, Szaky says, is that more people will be inspired to change their everyday patterns of consumption and reduce the amount of waste they create.

“I would love for people to make [TerraCycle] irrelevant through their choices and consumption. Wouldn’t that be awesome?” he says, chuckling. “And then I get to start another company.”

• Learn more at www.terracycle.com.

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