Gaining a foothold

Small businesses are using innovation and disruption to tackle the global waste crisis. Katie Burton talks to four new start-ups in the sector.

For a long time, waste was relatively untouched by the start-up scene. New businesses sought to tackle climate change and pollution, but rubbish was discarded and forgotten.

Now, with plastic vilified and the dangers of landfill and ocean-dumping brought to the fore, entrepreneurs are busy identifying gaps in the recycling market and finding ways to make money from rubbish. Some of these businesses have already shaken up the industry. How have they done it, and what are the ingredients of a successful start-up?

Spot the gaps

“I think that disruptions to the industry come from start-ups, because that’s in their DNA. They come up with new solutions,” says Jack Ostrowski. He’s the creator of a new app, launched in the UK in April, called reGAIN. The app lets individuals send away unwanted clothing in return for discount coupons for a range of goods and services. The clothes are then recycled, reused or upcycled.

Ostrowski came up with the idea off the back of his existing work in the textiles industry. “I knew that 300,000 tonnes of textiles go to landfill every year, so it was a no-brainer,” he says. He noticed that, while a few brands were already running take-back schemes, there was a gap. “I thought to myself, hang on, what about all my other customers who are online only – would they like to introduce a take-back programme to their customers?”

So far, the reGAIN app has had 51,000 downloads and has diverted 46,000kg of clothes from landfill, Ostrowski says.

Spot the problems

As Ostrowski and reGAIN demonstrate, good ideas often come from spotting gaps in the market. In other instances, they spring from a feeling that existing methods don’t make sense. Charles Yhap is co-founder of CleanRobotics. The company’s flagship product, the Trashbot, started life in 2015 when its creators secured a place with a start-up accelerator in Pittsburgh. The Trashbot is a bin that automatically separates recycling from other waste using artificial intelligence and robotics. It is currently installed at Pittsburgh International Airport.

The idea for the Trashbot sprung from the confusion caused by the range of recycling bins at places such as his local Whole Foods, Yhap says. The incoherent systems presented him and co-founder Tanner Cook with an intriguing dilemma. “We started thinking: there’s got to be a better way to do this. We looked at the cost of sensors and the state of recycling in the US and globally and we figured: maybe this is something a robot could do.” He says the Trashbot is now 90% accurate in identifying recyclable material – three times better than a human.

“Good ideas often come from spotting gaps in the market”

Like Ostrowski, Yhap thinks it’s the right time for new ideas. “It’s more important now for the recycling industry to innovate than ever before,” he says. “Start-ups are part of that story.” He points in particular to China’s National Sword policy, enacted in January 2017, which saw vast amounts of formerly exported recycling rejected for poor quality. The repercussions of the policy are still reverberating through the industry.

Keep it simple

When it comes to that first idea, successful start-ups have something in common – they keep it simple. Michael Allegretti is senior vice president for policy and strategic initiatives at Rubicon Global, a tech company with thousands of customers across the US and 16 other countries, including the UK. It offers a range of waste management services to companies, city governments and local authorities – including what Allegretti describes as the “Shazam of garbage”, an app that picks up on audio cues to register when waste enters a rubbish truck.

Yet, as Allegretti explains, when the company was founded in 2008, it focused on one question: can you use technology to confirm to a customer exactly when their garbage will be picked up? The answer was yes. But nobody else was doing it.

Break the status quo

Untouched for so long, the waste management industry can look intimidatingly entrenched to those entering with new ideas. “Within the industry there will always be people protecting and defending the status quo,” says Ostrowski.

That’s something that relative newcomer Revolution Systems knows all too well. Just five years old, the company has created a smaller, cheaper ‘materials recycling facility’ – a series of machines that separate recycling into individual material streams. It wants small towns in the US to use the product to manage their own recycling, a new concept in a country where small towns normally transport their waste to big cities.

“We’re challenging assumptions,” says Patrick Tierney, co-founder of Revolution Systems. “It takes time. Some of the places that we visit, the customers don’t believe the numbers because they’ve been told for years that there was only one way to do it.” The team has had to counter local opinion, as well as challenge the hegemony of the US’s three largest landfill operators.

More than anything, start-ups in this space need resilience. “We’ve proved that we are more productive than anything else on the market, and that’s inherent in the design,” says Tierney. “Now we’re trying to sell more – we’re pushing hard to do that. Both my partner and I have tapped out our finances, and we’re both working second jobs.”

Lock down customers

Given these challenges, it’s vital for start-ups to find customers who are willing to take a punt. Allegretti explains that this was the key to Rubicon’s early success. “Most tech companies operate from the premise that if you build it, they will come. They’ll have the best app, the seamless experience, downloads will take off and it will be a thing.”

Aware that it was attempting to enter an entrenched, multi-trillion-dollar industry, Rubicon focused instead on securing big accounts, partly by undercutting the incumbent players on price. “There were customers that committed to making a greener choice and trying something new. That created a footprint for us nationally at a very fast rate.”

In some ways, Ostrowski disagrees with this analysis, believing in the adage: ‘Be so good that they just can’t ignore you’. “The best ideas will be the ones picked up by the retailers.”

Fail fast, fail forward

Initial success is not always a precursor to a lasting business, and start-ups have to keep moving. Luckily, this is something that small businesses are ideally placed to do – part of the reason they can drive innovation. “CleanRobotics doesn’t have millions of dollars of investments into assets and capital expenditures, so we can move quickly,” says Yhap. “That’s what this space needs – a lot of small, agile companies that can adapt quickly to this shifting environment.”

It’s an idea that is often repeated. Speaking about Revolution System’s small-town recycling facilities, Tierney says: “We’ve been wrong about a lot of stuff. But we’ve been right more than we’ve been wrong, and that’s part of our progress. Our low cost means we can iterate a lot faster than the wider industry, which deals in $100m decisions.”

Innovate or disrupt?

Entrepreneurs favour different language. For some, pure disruption is the goal. “All innovation does is improve the existing system that’s out there,” says Ostrowski. “Disruption makes the old way of doing things irrelevant, and I think that’s what reGAIN will do.”

For others, innovation remains a worthy pursuit. “We want to evolve the industry,” says Allegretti. “There’s a place in the future industry for everyone. Many of the current players will have a role – they’re increasingly starting to understand that times are changing.”

Innovative or disruptive, it’s clear that start-ups are important when it comes to the waste industry.

As anyone who cares about the environment knows, the old ways just aren’t working.

Katie Burton is a production editor and writer