In just 29 years, Tom Szaky has lived quite a life. Born in Hungary in the 80s, he lived with his family under the Iron Curtain where the idea of entrepreneurship did not exist. It wasn’t until the Chernobyl disaster that Szaky and his family left their native land in search of a better life. They landed in Canada, and so the trajectory of Szaky's life shifted and a new path began.
Szaky was just 14 when he was bit by the entrepreneurial bug. The idea of starting a company was new to him, but he was interested in the internet. So he taught himself to code and launched a graphic design company. The business—which employed a few people—lasted until Szaky was 16 years old. From there, he attempted to start a slew of other companies, none of which took off.
It wasn’t until his freshman year in 2001 at Princeton University that one of his business ideas would take off. The idea: to transform garbage into usable products. Fascinated by the concept, Szaky quit school during his sophomore year to launch what is now TerraCycle, a Trenton, NJ-based company that inspires people in 20 countries to collect waste and send it to recycling centers. The company then converts that waste into products including bags, coasters, garden equipment and clocks—available for sale at such big-box stores as Wal-Mart and Target.
So how did he build such an innovative company? I called him up to find out.
Q: How did you come up with the idea for TerraCycle?
A: During college, a few of my friends in Canada were growing marijuana in their basement and were feeding their plants worm poop. I dropped out of Princeton to start a fertilizer company using worm poop. It’s just grown from there.
Q: How did you secure financing?
A: We didn’t have any money, so we just entered and won business plan contests. Overtime it helped us raise enough money to prosper. Over a five-year period, we ended up raising $18 million.
Q: How did you move from worm poop to other types of waste?
A: After a few years, we started thinking about how we could expand our model. The great thing about the worm poop concept was that it taught us that we could make something useful out of garbage, so we started looking at other types of waste and how we could translate it.
Q: What challenges have you faced over the years?
A: There have been perpetual challenges. We’ve taken a lot of small risks and have learned from them. I think one of our challenges starting out was that we were doing all of the recycling ourselves. It was very difficult and we ended up losing a lot of money. Now we outsource that function.
Q: How is the company doing now?
A: Things are going really well. We are getting bigger every year. Right now we have 110 employees and we are $15 million in size. It’s been exciting to see such dramatic year-over-year growth.
Q: What’s your secret of success?
A: I think it’s our appetite for growth. The culture of our business is to grow as big as possible. We are going global and are now in 20 countries. There is a nice restlessness and deep culture of growth in the business. Plus, we have no competition, so we have the ability to grow rapidly.
Q: How do you work with the likes of Target and Wal-Mart?
A: We go in and talk with them about their waste streams. Then we explain that we can transform their waste streams into products that the public can use and buy. That’s how we’ve gotten to work with those companies and why they now sell our products.
Q: Do you ever have trouble approaching companies?
A: Definitely. Sometimes they get what we do and sometimes they don’t. First, we have to go in and convince them that they need someone to solve their waste problem. We also have to make sure they agree that it is a problem. Once everyone agrees, we explain how we will solve it. Some people love the idea and some people don’t.
Q: What does the future hold for TerraCycle?
A: We will continue to grow aggressively around the world and take on different types of waste. We are really driven by what types of garbage we can collect. Next year we will be able to make things out of chewing gum, cigarettes and dirty diapers. It’s pretty amazing.
Q: What is one lesson you’ve learned along the way?
A: I think the biggest one is to be prepared to fail a lot and to focus on learning from failures. I think that is the most important thing an entrepreneur can do. From there, everything is possible.
Q: What advice can you give to budding entrepreneurs?
A: Look for something unique that can grow quickly. Only do what is unique and outsource as much as possible. Focus on your key proposition.