Economist Humor
Academics in general, and economists in specific, are not known for their sense of humor. However, there is an old joke about an economist strolling down the street with an entrepreneur when they come upon a $100 bill lying on the ground. As the entrepreneur reaches down to pick it up, the economist says ‘Don’t bother — if it was a real $100 bill, someone would have already picked it up’. The entrepreneur shrugs her shoulders, puts the bill in her pocket and responds ‘You’re right — someone just did’.
Serious Entrepreneur
The entrepreneur in the joke is probably Brooke Farrell. The $100 bill? Not exactly US currency, but likely more valuable. Its trash. Farrell spent 8 years consulting to US waste conglomerate Waste Management, and saw how many $100 bills cross the curbside every day. In her own words:
“You look around and you see waste absolutely everywhere. If you loaded the annual waste generated by the US into trucks, the convoy necessary to carry it all would circle the equator of the earth 600 times. But look around again. What you’re seeing are opportunities. Everywhere.”
Match Maker
In 2009 she quit her job, and together with her brother-in-law, co-founded a firm called RecycleMatch. The idea: an online exchange where firms trade trash. From a recycling perspective, it is a natural recombination of her experience in the waste business with his software expertise creating Business-to-Business marketplaces. But having a good match in the founding team does not guarantee the same with the clients.
A Market for the Market
The pair self-funded the venture on the shoestring they were willing to invest, and spent the first 6 months creating a prototype they could show potential clients. Most executives in large firms do not spend their days looking for a market for their waste, so Farrell went looking for them. The first was a large international corporation with 180,000 pounds of window glass that had been damaged in a hurricane. Covered in a thick plastic coating, the glass was deemed un-recycleable and was headed for a landfill.
“We went in and told them we could make them money listing their material on our marketplace. We thought we were offering upside, but actually they signed with us because they had nothing to lose. Our service is confidential, and we don’t get paid unless the market clears. We found another company that wanted to crush the glass and “upcycle” it into countertops. The market was born.”
Money Maker
RecycleMatch launched in February 2011. Already, the firm has enabled trading of waste polyester from paint roller production to an automobile manufacturer, and consumer product returns from an interior decorator to a textile producer that upcycles the unwanted upholstery. It has attracted outside investors and a seasoned CEO. Farrell, never to let an opportunity go to waste, is already working on a new offering from RecycleMatch. In addition to the public marketplace where any company can list waste and bid on it, she is creating an enterprise product – software that helps large companies and supply chains manage, track and monetize waste streams and industrial byproducts across their distributed locations.
“I would go to a big firm, and tell them what we are doing. They would tell me it’s fantastic, but that their trash isn’t like that. It took me a little while, but what I realized they were saying is that they have absolutely no idea what they waste. We’re going to fix that. We’re going to give them the information they need about themselves to be more sustainable and make more money.”
Aside from seeing how business can do something good for the world, the takeaway is where opportunities originate. It isn’t the theories from the economist, or the inevitability of the market. It is the dirty hands of the entrepreneur that pick up $100 bills.
Publication:
British Airways Business Life
Author(s):
stuart
saras
Relevant Principles:
Bird-in-Hand (Means)
Affordable Loss
Crazy Quilt (Partnerships)
Lemonade (Leverage Contingencies)
Pilot-in-the-Plane (Control vs. Predict)