245 | Creating a Thriving Circular Economy Business with John Shegerian
Our guest this week on the pod is John Shegarian. John is a serial entrepreneur responsible for co-founding Homeboy Industries, FinancialAid.com, Engage and many other impactful companies. His is currently the co-Founder and CEO of Electronic Recyclers International (ERI), on of the largest e-waste/ITAD companies in the world.
Resources mentioned in this episode include:
Episode with John Shegerian on Creating a Thriving Circular Economy Business
NOTE: While it’s not perfect, we offer this transcription by Otter.ai for those who are hearing impaired or who don’t find listening to a podcast enjoyable or possible.
SPEAKERS
John Shegerian, Paul Zelizer
Paul Zelizer 00:01
Hi, this is Paul Zelizer, and welcome to another episode of the Awarepreneurs podcast. This podcast is all about the intersection of three things, conscious business, social impact, and awareness practices. Each episode I do a deep dive interview with a thought leader in this intersection. Someone who has market tested experience, and is already transforming many lives. Before I introduce our topic, and our guest today, I have one request. If you could go over to Apple podcasts or whatever app you're listening to the show on, hit the subscribe button, do a rating and review it helps tremendously. Thanks so much for considering. today. I'm thrilled to introduce you to John Shegerian. And our topic is Creating a Thriving Circular Economy Business. John is a serial entrepreneur responsible for co-founding Homeboy Industries, FinancialAid.com, Engage and many other impactful companies. He is currently the co founder and CEO of electronic recyclers International, E. Ri, one of the largest e waste, and I T ad companies in the world. John, welcome to the show. Paul, thank you for having me, it's an honor to be here. Just reading that short bio, I'm like, Oh my gosh, we're gonna need three, four hours to talk about what you've learned about impact business. So John, were called Awarepreneurs And one of the ways we like to get to know somebody is to ask you about a wellness or resiliency practice that you use to resource yourself for this important work.
John Shegerian 01:31
Yeah, I'll give you three different words, sleep, eat, exercise. So I've been a vegetarian, for almost 42 years and vegan plant based eating for about 15 years. I exercise every day without missing and I try to get as much sleep as possible.
Paul Zelizer 01:55
I think you just like put out like, here's how you live a good life. Add purposeful work and like, you know, slam dunk, we're done. Okay, this podcast is over, go live a good life.
John Shegerian 02:06
But if you want to know one of my real secrets to the exercise, because I travel so much on business, on behalf of ERI. Sometimes you're stuck in cities, or inclement weather that don't have gyms or things close by for you to use when you get in an odd hours and in different time zones. So my little one word secret is stairs, stairs. And what I mean by that is I go to the top floor of the hotel, take the elevator to the bottom floor, then I get in the stairwell. And I just start to climb step by step. And I do that, depending on how tall the building is anywhere from four to 10 times. It's the greatest workout you can get it reset your body and whatever time zone you're in. It's great for your heart. And it's great for stress relief. So stairs is the greatest gym secret exercise secret that I could ever share with your audience. Night. I did the low, low tech and low urban. My running buddy and I today once a week we do Hill sprints or hill repeats because ultra runners are the same idea. You know, it's you're less likely to get injury, there's less impact and just using gravity as your workout is like as low impact and you can't get any more affordable. It's free gravity's there USE IT people. Exactly. Yeah, exactly.
Paul Zelizer 03:32
Great suggestion. So John, as I, as I said, You've been in this impact space for a long time Homeboy Industries is one of the social impact … it's like the OG - the original gangster, so to speak - of impact businesses in the US. Give us a little bit if listeners didn't know who John Shegarian was, give us a some highlights of like, what are some of the skill sets are the roles that you bring to the table? Maybe before you got into the impact work? Have you done anything besides be founder or co founder of any business?
John Shegerian 04:13
Yeah, when I was growing up, I wanted to be a jockey and I was too heavy. My dad broke the news to me that I was too heavy already as a little guy to be a jockey given that they have to be between 90 and 105 pounds and, and so I then was determined to become a hardest race driver. And hardest driving hardest racing was a very popular sport, the last 200 years in the United States and all sorts of great communities. And so I learned at a very young age, to be responsible to take care of the race horses that I wanted to race and be part of and that started about 1011 years old. I learned how to manage people's money, other people's money, how to raise money, but more importantly, the I started having real sense of awareness of the beautiful ecosystem that we live in. It's just not about people. And it's just not about plants, but it's about our animals and all the other great living organisms that we're surrounded by. So the environment became very, very important to me. And then at a young age when I had a champion racehorse like that got an offer to sell the race horse to a very successful family out of Belgium. We were going to sell this horse for stud purposes, when I was about 16 or 17 years old. And we did and this family the hay and family made their fortune in windmills in Belgium. And my dad then partnered with them after we sold them our horse, noble Darby, to be the first person entrepreneur back in the late 70s, to bring windmills and wind farms for alternative energy to America. So the seeds were set very young, both with my racehorses. And then the racehorses led to our windmill farms, which was called windmaster. And I really started getting an understanding thanks to my father at a very young age, for the beauty of animals, the importance of all living creatures, but then the importance of also thinking about this beautiful and wonderful world that we live in, and how we can be more efficient and leave a better world behind that we found.
Paul Zelizer 06:26
What a beautiful story John. So when did you come into the world of business and entrepreneurship?
John Shegerian 06:34
Yeah, I started working for my father right out of college, and then eventually went to law school and then worked for a gentleman named Ira Yellin in LA and I was a big real estate redeveloper. And I just got a an MBA in real estate development, business management, landlord tenant law and everything working with him for IRA and that's when we co founded homeboy tortillas in the Grand Central Market in downtown LA. And there was no such thing back then pull. As the words were never put together social and entrepreneurship were impact business. This was 1992 1993 Right after what are now called the LA riots, which were then called the Rodney King riots. And Father, Greg Boyle, and I got together, we started homeboy tortillas, which then evolved into Homeboy Industries. And after two to three years of that my wife and I decided that we don't want to ever do any more businesses that don't make an impact that don't just make a profit, but also make the world a better place. And then we were off to the races after that on our on our venture together and our journey together with regards to impact, investing in social entrepreneurship.
Paul Zelizer 07:47
And I remember even when I was getting started quite a bit after you Yeah, 2008-2009 like business for good and conscious business, those terms. But social entrepreneurship, like I vaguely remember hearing about it, but it wasn't a thing. So so what we now know as the impact business and social entrepreneur movement, which is like one of the fastest growing courses of study on college campuses around the world, young people are saying, we need to understand how you do this and have a vocabulary and people are studying and we have all these great examples. Even 15 years ago, it was much harder to find vocabulary for what you've been playing with for 30 plus years.
John Shegerian 08:31
Yeah, yeah. And that's fun. It's fun to be ahead. Of course, when you start people look at you like you're a Martian, and why are you doing this? Why do you care about all the social good that this does that the world is, you know, back, you know, just think about it. These were the era of Gordon Gekko with greed is good and More money's better and those days are gone. It's not that money's bad. It's not that making profits. Not important because you can't save the world unless you have a sustainable business model. But making sure you're making an impact. And leaving either someone or some people or a community or the world at large a better place is the way to run a business now.
Paul Zelizer 09:10
We recently did an episode with the current CEO of Homeboy Industries and put a link to that as well as many other things in the show notes. So you gotta do sort of like the gateway drug, gateway drug with Homeboy Industries. And you're right, this is what I'm going to do. What do you do next?
John Shegerian 09:27
After that, I founded a little brewery in Fresno. And I didn't know anybody when my wife and I moved here. She was originally from Fresno. And in the back in between lunch and dinner hours, I held meetings with people that wanted to do businesses and it was just the budding time of the internet and the guys who made my T shirts deal Brian brothers Mike and Matt O'Brien became great friends of mine. We came up together with the concept of starting a.com. Their dad was one of the first importers of laptops and computers from Asia. And they were much more aware of the internet and what it could be that I was they taught me 97-98. We bought to URL financial aid.com. 98 was the year Google was founded. And we got thrown out of every venture capitalist office. And then we eventually just bootstrapped it, went into debt went into Hock and, and basically started this little company out of their T shirt store, name, financial aid.com, and eventually democratized the student lending business online, and ran it for six years until we sold it to the oldest what was then the oldest bank in North America, CIT, and it was a really a heck of a great journey. But the fun part is not only do we make money, but we got people educated, and gave them access to the financial means to get educated and invest in themselves.
Paul Zelizer 10:58
And listeners, if you're been around for a while, you've listened to a show or two, you know that I'm super passionate about the Sustainable Development Goals. SDGs is the shorthand of the United Nations. And fair and quality access to education is one of the SDGs is one of the Sustainable Development Goals. There's so much research like the smartest minds on our planet is saying this and 17 other areas, is these are the levers we can pull on to turn the ship of planet Earth and make it sustainable and a beautiful world for future generations. I just wanted to say that, John, thanks in you know, can you were just like, well, what does that have to do with impact? Like literally the smartest minds on our planet, they pull on one of these levers and you pulled on my mother and it's a really, really interesting there. So let's fast forward. You've been at this a long time. We could spend all 50 minutes just like going through your career. I don't I think our listeners right, I get who this John guy is. He's been doing this a long time. He's got some street cred in terms of industries and STDs and all that. So your latest venture is something called Electronic recyclers International. Tell us a little bit like what was the concept behind? Yeah, and what do you do?
John Shegerian 12:11
Great question. I, I was introduced by one of my employees at financial aid.com Kevin Dillon, we had moved financial aid dot coms offices to downtown San Diego, in the Emerald towers. And there was a young man also living in San Diego with who had grown up with the mayor and Blum and Aaron in 2002. started what was then called Computer recycling in America in North in Vista, California, which is North County, San Diego. And his concept was he wanted to recycle computers and other electronics. And we became friends started going to sporting events together and having some dinners together. And by the time we sold financial aid.com in October of 2004, he came to Kevin and I Aaron did and said, Hey, listen, guys, I want to do what you did with financial aid.com. I'm doing a lot of volume. But I'm not making money. In fact, I'm losing money. Can you guys come in and restructure this thing we came in, and we renamed it your i We closed down the location in Vista because logistically it wasn't a great location. And we moved it to Fresno, which is the center part of California. And we reopened under the name era in April of 2005. And the whole goal was to keep electronics out of landfills. And in the keep electronics from being shipped off our shores and being dumped into China, India, Africa and other places other emerging economies around the world. Because those economies typically a it's a bad carbon footprint to send this stuff off our shores when it can be responsibly recycled right here in the United States. Secondarily, those folks in those emerging economies typically don't have the right tools. And sometimes they even Co Op children into the process of these human rights problems with it, environmental problems with it. So the idea was to responsibly recycle or old electronics, which in 2005, was the fastest growing solid waste stream in the world, right here in the good old of USA. And we started in our first month of business recycled somewhere around 10,000 pounds of electronic waste. And if you fast forward Paul 17 years later to 2020 to last month, January of 2022 which is just about 17 years since we started this under the Esri brand label. E waste is now the fastest growing solid waste stream by an order of magnitude of three to five times over the second fastest growing solid waste stream in the world which is plastic. And now we have 10 locations in eight states, over 1000 employees. And last month in January of 2022 we recycle about 20 million pounds of electronic waste responsibly. So the journey Yeah, the journey has been fantastic. And it's been one about growth and making a huge impact. But we're far from done.
Paul Zelizer 15:09
So from 10,000 pounds a month, to 20 million pounds. I hear you right? Yeah, you heard me, right. Wow. That's pretty significant and, and doing the research that makes you one of the largest D waste recyclers on the planet is my understanding.
John Shegerian 15:27
We're one of the biggest brands now. And we serve 70 countries around the world. We have our facilities here in the United States, but we have sister companies that we've audited and made partnerships with all around the world. And it's been, it's really been a good run, it's really been a good run. But we still feel that we're in the top of the second inning, because, Paul, here's the dirty, little unfortunate secret. According to United Nations, only 17% of all electronics that are used on this planet, today are being responsibly recycled. And unfortunately, in the United States, according to United Nations, the numbers closer to 12 and a half percent. So although we've feel like we've made a dent and an impact, we feel still feel the opportunities bigger than ever, and the delta of growth is even bigger in front of us than it was behind us.
Paul Zelizer 16:18
In in most businesses, if somebody said, Hey, guess what, there's a market share at seven and a half percent, that's totally available. Most people would say, that is the business, here's my money, go get that, we'll get that market share, right. So let's wine back just a little bit, John, because because some of our listeners might be like, Alright, I have a context for this. But some of our listeners might not know, you just you touched on just a couple things. Like, for instance, you talked about child labor, like, what goes into the electronics that we use, you know, whether it's a laptop or an iPhone, right? Like, what are some of the minerals, for instance, I know, that's one of the key things, how their mind who's mining the living conditions of the folks who are actually building these things, just give like on the on the front end of what goes into electron, and we'll talk about recycling it. But I think some of the data is having a context of what somebody who is, you know, maybe not, in the day to day of building these things might not know about what goes into our electronics, can you can you catch us up, get us up to speed what's what's on that front end?
John Shegerian 17:33
Well, in terms of the recyclable stuff, or the bad stuff that we want to keep out of landfills? Well,
Paul Zelizer 17:37
both. Just like if I don't really understand what goes, I got this iPhone, and it's awesome, but like, really what's behind the screen? I remember freaking
John Shegerian 17:47
good. Okay, good, great question. But there's a lot of people don't ask me that. So I'll give you the bad news and the good news. So the bad news is, why do we want to keep this stuff out of landfills? And why do we want to not dump it into oceans or landfills or let it get this stuff? migrate into our ecosystem? Okay, most electronics have some trace elements of arsenic, beryllium, lead, cadmium, mercury, and those kinds of what could be toxic materials, if they leached into our landfills, and to our ecosystem, water supply, vegetation, animals and people bad. So that's the that's the genesis of why the industry was created as a backside of the technological revolution, and why the industry originally was created. So the good news is that when responsibly recycle when we recycle those 20 million pounds, Paul, what are we get out of it? The vast majority of the materials that come out of it are this in order of volume. It's shredded and clean glass, which we do on site with our proprietary technology, shredded and clean steel, which again, all done here with the world's largest proprietary e waste shredding machines that we we self created and built, and people have tried to replicate with no success to date. Then comes plastic, shredded and clean plastic, aluminum, copper, then comes gold, silver, lead, palladium, and now even include cobalt, nickel and lithium because now our batteries are getting recycled by JB Straubel is Redwood materials. So the nice news is that in one of the greatest ESG Circular Economy best kept secrets is that when electronics are responsibly recycled by either ESRI or another great competitor, and there's a bunch out there, you can recover all the commodities and all the commodities can be sold for beneficial reuse. None of it goes to a landfill. So at the end of the day, your zero landfill zero emissions and zero waste which is just a great way to run a business and a good way to put your head down and night on your pillow.
Paul Zelizer 19:59
So you're saying And if one of our listeners gets excited and send you their iPhone or their laptop, it's you know, how long I think whether it's an Android or an iPhone. I think most companies nowadays like if you do three or four years, that's a guaranteed updates after that. There's literally some security risk like you planned obsolescence, right? Like, you could maybe keep it five and probably will stop working six or seven year like, there's just a shelf life to these things, right. So so whatever that shelf life is for you, you know, 356 years, whatever you're like, alright, I literally can't use this thing, the way it's been intended. At least if it's a smartphone, I send it in, and you're telling me 100% of that thing that I send in to you. Whether it's the glass, the plastic, or the metals that go into 100% of it is going to be kept out of the landfill and actually reused in some way.
John Shegerian 20:53
Yes, because either we commoditize it like I just shared with you and those commodities get resold or depending on the contract and who sent us the materials and what clients are coming from. We also have some contracts that allow us to wipe or destroy the hard drives, reef, refurbish and retest, repackage and resell the the the phones, the laptops or tablets, whatever they may be. So these two divisions is a commoditization side of the business. And then there's also the resale side of the business and both ensure that we're zero waste in zero landfill.
Paul Zelizer 21:29
Beautiful. Wow, that's that's really impressive, John, great. Well, I knew I knew many parts, but I literally had no idea it was to that extent you're talking a truly, and I'm about to use some lingo here. You're talking a truly Circular Economy business. And I think our listeners are pretty much understand it's kind of self explanatory. But but let's define our terms. Like I hate when people toss out jargon and don't define it. Like if I'm on the other end of it. I'm like, I'm a biohacker. Or like, when I was new to social entrepreneurship, and people would toss around these terms, right? Yes, geez, an STD. What the heck are they tired? All right, I'm fine, circular economy for us.
John Shegerian 22:10
Yeah, circular economy, let's just look at it simply. Europe and parts of Asia, let's just take Japan and South Korea. And then let's look at Europe and take Germany and UK just as and France as some examples. Because geographically, they're set up much different than the US. They're smaller nations, but they want to be sustainable, they want to thrive, they want to have great economies, they learned to run circular economy, you know, lifestyles way before us. And what that means is, it means instead of using something and throw it into a landfill, they learned how to use it, and then repurpose it and recycle it in one way shape or another. Therefore, not to fill up landfills, which have very little geography to do so. And also to mine less materials underneath the earth. So to further you know, why further liquidate the precious materials that we have in our planet, when we can reuse most of everything that we're already using. So reusing everything that we're already using is a circular economy. So for instance, a cell phone or a laptop, or desktop, or grandma's old television set, which used to go to a landfill prior to the year 2000, or get to shipped off to China now is kept above ground, all the metals and the plastic and the glass is recovered. And all that goes into new products. Now whether it goes into new electronics, or new airplanes, or new hospitals in India, or China or other emerging economies doesn't matter. We're not further liquidating the environment by having to mined for more aluminum or mine for more gold or other limited and precious materials.
Paul Zelizer 24:03
Beautiful. But one of the best examples I remember early on when I heard the word circular economy and I had this major light bulb was a commercial flooring company. I can't remember the name of the company. I'll try to look it up. But it was they were doing things like think about the you have a physical location. And let's say there's carpet for instance, right? When carpet wears down, the stuff like close to the wall doesn't wear at the same rate like right down the middle of the path where like the doors are right. So what they did is they made these little carpet tiles instead when we're out in the middle instead of having to like rip it all out and replace the entire carpet, that these little tiles and then we take out only those tiles that were worn. And because of the ones that were worn, they'd shred them up and it was the same color same materials and they just wash out the actual fibers and make just those tiles it saved the company's money. The kept stuff out, usually carpet in the old days. He's I don't know if anybody's recycling it now, but they would literally just, you know, put down the new tiles. And it was genius, that circular economy thing. I was like, Oh,
John Shegerian 25:13
you're speaking of the great ret late Ray Anderson is our array of industries. And I had him on my podcast years ago before he passed. And he's one of the most lovely human beings. But you're right. He was one of the real founders of the sustainability movement in the United States, because he started with his, with his carpet tile concept, like you said, back in the in the 90s.
Paul Zelizer 25:39
Yeah, then the 90s. Exactly.
John Shegerian 25:41
Yeah. That's the guy, Ray. And I will put
Paul Zelizer 25:45
a link to Ray Anderson, and thank you, Ray Anderson for being we are standing on great guy. So let's do this. In a minute, John, I'm gonna come back and hear what dri looks like now and a bit more about revenue streams. And yeah, you grew to 1000 person company and where you're going, before we did, I just want to take a quick break and hear a word from our sponsor. Do you have a business that's about making the world a better place, and you want it to grow, both in terms of helping more people your impact, and your income, so you can live a good quality life? If so, I'd like to talk to you about some research for a second. When scientists look at when human beings actually what contributes to human beings actually meeting our goals, whether that's in the realm of wellness, or whether that's in the realm of business, the single biggest predictor of whether we actually reach our goals is something they call social support. In other words, do we have a community of folks that understand the journey, we're on the ups and downs, and those little tweaks and nuances, right. But we're partners has a community like this of hundreds of generous and really experienced social entrepreneurs, and this is what we do with each other. Both the information part, hey, here's something that tends to work with websites for a kind of business, or here's a lawyer that can help a trademark, as well as the emotional support of the ups and the downs of being an entrepreneur who's both trying to make a good living and trying to make the world a better place. It's called the AWARE printers community. And you can find out more at aware printers.com forward slash community. Thank you to everybody in the intrapreneurs community who sponsors this podcast. So John, in the second part of the show, we like to talk about joke about putting on our entrepreneur glasses. So if you put on your entrepreneur glasses right now, and you look at era, you gave us some data points, 1000 person company, you got, you know, eight locations, you got partnership in other countries, like give us a sense, like, what are the most common revenue streams? Like what are people actually paying e ri money for? And who do those people tend to be right here right now? Yeah,
John Shegerian 27:57
it's great question. You know, we, our first first big client, who's still honored to say as our client was best buy. Now, they're the largest consumer electronics retailer in the United States, if not the world, and it was an honor to partner with them back starting in 2005. And eventually, the discussion started sending around, we've got to do more. And they were always about dt from a DNA perspective, doing more doing more for their communities and constituents that they serve. So we all came up with the idea of why don't we do consumer take back of electronics. And everyone said, that's another idea. You don't give up, you know, the golden space of retail space, where you're supposed to be selling out bound products to be taking back old products. But we tried it. And we started that in California with 10 locations with Best Buy in a partnership and oh seven, and that grew to 100 locations, and that eventually grew to every store in the United States. And it's now the most successful they take back program, consumer electronics kickback program in the world, and Best Buy lead on it staples follow. Other brands have also followed both online and other ways. And we get to manage for retailers, including Amazon, including staples, Costco, Best Buy target, and a little bit even for Walmart, a lot of their take backs, and a lot of their old electronics returns and other damaged goods that come back to them. So retailers are big clients of ours OEMs, LG, Samsung, and many other of the household brands that we know about 75 of them are clients of ours because there's no stakeholder here, whether it's the manufacturers, the retailers or us as the consumers that don't believe that we should be drinking cleaner, water, breathing, cleaner air and leaving a better environment behind that we found so all the stakeholders that are in this eco The system, the manufacturers, the retailers, and the consumers all have become clients of ESRI. Over the years, including cities, the city of New York has us on a 15 year exclusive program. So we serve as all the residents of the city of New York. It's a massively successful program. But it's also much different than the program we launched in LA in 2006, where we serve as the citizens of the city of LA, they're different cities, ones, a vertical city once a horizontal city. So you also have to learn to create idiosyncratic solutions, custom crafted, depending on who the client is, what their DNA or perspective is. And you have to make sure that recycling at the end of the day is easy, because the landmark of responsible recycling is if it's not easy, it won't happen.
Paul Zelizer 30:55
So John, these are incredible partnerships. And they really are a key to how you become one of the biggest e waste recycler businesses in the world. Our listeners are folks who are incredibly dedicated to social entrepreneurship, they have that vocabulary for them. And they want to have more impact. Most of our listeners do not have partnerships, like, let's say that, so whether we're talking at BestBuy or the city in New York, like how somebody who's wanting to build that muscle of developing strategic partnerships, even with, you know, maybe it's not the city in New York, but maybe it's a, you know, a medium sized city that just completely blew their mind that that would even be possible. What can you share with our listeners who are maybe haven't yet leaned in as much as they could to strategic partnerships in terms of growth? What have you learned what contributes to success? They're?
John Shegerian 31:54
Great question. Think big, think big, and act big. And even though we're relatively poor, a small brand, compared to Tesla, or Apple, or Microsoft, or Facebook, or one of these trillion dollar brands, let's just say, we, you can make a big impact, if you think big. And what I mean by that is I gave you our strategic partnerships, which was a lot of our client base. But our strategic partnerships, on the other side of the business, are potentially even more valuable for your social entrepreneurs, that want to grow a business and make an impact and make a difference at the same time. Let me explain what I mean. We had an all in moment, in 2008. My partners, including my wife, who's my partner, traveled the world with our engineers looking at what was then the state of the art, best of breed shredding system for consumer electronics. They didn't find anything they liked after traveling through 17 or 18 countries, from Japan, to Germany, and everywhere in between they went, so we decided to build it ourselves. Now, our bankers believed in us, our investors believed in us but if we missed, we put all our money into this one big shredder in Fresno to start with. That was our beta test. And if it missed or didn't do what it was supposed to do, which is create a faster throughput of volume, and also cleaner commodities. But this cleaner commodities are more valuable to the smelters around the world. We were going to be out of business. Luck, as luck would have it. It worked. And what did that do? We created something that no one else had created before. So we got approached by a company named ls Nico, copper. ls Nico copper is a partnership between what is the LG family the COO family from South Korea, and Miko, Miko does no longer exist as a predecessor company in Japan, named JX, which is the largest metal mining company and energy company in Japan. They own the second largest copper and precious metal smelter in the world in South Korea. And they approached us to become a strategic strategic investor, sit on our board, put in a huge investment $10 million for us what was very huge for small and growing company. And more important, they would then take all of our printed circuit boards which contain precious metals, copper, and lead and other trace elements. They would we would ship them all to South Korea, and they would melt them down and then sell them to people who wanted to buy them those materials and put them into new products. Well, we thought this was great because we needed growth capital, we wanted to have a home for this, we wanted to get rid of all the brokers in between. And we took their investment, they they've sat on our board since 2009. And 13 years later has been one of the greatest partnerships we could ever have. Because why it created something that was very appealing. We didn't realize this at the time. But the unintended benefit and happy accident that it created was it created what we call now radical transparency toward downstreams. And as luck would have it, and faith, radical transparency has become one of the pillars of both impact investing, circular economy, and great ESG behavior. And so they did that investment. And then our potential clients and our existing clients loved us even more and rewarded us with more business, because they knew exactly where our materials going. It wasn't just some sort of paper trail. They knew they put millions in that these folks said on our board of directors, and that they had a say so about the future of our company that then was followed. That paradigm was then replicated, again by us with Alcoa one year later. So in 2010, Alcoa did the same type of investment and sat on our board and took all of our aluminum, creating more radical transparency to our downstream. And then 10 or 11 years later, in the January of last year, a gentleman named JB Straubel, who happens to be the co founder of Tesla with Elon Musk started what has now become the largest battery lithium ion battery recycling company in the world. And he made a similar investment. And he himself sits on our board of directors. So what we've created is the strategic partnerships for our downstream materials that have created this radical transparency, that not one other recycler on the planet has. And it gives our current clients and our potential clients a tremendous peace of mind, and so much transparency on where their materials are really going. They continue to reward us with more business. And it no one else has replicated it. And it's become really the standard for the business now. And it's allowed us to not only survive, but thrive in all these years.
Paul Zelizer 37:28
What a great story, John and listeners, I hope you'll take that idea those examples of strategic partnerships and put them in your pocket and put them into use in your business, because that's such a great way to grow a business like this. So thanks, Tom, for those stories, going in a slightly different direction for a moment, John, after decades in the space during all this incredible work at very significant degrees of scale, you've decided to write a book about some of these great examples. Tell us a little bit about that?
John Shegerian 38:05
Um, well, you know, I've been very, very lucky. And one of one of the most recent book we wrote was called the insecurity of everything. And that became a very important topic to us. Because as we were growing a business that was doing great for the environment, we also had sort of an aha moment during the journey, that if we could see shredded trucks all across America, shredding data on paper, who is going to be destroying in a responsible way, like shredded, those are responsibly? How are we going to responsibly destroy the data that's contained in our growing amount of hardware items? So when we started this business, as I said, e waste was the fastest growing solid waste stream on the planet. But if you fast forward 1718 years later, how do we become the fastest growing solvation by an order of magnitude of three to five times? That is a little bit incongruous with the growth with the with the birth and the growth of the responsible recycling movement, but not really, because what's happened is the Internet of Things has outstripped the recycling movement. And so now you have wearables now you have evey cars becoming computers on wheels, and our white goods now having hard drives in them. So they can tell you when your refrigerator now is out of milk and reorder it and have it delivered to your house before we even get home. And then you have the Advent and the rise of ring, and nest and all the gadgets that we have for our smart homes. So you have electronics that become ubiquitous to our lives. But one of the things that we forgot, first we forgot that we should be responsible, responsibly recycling these materials to make a better planet. So we got that down. But what we started forgetting Wait a second, if I just give my cell phone when it comes to its natural end of life? Or when I want to get a new one, if I just put it up on Craigslist or eBay, is it really wiped? Is it really getting sanitized? Who's buying it from me? And what are they doing with any information that still can be residual on that item. And that goes for people who return the latest model cars to their leasing agents that now have all their downloaded material from their tablets, or their cell phones, that goes for rent to cars that download your materials because you opted in by accident while you were fumbling with the radio system. When you rent a car that now has all the info from the last 30 drivers stored in its hard drive. What happens to this data, and what happens to the data on a copier or fax machine in a healthcare facility, a hospital or doctor's office when when the facilities manager said I just was trying to save money. So instead of paying X amount of dollars per pound to the responsible recycling down the street, I gave it to the no fee, recycler, who just put picked it up, put it in a container. And then by the way, sold that container to the highest bidder off of our shores? What happens then to the data that's contained in all our old hardware?
Paul Zelizer 41:24
So the book goes through some of these, like how to do that skillfully? And what to even pay attention to in this internet thing? Yeah, great, right.
John Shegerian 41:35
I mean, it's one thing to spend a lot of money on software solutions to protect your family, or your organization, or your publicly traded or privately held company, from the bad guys, the cyber criminals. But unfortunately, as we know, now, the cyber criminals are winning this war, when we were little kids poor and our parents said crime doesn't pay so don't get involved. Unfortunately, when it comes to cybercrime, that all that is doesn't hold true. In 2015, the cyber criminals made away with about $3 trillion in assets around the world, that number has jumped in 2021 to $6 trillion. So people who are spending good money on protecting themselves or organizations, their families with good software solutions for cybersecurity reasons, but are misappropriating or miss allocating, even if it's benignly their old hardware and electronics, and it gets into the wrong people's hands, that there could be a disaster that comes from that misappropriation, I'll be even benign, you people have to be more aware of where all their old hardware is going nowadays.
Paul Zelizer 42:49
And listeners, we'll put a link in the show notes, so you can go check it out. So John, you've been at this a long time. And I can imagine in the current context, you know, there's a lot going on, y'all have grown fabulously and congratulations, by the way, and building something just incredibly impact the largest company or one have in the world, these incredible partnerships. I didn't say that before, but just like a big high five for creating something. And that kind of scale in such a impactful industry. I just just think you and I kind of have a sense of you. You're not like just going to put your feet up on the coffee tables there. I worked on like the world demands, but we got a good thing going we're done. Like, like, that doesn't seem like the job that I've met, right? So like, give us a give us a like coming attractions like what's on your radar, you look ahead three to five years, both in dri or anything else that's like on your radar that you're saying, Okay, we're doing great. And I still wanna I still got some things I want to work on. Like, what are some of those things? Well, it's
John Shegerian 43:57
some of the things have to do with continuing to responsibly grow profitably grow. Era, because it's so exciting. Yes, it was 17 years removed from our start. But we still feel like a startup we still culturally, are we run the company like a startup. And it's just, it's an honor to now that the world and the United States has caught up with white Europe and parts of Asia. We're already on to this sustainability revolution, now called the circular economy and ESG transformational generational movement. It's exciting now to be in the middle of something when you're actually wanted. Back in the days when we were talking to people when we first started this business, except for some great brands like Best Buy and other great brands like that. Most people showed us the door quickly. Now everyone's excited about us coming in and helping them both environmentally, but also from a liability perspective with regards to protecting data. So doing more of that is definitely gets me out of bed in the morning but also are deploying our assets. This goes from my wife and myself, Tammy and myself, deploying our assets to follow what we started homeboy for two years at Homeboy Industries, doing more good with the assets we've been blessed with. So for instance, one to two or three of the companies we invested in, we invested with a great friend, we were one of his first investors in trajectory energy, which is a community based solar company out of Chicago, out of Illinois, and it's absolutely revolutionising community based solar opportunities. And John has just been a tremendous entrepreneur, and he's massively succeeding in his original vision and goals. And that's been an honor and a wonderful journey to be on with him. Another type of impact investing came to us of from a happy accident, I was hiring a speaker for our end of year fight on award that we give out every year at ESRI and our board dinner at the end of the year, and I was hiring a young man named Jake Olson. And Jake was at USC at the time, and he was the first blind person to ever play Division, one NCAA, double A football for the USC Trojans. So I met Jake in his lunch room with his roommate who happened to be agents as well. And, and we hired him to come speak at that event. But at that luncheon, what I was seeing Jake, and understanding his real life force, and his real energy, and his great attitude to attitude towards life, and living and never giving up. I asked them, both him and his partner and his roommate, Daniel, what do they want to do with their lives? And they said they wanted to start a internet business. And that democratized public speaking opportunities, because they said it was a very clunky industry, and they wanted to put it online, and make it really simpler and make it just a couple of touches. And, and I thought it was a good idea. And I wanted to do something different because I realized something horrible about myself, that I thought was embarrassing, and both shameful at the same time, that I was at that time. 54 or 55 years old, poor, and I didn't have any friends that were handicapped. And why How come no one on CNBC or Bloomberg, I started thinking to myself, is a tech entrepreneur that is missing an arm or a leg, or is blind or is deaf? Why does everyone have to look like gates or Zuck or Musk or bezels or Sara Blakely, it just didn't make sense. And I said to my partner, if you meet this guy and like him as much as I do, let's invest in these guys and support them. And he did, he fell in love with them as well. We've invested in them. And now, Jake Olson and Daniel Hyundai's run what is called our company's clothing gauge, you can find them at www dot let's engage.com They become one of the largest most successful speaker bureaus in the world far exceeded our vision or dreams when we first met. And it's really fun because I tell Jake, how does it feel to be the CEO and the founder of a fast growing tech company. And although we're not a unicorn yet, I tell him, I said, Jake, your turn is going to come in, because you're running Asuna corn. And I said, Now we're going to finally Bloomberg and CNBC, you're going to wake up that not everybody has to have two eyes and two years to be a successful impact entrepreneur, social entrepreneur, they can be missing certain parts, but they could still put their whole effort forward and still make the world a better place. And that's what Jake Olson is doing. And that's what Daniel is doing. And I'll tell you what, Paul, it's been beyond the magical journey with those guys. So we're going to do more of that investing, and keep focusing on how to be more inclusive, how to make the tent bigger, they 63 million people in America that are handicapped, and Jake's going to be one of their shining lights and heroes. And we want more people to come out of the shadows and not be marginalized, who have good ideas and go make the world a better place. And that's our goal to keep investing in those kinds of people.
Paul Zelizer 49:22
Not a beautiful story. And if Jake wants to be on the show, we'd love to offer him an opportunity. I'd love to amplify what you're all are doing with engaged. Just a little side note there.
John Shegerian 49:33
Person I'm sure he'd love it. I'm sure Yeah,
Paul Zelizer 49:35
feel free to put that out there too. So John, I can hang out with you all day. You've got such great information and stories and you're a busy guy and our listeners are busy people will certainly put a link to everything we talked about in the show notes, the booking, engage and Uri and all the great things that you're doing and have mentioned on the show. If there's something Besides, go check out the website and listeners go check out the website, start sending your phones and your laptop, dri make sure it gets into such a great company doing awesome work. So start sending your stuff there. If there's something you want to leave our listeners with about, you know how they can have more impact or what might help them grow their impact businesses. And we haven't talked about it yet some tips, some suggestion that can help an impact entrepreneur, really just make that shift and something clicked have a bit more impact. And to help a few more people in their space. What would that suggestion be?
John Shegerian 50:39
You know, I'm approached by a lot of young people who want to do great things and their ideas, many of their ideas are really great. But what I find as years go by, many of them never even start. They're afraid of failure. They're afraid of the journey they're afraid of. They can't raise money. They are they're afraid, fear gets in the way. And my My piece of advice is just do it. Just failure is is never final number one. It's just just really basically another lesson. And you'll be shocked to find out how many won't fail, how many will click, and there's no way we're going to make the world a better place collectively, and make the 10 Bigger, unless you just go do it. So just go do it. Step forward, take the first step doesn't have to be big, take a little step forward, then the next little step and just never look back. I guarantee you'll never regret the journey ever.
Paul Zelizer 51:37
Tom, thanks for being on the show today. It's been fabulous having you,
John Shegerian 51:41
Paul, totally my honor, happy to share my journey anytime. And I'm just so grateful for the Great show you're doing and sharing all these wonderful stories that the world should hear.
Paul Zelizer 51:52
That's my little part if I can amplify the world, you know, full of how this Harvard Business calls this the case study method of business education. And according to Harvard business school, learning from people who've actually made a real dent in the direction you're trying to go as a business person is the single most effective way to learn. So to do that, with impact businesses like that, I love doing it. And it also feels like the most helpful thing I can do in this time. So anyway, that's a little Why would I do this show. So that's all the time we have for today's show listener before we go you heard me just do with John if there is somebody who is in our orbit and has a great story we love to have listener suggested people in our community say here is a story that we can learn from. If you've got an idea, go to the website, go to our contact page, we have three simple criteria. John talked about transparency. They're literally right there. Here's what we're reading for are the lenses are the guidelines, we're using Tibet. If you say Check, check, check. Please send your ideas and we love it when our listeners make suggestions about the stories you want to hear. So for now, I just want to say thank you so much for listening. Please take really good care in these intense times. And thank you for all the positive impact that you're working for in our world.