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College Dropout Turns Worm Poop into Millions

Fertilizer Company Grows Profits with Zero Waste

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What started back in 2001 as a simple scheme to make an organic fertilizer, TerraCycle is now a company that manufactures products out of your garbage. Juice containers, candy wrappers, e-waste – even used cigarette butts.

TerraCycle's owner, Tom Szacky, aims to eliminate all the world’s waste. You might think that goal is seems too idealistic, until you realize he’s making a killing growing his ideals into a multimillion-dollar global enterprise.

“When you look at the global garbage problem, it’s important to realize every object we buy will one day become waste," says Szacky. "That’s where we end up with this monumental issue: 5 billion tons of waste a year.”

Szacky's company simply collects these materials and builds new, high-quality consumer goods out of them like new plastic bins, packing materials, shopping bags, toys, and office supplies. Because, says Szacky, “If you can use garbage as a raw material then that’s not really garbage at all.”

Born in Hungary under a Communist regime, Szacky emigrated with his family to the U.S. when he was a child. “The idea of entrepreneurship just wasn’t a possibility. [But] I got into Princeton…so I knew I had to do something important.”

On a lark, in 2001 Szacky and his Princeton roommate started feeding cafeteria leftovers to an army of earthworms. The worms ate the food, and the pair discovered that the worms' waste – worm poop, or liquid compost (the more technical term) -- was an ultra-effective garden fertilizer. “At one point we had over 10,000 worms in buckets in our room. People really thought it was disgusting!” he says.

The duo knew their fertilizer was good, so they dropped out of Princeton and decided to focus full time on their idea. With no money for packaging, getting it on store shelves was a challenge. “We had to think differently,” says Szacky. So they began bottling their produce using old soda bottles collected from recycling bins.

“We realized that the No. 1 seller of fertilizer in this country was Walmart (WMT). So we just started aggressively calling Walmart,” Szacky says.

But with no factory or bottling system, they decided to turn to local schools to send in their used soda bottles and it worked: Szacky and friends hand-bottled and labeled over 100,000 containers of plant food and in the process, unwittingly created the world’s first product both made from and packaged entirely from waste.

Though the team got help from some business contests and investors, Szacky eventually turned most of the funding down, never compromising his vision to do things his way.  And it paid off.

The next big order was from Home Depot (HD) and now, over a decade later, TerraCycle has grown into a company with annual revenues of over $20 million. In particular, TerraCycle’s Bottle Brigade program, where schools and communities can send in recyclables for cash, now operates in over 26 countries around the world.  

On a recent business flight to Mexico, Szacky describes looking down at the bag of chips the airline provided and seeing the Terracycle logo. “I sat back and I thought, wow, we’ve really accomplished something. We’ve created impact.”

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Video produced by Jessica Ashford; co-produced by Emily Sharnhorst. Production by Michael Manas, Richard Rella, Josh Kesner, Maryann Vanderventor and Conor Olmstead. Edited by Sean Elms. Graphics by Todd Tanner and Adam Saul For Yahoo! Studios. Executive Producers: Russ Torres and Peter Gorenstein.

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