When Do Partnerships Make Sense?by Tom Szaky on Wednesday, Jul 1st, 2009 ShareClick to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)How Terracycle is partnering with name brands to upcycle everyday goods. Have you heard of a company called FAB? I’m guessing not, and at the same time, it’s a safe bet you’ve seen their products. And depending on how old you are, you have been running towards or running away from them for years. And fast. FAB has licenses for a huge variety of today’s biggest pop culture brands: Paul Frank, Hello Kitty, Hannah Montana, Nickelodeon, Hello Kitty, Disney, Marvel, and on. From backpacks to snow globes to “novelty clocks,” their collective licensing and manufacturing might create an enormous amount of trinkets that will likely end up in the trash months after purchase. And we’re now partnered with them. Yes, as of April 27th, TerraCycle and FAB are working together. We’re great at getting post-consumer “waste” via our brigades and FAB is extremely skilled at making quality products at low prices, an ideal sweet spot we seek to hit with everything we make. They’ll be making messenger bags, backpacks, stationary, school supplies and home decor accessories for us, all out of what would otherwise now be sitting in a landfill somewhere. Upcycling new opportunities Yak Pak is a name you more likely know. They’re known for making everything from messenger bags to guitar totes for 20 years now. When it comes to making quality gear that has longevity, they’re among the best. Now they’ll be taking billboard material we collect and making messenger bags and backpacks out of them. With 10,000 tons of vinyl billboards discarded in the US alone every year, we’re excited about the challenge, the opportunity. (You can also check out an article Nick wrote about the partnership a couple weeks ago here.) Noticing a theme yet? How about that we’re in talks with American Greetings to make Terracycle Holiday by American Greetings. Just about any place in North America you see greeting cards and the things that go with them, they’re there, deeply ingrained in the gift oriented retail landscape. In this case, we’d link them to waste we source and collect, and they’d turn it into bows, ribbons and gift bags. Now, people will have a chance to choose something other then reams of virgin material for something that in most cases gets discarded shortly after use. What’s the connection? What connects all these partnerships is that we know what we’re good at: branding, materials science & repurposing, and post consumer collection programs. Anything else, we can do it, but there are often others that do it better. Why expend a lot of energy trying to up our game in those areas, when we can instead focus on maximizing the amount of “waste” we collect, making the most people aware of these options, and benefiting thousands of people who collect for our brigades? But let’s step back for a moment. What are your thoughts on this? By making partnerships with other companies, are we becoming more dependent on others to make what we sell? Are we, as they say, “selling out” by partnering with companies with no green characteristics themselves? Or is this a good idea, maximizing our respective strengths for maximum impact? Assuming it is, who else do you think we should be partnering with? Tom Szaky is the Founder and CEO of TerraCycle, Inc. a company that makes eco-revolutionary products entirely from garbage! TerraCycle, since its humble beginnings in a Princeton University dorm room, is committed to being a triple bottom line company. Tom at the ancient age of 19 learned about composting with worms. The concept of using tiny little worms to turn food waste into a powerful, organic fertilizer fascinated Tom, who was appalled by the amount of food discarded by his campus's cafeteria. Tom started TerraCycle with no investors from a friend's garage by building a Worm Gin where he could house millions of worms in a small area. He all but bankrupted himself and maxed out all his credit cards to build the machine. With the help of friends he would shovel pounds of rotten, maggot-infested food from the Princeton cafeterias. Without any money left over, Tom could not afford to buy bottles to package his fertilizer. That's when the sustainability gods smiled on Tom, who was up one night wandering the streets Princeton in search of an answer to his packaging dilemma. It just happened to be recycling night and Tom realized that millions of homes were putting billions of free bottles out on the curb once a week! That serendipitous moment set everything to follow into motion. Slowly he began to finance his infantile start up by winning business plan contests. Finally he hit the pay dirt! He won the million dollar grand prize at the Carrot Capital Business plan contest. However, the financiers of the contest wanted to move TerraCycle away from used bottles and away from it's environmental focus. Despite being on the verge of bankruptcy, Tom turned down the money. In the six years since then TerraCycle has grown to a multi-million dollar company that doubles in size every year. Still we are committed to our triple bottom line beginnings. Still making our products from other's people waste. Still based in an Urban Enterprise Zone in Trenton, NJ. Still a second chance employer. Find out how and why, here at triplepundit.com Follow Tom Szaky @triplepundit 2 responses Partnerships are a great way for TerraCycle (and other companies) to keep costs low and further popularize green products. By teaming up with companies that are not traditionally green, TerraCycle may be able to expand its consumer base. If partnerships are necessary to increase the ability for companies to create more green products for more consumers, then go for it! Terracycle should fully take advantage of their ability to work with a wide variety of companies so long as they stay true to their own values. Partnerships can be critical for extending a company’s reach by ‘partner-sourcing’ to add capability and consumer niches. But we see a lot of weird, inauthentic partnerships out there, too many. For-purpose and for-profit organizations can make great partners! I think that the most important dimension on which to assess potential partners is the alignment of each partner’s purpose with the purpose of the other. They don’t have to be the same- but they do need to be complementary. If there are merely ‘not conflicting’, that’s a missed opportunity. I’ve thought about the idea of authentic partnerships, and would like to invite others to come talk about them, at http://AuthenticOrganizations.com. Comments are closed.