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Betting on RecycleBank: The Next Big Thing?

| Monday March 8th, 2010 | 4 Comments

In the CleanTech space, solar may be hot, the future of the smart grid may be bright, but Ron Gonen, CEO of RecycleBank, is proving that recycling can be sexy too.

At its ECO:nomics conference, the Wall Street Journal announced its first ranking of the Top 10 venture-backed, clean technology companies. The survey “seeks to identify green companies that have the capital, executive experience and investor know-how to succeed in an increasingly crowded field.” CEOs from three of the ten firms—John Baumstark of Suniva, Cree Edwards of eMeter, and RecycleBank’s Gonen—were on hand at the conference for an elevator pitch competition titled “Uncovering the Next Big Thing.” After the pitches and follow-up questions, the audience voted on who they would fund with a hypothetical million dollars. RecycleBank won the three-way race with nearly half of the votes.

At its core, RecycleBank is a program that motivates people to recycle through rewards points—an average household can earn up to $400/year. RFID chips in recycling carts, GPS technology, and proprietary software largely automate the process of awarding points based on consumer’s recycling volume. Triple Pundit has eagerly followed the company’s development over the past few years. MBA students take note: the idea was born at and received seed capital from business school.

What is it about the business model that got corporate executives, venture capitalists, and entrepreneurs at the conference excited about recycling? According to Gonen, “people were looking at the economics of recycling incorrectly. The true value of recycling is not in the value of the commodity it is in the value of diverting from the landfill.” With billions of dollars spent every year landfilling recyclables, and RecycleBank fees coming out of these savings, the market potential is significant. Increased taxes on landfills would make the business case even stronger. Advertisements from the online store where customers go to redeem points provide a secondary revenue stream.

Pressed on the company’s source of sustainable competitive advantage, Gonen spoke of the 5 to 20 year contracts he signs with municipalities as a significant barrier to entry. With 50 U.S. cities under contract, including Los Angeles, Chicago, Houston, Phoenix, and Philadelphia, and service beginning in the U.K., Gonen is moving fast to capitalize on this first mover advantage. And though many of the big cities self-haul their own material, RecycleBank is simultaneously developing relationships with waste companies large and small. With the endorsements rolling in, raising the capital needed for expansion should be getting easier.


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  1. June 04, 2010 at 14:24 pm PDT | Greenco writes:

    This sounds like a great idea, and I'm sure many benefit from it and the savings per month outweigh the fees…..which would be what? On average, how much extra is it per month? I have read many articles but none talk about fees for subscribing residents or costs for cities that contract with Recycle Bank. The most I have figured out is that municipalities pay Recycle Bank based on $$ saved from diverting extra recyclables tonnage from the landfill. What about costs for retrofitting trucks with the computers and scales? Is that something that a hauler would have to take on? Or the city pay for for a hauler? What about lower income households that don't have computers to set up and maintain their accounts? According to surveys, they seem to be the demographic that have the least participation in the first place. Implementing a program that they have little to no availability to participate in isn't going to increase their recycling rate. Plus, most coupons, even though $10 off is a good deal, are usually $10 off after a certain greater amount is speant, limiting the use of the coupon, and ultimately, the actual reward amount earned.

    Reply Or REGISTER HERE if you are new.

  2. June 04, 2010 at 21:24 pm PDT | Greenco writes:

    This sounds like a great idea, and I'm sure many benefit from it and the savings per month outweigh the fees…..which would be what? On average, how much extra is it per month? I have read many articles but none talk about fees for subscribing residents or costs for cities that contract with Recycle Bank. The most I have figured out is that municipalities pay Recycle Bank based on $$ saved from diverting extra recyclables tonnage from the landfill. What about costs for retrofitting trucks with the computers and scales? Is that something that a hauler would have to take on? Or the city pay for for a hauler? What about lower income households that don't have computers to set up and maintain their accounts? According to surveys, they seem to be the demographic that have the least participation in the first place. Implementing a program that they have little to no availability to participate in isn't going to increase their recycling rate. Plus, most coupons, even though $10 off is a good deal, are usually $10 off after a certain greater amount is speant, limiting the use of the coupon, and ultimately, the actual reward amount earned.

    Reply Or REGISTER HERE if you are new.

  3. July 21, 2010 at 11:08 am PDT | Neiljrandall writes:

    As a waste manager in the Uk who has een approached by Recyclebank i am also interested in how their bsiness model works.

    I understand that the cost to anstall the measuring equipment on collection vehicles is between 30 and 45 usd and the cost to equip each bin is about 15 usd this represents a significant investment for the Local Authority.

    Reply Or REGISTER HERE if you are new.

  4. March 04, 2011 at 8:12 am PDT | Richard Bennett writes:

    How do you (the company) handle “the wet and the smelly “?

    … = approximately 25-40 %…of the total!

    Does your method sequester carbon? Mine does.

    Does your method create a material “that eats everything!”. Mine does.

    Does your material “hold water like a super efficient sponge?” Mine does.

    Cheers.

    Richard S. Bennett, founder of EARTHSEASON

    Reply Or REGISTER HERE if you are new.

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  1. March 08, 10 at 5:33 am PDT | Betting on RecycleBank: The Next Big Thing? |Triple Pundit | Green Company Report writes:

    [...] Go here to see the original: Betting on RecycleBank: The Next Big Thing? |Triple Pundit [...]

  2. March 10, 10 at 9:35 am PDT | Betting on RecycleBank: The Next Big Thing? « Perspective writes:

    [...] This blog entry is cross-posted on Triple Pundit. [...]

  3. October 18, 13 at 14:54 pm PDT | Today in Cleantech — GigaOM Research writes:

    […] honors are Solyndra, Suniva and eSolar. Fourth on the list is RecycleBank, a company that’s bringing reward program mania to recycling using RFID, GPS and software to automate the accumulation of points. The company hopes that […]