How Tom Szaky makes money off your cigarette butt and flip-flops

In ’s vision of the new economy, nothing is garbage. Not cigarette butts. Not dirty diapers. Not even used tampons.

Szaky, the founder of TerraCycle, a New Jersey-based garbage startup, has built a $24 million business around the belief that everything is recyclable. He’s convinced some of the world’s largest brands and retailers, including Procter & Gamble Co, Colgate-Palmolive  and Office Depot, that there’s value in spending to keep garbage out of landfills.

Now he’s seeking millions to help fund a bigger mission: making trash the star of a circular economy, where re-use is the norm. Inspired by the glass milk-bottle porch deliveries of yesteryear, he’s creating a durable consumer-recycling system. Think shampoo encased in gleaming stainless-steel capsules, ice cream packaged in thermos-like containers, coffee sealed in metal pods instead of plastic — all the packages to be carted off, sanitised, deconstructed and used again.

Szaky, 35, says major brand names have already signed on. He’ll unveil them at the World Economic Forum, the annual gathering of the world’s problem solvers every January — but in 2019, not 2018. First, he needs to appeal to the environmentally conscious mom-and-pop masses and raise as much as $25 million through a kind of pre-initial public offering .

For investors in the private company, one risk is Szaky’s expectation to lose money on research-and-development at least until Davos, when TerraCycle plans to unveil the products for sale starting in New York and Paris. On top of that, the company has a complicated business model driven by one key executive: Szaky. He’s a self-proclaimed “chronic overprojector” of revenue who survived an effort by senior staff to oust him before the company started earning a profit in 2011. Plus, the money part of being green could be greener. Last year, of $19.4 million in revenue, about $500,000 was profit, according to Szaky. This year it’s expecting $24 million in revenue, with just under $1 million profit.