Twenty-three year old, TerraCycle founder, Tom Szaky, shoveled through 50 pound garbage barrels filled with pounds of maggots to get his company out of the dumps. Relating to the movie Shawshank Redemption, he is the modern day Andy Dufresne who “crawled to freedom through five-hundred yards of shit smelling foulness I can’t even imagine.” TerraCycle is worlds first consumer product where every part of packaging and product is waste. I had the opportunity to hear his amazing story in my Entrepreneurship class this morning. His startup story is compelling, very down to earth, and extremely inspiring.
A few key points that he empasized in regards to entrepreneurship:
“Make everyone believe” – If you are starting up a company, it is your job to make everyone believe in the vision. The better you are at this, the better your company will be. Evangelizing happens when asking for money from investors, hiring employees on stock, and keeping people inspired during bad times.
“Surround yourself with a great team” – This is a benefactor of making people believe in your idea. The better founders can make people believe the better talent they will bring on. Tom brought up a point in the companies history when they hired an experienced 55-year old employee from across the country with a family. This employee had not yet relocated, and slept on an aerobed in the office for 2 months before moving his family over. Making people believe and bringing on great people where two of Tom’s most emphasized points.
“Everyone quits” – Whether it is selling out for stock, going to the Bahamas for a week, or quitting on the way on the rollercoaster of a startup. Prepare for this by bringing in the best people possible, makes absorbing this easier to handle.
“Don’t drop out of school” – What do all entrepreneurs that drop out of college always say? Don’t drop out. Although he did admit an ivy league education is overrated, it is good to get an education.
“Being an entrepreneur is like being on drugs” – Life as an entrepreneur is a roller coaster. The highs are great but the lows are real bad. He contrasted a startup physique with working for a safe corporate job like JP Morgan, where there is a consistent high. When start-ups are going through low times: It is important to hold on, rehab, and inspire.
“Business Plans don’t mean anything” – Don’t worry about Business Plan’s. Being savvy presenting with PowerPoint’s and elevator pitch simplification is more important. A good team is also more important. He says, “investors would rather put money into a hotshot team with a poor BP then a poor team with a bulletproof BP.”
“Keep a laser focus on your desired goal” – Tom dropped everything when he started project worm, now known as Terracycle. He dropped out of Princeton, gave up a 20-year old party lifestyle, and focused specifically on his startup team and business to shovel college cafeteria waste to make a proof of concept for his idea.
“Wear your greedy hat” – Not talking about keeping company stock! This is in regards to being efficient with company resources. Point and case is Tom’s decision to have HQ located in Trenton, NJ. There “next to the bloods and crypts” he can receive efficient labor. Also, he believes in never paying for computers or office equipment. He says, “with companies like JP Morgan paying $100 to get rid of year old computers you should never pay for computers.” He hasn’t and has over 15 employees on computers.
“There is more lawyers than demand for lawyers” – His point was to take advantage of this. Should be able to receive this work for free or for very little stock.
“Put all eggs in one basket or you are cutting your idea short” – For a young entrepreneur, it only makes sense to invest all of your time, effort, and energy with a startup.
“If young, mistakes are fine” – Investors expect mistakes from a younger entrepreneur. Compare this to a 45 year old seasoned professional where they would expect a complete act. If you are younger, leverage this by not acting like you know everything. Generally, investors like to assist and expect mistakes from young entrepreneurs.
“Only Patent Fundamental Processes” – By posting patent to the public you lose your proprietary idea. All it takes is someone to look at the patent and change it by the smallest amount to steal your proprietary practice. It’s a better strategy to simply keep these practices secret. Also the very high cost in these makes these inpractical. The only worthwhile patents for Tom are “fundamental patents”. For him the only reason investing in a patent is if it could do something like give Terracycle exclusive rights to recycle Pepsi bottles.
Tom was only 23 and spoke like a seasoned veteran. He will be speaking in a seminar later today to the entire school. Plan on making his speech available via mp3.