7 Tips for Social Entrepreneurs: an interview with Tom Szaky

 In Centre News, Guest Blogs

Guest Blog by Liepa Olsauskaite, Marketing Specialist working primarily in the area of circular economy

Tom Szaky, the CEO and founder of TerraCycle, a global leader in recycling hard-to-recycle materials (think cigarette butts, dirty diapers, coffee capsules, etc.), is a role model to many aspiring social entrepreneurs and a living proof that one man’s garbage is another man’s treasure.

A few weeks ago I was lucky enough to connect with Tom in person during a live Q&A session I attended as part of an online Diploma in Social Innovation program I’m taking through the UPEACE Centre for Executive Education. Tom joined us for a webinar in the course Tackling Finance in the Social Sector: from fundraising to impact investment, and I was amazed by his honesty, grit, enthusiasm and down-to-earth earth attitude. In the hour we spent with him, Tom shared truly valuable insights about innovation, failure, resilience and what it takes to be a successful entrepreneur.

Beyond TerraCylcle, Tom is also the founder of the world’s first shopping system delivering products in reusable packaging, Loop. Szaky has written several books focused on sustainability, including “Revolution in a Bottle,” “Make Garbage Great Again,” “Outsmart Waste,” and “The Future of Packaging.” He is a heavy hitter in the field of circular economy and has received numerous social, environmental and business awards from the United Nations, World Economic Forum and Environmental Protection Agency.

Operating in 21 countries, TerraCycle has grown in three major areas for 18 years in a row now, looking at people, revenues, or partners. Even during a global pandemic, TerraCycle managed to maintain profitability and did not have to lay off any single person. What is their secret?

Reflecting on the conversation I had with Tom Szaky, I’ve put together 7 tips for social entrepreneurs that stuck with me. Some of them might really surprise you!

1. Forget about your mission

If you are a social entrepreneur, your mission defines why you’re in business. It gets you up in the morning and motivates you to overcome each set back and failure. When discussing his most important lessons learned in social entrepreneurship, Szaky confessed that if there was one thing he could do differently, he would choose not to lead with his mission. This surprising advice has to do with approach. Tom meant that you should approach potential clients or investors with a focus on the underlying business questions — What drives profit? How your solution will help the client achieve more of their goal? If it is hotels, fill hotel rooms, if it is product, sell more of it.

Szaky says that if the client agrees to work with you because it is “the right thing to do,” it won’t work! If a client is only working with you because it is ethical and you have nothing else to offer to serve their core purpose, then, mission or not, your idea will likely get discarded along the way. If it’s all about your mission, it serves your purpose, not theirs.

2. Standardize and build resilience

Szaky believes in standardization. By keeping strict guidelines and practices across the 21 countries, cultures and distinct contexts in which they work, the company is able to maintain focus, grow globally, and create a consistent stream of revenue that helps to survive in times of uncertainty. Every time, TerraCycle makes a change, that change is reflected globally. If an idea or a process cannot really play in all of their markets, they just skip it.

3. Focus on the missing link

Social entrepreneurs are often described as driven, creative, committed and hands-on. This last piece is what Tom Szaky believes can get in the way of achieving impact. Social entrepreneurs often want to do everything by themselves, which he sees as a “recipe for staying small.” You simply cannot do it all yourself!

Szaky advises to find the missing link, and fill in only that piece of the puzzle. For example, when TerraCycle decided to launch a program for recycling dirty diapers, they outsourced most of the R&D, logistics and processing. There were already others out there doing these pieces well, so why reinvent the wheel? They also did not do the marketing all by themselves and instead partnered with a diaper brand to piggyback on “the credibility and capability of their megaphone which is bigger than Terra Cycle will ever have.” TerraCycle just filled in what was missing – connecting the dots between all the players to allow for a more circular system. Essentially, Szaky said, they just spun the supply chain around, allowing them to test the innovation at low cost and increase their chance for success.

4. Think big, innovate fast

A quick Google search tells me that innovation is “a new idea, creative thoughts, new imaginations in form of device or method.” When asked about the innovation process for TerraCycle, Szaky outlined three steps and explained why they were important to his business:

  1. Figure out what no one else is doing. According to Szaky, not having competition allows you fail without major repercussions and to have high margins;
  2. Assess market size. Szaky pushes you to ask yourself if the problem you are trying to solve is big enough. Thinking big attracts capital, and more capital often means an opportunity to achieve greater impact;
  3. Iterate. Iterate. Finally, Szaky puts high importance on testing. Every idea that comes out of TerraCycle has to be tested in 30, 60, and 90 days and then iterated and improved.

5. Get feedback – even when it hurts

Feedback shows you if things are going in the right direction or need to be adjusted. When presenting innovative ideas to investors and potential partners, the TerraCycle team asks for all the reasons their innovation may not work. According to Szaky “the best feedback by far (is) to be able to really refine that idea into something that is truly spectacular.”

6. Invest in failure

As painful as bad feedback can be, failure is usually worse, but it’s an important part of life. Szaky encourages you to overcome the negative feelings by looking at failure as tuition in the school of life: “You pay and you accomplish nothing other than learning. You don’t build anything in the class, your homework is never seen by anyone than your teacher. So, you are not being productive per se, but you are learning, and you are paying money for that learning.” The more innovative the idea, the more mistakes and failures are likely before the idea can truly reach fruition.

7. Embrace your inner American cowboy

Social entrepreneurs often deal with incredibly difficult issues and, at times, those issues are worsening even as they work to solve them. This constant uphill battle can be exhausting, and even debilitating. In order to keep going, Szaky suggested that every social entrepreneur should have the optimism of a crazy cowboy baked in them to resort to in difficult times. It is something that he, as a Hungarian, has observed in American culture and wished for his team and the world. “If I can encourage anything it is really to create that optimism and to look at every negative as ‘what can I learn? How can it be an opportunity not a failure?’”

Special thanks to Professor Shelly Galvin who invited Tom to join a virtual Q&A session with students just like me, pursuing an online Executive Education Diploma in Social Innovation at the United Nations-established University for Peace. If you are interested in enrolling in one of the online courses, you can find more information here or reach out to me with any questions.


Liepa Olsauskaite is a contributor to the UPEACE Centre for Executive Education blog. She is a marketing specialist, working primarily in the areas of circular economy and social impact and is currently pursuing a Diploma in Social Innovation at UPEACE. 

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