What is the idea?The startup idea is to establish a company which shall collect recyclable waste from households and make recycled products. The startup will make products which can either be sold on its platform or other established e-commerce platforms for recycled products.
Market DefinitionWorldbank has reported some astonishing facts about global waste.
- a) Global solid waste generation will increase to more than 6 million tonnes per day by 2025 from 3.5 million tonnes per day in 2010.
- b) The waste from cities alone is already enough to fill a line of trash trucks 5,000 kilometres long every day;
- c) The global cost of dealing with all that trash is rising too: from $205 billion a year in 2010 to $375 billion by 2025, with the maximum increase in developing countries; and
- d) By 2100, it is estimated that the growing global urban population will produce three times as much waste as it does today.
Some of the important statistics about the recycling industry, as reported by perfectrubbermulch , across the globe are:a) The global recycling industry employs over 1.5 million people, making it a $160 billion a year industry;b)Switzerland has the highest recycling rate in the world with over 52% of its waste getting recycled.c) Austria comes in a close second with a recycling rate of 49.7%;d) Recycling rates in Australia are high with 95% of Australian households partaking in recycling programs.
Competitor AnalysisBecause of the sheer potential of the businesses in the area of recycling, various companies are trying their hands at doorstep or valet recycling. There is POM POM in India and Wastepoint in the US. There are startups like Hipcyle which sell the recycled products online. The recycled products are made from products ranging from paper, aluminium to tyres.
Pain Point & Target AudienceThe targeted customer market for this business is "Households". Households produce a lot of trash which is not being properly managed, and as a consequence, the trash never reaches the recycling companies. In addition to this, due to non-segregation of waste materials, hazardous waste is getting mixed with recyclable waste, thereby impacting our health. According to toxicsaction.org, "More and more of our everyday products contain toxic chemicals, such as mercury or PBDEs (flame retardant chemicals) which impacts public health and the environment".
Value PropositionCurrently, in most parts of the world the households don’t have access to services that can collect to trash for recycling and hence, most of the trash is dumped randomly. The startup shall aim to offer monetary incentives in the form of credit which can be used for buying recycled products from their platform.This will not only help in solving the problem of waste management but also help households to make use of their household waste.
Business Model The startup will collect the recyclable waste on demand from households and provide credit in return which can be used to buy recycled products from its platform. The startup should tie up with recycling factories to optimise its upfront cost and recycle the waste into products which could be sold online. The startup will monetize from the sales made through its e-commerce platform.
Way to marketThe startup will have to educate people about the benefits of recycling and the problems that it causes for the coming generations. People would additionally be tempted to use it because of the monetary benefit attached to the selling of waste. The startup will also have to tie up with various NGOs working in the space of waste management. If the startup starts in a country like India, it could tie up with the government initiatives in their country to gain traction. Many campaigns promote sustainability; the startup should consider being a part of such campaigns to gain traction.
The key to success of this startup will be the sale of recycled products from its platform. And with the model of giving credit for waste, it will automatically build a clear traffic puller for the platform. This ensures that the cost of acquisition of raw materials also becomes the cost of acquisition of the customer, which provides an upper hand to the startup.
MilestonesThe startup should target major cities in one of the developing countries and start from there. It should test and perfect its model with a couple of localities having a decent millennial population as they would have a higher propensity to use e-commerce platform. Model testing should be completed in between 3 to 6 months, and then the startups should expand in 3 to 4 major cities in the country in next 12 months. The leading indicator for the business model will be the amount of waste collected. And it should target to collect at least 10% of the city's recyclable garbage by the second year.
Investment Needed For PrototypeFor testing & building the prototype, pitch for raising 200K USD from angel investors or incubators. There are not many incubators who incubate recycling startups, but we did come across "Recycling Lives" which does it. There should be no office rentals or salary payout; the entire budget should be apportioned for customer acquisition and technology.
Team CapabilityYou would need a person with supply chain and logistics work experience to handle the complete segregation and material movement process. Having the second person with Environmental Science background will very well supplement the team.
Investors / Expert TakeWaste management and recycling is an area which is of concern across the world. There are countries which are taking care of such issues themselves like Switzerland and Austria. However, the developing countries are struggling with waste management problems and do not have the resources to manage it. The startup should consider reaching out to impact funds and celebrities that are endorsing sustainability for building investor interest.
According to Abhiroop Rishi of Fundamentum Advisors, an investment consulting firm that offers advice to High Net Worth Individuals for Startup Investments “ We have been looking for startups in the Socio- Tech field for some time, the market is very broad, and there are very few players as on date. It is a clean territory for new ventures to build a big business.” In case you want to build a startup on these lines, feel free to write to us at yostartups.com and we will offer you our support and guidance to scale this venture.
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