Incentivizing E-Cycling with ecoATM’s Mark Bowles

December 20, 2013

JOHN SHEGERIAN: Welcome back to Green is Good, and we’re so excited to have Mark Bowles on with us today. He’s the founder and Chief Marketing Officer of ecoATM. ecoATM, if you’ve missed it recently in the paper, was just purchased by Outerwall for $350 million. Welcome to Green is Good, Mark. MARK BOWLES: Good morning, John. Thank you for having me on. JOHN SHEGERIAN: You know Mark, you have a fascinating background and journey. You’ve done a lot more than ecoATM. You’ve created a lot of disruptive technology, have lots of patents. Before we get into the amazing story of ecoATM, can you just please share your journey leading up to that great brand that you’ve just recently created? MARK BOWLES: Sure. You know, I was born in a strange family. We were Greek Orthodox Cajun hippies, I guess, and we owned a small restaurant and so it was entrepreneurial in that sense from day one and then came up to Silicon Valley in ’87 and worked for big companies for a while and then I saw how much fun the entrepreneurs were having and the startups and so in the mid-’90s, I started my first startup and I’ve been doing venture backed startups that I started myself for the last 20 years. I’ve done six of those and had some nice successes and some big smoking holes in the ground. It pays your money and you take your chances and ecoATM is one and it was probably the most fun. JOHN SHEGERIAN: Well, you’re a serial entrepreneur with massive success, but we’ve got the great story of ecoATM today and for our listeners out there who want to follow along as we have this wonderful discussion with Mark today, he’s got a great website. It’s not only great because it’s informative but it’s fun because he’s got a great video on it, a YouTube video, that’s very informative about how his disruptive technology works so go to www.ecoatm.com. I’m on it right now while we’re chatting with Mark. I encourage you to go there also. Mark, so talk a little bit about your epiphany, your aha moment. How did you even start and why did you start ecoATM? MARK BOWLES: Well, I was between startups trying to figure out what the next one would be and there was this survey in 2008 that I read, a worldwide survey, that only 3% of mobile phones were being recycled and I sort of did the classic me search where I asked myself why don’t I do it? And, the answer was I really didn’t know where to do it. I had some vague notions that you could put them in a donation box at the zoo and things like that and it really wasn’t motivated and incentivized and it wasn’t easy and so that was the epiphany is I knew these things had value and that if I made it convenient and immediately incentivized that lazy people, like myself, would probably respond so I guess my real insight was to how lazy people are. JOHN SHEGERIAN: Hey, listen, you found the common denominator and it works so talk a little bit about because you’re such a brilliant engineer and you’ve had so many patents and created other disruptive technology, what was the real special sauce here? Without giving away any secrets, what was your secret sauce though that was your technology that won the day here? MARK BOWLES: You know, because of the technology, we’re using technology here to clean up a problem that technology itself made and so I went to technical solutions but I’ve had some background in facial recognition technology and it hit me one day, what if we applied that to this problem? And it turns out it’s a really much bigger different problem than facial recognition in a lot of ways and the machine vision technology and artificial technology doesn’t easily adapt itself to this particular problem. A lot of people told us we couldn’t do it but it turns out it worked. It worked pretty well and then of course, the electrical inspection piece, that technology mostly existed but figuring out how to do that in a kiosk with 4,000 different models of phones that walked up also wasn’t trivial but the combination of the machine vision and the electrical inspection allowed us to automated that for the consumer self serve kiosk. JOHN SHEGERIAN: For our listeners out there, the process is so fun to watch on Mark’s website, ecoATM.com. He’s got a YouTube video, which is just so cute and it actually is very informative. So, people go up, they put their phone or tablet into your machine, and it produces instant cash. MARK BOWLES: Indeed. JOHN SHEGERIAN: So, that’s the incentive and that goes back to what you said. You wanted to create for good behavior an incentive so the instant cash is the incentive. MARK BOWLES: Right, and give the people what they want and then it turns out people like money but first, because my product is money but the inspiring the masses to participate. Everybody wants a clean planet. None of us want to live in a dirty place, but we all have different thresholds of when we’ll respond and I wanted to lower that threshold again, with the medium of incentive and convenience. Put it in your normal weekly path. It’s not a special trip to the zoo. It’s in your normal path at the grocery store or the mall and so you’re going to see it over and over and then you have those phones and you want to get rid of them, we’re going to give you money. These things have a lot of value. Why give them away for free? So, that was the original insight and it turns out most of that was correct and it works pretty well and we are, I think, inspiring the masses and as we roll out more and more machines, we’ll reach more and more people in collecting more and more phones and I think we will be a significant part to helping clean up this e-waste problem and changing our behavior. It’s a really massively wasteful product life cycle that we currently have with these electronics as we get new ones all the time and it doesn’t have to be because there’s always somebody downstream that wants to use the things you just got rid of so we’re just making a more efficient market connecting the people who are getting rid of stuff with the people that want it. JOHN SHEGERIAN: I love it, and we already talked about the wow number. You sold the company recently for $350 million, which is amazing, but let’s go backwards and talk a little bit about all the other great things you’ve done along the way here. When you talked about locations, to date, Mark, how many locations have you already installed this great machine in? MARK BOWLES: You know, at the end of last quarter, we were at 650. I think we’ll end the next month here at close to 850, and part of the fact was issued that they Outerwall are the folks that own Coinstar and Redbox and they are the world’s best and biggest at consumer self serve kiosks, massive infrastructure and lots of resources and capital and so forth and so our dream of, let’s just say, world domination with them is accelerated by this relationship because they can help us reach to things that we wanted to reach much sooner. Ultimately, our goal was to get these machines within 5 miles of 90% of the population here in the U.S. and that’s thousands and thousands of machines and this acquisition will help accelerate that and we even have talks of potential and a lot of interest, quite frankly, in the international markets, Europe and Asia and so forth, so we’ll look forward to that as well. JOHN SHEGERIAN: Got it, and then in all of those locations so far, approximately how many phones have you recycled since your inception? MARK BOWLES: You know, in April we announced that we had recycled a million phones and I think we will easily surpass another million here shortly. It’s accelerating very quickly as we add more machines and more people know about it and we collect more things so it’s ramping in lots of different ways so we’re moving pretty fast. I don’t know the exact number. JOHN SHEGERIAN: Right, right, but still, that’s amazing. What happens to the phones and the tablets that you collect and what kind of impact? When you go to bed at night, not only have you done good financially, which of course is the trademark of every great entrepreneur, how we all use as a scorecard, but also you’ve done good socially. You’ve done good environmentally so you get to check a lot of boxes and feel good when you go to bed at night. What happens to these phones and what’s the ultimate impact on the environment that you get to feel proud about every day? MARK BOWLES: The idea is you can do well and do good at the same time and I think one of the things we’re proudest of is that we take everything. Most phone collector folks are real valuable smartphones and so forth. We take anything and everything in our machine, at least almost everything. Even if we don’t recognize it, we’ll still take it and nobody else really does that, so 40% of what we collect is too old or too broken and we can’t find a secondary market for it and if we can’t, nobody can so then, 40% goes into materials reclamation. You get back the pressed metal, the platinum, gold, silver, copper, and so forth so about a dollar’s worth for each phone so it’s kind of a break even doing that but what drives our P&L is the 60%, which is the phones that we do find a second life for or even a third life. We’ve seen one particular iPhone come through our system three times with three different users and sellers so those things can second life and reuse is actually the best kind of recycling because you don’t have to build a new phone so the EPA numbers are what we use to calculate this and for every one of our machines, it collects enough phones annually and recycled them or has them in reuse, and we give environmental number on that, it’s equivalent to taking about 21 houses off the grid in terms of energy saved because you don’t have to build the new phones and mine new metals and so forth and about three cars off the road in terms of greenhouse gas saved so these little robot machines sold that march out of our factory here every day are going out and cleaning up the planet at some pretty phenomenal impact rates so I don’t know the aggregate number today but it’s a big impact and phones are not as nasty as some of the electronic appliances, particular TVs and medical assets and so forth and we’re becoming more benign every day as manufacturers get smarter about building them, but they’re still not good for landfills and so forth, so yeah, we’re proud of the environmental side of it and not only the environmental side. We’re actually putting millions and millions of dollars back in the hands of the consumers that would have otherwise been toxic landfill so that value goes back in the consumers’ hands when they avoid the landfill and they spit with stores that host our machines and it’s sort of a stimulus package along with some environmental benefit and of course, we win and the retailers win and so literally, it’s a win win-win-win kind of business and it’s fun that way. JOHN SHEGERIAN: Hey, you know we’re down to the last minute-and-a-half, Mark, and I want you to share two parts of your story. Personally, what do you do besides this great work to be green inside and outside of work and what are two or three pearls of wisdom for entrepreneurs out there? The young people are listening to you. You’ve done this now so many times with so much success. What are a couple pearls of wisdom for the next generation who want to be the next Mark Bowles? MARK BOWLES: Well, let me answer the first question first. Between work and trying to keep my three sons alive and out of the emergency room from accidents and from surfing and skateboarding and all that and not driving their mom crazy, that’s pretty much all I can manage besides surfing and I do mentor a lot of entrepreneurs and I speak with a lot of M.B.A.s and so forth and the one thing on the environmental side is I think most environmental marketing has skewed too far in the direction of guilt and save mother earth and so forth. Everybody agrees with that but not everybody responds to those messages. It’s overused. Don’t worry about why people recycle or why people buy green products to save mother earth. Just give them some other incentive. Most people in ecoATM’s case, I don’t care why they come down as long as they recycle and giving them a cash incentive, who cares if they’re doing it for the environment? We’re still collecting that phone and recycling it and so most people are just trying to survive and the more you put the value proposition in, not guilt and save the planet, but in things they can really respond to in their daily life just trying to get by, I think, is the direction to go more to get people to respond. JOHN SHEGERIAN: Great message and a great entrepreneur. Find Mark’s machines all over there. You’ve got to go on his website and learn where to go to ecoATM. It’s www.ecoatm.com. Mark Bowles, you are a truly visionary ecopreneur and living proof that Green is Good. MARK BOWLES: Thanks, John.