Safely Recycling Electronics with Riduvit’s Leo Raudys

March 19, 2014

JOHN SHEGERIAN: Welcome back to Green is Good and I’m so excited to have my friend on as our second guest, Leo Raudys. Leo is the Founder of and the social entrepreneur and conscious capitalist behind Riduvit. Welcome back to Green is Good, Leo Raudys. LEO RAUDYS: Hi, John. Thanks for having me on the show. I appreciate it. JOHN SHEGERIAN: Hey Leo, even though I know the story, and I’ve known you for many years now, I want you to share with our listeners who Leo Raudys is, where you’ve been, and how you’ve got to become now a conscious capitalist and a social entrepreneur, really changing the world with your great new company, Riduvit. LEO RAUDYS: Oh thanks. Yeah, you know, there’s a whole lot to say but I’ll just boil it down to the essentials. I’ve spent most of my adult life in the environmental protection field, primarily on the regulatory side but I moved over into the private sector about five or six years ago to focus on some trends that I thought were pretty compelling around electronic waste and the need to more properly manage all that stuff that we’re generating as a culture so I spent just quite a bit of time, again, on the regulatory side, working in policy, helping to make the world a better place and went on to do I think some interesting things on the business side and that leads me to where I am today, decided to found a company that focuses squarely on trying to help businesses make it easier to recycle electronics. JOHN SHEGERIAN: Also, let’s be honest here. You’re a very humble guy. I’ve known you for years. You’re a great friend and I’m so excited to have you on because your new business has so much to offer our listeners out there and around the world but before we get there, you were one of the big guys. You were the Head of Environmental Sustainability at Best Buy and I don’t want our listeners to not know that because that’s so important. You were both on the public side, a very integral part of one of the most successful takeback programs in all the world, actually and now you’ve come to this point with Riduvit. LEO RAUDYS: Yeah, thanks. My time at Best Buy was extremely rewarding. I just worked with some amazing people and learned quite a bit but I thought we did some pretty nice things and I look back on that time very, very fondly. JOHN SHEGERIAN: Now you’ve done those two pillars of your adult life, the Best Buy experience on the corporate side, your public policy work prior to that and the public service work you did. What was the aha moment to make you create Riduvit? And before we go into that, I want our listeners to go to your website. It’s beautiful. It’s so well done and it’s also spelled really differently. It’s www.riduvit.com. Share that epiphany moment or how that aha thing happened for you. LEO RAUDYS: Yeah. Well, let me first just tell you what it is, which I think will help you sort of set the stage. Very simply, it’s an online platform that makes it easier for companies to find very qualified and cost effective recyclers to recycle electronics and ITS and the key word there is responsibly and when I talk about electronics and ITS, it’s typically what you would think of, computers, mobile devices, TVs, stereos, pretty much anything with a chip or a board in it is the best way to think about what we cover but as far as how I came to this idea, over the last five years, as you mentioned, I’ve been deeply involved in efforts to make it easier for consumers to recycle responsibly and again, responsibly is the key word because, as you know, too often that’s still not the case but even though it’s gotten better over time, there’s still a lot of room for improvement on the consumer side of things but on the business side of things, it’s still an extraordinarily confusing landscape. It’s unfortunate but it’s still too hard for companies to find reliable, responsible recyclers that are also cost-effective and the funny thing is, it’s kind of a paradox of choice out there because there are hundred of recyclers on the market and companies have a hard time making the right choice because there are so many so they’ll either make a wrong choice or they won’t make a choice at all and either one of those choices, in my opinion, is a risk. What I did was started doing some research in the market and pretty quickly found two things to be true and we found these things to be true over and over and over again. First, we figured out that companies just don’t understand what third party certification means when it comes to electronics recycling or why they should even care and specifically, I’m talking about e stewards and R2. These are the two third party certifications for electronics recycling so just a fundamental lack of awareness and understanding. Second is it’s apparent that very few people understand how the industry has been changing over the past few years and why those changes have improved things, both on the security side -When I say security, I mean both data and environmental- but also on pricing so as business models have evolved, as capabilities have evolved, as companies have gotten bigger and more sophisticated on the recycling side, it’s pretty clear that the companies that need those services really haven’t kept pace with that so what does that mean? It means that companies who need the recycling service are not getting the help that they deserve and they’re probably paying too much for it so based on these two observations, it’s led me to conclude that there’s a pretty significant marketing opportunity out there and it centers around just the notion of simplicity. I know you’re a fan of Richard Branson. he talks about complexity being the enemy and specifically, there’s this great quote that he has. He says, “Any fool can make something complicated. It’s hard to make something simple,” and I completely agree with him and it absolutely applies to this problem so I decided to do something about it . I took something that’s way too complicated for companies and I boiled it down to its simplest elements and those are service, risk, and cost. JOHN SHEGERIAN: That is great so let’s talk about that. What are the costs of using your great website? For listeners who have just joined us, we’ve got my friend on, Leo Raudys. He’s now an entrepreneur who has started a website, www.riduvit.com. Talk a little bit about the costs of service and what you’re providing with this great website. LEO RAUDYS: Well, it’s free to use and that’s part of the beauty of it. If you’re a company that needs to find a responsible recycler, you can use it for free to get connected with companies that I think are the best in the business so no commissions, no membership fees. The ultimate cost of a recycling program is going to depend on a number of things so you can imagine if you’re a company that has a load of electronics, whether it’s servers or iPads or devices, etcetera. Based upon where they are and what they need and what that material is, it’s going to cost them X or Y or Z but the cost to use the service to get in touch with those recyclers and to find the best in the business is free. The way I look at the value that we’re able to provide companies that use us is they can essentially take comfort in knowing they are working with recyclers that have been vetted and we have all their certifications on file. I’ve visited the facilities and I know the people very well and for companies that have a lot of other things to do. They’re running a business. They can’t necessarily afford the time or the energy or the money to do that vetting so we do that for them, essentially for free. JOHN SHEGERIAN: This goes back to your history though because both as a regulator and a business leader, this is sort of the convergence and culmination of all of your experience in that you know the companies that you’re pointing people to. You also know the pitfalls and the real bad things that could happen if people recycle their electronics incorrectly. Can you share that a little bit? Because it used to be all about the environment and it still is in many ways, Leo, but can you share a little bit about what’s going on now with regards to data protection and whether you’re the person on the street or a government agency, a small company, or a big publicly traded company that warehouses lots of information for lots of your clients. How does this all play into the great model that you created at riduvit.com? LEO RAUDYS: Yeah. Thanks. I definitely lean on my experience as a past regulator and enforcer of regulations to think about how I approach this business. In the case of electronics recycling, this is just a huge issue so if I go back to the time that I spent as a regulator, I can tell you that I’ve seen the good. I’ve seen the bad. I’ve seen the ugly and everything in between and the truth of the matter is at least in recycling or any business, there are good actors out there and there are bad actors out there and then there’s just a whole lot that’s in between and unfortunately, when it comes to recycling electronics and ITS, the margin of error is extremely thin. You mentioned data security issues. That’s just a huge risk that companies are able to manage. particularly today. There is no excuse for taking risks with customer or company data by improperly recycling or liquidating old products so just think about all the news around data breaches lately. It’s only going to continue and the sad fact is that cyber criminals are always going to find the easiest ways to steal your data and the analogy I like to use is if you leave your door open when you leave for work in the morning, you think about that in the context of improperly recycling or liquidating electronics. It’s like leaving the door open and it’s going to leave it open to trouble and eventually it will walk right in and it’s going to do something bad. JOHN SHEGERIAN: Talk a little bit about the possibilities. When you were envisioning Riduvit, who are your potential target markets that you’re looking to guide the right way and advise the right way in terms of responsibly disposing of their electronic equipment and waste? LEO RAUDYS: Yeah, well, the universe can potentially be pretty broad. I mean any company that has electronics or IT equipment to recycle can use the service but for our purposes, the first year we’re targeting a handful of sectors. We’re targeting banks, law firms, retailers, the Telecom industry, and hospitality industry and the reason we’re focusing on those industries first is that they tend to have more dispersed operations and can probably more greatly benefit from the scale that we bring to bear so all the recyclers that we work with are national scale so we can cover the entire continental US so that’s our target market and I should also mention that we also provide this service for liquidating electronic products. We think about retailers, for example, that have to liquidate returned or damaged electronics and this could be quite a bit of material. There are liquidation channels out there that do that work and some of them are not third party certified, which I think is pretty important from a risk management perspective so we provide a service to responsibly and at a lower risk liquidate those electronics that have to go out the backdoor of a retailer. I just can’t imagine a CEO these days that doesn’t spend at least part of his or her day thinking about data security, how to avoid having a problem and I think we feel that our service is giving somebody some peace of mind. JOHN SHEGERIAN: Well, you know, if we all think about sustainability as a global issue but we say think globally, act locally. What’s more local than the cell phone or the iPad or the laptop, our possession as to how to dispose of our own things as concerned people correctly? Then when you start thinking about environmentally, as you say, responsibly, which I think is the best way of putting it, then thinking about our own personal data, you scale that up to any company that we all work for or are involved with or know, I think then almost everyone is a potential universe of clients down the road. Is that not true? LEO RAUDYS: Absolutely and it’s exactly for those reasons and it really does come down to those two compelling risk issues, the environment and data, and each of them presents its own particular set of problems and absolutely, we live in a global economy and all these products that we’re talking about, they move around the world as global commodities but the fact of the matter remains that all too much of it still moves around without the appropriate security or environmental control so if you can imagine, if you’re disposing of some sort of electronic device and it ends up in a place in the world that you don’t want it to end up in, bad things can happen, either to the data or from an environmental perspective because it’s just not being managed properly so it’s definitely a problem that’s still out there and I’ve seen this both as a regulator and in my work at Best Buy and I hope that we continue to make progress in some pretty compelling problems. JOHN SHEGERIAN: What changes are you seeing? What trends do you have visibility on that you feel will help make Riduvit even more compelling as the months and year ahead of us continue to move forward? LEO RAUDYS: I’d say it’s two things. One is that IT spending is still pretty healthy. One of the reports that I just read, well north of 400 billion is going to be spent worldwide on IT purchasing so that’s new stuff and new stuff replaces old stuff. That means that there’s a lot of equipment that’s going to need recycling so I think it just feeds the overall growth and it’s already a pretty large recycling market. Then the second one is what we’ve already been talking about, which is increasing emphasis on data security so I believe that there are going to be many more companies out there asking a lot harder questions about where their electronics are going and who’s handling them and I think in years past and maybe even months past, many companies could get away with just doing what they would normally do. I just don’t think that that’s going to continue. I think there’s a much greater demand for data security and transparency around where things are going and I think that’s just going to drive more business our way. JOHN SHEGERIAN: Leo, last week in Washington D.C., there was a hearing on electronic waste. One of the senators held a hearing. Can you share a little bit about what’s going on with the federal government, the GSA and this issue of cyber security around electronic waste and, again, responsible recycling of electronic waste? What’s the connection between what’s happening with the US federal government and cyber security and what Riduvit is doing and wants to continue to do and to grow with? LEO RAUDYS: I think at a policy level, things are moving forward slowly in bits and pieces and unfortunately, we haven’t been able to land on a national regulatory framework for e waste recycling. I think there are some protections in place but I think pretty much anybody who knows anything about this area believes that more can be done, that there needs to be a national framework, similar to what’s happened in half the states in the United States so the hearing once again was an opportunity to hear about what’s happening on a policy level to get a handle on control and where this stuff is going and making sure that it’s responsibly recycled but the very interesting thing from my perspective is what’s happening on the cyber security side so the federal government issued a cyber security framework a few weeks ago that they’ve been working on for quite some time and it’s a fairly simple approach, I think, and it’s just basically a framework for managing cyber security risks. What I was very happy to see was that the framework specifically called out the need to have formal approaches for managing the disposal and recycling of ITS and so I think that’s going to move companies more and more in the direction of having formal processes set up and thinking about who they’re using on the back end to recycle these goods because it’s being called out as a potential security threat. JOHN SHEGERIAN: You know we’re down to the last two minutes here and for a budding and growing audience who wants to be entrepreneurs, who want to be the next Leo Raudys, who want to change the world for the better and make the world a better place. Any good advice on how to be more involved and how to be a conscious capitalist or a responsible entrepreneur? LEO RAUDYS: I would just say that you just have to pursue your passion with a tremendous amount of dedication and recognize the fact that there is really enormous amount of opportunity out there in areas that provide a significant social and environmental benefit so if you have a passion for that type of work, and you have an area of expertise that aligns with that, go for it and pour your heart and soul into it and I think you’ll find success and I think that’s true in any endeavor but certainly when it comes to developing businesses in a social environmental space. I think it really comes from a point of passion. JOHN SHEGERIAN: Right and that’s a perfect way to leave today and I’m so happy, Leo, you came back on Green is Good and now with your new venture and I can’t wait to have you back on to discuss how it’s evolving and how it’s growing and I’m sure it’s going to be a massive success and for our listeners out there again who want to use Leo’s great new website, please go to www.riduvit.com. Leo Raudys, you continue to be a sustainability superstar and are truly living proof that green is good.