Leading the Future of ITAD with Todd Zegers of Circular Integrity

July 10, 2024

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Todd Zegers, the Founder and CEO of Circular Integrity, is a passionate entrepreneur and most recently the global leader of Ingram Micro’s ITAD & Reverse Logistics business unit from 2015 through 2022. His experience in the ITAD industry dates back to 2003, when he left his post at a top Tempe, AZ based IT reseller to co-found GreenAssetDisposal, an ITAD company focused on serving F1000 clients worldwide. In 2009, after nearly six years of incredible growth, GreenAssetDisposal was sold to CloudBlue. Zegers became part of the executive leadership team and led the sales & marketing organization from 2009 through 2013, until being acquired by Ingram Micro in 2013.

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John Shegerian: Do you have a suggestion for a rock star Impact Podcast guest? Go to impactpodcast.com and just click Be A Guest to recommend someone today. This edition of the Impact Podcast is brought to you by ERI. ERI has a mission to protect people, the planet, and your privacy, and is the largest fully integrated IT and electronics asset disposition provider and cybersecurity-focused hardware destruction company in the United States and maybe even the world. For more information on how ERI can help your business properly dispose of outdated electronic hardware devices, please visit eridirect.com. This episode of the Impact Podcast is brought to you by Closed Loop Partners. Closed Loop Partners is a leading circular economy investor in the United States with an extensive network of Fortune 500 corporate investors, family offices, institutional investors, industry experts, and impact partners. Closed Loop’s platform spans the arc of capital from venture capital to private equity, bridging gaps, and fostering synergies to scale the circular economy. To find Closed Loop Partners, please go to www.closedlooppartners.com.

John: Welcome to another edition of the Impact Podcast, I’m John Shegerian. I’m so happy to have with me today, my old friend and great friend, Todd Zegers. He’s the President and CEO of Circular Integrity and he’s back to do another episode of the Impact Podcast. Welcome, Todd, back to the Impact Podcast.

Todd Zegers: Thanks, John. I appreciate it. Thanks for having me.

John: Oh, of course. Todd, we spoke about a year ago when you were launching your great brand, Circular Integrity. For our listeners and viewers who didn’t have the chance to see that episode, can you share a little bit about your background, how you got on this journey of working in the ITAD and asset management business and sustainability business and the transparency business and what brought you to the founding of and launching of Circular Integrity.

Todd: Yeah. Well, I definitely didn’t grow up thinking I was going to be in ITAD my whole life. It wasn’t even a term back then, right? Now, I got into it in 2003. I left Insight, a big IT bar here in Phoenix, Arizona. With all the Y2K spending, all the panic buying back then, obviously, there’s a lot of material getting put out and I saw a huge opportunity of three years life cycle after the Y2K hits, where’s all the stuff going to go? And I was just ready to go out and start my own thing. So, I had a partner of mine, and we got together and started a company called CARD, which is computer asset remarketing and disposal in 2003. Shortly after, we rebranded to greenassetdisposal.com because that was back in the day when you made your name, exactly what your business was, and your website, right? We built that. That was an ITAD platform 20 years ago. There was no online ordering, no online tracking, and no nationwide players so I stitched together a platform and brought together best-in-class partners in the US and some international ones to give my clients that single pane of glass. I was a partner model, so in 2008, the county wasn’t doing so hot, and looked to raise some money, CloudBlue was one of our business partners in Indianapolis and Chicago. We decided to make a deal so we sold the business to CloudBlue in 2009 and led inbound sales and marketing efforts for CloudBlue until we sold that to Ingram Micro in 2013. Shortly after doing that, Ken Beyer, the CEO of CloudBlue, took on a global role as far as eCommerce fulfillment logistics within Ingram Micro and I took over the reins of building out the ITAD business globally. So, from 2013 to 2023 basically, I helped expand and grow a really successful ITAD business at Ingram. I had a great team over there, a great organization, a great company. Obviously, Ingram was global so it was fairly easy for me to take and expand the business that aligned well with distribution and the reseller customers they had. I think in early January or February of 2023, I’m just at a point where it was – big corporate America has been going for a while and I was ready to start something new again and just decided to make the jump. I talked to my wife about it and said, “Listen, I’m going to quit, I’m going to go do consulting for a while and I’ll figure out and see where it takes me.” This switch was just shortly before you and I talked, right? I think we talked in April or May of last year or something like that. I’m still doing the same thing, figuring out as we go but I’m having a lot of fun. I think a lot of the vision I had of, going back to your point, is around circularity and transparency in the space, which I still feel is a lot to be desired. Now, there’s still a massive opportunity there, but the number of stakeholders if you look up and down or around the IT supply chain, the number of people who actually care about this industry and actually understand what the word ITAD even means anymore has really come full circle – no pun intended. But there’s really a lot of opportunities right there. So, I think everything I planned on doing when I left that I said I was going to do, all come to fruition and a little bit more. It’s been a lot of fun so far.

John: Well, for our listeners and viewers to find Todd and his group and all the great work they’re doing in circularity and transparency, and in the ITAD business, you could go to www.circularintegrity.com. Now, Todd, two things. I have the benefit of knowing you as a close friend so I know behind the scenes how successful Circular Integrity has become, and I don’t want you to give away any trade secrets or brand names or anything, but when we spoke, you were just about to launch this great vision that you have. What is the mission of Circular Integrity and talk about the journey as a newly minted entrepreneur in your next iteration. You’ve already been a serial entrepreneur over and over again with a lot of success in your wake, but this was a new venture at a new time with all these trends at you’re back in terms of radical transparency, circularity, ITAD growing, and reuse growing, talk a little bit about how this first-year journey has been and how successful you’ve really been in terms of – it’s almost being somewhat overwhelmed with all the opportunities that you’ve come up with.

Todd: Yes. So, the vision of working with all the stakeholders again from parts to components to the contract manufacturer to the OEM to the distributor to the reseller to the corporate consumer to the services and management companies to ITAD, e-waste, and all down the line, right? Those are all folks that I had planned on working with. The whole point of Circular Integrity is not only to help out each organization or companies in those verticals but also to connect them together with people who are doing things the right way. So, whether this guy over here is doing something great but he needs a solution in Japan or wherever else and I’ve got partners in Japan that he could be connected with who want to do things the right way, connecting those dots. So, I think a lot of the first three to six months was reaching out to people. I’ve known the business, trying to find out what their strategy is, what their journey is, and figure out how I can help and who I can connect them with to find the right partnerships to help accelerate their business. It’s been a lot of stitching together of that for the last 12-plus months. But in doing that, there’s been a huge need for a platform of source to connect buyers and sellers together but also to help corporate America, for example, who has multiple ITAD providers who want to not only do everything there right away and track everything right away but they don’t want to go to five different places to do business. They want to centralize that so one of the products we’re coming out with here soon that’s in a pilot phase right now is called Beautegrity which really enables both large corporate customers to do that type of service. Really, I think, the biggest opportunity for the platform will be in the IT reseller and the OEM and distribution space where clients are requesting and even requiring from their partners that they offer these ITAD services mainly because of ESG and for the man to report on all the circular aspect, Scope 3 emissions, etcetera, etcetera. A lot of resellers just don’t have a platform that enables that type of service to do all the traditional tracking and reporting or replacing through a website but also, obviously, the aggregation of all the environmental benefit data in the form of Scope 3 emissions. I think that’s where a lot of our big focus will be going on forward but we’re still getting calls every day from whether it’s a private equity company or another OEM or another reseller looking for help. So, it’ll be interesting to see if we have this conversation again a year from now of what our organization looks like.

John: Oh, we’re going to have this conversation this time next year. So, simply put, you really created a business model right time, right place, and right industry.

Todd: Yeah. The timing couldn’t have been better. I mean, obviously, I saw some writing on the wall of the opportunity. A lot of people told me it was a good idea then I got into it and I started realizing, okay, maybe it really was a good idea. Timing is everything. Luck favors the prepared, right? And I think I was prepared to get lucky at the right time.

John: Talk a little bit about some of the biggest trends in the last year that you’ve seen evolving in the ITAD industry, not only just for the OEMs but for all the stakeholders right now.

Todd: Well, I think primarily for the meat and potatoes of our industry is the ITAD, the e-waste space, and obviously, you guys who are some leaders in this space, is around vertical integration, right? There are a lot of companies now that whether they’re in ITAD or they’re trying to look to do acquisition or work their way downstream into owning all the true recycling apparatus, if you will, and then there are the folks at are kind of historical recycling companies that are trying to work their way up in the ITAD space. I think there’s a really, really big concentrated and concerted effort for those two sectors to merge into one. I think from whether you’re an OEM or reseller or corporate customer, if you’re sending your devices to a company who can do the ITAD services, it’s really great to know that whatever products can be refurbished and resold have to truly be recycled, meaning recycle, that it was component elements that’s just a doorway next door or they’re lifting it up and feeding into the shredding machine. I think there’s a lot of that happening right now. I think there’s a lot of private equity in the space still looking and hunting. We get probably two or three calls a week now with private equity companies that are looking for people to buy or invest in. I think the challenges there, obviously, interest rates are high right now. No one’s EBITDA or earnings are anywhere near where they were during the COVID sugar high of high product values and everything else and multiples are generally down right now. So, it’s a little bit of a weird time. I think there’s still some activity out there and opportunities, but time will tell how that goes. I think there’s a lot of focus on investment and warehouse management systems and ERP systems. I think in today’s world where everybody does the same thing now from an operational standpoint, everybody’s either got R2 or e-stewards, everybody’s selling their product back to the various e-commerce channels that are all the same. I think people are starting to really struggle for how am I going to differentiate my ITAD business from the guy next door. I think digital transformation is probably finally making its way into this world that we call ITAD where it’s going to be a disrupter in the space. The ability to scale and do it at a pace is going to be what really sets apart the winners from the losers but also, I talked to you the other day about this. People have been processing devices in their warehouses the same way for years, it’s a hard business to automate from an operational standpoint. But I think there is technology and opportunities out there to automate more of those functions back in the warehouse to try to drive your costs down because outside of, again, all the things everybody’s doing in common, I think every ITAD company needs to figure out how to do it better, faster, and cheaper. And, obviously, at scale and then not only in the US but internationally. I think there’s a lot of that. Digital transformation could come from whether it’s a better online client portal, whether it’s a better warehouse management system, whether it’s a better ESG reporting mechanism. I think most of the investment interest I’m seeing in the space is really around the platform-type stuff.

John: For those who just joined us, we’ve got Todd Zegers with us. He’s the President and CEO and Founder of Circular Integrity. To find Todd and his colleagues, please go to www.circularintegrity.com. Without giving away trade secrets or any brand names that you’re not allowed to discuss, what are the types of primary engagements that you’re working on right now with your clients? Because I know, I mean, a year ago when we taped our first show together when you were just launching Circular Integrity, you had a great vision, but now, you are literally buried in work and opportunities. Talk a little bit about some of your favorite engagements that you’re allowed to talk about and what kind of work are you doing with what kind of clients.

Todd: Yeah. I think an overarching practice that we’re doing primarily is strategy, right? So, whether you’re an e-waste company looking to move up the stream, whether you’re an OEM trying to figure out how to build a program around ITAD or e-waste or whether you’re a private equity firm that wants to do some roll-up and put together a big organization, it’s really around strategy. And again, I think, outside of the international piece of trying to stitch together what an international footprint could look like is really around systems. I think people undervalue how important systems are to really building a business on rock and a really fundamentally sound business. So, I think, strategy is a very uniform occurrence across all the different sectors that we’re working. Marketing and business development is another decent-sized one we’re doing because, again, whether you’re an OEM looking to get into this ITAD-type role of figuring out how you market to those clients and what those buyers want to hear and what message resonates with them. The same thing with the distributor or reseller and, obviously, even on the e-waste side. If you’re just a traditional mom-and-pops right there and you want to be able to offer what we call pure ITAD services, the buyer of an ITAD service versus the buyer of just taking out the trash, if you will, on the recycling side, are two different buyer personas that you really have to understand how to message that out to. If you think about selling an ITAD service, for example, again, whether you’re an OEM or an ITAD company, the number of stakeholders that are involved in an ITAD decision today is much different than when it was 15 years ago. It was the guy who’s sitting out back that we just find the guy down the street to come take the stuff for free or whatever, right? Now, you’ve got an IT asset manager, you got someone from procurement, you may have a CESO that’s involved with that because they want to understand what’s happening with data security. You got environmental health and safety folks in those decisions. You’ve got the data center guy as we all know who thinks he knows everything and then how things should be getting done from a data center perspective. So, the amount of stakeholders that are involved in decisions now continues to grow and becomes more important that you don’t just find one person that the message resonates with them to make sure you’re touching all of those.

John: When you were starting your company, it was just you. You were sort of a sole practitioner in Circular Integrity. Have you grown in the last year? And are you still continuing to grow?

Todd: Yeah, we are growing. And what I’m starting to find is where we’ve got some regular occurring common themes, you probably saw Tim Suhling joining now as president. So, now, I’m the Founder and CEO, so the President/CEO. But Tim came on board a couple of weeks ago, I guess. Tim was a [inaudible] at Ingram Micro for years. Tim is super, super smart around systems and business intelligence and marketing and sales strategies and stuff like that. And again, one of the very common themes in our practice or the ask of our clients is around helping them out with those exact functions. So, being able to bring Tim on board and subsidize some of that work with Tim’s expertise because, obviously, I’ve been in the ITAD business longer but I think from a fundamental process and structural standpoint, he’s built a really, really good playbook that I think can resonate no matter where you are in that stack or that circle of the IP supply chain. I think what he’s built can really apply to a lot of that. As you get outside of those, I mean, I’ve got a marketing guy, if you will, that’s helping me on the side when we got marketing projects. I got an operations guy that’s available so I’m not really bringing any full-time employees per se except for Tim, but as work and has projects come up, it’s amazing right now how many folks are actually out doing consulting right now. Maybe it’s because of the COVID turnover or whatever else but there are a lot of folks that have some availability right now to help out, who have the expertise in certain segments where either I don’t have the bandwidth or that’s what they do for a living and I’m good, but they’re great. So I try to bring those folks in to help me out with some of my engagements where I can augment the team.

John: Speaking of engagements, do Fortune 100 or 200 or 300 companies hire you to help pick their e-waste or ITAD provider?

Todd: Yeah, it’s both. I have both OEMs, I have resellers, I have Fortune 100 customers, global customers that came to me and said, “Hey, listen, we’ve been doing it the same way for years.” I just had a financial institution, a leasing company, a technology finance company come to me last week, saying, “Listen.” Pretty much everybody’s the same thing, “We’ve been doing it this way for five years or 10 years, there’s got to be a better way to do this, whether it’s finding the right vendors who do the right types of product capabilities or the right service levels in various countries who have the right types of reporting that I need.” Or “Hey, listen. This has just been a legacy program that was handed over to me. I don’t know what to do. How do I get better?” But doing a lot of RFPs where I sit down and go over what their desired state is and give them some of my expertise and my experience as far as what I’ve seen work well in their type of environment whether their types of products that are geographical footprint or what some other service requirements they be. Because, obviously, what an OEM wants versus a VAR versus a corporate end-user versus a leasing company are very different, and what they want as far as a deliverable and the ultimate outcomes, right? So, it’s pretty diverse.

John: That’s so interesting. With regards to challenges in the industry right now, what are some of the biggest challenges that you see in the ITAD sector that need to be addressed right now?

Todd: I think, number one, I touched on it a minute ago is really around digital transformation and digital strategy. How can these people scale their business without adding people? As you know, I think that is a very, very labor-intensive business and the more labor you can start – I don’t want to say getting rid of, that’s a wrong word to use – but the more automated processes you can put into your operations, the better. One way to look at it outside of just robotics replacing people is they think about even things like grading, right? We know and this was the same in the mobile space. Everybody’s been trying to standardize grading the mobile space and we’re trying to standardize in the ITAD space, but I can look at a laptop that’s got whatever dents or dings or scratches on, we can send it to a hundred people, and you’re going to get 99 different ways of looking what that grading is. So, I think about things like that, like grading and automation and how can we create a standard through the use of technology to try to standardize on grading. Everybody’s operating on a level playing field, there’s not a lot of back and forth as far as, “Hey, you told me it was this but it’s really this.” I also think about, from a processing standpoint, if you think about products coming into your world, in the mobile space, mobile phones are obviously small. There’s only so many form factors and you can load up on these big machines, you can load all these mobile phones on those, and they get plugged in and it goes through this big grading automation device. A little bit different in the world of ITAD because you’re going to have a pallet that comes in with a printer that’s this big, a mobile phone this big, a cable, and then a laptop, right? So, how do those flow down the lines and get automated? But I think there are some solutions coming out. I know you guys are working on one that we should be talking about soon. But I think there’ll be some interesting developments on that front. But I also think about, from the digital side, if you think about, again, most people are selling all the higher-end devices like laptops, for example, back through the e-commerce channel. So, back to Amazon and eBay and Newegg, etcetera, etcetera. Well, there’s a lot of work that gets done in that process. So, to be bringing a device, you plug it in, let’s say you use Blancco, for example, that gives the diagnostics to give you a report of that device and you move it from that bench over to the imaging or the erasure vents. It’s just there for how many hours and goes to the erasure process. After that, we’re going to put Microsoft back on it. Okay, great. Now, we want to maybe load some additional applications because we want to modify some software from the consumer but there are a lot of moving parts in that. I think there’s a lot of effort going around to figure out how do we bundle that down in a much more efficient process where you maybe just plug it in once and it just goes through and does everything and then it moves over, and the finished goods moves that device back over into repair. So, I think, there’s still a lot of opportunity for automation and I think because of where the industry sits now, those who invest in automation and technology and stuff like that are going to be the ones that come out winning. I think, also, on the on-site scanning of devices, for years and years, people go out there to the scanners and you got a spreadsheet, you scan it to the Excel file, all of a sudden, you get back to upload the Excel file back in your operation, and that thing went either one missing or the file is corrupt. So, coming out with tools to be able to do on-site scanning and other functions to capture that asset information on-site with OCR technology, for example, where you’re going to get a photo of that, so you got an actual physical picture and record of that device. But feeding all that information back in the cloud to give the customer, again, that next level of service. They’re getting a real-time reporting. They know before John leaves with their laptops, exactly what’s scanned and taken on-site before your truck, you need to drive off to the docks. Sorry to belabor that one but I think those are important points to talk about.

John: No. That’s very important. Is your business now, since electronics and the electronics industry is a worldwide industry and everybody seems to be getting more and more connected whether you’re sitting in Mumbai or Shanghai or Dubai or the middle of Phoenix or Fresno, are you getting clients from around the world now and consulting around the world, not just the United States?

Todd: It’s mostly here. We have started seeing more stuff coming in from Europe. But it’s really weird because I just feel like, well, Asia, the Middle East, and even Latin America, for years, just have never made much of a push into this space, right? It’s always been available. Now, listen, if you go into countries like Singapore and Australia, that just gets a little bit more robust, but you go to places like India and China, it’s still the wild west. The same thing with Brazil or Mexico and stuff like that. So, if you look at the different nations, Latin America and Asia are very, very different worlds versus Europe and the US. I think we both know that Europe is really leading the way with all the environmental push to do things the right way to get a lot more focus on the circular aspects of our industry and not just talk about it, but actually put things into action by legislation and regulatory acts.

John: What’s next, Todd? You seem to be having a lot of fun. I talk to you numerous times every week and it’s just fun to hear you grow your new venture and continue to nurture it. Where do you go next with Circular Integrity?

Todd: I would like to work less. I told myself when I left Corporate America, I was going to slow it down and take it easy and just do a few fun games outside, which I’m doing. I’m only working with people that I really enjoy to work with, that I know to be stand-up human beings and then operate good businesses, but there’s so much opportunity out there, it’s hard to say no. So, I think, with me, what’s next is I’m going to continue to look for people who are wanting to do the right things in the space and then figure out a resource. For me, finding the right people will be the hardest part of growing my practice just because, I don’t want to call myself a generalist, I know how to do a lot of things. A lot of folks come into the world of consulting and have a very narrow thread as far as what they’re good at, right? So, the challenge I have learned in growing this business and growing the practice is that unless I have a lot of clients who need operational support or a lot of clients who need systems support, it’s really hard to justify the expense to because consultants aren’t cheap. So, to bring on a very high-level resource that I feel would represent our brand and do our customers justice, I have to make sure that I’ve got enough business to justify the cost to bring on someone very expensive to deliver a very valuable service, I guess, is probably my thought. But my big vision really is around the Beautegrity piece. I think there’s a lot of opportunities there to really change and transform a lot of the industry and there’s a customer need. There’s a kid’s movie I was watching with my kids called Robots and there’s this guy called Bigweld on there that says, “See a need, fill a need.” I think there was a massive, massive need for consolidation and aggregation in this tool that we’re building, especially in the reseller and the OEM space, a little bit of the corporate America but that’s probably where I’ll put a lot of my time and focus outside of the existing clients that I serve daily.

John: When people want to come see you speak, you’re going to be speaking, I know you do a lot of public engagements every year. From July on, where are you going to be this year, speaking at what events?

Todd: As far as right now with the ITAD Summit, obviously, I tried not to miss that one. Unfortunately, I had to miss [inaudible] a couple of weeks ago just I got sick, but I had a panel there. Kevin was on it. I had some folks from HP on there. I had Jim Pocket on there and Rust from Blancco. So, I’ll be doing a speaking session of the ITAD Summit with the HP Team. I’ll be moderating a panel with HP around a new program there. I have not signed up for anything at the E-Reuse Conference but I’ll be planning an electronics sustainability – I can’t remember what they renamed it. I can’t remember what’s the name of it. It’s in October in Austin, I know that.

John: So, you’ll be there? You’ll be in Austin in October?

Todd: Yeah, I’ll be there. I like doing speaking engagements, but I’m trying to get a little bit more behind the scenes. I’m hoping that Tim is going to step up and take the baton and start leading some of these for us, but we’ll see.

John: It’s fun to be the sage on the stage but it’s also really a lot of fun to be the guide on the side.

Todd: Yeah. That’s a good way to put it. Listen, you’re like the professional speaker of our industry for many years. You speak at everything that’s out there, so.

John: Oh, it’s fun to speak together, I know that. And it’s also always great and an honor to have you on the show because just watching you build all this new success over and over again and your serial entrepreneur journey continues. It has been fun for me and an honor for me and, Todd, you’re always welcome back on the show to continue to share the great success you’re having at Circular Integrity. For those who want to hire Todd or meet him or hire him and his team for their services, please go to www.circularintegrity.com. Todd Zegers, you’re the best. I’m so thankful we’re good friends, but I’m also thankful for all the great work you’re doing with regards to protecting the environment and making the world a better place. Thanks again for all you do and thanks for sharing time with us today on the Impact Podcast.

Todd: All right. I appreciate it, John. Thanks for having me. I’m honored. Thank you, sir.

John: This edition of the Impact Podcast is brought to you by Engage. Engage is a digital booking platform revolutionizing the talent booking industry. With thousands of athletes, celebrities, entrepreneurs, and business leaders, Engage is the go-to spot for booking talent, for speeches, custom experiences, livestreams, and much more. For more information on Engage or to book a talent today, visit letsengage.com. This edition of the Impact Podcast is brought to you by ERI. ERI has a mission to protect people, the planet, and your privacy, and is the largest fully integrated IT and electronics asset disposition provider and cybersecurity-focused hardware destruction company in the United States, and maybe even the world. For more information on how ERI can help your business properly dispose of outdated electronic hardware devices, please visit eridirect.com.