About one month into his role as RecycleBank’s new CEO, Jonathan Hsu is rattling off some ambitious numbers: An IPO by 2013, plans to grow his staff from 150 to over a thousand by 2012, and to reach nine-figures in annual revenues in that same year. That’s a herculean task for any company but especially one that plays in the labor and capital intensive world of recycling.
And yet, sitting in his new office in New York’s West Village, Hsu seems utterly confident, framing each prediction with a when-not-if mentality.
The well-funded RecycleBank— which has raised more than $70 million from VC firms like Kleiner Perkins, RRE Ventures and Sigma Partners— is a recycling rewards program that works with municipalities and large corporate sponsors, like P&G and Kashi, to install local programs in US and UK cities.
Under RecycleBank’s program, a household signs up for an account online and receives a special bin or “smart cart” for their recyclable waste that is equipped with a unique RFID-tag. When the hauler arrives to remove the waste, the cart is weighed and the household’s account is credited with points based on that weight. Those points can be redeemed online for rewards or savings with more than 1,000 local and national businesses.
Since its inception in 2005, RecycleBank has installed itself in more than 300 cities in the US and UK, with 3 million-plus households under contract. According to Hsu, revenues have been tripling every year, for the last two years, and the company is very close to profitability.
Hsu, who was formerly the CEO of 24/7 Real Media (an online marketing firm firm acquired by WPP for $649 million in 2007), was brought on to get the firm solidly in the black and to use his marketing background to help the company achieve tremendous— some might say unrealistic— growth offline and online.
“One of the things I will bring to bear in this company is the ability to grow to a mass market scale so that RecycleBank can be the first green mass market brand,” Hsu says. “This company will IPO in the next several years.”
So what is Hsu’s battle plan to get RecycleBank ready for a 2013 IPO— an IPO that he says will value the company in the multi-billion dollar range?
Hsu has three priorities: a new revamped online portal that leverages social tools, increased corporate sponsorships and a major push to get RecycleBank in new cities.
According to the CEO, he wants to work with municipalities to create hundreds of hyperlocal online destinations, to connect the users within RecycleBank communities. These new sites will feature social chat, gaming, a bulletin board for neighborhood announcements and a schedule of local activities. Calling it “Facebook with a purpose,” he says he doesn’t “want to reinvent the wheel of how people communicate but we want to leverage those tools successfully.”
Currently, RecycleBank makes the bulk of its revenues from its deals with municipalities— local governments pay the company a fee for diverting waste from landfills. The company also gets money through corporate sponsorships, but it only has a few dozen of these partnerships today. Over the next few years, RecycleBank plans to dramatically expand its portfolio of lucrative sponsorships, and Hsu predicts, eventually the amount of dollars coming in via sponsorships will significantly outweigh the amount from municipalities.
However, if RecycleBank wants to become a truly, global green, mass market brand, it will need to find a way to crack the markets outside of the US and UK. For example, given China’s rapid urban development and 1.3 billion strong population, it is a rising power player that is creating significant economic growth— and by extension, mountains of waste. It may be relatively easy to deploy millions of “smart cans” to households in highly developed countries, but it will be interesting to see how the RecycleBank program fares in the world’s major developing regions.
Hsu says he wants to tackle the larger international picture but it will be a challenge to do it directly (at least in the near term), because of their ambitions at home and in the UK. At least for the next few years, he wants to stay focused on expansion in these markets, and perhaps, link up with international partners to address other regions. The arms-length approach will likely blunt RecycleBank’s effectiveness in new markets, but it’s a start.
Hsu has a long way to go before he proves himself to his staff and RecycleBank’s investors— and he’s giving himself a short runway to do so— but he says he’s happy to have at least impressed one very important critic: his three-year old daughter.
“I really cherished my time at 24/7 Media…but it was hard for me to describe to my daughters what exactly I did. So I would show them a website, like Weather.com and show them the banner ads that they see on the top and sides and say to them abstractly, “Daddy’s company helps show those ads.” And they would nod to me, and they loved me because they’re my daughters but at the end of the day they didn’t really understand. Today when I tell my daugther…I show her the recycling bin and the trashbag and she can see how my company can move from the waste bucket to the sustainability bucket, she understands. She understands that daddy helps put less garbage on the street.”
See our video with Hsu above.