Case Study

TerraCycle (C): Eco-capitalism and “upcycling” waste

7 pages
October 2011
Reference: IMD-3-2264

In 2001 Tom Szaky, a Princeton freshman, founded TerraCycle with the hope of creating perfect eco-capitalism. His idea was a company built on waste – worm waste to be exact. To help fund his fledgling company, Tom entered and won several business plan contests – though he turned down his biggest prize of US$1million because it came with strings attached that conflicted with his aspirations for the firm. Eventually, Tom dropped out of Princeton to pursue his dream of eliminating waste and the company expanded into upcycling – making products from waste that would otherwise have been sent to landfills. Eventually, the company moved into sponsored waste, whereby companies would pay it to set up collection sites, or brigades as TerraCycle called them, for used packaging associated with their brands. TerraCycle would take challenging-to-recycle packaging and turn it into affordable, high-quality products. Ten years later, TerraCycle’s eco-friendly products had received numerous environmental accolades, partnerships with multinationals such as Kraft, SmithKline Beecham and L’Oréal, and the company’s upcycled products were sold at major retailers from Home Depot to Walmart. But profits continued to elude the company, and Tom found himself at a crossroads.

Learning Objective

Each case in the five-part series addresses a key managerial issue at a crucial point in the company’s evolution. The series provides an excellent illustration of the transformation process entrepreneurs go through to ensure their company not only survives but also thrives during each phase of its development. The case series lends itself perfectly to active participation by students. The first three cases demonstrate all five principles of effectuation through the decisions as well as some of the successes and some of the mistakes Tom and his team made. Each case in the series ends at a crucial decision point that will push participants to think hard about: 1) the role of resources (investment and non-cash resources) in new venture creation; 2) the tradeoffs of ownership and control; 3) Building partnerships with consumers, multinationals and government; 4) the importance of the role of management as ventures evolve; 5) effectual partnership and contingency. This case series is ideal for a four-hour session (or two 120-minute sessions or three 90-minute sessions). There is also a compiled version of the case, which works well in a single 90 minute teaching session.

Keywords
Entrepreneurship, Social Entrepreneurship, Effectuation, Strategy, Competitive Strategy, Non-market Strategy, Innovation, Sustainability, Sustainable Development, Environmental Management, Waste Management, General Management
Settings
United States of America
2001-2011
Type
Published Sources
Copyright
© 2011
Available Languages
English
Related material
Teaching note, Video
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Research Information & Knowledge Hub for additional information on IMD publications

This case study is part of a series
  • TerraCycle (C): Eco-capitalism and “upcycling” waste
  • TerraCycle (D): Where’s the capital in eco-capitalism?
  • TerraCycle (K): Branded waste
  • Terracycle (A): Building a venture with spineless employees
  • Terracycle (B): A million tradeoffs
  • Terracycle: Outsmarting waste
2012 OIKOS AWARD (Social Entrepreneurship Track)
This case study is part of a series
  • TerraCycle (C): Eco-capitalism and “upcycling” waste
  • TerraCycle (D): Where’s the capital in eco-capitalism?
  • TerraCycle (K): Branded waste
  • Terracycle (A): Building a venture with spineless employees
  • Terracycle (B): A million tradeoffs
  • Terracycle: Outsmarting waste
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TerraCycle (C): Eco-capitalism and “upcycling” waste
By John Stuart Read Philippe Margery and Jan Lepoutre
Case reference: IMD-3-2264 ©2011
Summary
In 2001 Tom Szaky, a Princeton freshman, founded TerraCycle with the hope of creating perfect eco-capitalism. His idea was a company built on waste...
2012 OIKOS AWARD (Social Entrepreneurship Track)
Reference IMD-3-2264
Copyright ©2011
Copyright owner IMD Copyright
Available Languages English
Contact

Research Information & Knowledge Hub for additional information on IMD publications

TerraCycle (D): Where’s the capital in eco-capitalism?
By John Stuart Read Philippe Margery and Jan Lepoutre
Case reference: IMD-3-2275 ©2011
Summary
In 2001 Tom Szaky, a Princeton freshman, founded TerraCycle with the hope of creating perfect eco-capitalism. His idea was a company built on waste...
2012 OIKOS AWARD (Social Entrepreneurship Track)
Reference IMD-3-2275
Copyright ©2011
Copyright owner IMD Copyright
Available Languages English
Contact

Research Information & Knowledge Hub for additional information on IMD publications

TerraCycle (K): Branded waste
By John Stuart Read Philippe Margery and Jan Lepoutre
Case reference: IMD-3-2286 ©2012
Summary
In 2001 Tom Szaky, a Princeton freshman, founded TerraCycle with the hope of creating perfect eco-capitalism. His idea was a company built on waste...
2012 OIKOS AWARD (Social Entrepreneurship Track)
Reference IMD-3-2286
Copyright ©2012
Copyright owner IMD Copyright
Available Languages English
Contact

Research Information & Knowledge Hub for additional information on IMD publications

Terracycle (A): Building a venture with spineless employees
By John Stuart Read Philippe Margery and Jan Lepoutre
Case reference: IMD-3-2262 ©2011
Summary
In 2001 Tom Szaky, a Princeton freshman, founded TerraCycle with the hope of creating perfect eco-capitalism. His idea was a company built on waste...
2012 OIKOS AWARD (Social Entrepreneurship Track)
Reference IMD-3-2262
Copyright ©2011
Copyright owner IMD Copyright
Organization TerraCycle
Industry Utilities, Recycling
Available Languages English
Contact

Research Information & Knowledge Hub for additional information on IMD publications

Terracycle (B): A million tradeoffs
By John Stuart Read Philippe Margery and Jan Lepoutre
Case reference: IMD-3-2263 ©2011
Summary
In 2001 Tom Szaky, a Princeton freshman, founded TerraCycle with the hope of creating perfect eco-capitalism. His idea was a company built on waste...
2012 OIKOS AWARD (Social Entrepreneurship Track)
Reference IMD-3-2263
Copyright ©2011
Copyright owner IMD Copyright
Available Languages English
Contact

Research Information & Knowledge Hub for additional information on IMD publications

Terracycle: Outsmarting waste
By John Stuart Read Philippe Margery and Jan Lepoutre
Case reference: IMD-3-2311 ©2012
Summary
In 2001 Tom Szaky, a Princeton freshman, founded TerraCycle with the hope of creating perfect eco-capitalism. His idea was a company built on waste...
2012 OIKOS AWARD (Social Entrepreneurship Track)
Reference IMD-3-2311
Copyright ©2012
Copyright owner IMD Copyright
Available Languages English
Contact

Research Information & Knowledge Hub for additional information on IMD publications