Case Abstract

In 2001 Tom Szaky, a Princeton freshman, founded TerraCycle in the hope of starting an eco-capitalist company built on waste – worm waste to be exact. Tom and his small team had little experience in building a business, but all possessed entrepreneurial spirit. Eventually, Tom dropped out of Princeton to pursue his dream of eliminating waste. Surviving on the goodwill of family, friends – both old and new – and a tremendous amount of dedication, the team had to constantly keep developing new ideas to keep the business from bankruptcy.

The company eventually moved into partnering with companies who would sponsor the collection of waste associated with their brands, and TerraCycle would transform that waste into affordable, high quality products. In 2006 Inc. Magazine named TerraCycle “The coolest little start-up in America” and Tom “The no. 1 CEO under thirty.”

By 2011 Tom had successfully built TerraCycle into an icon for environmental sustainability that was projecting US$16 million in annual revenues. However, sustained profits continued to elude the company, and though Tom was committed to eliminating waste, he was beginning to question whether TerraCycle had the right business model to achieve the triple bottom line.

Authors: Jan Lepoutre, Stuart Read, Philippe Margery
Institution: Vlerick Leuven Gent Management School, Belgium; IMD, Switzerland
Competition Year2012
Place1st place
Track Social Entrepreneurship
Key WordsEntrepreneurship, Effectuation, Strategy, Sustainability
Permission RightsAn inspection copy of this case is available here. This case can be purchased from ecch: Part A (IMD-3-2262), Part B (IMD-3-2263), Part C (IMD-3-2264), Part D (IMD-3-2275), Part K (IMD-3-2286) and Part "Outsmarting Waste" (IMD-3-2311).
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oikos International

posted June 30, 2012

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