How my passion for waste was born
Don’t fall in love with the solution but with the problem you want to solve.
September 2018. I’m in Puerto Vallarta, on the west coast of Mexico. The city, which has about 250,000 inhabitants, is surrounded by wonderful nature: hills of tropical forest that stretch from the hinterland to the Pacific Ocean.
In addition to the scenic beauty, I’m shocked by the city’s garbage and its management. During the afternoon, piles of sacks begin to be seen on street corners. The inhabitants start to bring them from the afternoon until the evening when the garbage truck passes by to collect them. In the meantime, however, dogs, cats, and cats open the bags to look for something to eat. Not only the animals but also people are looking for some waste in those bags. Humans, however, do that, so they then sell in one of the shops that buy recyclable products. People who find their main source of income in this business. They are responsible for the recycling of waste, as there is no public separate collection service. I’m shocked by the backwardness of that system.
So I start studying the waste industry, and I realize the emergency we live in and for which we are responsible as human beings. The waste problem in the world is enormous, and we must take action quickly and effectively. So I begin to imagine possible solutions, starting with the city where I’m. Together with a small group of local friends, I begin to devise a recycling and education program for the population.
At the end of 2018, I go back to Rome for the Christmas holidays and never returned to Mexico. Throughout 2019 I stay in Italy and take care of other things.
It is only in early 2020 that I begin to deal with the waste issue again. When I arrive in Sao Paulo, the Brazilian economic capital, I find a disastrous waste situation very similar to the one I had seen in Mexico. I resume studying the waste sector and drawing up a plan to improve it without waiting for the public sector.
In Sao Paulo, there are thousands of people who, independently and spontaneously, look for, collect, transport, and resell recyclable products with economic value: especially paper, some types of plastic, and all metals (primarily aluminum cans ). They are called catadores and those who have a cart (in Brazilian carroça), carroceiros.
Although they are responsible for almost half of the waste that is then recycled, most of them are poorly organized. The informal waste pickers constantly wander around the city searching for paper, cardboard, cans, and metals, which they then sell in one of the many shops (called sucata) that buy them. Some of them are more organized: they have a two-wheeled cart that can hold hundreds of kilograms of materials that they push and pull by hand. Few of them have agreements with shops, offices, and residential condominiums to fetch the products. Once the bags of waste, which for the most part are undifferentiated, have been collected, they spend hours separating them. The system is highly inefficient, and I want to find a way to increase people’s recycling rate and waste pickers’ income.
In Brazil, the percentage of waste recycled in 2011 was 3% (Plano Nacional de resíduos sólidos, 2011). Most recycling chain occurs in the Brazilian megalopolis thanks to the public sector (19%) and private companies (37%). Informal collectors contribute 44% to recycling waste (Instituto de Energia e Ambiente da Universidade de São Paulo (USP), 2017).
A figure from IBOPE (Instituto Brasileiro de opinião e estatística) of 2018 catches my eye: 98% of Brazilians think that waste recycling is essential for the future, but 66% of them know little or nothing about how to do the domestic waste separation. From here, I understand the need to educate people on how to manage waste at home.
I find a person who is passionate about my project: Matheus. As a child, when he went around with his parents, he collected rubbish from the streets to throw in the bins he met. When asked what he wanted to be when he grew up, he replied, “the garbage man.” He helped me get to know people and the market, not on the internet but in the streets, as the entrepreneurial theory advises.
We interview dozens of informal waste collectors, shopkeepers, everyday people, apartment building managers.
In addition to the need to educate people, we also note the need to put informal waste collectors in contact with the people who generate them at home. We are not the first to have had this idea: for years, there has been an association in Brazil, Pimp my Carroça, which deals with the rights of informal waste collectors and wants to improve their quality of life. They recently created an app, Cataki, which connects those who generate waste at home with collectors. However, it was not concerned with educating people on proper waste management and home separation.
We elaborate a plan that foresees to make agreements with the condominium’s managers so that they allow us to make an educational program for the condominiums and have the waste collected by a collector of our partner. The educational program includes posting information signs in the condominium’s common areas (entrance, elevators, waste room, laundry room, and other places) with some basic information and an invitation to download the app. Once on the application, each condominium’s inhabitant can learn step by step how to improve their home waste management.
Another fundamental element of our idea is to put informal collectors in contact with our partner condominiums. To this end, we think of an Uber-type app that allows condominium porters (responsible for garbage management) to communicate through the app when the recyclable waste bags are full. The system sends a notification to our partner waste collectors, which disappears when one of them accepts the call.
Do the waste collectors have a smartphone and an internet connection? We put this question to the dozens of them we interview, and most of them answer in the affirmative. This is not an obstacle as we thought.
We find a name for our project: Realixo. In Portuguese realizo (in Italian realizzo, in Spanish realizo, in English realize), it is the first person of the verb realizar and means to make something real, concrete, effective. Conceive clearly, understand. Convert something into monetary value. Lixo in Portuguese means garbage. The word Realixo is a neologism.
We write a business plan to present it to potential investors. Once ready, we read to some friends and colleagues from the business and corporate world who give us their feedback.
In addition to thinking about their advice, we stop to reflect on three critical points:
1. Do we want to start operations in Brazil? By studying the world’s waste market, we realized that there are conditions similar to those present in Sao Paulo in most big cities on the planet. The project is therefore replicable and, as they say in the jargon, scalable. Brazil’s political situation is unstable and dangerous, given President Bolsonaro's threat to carry out a military coup. Also, the Real, the national currency, has suffered a devaluation against the North American dollar and the euro in just three months, by more than 30%.
2. Do we want to create a for-profit or a non-profit enterprise? A for-profit business can attract a lot of capital and therefore achieve our mission more quickly. On the other hand, a non-profit organization can favor the population that does not question the goodness of our intentions, free from the selfish interest represented by profit. Besides, it can get us to obtain donations and funding from other entities that allocate them only to non-profit organizations.
3. Is the business model we have identified adequate? From the perspective of a for-profit organization, we had identified a revenue model in which we obtained a percentage from the sale of recyclable products. In practice, we made agreements with some shops that buy recyclable products (abundantly present in the city). When one of our partner waste collectors sells the products in one of the stores with which we have an agreement, the store does not give them 100% of the value but a smaller percentage (we assumed 80 or 90%). In addition to other critical issues, this model ran the risk of being seen as an exploitation of these people’s work, who are part of a fragile population category because they have no pension, fixed salary, health, and accident insurance. Furthermore, like any Uber-type business model, it could put us in front of criticism from informal collectors and the public.
We take some time to think about these crucial points before writing the business plan version to present to possible investors/donors.
With Matheus, who in the meantime had officially become my co-founder and CMO (Chief Marketing Officer) of the company, we decide to consider another country where to start the operations. For various reasons, we choose Mexico, where we went in October 2020. For many reasons, the Country was similar to Brazil (and other countries of the world) and suited our business idea. Our model could also be applied there. We spend three months in the Country, conducting interviews and forging relationships with various players in the sector. However, we decide to start operations in Brazil as the percentage of waste recycled here is lower, there is a more abundant presence of informal collectors, a lower diffusion of the public recycling service, and a higher population and per capita income.
We decide that our business’s best form is the for-profit one precisely because of the potential to scale and rapidly operate in more countries worldwide.
Finally, we change the business model. Through personal and in-depth interviews, we identify a niche in the market willing to pay for a separate product collection service. In Brazil, only 17% of the population is reached by the public sector’s separate collection. There is a massive slice of the people who cannot do it by relying on informal waste collectors. Many people in this niche (early adopters) would also like to have a compost bin at home, but not everyone can keep it (for roommates, parents, or partners against it or lack outdoor spaces). Also, many of them sometimes have doubts about how to separate products in the house (where to throw what) and have a hard time leading a zero waste life (although they would like to).
Hence the solution we have found: to offer a separate waste collection service and various tools to help them lead a zero waste life. To collect the waste, we give some informal waste collectors a decent salary, removing them from the black labor market. The waste, which in reality we should begin to consider second-hand products with economic value, is taken to a warehouse in the city and from there destined to the various recycling and recovery circuits.
One of the tools we offer to our subscribed customers is an app that allows them to scan the product barcode and get helpful information for their purchase choice. The idea is that to have a zero-waste life, each person must also refuse to buy certain products that cannot be recycled for various reasons. This app can also help you understand, once the person wants to get rid of the product (or its packaging), where to throw it. In fact, many people often have doubts about the correct home separation of products.
Realixo’s mission is to accelerate the transition to a zero-waste world. To do this, in addition to offering the collection service for recyclable products, we also want to allow our customers to have local, organic products at home and with packaging that can be recycled or reused.
After testing the service in Sao Paulo, if the results prove us correct, we want to expand first to other big cities in Brazil, then to other Latin American countries, then to India, Africa, and every other major city in the world.