If ecoATM founder Mark Bowles ever invites you to a board meeting, make sure to bring a wetsuit. You'll be visiting a California beach, not a conference room.
At least once a month in the winter season and weekly in the summer, Bowles and a dozen other enthusiastic ecoATM staffers congregate for some downtime at the local surf break, simultaneously catching waves and catching up about the latest progress at their San Diego startup.
"It's a hard sport unless you're really passionate about it and want to spend a lot of time," says Bowles, 49, a native Texan who only dove into it himself 10 years ago.
The same could be said, of course, about the sport of startups. Given the rather unique way he chose to deal with his mid-life crisis, I'm barely surprised to hear that Bowles has been involved with no fewer than six venture-backed companies in the past two decades, most of them in the semiconductor or technology hardware space.
One of those startups was BlueSteel Networks, a fabless Internet security chip company that sold to giant Broadcom for $110 million at the height of the bubble in 2000 (when it was barely a year old).
"I have had some nice exits and a couple of big smoking holes in the ground," Bowles writes, in response to a bunch of background questions I've sent in preparation for our Skype video. "You learn valuable lessons from all of them, but I think ecoATM is the most fun so far."
It is arguably the most groundbreaking. The idea bubbled up after a friend shared some statistics about the abysmal recycling rate associated with mobile phones: just 3 percent globally in 2008, when that fateful conversation took place.
"There were a billion mobile phones shipped that year, so we began to wonder how we might increase consumer participation in recycling and, of course, did the classic 'mesearch' by asking ourselves why we had a drawer full of phones at home ourselves," Bowles recalls. "The answer was threefold: we didn't know where to recycle, we weren't properly incentivized, and we were concerned about our personal data. We decided that if we could solve those concerns we could get consumers to participate at a higher level."
Appealing to mainstream America
Peering intently through brushed metallic glasses across our questionable video connection, Bowles explains that he and his co-founders figured the best collection point for castoff mobile gadgets would be the very same place the American public flocks to buy them: shopping malls.
As for the format: why not a collection kiosk that could actually spit out cash in exchange for used or broken electronics? The automated teller machines (ATMs) most banks use to conduct transactions outside bankers' hours seemed to them a reasonable approach to emulate.
The "ecoATM" prototype was a simple wooden box (nicknamed "Old Bessie") that used a touchscreen for collecting information about the device and a trap door for depositing items. An attendant staffed the machines, calculating the value and handing out the cash. The first system was tested at a Nebraska mall. Within weeks, the lines of people waiting to drop off items sometimes topped 45 minutes. The market research team collected 2,300 phones within a month.
"It took about a year to get the first manual prototype in the market for testing, and that is the day that our learning curve went through the roof," Bowles recalls. "We were learning slowly until that point but getting in front of hundreds of customers and moving used devices into the channel really accelerated our learning and progress."
Today's ecoATMs are far more sophisticated and completely automated, as befits Bowles' high-tech past as well as his academic degrees: a Bachelor of Science in industrial distribution from Texas A&M, and a Master's in technology management from Pepperdine University. Even though Bowles bears the official title of chief marketing officer, he's kind of a geek with three patents (and 20 pending) in kiosk technology, plus another three related to ultra-wideband transmission. He decided to skip the CEO position and spent six months wooing the operations expert he thought would be perfect for that job, Tom Tullie, an operations expert who rose to the position of COO at Applied Micro Circuits Corp.
ecoATM relies almost completely on bright signage and basic human curiosity to drive foot traffic to its kiosk network - it does very little advertising, at least so far. Standing about 5 feet tall, the systems use artificial intelligence to calculate the worth of more than 4,000 different mobile phones, MP3 digital music players and computer tablets. Cameras make a visual assessment of the devices, while a series of electronic plugs is used to determine whether or not there is electrical damage.
ecoATM is also adding algorithms to help figure out whether a system is a fake or might have been stolen. When I spoke with Bowles in mid-February, he had just arrived in Washington, D.C., for discussions with Federal Communications Commission (FCC) staffers and law-enforcement officials.
Where does this discarded stuff find a second life? A large majority is refurbished and spruced up for insurance and warranty companies, which use them as replacements for broken, lost or stolen devices. It's a big market: approximately 90 million people have mobile phone insurance, Bowles estimates.
The rest is handled by certified recyclers that comply with regulations for responsible handling of electronic waste (aka e-waste), such as the Responsible Recycling (R2) designation or ISO4001.
"These standards are fairly new but they are having the desired effect on the industry, which is that companies that are sincere about their environmental commitment are getting the certifications and those that aren’t sincere are not getting them or can’t," Bowles says. "There is a long way to go in the industry, but there is good momentum already and it's fairly easy to find responsible downstream partners and to avoid those that probably aren’t."
The rapid pace of ecoATM's expansion is a testament to how quickly things are evolving in the whole e-waste and electronics recycling space. Some estimates now place the U.S. mobile phone recycling rate at close to 20 percent -- still quite low but pretty impressive compared with that 3 percent number from five years ago.
In September 2012, ecoATM trumpeted its presence in 10 states. By the time of this February interview, that number has doubled, and the company has just secured another $40 million in mezzanine debt financing to "continue its goal of providing a convenient portable electronics recycling solution to everyone in America." Right now, ecoATM counts kiosks in approximately 300 locations, usually big shopping malls or other public locations where they'll be seen be as many people as possible without a whole lot of advertising. The company relies on the likes of partners with vast reach, such as Pitney Bowes and Loomis to maintain, service and secure the equipment. Coinstar, which makes coin collection kiosks, is a strategic investor.
ecoATM doesn't reveal how many devices it has potentially taken out of landfills or kitchen junk drawers. But another company focused on collecting cast-off mobile devices in Europe and North America, eRecyclingCorps, recently revealed it had collected more than 7 million devices in 2012. That's almost 20,000 per day, representing about 2,255 tons of e-waste diverted from landfills.
Marrying environmentalism and capitalism
Bowles admits part of his motivation for creating ecoATM is that he feels at least partially responsible for the growing e-waste problem, given all his past high-tech ventures. He hopes ecoATM's business model combining a concern for the environment with a legitimate way to generate revenue will convince other eco-entrepreneurs that environmentalism and capitalism aren't mutually exclusive.
That's why, even though Bowles routinely logs 12 hour-plus days on ecoATM's behalf before he goes home to his wife and three boys, he actively mentors other environmentally-focused startups and serves on the board of the University of San Diego Center for Peace and Commerce. The organization teams business students with those involved in "peace studies" to build better empathy between the two schools of thought.
"I have been bewildered over the years by the 'common wisdom' that capitalists and environmentalists are born adversaries, because they needn’t be and increasingly are not," he declares. "While it is true that the root cause of many environmental issues can be traced directly to consumption, or over-consumption, of one resource or another, and it’s also true that a great deal of capitalist activity fuels this consumption, it is precisely these reasons why capitalism holds the biggest lever for changing the environmental tide."