As part of my series about the “5 Things You Need To Know To Create a Successful Service Business,” I had the pleasure of interviewing Zachary Kirstein.
Zachary Kirstein is vice president of 4G Recycling Inc., a growing international recycling company that services clients in all 50 states.
Thank you so much for joining us! Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
Our family’s recycling roots date back to 1910, when my great grandfather, Philip Kirstein, founded United Paper and Metal with a horse and wagon. The company was run by our family until 2008, when we merged with Greenstar Recycling, an international recycling company based in Dublin, Ireland. During this time, we kept company stock active so the legacy continued without interruption, and my brother Brent and I worked with Greenstar in leadership roles for more than three years.
In 2012, my brother and I formed 4G Recycling on a leap of faith. We have been fortunate to meld the entrepreneurial spirit we learned working in our family business with big international business fundamentals into what we are today at 4G.
We started working with one account out of my living room. Today, we have grown into a brand that is recognized across the recycling industry, and from the two of us to 27 full time employees and 10 sales consultants.
4G Recycling is one of the largest buyers of Pulp Substitutes grade paper in America.
We also purchase a variety of other paper grades, such as cardboard, over issue news, hard white, SBS, coated book and most other grades of paper as well as plastics and metals. We also offer trash services, pallet sales and recycling. Additionally, we provide equipment leasing programs with no out-of-pocket costs to prospective clients.
We service clients in 48 states as well as internationally. We export recyclables to 12 international countries in any given month, a large percentage of our sales are to domestic US consumers. We appreciate the symbiotic relationship with American industries and we take great pride in providing consumers with the products they need to help keep their businesses running.
What was the “Aha Moment” that led you to think of the idea for your current company? Can you share that story with us?
Working for a large international corporation, I became increasingly frustrated working for a “big business.” I would spend six to eight hours a week filling out paperwork about business opportunities, instead of moving those business opportunities forward.
With our industry experience and work ethic, my brother and I knew that we could be profitable and successful running our own business. So, we started 4G Recycling at the beginning of 2012, with a focus on a unique business model and a client-oriented approach that we noticed was missing from the recycling industry.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
A critical learning experience: All business is not necessarily “good business”.
Two weeks after we started the company, I was presented with an opportunity that highlights this new understanding. We were referred to be the sole recycler for the Emirate of Sharjah in the UAE after two weeks in business. Within 24 hours of that call, I was on the next plane to Dubai with another recycling industry veteran. He and I worked 18-hour days for the 6 days of our trip. I was concerned that the UAE Government planned to close the other 27 recycler’s businesses and award it to one American company (but we stood to make millions in profit so we trudged forward). Standard due diligence requests came with demands for monies for common questions we would need answered; the negotiations were a stretch for me, even with an international business background. Later during those conversations, after a tremendous amount of work and driving all throughout the UAE for site visits and lots of meetings with various characters, they declared we had to sign over 51% equity in our entity to an Emirati citizen and wouldn’t be in control of our own business. We flew back the next day and boy, did we learn the lesson that all business wasn’t good business.
From this experience, we quickly learned the lesson of having quality clients that would become our strategic recycling partners, versus taking on any and every new business opportunity.
Thank you for that. Let’s now pivot to the main focus of our interview. Extensive research suggests that “purpose driven business” are more successful in many areas. When you started your company what was your vision, your purpose?
Our vision was to carry forth the legacy our family was synonymous with: amazing customer service. We want to make an impact in the world of recycling and beyond.
We recognized shortcomings in the marketplace and decided to build our own custom CRM system as one tool to address this. I had used other platforms in the past, and recognized a need to have a product we could use that was more recycling centric. Our purpose has been to improve recycling and, in many ways, the successes we have experienced are a testament to the level of dedication we feel.
What do you do to articulate or demonstrate your company’s values to your employees and to your customers?
We guarantee movement for our suppliers regardless of market conditions. This responsiveness has positioned our company well, allowing us to access new contracts across the country, and enabling our current clients to continue meeting their sustainability goals while profiting from their recyclable materials. We will often warehouse material, ship to a new emerging market or take any route necessary to honor our commitment to our clients.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
Always be true to your word. When we say we are going to do something, we do it. We take A LOT of pride in being honorable in all our dealings (especially in an industry with a reputation that has come under fire in the past).
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
We made a hard decision to move the business to Florida eight years ago. On a personal level, at that time we had a parent with cancer. My brother had just gone through a divorce and lost his dog of 14 years. We did not know the lay of the land in a new state and had a lot to learn. Since then, we have been named the Fastest Growing Recycler in the state of Florida (the third largest state in America) by Inc. Magazine and have carved out a nice slice of life down here. No, we NEVER considered giving up as we weren’t built with that in our vocabulary.
So, how are things going today? How did your values lead to your eventual success?
We continue to grow and scale the business. We are proud to be the largest buyer of envelope waste in North America. We have been fortunate to stay ahead of the curve, and our strong partnerships and strategically located warehouses have enabled us to contract and market more than 450,000 tons per year of recyclables that are generated all over the world. We continue to move material despite industry transitions, challenges and trucking shortages. The family business values we grew up with have fostered our unprecedented growth and is something we take a lot of pride in. We want to continue to shine for our clients and appreciate building on our family’s legacy.
Based on your experience and success, what are the five most important things a founder or CEO should know in order to create a very successful service based business? Please share a story or an example for each.
- Diversify Clients: Having a broad range of clients will prepare you for any market changes. 4G has a well-diversified portfolio across many different industries. This is a strategy we began focused on executing in 2018 to prevent large shifts in revenue due to declining recycling markets. And it has served well this year during the pandemic because while some customers were shut down due to being non-essential businesses, others, like grocery and e-commerce retailers were up significantly, bridging the gap.
- Be Nimble: World events and market changes are always in flux, and to run a successful service-based business, you should be flexible and willing to adapt your business to meet the needs of the current environment. Responding quickly can help keep your business running. While this has always been a part of our business model, 2020 required us to be more flexible than ever before, as we adjusted to the unprecedented changing market demands and related client needs. One of the most important things 4G did was to move quickly to get certified as an essential business that enabled us to keep operating. And from very early on, the company ordered a sophisticated new phone system, more laptops, monitors, and other resources so our employees could work safely at home. This ensured that clients could continue recycling programs with little to no interruption.
- Embrace technology: Technology is constantly driving industry forward, and to remain a leader in your field, you have to be ahead of the curve adapting to technological advancements. As an example, we recently built a new bidding platform to maximize profits for our clients in years where the value of recycling commodities was low. Bidding platforms are used by some recycling companies to determine how much a business will be able to make from the materials they recycle. Maximizing the value of these recyclables encourages companies to up their recycling game, and ensures that materials are as clean as possible for reuse. We believe that the current bidding platforms offered are lacking, cumbersome and inefficient. They fail to truly capture and understand the dynamics of the actual recycling bidding process. In response, we created our own bidding platform designed with the recycling industry in mind, and have used it to maximize revenue for some of our larger clients. Despite the rough year in the recycling industry, where many people were seeing losses, we were able to secure a $1 million increase in revenue for one major client compared to the previous year. We have plans to introduce this platform more broadly to the recycling industry so that other companies can help their clients maximize revenue in this manner, and encourage even more businesses to recycle their waste instead of trash it.
- Be strategic and unique: A unique business model can position your company above others in your field. For 4G, our unique business model is based on economies of scale and generating the cleanest possible material. We provide incremental tonnage to recycling facilities processed at wholesale rates and partner with strategic mills to provide the maximum rebate structure for clients. Unlike many other recyclers, we finance equipment installations for customers and the recycling companies that process material. This often includes balers, shredders, air systems, dust collectors, EPS (expanded polystyrene) densifiers and plastic grinders. Simplifying the recycling process for companies lowers the risk of recycling contamination. We also fund printing presses and packaging equipment for clients. We believe the strategic recycling partnerships we form offer unique, custom tailored value.
- Adapt sales practices: Just like the rest of your business, your sales and marketing strategies need to adjust based on technology and current environments. The sales side of 4G Recycling’s business, which historically was always grown through face-to-face meetings, has shifted to more video conferences, e-mail communications and conference calls during the past year. Our ability to shift quickly meant that despite the impact of the pandemic on overall recycling tonnages, the company actually experienced a 10 percent increase in sales in 2020, as we’re now selling more on price in addition to our traditional value-added service model. We also partnered with our ERP software provider, Cietrade, to automate additional in-house tasks and streamline workflows. We implemented one solution called a service macro, which has increased the efficiency of our logistics and billing team by upwards of 50%. We’re still in phase one of that project but we feel confident the benefits of this automation will help make the customer service experience of working with 4G even more user friendly.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
Our father, Harold, has been a tremendous resource for us. Considered one of the top recycling executives in the world, we have this wealth of knowledge available for 4G. He has helped us remain consummate professionals, and fostered our growth through his unique experience and a hard-working attitude that reigns supreme at 4G.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
In my personal life, I have embraced my faith more and that has been a wonderful thing for my family.
Recycling is something that can bring about a lot of good when done properly — last year alone our recycling activities were responsible for saving more than 7 million trees. I hope more recyclers utilize technology and provide greater visibility to the industry and the world as a whole. It is a goal of mine to help create a more transparent industry, where we are recycling focused instead of just being focused solely on prof
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