Rethinking Business as Usual: building a viable company to create a viable future
by ELISSA J. TIVONA
Fort Collins, CO, August 2, 2018
Northern Colorado native Geoffrey Schmidt wants a bright future for his two young boys — so he peered into his garbage. Where others saw discarded chicken bones and potato peels, Schmidt imagined opportunity. With that single glimpse into his trash can, Schmidt found himself staring at a rich agricultural resource which, properly handled, could take a huge bite out of global warming.
Rotting food waste in global landfills accounts for roughly eight percent of all global emissions contributing to atmospheric warming, according to Project Drawdown, a coalition of scholars, scientists, entrepreneurs, and advocates that is meticulously assessing global warming and developing comprehensive solutions to the problem. In its first major report, Drawdown, the Most Comprehensive Plan Ever Proposed to Reduce Global Warming, the coalition of experts ranked reducing food waste third on the list of 100 strategic initiatives to reverse climbing temperatures.
Visionary entrepreneurs like Schmidt are stepping up to align business interests with a new bottom line. These enlightened founders see a huge up-side for themselves, their children and grandchildren, by combining the goal of maximizing profit with the goal of becoming conscientious stewards of the planet.
Schmidt’s inspiration to build a business based on food waste recovery was born during a college permaculture class, part of his Environmental and Sustainable Studies program at the University of Northern Colorado in Greeley.
“During that semester my wife, Brittany, and I decided to start composting our own food waste to be as sustainable and environmentally focused as possible,” says Schmidt. “In the spring when it actually started to warm up and the flies and odors came, we realized you just can’t do this on the back patio of your apartment.”
The Schmidts moved their composting operation to the backyard of Geoff’s mother in Greeley.
By mid-summer, they got the hang of transforming garbage, otherwise destined for a landfill and the release of unwanted methane, into a nutrient rich organic compost with the proper ratio of carbon and nitrogen: a perfect amendment to recycle back into depleted garden soil.
Realizing how many people simply do not have the resources or knowledge to compost food waste for themselves, Schmidt says, “Right there we had the idea to start doing this for other people. We knew there was a learning curve, and we could take advantage of that and operate a business with it.”
In September of 2014 Brittany and Geoff Schmidt launched Common Good Compost, LLC, and set out to transform the germ of a good idea into a viable business. Over the past four years, the Schmidts have shown the grit and determination needed to overcome each challenge as it comes along on the bumpy start-up journey. And there have been many.
Beginning in January of 2015, the Common Good Compost business formula met with success. They provided each customer with a free starter kit including a 2.5-gallon indoor compost bin with aerated lid, a box of compostable bags for the indoor bin, and a 5-gallon outdoor receptacle with lid. They picked up customer food waste curbside on a weekly basis and in the early days hauled it to their facility in Greeley for processing, which at the time was designated as a backyard composter by Colorado Department of Public Health and Environment. Pledging to be a full-circle residential food waste collection service, they also provided delivery of up to 4 free bags of finished compost a year to customers.
Among the many details they also worked out was setting up efficient collection routes to maximize efficiency and minimize the company’s carbon footprint.
Common Good Compost continued to grow until January of 2016, when the amount of food waste allowable by law for a designated backyard composter was reduced dramatically from 100 cubic yards to 10 cubic yards. There was no way for the Schmidts to continue operating without securing a Class 1 facility permit, requiring a $20,000 application fee and a months-long process to rezone the property from agricultural to commercial. Their original vision to compete with other commercial composting facilities in Colorado, like A-1 Organics and Alpine Organics, faced serious jeopardy in the wake of the regulation change.
So, in true start-up fashion, Schmidt opted to pivot the company’s goal from competition to partnership. He adjusted his costs to accommodate drop-off fees charged by A-1 Organics for commercial composting service and carried on with the sales, management, and curbside pick-up side of the business. He even raised the bar on his competitive advantage as a sustainable business by using a zero emissions electric vehicle for his routes, a practice he backs 100%, hoping one day to charge his electric vehicles using photo voltaic energy from solar arrays.
But, the challenges were not over for the fledgling company. “It was working pretty well until about 4 months ago when I got a call from the COO, Scott Pexton, and he notified me that [A-1 Organics] could no longer accept the compostable bags in Weld county. They determined that [the bags] weren’t being processed adequately,” Schmidt reports. Litter around the A-1 Organics facility was getting out of control and methods put in place to fix the problem were not working.
For about a month Schmidt tried to accommodate the needs of the Weld county facility and went about the unpleasant task of debagging 5-gallon bags of raw compost for all his customers, which by this time exceeded 200.
“I learned the hard way that it was not going to be feasible at all! It was just awful,” Schmidt recalls, “The bags are just an integral part of the whole system. People think of composting as this really gross, messy process and without these bags it really can be.”
Fortunately, in short order Schmidt learned that the east regional landfill near Bennett, Colorado, operated by Alpine Organics, still collected the compostable bags. “So, we’ve been contracting with them,” says Schmidt. “That’s one thing about starting this service: it didn’t exist in any [form] when we started it, so we didn’t have anyone to follow. We absolutely had to think of everything.” He cautions, “If somebody wants to be an entrepreneur, they are. But if somebody doesn’t want to be an entrepreneur, I wouldn’t push them to be, because it takes so much commitment. It’s easy to talk about the up sides about entrepreneurship, but the down-side is that the responsibility is entirely on me.”
Ultimately, the sweet spot for a sustainable business according to Schmidt is to “find a problem that needs a solution,” then go out and put together all the scientific, marketing, business and legal resources necessary to be first at solving it.
Oh, and one more thing: have the foresight to be in the right place at the right time. For Schmidt this meant expanding his service to Greeley’s neighboring community of Fort Collins, Colorado. In 2015, Fort Collins put a “Road to Zero Waste” Plan in place, targeting diversion of all compostable and recyclable material from the Larimer County Landfill by the year 2030 along with the construction of a county-wide compost facility by 2025.
With community support for achieving zero waste, expansion into Fort Collins played a pivotal role in helping Common Good Compost reach the threshold of success. “A couple days ago I had 6 customers sign up in a 24-hour period, and we’re doing NOTHING to market this business at all, except for an online presence on Google,” Schmidt reports. “Now that customers are coming at us very regularly, I have to determine what do I want to do.”
Looking ahead, Schmidt sees many opportunities for expansion, from answering the growing demand for residential service to moving into commercial markets like restaurants and other large institutions. But he also sees risks. Steering a venture toward ongoing sustainability is a whole new level of challenge.
The business “is set up in a way that we provide enough of a convenience to make it worth the money we charge, and we charge enough money to make the business very financially feasible,” the ideal balance from a systems perspective, according to Schmidt. And a big part of that balance is achieved by working with nature.
“Our employees are trillions of bacteria who do the work for us,” he says with a wry smile.
But looking forward, he asks, “Do we look for an investor to bring our business plan to and get this going big and fast? Or do we take out a loan and still do it ourselves?” He also ponders possibilities for franchising, but concludes, “Either way we have to get prepared for growth. The growth is constant; it just doesn’t stop.”
Schmidt pauses and circles back to his original motivation to become an entrepreneur, all those new and less tangible measures of success. “There are just so many opportunities for us to work closely with natural systems to ensure that our environment is dependable and predictable for our kids. That’s my biggest, concern. Our primary goal for this business is diverting food waste from the landfills! If we do it, or somebody else does, it’s a success!”
