Episode 31 – Tom Fecarotta of Rheaply

Transcript

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Catherine Weetman  00:59

Today I’m talking to Tom Fecarotta. Tom is vice president of External Affairs at Rheaply in the United States. Rheaply’s mission is to make the world’s resources more discoverable and transferable through technology. Rheaply combines enterprise Asset Management with a virtual marketplace, which allows organisations to track inventory and depreciation. It helps people to visualise, quantify and use surplus assets and to offload end-of-life unwanted assets to organisations that need them. Before joining Rheaply, Tom worked for over 10 years as a digital and content marketer for various life science and clean technology companies. Tom’s fascinated by the impact of technology on the future of human health and sustainability. At Rheaply, Tom is using his agency roots and content marketing background to drive awareness, engagement and adoption of the platform. Tom, welcome to the Circular Economy podcast.

Tom Fecarotta  02:02

Thank you, Catherine. It’s a pleasure to be on this podcast.

Catherine Weetman  02:05

Great to talk to you today out in the Greater Chicago area. And first of all, I’m curious to know more about what Rheaply does. Can you talk us through the kinds of organisations using Rheaply and the types of equipment, materials and other stuff they’re exchanging?

Tom Fecarotta  02:24

Absolutely. So Rheaply is a technology company. We’re based out of Chicago, Illinois, and our platform allows users to share physical assets and resources within and between organisations. And these organisations could be government, NGO, higher education (which is where we actually started), enterprise, retail, really any organisation where there is a significant R&D budget, and significant assets and inventory. We like to say that we built the technology needed to scale the circular economy, which I know is somewhat of a lofty proposition, but you really hear in circular conversations today a lot about designing out waste in production, this idea of creating sustainable and more resilient products, products-as-a-service is another recent use case for the circular economy where you have manufacturers retaining control over products to avoid downstream waste. All of these efforts are sort of this design thinking approach to the circular economy. What is often missing from the headlines in the conversation, and where we come in is this notion of internal waste reduction, and how to connect everyone in the circular economy together through technology. So we like to say our mission is to empower organisations to save money and the environment by making resources more discoverable and then second, making them easily transferable. To give you a little sense of how this works, our core technology is called an asset exchange manager, or AxM. And it increases the likelihood of resource sharing both within and between organisations. So we often see university to university transactions, or maybe a business to a university or university to a nonprofit. So what we’re doing here is we’re increasing the demand through connected marketplaces, and the value we’re creating is through this reduction in double buying scenarios in the workplace. Right, do we have this item already? So we’re controlling the material flows by building transparency and ease of use into resource management. And we’re making operations teams more efficient, really, you know how to make the best use of idle materials by connecting them to people who are permitted to use them, first of all, and then second, just connecting them to people who need them the most.

Catherine Weetman 05:06

So it sounds as though some of the biggest opportunities are within the same organisation where one team of people have no idea that there’s a piece of equipment or some materials or chemicals or whatever, lying unused. Is that what you’re saying?

Tom Fecarotta  05:24

So, so yeah, you’re absolutely right, Catherine, with businesses, government, higher education, retail biopharma, a lot of the companies that we’re working with today that you would find on the platform, they’re now coming up with zero waste to landfill strategies. They’re starting to feel, at least from a bottom-line perspective, their contribution to material waste, the steel, plastics, electronics, all of the sort of the byproducts entering the landfill, that they own. They’re really starting to feel that waste from a bottom-line perspective, and this is really timely because moving to 100%, renewable energy just solves half of the climate crisis, and it’s the harder half. We like to think at Rheaply, we’re trying to solve the problem of material waste with circular technology. And organisations on Rheaply are getting the highest asset value return of a surplus item really before it ever goes to landfill. We want to empower our users with guidance around, “Okay, what is the most impactful path for reuse?” In the majority of cases, that might be recirculating resources within nearby departments, right, teams, buildings, on a campus or within a nearby warehouse, where you can sort of avoid the shipping and temporary storage. In other cases, the best or the most impactful path of reuse might be selling or donating it to a preferred vendor or donation centre within the city or the location that your business operates in. So on Rheaply, you can kind of accomplish both — there’s this timed release of resources, where you have a 15- or sometimes a 30-day window in which stakeholders in predetermined teams can make an offer on resources, and so that’s really a big value creation there.

Catherine Weetman  07:31

And at what stage do organisations start to put their assets, equipment, resources onto the Rheaply platform? Do you do it as soon as you bought it, or a company’s waiting to realise that they’re no longer using that particular bit of kit?

Tom Fecarotta  07:50

We honestly have seen both use cases. I would say the majority of the use cases are more the latter. We’re working with surplus teams that have identified either uninventoried assets or assets in storage that are just going underutilised, and they make it onto our platform, and then specific teams or business units have the opportunity to reuse those resources. And then from a sort of waste diversion and tracking perspective, our platform kind of gives you insights into, “Okay, what are the classes of assets that are being reused the most? Where can we make systemic improvements on other resources?” And it’s kind of all done in this easy-to-use user interface.

Catherine Weetman  08:37

And are you able to help companies and other organisations, universities and so on, benchmark against similar organisations? So if your best-in-class university had a reuse rate for chemicals of this and lab equipment of that, are you able to kind of give people a picture of where they should be aiming to?

Tom Fecarotta  08:59

I will say that we can give them a picture of that information from an intramural or from an internal perspective. But we haven’t done it in the sense of, hey, we’re going to share the metrics of one organisation against another. We don’t want to pit organisations against each other, we want to make sure that they understand how they’re improving waste diversion efforts across campuses, across business units, and how they can make, you know, marked improvements.

Catherine Weetman  09:34

And I thought it was interesting that you talked about the zero waste strategy because from what I understand, that’s quite an American focus. Companies are really starting to look at, “Well, what are we discarding? What are we sitting on, that are unused assets, consumables and so on?” and really start to get to grips with that. Whereas I think in Europe, companies are perhaps looking more at how, you know, how can we keep things for longer? Or how can we circulate things? You know, how can we design things for circulation? But I think it’s an interesting perspective when you start to measure what’s going out the door and how can we do something about it? And I remember a good sort of motto — I can’t remember who this was now — somebody in the sort of circular economy leading thinkers, that zero is a very motivating target. It shouldn’t be to kind of, you know, reduce 90% of the waste at the moment, it should be to get to zero waste, because that’s very definitive.

Tom Fecarotta  10:42

Yeah, you’re absolutely right. We have a personal connection of ours that calls it zero waste heroes because it is this heroic effort. We built the technology to connect people to each other, to things, but also to value, and instead of letting items depreciate in value, from storage or go to the landfill, we’ve made it possible for users to continue getting value out of items for things that they don’t want anymore, right, and get rewarded for it. Our technology actually uses gamification and a monthly reward system to give people the actual incentive to share and reuse. So I think you’re right, like in terms of this greater purpose, if you want to call it that — we feel like technology can own this responsibility to rebuild our economy from a linear one to a circular one. At Google, there was — this was at Circularity in 2019, and I believe it was in Minnesota the first year; I wasn’t there, but I was watching it live. And Kate Brandt, who heads up sustainability at Google, said that waste is a data problem. And it’s a problem that needs to be solved with technology. And we couldn’t agree with that more. If you look at the UN’s 17 SDGs, the Sustainable Development Goals, they really act as a rubric for the future, and they present us with this sort of a shared common goal towards a zero waste future. But you can kind of say that our technology sort of sits at the middle of all of the circular-focused SDG targets, right? I think Rheaply kind of fits more in line with SDG 12, which is more about ensuring sustainable consumption and production patterns. But what we’re really trying to accomplish is this way of achieving these goals through interconnectedness and connecting people to each other and to critical resource information.

Catherine Weetman  12:57

That’s interesting, and in terms of connecting people to each other, I guess, if I’m thinking about one organisation and connecting departments, they are more likely to share a common language in terms of the categories of equipment and assets and consumables. When it comes to between organisations and perhaps even jumping from one sector to another, the terminology, the data categories could be completely different. How do you overcome that?

Tom Fecarotta  13:29

Yeah, we have a sort of a categorical shift organisation to organisation. So the beauty of Rheaply is you can configure it to your organisation. So, you know, how Rheaply looks to an institution will look different than how it looks to a manufacturer. Same thing with biopharma, right, they might want thousands of antibodies, and so we’ll have to measure the rate of exchange by volume, in some cases, so we’ve built this system, it’s a progressive web application that — not to get super technical — allows for this sort of configuration changes so that really any two organisations can connect via a shared category interest.

Catherine Weetman  14:18

Okay, so Rheaply sits in the middle with a standardised set of categories. And each of the users can tweak the terminology, according to what they call it.

Tom Fecarotta  14:30

Exactly. 

Catherine Weetman  14:30

That’s great. And just coming back to the gamification, that sounds interesting, the rewards to help encourage people, because what I was thinking ahead of the podcast was, a lot of this is about changing habits, isn’t it? People have been used to not having to worry about assets that aren’t being used anymore, or little bits of chemicals or reagents that are left and they move on to the next project. And it’s, you know, it’s hard to keep track of that. So what kind of rewards are you able to offer and what kind of games do you get people involved in to kind of bring it to?

Tom Fecarotta  15:08

Sure. We have a lot of leeway when it comes to private organisations, right, we can get creative with gifts and the actual reward itself as opposed to a state-run institution in the United States that is restricted when it comes to giveaways. But, you know, this could be… we have a leaderboard game. So if you’re in the top, you know, 10, you are automatically entered into this lottery system that will spit out the winner at the end of the month. We also have a series of what we call kind of themed giveaways. So once or twice or maybe three times a year we’ll have a theme giveaway for plastics, right, if you post X amount of plastics for the month of July. Which is linked to plastic-free July, you get X amount of points. If you post during campus sustainability month — we work with a ton of higher education clients — you get X amount more points. So we’re trying to make it fun, trying to think about these different classes of resources and how we can gamify each one.

Catherine Weetman  16:26

That sounds great. So you really can be a zero waste hero then. You know, by coming top of the prize stakes and so on.

Tom Fecarotta  16:37

That’s right. That’s right.

Catherine Weetman  16:40

And in terms of starting up Rheaply, what kind of struggles have you faced or what’s surprised you in the journey so far?

Tom Fecarotta  16:49

Yeah, I’ll start with the surprises because there were many, I think, getting started when this idea took root. I actually wasn’t in the picture — I joined a little bit later — but when we started the company in an academic lab setting, we conducted research and really were surprised to find out that there were a lot of reuse efforts already underway in higher education, and particularly in research. It was just done in a very inefficient manner. For instance, you often see departmental listservs and donation forms for unwanted items, sort of these like passive classified ads, and they were all kind of attempting to speak to each other. And the intentions were really good. But there was this incredibly, you know, high propensity for waste, people were throwing out perfectly usable unopened boxes of lab consumables and furniture and even equipment in some cases. And if nothing, this is what was really interesting, if nothing was claimed within the nearest building, because they had really nowhere else to turn, people would just naturally throw it out or put it into storage because there’s a lot of space constraints within these labs. So this is what was happening. And it was really unfortunate, because it was happening at a time when the U.S. government budget cuts for research were at an all-time high. And simultaneously, the cost for conducting research with new equipment was at an all-time high. So this very thought of, you know, throwing out reusable research materials was just kind of a complete travesty. So you have this resource gap issue going on, but you also have these closed-off and disparate reuse and resource management systems on campus, and we felt like there was an immediate opportunity to make this process better. I’d say that the struggle or the second surprise, we began to understand that this problem is linked to a trillion-dollar circular economic movement and it kind of gave way to a struggle to understand how our technology, which was meticulously built for a lab setting, could be redesigned for other industries. What would this look like for the fashion industry? They were experiencing a similar issue with textiles and waste. And how could it be redesigned for other industries, enterprise and NGOs, the built environments? Many of these organisations are now committing to their own systemic transition to circular approaches in pledging carbon neutrality over the next decade. So that became a way for us to start thinking about, “Okay, how do we apply this to situations outside of campuses?”

Catherine Weetman  19:48

I think going back to the space problems and the logistics issues. As we’re seeing at the moment for the oil price, you know, why is the oil price gone negative? Because it’s so expensive to store it on a tanker. And if you’ve not got anywhere to store it, and you’re having to pay through the nose for it to sit on a tanker — I think I read it was something like $200,000 a day for the oil tanker. So suddenly, you can’t, you know, you’re paying somebody to take your valuable assets away. And I’ve heard stories when I was at DHL, you know, stories of hospitals where a new X-ray machine was coming in, but nobody had thought about what to do with the old one, which was still functioning, it’s just that, you know, it had come to the end of its allotted life. And, you know, where’s it going to go and suddenly, it’s either, you know, put away somewhere if you’ve got storage and forgotten about, or even worse, it’s given away in a kind of fire sale, because suddenly it’s an expensive problem to have to sit on. And this whole business of flagging things that are likely to become available well ahead of time and starting to get those marketed out to organisations that can make use of them. I think that’s one of the keys as well as this common categorization and finding a common language.

Tom Fecarotta  21:18

Yeah, you’re absolutely right. I love that you brought up this idea of time, this time delay that we’re so interested in, because that is a huge part of this. We want to get in front of these resources. And I think for a circular approach to be successful people have to be — you have to be framing the issue less on sustainability and more on the economics, right?

Catherine Weetman 21:42

Yeah.

Tom Fecarotta  21:43

It’s in the name. People have to be saving money and making money. And when materials are shared and consistently in use, the value of those resources, it’s just they’re just less likely to deteriorate, right?

Catherine Weetman  21:57

Yeah, I think there are two things from the — well, one from the circular economy, one from Six Sigma. Six Sigma’s got the eight forms of waste. So something underutilised is one of those. And coming back to the circular economy, I’ve now forgotten what it was gonna say… Oh, yeah. When you start to design a system, you should be thinking about the end of use for that system. So if you’re designing a product, when it’s finished the end of its useful life, what happens to it then? Are you designing it for disassembly? So in the same way, as you’re designing a research project, you should be thinking about everything you need for that, and what’s going to happen to it afterwards, and start to plan for it at that stage. Don’t plan for it once the project’s finished. It may be that you decide to lease something instead of buy it. It may be that you decide to collaborate with another organisation and share things between you. There’s so many different ways that you can get more value and more productivity out of every bit of equipment and resources.

Tom Fecarotta  23:10

Yeah, absolutely. You’re absolutely right. I think for us it’s the accessibility to real-time asset disposition information for people. What are we doing when items are no longer needed? Is everyone following the sort of same set of guidelines because there are a tonne. And so we built the system to have this sort of permissioned exchange, if you want to call it there, to really start to piece together a way to reuse items sort of more holistically within organisations.

Catherine Weetman  23:45

Brilliant. And, Tom, what would your top tip be for another organisation looking at how they can do something meaningful for the circular economy?

Tom Fecarotta  23:56

Top tip… I think in terms of a top tip for circular businesses — I think honestly, getting started with a circular idea is easier than you think. If you’re a large organisation, think about your internal operations first, and then you’ll start to open your mind to what’s possible for your supply chain. What’s a quick way to have a 10% higher waste diversion rate? How can you shore up resource inefficiencies? I think, for all sized organisations, not just large organisations, think about your upstream and downstream systems. Are you connected to your recycling infrastructure? Do you know where your stuff is going when it’s no longer wanted? Do you understand — I think this part is key —all the players locally in terms of the demand for scrap and secondhand items? Remanufacturing is something that’s really interesting. How do we connect remanufacturers to this ecosystem for reuse and circular sharing? What is the demand for unwanted plastics? So I think those are questions that you can ask and you can really start to piece together, you know, effective monitoring, if you want to call it that, in a more holistic fashion.

Catherine Weetman  25:19

Yeah. And I think you’re right with the quote from Google that, you know, waste is a data problem. And that’s the key to it, isn’t it? And now we’ve got a better opportunity than we’ve ever, ever had before in human history of using data and using machine learning and AI and so on to better understand what the potential flows are and connect “I have” with “I need.”

Tom Fecarotta  25:45

You’re absolutely right. Organisations — our Chief of Staff actually mentioned this to me the other day; he mentioned that organisations really function a lot like people do. When you rethink one aspect of your life, you start to rethink your other actions, right? And I think for organisations, that means it needs to spread, we need to spread this thinking to other parts of your operations. Organisations are made up of people and people are really how we’re going to impact the world. So I think that’s something that we’re trying to empower with our users as well.

Catherine Weetman  26:23

So yeah, look for the zero waste heroes in your operation and start with them. So, Tom, how can people find out more about you and about Rheaply?

Tom Fecarotta  26:34

Yeah, so we’re pretty active on social media. You can follow us on Twitter, LinkedIn, and Instagram, we also have a website, www.rheaply.com. And you can email us at info@Rheaply.com if you want to get in touch via email. And we’re always pretty available, so.

Catherine Weetman  27:38

Great, thank you. And we’ll put those links in the show notes. And perhaps for those who haven’t got a — who are trying to imagine how to spell Rheaply, we should spell it. So it’s rheaply.com. Is that right?

Tom Fecarotta  27:54

That’s right. Thank you for saying that. Yes, you got it right.

Catherine Weetman  27:58

Yep. Because I guess sitting there listening, you could be thinking, “Oh, well, there’s several different ways of spelling this.”

Tom Fecarotta  28:04

Different ways of spelling and different ways of saying it, right. We often get “reapply” — if you change the syllables around it kind of has that dual meaning.

Catherine Weetman  28:13

Right. Yeah. Good stuff. Well, thank you, Tom, for sharing all those insights with us.

Tom Fecarotta  28:32

Absolutely. Thank you so much, Catherine. It was a pleasure.