How does Cleanhub address plastic pollution? Well, co-founder and CEO Joel Tasche is here to share their secrets. Cleanhub is a startup that aims to preserve and protect the world’s oceans by collecting and managing multi-layer packaging, which is a type of plastic that is almost impossible to recycle using traditional technologies, and so that is what Cleanhub is for.
Having had the chance to explore many countries in his youth, Joel was grateful for the chance to fully appreciate and immerse himself in nature and the oceans. After finishing his degree, he worked at a startup, later on quit, and got his waste management certification in Germany. And then, together with his two friends Florin and Bosse, they set out on a mission to solve the problem of plastic pollution, thus, Cleanhub was born.
Joel elaborates on the waste collection and management cycle and stresses the importance of not just waste management but of creating more sustainable materials to begin with. He talks about their business model and how and why they partner with businesses that aim to take responsibility for plastic waste and what motivates these businesses to do so in the first place.
He goes on to share why they chose to fly from Germany to India to get Cleanhub running, why they focus on multi-layer packaging in particular, and some of the challenges they faced creating Cleanhub right before the COVID-19 pandemic and how they overcame those challenges. He ends with what he thinks is the key ingredient for companies like them to scale and how he hopes the world becomes more circular (economy wise) in the years to come.
Maiko Schaffrath 00:07
You are listening to Impact Hustlers, and I am your host, Maiko Schaffrath. I have made it my mission to inspire the next generation of entrepreneurs to solve some of the world's biggest social and environmental problems. And for this reason, I am speaking to some of the best entrepreneurs out there who are solving problems such as food waste, climate change, poverty, and homelessness. My goal is that Impact Hustlers will inspire you, either by starting an impact business yourself, by joining the team of one, or by taking a small step, whatever that may be, towards being part of the solution to the world's biggest problems. Alright. It's really exciting to have you on Impact Hustlers, Joel. Plastic pollution is a topic that I've been following for a while, and there seems to be some interesting solutions, but nothing really that seems to be operating at scale yet. And I'm really excited to talk to you about how Cleanhub thinks about solving that problem at scale. Obviously, you're still early in your journey, but you're already showing some really interesting traction on removing plastic from Planet Earth. And it's great to have you on the show.
Joel Tasche 01:40
Yeah. Thanks for having me, Maiko. Really, really a pleasure to talk to you.
Maiko Schaffrath 01:44
Thanks for joining. So, let's start with the early days of Cleanhub. I think you were actually working for a startup before in a marketing function and working there. Tell me about the time you first discovered or really spent time on the plastic pollution problem and decided to say, "Okay, I'm going to launch a company to solve that problem." Tell me about how Cleanhub actually started.
Joel Tasche 02:16
I think I can actually go back to all the way into my childhood because I grew up sailing. I grew up at Lake Constance. I had an amazing childhood basically, constantly playing in or on the water. When I graduated from high school, I spent a couple of weeks in Costa Rica learning to surf. Somehow, that stuck, and I was really submerged in the subculture of surfing. I was also able to spend really nice semesters abroad. One of them was in Hawaii, where you really discover how close people live to the ocean, how much it means to them, and that also happened to me. And generally, during my studies, I'd spend a lot of time working during the semester to take the semester breaks often. I was really fortunate enough to see quite a bit of the world before I started my first job. And in these early days, like in 2010, '12, '13, if you went to Indonesia, for example, you were already very much exposed to the problem of plastic pollution before mainstream media was talking about it here in Europe. Once I was done with school, I went into a B2B SaaS company called Avrios. We did fleet management software. It was a super interesting learning experience, but I was never really passionate about the topic, but I went in there to really understand how to build a company. After around two and a half years, I said that, "I think the time has come to at least try to do the first company." And then obviously, the question was, "What should I do?" And for me, I really wanted to follow something that I was passionate about, and that was plastic pollution and the entire topic of the circular economy. I didn't know anything about how the solution should look like. But working in the startup ecosystem, it was clear to me that I wanted to do something that can scale and that should also be profitable, because I believe the solution needs to be profitable to work at scale. That's basically it. And then, I quit my job end of 2018, spent a lot of time on conferences actually, because I thought that this is the spot where people will talk about the future, which was also the case. I visited around a dozen of them, from Brussels to London to Germany, different kinds of settings. Also, different shades of green, I would say, from hardcore circular economy conferences to the lobby of waste-to-energy plans somewhere in Brussels, and understood the entire spectrum. I talked to a lot of companies in the recycling space to really understand what are the issues. And at the end of it, I did a certification for a waste management officer, which is a thing here in Germany, because we have certifications for everything. But that gave me a good perspective on, where's the market going? Or where does the market think they're going? What's the problems they are facing now? And it was also the legislative framework for waste management in Europe. And at that time, I met the- we are three co-founders in Cleanhub. Florin, who was working with me ever since before, and around that time, I was met Bosse, who was the third co-founder, and we just said, "Look, we cannot solve the problem of plastic pollution from our desks in Germany. We need to go where the problem actually is." We have a good network in India, so we decided, "Let's just board a plane and go to India to cross-compare, what is working here in Europe or what is also not working so well here in Europe? And what is working or not working in countries like India where, for example, the Ganges is producing a lot of ocean-borne plastic?" And yeah, that's really how it went down.
Maiko Schaffrath 06:09
Got it. So, the actual problem of plastic pollution, you already said it a little bit, is very related to the quality of waste management. Like in Germany, for example, you have, I think, a waste collection system where manufacturers of plastic have to pay a certain fee for the plastic waste to be collected and recycled when possible. Whereas I guess, I've never been to India, but I guess in India, that system may not at least not work properly if the plastic all ends in the Ganges. Is that the main reason why we end up with pollution?
Joel Tasche 06:46
Yeah, I think that's the core takeaway we can take. I think we need to generally separate into downstream solutions, which is what we are in, like the proper waste management, and then in upstream solutions, which is bringing better material to the market, solving the problem at the top of the hierarchy. And we need both. That's without question. We need both solutions. We focus on the downstream, on the actual waste management. And the surprising thing, for me at least personally, was when I went to India is like, the actual circular economy in regards of recycling, in my perspective, works much better than, for example, in Europe, they have higher recycling rates, because in these economies, nothing that is of value is thrown away. The PET bottles are collected by informal waste workers, brought to small purchasing points where they will just turn it into new products, like be it yarn, be it, I don't know, furniture, whatever. But when you go to India, or Indonesia, or wherever in the world, even here in Europe, what people leave behind is flexible packaging, is multi-layer packaging. This plastic basically has no value, so nobody wants to collect it, and it's extremely lightweight. If it's not properly managed and you have weather phenomena like the monsoon, it will just wash it away. The wind will blow it away into sewage systems into streams and from there, it will enter the ocean. So, the problem really is that there's no proper waste management system in place. Anything that is of value is picked out of this not really well-functioning stream, but everything that has no value is basically left behind. And from there, if nobody's taking care of it, it will go into the ocean.
Maiko Schaffrath 08:30
Got it. Let's try to understand your model. Essentially, I think for anybody that's listening, people are probably quite familiar with carbon offsetting where, basically, you pay for a company to plant trees most of the time and to basically compensate your carbon emissions. Is that a good analogy and can you just explain your model? How does it exactly work? Who are your customers? What are they paying you? And what do you do as a result of that whole process?
Joel Tasche 09:07
Yeah, I think the analogy generally is correct insofar that credits always work as a substitute or as a financial injection into a system to make it better. For plastic, I think before really going into our model, there's one thing that needs to be understood, and that is, if I run a waste pickup service, for example, if I go from house to house to house to collect plastic waste, I do receive some items that I can sell, but the majority of waste that I'm getting has no value. Now, I still need to pay the people who collect the material. I need to pay for logistics. And in the end, I also need to pay the company that's going to take care of the waste in regard to, for example, core processing or, yeah, bringing back the energy out of it, and that's a horrible business model. There's zero profit in there. Actually, you're losing money, and that's why we need those plastic credits to incentivize people to still do the process. In the end, it is a service. It's not a value-extracting activity, but really a service, and that's essentially what we do in our model. So, we talk to brands that want to take responsibility for plastic waste. Some of them have plastic in their packaging. Some of them don't have plastic packaging at all, but what really unites them is that they want to do something against plastic pollution. So, they basically buy a certain volume of plastic that should be properly managed, and we pass on that contract to collection partners in India, in Indonesia, and Brazil to properly collect and recover this plastic waste. That's our model, and we take a transaction fee on these sort of, say, plastic credits. So, one plastic credit equals one ton of plastic waste managed.
Maiko Schaffrath 11:16
Got it. That's very interesting. And why did you initially decide for that model where you're partnering with companies in India, for example, to collect that plastic waste? And I guess, where are they collecting that waste?
Joel Tasche 11:32
The reason why we decided to partner with them is because everything's already there. The infrastructure is already there. There's people out there who already collect waste, but they collect very specific types of plastic. They don't collect everything. Then, there's logistics in place. There's the warehouses in place to store waste. There's balers in place that can compress waste to make it cheaper for logistics. We have the disposal endpoints in place. Cement factories basically are all over the world, and they can use this material to replace coal in their production process. But someone needs to pay for the process, and that's really what we discovered and said, "We don't need to invest into infrastructure. We need to make sure that the service of collecting this plastic waste is paid for," and this is why we decided to partner with organizations that are collecting plastic. The thing that we do is we say, "Look, we also pay you for the non-recyclable part of the plastic waste. We don't want to interfere with anything that is recyclable." And for that, we didn't need to invest into any new technology or whatever. The only thing that we did is we built a platform that allows for two things. The first thing is really to track and trace the material. So, they need to deliver proof of work. They need to take pictures of the waste on the scale. They need to deliver weighing notes, truck details throughout the entire process. And the other thing is we connect these collection partners to disposal endpoints where we know that the material is treated safely. That's what we built the platform for, and that's also what giving the transparency to brands that they can trust that the impact that they pay for is actually performed.
Maiko Schaffrath 13:24
Let's zoom in on that actually. So, one issue, I guess, is a lot of plastic gets collected already, so you don't want to sell a service that's basically just paying people some additional money to collect the stuff that they collect anyways, because then, you don't have an additional impact. So, how is your approach on making sure that you're generating additional impact, collecting additional plastic that would otherwise never get collected? How do you do that?
Joel Tasche 13:55
We focus on one very specific material group, which is multi-layer packaging. I think the best example for that would be your standard chips bag, where you have a metalized inlay and a plastic outlay. These materials can't be recycled in a mechanical way. And as I mentioned, they need to take pictures of the waste that is produced. That way, we can also see that it's actually the material that we get. And we do sample testing within our reverse logistics chain to make sure that it is really the material that we asked to be collected. And for that plastic, basically every study shows that, I think, the unofficial collection rate of that material is at 1%. The official is at 0%. The unofficial is at 1%, and that shows a lot. Nobody wants to have this material. And basically, whatever euro we spent on that kind of material will be additional, and that's really how we make sure that there's additionality in the collection. So, we do not collect PET bottles, because they are already collected. We do not collect HDPE shampoo bottles. We only collect flexible packaging.
Maiko Schaffrath 15:12
And then, is your focus on preventing ocean plastics specifically? And if so, how do you focus on that? Do the collection companies focus on rivers and oceans? Where does the classic actually get picked up?
Joel Tasche 15:35
In an ideal world, every single household would be connected to a managed waste service, someone like we are- or at least, like I grew up with the waste in front of our house, and the workers come once a week, pick it up. And that way, the material doesn't end up in the environment in the first place, and that's the kind of system that we want to incentivize. Quite frankly, this is sometimes a bit difficult in communication, because it's not as sexy, so to say, as picking up a bottle out of the ocean, but it is what needs to happen. Because if I spent one euro on such a process, it should be the most efficient way. I want to recover the plastic in the most efficient way, so to say, that I can collect more. That's where we should get, and household collection is the most efficient way. It doesn't make sense to throw it in the environment and then pay someone to pick it out from the environment. So, that's our number one priority. We do specifically incentivize household collections. However, we also see the need to pay for certain infrastructure, interventions, like for example, river barriers. We do have partners that also collect plastic out of rivers to make sure that it is treated safely, because there's this massive inflow, and we just need to make sure that we intercept at the right points. What we as a company don't do is we don't really pay a premium for material that is recovered from the ocean or that is recovered from the rivers. But with our partners, it's a startup so the prices do range slightly, but we try to pay a very standardized fee and then let the partners work with that. And then, it's up to them to decide, "Okay, I get X amount of money for a ton of non-recycled plastic waste. What is the most efficient way for me to get to this material?" So, we take a very market-based approach to the problem.
Maiko Schaffrath 17:35
That's great. I guess there's a few prominent startups out there and solutions. For example, The Ocean Cleanup is probably one that received a lot of public attention. That's on- yeah, and that's great. I think they brought that whole topic of plastic pollution to the masses' attention, which is great. I think it's a great company and great ambitious goals as well what they're pursuing with, basically, collecting plastic in a tech-driven way from rivers and oceans directly. But what I love about your solution is you're going a bit earlier than that, because the problem is it's a bit of a leaky bucket at some point if you're trying to collect from the oceans but you're not stopping the inflow into the oceans or, generally speaking, into the environment. It's not just the oceans.
Joel Tasche 18:29
Maiko Schaffrath 18:30
I really love the approach. I guess you're just putting an incentive price tag onto plastic to say, "Hey, all this stuff that's not valuable at the moment because there's no value to it inherently, we are putting a value on it. We pay you for it, and we recover that from companies you work with."
Joel Tasche 18:51
Yeah, exactly. I think mentioning The Ocean Cleanup brings up a very important point. Everybody who's trying to do something about the problem gets criticism. It doesn't matter. You can try to be the best company in the world; you will be criticized. And I personally believe that this is the entirely wrong approach. There isn't a market to solve the problem and we need all solutions. There is not a silver bullet to the problem, but we need every single one in the market. The Ocean Cleanup doesn't need us to finance their collection. I think they are pretty well off themselves. They hit their runs professionally, but they essentially have the same issue. They are fishing out a certain type of material from the ocean that has just a very limited value and they somehow still need to finance their boat, so there's always this- what's my bottom line then? And this needs to be fixed. By passing on the theory, by passing on the cost to the polluter in the capitalistic world, you're also setting the incentive to pollute less, and that's what we need to keep in mind. So, everything goes into this direction of an extended producer responsibility, like the polluter pays and that's what's important.
Maiko Schaffrath 20:18
Got it. Let's talk about the polluters or, let's say, your customers which, in some cases, they don't even use plastic packaging, because I think you actually require them to have a policy in place to reduce plastic emissions anyways, because that's the best way to start as a company. But then, when they work with you, tell us a bit more about why they usually work with you and what type of companies are usually interested in taking plastic out of the environment.
Joel Tasche 20:53
I think the motivations are, in the core, always the same. I really truly believe that every single company that we work with wants to do something good for the planet. I don't really believe in the fact that there's people out there who really want to do harm to the planet, which might sound super naive. But in the end, that's just my belief that keeps me going, and that's the core motivation. And then, there are industries where there is just no way around plastic. In certain applications, you are, for example, not allowed to use recycled plastic for hygiene reasons, especially in food. Then, in other cases, if companies really do the lifecycle assessment of the packaging of the entire process of what they do, plastic might be the most sustainable option. Again, let's take the example of food. I hope that I'm not making too many enemies here, but the biggest problem would be if the food goes bad on the shelves, then everything that was done before it went onto the shelves was for nothing. All the carbon emissions of harvesting, transportation, etc., were for nothing, so it is about to keep the product as fresh until it is consumed, basically. And plastic, in many cases, is the thing that enables us to do that, because we as a society demand that convenience, and it is a complex world. If, basically, at some point, you can decide as a company, "I'm not going to use plastic at all anymore, which might mean for me as a company that I need to go out of business," then maybe someone else is going to pop up and do the exact same thing again. So, I don't want to protect any company to say, "We were not working on packaging." However, in some cases, I would also like to ask the consumer to at least give the companies a chance to explain why they decide in certain ways. I think that's what consumers should do. They should hold companies responsible. They should ask for reasons, but also give them the chance to explain themselves.
Maiko Schaffrath 23:14
Got it, and-
Joel Tasche 23:15
Yeah, I think for these companies that really did the math, that looked at the options, "What can I do? What can't I do? What works in this specific market that I'm working in?," because if you work with a biodegradable plastic, for example, that is not accepted in every single composting unit, not across the UK, not across Germany, and you might actually do harm to the actual recycling stream in the market that you're in. So, you have to look at these things from a lot of different perspectives. It is always complex. And again, I can only encourage every single consumer to demand for information from the brands that they're working with. And if there's no other option, then we come in basically and give companies the chance to say, "Look, we know that we are not perfect. We know there is currently no better alternative to that. The best that we can do is basically then to say, 'Okay, at least I'm making sure that, definitely, 100% of the plastic that I put out there will be recovered on a net balance of the same.'"
Maiko Schaffrath 24:16
Great. I want to dive a bit deeper on you building Cleanhub and some of the challenges in your journey and your journey in general and zoom in on that. I think what you've done, if I summarize that, you've built a really interesting economical system and platform for companies to compensate their plastic emissions or have a net positive impact basically, where almost each product they sell takes plastic out of the environment ideally. You have a network of partners that are actually collecting the plastic. You have ways of certifying that the plastic is actually getting collected. So, it's quite a bit of a complex system of a lot of moving parts. If we go back to day one, you wanting to solve this problem, knowing some people in India and you're like, "Okay, maybe that's one avenue to go down," since that day, what's been the hardest part of making all these puzzle pieces fit together and then also sell them as a product to companies?
Joel Tasche 25:36
I mean, for me, personally, the most difficult thing was I was in Mumbai to basically close our first partnership on the ground when Germany closed its borders due to COVID, and I was on one of the last planes back to Germany. And suddenly, we had to operate in a country where I have no cultural background of operating. Every country is always slightly different in their practices. However, we had people that we could trust in India, and then we had to build this entire thing completely remote. And at the same time, we're fundraising. I'm very happy that our investor put the trust in us and says, "I know you can get this done," and everybody was extremely supportive from our investor side as well. There was, in the beginning, a bit of a shock, because also, India, for example, was extremely and is, again, extremely hit by COVID. Operations were down. Nobody really knew where things are going. That was probably one of the toughest things. But I think it was a great learning opportunity for us as well, because we didn't know where the journey would go. It forced us to be extremely cash-conservant. So, we built this entire thing with four full-time employees, which was us founders and Rodney who is doing our sales, and that allowed us to build everything extremely efficiently and really focus on things that were important. And I think that's the silver lining and probably what also shaped, really, our culture as a company moving forward, that we were born into this remoteness and that we were born into staying efficient with what we have in regard to resources. And yeah, that was really our biggest challenge, I would say.
Maiko Schaffrath 27:42
Got it. And did you have your first customers confirmed before that whole system was set up even and figured out along the way? Or did you spend a lot of time really developing the partnerships, collection partnerships, and then started to sell that to customers?
Joel Tasche 28:02
We started the company in January 2020, and then we started to focus on the operations. And in, really, June, we started our outreach, so Q3. We started. [Our] first customer was, to be honest, my best friend from university who has his own e-commerce store. He was the first one to get the ball going. But from there onwards, we immediately focused on setting up a sales approach that would allow us to talk to as many customers as possible. There was a lot of sending emails, sending LinkedIn requests afterwards. And then, the beauty of our model, I would also say, is people talk about it and that brings us also a good amount of traffic that we don't need to pay for. But yeah, that was the progression of what we did. So, first focus on making sure that we can keep the promise that we deliver to our customers, to make sure that technology works, that we have control over the reverse logistic chains. So, we also send auditors into the companies that we work with to make sure that labor standards are in place, etc., that we really can track and trace the collection of plastic, and then we really went out into the market.
Maiko Schaffrath 29:35
Great. And if we look at the future, what do you think is the biggest barrier to success or the trickiest bit to solve for to make your model work at scale? Let's imagine really removing massive amounts of plastic worldwide, having massive amounts of corporate customers. What's the thing you need to figure out or anybody that's in that space is trying to figure out? Because it doesn't seem like anybody has figured it out yet at scale. There's no company that's currently doing what you do at a massive scale. So, what is it that's stopping people from getting to that scale?
Joel Tasche 30:19
I think, first of all, the timing is right, right now. People are very much on top of what's going on, so I do believe that the timing just wasn't maybe right in the past four or five months, like that. I really do believe, and we see that with our customers, that consumers really appreciate when companies take responsibility, when companies are also transparent about how they conduct business, and that's a massive change that the consumers are driving that is going on right now. And I do believe that, depending on how fast we are in that regard as consumers to challenge brands in the way that they do business, the faster models like us will scale because what I can tell you quite frankly is the difficult part is not to get plastic waste collected. It is a manual process. Obviously, it costs money, but it is not, and I mean this in the most respectful way possible, it is not rocket science. All partners are doing an amazing job, absolutely. I have so much respect for everyone who is working in the industry and who's been working in this industry for the past 30-40 years. Nobody really cared about what they were doing, and only now, it comes to the surface of, "Oh my god. There's something going on." But it is a service that can be provided. It's the willingness to pay and really putting the money where your mouth is what we need to get going and get more brands to sign up for that. That's what I see as the biggest barrier.
Maiko Schaffrath 32:02
Got it. And are you focusing much more on helping brands communicate that impact as well? Are you thinking about providing certifications or any sort of materials where they can say, "Hey, we are Cleanhub-certified," or, "That's our impact we have"?
Joel Tasche 32:19
Yeah, yeah. That's actually now also the focus for the next several months. We have our first hire since besides Rodney who's also one of our-
Maiko Schaffrath 32:31
Joel Tasche 32:33
And she will start in May, focusing really on content, on explaining all that that I just explained to you, because people need to be educated about the problem as well and people need to be willing to learn about these things to really appreciate what the brands are doing also with our system. And this is really where we want to double down on also, to help our customers explain their impact better. And also, I think we had a lot of learnings in the past on how you can communicate on sustainability or your sustainability initiatives. And for me, that's clearly transparency, and that's our biggest bet by also making the recovery transparent, but really providing the data that proves that the plastic waste was collected. That's really what we focus on. I mean, the one thing that we really verify in the end is how much plastic was collected, making impact visible, making impact measurable. That's the big trend in my eyes.
Maiko Schaffrath 33:44
That's great. Let's cover one more question, which is my last question. How do you think the world will look like in 10 years' time if Cleanhub succeeds? How does the world look like?
Joel Tasche 34:02
A lot more circular, which might sound funny, because we focus on a very linear and waste stream. But what we want to really do is set up collection systems for waste, and that's just a crucial part for the circular economy. If every piece of waste would be collected from a doorstep level, the quality of waste that you would receive would be much better, so it's better recyclable. The collection system is a lot more efficient, so you get bigger volumes at a cheaper price which also lowers the price of a secondary raw material. I hope it's not getting too complex, but in my eyes, it's a lot more circular. And our big goal, basically our North star is, and it might sound extremely ambitious, but it's the startup founder in me talking, our big goal is to really half the amount of plastic entering the oceans. So, cut it in half. Again, I think sometimes you need these DX and-
Maiko Schaffrath 35:12
Joel Tasche 35:14
We're still a star away.
Maiko Schaffrath 35:16
Love it. I had Daniel Epstein, the founder of Unreasonable Group, which you may be aware of. They're supporting a lot of scaling impact startups and he calls it, I think, BFPs, big fucking problems. So, you are definitely solving one of those, and it's great to see that you have such an ambitious vision and that you're already right now creating the economics that incentivizes companies to take action and fund taking plastic out of the environment. It was really great talking to you, Joel. Thanks very much for joining me, and all the best for the next few years and decades ahead.
Joel Tasche 35:58
Thank you very much, and if I may say that we are hiring. If you're a product designer-
Maiko Schaffrath 36:04
Joel Tasche 36:05
Feel free to reach out.
Maiko Schaffrath 36:08
Perfect. So, I guess you'll be hiring new positions all the time, so whenever you're listening to this episode, I think that's Cleanhub.io., and people can find out about opportunities at Cleanhub.
Joel Tasche 36:20
Maiko Schaffrath 36:21
Absolutely. Thank you very much.
Joel Tasche 36:22
Perfect. Thank you so much, Maiko. Have a good day.