Solidos – A Zero Waste Business Platform

Creating a Zero Waste / Zero Plastics world will only be possible once we allow the private sector, Circular Economy to operate freely and without government competition. Solidos presents businesses with an alternative to public waste management by offering a pay-as-you-throw platform connecting waste generators to professional transport companies and processing facilities that utilize a groundbreaking chain-of-custody transfer protocol that tracks real-time codified waste data and ensures no double counting of waste materials, thus, bringing transparency to the waste market. Solidos, in partnership with the Ecozinha Institute, is in the process of digitizing 86 bars and restaurants, 1 glass transporter, 1 glass factory, 2 recycling coops and 5 composting sites, to create the first fully digital, Zero Waste Bar & Restaurant network in the world, which already diverts 150 tons of waste from landfills, supports 28 jobs and creates more than R$67,000.00 in economic value per month. 

The recycling rate for Brazil in 2017 was 1.6%.  In 2019, the Ecozinha Institute in Brasília, was able to transition 86 businesses (bars and restaurants) to a landfill diversion/recycling rate of more than 70%, while taking nearly half of them to more than 90%. This success is in part due to a new legal framework that requires businesses to pay for transport of waste to landfills, placing a cost floor on waste management, and providing opportunities for more environmentally friendly solutions/services.  For bars & restaurants more than 80% of the weight of the waste generated is in glass and organic waste, two material types for which the market had no solution, is difficult for pickers to handle and when comingled with plastic and other recyclables becomes too costly to sort and recycle. Given that landfills charge by weight, we found a solution in sorting waste in 4 main material types: organics, glass, recyclables, and landfill and providing dedicated logistic solutions for each.  The cost of recycling glass and recyclables are below landfill rates and make up for the cost of composting the organic waste. While we solved the problem, to scale, we needed to digitize the process, and that's how Solidos was born!

Solidos is a B2B platform for three business types, designed to mirror the existing, successful Ecozinha recycling ecosystem: waste generators, transporters and processing facilities.  At Generators we work with business owners, finance team, floor managers, and cleaning staff.  At Transport companies we work with drivers, logistics managers and the financial department.  At Processing Facilities, we work with business owners, site crews and financial managers.  Each business type has specific needs and we engage with each user within that business to understand the lowest delivery of value requirement which still ensures product use.  To this date, our churn is 0% which means every business customer sees value and is willing to pay for the service.  Because our products (a web portal, a generator app and a logistics app) are already in use we receive constant feedback and apply a customer success model that weighs each new feature on a value-returned vs time-to-develop basis and we focus first on introducing minimal value to new user types before extending additional value to existing users. Key to the success of the ecosystem is the quality of the service provided by the Transporter and given the greater complexity we spend rough ¾ of our efforts on their service.

The fundamental challenge with recycling is lack of trust among parties, accountability and data quality.  Solidos solves this by codifying waste collected at waste Generators and using a proprietary chain-of-custody (CoC) transactional protocol (blockchained,) to track Waste IDs as they are transferred between stakeholders until reaching a final, certified End Processing facility.  Using mobile devices, we log every transaction ensuring a responsible user/company as custodian of each Waste ID, timestamped and geolocated to enable any waste generator, transporter or processing facility to plug their existing infrastructure into Solidos. By applying QR codes to waste bins characterized by bin type, weight, volume and waste type (attributed to a specific client,) and integrating a communications module to truck scales that is connected to our logistics app, Solidos helps transporters codify waste collection using existing equipment making the solution scalable.  In addition, because each Waste ID is unique and part of an end-to-end system, we can issue recycling credits with a guarantee of no double counting.  This creates an opportunity for a massive paradigm shift, by creating a vehicle through which Consumer Packaged Goods companies can contribute economically to the recovery of post-consumer products without having to get involved directly in the recycling market.  Regulators can verify the authenticity of recycling credits and pressure polluters to contribute.  Economic value can be redistributed to the waste generators who carry the greatest burden of having to sort their waste and pay for services to transport it to the best destination. Credits can be listed on an exchange and pricing can float freely without government intervention.

On top of this CoC core, we build business logic to enable waste generators, transporters and processing facilities to connect and request/offer services for waste collection, sorting and treatment.

In terms of products we offer a web portal for owners of each company type to manage accounts, clients, assets (trucks and bins,) routes (in the case of transport companies,) reporting, contracts and payments.  A Generators app informs users of scheduled pick-ups, offers collection history data and handles pickup requests.  Drivers uses a Logistic app to view collection routes and execute service orders for individual company bins or shared (by multiple companies) street bins.  End Processors also use the Logistics app to view waste delivery schedules, record sorting data and manage inventory.

We help regular working people become environmental agents and custodians of our planet for future generations.

The opportunity for a private, pay-as-you-throw solution for businesses in Brazil is born out of a series of new factors, top to bottom and bottoms up.  First, government run/supported recycling programs are not as developed in Brazil as in Europe, North America or much of Asia, offering less competition for businesses and a shorter path to market disruption.  Second, businesses now have to pay for their own waste hauling to landfills, opening the door for better recycling solutions. Third, the post-consumer waste problem is becoming more top-of-mind for consumers and citizens are more interested in learning how to recycle, willing to sort, pay to haul to the best recycling destination and purchase from more environmentally friendly companies.  Fourth, with few recycling options, solutions are typically highly technical and specific to a material type which do not meet the needs of waste Generators which require a holistic waste management solution.

Our product is designed to fit this segment of the market understanding the economics at play and ensuring that customers can, and have to, pay for a solution while also extracting the highest material value through quality sorting, at volume, while creating new standards for a marketplace that is credible and verifiable using our key technology, our chain-of-custody transfer protocol (described previously.)  While the Solidos platform is a new business model we aim to be waste Generator, Transporter and Processor agnostic, allowing for existing equipment to be plugged in to our CoC core, so that we can scale fast!

Brazilian businesses need to report to government authorities the nature of the waste they produce, to where it is being sent and to pay for it (PGRS).  This work is of little interest to most business owners and comes at a high cost (time and money).  Generators need a minimally intrusive, internal sorting process, and an automated external waste collection procedure to generate quality hauling data. While the cost is considerable, between R$750.00 - R$2,000.00 month, the benefits include insight into inefficiencies, an opportunity to cut waste, improved perception by employees that the company they work for is aligned with their values, a new conversation channel to engage with customers and ultimately prestige and status among bars & restaurant owners.  We have had zero churn and customers are paying every month for services rendered.

Transporters see a new business opportunity but don’t know how to engage with waste generators.  By having a sophisticated solution at their disposal, they can become companies working on behalf of the environment rather than against it.

End Processors that have been in the market for years, finally have an opportunity to invest in composting and recycling services, or new companies arrive.  Government authorities who have had no way of enforcing laws and monitor company data can gain insight into the waste market.  Zero Waste Consultants who have been frustrated with no work opportunity finally see demand and can connect with companies over the platform.  A new business community for good, is born.

In Brasília, we are currently serving 86 bars and restaurants, 5 composting facilities, 2 sorting cooperatives and 1 glass transport company. In Rio we are serving 1 glass end processor (Owens-Illinois.). In Santa Catarina we are serving 1 composting transporter and end processor and 26 businesses.  In total we estimate that we are serving close to 1,250 people. 

In 12 months, and with the support of our partners Owens-Illinois and the Ellen MacArthur Foundation we expect to serve more that 2,000 bars and restaurants and integrate close to 60 transport companies and processing facilities.

In five years, and with additional market segments such as commercial and residential buildings we expect to serve hundreds of millions of users in Brazil and all over the world.

At the moment we focus on the following KPIs for positive impact: 1) total weight of waste materials diverted from landfills, 2) reduced Green House Gas emissions by composting organic waste (GHGs emissions avoided at landfills and CO2 sequestration from organic compost applied to soils,) 3) Green Jobs and 4) Economic value.

We have been in full operation for only 1 year and on a monthly basis with Ecozinha’s bars and restaurants we are averaging 150 tons of waste diverted from landfills, 250 tons of reduced CO2 equivalent, 28 jobs supported directly and generate R$67,000.00 of economic value.

With our glass transport partner in Brasília we are sending 550 tons of glass to a glass bottler in Rio de Janeiro every month (already the largest glass recycling operation in Brazil) while supporting 8 jobs.

In Santa Catarina, we are helping our partner compost 600 tons of Organic waste, reduce 1,625 tons of CO2 equivalent GHGs and generate an economic value of approximately R$270,000.00 per month.

Our goal for the next year is to focus on the Restaurant & Bar segment and create value out of the two heaviest waste materials (Organic Waste and Glass,) being ignored by the market due to its low resale value.  Focusing on these two waste materials is key for bars and restaurants as it represents roughly 80% off all of the weight of waste, and it indirectly serves as the best way to improve recycling rates of other recyclable products, including plastics. In addition, because of the unique properties of Glass (100% and infinitely recyclable) switching to glass once reverse logistics is set up, is the best solution to cutting plastic use!

There are three key barriers which need to be overcome to scale our solution to hundreds of millions of users.  First, governments need to understand that they cannot be directly involved in the Circular Economy, competing with business and preventing investment in this market segment.  Second, the “Large Waste Generator Law” (Lei do Grande Gerador) is getting adopted all over Brazil, but on a state by state basis.  This law needs to be Federal so that service providers can do business in the same manner in every state limiting complexity and bureaucracy.  Third, organic waste can no longer end up in landfills.  It represents 51% of the all of the waste generated in Brazil (60-70% for restaurants,) has the largest GHG footprint, contaminates other recyclable materials and is an incredible lost opportunity, as we need to be using the compost extracted from organic waste to replenish our soil.  This means that we need immediate legislation to support a boom in composting services all over Brazil. It is the problem which need once removed also becomes the solution for the entire recycling ecosystem.

The Ecozinha Institute is the vehicle we use to communicate legislative changes to the local government in the Federal District.  We are doing the best we can, but the government is being pressured to offer services and the risk is that government will continue to see itself as the solution and get ever more involved in the waste sector.

Unfortunately, we don’t have the power to shape government, but, fortunately the Large Waste Generator Law has opened the door for the private sector to get involved, even if it was done unintentionally.  The Ecozinha Institute model, and now with the support of Solidos through the digitization of its circular economy, has proven that our way is far more efficient and produces incredible results.  We will increase our marketing efforts as much as possible to make sure our solution is seen and understood.

We are currently a partner on Ellen MacArthur Foundation’s “Food and The Circular Economy” program in São Paulo.  Through this partnership we are working hard to explain the “waste problem” to Government Authorities and the importance of having composting legislation and support for composting entrepreneurs.  We created the first composting program within SEBRAE (a government support agency for entrepreneurs) in Brasília and hope to do much more.  As doors open we hope to create a financing vehicle for our composting partners through a franchise model we have developed with our Santa Catarina partner.

It is not.

Our solution has only been implemented in Brazil thus far, but we have plans to be global, as the platform is essentially just software and requires minimal hardware on trucks and processing facilities.  We would ideally expand to other countries in Latin America and the Caribbean first, but are likely to support markets that are most advanced with composting, first, and have glass manufacturing. 

The demand for recycling glass has been greater than we expected due to the overall weight of this waste material and its low cost in recycling (cheaper than sending to landfills,) especially when compared to composting organic waste (greater volume and much more expensive at lower scale.)

Solidos (14)

• Full-time: 8
• Part-time: 6

Ecozinha Institute (3)

• Full-time: 1
• Part-time: 2

(We consider the Ecozinha Institute as sales channel for the bar & restaurants business segment, helping us expand.  For this reason, we include them here.)

Our CEO, Ian McKee is a serial entrepreneur who has worked in the sustainability and technology fields for more than 15 years.  Ian is the technology adviser and serves as a member of the certifications committee for the Zero Waste International Alliance.  Ian is an accredited TRUE Zero Waste Advisor by the USGBC.  He launched the Zero Waste Brazil Institute in Brasília, and for the last year and a half managed the Ecozinha Institute taking more than 80 bars and restaurants to Zero Waste, the largest known Zero Waste Bar and Restaurant network in the world.  For the last year, Ian has been learning from the challenges of his work managing the logistics and business operations of the Institute and its partners in order to digitize the process and make this Zero Waste business-to-business model scalable. His experience in the financial markets (Goldman Sachs) gives him confidence that certified recycling credits can be listed on exchanges in order to drive economic value into the recycling market. 

Our COO, Marcelo Doria, is also a serial entrepreneur with vast experience in business development, marketing and communications and in the application of data-driven strategy decision making.

Our CTO, Paul Eipper, is a system engineer with great experience in project and product development, and with managing engineering teams of all sizes.  His experience at Huru Systems, in particular, with developing chain of custody solutions on blockchain and asset management make us a true force!

• Solidos has as a key strategic minority shareholder, Huru Systems, a US company with an office in Brazil, which for more than 7 years has been developing solutions for real time inventory, chain of custody, and logistics management, including asset tracking for the electric utility industry, such as expensive meters and sensors.  By partnering with Huru Systems we have gained access to valuable technology and an on-demand backup team that has helped us accelerate our development from what would take us years to develop into months!
• Solidos is the digital partner of the Ecozinha Institute and its service providers which today is considered the largest multi-stakeholder Circular Economy project in the country. Our goal is to scale together.
• Solidos has partnered with the Ellen MacArthur foundation on their Cities and Circular Economy for Food Initiative in São Paulo, focused on the bar and restaurant segment to collect organic waste that will be hauled to composting facilities.  We will use the Ecozinha Institute educational program for sorting food and use the Solidos application to manage services while providing important waste diversion data to the Foundation.
• Solidos will partner with the Brazil Zero Waste Institute to help their Zero Waste consultants find work.

Solidos is a social impact company and a marketplace solution.  We break down our service fees based on business type: Generators, Transporters and Processors.  Every business type pays a fee according to the amount of waste hauled (kgs or tons) during the month, according to waste type (each having its own price.)  Flexibility is key to ensure every type of client need can be met and that service providers can maintain a healthy margin in order to grow their business.

In addition, waste generators pay a monthly SAAS fee according to their business segment: bars, restaurants, commercial buildings, residential buildings, hospitals, hotels, shopping centers, etc. to manage their team, view historical data and request waste collection.

IMPACT

• Waste Generators receive a high-performance waste management solution for their business that can help them improve efficiency, reduce costs, avoid fines, report to waste data to regulators, engage with employees and customers and improve brand value.
• Transport Companies not only get a new business opportunity, but become environmental stewards, helping to recover post-consumer waste and make money while working on behalf of the environment.
• Processing Facilities will receive high quality materials, properly sorted, and be able to charge for differentiated services in this segment.  They will be able to dialog with waste generators and help educate consumers on what is, and more importantly, what is not recyclable.  With more high-quality materials, Processors will also be able to offer pickers, material sorting jobs helping to provide income opportunities in a more human fashion.

Solidos currently has enough investment capital to run its operation for ~8 months.  Because we are a software company, our costs today are primarily related to development and engineer wages.  Our goal is to avoid sales and marketing costs by growing with our transportation and processing partners and convincing them to invite their customers to also become paying Solidos customers, charged as a monthly membership/service fee (SAAS) that runs ~US$33.00 per bar or restaurant.  Our target is to grow by 10X in 6 months and reach 1,000 businesses.  With total costs at ~US$25,500.00/mth and a monthly SAAS revenue of US$33.00 per client we can reach break-even with 772 paying customers, assuming no revenue is obtained from our transport and processing facility partners, or any other sources.

We believe Rethinking Plastics is really about reducing or avoiding plastic use altogether.  We have reduced plastics dramatically by creating a reverse logistics solution for an alternative material type, glass, which is 100% recyclable and can be recycled infinitely.  But, thinking about glass and plastic alone isn't a solution either.  We need to be thinking about the recycling problem holistically and understand that the source of all problems lies with the fact that we are still mixing organic waste with glass and recyclables, such as plastics, and sending everything to landfills.  This is why we need to disrupt the existing waste management ecosystem, run by governments, by starting with a solution specific for businesses that handles all waste material types.  

We feel we need a strong partner who can bridge the business and political worlds and back innovative solutions, including financing or guaranteed loans for entrepreneurs who through their services can disrupt this industry.  The IDB could be that partner, and in fact be directly involved by making loans to Solidos platform integrated Transport and Material Processing companies and follow the waste being hauled and treated, along with the impact created, in real-time!  This is a solution that can be transformative for Brazil, Latin America, the Caribbean and the world.

We believe the IDB could select as the special award project, to help one of Solidos' platform partners with financing the first professional, industrial sized composting facility in São Paulo as part of the Ellen MacArthur Foundation Circular Food Initiative.  This project, as a connected solution to the Solidos Platform would be able to handle enough organic waste from more than 1,000 Bars & Restaurants in São Paulo, showing to the world how we can transform the recycling market and Rethink Plastics by thinking completely out of the box!  With glass as a solution, bars and restaurants need no longer to use plastic bottles or aluminum cans in their establishments.  

With the backing of the IDB, we are confident that Social Impact Funds and environmental funds will follow with additional financing vehicles to help micro, small and medium sized business from the private sector to come in with solutions for our environmental waste problems.

The key is speed.  We need to scale and get the solution into the market fast in order to accelerate change.

As mentioned earlier we would like a closer relationship with social impact and environmental funds who understand the challenges regarding the recycling market and can help us scale environmental solutions through investments and loans directed at small and medium businesses working to collect and haul waste and processing facilities who will sort and treat post-consumer products and materials.  The solution lies with a decentralized, private market without government competition.

A second key partner would be traditional stock markets and exchanges such as the Bovespa, New York Stock Exchange or Commodities exchange for the listing of Recycling Credits.

Finally, we would love to speak with the European Union Emissions Trading System to understand how we could also list Recycling Credits in Europe.

It doesn't matter where GHGs (greenhouse gas) are avoided, because we only one planet, so we should work with whatever institution is most interested in working with us.  In addition, the largest CPGs companies are global and pollute in every continent.  It would be helpful to learn more about how the Carbon market works currently and see how Recycling Credits can fit into that market.  We need to start extracting value from these products so that we can return it to companies that are doing the hard work and paying to do the recycling, as soon as possible.  This is how we make the Circular Economy work.