The U.S. Congress is finally catching on to what E-Structors company executives have known for almost a decade: that recycling electronic devices is not only good for the environment, it’s an entrepreneurial opportunity for someone who can do the job — and do it right.
Rep. John Sarbanes (D-Md.) toured E-Structors at its Elkridge headquarters in July, right after introducing the Electronic Device Recycling Research and Development Act, legislation that will create competitive research grants for reducing the environmental impact of discarded electronic devices.
Sarbanes said recycling waste is a “win-win for our economy and our environment,” plus, he said, it makes U.S. companies “less dependent on foreign suppliers of minerals and other materials.”
Sarbanes and his congressional cohorts are just putting into legalese the tenets on which entrepreneur Mike Keough founded E-Structors, an electronics recycling company that securely destructs electronics, computers and documents for both the public and private sectors.
A pioneer when he began E-Structors in 2003, Keough now acknowledges that his industry has become very competitive. But, he says, it’s still a new field. He estimates there are perhaps a dozen bona fide electronics recycling companies across the country — and many more that bill themselves as the genuine article but fall far short in their actual process.
‘A Lot of Misinformation’
E-Structors has received two key certifications that set it apart from its competition: a Responsible Recycling certification, which is an Environmental Protection Agency-guided set of standards, and an ISO:14001:2004, a catalog number that designates the International Organization for Standardization principles on environmental management.
E-Structors is the only electronics recycling firm in the mid-Atlantic to hold both these certifications. It’s a signal to clients that the company is doing its job responsibly, said Keough. “There is a lot of misinformation out there,” he said, and, because of this, a key part of his job is to educate his customers on why recycling electronics matters.
Considering that up to three-quarters of the heavy metals in landfills come from electronics equipment, it’s an issue that’s not going away anytime soon. “We invite clients to visit our facility and make an informed decision,” he said. “We are setting the bar very high.”
Just how does E-Structors recycle electronics?
First, the company collects and transports materials from a client’s workplace to E-Structors’ 187,000-square-foot processing facility. Then, an on-site destruction system shreds the electronic material into pieces no larger than 1.5 inches, rendering all critical or sensitive data irretrievable. An on-site paper destruction system pulverizes documents into pieces smaller than half an inch, again making it impossible to retrieve information. Clients then receive a Certificate of Destruction or a Certificate of Recycle.
In a world where government agencies and private corporations store huge amounts of personal data about their employees electronically, and in which the computers storing that data turn obsolete within a few years, securely disposing of information becomes a complex challenge.
“From a corporate perspective, you could have the identity of your employees stolen, and you could be legally responsible,” said Keough. In a medical facility, health care companies have the added challenge of adhering to ever-stricter patient privacy regulations in their industry.
Keough is well aware of the disasters that can befall businesses if they don’t dispose of their data in a secure fashion. He’s equally aware of dozens upon dozens of upstart, pseudo-companies that claim to take care of sensitive data, once and for all, for a rock-bottom price.
“The problem for the average middle manager is that he or she is under pressure to meet a budget, and the cost of disposing of electronics properly oftentimes isn’t even a line item on that budget. So when a company claims to dispose of electronics for very little money, that middle manager might not ask too many questions about the process,” said Keough.
Out of the Landfill, Into the Field of Dreams
In the worst cases of fraudulent electronic recycling, heavy metals end up in landfills and wash into water supplies and soil, where they cause an increasingly documented array of harmful health effects. There is very little enforcement of current regulations that keep businesses from simply dumping electronic equipment into landfills.
With both the security issues and a concern for the environment, Keough and his wife, Julie, stepped forward to finance and furnish E-Structors before they ever had their first customer. “At that time, in the beginning, it was what I would call a field of dreams,” recalled Keough. “We believed that, if we built it, the customers would come.”
Keough’s forethought has paid off in spades, but at the time, he wasn’t always so sure. “We had a lot of people wondering if what we were doing was cutting edge or just plain stupidity,” he laughed.
‘Entrepreneurship at Its Finest’
The Keoughs have surrounded themselves with trusted business advisers, many of whom have been with them since the beginning.
Art Jacoby, a business strategist, said he has watched the Keoughs overcome even the most severe obstacles with hard work and steely determination. “They survived entering the market years before it was ready, then they survived the collapse of commodity prices, and they succeeded in a very difficult, competitive business through outstanding sales and service and by building a state-of-the-art operation. This is entrepreneurship at its finest.”
The Keoughs knew they had a good idea. But, Mike Keough recalled, “We needed seed money to buy equipment, and when we went to banks, everybody turned us down.”
They decided to enter Howard County’s Center for Business and Technology Development, where they were able to get the support they needed to finally secure a loan from M&T Bank.
“At that point, we had a very sound business model,” said Keough, “but at the same time, we had no other choice but to succeed. It was a huge risk. It was tough.”
Sense of Timing – and the Future
From where they’re sitting now, the risk was well worth it. Mike Keough was named “Innovator of the Year” by the Maryland Daily Record in 2004, was included in Baltimore’s SmartCEO “Future 50” in 2008 and 2009, and was a “Future 50 Emerging Growth” recipient in 2011.
In 2009, Julie Keough was selected as a “Brava!” Women Business Achievement Award winner by SmartCEO magazine.
Looking back, the couple had an excellent entrepreneurial instinct, said Newt Fowler, a partner with the law firm Rosenberg | Martin | Greenberg LLP.
“One of their biggest entrepreneurial strengths is their balance of risk-taking when it makes sense and patience when it doesn’t — sort of an entrepreneur’s sense of timing,” said Fowler.
The couple also has a deep focus on giving back to their community. About 20% of E-Structors’ workforce has a disability, and are successfully integrated and working a full- or part-time job inside of the facility.
“We have spent time helping people with special needs fit into our workforce, and we have also spent time educating our employees on how to accept and treat a person with special needs,” said Keough. “We believe in social responsibility, and we believe in passing it forward.”
