"Palo Alto company helps put E-waste in its place" San Francisco Chronicle - July 22, 2005

Startup GreenCitizen targeting the 2 million tons of electronic equipment discarded each year

by Christopher Heredia

Three years ago, James Kao of Burlingame was watching a PBS special on "Toxic E-Trash," hosted by Bill Moyers.

The program about electronic waste winding up in landfills and incinerators, polluting the environment, so struck Kao, CEO of a Silicon Valley startup, that he did a quick inventory of all the old gadgets his family had accumulated. He found old computers, cell phones and televisions gathering dust. Where would they go?

A veteran of electronic giants Hewlett-Packard, IBM and Oracle, Kao began penciling out his vision for his next venture: a company that would recycle obsolete electronic products in an environmentally friendly way.

After leaving his last job as an executive in data analysis at Oracle in 1994, Kao spent the next decade launching three businesses of his own. He knew whom to approach and how to sell them on his idea. He tapped private investors. He dipped into his own bank account.

And on Earth Day 2005, in April, he opened GreenCitizen, an electronics recycling firm, in Palo Alto.

In the past 2 1/2 months, GreenCitizen has recycled more than 60,000 pounds of electronic waste, Kao said.

"We have to do something to address the global e-waste problem," said Kao, 46, a computer scientist and engineer.

"I started thinking, as a citizen, we have all this inventory, how do we address the end of it?"

While developing the concept for GreenCitizen, he learned that the extent of the problem is far greater than most people are aware. The U.S. Environmental Protection Agency estimates that Americans unload 2 million tons of obsolete or broken electronic equipment every year. Many people like the Kaos hang onto broken or out-of-date computers, televisions and cell phones because they don't know how to dispose of them.

Kao worries that as the pace of technology advances, equipment will have a shorter life and wind up in landfills and incinerators, releasing toxic metals, such as lead and mercury, and chemicals, such as dioxin, a carcinogen.

"The No. 1 problem in recycling old equipment in the U.S. is lack of convenience," Kao said. "If you want to recycle your old cell phone or laptop, you have to go on the Web and find out where they take these things. You're lucky to find a place open that is close to your home or office."

GreenCitizen, which has three full-time employees, seven part-time employees and two volunteers, tries to make recycling as convenient as possible for the consumer.

The company does not charge a fee for dropping off old computer monitors, laptops, cell phones, batteries, printer cartridges or televisions smaller than 28 inches (a new law that went into effect earlier this year requires recyclers take these at no cost to the consumer).

They do charge handling fees for larger televisions ($15 for televisions with 28-inch to 34-inch screens and $30 for screens 35-inch diameter and up) and hard drives ($12). There are also fees for recycling ink jet printers, keyboards, game consoles, DVDs, VCRs, laser printers and fax machines and some other equipment. A spokesman for the Silicon Valley Toxics Coalition, a group that has pressured large electronics manufacturers, including Apple, to take back old equipment built by their companies, applauded GreenCitizen's mission.

In June, the coalition claimed partial victory in Apple's announcement that it would take back old iPods from customers. Now, the group wants the company to do the same with all its computer equipment.

"In addition to going after bad recyclers, we want to promote responsible recyclers that are doing good clean recycling and creating green jobs," said Gopal Dayaneni, director of sustainable technology programs at the San Jose- based coalition. "GreenCitizen is not only looking at just the business opportunity here but also at educating the public about the magnitude of the e- waste problem."

GreenCitizen's advisory board taps expertise from the burgeoning electronic "buy back and recycling" field, marketing as well a computer scientist who is an expert in data analysis. The revenue the company generates comes from fees and from reimbursement for recycling monitors it receives from the state Integrated Waste Management Board.

The way GreenCitizen tries to ensure that bad waste gets where it is supposed to get is by a system of tracking it from the moment an item is brought in.

After you drop off that old monitor or hard drive, an employee slaps a bar code on it. It then is sent to the company's warehouse where it is categorized, weighed and shipped to a company that disassembles it. Recyclable parts are broken down into raw material and forwarded to a company that can reuse it. Toxic material is sent to an EPA-approved waste-handling company.

Green Citizen also tracks the items it has recycled once they arrive at their destination. "We confirm the weight received was the weight we sent," Kao said.

None of the equipment that GreenCitizen handles ends up in landfills or is incinerated, Kao said. The companies that take obsolete equipment from GreenCitizen's warehouse sign a contract specifying they will not transfer the materials abroad.

Kao, who earned his MBA from the UCLA Anderson School of Management in 1987, hopes that by cataloging the devices GreenCitizen will be able to show what's being produced, by whom and where it's ending up.

"It will give us a macro perspective," he said. "We will be able to provide data for environmental groups, manufacturers and government for future planning."

Kao said in order for electronic recycling to work on a large scale in the United States, everyone has to get involved. During Kao's travels, he has studied how other countries deal with obsolete electronics. In Switzerland, electronics manufacturers are required by law to foot a percentage of the country's recycling bill using a formula that determines the amount of waste they create.

"Let's say Sony has 10 percent of the market share in Switzerland. It means they foot 10 percent of the e-waste recycling cost."

It's not a system he is in favor of replicating here. He'd rather see a free enterprise system established in which everybody contributes a little -- businesses, the government and consumers.

Recently, the company began picking up old electronic equipment from businesses within a 20-mile radius of its Palo Alto drop-off center. The minimum fee for the service is $100 for pick-ups that take less than an hour. Each additional hour of labor is $65. There is also a 50 cent per pound recycling fee (for items including hard drives, copiers, fax machines, printers, keyboards, game consoles, DVD players and VCRs) and 10 cent per pound shipping and transportation fee.

He sees tremendous growth opportunities beyond the Silicon Valley, not only for GreenCitizen but other e-waste recyclers.

"San Francisco is our next target," Kao said. "I want to cookie cutter this so it's like a Starbucks or McDonald's of recycling. The whole world needs it."

R.I.P old electronics

GreenCitizen electronics recycling is at 3180 Park Blvd., in Palo Alto. Drop-off hours are 11 a.m.-7 p.m. Mondays-Saturdays and 11 a.m.-5 p.m. Sundays. Many items may be dropped off free of charge. Check Web site for fees for other items and for business pickup. (650) 493-8700 or www.greencitizen.com