When Steve Meldrum joined Eco Waste Solutions in 2003 as chief executive officer and president, the company had sound technology but lacked direction and market focus; it was chasing business all over the world and trying to find as many different applications for its equipment as possible.
For a small company with limited financial and human resources, it was not a winning strategy. So Mr. Meldrum and Jean Lucas, director of business development, mapped out a new direction for Eco Waste, a maker of industrial waste incinerators.
The company, they decided, should focus on providing waste-disposal equipment for use on military bases, mines, oil rigs and in remote communities with no access to landfills. “This is what we are good at,” Mr. Meldrum said. “This is what really differentiates us.”
In 2007, through its ties with the Canadian and U.S. military, Eco Waste heard about a lucrative NATO contract to provide four custom-built incinerators for military use.
Eco Waste submitted its bid in January, 2008, and won the contract early this year, beating out several European and North American competitors.
Mr. Meldrum predicts the NATO job will help boost the company's revenues to between $5-million and $6-million this year.
Mr. Meldrum joined us on Friday to discuss his company's breakthrough. Your questions and Mr. Meldrum's responses appear below.
Dianne Nice: Hi Steve, thank you for joining us today to talk about Eco Waste Solutions. How did you get your start as an entrepreneur and how did you get involved in waste disposal?
Steve Meldrum: Thanks Dianne, it's great to be a part of this online discussion.
I approached being an entrepreneur in a backwards fashion. I spent the first 10 years of my career with a multinational business and technology consulting company where I worked with dozens of companies in many countries; some small in nature and some very large. From this I was exposed to a great deal regarding process, technology, people and strategy within business.
After 10 years, I found myself travelling more than I wanted to and was looking for something local to Toronto. In 2003, I was introduced to Eco Waste Solutions through various venture capital connections that I had at that point. At that time, the board of directors was looking for somebody to come in, lay out a plan and grow the company. I interviewed for the positions and joined Eco Waste Solutions shortly after.
My background was not in waste management, but from my consulting days, I had worked with a bunch of companies that were in a similar position to Eco Waste Solutions in trying to map out a strategy and grow their business. It seemed like a good fit.
Dianne Nice: Dianne Nice: When you joined the company in 2003, you wanted to focus the business on waste disposal equipment and focus on markets in North, Central and South America. Was that a risky venture for the company? What would have happened if this strategy had not panned out?
Steve Meldrum: It's true that having a specific market focus was a risk; however, it was a thought-through risk. I knew that the past strategy of trying to be all things, to all people, everywhere in the world was not working. With limited resources and capital, we had to "pick our battle." We spent a lot of time reviewing all of the markets that we could address and the geographies that we could go after. After a detailed analysis of weighing: market size vs. applicability of our technology vs. customer motivation to buy vs. resource allocation to address a given market - we ended up with point-of-need applications in the Americas. This meant: remote mining camps, remote oil and gas camps, remote military camps, remote communities, and dead animal disposal.
If the plan didn't pan out, it didn't pan out. But, we had to do something different in our approach to growing the business, and this seemed to be the best shot we had.
Scott M from Canada writes: Congratulations on your success to date. I'm a bit surprised to learn that using the heat-generated by incineration is considered a nice to have, rather than a must have. For example, I know that ghgs are an issue for the U.S. military these days, not to mention the much more critical issue of minimizing the volume of supplies that must be delivered to bases operating in hostile environments, due to issues of risk to personnel (and, to a much lesser extent, cost). Why is that? For example, are the specs being written by people who are not responsible for the provision of fuel, heat, hot water and steam? And, if so, could you benefit by proactively seeking to bring them in and ensuring that you design a solution that answers their needs? I.e., if you work with them to tailor a solution to their needs, they are likely to base their RFP around your solution.
Steve Meldrum: We do get asked to provide optional "heat recovery" systems as a part of our proposals from time to time. Because of the size of our systems (up to 10 tonnes per day) and the fact that they are batch-style in nature (i.e. waste is loaded, it's processed, and then the next day the process starts again), electricity production is not really an option. We have engineered hot water systems and steam systems and bid these as an integrated component to our waste system. However, from what I understand from our customers, for now their primary issue is getting rid of waste in remote locations. Often the unit is located away from the main camp as it processes garbage and utilizing hot water isn't immediately practical.
Your point is excellent in that a more holistic approach to designing a remote camp or community should be taken not just looking at "waste" as an issue, and "power/utilities" as an issue, and "physical plant" as an issue. In our discussions with engineering companies who typically do a lot of this planning, we will be sure to incorporate a holistic planning approach for their consideration.
Dianne Nice: A reader left this remark in our comments section: globefan Eh from Canada writes: While these are being sent to military sites and mine sites, I can think of many third world refugee camps that would benefit from them and with a higher payback. Gaza City for one.
Steve, what do you think of this idea?
Steve Meldrum: It's true, the best application for our technology is in remote areas that have a difficult time managing their waste in an environmentally responsible fashion. Refugee camps would certainly seem to fit this profile. It's not an area we have specifically targeted, back to our market focus approach; however, there certainly seems there might be a need. I'm not sure if the customer would be NGOs, governmental organizations, or others. It is an excellent idea, but not an area where we are currently focused.
K Maloney from Toronto asks: Preparing a bid for an international organization sounds like a complicated procedure. Did you get any help from any Canadian government agencies, or did you go it alone? And did your company (or you and your employees?) have to be "vetted" by NATO in any way, such as for security reasons? What advice would you give to small companies dealing with such a large organization?
Steve Meldrum: Preparing bids for large engineering companies (such as SNC-Lavalin, AMEC, Hatch or Fluor) or NATO isn't so much complicated as it is involved. There is a tremendous amount of engineering detail that is presented in the bid package that must be considered in developing the solution.
What we have tried to be very good at is addressing all of the items that are required as a part of the bid and being as complete as possible. We try to think of it from the customer's perspective: they spent a great deal of time and effort laying out the requirements that they are looking for and if we only provide bare-bones information or boiler-plate proposals, why would they think we can deliver a quality product, or meet their requirement? So, we put a team of people together and spend weeks responding to all of our customers' requirements. We take this very seriously because it's easy to differentiate yourself against other companies who provide a half-hearted response. Again, it's time, effort and cost, that may result in a sale. But the alternative is that you don't put that much time and effort into it, and you definitely won't get the sale.
So, my advice to small companies dealing with large organizations is: be good at the details and paperwork. Large organizations care about this stuff and if you can't do it well, you may get one job, but you probably won't get another.
James Lade from Hangzhou, China writes: I am living in Zhejiang province, China. The common practice here is to burn garbage in little roadside sheds. Imagine the air pollution this causes. I remember when I was a kid in Toronto burning leaves was prohibited because of the air pollution. And here it is so many hundreds of times worse. They burn all kinds of garbage every day. And Zhejiang province has more people than all of Canada. Add on more than 20 other provinces. A better, more efficient incineration system would help the lives and health of millions here. Please help if you can!
Steve Meldrum: I agree, James. There are very large waste management problems in many places. However, from a business perspective, the question for Eco Waste Solutions is: Who do we sell to and what is their motivation to buy? We have been approached many, many times about selling in China. In fact, a good friend of mine is very entrenched in the environmental movement in China. But every time we analyze relevant information about entering China as a market, we come to the same conclusion: 1) There is no doubt a massive market there for our technology, however 2) to do it right requires a team of people on the ground in China full-time doing nothing but sales and business development. At this point in our company's growth, we don't have the necessary resources to apply to tackle this market as a new entrant. Conversely, to do it half-hearted would be wasted effort that we could apply to markets where we are focusing.
Dianne Nice: Here's another interesting suggestion from our comments section:
Josh Taylor from Dublin, Canada writes: Good work guys. Real innovation from a Canadian firm. Next step possibly combined heat or power?
Steve, what are your thoughts?
Steve Meldrum: The addition of a heat recovery system resulting in hot water or steam is something we have designed and proposed on multiple occasions. As of yet, our customers have not purchased this add-on option. My belief is that over the next few years we will be asked for this more and more and it will be included in the purchase of our units. Accordingly, we are working with our customers to better understand their utility needs and further refining this aspect of our technology. I believe this will be a growth area for our company.
Dianne Nice: It sounds like there's great demand in countries such as China for the type of equipment you supply. Do you think some day you will expand into new markets? What would it take to get you there?
Steve Meldrum: Yes, I do think that some day we will be addressing these markets. And you're right, the question is "what would it take to get there?" It would likely come down to two possible paths: The first path would be for us to analyze the specific market (like China) in tremendous detail and appropriately size the investment required to go after it properly. This would include trying to size the resource requirements for sales efforts and production efforts (which is a major undertaking on its own). We would really need to get a gut feeling that this was the right thing to do and there would be a return on this investment based on addressable markets and our projected market share. We would then need to either raise capital to do this, or try to do it financially on our own. For the size of the Chinese market, and all of its political intricacies, I think it would be difficult to do in the near future.
The second path would be for us to partner, license or otherwise engage with another company that is already positioned. Again, we would need to weigh the cost and resource requirements to do this properly. In either path, there is a great deal of commitment that is required to even consider it as an option.
Branching into other markets is definitely something we will consider at some point. It's just about picking "the next battle."
Jeff Labow from Toronto asks: When you were competing against other companies from North America and Europe for the NATO contract, what do you think gave you the edge to beat out your competitors?
Steve Meldrum: Although we'll never know for sure, I believe that winning contracts from large organizations comes down to a few things (in no particular order):
1) Attention to details putting your best foot forward every time you submit a proposal or tender response is critical. Making your proposal professional, easy to understand and making sure it clearly addresses all of the customer's requirements is a necessity.
2) Proven technology there are a lot of companies who are selling solutions based on prototypes or black-box designs. Having a demonstrated track record and scale, real-world technology only positions you favourably.
3) Being thoughtful and nice all conversations, communications and correspondences from any person in your company need to be thorough and considerate. At the end of the day, you're dealing with people who will be making decisions and being curt or dismissive puts your company in a bad light from the onset. People like doing business with people they like.
Dianne Nice: Steve, thank you again for talking to us today about Eco Waste and congratulations on your NATO contract. It's great to hear about a Canadian small business doing well internationally. Is there anything you would like to add?
Steve Meldrum: It was my pleasure, Dianne. Thanks for including me in this online discussion, and thanks to The Globe and Mail for spotlighting Eco Waste Solutions.
Although I'm the one doing all of the speaking right now for Eco Waste Solutions, in a small-medium-sized business, everybody needs to wear about a hundred hats on a daily basis. The reality is that our success to date is really a result of everybody that works at Eco Waste Solutions. The countless hours of engineering, business development, marketing, production, on-site technical services, R&D and in-house support has all lead to our success. So a congratulations to the company is really a congratulations to all of the employees at Eco Waste Solutions.
Also, thank you to all of the people who took the time write questions and pay attention to the company.