Electronic Eye

Keating, Harford and Dornich

If thinking on the fly is what separates a successful entrepreneurial endeavor from one that fails, then the Reclamere team has demonstrated that it belongs in the successful camp.

"At first, we believed our business would be about demanufacturing and selling commodities, but the business model has changed—we quickly realized that was not going to be the best model," says Harford.

Harford says the trio has "morphed" the Reclamere business plan throughout the past four years. "What we see working from a revenue side is our removal service, data destruction service and exporting [equipment] for resale in other countries," he says.

Changes to the business model have occurred largely based on customer input and feedback. Responding to those requests has been a natural course of action for Dornich, Harford and Keating, who pride themselves on their love of the entrepreneurial lifestyle and their devotion to customer service.

Harford and Keating had been co-workers at a computer value-added reseller (VAR) firm and both agreed that they would rather be working for themselves than for someone else. "I am not a good employee in bureaucracies, and being an entrepreneur was a natural fit for me," says Harford.

The duo also agreed that Bob Dornich, who they knew as a member of the central Pennsylvania business community, would be a valuable addition to any such venture because of his demonstrated ability to formulate a business plan, raise capital and operate several small businesses. (Dornich had previously operated delicatessens and catering businesses in the area.)

The thirst for entrepreneurship preceded the selection of electronics recycling as the focus of the new business. But that focus was soon provided by Keating, who conducted research that convinced her that providing efficient electronics recycling options presented a clear opportunity.

As has been a recurring theme with the Reclamere partners, agreement on how to proceed was not sudden and unanimous, but was instead the result of open and thorough debate. "The first thing I said to Angie and Joe was, ‘I don’t think this idea has legs,’" recalls Dornich.

Eventually, though, Dornich proceeded with a business plan that he could take to bankers and potential investors to secure initial financing. "It was a tough sell," he recalls. "My prior business was food service, and bankers understand that. But explaining this to bankers took practice."

But the initial doubts that Dornich had were soon replaced with the conviction, based partly on potential customer visits, that the idea was sound. "When we realized the potential, we became impassioned. I don’t think anyone tells a story as well as someone who believes," says Dornich.

The idea of Reclamere thus became a reality in May of 2001, when the company was incorporated, and in December of 2001, when all three partners began working full-time at the site of a former grocery store that houses Reclamere’s multi-faceted operations.

For several years, asset return specialists helped companies dispose of their obsolete electronics equipment with the primary focus on maximizing the returns (or minimizing the cost) of the transactions.

But earlier this decade, the practice of computers and monitors being disassembled by hand in blatantly unsafe and environmentally unsound ways cast attention to the environmental aspects of electronics recycling.

That aspect of electronic asset recovery remains critical, but it has been joined by another important concern: the protection of confidential data and information found on computer hard drives and other storage media.

Once again, it was Keating who saw this emerging concern as an important opportunity for Reclamere, and once again there was considerable discussion before all three partners were convinced it was the correct path to follow.

"Angie was the genius who saw the potential of information destruction and data security," recalls Dornich. "I fought her on it at first, but it turns out she was very right. It’s the fastest-growing crime in the nation, and we need to protect our customers."

Harford also credits Keating with pushing Reclamere down the secure destruction path. "She took a lot of time to understand how NAID (the National Association for Information Destruction) worked and what they stood for and how their standards could conceivably mirror themselves over to electronics recycling," he says. "Reclamere was the first electronics recycler to become a member of NAID and we’re still active within the organization."

Legislation has been a key factor pushing Reclamere’s customers to place data security higher on their priority lists, but Keating says she believes that civil litigation from those who have been harmed by information leaks will provide further incentive. "Plaintiffs’ attorneys can be merciless," she says. "If people want punitive damages for their medical or financial information getting out, that can be a real motivator."

Ideas have been one key to the success Reclamere has enjoyed during its four years in business, but ideas without execution don’t usually add up to sufficient revenue.

All three Reclamere partners point to what Harford calls "a fanatical devotion to customer service" as one of the keys to their success operationally. "Customers call in and there is an immediate response to a request," he continues. "There is a very short turnaround time to meet customer requests here."

Operationally, the customer service philosophy and teamwork have added up to an impressive flow of material moving into Reclamere’s 10,000-square-foot building in Tyrone’s central business district.

The former grocery store building features a customer service desk at the front to handle the small number of walk-in customers who may be seeking a pre-owned computer or monitor. Also toward the front of the building is Reclamere’s office space.

Behind the offices, a walled-off, secure-access-only portion of the building is where employees receive the electronic equipment that arrives by truck. Employs scan serial numbers and prepare equipment for testing and troubleshooting, data erasure or whatever other steps are necessary to prepare it for re-marketing.

Reclamere’s staff tests incoming monitors, while they handle computers in different ways depending on customer specifications. Many customers want the hard drives wiped, with data destroyed digitally, but with the drives themselves staying intact for remarketing. Others, though, want the drives physically destroyed. Reclamere offers both services and performs them to Department of Defense standards.

Equipment is procured almost exclusively from corporate and institutional (government, hospital, university and school system) clients. "We don’t typically draw from one-day drop-off events," says Harford. "We are more of a commercial service provider."

The majority of working equipment is prepared for resale to export markets, where computers with semiconductors and memory capacity that may be considered obsolete here can still find a ready market.

Newer equipment, though, can be marketed domestically, including through eBay, where Dornich says, "Higher quality products can be sold for a good margin."

The company’s eBay offerings are linked to its www.Reclamere.com Web site and on one recent day included products ranging from refurbished Dell laptop and tower computers to 20-gig hard drives and a Sharp Vision projector unit.

Reclamere currently enjoys a 99.7 percent positive feedback rating with its eBay customers.

Adds Harford, "Unit sales are where the bulk of our business comes from—complete CPUs or monitors. We don’t do very much demanufacturing." An exception, he notes, is the removal of hard drives to wipe them clean or to destroy them.

The operations area of Reclamere is packed tight with shrink-wrapped pallets of incoming and outbound computers, monitors and other electronic equipment. The inventory is far from static, though.

"Bob and Angie have done a terrific job of getting throughput improved," Harford says of inventory turnaround times. "The turnaround time has gone from six months down to two-to-four weeks—sometimes even one week," he notes.

That turnaround time has improved despite the fact that Harford has been diligently lining up more customers with greater amounts of equipment heading into the Reclamere facility. Dornich says the markets are there, though. "I can pre-sell almost everything we take in," he says.

The export market, where much of the company’s inventory heads, has at times been the subject of scrutiny, especially in regard to the safe handling of obsolete monitors that contain lead and other hazardous substances. But Keating says there is a world of difference between exporting working equipment and dumping junked items—and Reclamere does the former.

"I think there’s more educating to be done," she says of the general public’s knowledge of the export markets. "Companies must be willing to put time and money into due diligence and audits—that’s what separates a true exporter from a dumper." She says the company has averaged at least one trade mission each year to make sure that it is "dealing with the best people out there."

The business has rapidly outgrown what, at first, seemed like a sizable amount of space. The company has already expanded its loading dock to handle as many as three trucks at a time, but more expansion will probably be necessary.

The company has worked out preliminary plans to embark on two expansion phases and more than double its space to nearly 25,000 square feet.