Southern Success

Shred First LLC establishes itself as a regional destruction services provider in the Southeast.

John E. Bauknight IV and Nick Wildrick readily admit that their master plan was somewhat sketchy when they created Shred First LLC in Spartanburg, S.C., in 1997.

But planning on the go and making adjustments as needed have been key management strengths for the duo, who have guided their company to growth and diversification, even during what were lean years for the overall U.S. economy.

At the start of 2004, Shred First LLC is a company that can provide document and product destruction services—as well as recycling services—to a variety of industry sectors not only in its Spartanburg home territory, but also in Charleston, S.C., Atlanta, Charlotte, N.C., and other nearby regional markets.

John and Nick started Shred First in 1997 to service a banking customer with on-site shredding services. From this start the company quickly gained customers in other sectors typically served by document destruction companies, including in the records storage and engineering sectors.

Some variety was introduced into the mix the next year, when a music and software company became a significant new customer. "They gave us a small amount of material to destroy for study purposes, and when we found we could do it, it leap-frogged us into product destruction," says John.

After this initial success in destroying fully packaged CDs and software, Shred First gained additional product destruction clients, and by 2000 product destruction was making up 90 percent of the company’s business. "In the fall of 2000, we hired a sales force to start growing the paper and document destruction side of the business," notes John.

The destruction of compact discs yields a mixed stream of plastics that the duo initially treated as mostly unrecyclable. "The recycling story started out bad, but has a good ending," says John. "We were originally landfilling most of the material, but then in 2000 we began exploring the recycling options. Since then, we have processed almost 1,000 tons of this material per month and recycle over 95 percent of it."

Although they note that the plastic film wrapping around the packaged CDs is not being recycled, the plastic used in the jewel cases and the discs themselves are being recycled.

Don't Shred the Humor

Movie, television and comic strip writers have found a rich well of dark humor in the bureaucratic, oppressive and stratified conditions that can exist in office workplaces. But John E. Bauknight IV and Nick Wildrick, co-owners of Shred First, LLC, Spartanburg, S.C., have apparently taken steps to ensure that people at their company enjoy their day at the office, rather than dreading it. "It’s almost like a fraternity house," says Nick, which is not too hard to believe, since Nick and John’s friendship goes back not only to their childhood days at summer camp, but also to a stint as fraternity brothers at Wofford College. They have brought that frat house feeling into the sales office, where, Nick worries, "Our sales guys have too much fun sometimes." The fun atmosphere is evident to vendors such as Mike Boehringer of routing software supplier EZshred LLC, Chagrin Falls, Ohio. "It’s like a party there," Boehringer says of the Shred First office. "The salespeople bang on file cabinets when they get a new account," he notes. Boehringer credits Nick and John for fostering the fun atmosphere. "They pretty clearly made a decision that if they are going to run a company, they are going to have fun and build a business at the same time."

They now have a partial ownership stake in a processing facility in southern China, where the mixed plastics are separated and harvested for recycling. "We partnered with our materials broker to open that processing facility two years ago," says Nick.

The joint venture in China is indicative of John and Nick’s willingness to expand Shred First well beyond the shredding of confidential and obsolete documents.

Serving the needs of its confidential shredding customers remains a priority for Shred First, but the company’s ability to offer additional services continues to open up new doors, says the duo.

Product destruction in particular has led to an array of opportunities (sometimes disguised as challenges), as the company has found itself responsible for the destruction of clothing, shoes, toys, auto parts, small appliances and even larger objects such as back yard grills. "Any manufacturing process is going to occasionally yield defective products that don’t meet quality control standards," notes John.

Just downstream from the manufacturing process are distribution centers, mammoth facilities where the products of manufacturers meet the logistical networks of retailers. Like manufacturing plants, these facilities can generate streams of material that will need to be shredded or otherwise destroyed. "From a distribution standpoint, you’re going to have damaged goods and product recalls," John remarks.

Shred First has also treated its recycling knowledge and abilities as a potential growth generator. In late 2003, the company signed an important new contract to provide metals recycling services to an automotive-related customer. Nick says the new contract will "bring us heavily into the metals industry. It is almost a straight recycling contract, with some product destruction aspects."

Although document destruction remains a key activity for Shred First, Nick and John say much of the company’s growth can be credited to its willingness to take on additional projects. "We’ve always pitched our fellow NAID (National Association for Information Destruction) companies to try the oddball items," says John.

Document and product destruction are growing industries, with customers often learning about the services at the same time they are shopping for them.

While such market conditions may allow less scrupulous and less efficient operators to earn market share at first, Nick and John say they have done several things to help separate Shred First as a premiere service provider in their region.

The company has been working toward achieving its NAID certification, and may have done so by the time this story prints. The company has always marketed its NAID membership and found it to be an effective strategy, notes John. "We market the NAID membership and its code of ethics."

Even though they may have to explain what NAID is to some customers, once they present their case it can be persuasive. "There are so many people getting into this industry, and some may not behave as ethically or operate as thoroughly," says Nick.

There is little chance that Shred First will let its NAID credentials slip anytime soon. In fact, starting in May of 2004, John will begin his term as NAID’s president. He currently serves as president-elect and has been on the NAID board of directors since May of 2002.

John and Nick have been friends going back long before Shred First was created in 1997, having gone to the same summer camp as children and having pledged to the same fraternity at Wofford College in Spartanburg. Now they are tied together "for better or for worse," they joke, because they are married to two sisters (Laura and Cile, whose former last name was Chappell.)

Although each has a background in sales, they have divided management up somewhat so that John oversees sales and marketing while Nick administers the operations and finance aspects of Shred First.

While they ultimately cooperate, both John and Nick are athletes and sports fans, and they enjoy the competitive aspect of how they have divided up their duties. Nick compares it to a story he read several years ago about the wine industry’s Gallo brothers. "One said he could make more wine than the other could sell, while the other boasted the opposite," he recalls.

The duo also credits their employees as a key to their success. "We’re really fortunate with the people we’ve worked with," says Nick. Adds John, "We’ve learned to surround ourselves with good people and to delegate. At times we probably waited too long to delegate things." They have delegated much of their activity in the Atlanta region to newly hired staff member Charles Smith, who is heading up the product destruction and recycling division as its vice president.

In Spartanburg, the company has "set up a fantastic sales team," says John. "We’ve invested the time and money to do that instead of trying to do everything as independent business owners. These guys are becoming more and more mature in what they are doing."

John and Nick list good people, persistence, integrity and service to customers, employees and to the wider community as the core reasons Shred First has grown from year-to-year, sometimes in impressive leaps.

"I’ve been huge on persistence," says John. "It’s not going to happen overnight. We went through some painful times as we started and grew the business, but we also persisted."