Startup Series: Dispatch Goods
Today's guests are Lindsey Hoell, Co-Founder & CEO, and Maia Tekle, Co-Founder & Head of Sales and Partnerships, at Dispatch Goods.
After noticing microplastics littering beaches while living in Hawaii, Lindsey, and her partner, Maia, founded Dispatch Goods in 2019. The startup provides reusable metal containers for restaurants to use for takeout service rather than single-use options. Initially, Dispatch Goods partnered with restaurants near office buildings so employee lunch orders could come in reusable containers. Employees dropped off the containers in return bins on each floor, and Dispatch Goods collected them, cleaned them, and redistributed them to restaurants. When the COVID-19 pandemic began, Dispatch Goods quickly rebranded and expanded to pick up their containers at customers' homes. Dispatch Goods is on a mission to make reuse easy and delightful for everyone.
In the episode, Lindsey and Maia walk me through their motivations for starting Dispatch Goods, the gap in the market the startup is filling, and how the process of ordering takeout works. We also dive into a conversation about how to scale their operation, how COVID-19 affected the Dispatch Goods, and what the startup has planned for the next 12 months. Lindsey and Maia are great guests, and I enjoyed learning more about Dispatch Goods.
Enjoy the show!
You can find me on twitter @jjacobs22 or @mcjpod and email at info@myclimatejourney.co, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.
Episode recorded November 1st, 2021
In Today's episode, we cover:
Overview of Dispatch Goods and the climate problem the startup is tackling
Maia and Lindsey's climate journeys and what led them to found Dispatch Goods
The "fourth bin" for waste and the infrastructure we need to support home sustainability
Why reusable containers are different from traditional packaging
How restaurants participate and why takeout needed to be reimagined
How Dispatch Goods is scaling and the logistics around serving more customers
How the COVID-19 pandemic caused Dispatch Goods' to relaunch and expand its customer base
The process of utilizing Dispatch Goods' services
Why it's challenging to scale Dispatch Goods' model
What motivates restaurants to participate in Dispatch Goods
How single-use harms our planet
The future goals of the company over the next 12 months
Links to topics discussed in this episode:
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Hello everyone. This is Jason Jacobs, and welcome to My Climate Journey. This show follows my journey to interview a wide range of guests, to better understand and make sense of the formidable problem of climate change, and try to figure out how people like you and I can help. Today's guests are Lindsey Hoell and Maia Tekle, co-founders of Dispatch Goods. Dispatch Goods set out to make reuse easy and delightful for everyone. Now, they met through the Sustainable Ocean Alliance, where Lindsey was working to launch Dispatch Goods, and Maia was the West Coast partnerships lead at Caviar. Lindsey had seen the plastic crisis firsthand as a surfer, Maia understood the enormity of the issue via her time working in food delivery. They both felt compelled to solve this problem as soon as possible and they came together to do just that.
We cover a lot in this episode, including the plastics problem, what makes it so big, what makes it so hard to solve, and what some of the symptoms and side effects are of this difficult problem? We also talk about the Dispatch Goods approach we talk about their starting point, their traction to date. We talk about some of the differentiators between them and some other approaches. We talk about some lessons learned, and we also talk about Lindsey and Maia's theory of change and what will happen if Dispatch Goods is wildly successful. And also what it will take to make it so. At any rate, Lindsey, Maia, glad to have you, welcome to the show.
Lindsey Hoell: Thank you so much for having us. We're really excited to be here.
Maia Tekle: Yes, super-stoked.
Jason Jacobs: Thanks for coming. And we were joking before the show that usually you divide and conquer when you do stuff like this, but from my standpoint, we've had many discussions before, and I've never not talked to the two of you together, so I'm not sure I believe you on that. [laughs]
Maia Tekle: You think the story and background of Dispatch, it sounds the same coming from either one of us, but pretty interchangeable, but it'll be fun to do it together this time.
Lindsey Hoell: Yeah, it's a special treat for us to be together. [laughs]
Jason Jacobs: I don't believe you on that either, [laughs] but Lindsey kicking things off what's Dispatch Goods.
Lindsey Hoell: Yeah. So dispatch goods is a reverse logistics company, accelerating the shift to reasonable packaging. And when I say reverse logistics, what I mean is that collection, sorting, processing, cleaning infrastructure, that's required to have an easy and delightful experience with reuse. We really modeled it after recycling, curbside recycling pickup, and thought, if we're going to really tackle this problem at scale, we need something that's as easy as recycling. So we launched really with this vision of a fourth bin, 'cause in the bay area, we have trash compost and recycling bins and really thought we needed an infrastructure to facilitate a fourth bin system that's facilitating reuse rather than, uh, a linear waste pathway.
Jason Jacobs: And when you say this problem, what problem are you referring to?
Lindsey Hoell: Oh, the devastating amount of single use waste, single use packaging waste in particular, that's created in our food system, but a lot of other areas as well. And I experienced it firsthand. I'm a surfer and I was living and working and surfing in Hawaii and was really devastated by the micro plastics on the most remote beaches. It helped me understand that this was a source generation issue and not a littering issue. I thought that like beach cleanups were for cleaning up after litters, and then I realized that the dirtiest beaches were actually the most remote ones because no one was there cleaning up what was actually turning in our oceans and landing on our beaches. And so I got involved with Surfrider Foundation and I started to learn more and uncover really the devastating problem of single use packaging in our waste infrastructure at its core.
Jason Jacobs: And it'd be fun to hear a bit about the origin story of the company, but maybe before I ask you that, it'd be cool just to hear from each of you about your personal journey and how you came to be doing the work you're doing now and how you came together. So Maia, do you wanna kick off?
Maia Tekle: Sure. I would say that I have been a lifelong environmentalist. My parents are very earth friendly. I grew up, uh, composting, I thought everyone had a backyard compost that they use to then [laughs] use to plant their gardens and grow vegetables and can their vegetables. And we collected our rain water. And so my dad grew up on a farm and so that's kind of just been ingrained in my, how I was raised, is to have the least an amount of impact on our planet. That being said, I moved to big cities after I graduated. And the ability to have a low waste lifestyle was sometimes inaccessible, especially in cities like New York, where the waste problem is pretty extreme.
And then I had been cruising along in my career journey and then met Lindsey when I was at Caviar as the restaurant partnerships lead and realized that like, oh, I can align my personal values with my career path and help this incredible woman tackle this gigantic problem. And I felt super compelled per vision. And to me it's always been the same. It's been creating the infrastructure for reuse and this fourth bin system and that is where it all started. Keeps us going and we're obsessed with the problem and tackling it.
Jason Jacobs: And what about you, Lindsey? How did you come to be doing the work that you're doing? You mentioned a little bit with the surfing, but maybe just add a little more color on how this all came about.
Lindsey Hoell: Sure. I would say not exactly like Maia's, I grew up in a suburb of Columbus, Ohio, and sustainability was not on my radar growing up or my parents. We'd learned about recycling at school and I bugged my parents enough to start recycling. It was like my first advocacy. And then as I moved to the Bay Area and then Hawaii, I just became more and more entrenched in the sustainability movement, in part because I started surfing and saw it firsthand, and then got involved with Surfrider Foundation. And right when I started volunteering with Surfrider Foundation, they were launching a program called Ocean Friendly Restaurants, and I kind of hand raised to lead that program. And it was an overwhelming success in that like businesses wanted help in shifting to more sustainable practices and there was a lot of consumers that wanted to use their purchasing power for good.
And because of that, we were able to create a really large grassroots movement to basically help facilitate the movement of policy that it stagnated for a decade. Because we had business buy-in and consumer buy-in, it kind of de-risks that policy for the policy makers. So I saw this like magical thing happen when you were able to create a movement that all like this trifecta of consumers, businesses and policies could all work synergistically to shift an industry. But as I learned more about waste and where it was going, we were really focused on transitioning restaurants from styrofoam to compostable, but the more I uncovered, the more I realized it was all just still trash and that there needed to be something beyond single use as the only alternative.
And so that's how the idea of Dispatch Goods came. But at that point, I'm one of the most isolated landmass on earth with this idea that is a big idea, building a new infrastructure is not something that's easy. I was working in cardiac surgery, so not exactly in the right career path. [laughs] And so I was trying to figure out how to get back to the Bay Area, completely changed my life to enable this big idea. And so went back to my MBA at Berkeley and I actually only applied to Berkeley 'cause I figured that's where something like this would start. In about six months into my MBA started putting together the building blocks for Dispatch Goods. And yeah, the vision hasn't changed much in that it's the infrastructure piece that I think we're missing. The execution is constantly evolving as we learn more about where the fastest way to build the infrastructure lays, but it's been this waste problem and creating something circular since that moment in Hawaii, where I saw the plastic.
Jason Jacobs: And as you've provided some of this other context, you've touched on it, but I'll just ask you directly, what's the big idea?
Lindsey Hoell: So the big idea is this fourth bin infrastructure where people can put out reasonable products that can be collected, sorted, and cleaned, and then sold back into businesses. The idea started with restaurants being the entry point for creating the local density needed to create this infrastructure, and now we're kind of looking beyond that too, but really it's this fourth bin infrastructure where people can participate just like they participate in curbside recycling.
Maia Tekle: And I would say also diverting as many items that can and should be reused from our other bins, so the landfill bin and the recycling bin. We throw away a lot of valuable materials and resources that can and should be reused. The infrastructure is the piece that just doesn't exist.
Lindsey Hoell: Yep.
Jason Jacobs: And so when you say fourth bin, so there's the landfill bin, there's the recycling bin, is it composting that's number three?
Lindsey Hoell: Yeah, I know it's bay area not everyone has a compost ban. There's some places they're still working on their second bin.
Jason Jacobs: And so this fourth bin, what was the initial gem of an idea? And I get that okay, fourth bins so that reusable plastics can get bought back and reused at the highest level, but operationally, what was the thinking in terms of how that would actually play out in practice? And then what have you learned along the way? Because it sounds like the why has remained consistent, but what about the how, where did you start with that thinking and what have been the twists and turns and where are you today?
Lindsey Hoell: Well, there is a big twist in our journey called COVID. I don't know if you've heard of it?
Jason Jacobs: I had it like five weeks ago, so I've definitely heard of it. [laughs]
Lindsey Hoell: Oh, well we're glad that you're feeling better. That's been a difficult journey for so many. So yeah, we started by putting forth bin in offices because we knew that we needed density in volume in order to make the early economics work. And Yelp was our first pilot partner where we put the fourth bin at the Yelp offices, we got a bunch of restaurants near the Yelp office to carry dispatch containers, steel bowls for the lunches, and then employees could get the steel bowls instead of single use and just put them in the bin when they got back to the office. And it really was the fourth bin. There was a trash compost recycling bin at the office and then there was a bright pink dispatch bin.
And every restaurant that participated, had a sign that said, if you're a Yelp employee asks for a dispatch container. And it was like the most beautiful rocket ship ever. I didn't even really know how large of a pain point this was for so many businesses downtown, but immediately all of the other businesses that were downtown started contacting us to see if they could get a fourth bin at their office and if they could participate in the same system. And we're like, "This is amazing," and then COVID hit.
Jason Jacobs: So before we move on, what was the pain point that they were feeling?
Lindsey Hoell: So I think it was two-prong. One was, just like they had sustainability goals and they realized very quickly that when it came to waste, the number one contribution to their waste stream was the takeout lunches from nearby restaurants. And that felt like a very unsolvable problem for them because it's not like, oh, we can just in our cafeteria switched to reusables, it was a whole orchestration with, uh, an entire downtown lunch system where it was really difficult for one business to solve this on their own. So there was a sustainability pain point and then there was an actual financial pain point where waste is really expensive for companies and they get dinged very heavily in San Francisco for stream contamination. Meaning if you put recyclables in the compost, if you put compostable in the trash, the waste haulers here have pretty hefty fines.
Jason Jacobs: Is that coming from them or is that because the government has a policy that enacts that?
Lindsey Hoell: I think the government has a policy that enacts it and it's for businesses. Consumers right now don't... Are not held to the same standard, but it's like hefty fines for businesses. So some businesses were actually paying other companies to have their trash pre sorted so that they wouldn't get dinged as well as washed. So they were washing their recyclables because if you have too much food waste and you're recycling then you get dinged. And so this was a really big problem for businesses, both from an environmental as well as financial standpoint.
Jason Jacobs: So the businesses on the sustainability side, I mean, maybe they had principled ownership, but in a lot of cases, maybe it was just wanting to keep happy employees and the employees were grumbling about all the waste I'm guessing. And then on the financial side, I mean, that's clear if they're getting dinged and there's a cost associated with it and they don't wanna absorb that cost, but if they can avoid it, then they're motivated to find an alternative. And what was the initial thoughts? So you mentioned this fourth bin and Dispatch, was it Goods, or what? I forget which word you use for the dispatch plates and forks and that.
Lindsey Hoell: Yeah, are goods. It's an all encompassing term.
Jason Jacobs: And what was the thinking in terms of having your own goods and how were those goods different from the traditional packaging that single use?
Maia Tekle: Yeah, I would say our first bowls were stainless and continued to be stainless steel with silicone lids. And so just based on an experience alone, we recognize pretty quickly that people were excited to get their lunchtime food in something that was better plastic or even compostable, is that it was a more akin to dining in, but they could bring it back to their office. And then I think one of the behavioral things that was really illuminating to us is that the virality, if you're waiting in line at your lunch counter and all of your other coworkers are one after another getting the steel bowl, you want that too? And it's like, "Oh right. Yeah, I can get it in a reusable."
Then again, mimicking what the behavior is already, which is they already know to go put their things in one of the bins, but we had to differentiate it enough to say like, "Oh, what's this pink one. Okay, cool. That's..." And people just did it. And it was really exciting for us because they weren't reinventing some of the behaviors, so again, like they still distribute it into a bin, but the experience was a much more delightful. And then again, there's more virality and then it's fun to walk around with something that is a little bit nicer than your just regular single.
Lindsey Hoell: Yeah. There's some social signaling that happens, which I feel like...
Maia Tekle: Am saving the planet, look at me. [laughs]
Lindsey Hoell: Yeah. I think we need to lean into.
Jason Jacobs: So if you're at the restaurant and you're getting takeout, you can only get the Dispatch Goods if your company is a participant?
Lindsey Hoell: Yep.
Maia Tekle: Yep.
Jason Jacobs: So how do the restaurants know who was a participant and who wasn't?
Lindsey Hoell: It's the honor system, you'd be shocked at how far the honor system has gotten us to this business. And I think that, yeah, it's very clear instructions. We did get to a point that as we were dropping off more and more forth bins at offices, this is again like leading right up to COVID, we realized pretty quickly, okay, we're going to have to get past the honor system because restaurants couldn't remember that all of the partners we had at that point. And so we were getting to the next stage of, okay, we're going to need digital badges on like an app on your phone. So that's the direction we were heading. And we dropped off fourth bins at Zendesk, we had pilots signed up for Autodesk and Deloitte. Um, we were due to walk through a Salesforce and then COVID hit, and so that's really like where that came to a screeching halt.
Jason Jacobs: Oh gosh. So you were going in and partnering with these businesses and getting lots of demand. And then you delivered a few pilots and we're getting ready to expand and then all the businesses stopped having employees that showed up in the office.
Lindsey Hoell: Yup. And all the restaurants closed because they also cater to the downtown lunch crowd. And we were just getting ready to fundraise, so we had no money and no partners and no businesses. And it was one of those moments that were like, holy crap, how are we going to resuscitate from this situation?
Jason Jacobs: And did you know at that point, assuming that that model had remained and scaled, how you would charged or were you still figuring that out?
Lindsey Hoell: Yeah, we had paid contracts, employers paid per employee per month, somewhere between two and $10, depending on how large their companies were. And so at that point it was free for restaurants, but companies could pay to have the fourth bin at their office and get their employees access to all of our containers.
Jason Jacobs: Got it. And then from a logistical standpoint, the restaurants would need to be stocked with the dispatch goods and then the companies would need to be stocked with the bins. And then how did everything get delivered on the one side and picked up on the other?
Maia Tekle: You're looking at those first [inaudible 00:17:45]. [laughs]
Jason Jacobs: I thought you were the co-founders.
Maia Tekle: Yeah, I had a yellow badge and I would service the bins in the afternoon, dishwasher at night, and then we would return the cleans to the restaurants as needed the next day. And you basically, uh, Lindsay and I were two of the first dishwashers and drivers. I think honestly, really to understand what was fully needed in the system, but yeah, we had a little red wagon that we would use and, uh, canvas bags that we still use now to service the return bins that we launder.
Jason Jacobs: It's like enabling an Eden experience, but from wherever you are?
Lindsey Hoell: That's right.
Maia Tekle: That's correct.
Lindsey Hoell: I think that there's a study that Disney did that people only walk like 30 feet to find it bin, and if it's not the right bin they're going to throw it in there anyways. So every place there was a trash compost or recycling bin at the offices, there was a fourth bin too. And that was something that we learned really early on is that if it was going to make its way back to us, 'cause we don't have penalties or non returned items, it really has been our focus to lower the barrier to entry versus to track containers, but we needed to have it be as convenient as recycling or else things would not make it back to us. And our loss rate was ridiculously low, like 2% with that model. So we were getting all the containers back 98% back.
Jason Jacobs: Okay, so COVID hit then what? [laughs] Let me guess you went surfing to clear your head.
Maia Tekle: Yeah. I feel like COVID hit and we took a beat because I think at that point we were like, that was the early days when we were like, "Oh, it's going to be six weeks and then we'll be back on our feet." [laughs]
Lindsey Hoell: I actually didn't think that.
Maia Tekle: Yes. [laughs]
Lindsey Hoell: I think because of my healthcare background, I was like, I don't really see our way out of this till there's a vaccine. Maia's way more optimistic in life than me, just in general. I'm for sure the pessimists in this relationship. [laughs] And so I was like, "It's gonna be forever, like until they have a vaccine, I don't know how anyone's going back to the office." And so I remember my mom sent me sympathy flowers, like, sorry, your business has gone. And I took a couple weeks to like cry in my beer. And then what we decided first is like, let's talk to customers and see if they still want this. And so that's how we kind of started to understand whether there was still a demand for reuse.
Because there was articles coming out like reuse is dead forever, the virus has killed the circular economy, and people were like putting bleach on their vegetables or something at that point, like it was just like a lot of nonsensical behavior. People didn't know how the virus spread at that point and didn't know if surface transmission contributed to the viral spread. So we spent a lot of time talking to customers at that moment to understand how they felt about reuse.
Maia Tekle: And restaurants too, but delivery and to go went sky high. And so we knew that if there was still a to go market and a delivery market, that there's nothing different in that sense, like in terms of transferability with single use and reusables,. We realized that this was a big, big waste to pain point from the restaurant's perspective. They were feeling an immense amount of guilt because now 100% of their volume was going out in to go and they were filling their dining rooms and they're inside of there where people would be dining in with to go packaging, and we had underestimated that pain point from the restaurant's perspective.
Jason Jacobs: So it sounds like, and correct me if I'm wrong, but that in the aggregate the amount of takeout and to go increased, but in terms of which restaurants it was coming from maybe it shifted from the ones that were near offices to the ones that were near more residential areas, it that right?
Lindsey Hoell: That's exactly right. Yep. I think that single use packaging rose 250 to 300%, like month over month after the pandemic started. So the problem was worse than ever. And when we talked to customers, they said the exact same thing, they're like, "The waste is accumulating in my home and I feel terrible." And we were like, okay, there's still a market here. Then we started talking to doctors to make sure that what we were gonna continue was safe and we like beefed up some of our protocols and then tried to figure out how we could relaunch because now we didn't have the luxury of was a lot of people in one space to get that density component that we had previously with the downtown lunch crowd.
Jason Jacobs: And so when you did relaunch, what elements were the same and what elements were different and how are they different?
Lindsey Hoell: So we were working towards a pilot with DoorDash right before the pandemic, and then they kind of backpedaled because they were like, "We don't know, this is scary." And we're like, "We have to get going or we're gonna lose all the momentum that we had." And so Zendesk is, the director of sustainability there, or I think social impact, he is just an absolute legend. And he told us that he would keep paying us, even though we weren't providing the service to keep us afloat. And I said to him, "I actually don't want that. What I want is your business. So I don't care if Dispatch takes a dime, but what I want to figure out is how to get food to your employees in reasonable packaging and start to build this."
And so there was one restaurant that we were about to launch with that didn't close during the pandemic. In fact, their sales skyrocketed, and that was Square Pie Guys, like a square of Detroit style pizza place. And it was right by the Zendesk offices. And so we talked to Zendesk and we're like, "Hey, can we get you guys to pay for food for your employees at home, from Square Pie Guys and we'll provide Square Pie Guys with the packaging so that we could start to learn the delivery logistics or the collection logistics from home." And we didn't have a delivery partner 'cause kind of DoorDash had decided to delay the pilot, we ended up relaunching a little later. So Maia and I again, had to do the delivery. [laughs] So we started off with one customer, which was Zendesk employees and one restaurant, Square Pie Guys, but we got some publicity around it. And so we kind of were able to get this flywheel going again.
Maia Tekle: Yeah. It was really exciting. I feel like one of the really, really key pieces that is so, so, so unique to the pandemic was that we were gathering so much customer feedback and data because we were the delivery drivers and people were home and they were... Just did their individual home pods. And so anyone that was external, we could just ask one question and sometimes I made those early like metrics of my delivering would be like, [laughs] I'd only get to like two or three houses an hour an hour at like 12. [laughs] But like, because I was so curious, I ask questions and see like how the experience was and what was working, what wasn't working. And that was one of the things that we've continued to do, is just gather an immense amount of as much customer feedback as we can just to ensure that what we're building makes sense and is on the right path.
Lindsey Hoell: Addressing their biggest pain point.
Maia Tekle: Yeah. And as addressing the biggest pain point because some of our assumptions have been wrong.
Jason Jacobs: So is the model still that the businesses pay?
Lindsey Hoell: No. So we did that for a couple months and learned a lot. And what customers told us is that they don't wanna order necessarily through Dispatch Goods, they just want, however, they're getting their food but make it reusable. And so what we realized is this just needs to be something... Our first thought is something that you can add on when you're checking out, just like you can add avocado or switch tote milk. So in August of 2020, we launched basically what the business is now, which is you order however you're ordering, through DoorDash, it's now available on Uber Eats for some of our restaurant partners, or directly through the site. And you can get pickup or delivery. And then basically you schedule collection and we come into your house and collect things.
And so we only collect in every neighborhood once a week. So if Tuesday's your dispatch day, Tuesday's always your dispatch day. You can pick a different Tuesday, but it's always Tuesday. And we provide the reverse logistics. And so that got a lot of early momentum for us, again, like more press, and then we were capturing like five to 15% of customers were selecting the Dispatch Goods option, which was awesome 'cause we'd modeled it at three to 5%. So we exceeded our assumptions. And it was often the most popular modifier on the menu. We are beating Avocado, which I feel like was the running joke for us being Californians. We felt like, wow, you know, we're onto something if we're beating Avocado. And so that was really exciting. And then we had a restaurant that said, "I actually don't want to offer single use at all anymore. I want everything in dispatch." And we're like, "That's kind of terrifying." Because our hypothesis again had been that people that opt into something care enough to return it. And so we were like, if this is the default, are we just going to bleed inventory cause no one cares?
And so we had a tiny bit of money at that point and we use it all basically on enough containers to get this one restaurant launched with 100% dispatch. And that was kind of one of the biggest risks we'd taken, 'cause we're like, "This is either going to go well and we're going to be able to fundraise, or this is going to go poorly and then we're going to be in a pickle."
Maia Tekle: We put all of our chips in [inaudible 00:26:23]. [laughs]
Lindsey Hoell: We did.
Maia Tekle: Let's go for it. [laughs]
Lindsey Hoell: It was super scary. But what happened was we launched with this restaurant, after they made the announcement that everything was going out in dispatch, their takeout volume doubled. And we got a higher return rate than with the opt-in customers. So that was a really interesting early finding that really Dispatch Goods is default, adds a lot of benefits for us from a density and volume standpoint, and the return rate increases because when people pay for something, we learned they feel less guilty not returning it. And if they didn't pay for it, then the pressure of the container saying it's not yours, which is basically what it says, is enough to motivate people to return things.
Jason Jacobs: So does this add on cost money? Who pays?
Lindsey Hoell: So the restaurant pays for dispatch instead of paying for single use packaging. Right now we're a tiny bit more expensive than compostable, but we're getting closer and we're working on some products that will be more cost competitive with single use in its entirety. But essentially, yeah, it's just instead of paying for single use compostable they're renting dispatched containers essentially. And in all of that, the logistics are included. So we do the collection and our goal is to collect as many items per stop and get to as many stops per hour as possible.
Jason Jacobs: And when you say stop, so where are these stops situated relative to the consumers who are ordering the food?
Lindsey Hoell: The stops are at their home. So it's like home collection.
Jason Jacobs: Got it. And does it require a special, and if so, how will you know who has the bin when they go to sign up in the app when they're ordering the food?
Lindsey Hoell: So there's no bin, the fourth bin is the visual for the infrastructure, but the food comes in a dispatch bag and they put the bag out in front of their house and then the drivers get their routes and they go, it's like a little fun scavenger hunt, that they go house to house and look for the blue bags. And then they collect and drop off at the warehouse at the end of their route.
Maia Tekle: And for a lot of people, it's just, if they ask where to put their bag, it's exactly where they would normally instruct an Amazon driver to place their packages. So if that's a stoop, if that's, uh, in their lobby. And then we also have a system of return bins throughout the Bay Area for people that are out and about and also just prefer to return them on their own. We have a lot of people that are repeat customers to certain restaurants and that just like to bring back their bag as well. So we give them options.
Jason Jacobs: And when you say they for the drivers that implies that it's no longer you two? [laughs]
Lindsey Hoell: Yeah. Every once in a while have to roll up our sleeves and do it. And honestly, I really like it. I listen to NPR and in my little Prius and bebop around town and pick up blue bags, it's good work. But yeah, now we have... This has been a really busy month for us. So we're hiring more drivers. So we should be up to about eight drivers after I think we're going to bring on two more this week.
Jason Jacobs: And are these employees of the company?
Lindsey Hoell: Uh, we use contractors. So it's similar to DoorDash driving. Our delivery drivers are employed. So we have the drivers that are delivering to restaurants, basically the orders for the day, but the contractors do the home collection.
Jason Jacobs: Got it. And then in terms of where to go, so, I mean, is there an app that they use similar to what an Uber driver would use or how does that logistics work?
Lindsey Hoell: Yep. They download the app, they get their route, and then it's just like ping, ping, ping to all the houses in the route and drop them off at the end of the route. And I think right now we have all female drivers, which is [crosstalk 00:29:39]. Maia and I, when we were doing this job we're like, "This is a really good job for women." Because it's daytime hours, it's generally you don't have to communicate or talk to another person. No, one's in your car, you're not going to areas late at night to deliver food. So we were like, "This is a really female-friendly job." And then that's been who applied and to... I mean, we have amazing retention for contractors in this space. That's very, I would say turbulent for keeping people to be driving every week for you. So I think that... The consensus says that it's good work.
Maia Tekle: It's a good job. Well, and also because we were doing it ourselves for so long that we've, we've done every job at the company so far. And so we understand what is needed to complete the job, but also designing a job that is really fun and it's good pay. So a lot of our motivation as well too, and we're able to retain awesome people that like what they're doing.
Jason Jacobs: And only Bay Area to start?
Lindsey Hoell: Yep. So we're in San Francisco, Mill Valley. Well, actually nowadays we're collecting all the way down to San Jose. So we're in, in the greater Bay Area right now. We don't have restaurants in every region, but we have customers that schedule collection. [Azuni 00:30:50] Cafe was the first restaurant to do 100% dispatch containers. And like Maia said, we interview customers every week 'cause we're always asking them like, "Are we tackling your biggest waste pain point, and if not, what is it?" And one thing that kept coming up was the freezer packs that come in all the grocery delivery boxes. So we started telling our customers, "Hey, just put those in there and we'll see if we can clean them and resell them." And then pretty quickly some of the Imperfect Foods employees where our customers and are like, "Can you do this for our company?" And we were like, "Sure."
So in like two or three weeks, we launched with Imperfect Foods based on again, like the packaging being such a major consumer pain point. And so starting in October, we allowed people to schedule collection for the other items that we're now collecting, which include deli containers, and those freezer packs, and a couple other items we're testing. Even if they don't have the dispatch bowls, we have found again, an enormous appetite for this. We shared this meme on our Instagram page and it was shared almost 300 times in the Bay Area and did like three times better than any other posts we've ever done. So people have been hoarding things like freezer packs, knowing that they could be reused they're feeling really guilty. So that's the fourth bin idea.
Jason Jacobs: And then from an expansion standpoint, what goes into expanding say 10 miles or 20 miles or 50 miles away, and then same question as you look at state to state or even someday country to country? So what goes into it and how challenging is it?
Lindsey Hoell: We are actually going through this right now, as we're expanding beyond the Bay Area, like how far can we go where we still expect the drivers to go back to the warehouse at the end of the route, versus essentially 10 miles, they can come back to the warehouse, there's not a lot that goes into the expansion. Now, 50 miles, that's harder for the drivers to, at the end of the route, want to drive back to that warehouse. So we need to put a storage unit in what we call like our hub and spoke model. That's kind of the next stage of dispatch, is to build out these spokes. So we're looking at like Santa Cruz, Sacramento, actually increasingly looking at LA and doing like long hauling once a week from LA for some demand we have there right now, but we're not in a place that we're planning to build a warehouse there tomorrow.
And so what our goal is really over the next year, we have models for this, but we want to put it into practice, is really understand the economics of transporting and also the carbon impact of transporting, and understanding when it's worth building a warehousing infrastructure versus transporting. And so like, yes, in LA it's possible that we could share a warehouse processing facility, it's also possible we'll build two, but for New York, obviously we'll need to build a full facility. There's no way that long hauling makes sense from an environmental or economic standpoint.
Jason Jacobs: When it does come to impact. I mean, you mentioned the emissions from transport as an example, how do you think about impact and how do you track it and or report on it if at all?
Lindsey Hoell: Yeah, so we measure waste a lot. And so that's one piece that, of course we track. So this year alone we've replaced over 200,000 items from the waste stream. So we're excited. I think last year in total, it was a few thousand. So it's been growing quickly, which is awesome. And then from a carbon standpoint, we do our own internal analysis to like understand where our biggest contributor to carbon is. So really the three buckets are the manufacturing or the packaging, which includes mining and all the source generation or material generation, um, and then there's the transportation. So that's delivering to restaurants and collecting from homes. And then there's the dishwashing. And so really what we found quickly was that the steel packaging was the biggest contributor pretty quickly. So the first place we look to reduce our footprint is in the packaging itself, which is one of the reasons why we're rethinking, redesigning some packaging to lower the manufacturing footprint of our steel packaging.
I think that the thought is that the biggest footprint would come from the collection and the processing, but that's not actually the case. Recyclers also are coming to your house and collecting or composting companies are, so we're just emulating that infrastructure. We're not quite as efficient yet, but with density, we hope to get there. But the actual manufacturing of the containers have had a bigger impact on our carbon footprint than we'd originally realized, which is why we're re thinking that. And then we also offset all of our driving miles. So it's something that we still again, hope to reduce over time, but in the interim, that's kind of our solution there.
Maia Tekle: And we are going to be launching our impact page on our website so that people can kind of, not only see how much we're saving, what Dispatch Goods is doing, like some of the behind the curtain how we think about things, but also a lot of our incredible partners and nonprofits that do a ton of this research and have a really great articles and a lot of great information for people to dig a little bit deeper, and understanding our full waste system a little bit better. So we're excited to lodge that over the next few months.
Jason Jacobs: And from a customer standpoint, I know that the restaurant industry has been struggling. Do the restaurants need to care about this problem because it's the right thing to do, or if they're just in survival mood and being greedy capitalists does working with Dispatch makes sense today? And if not, what does that roadmap look like and what will need to change or where do you need to get to so that even if they don't factor in conscience, as an example, they'll want to work with you anyways?
Maia Tekle: I would say that our early movers in terms of our restaurant partners were very much mission aligned, but because we had to prove ourselves, which allowed for us to understand some of the business benefits because they gave us visibility into what we were doing for their business, their top line revenue. So as Lindsey said, our first 100% restaurant doubled their volume and that maintained. And so they were ecstatic that they had made that shift and they were getting a ton of positive press. And I know that every restaurant owner, some of them avoid Yelp altogether, but their Yelp reviews just changed overnight almost and they just started to get... This never happens, but positive reviews on packaging and how wonderful the experience was and that the temperature was great because of these thermal bags.
And so now over time, as we start to measure the business impact, we are seeing that even if you're not an environmentalist, we are driving top line revenue from a really important consumer base. And one of the reasons that people don't order delivery is because of the waste. And so by alleviating that eco guilt, you're not only driving revenue with a completely new consumer base, but they're ordering more often and they're very loyal and they're very happy customers. And so we've grown with 85% of our restaurants, either a new location, or they've gone from opt-in to 100%, which is really exciting because we're... Now we're doing something good from a business perspective too, on top of an environmental perspective.
Jason Jacobs: So it sounds like the story is, I'm stating this as a statement, but really it's just a question to test my understanding, but hey, you know, given we're small, the math may not quite pencil out just yet if you're only looking at cost of Dispatch Goods versus costs of single use packaging as an example, but with economies of scale, that's going to come down. And in the meantime, because you're early, you're going to get such a halo, that's from a marketing standpoint, your sales are gonna increase well beyond what they would be to make up for it in an industry where you're probably having trouble differentiating since everybody looks the same. And maybe you don't use those words, but is that the story?
Lindsey Hoell: It's exactly right. Yep. It's that and you get containers into a chef's hands and they are really careful about the way their food is presented. And so giving the chef an option to have something that more closely emulates the dining experience, I think also can help nudge owners and managers in the direction of support. The one thing that I'll add is that we have had to target a little bit higher end restaurants because of the price point. It's a little unapproachable for fast casual restaurants, unless they're doing it as opt-in and pass the cost onto the consumer. So that's one opportunity area that we're looking at is how to have a product offering that may be a different material for that market segment, the fast casual restaurant.
And so we have to amortize the cost of the container over its useful life, and so we need to find something that's a little bit probably lower material costs in the long run for fast casual restaurants. And so that's where we're at and I think a really exciting opportunity. We really wanna disrupt black plastic, it's not something that people love, but it exists so prevalently and it's so universal. The containers we have now are all off the shelf, so it's really fun right now to take the time to think about what's missing from the system that could be a better experience but offer it at a similar price point.
Jason Jacobs: And you mentioned that when you're surfing, you saw this waste on the beaches and you also mentioned that the waste processing facilities can whack the businesses because of what it sounded like were some policies in place from the local government to do so. From a broader societal standpoint, is the optics and the seeing the trash on the beaches the biggest detriment to health, or are there other things that this single use waste does that harm our planet and the people and other living things that are on it?
Lindsey Hoell: So I think we talk a lot about the downstream effects, so like where waste ends up. And I think that's a lot of times how people get involved or excited about the Zero Waste Movement, is I have talked to so many people that had the same reaction to some place where there shouldn't be trash and there was, and it's just enough to get you, okay, let's get rid of plastics. That's usually how we start. But Maia will tell you that in the past few months we have had a lot of restaurants reach out because they couldn't get their hands on coffee cups or on pizza boxes. And we focus a lot less, I think, in the environmental community and sharing really what the upstream effects are, which is like where these materials are coming, what the footprint for manufacturing is, who's living next to these factories, and what kind of missions are being put off?
And so I always say, where are you gonna get more pizza boxes from? Well, trees. We're gonna cut down more trees to make pizza boxes that are used on average for 12 minutes and never used again. And so that's when my mind shifted to, we cannot be growing thing in one part of the world, shipping it to another part of the world to be manufactured. Best case scenario goes to like a distribution warehouse and then might get shipped across the country to be used for 12 minutes. It's just not the best use of our resources. And the pandemic has accelerated this. We now have restaurants reaching out increasingly because of supply chain disruptions, more than anything else. They can't get their hands on the packaging they had before, because there's so much demand for it and it's just not the best use of our resources or ag land, even if it's compostable in the end.
And so that's where I would say I'm even more passionate before than like the end of life. It's like, oh my gosh, we have so much need for our resources that we need to focus on curating that for products that are more long standing than something that's used so temporarily and so wastefully.
Maia Tekle: Yeah, the upstream. It's illuminating that piece of it for people, then there's this aha moment that's like, right, it doesn't just arrive with my pizza, it's probably traveled across the world. And that's absurd just for that one meal. I mean, even now, just as of this week, because of supply chain, there's restaurants that have had to close because they don't have packaging. And I think that there's a real opportunity to say like reuse is not only a viable, but a necessary solution.
Lindsey Hoell: I say a lot of times like this problem is stupid. And I don't know what better word it is, it's just dumb. Like how we've decided to use our resources in such a stupid way is infuriating. And I think about like glass, like glass is what are the most absurd things that we use as single use. There's nothing single use about glass. Why are we putting into recycling bin? By the way, the carbon footprint of recycling glass is about the same as manufacturing from virgin materials. There's not a huge environmental benefit to recycling glass. What a lot lower is just washing it for reuses. And luckily some policy passed in California a couple weeks ago that makes a really clear pathway for bottle reuse programs in the state. So we're seeing the direction shift back towards reuse, but like in what world did we decide that we should crush this thing just to rebuild the same thing all over again? It doesn't make sense when we could just be supplying materials to a local economy in a much smarter and more sustainable way.
And like we're recapturing the value of products. Like glass is expensive. These businesses... So many businesses to get away from plastics are shifting to glass for their packaging. That's much more expensive and it's a lot cheaper to wash that than it is to repurchase that glass all over again. And yeah, much better from a sustainability standpoint.
Maia Tekle: Clearly we're very passionate about, about this topic. [laughs] We could talk about this for hours. [laughs] We do.
Jason Jacobs: And given that that's the second time I've heard about policy and the importance of policy to properly incentivize restaurants, or consumers, or whoever to care about this problem beyond for the societal good. So given that, how important is a favorable policy landscape when you look at an expansion path? And a corollary question is, how active do you envision that you'll be as a company over time, if at all, and actually influencing that policy and advocating?
Lindsey Hoell: I would say that we have always had the perspective that we cannot rely on policy to make our business big and that we have to have a better offering for consumers and businesses. And so that's been our perspective. We've not relied on policy. That being said, policy makers are looking to us to de-risk the policy they wanna pass. That's what we've noticed, is that the more market penetration we have, the more their policy agenda is de-risked in that there's a viable alternative. So they come to us a lot about like what policies would work, and some of the ideas they have I agree with and some of them I don't as much agree with. I don't know that that would be the way that I would go about it.
And so I would say that we have a skin in the game to help them think through as really like, as small as we are still one of the bigger operators in the circular packaging economy, we want them to understand the challenges and what actually could help to create a tailwind. But I would say that we have not relied on it as our pathway forward because this needs to exist, whether or not our policy makers can, can get it together and help create some tailwind for us.
Maia Tekle: I think it's also really trying to wrap their heads around progress not perfection, and that there are necessary steps. We can't wait for a perfect system. They can't wait for... 'Cause we'll never get started. And that's always been something that Lindsey and I feel very passionately about. And why we don't wait for policy is that we have to just go. And so for them, it's actually been really exciting to see that like, okay, now that we are getting bigger and like, they're like, okay, oh yeah, yeah. Like there's steps that you can create to accelerate reuse. And there it doesn't have to be the perfect solution to solve the big messy problem, there's going to be steps that will enable of that problem to get better over time. But yeah, I think that's been exciting for me at least to see that there's like been like steps in the right direction that they're not waiting for like the perfect time or the perfect policy, or for again, for us to be big enough to be the one solution, it's going to be a lot of different types of collaborative solutions.
Jason Jacobs: And do you envision and in terms of crossing the chasm and getting into mainstream consumer consciousness and adoption, how much of that is reliant on them becoming awakened to the magnitude of the problem and the social good of reuse versus a more selfish value proposition? What do you think is the hit between the eyes message for mainstream consumers versus the early adopters where you're starting today?
Lindsey Hoell: I mean, it's been shown that a lot of behavior comes from what your neighbors are doing. And so I think that if we do our branding and messaging and marketing well that we can create a movement where there's the early adopters that are really proud of participating in the dispatch system that help influence their neighbors in the same way we've seen it with solar panels, we've seen it with Prius's, and recycling as well. I think that there's something to the visual of your neighbor participating, or someone in your apartment building participating in this that helps motivate. But even more than that, if really the businesses can make this choice for their customers in a way when it's the default.
Now, 70% of our volume is to driven by restaurants that have made Dispatch Goods the default. What that means is there's a lot of customers that didn't choose to participate in this dispatch system, but most of them are still returning it, even though it wasn't a choice. And so we have received very little pushback, I think, 'cause the experience is better too, but that's something that we need to stay on top of and make sure that continues. I think that it's actually an opportunity for businesses to help really shift a market by shifting to reuse as the only option available.
Maia Tekle: Yeah. And I think why we continue to be really excited about this design project is that we can beat single use just on experience alone. So you don't even have to care about the planet, but if you're like, "This is nice, I like this and I didn't have to pay anything more for this," cool. And then my dream is that people look at single use packaging as akin to smoking in airplanes, like I can't believe we used to do that or that used to be allowed.
Lindsey Hoell: Yeah. So I do think that the consumer attitude shifts and then it de-risks policy. And the same way we saw it with ocean friendly restaurants do risking banning styrofoam in Hawaii, I think we're starting to see the same thing here. Then there's really big companies that are doing this, that we're working with now. Like imperfect Foods and Good Eggs have a lot of market penetration in the Bay Area, and now they're Dispatch partners. So the amount of consumers that are touching a product that can be what we call dispatchable sent back to us for reuse is increasing. And then it gets to a point that we have enough consumers that have touched a Dispatch product that it's like, okay, let's get some potentially policy tailwinds to help support everyone having access.
Jason Jacobs: So what are the key priorities for the company over the next 12 months?
Lindsey Hoell: Like I mentioned, we're doing a packaging redesign, which is really exciting for us. We're also hiring right now, Maia and I have done all the sales so far, so we're excited to grow our sales team. And really we are working to expand beyond just the Bay Area. And so in January, I think we'll start long hauling from LA based on a partner that's launching there that wants us to come with. And so that's very exciting to start to map out the additional costs, both like I said, carbon and, and actual financial costs of doing that. So for us, it's building that blueprint for scale so that we know how many facilities we need to address the 50 largest markets in the US and what that's gonna cost us. So creating that blueprint is gonna be absolutely invaluable for us so that we can properly solve this problem for large companies that are not just Bay Area centric.
Maia Tekle: I'm just excited we've just seen a big uptick in solving this problem for a lot of companies that have been trying to think about ways to reduce their impact and their waste. And it's been really thrilling for our team. And again, I'm so excited to hire some more sales people because I think that there's just such an enormous opportunity for us to grow and scale just within the Northern California market, but understand again, that blueprint for the rest of the country.
Jason Jacobs: Where do you need help, who do you wanna hear from?
Lindsey Hoell: So we're hiring right now, an operational finance person to help us create that blueprint. So that is a very key hire for us. And we want so someone that is comfortable like boots on the ground, understanding the operations and the cost contributors in our processing facility, as well as working closely with me to create the blueprint for scaling. And then we're hiring sales right now. And then one probably junior designer. We actually are bringing on the former creative director from Airbnb. So we're excited that he's going to be leading our brand strategy. So that's gonna be a really exciting opportunity for a junior person to work with somebody that's built something pretty cool.
Maia Tekle: And we're also Always hiring amazing drivers who are looking for some really solid gig work during the day hours where you get to go in a cool scavenger hunt and you get paid pretty well to do so.
Lindsey Hoell: Yeah.
Jason Jacobs: Anything I didn't ask that I should have or any parting words for listeners?
Lindsey Hoell: Yeah. So I would say that one thing that we have seen happen is we partner with businesses, Imperfect Foods, but also offices and restaurants, now grocery stores, if you're working in a space and you're like, "Man, I wish that my company would do this," it's not been the director of so and so that has made the change in an organization, it's someone that is just very motivated and kind of incessant about the fact that they wanna shift this. And so it's been really exciting to see how one person, even if they're not the one in charge can shift in an enormous way the culture and the sustainability focus of a business. So if you wanna get activated, sometimes the best way is to just start where you are and look for solves because there's been a handful of people that have changed the direction of Dispatch just because they were motivated to get their company to do this.
Maia Tekle: Yeah. Be the squeaky wheel. [laughs]. Companies listen to their consumers. I think consumers underestimate the amount of influence that they can have on companies shifting their focus and their priorities. That has been one of the reasons why we've been able to accelerate, is that if you say you hate the waste, they're listening, and so use your voice for good. And I think that that is a great starting point. And then advocate for progressive policies. There's a lot of really great things that are very easy to do regardless of where you're located.
Lindsey Hoell: Waste is a problem everywhere.
Maia Tekle: Waste is a problem everywhere. Also kindness is free. [laugs]
Jason Jacobs: Great. Well, I can't wait for Dispatch Goods to come to Boston.
Lindsey Hoell: Same.
Maia Tekle: I'm from Massachusetts, so I cannot wait to be in Boston and I already have two drivers, my parents, ready to roll. [laughs]
Jason Jacobs: Amazing. Well, thanks so much both of you for coming on the show and sharing your stories. I think it's awesome what you're doing. And wishing you and the whole Dispatch Goods team, growing team, every success.
Lindsey Hoell: Thank you so much, Jason.
Jason Jacobs: Hey everyone, Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us at myclimatejourney.co. Note, that is .co not .com. Someday we'll get to .com, but right now .co. You can also find me on Twitter @JJacobs22, where I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear. And before I let you go, if you enjoy the show, please share an episode with a friend or consider leaving a review on iTunes, the lawyers made me say that. Thank you.
