How do you do that? He needs to get some help where he doesn't have the background or the inclination. He's got marketing contacts and distribution experience; he should weave that into some kind of relationship with a plastics recycler with a little more know-how. He does have a little business there that could feed into the activities of another firm. There are all kinds of options: a co-marketing arrangement, or a subcontractor or OEM relationship. He's certainly got a lot of energy and enthusiasm, which could be put to better use.
One of the common mistakes is to think people are going to buy products just because they're environmentally correct. You can't rely on that kind of altruism. It certainly can help. But people are very dollars-and-cents oriented. Recycled plastics products do not have to be more expensive than what they're replacing, and in the long run they can't be. In the long run they have to be cheaper.
If Robbins is lucky, maybe he can bring in the top line, but I think his costs are going to increase. The company is very thin, and he can't run a business effectively and wear all the hats at the same time. But he does have the option of finding someone who will work with him. He's developed a market and has some customers, which is an asset that should be valuable to someone.
OBSERVER
THOMAS J. PENRICE
Director, Plastic Consulting for Strategic Analysis Inc., a Reading, Pa., firm
I'm very bullish on Robbins's idea and his chances for success. I think his sales forecast is actually quite modest. And there may even come a time when his raw materials cost -- which is relatively high now -- could be negative. As communities collect all this plastic, they're going to need somebody to take it off their hands.
However, there is a major problem. He has seriously underestimated his marketing costs. If he uses the $72,000 he has budgeted (on $2 million of projected sales) to hire a marketing person -- and he'll pay at least that to get someone qualified -- there won't be any budget for mailings and travel. You have to go to the trade shows and network.
Eventually there'll be many viable consumer and industrial applications for recycled plastic products. However, Robbins's company must first survive the next several months. Instead of letting his customers dictate his marketing approach, I would begin by working directly with major producers of plastic resins -- the Dows and Du Ponts -- and work out a deal where they would give him the plastics they can't use in their recycling programs, the co-mingled plastics, and see if they would be willing to buy the picnic tables and the like from him. These companies all have active recycling programs and are eager to promote recycling. Once the applications are demonstrated to be practical and cost effective, however, Robbins has got to reach a broader market.
COMPETITOR
BRIAN HARPER
Technical director, Hammer's Plastic Recycling Corp., Iowa Falls, Iowa, The Plastic Lumber Co.'s largest competitor
They're going to be struggling to stay alive unless they do something clever, and there doesn't seem to be anything clever on the horizon.
First, the company is grossly undercapitalized. And it's not spending the little money it does have on the right things. It's marketing that drives companies that make plastic lumber, yet Robbins has scaled back his marketing efforts to save money. He needs large orders to survive, and without a marketing budget, he's going to be hard pressed to get them.
Even with a marketing budget, he would seem to be in trouble because he doesn't have a marketing strategy. He's going with the flow, and that's a big mistake. There is no inherent market for plastic lumber; you have to create one. I think Robbins believes -- as a lot of companies that are no longer in business once believed -- that his product is so good that people will fight to buy it. That's wrong. It's always been wrong.
But in addition to overestimating sales and underestimating marketing expenses, he has another problem. There is no depth of technology. Ken Boersma has left. Who's going to replace him?
If I were running their company, I'd go out and recruit a good marketing man and a good technology person, but I don't see how Robbins will be able to attract the money he'd need to do it. When potential investors visit the company's offices and see the lack of staff, they're going to conclude the company is close to broke. The venture capitalists won't trust the company with their money, and customers won't trust it with their orders.
Plastic Lumber is where we were four years ago, but we had marketing and we had technology people who allowed us to create new products. They have neither.
CUSTOMER
GLENN TROWBRIDGE
President, National Association of County Park & Recreation Officials; Park & Recreation Director for Clark County (Las Vegas), Nev.
New products have to do something above and beyond what old ones do. There are a hundred manufacturers of picnic tables and speed bumps out there already. If Plastic Lumber came out with, say, a vandal-proof bench you could wipe spray paint off of, now we're dealing with something. But customers already have long-term relationships with manufacturers, and they're not going to set them aside just because somebody says, "Hey, I've got a newer product." I'm approached at least once a month by picnic-table manufacturers; it's an incredibly competitive field.
Robbins will have to prove his claim of extended life expectancy -- he can't just come out and say it costs more but is going to last twice as long. The documentation seems absent at this point.
If the company isn't competing on price it's going to have to convince customers to raise the standards of what they spec -- for instance, to require that benches last six years -- and then the company will have to prove that its product meets those standards. Convincing buyers and architects to stop specifying one product and specify something more stringent, on the basis that it's better for them, is an uphill battle. But that's how the game works.
