As with many start-up founders, Ian Rosenberger’s entrepreneurial ambitions were sparked by a problem that needed solving. That problem: the mountains of plastic waste he saw in the streets while visiting Haiti.
After the devastating earthquake that struck the Caribbean island nation in 2010, Rosenberger flew to Port au Prince with a plan to help. An amateur photographer, he set out to document the devastation with his camera, sell the photos back home in the U.S., and donate the proceeds to the relief effort.
Little did he know his modest fundraising plan would evolve into a burgeoning multinational business that would create sustainable jobs for poor Haitians, address an environmental problem and launch a new product—fabric made from recycled plastic bottles.
The business 35-year-old Rosenberger founded and now heads as CEO, Thread International, is based in his hometown of Pittsburgh, and is a prime example of a growing type of social enterprise start-up that seeks to address social challenges through for-profit means.
From environmental degradation and climate change to poverty to hunger, a new generation of entrepreneurs is looking for ways to do well by doing good. The story of Thread International illustrates that dynamic at work.
Birth of a Company
On his first and subsequent visits to Haiti, Rosenberger befriended locals, including a young man, Tassy, with a facial tumor for whom he would later help to arrange medical treatment in Pittsburgh. That friendship drew him deeper into the country’s culture and problems, as he began casting about for ways that he might help in a more enduring way.
“The idea was kind of freewheeling,” he says in a recent interview with Project Invested. “I fell in love with Haiti and its people. It was like a war zone [after the earthquake], and in many ways a really bad place at the time. But there’s something about that place that sticks with you.”
As his ties to the Haitian people and culture grew closer, Rosenberger began thinking about how to break the cycle of poverty. He was convinced an effective solution would require more than charity—Haiti and similar countries needed not handouts, but instead money-making enterprises creating real jobs that would invest the Haitian people with dignity, autonomy and purpose.
“I went back through the photos that I had taken, and looking across those 3,000 pictures, you see the same two things in every picture: you see a lot of poverty and a lot of trash,” he explains. “I’d written in my journal on my very first trip to Haiti, ‘If Haiti could turn trash into money = good’.”
Finding a way to mitigate this environmental crisis became his cause. It began with a Google search, he says, as he typed “what can you turn trash into” into the search engine. Among the results, he discovered that plastic waste could be recycled as fabric. From that small beginning, his course was set.
“I realized that if we’re going to get this done, if we were going to place the people we were working with into jobs, that we were going to need to create [those jobs],” he says. “And that’s where the idea for Thread was born.”
Thread’s ‘circular economy’
In a nutshell, here’s how the Thread model works: Haitians gather discarded plastic bottles and deliver them to nearby recycling centers, where they’re paid for the collection. From there, the bottles are washed and ground into a plastic flake, which can be more easily transported.
The resulting flake product is loaded in containers and shipped to textile processing facilities in the United States or China, where it can be broken down and spun into thread, yarn and fabric. The resulting fabric may be either 100% polyester or a blend with other fibers. The goal is to create a high-quality fabric, responsibly manufactured to minimize the use of water and energy in the process.
It’s a “circular economy” model in which recyclable waste, instead of being routed to landfills, is re-injected into the production cycle. For low-income communities in poor nations like Haiti (and now Honduras, the second country in Thread’s roster of providers), that dynamic is creating jobs, boosting incomes and kick-starting a potentially valuable export market. Those are all components that can lead to economic growth in a nation where it’s desperately needed.
If you assume fabric made from recycled plastic would be stiff and scratchy, guess again. Thread currently produces a variety of fabrics, including a soft jersey material (like your favorite t-shirt); a rugged but supple canvas blend; and denim (which the company’s literature describes as feeling “like we stole it from someone’s closet”).
Getting to that point took time. The first samples the company developed were “terrible,” Rosenberg admits with a laugh. But they kept at it. Today Rosenberg says that if you held a swatch of Thread’s fabric product in one hand and a swatch of natural fabric in the other, you couldn’t tell the difference.
Rethinking the supply chain
Thread’s target market is apparel manufacturers, whom Rosenberger hopes to sell on the concept of a responsible, sustainable source for materials. Part of the company’s value proposition, he explains, is that his supply chain is completely transparent. Most suppliers can’t make that promise.
His research into the apparel industry revealed that many companies pay little attention to the ultimate source of their materials. “Even some of the biggest apparel manufacturers in the world, they have no idea where their materials are coming from,” Rosenberger says.
That can create long-term problems for a company in terms of both reputation and liability. For instance, if a sportswear company is unaware that the ultimate source of its materials can be traced back to sweatshop labor or environmental exploitation, they can face a public relations or legal crisis if they’re linked to such practices. For Rosenberger, it made good business sense to open up the supply chain to help mitigate those risks.
In 2016, Timberland became one of Thread’s first significant production partnerships. Perhaps not coincidentally, the New Hampshire-based outdoor wear manufacturer became the target of environmental activists in 2009, who accused Timberland and other apparel makers of supporting deforestation in the Amazon through their supply chains. Former Timberland CEO Jeff Swartz has written for the Harvard Business Review how that advocacy campaign encouraged the company to look more closely at how its supply chain worked.
As part of Timberland’s commitment to environmental stewardship and improving supply chain transparency, the company contracted with Thread for recycled fabric to be used in a line of footwear and bags.
“From the moment we met them, we knew this had the potential to be far more than a supplier relationship,” Colleen Vien, Timberland’s director of sustainability, said in announcing the new collection with Thread. “Building community has always been at the heart of Timberland, and we were also inspired by the Haiti connection, given our work there over the past five years. Any time we find an opportunity to create both environmental and social value, that’s a big win. And Thread does just that.”
Thread is currently working to forge similar partnerships with other leading outdoor gear brands that would like more transparency in the sourcing of their materials, Rosenberger says.
Those products hit stores in spring 2017, with the Thread tag prominently displayed on a line of Timberland-branded items. Rosenberger is unabashed in his excitement at having reached this point.
“It’s gonna be great to walk into a store, buy a Thread product, and put it on my feet and walk around in it,” he says.
Measuring the impact
Thread’s commitment to supply-chain transparency is made possible by advances in data-gathering and communication technology. Rosenberger describes his company as a “tech-enabled” manufacturing enterprise.
“We collect immense amounts of data,” he explains. “How much carbon is being put in the air, how much water is being used, how many people are affected, what’s the economic impact in most communities. Because we can collect and compile that data quickly, we can share it with our customers across tech platforms that makes it instantaneous for them.”
That relentless tracking of data, which Thread publishes in an annual impact report, shows a company on the move. A few key metrics from the 2016 impact report:
- Since 2014, Thread International supported 233 full-time jobs for Haitians throughout the company’s supply chain.
- Income opportunities in plastic collection and recycling for Haitians and Hondurans have grown slowly but steadily, expanding to 3,845 in 2016.
- Since 2014, over 1.17 million pounds of plastic waste have been exported from Haiti. One pound of waste collected equals roughly one yard of fabric.
- The company hit $669,000 in revenues (Rosenberger estimates that Thread will become profitable in the next two years) and has grown to 20 full-time employees (up from just five in 2014)
One of the most significant and enduring challenges any young start-up business will face is acquiring the capital needed to build and grow the business, particularly in the early stages. As with many entrepreneurs, for Rosenberg and his team that meant a time of intense frugality.
“We’re gonna write a book called ‘The Start-Up Diet,’” he jokes. “We ate a lot of ramen noodles.”
An early grant from a Pittsburgh seed accelerator, The Idea Foundry, helped in the early stages, he says. That was followed by about $700,000 raised from friends and family, angel investors, and other local sources. By 2015, Thread was tapping into venture capital funding networks that have afforded the company a bit of breathing room for its early stage growth.
The company also received a boost from its participation in the Unreasonable Impact accelerator program, a support program for social entrepreneurs formed as a partnership between Barclays and the Unreasonable Group, which we’ve written about before. This innovative two-week business accelerator program focuses on green and social enterprises, connecting start-up leaders with experienced business executives, venture capitalists and experts to troubleshoot the challenges common to early-stage companies.
Rosenberger was invited to participate in the program’s November 2016 class, which he says helped tremendously in building out and reinforcing his entrepreneurial support network.
“It’s lonely being a start-up, you feel like it’s you against the world all the time,” he says. “So being able to come together with other CEOs for two weeks, and the community that’s developed afterwards, was nothing short of extraordinary. And now I have these relationships with people that I just wouldn’t have had. I might have figured it out over time, but this made it happen faster. And it’s nice to have a place to find inspiration.”
Through the partnership with Unreasonable Group, Barclays is aiming to help entrepreneurs like Rosenberger scale up their businesses to increase impact and create jobs.
Mark Thain, Director of Social Innovation at Barclays said “we’re so proud to support the growth of such an inspiring group of entrepreneurs through Unreasonable Impact. Companies like Thread are not only tackling some of the world’s most pressing challenges but are also creating the jobs of tomorrow.”
‘I love the fact that we make things’
In the company’s literature, they jokingly refer to themselves as “responsibility nerds.” But perhaps a better way of understanding the Thread mission is to recognize that it’s a new type of manufacturing concern that reflects a millennial commitment to a broader array of social goals beyond profit—while recognizing the essential importance of making a profit to advance those goals.
For Rosenberger, who has a long family connection to Pittsburgh’s historic steel industry, manufacturing carries a special importance in a time when many start-ups focus on software, service apps and media.
“My grandpa worked in the mills, his dad worked in the mills, there’s something about making things that’s in me, for sure,” Rosenberger says. “We make things, and I love the fact that we make things.”
Currently, those things are marketed and sold primarily to apparel manufacturers (though Thread-branded t-shirts and overage fabrics are available for sale direct to consumers on the company’s website). More broadly, Rosenberger says he hopes Thread’s philosophy will serve as the vanguard of a change in thinking among consumers.
Just as he wants to see companies embrace greater sustainability in their supply chain and material choices, he hopes that mindset will extend to a new form of “conscious consumerism.” While he’s happy to have the support of what he calls the “deep green” crowd, of which he says he’s a proud member, he also wants the wider public to embrace an ethic of responsible, guilt-free pride in the products they consume.
That starts with having a quality product backed with a great story that relates a sense of authenticity and trust, he says.
“How do we make products that people can talk about?” he asks. “[Thread’s founding] was just about the time that TOMS Shoes was coming of age, and people were like, wow, there’s this thing we can do with clothing, we can help people. That model was just one step in the evolution toward what I believe will be a more conscious clothing industry.
“If we can create that conversation around our product, we know we’re doing something right,” he concludes.