Having taken 18 months out and travelled the world, just to find single-use plastic trash in the most remote of locations, serial entrepreneur Mike Smith set out to help solve the problem. Now, he’s raised $600,000 in seed funding, and more than $200,000 through a crowdfunding campaign, to get ZeroCo off the ground.
The startup is designed to re-think home cleaning items, providing uses with reusable bottles made from plastic reclaimed from the ocean.
ZeroCo sends out pouches of replacement products, allowing users to refill their bottles. The pouches are then returned for cleaning and re-refilling via postage-paid envelopes.
The startup has already raised $600,000 in seed funding from investors including director and chair of Adelaide Football Club and Coopers Brewery Rob Chapman; and entrepreneur Raymond Spencer.
It launched its Kickstarter campaign last week and racked up $40,000 in the first hour-and-a-half. Within 24 hours, ZeroCo had secured $100,000 in pledges.
At the time of writing, with 39 days to go, the startup has raised just shy of $200,000, almost 80% of its very specific goal of $251,313.
Speaking to StartupSmart ZeroCo co-founder Mike Smith says the response has been “so heartening”.
The majority of the funding has come from “strangers who believe in us and believe in this idea and want to solve this problem”.
While Smith admits it may have been easier to raise a tidy $250,000, the actual goal is a very precise number, for a very precise reason.
“I’m super serious about this product. And we’re a super-detailed bunch of people,” he says.
“That is the exact dollar amount that our budget is sitting at to get this project off the ground.”
The business is largely built around “radical transparency”, he says.
That includes being upfront about where ZeroCo’s materials come from, how much its products cost to make, and what its margins are.
“To keep that in line with everything we’re doing, the radically transparent number we need is $251,313,” Smith explains.
“That’s it. That’s the number.”
As real as it gets
Smith is no stranger to startup life, having been involved in four different projects over the past 10 years or so.
Notably, he founded Hot Chip, a startup that built wearable fitness trackers for surfers, and sold the rights to Billabong.
He then launched boutique wine brand Cake Wines, which he sold six years later in 2017.
Smith’s co-founder (and now wife) also previously founded beachwear brand Rye Swim, which expanded into 27 countries within its first 12 months.
In 2017, both Smith and Carter had been “really deep” in their respective ventures, Smith says.
“We decided to pack our bags and disappear.”
They took 18 months off to travel around the world, and it was during this trip that the seeds of ZeroCo were sown.
“We went to some of the most far-flung corners of the planet,” he says.
“We trekked along the border of Afghanistan and Tajikistan for a month, and we stayed in Kurdish villages on the border with Iran and Iraq.
“We went to Kamchatka in the far North East of Russia, near the Arctic circle, and just tried to get as far away from the tourist trail and from people as possible.
“We were just blown away by the amount of plastic that we saw everywhere we went — and in places where there shouldn’t be plastic.”
While in big cities or highly populated countries you may expect to see rubbish piling up, Smith was shocked by the amount of plastic that ended up in locations where there was no evidence of humans for miles around.
“When there’s plastic rubbish in pristine Alpine lakes and in rivers and at the top of the Himalayas … it really affected both of us.”
And so, although they were supposed to be taking a break from entrepreneurship, the couple put their heads together while they were on the road, to find a way to solve the plastic problem.
Smith and Carter returned to Australia in February this year, got married in March, and promptly moved back into Smith’s childhood bedroom at his parents’ place in Sawtell, New South Wales.
“It’s so romantic,” he jokes.
They converted his sister’s childhood bedroom into an office and hired “a marketing guru” as their first employee.
“It’s about as real as it gets,” Smith says.
Part of the idea behind launching a Kickstarter campaign was to spread the word about ZeroCo, and see what kind of support the founders could garner.
“To solve this plastic problem it’s going to take a groundswell of support from Aussies from all walks of life,” Smith explains.
“It needs to be people from all over the country coming together and deciding to change the way that we as a society deal with plastic.”
The crowdfunding campaign is intended to “empower people to join us on this mission and to contribute to making this thing real”, he adds.
“We can’t do it without people coming on board.”
While the team did discuss the possibility of launching an equity crowdfunding campaign —and it’s still something they may consider in the future —this round is just about getting the first production run funded.
It’s early days, and Smith is focused on getting the products into the world and the business up and running.
“Then we can expand to the next step from there,” he says.
Now, it’s looking increasingly likely that ZeroCo will hit its crowdfunding goal. However, Smith admits he went into the campaign with just a little bit of trepidation.
“I’ve never done a Kickstarter campaign before, and $250,000 is not a small amount of money,” he says.
However, an early teaser campaign with a basic landing page shared on social media gave the team a bit of a boost. Through sharing it with friends and family, they ended up with 13,000 signed up to their mailing list.
“We were quietly confident that there was interest out there, but we had no idea it was going to be that big. It’s blown us away,” Smith says.
Big picture project
While the team needs $250,000 to get the product off the ground, the longer-term, big-picture project is considerably more ambitious.
“We want to remove 1 million single-use plastic bottles from the planet in our first year,” Smith says.
“In order to do that, we’re going to need 14,000 Aussie households to get on board.”
Right now, 1,619 have backed the campaign, pledging to buy a box. So only 12,381 to go.
The 1 million-bottle target is “a big, audacious number”, he adds.
“I think we can do it as a country, if we rally together. That’s the moonshot we’re going for here.”
And, while Smith says it’s merely a happy coincidence, ZeroCo’s Kickstarter campaign comes at a pivotal time in the environmental protection debate.
Just weeks ago, hundreds of thousands of school children and supporters hit the streets in the Schools Climate Strike, a movement supported by thousands of Aussie startups, small businesses and VC firms.
Having been overseas for 18 months, the founders returned to an Australia that was already switched on the problems single-use plastics cause.
“We realised that all these things we’ve been thinking about and seeing was already resonating and happening here in Australia. People are talking about this problem,” Smith explains.
And, accordingly, the response to ZeroCo has been overwhelmingly positive.
“Aussies are fed up with the lack of action on this from big companies and the government … they just want a solution,” he says.
“The time is so right.”
You can help us (and help yourself)
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.