Why Did Leo DiCaprio Join a Garbage Start-Up — Literally?

Most people don’t know much about garbage aside from the fact that it’s something they set outside once or twice a week. Or maybe that it’s the sort of business venture that Tony Soprano would enjoy. But the garbage industry is really just a grimier version of the real-estate business. In the past, Big Garbage has been dominated by two big firms, Waste Management and Republic Services, which essentially make their money by taking trash and putting it into a landfill. “They own these real-estate assets—landfills,” as Rubicon Global C.E.O. and co-founder Nate Morris put it to me. “They’re trying to take your garbage and put it into those assets and charge you a monthly rent fee.”

Rubicon, named for the river that Caesar mythically crossed, is quite literally a start-up in the garbage business. And it is attempting to disrupt the industry via the Uber model. Morris matches independent local garbage haulers with multi-national clients, and lets them schedule on-demand pickups for their trash through a proprietary technology. Perhaps most importantly, Rubicon taps into the social consciousness of companies who care about what happens to their waste. It sure isn’t glamorous, but it’s not exactly a crowded market, and Morris has his sights set on solving problems around sustainability and waste management.

And it’s become one of the hotter investments in the rapidly cooling tech business. The company has raised $95 million in funding from investors like Salesforce C.E.O. Marc Benioff, founding Uber C.T.O. Oscar Salazar, Bill Ackman, and Goldman Sachs. It recently announced a board of directors that includes David Plouffe, the former campaign manager for Barack Obama who is now senior vice president of policy and strategy for Uber; Canadian businesswoman Marie-Josée Kravis; and, yes, even Leonardo DiCaprio. In tech circles, Rubicon is now sometimes known as “the Uber of Trash.”

Rubicon, of course, is not your average start-up. Morris, in particular, is far from the average hoodie-wearing, Stanford-dropout tech founder. He was raised by a single mother in Kentucky, and grew up steeped in the organized labor movement, which represents perhaps the sharing economy’s biggest foe. “My grandfather ran the United Auto Workers Local in Louisville. So I tell people that growing up in a union household was the perfect training grounds to disrupt the waste business,” he told me. After graduating from George Washington University, he worked in several government offices, including the U.S. House of Representatives, the U.S. Senate, the Department of Labor, and the White House. After college, Morris went to work for the Kentucky Cabinet for Economic Development, traveling all over and seeking business opportunities for the state.

It was on one such trip that he began to conjure the idea for Rubicon. While attending a lecture in Beijing, during the run up to the 2008 Olympics, Morris was dismayed by the city’s inability to deal with recycling and waste management. A year later, he founded Rubicon with a high-school classmate and friend, Marc Spiegel, whose family had worked in the garbage business for years. Their idea was simple.

Instead of hauling individual companies’ waste within a particular area, Rubicon operates at an economy of scale. Using its proprietary technology, it works by connecting independent haulers with companies who need their trash picked up. “Landfills are typically built around underprivileged communities, people of color, people in poverty. There’s certain aspects of waste to be carcinogenic,” Morris says. “This is becoming, I believe, one of the key social responsibilities as it relates to the environment.” Rubicon’s proprietary software platform, Caesar, also hosts an online bidding process that helps waste management firms compete for contracts, with the eventual goal of reducing the number of times a hauler visits a company to pick up its trash.

In an industry where haulers have traditionally been paid per pickup, thereby wasting time and money, Morris found an opportunity for efficiency. Now, clients can schedule their pickups using Rubicon’s platform as frequently or infrequently as they need it. The Uber model hasn’t worked for plenty of start-ups—an “Uber for ” start-up called Shuddle shut down in April, citing an inability to raise enough funding to stay afloat. Other on-demand start-ups must contend with the dicey economics associated with negative-gross-margin businesses. But Rubicon may work because it isn’t, in fact, a perfect comparison to Uber—Rubicon is not an on-demand service as much as it is a scheduling platform, but it mirrors the efficient logistics Uber has become known for.

Morris and Spiegel raised their first venture-capital funding from Atlanta-based firm QuarterMoore. Rather than move out to Atherton or Menlo Park, Morris decided to keep Rubicon headquartered in Kentucky and Atlanta. “It was never a matter of, do I need to go to San Francisco or New York to do this?” he says. “Some of the times the experts aren’t always right about what’s going to succeed and what’s not. There was no place I would ever live other than Kentucky.” For some, that was part of the appeal. “It’s so fascinating where he comes from. He’s a Kentucky Republican. He’s one of the most compelling people I’ve heard talk recently about the environment,” said Plouffe. “He brings a practicality to it. I think he’s very grounded—he’s got a very innate understanding of Middle America.”

Morris isn’t all folksy charm. At 23 years old in 2004, he raised more than $50,000 for George W. Bush’s re-election campaign. The Republican power broker is friends with Kentucky senator Rand Paul, and helped connect the politician to figures on Wall Street and in Silicon Valley during his short-lived presidential bid. Morris has also used that canny politicking to help support his own concern. “In the political sphere, the left and the right might have disagreements over climate change and global warming and the immediacy of those challenges,” board member Kevin Warsh said. “But Nate persuaded me that the immediate issue was increasing amounts of waste, uses of landfills that were counterproductive, and to communities and the broader environment.”

Investors are throwing money at start-ups that aren’t solving real problems. “We need to divorce ourselves from venture capital as an occupation and focus on using capital as a way to take really big bets on things that just seem totally audacious,” venture capitalist Chamath Palihapitiya told Vanity Fair. “Right now we haven’t done enough of that, and the result is that most of the things we’ve funded are mostly crap and largely worthless.” In a world where hundreds of millions of dollars are being funneled into “largely worthless” start-ups, Rubicon stands out by seeking to solve something that’s a clear problem. Rubicon’s vision of the world empowers smaller garbage haulers and incentivizes both them and their clients to think sustainably, instead of rewarding people for simply throwing out garbage.

Today, Rubicon has operations in all 50 states, and Morris plans to take his company public within the next couple of years. And it’s not just companies who use his services. “We’ve launched in households. We’re launching in governments,” Morris says. “We just want all the garbage.”
Maya Kosoff writes about tech for VF.com, with a focus on start-ups and venture capital.

Rubicon, of course, is not your average start-up. Morris, in particular, is far from the average hoodie-wearing, Stanford-dropout tech founder. He was raised by a single mother in Kentucky, and grew up steeped in the organized labor movement, which represents perhaps the sharing economy’s biggest foe. “My grandfather ran the United Auto Workers Local in Louisville. So I tell people that growing up in a union household was the perfect training grounds to disrupt the waste business,” he told me. After graduating from George Washington University, he worked in several government offices, including the U.S. House of Representatives, the U.S. Senate, the Department of Labor, and the White House. After college, Morris went to work for the Kentucky Cabinet for Economic Development, traveling all over and seeking business opportunities for the state.

It was on one such trip that he began to conjure the idea for Rubicon. While attending a lecture in Beijing, during the run up to the 2008 Olympics, Morris was dismayed by the city’s inability to deal with recycling and waste management. A year later, he founded Rubicon with a high-school classmate and friend, Marc Spiegel, whose family had worked in the garbage business for years. Their idea was simple.

Instead of hauling individual companies’ waste within a particular area, Rubicon operates at an economy of scale. Using its proprietary technology, it works by connecting independent haulers with companies who need their trash picked up. “Landfills are typically built around underprivileged communities, people of color, people in poverty. There’s certain aspects of waste to be carcinogenic,” Morris says. “This is becoming, I believe, one of the key social responsibilities as it relates to the environment.” Rubicon’s proprietary software platform, Caesar, also hosts an online bidding process that helps waste management firms compete for contracts, with the eventual goal of reducing the number of times a hauler visits a company to pick up its trash.

In an industry where haulers have traditionally been paid per pickup, thereby wasting time and money, Morris found an opportunity for efficiency. Now, clients can schedule their pickups using Rubicon’s platform as frequently or infrequently as they need it. The Uber model hasn’t worked for plenty of start-ups—an “Uber for ” start-up called Shuddle shut down in April, citing an inability to raise enough funding to stay afloat. Other on-demand start-ups must contend with the dicey economics associated with negative-gross-margin businesses. But Rubicon may work because it isn’t, in fact, a perfect comparison to Uber—Rubicon is not an on-demand service as much as it is a scheduling platform, but it mirrors the efficient logistics Uber has become known for.

Morris and Spiegel raised their first venture-capital funding from Atlanta-based firm QuarterMoore. Rather than move out to Atherton or Menlo Park, Morris decided to keep Rubicon headquartered in Kentucky and Atlanta. “It was never a matter of, do I need to go to San Francisco or New York to do this?” he says. “Some of the times the experts aren’t always right about what’s going to succeed and what’s not. There was no place I would ever live other than Kentucky.” For some, that was part of the appeal. “It’s so fascinating where he comes from. He’s a Kentucky Republican. He’s one of the most compelling people I’ve heard talk recently about the environment,” said Plouffe. “He brings a practicality to it. I think he’s very grounded—he’s got a very innate understanding of Middle America.”

Morris isn’t all folksy charm. At 23 years old in 2004, he raised more than$50,000 for George W. Bush’s re-election campaign. The Republican power broker is friends with Kentucky senator Rand Paul, and helped connect the politician to figures on Wall Street and in Silicon Valley during his short-lived presidential bid. Morris has also used that canny politicking to help support his own concern. “In the political sphere, the left and the right might have disagreements over climate change and global warming and the immediacy of those challenges,” board member Kevin Warsh said. “But Nate persuaded me that the immediate issue was increasing amounts of waste, uses of landfills that were counterproductive, and to communities and the broader environment.”

Investors are throwing money at start-ups that aren’t solving real problems. “We need to divorce ourselves from venture capital as an occupation and focus on using capital as a way to take really big bets on things that just seem totally audacious,” venture capitalist Chamath Palihapitiya told Vanity Fair. “Right now we haven’t done enough of that, and the result is that most of the things we’ve funded are mostly crap and largely worthless.” In a world where hundreds of millions of dollars are being funneled into “largely worthless” start-ups, Rubicon stands out by seeking to solve something that’s a clear problem. Rubicon’s vision of the world empowers smaller garbage haulers and incentivizes both them and their clients to think sustainably, instead of rewarding people for simply throwing out garbage.

Today, Rubicon has operations in all 50 states, and Morris plans to take his company public within the next couple of years. And it’s not just companies who use his services. “We’ve launched in households. We’re launching in governments,” Morris says. “We just want all the garbage.”

Click here for the full interview

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