When people were struggling in the economic recession in 2008, Nathan Benjamin, then a senior project manager for McCownGordon Construction in Kansas City, found an opportunity to build a business and promote sustainability through his startup PlanetReuse, an online marketplace for used construction materials.
The idea came from Benjamin’s observations as both a seller and a buyer in the construction industry. When renovating a building, he would get rid of good doors and windows and wonder where they wound up. Meanwhile, he saw other designers and contractors who needed quality materials.
Attempting to bridge that gap, Benjamin started PlanetReuse in 2008. As a broker, the company collected reclaimed building materials and looked for buyers. It grew 300 percent in 2009, fueled in large part by other companies cutting costs on materials — and thus choosing to build with used materials — during the Recession.
“In the construction industry, everything took a dive, so projects were put on hold and things slowed down,” Benjamin said. “Everybody’s budgets got really, really tight, which was helpful for reuse in a lot of ways.”
However, PlanetReuse’s growth rate eventually slowed, as the recession led to a decrease in new construction projects and the demand for building materials diminished.
Initially, sustainability was a new concept for numerous customers, but Benjamin says that’s changing.
“In the last couple of years, it was really taken off as the awareness builds, as well as the projects are now pushing forward,” Benjamin said. Currently, PlanetReuse generates 80 percent of its revenue from buying and selling reclaimed materials. Another 10 percent comes from architecture consulting, and 10 percent comes from fees for deals PlanetReuse facilitates as a market maker.
Lack of customer awareness is still the biggest challenge for PlanetReuse, Benjamin says. “We have to educate (customers) in the process and manage their expectations,” he said, “and also walk through explaining ourselves, who we are.”
As it recovered from the Recession, PlanetReuse rode the rise of mobile Internet at the end of 2010. Benjamin founded InvenQuery, a real-time inventory and marketing application to support PlanetReuse and other businesses that want to develop their e-commerce offerings. Using InvenQuery, customers can scan a QR code to look up information on goods.
Since February 2011, InvenQuery has raised $1.1 million in total investment from Omaha, Neb.-based venture capital firm Dundee Venture Capital.
Reuse slow to catch on in Missouri
Since 1992, the Missouri Environmental Improvement and Energy Resources Authority (EIERA) has run the Missouri Market Development Program to promote the market for reclaimed materials. The program has provided more than 150 Missouri businesses with financial or technical assistance and information services to help with the use of materials like used shingles or carpet scraps.
This year, EIERA worked with PlanetReuse to establish an online exchange platform called the Midwest Materials Exchange, which is a reused materials marketplace exclusively for Missouri and neighboring states.
“They already had a website,” said Kristin Tipton, development director for EIERA. “It functioned very much like what we wanted it to function. It was very similar type of things that we were doing.”
But the concept of recycling building materials is not as prevalent in Missouri as it is in some other states. “From what I can see, I don’t believe that Missouri is as progressive in this area as some other states,” Tipton said.
The use of reclaimed building materials could bring environmental and economic benefits, Tipton said. “If somebody else can take the material and make new products out of it, then you get some more jobs happening, some more economic activities happening, as the materials recirculate,” she said.
The Missouri Market Development Program has up to $1 million a year to help fund projects that involve recycled building materials, waste wood products and other reused materials. But Tipton said projects specific to reused building materials are not common.
Lawrence Lile, an architect and the owner of Lile Engineering in Columbia, says that the architecture industry in Missouri can be slow to adopt new innovations. But that’s not necessarily a bad thing, Lile said.
“Often, we have a better outcome because we are doing something that has been pioneered maybe in California or someplace else,” he said.
“Filling a great niche”
PlanetReuse is a member of the United States Green Building Council, a nonprofit organization that developed the Leadership in Energy and Environmental Design (LEED) rating system, widely recognized as one of the highest standards of sustainable construction.
“What’s really great about LEED in the USGBC is the fact that it changed people’s way of doing business,” Benjamin said. “I think LEED certification, really, people either love it or hate it.”
In the LEED certification process, builders receive credit for projects that utilize at least 5 percent reused materials. PlanetReuse offers consulting services for how to meet that and other LEED certification standards.
Lile, a LEED certified architect himself, says he’s impressed by PlanetReuse’s efforts in the industry. “It has been quite a need for some time,” Lile said. “They are filling a great niche.”